Fifteen years ago, David Erickson was at a crossroads.
He'd sunk time and effort into building a service to let users conduct screen sharing and videoconferencing, but then a rival company began offering a similar service for free.
So, he decided to get into the free business model himself. The result? FreeConferenceCall.com. (Bonus content: The Big Free Book of Success, a free e-book.)
Beginning with a $10 domain name--"it was sitting there at GoDaddy," he told me--his company has grown into an under-the radar behemoth. Here are some of the stats.
- Nine digits in annual revenue
- Between 5,000 and 7,000 new customers a day
- Billions of minutes of conference calls
- Worldwide service, with local dial-in numbers in 60 countries
- Online meetings with free screen sharing and videoconferencing for up to 1,000 participants for free. (That part's actually new, starting today.)
A nickel a click
I reached out to Erickson because I've been using his company for a long time--largely because the name was the first one I thought of when I needed to set up a free conference call. Even as our company has grown, we've never seen a need to change because--well again, it's free. Plus, everyone already has our free numbers programmed into their phones.
It turns out that's pretty much what Erickson hoped would happen when he started the company in 2001.
"Not a single person was advertising under the three keywords free, conference, and call in the search engines," he said. "Back then, it was GoTo.com ... that was your first PPC advertising. I got 'free conference call' at a nickel a click."
He was a "one-man band" back then, Erickson said, answering customer service calls at 3 a.m., and "kept innovating based on everything I heard from customers [calling my] apartment."
Now, he has almost 150 employees, the bulk of whom work with him in Long Beach, California.
"We've taken no institutional money and have no debt," Erickson said when I pushed him to disclose his private company's revenue. "Nine digits and profitable" was as far as he'd go, adding, "I want people to know we're not venture funded, not looking for our next round of capital."
The business model
So, the obvious question: How does FreeConferenceCall.com make money--especially in a world where most of us think we have unlimited long distance calls on our mobile plans?
The explanation, Erickson said, is that long distance isn't really free; it's just prepaid. Every time you connect to a different network, your phone provider pays that network's provider a fee, and that cost gets rolled into what you pay as part of your monthly bill. FreeConferenceCall.com makes money because it has agreements with various phone networks to receive a portion of those fees when its users call.
Additionally, the company runs FreeConferenceCall.com for Business, which is quite big in its own right--users from more than 800,000 businesses, including nearly all of the Fortune 500 companies.
However, some of the more interesting uses that customers have come up with are for things Erickson said he never expected when he launched. Here are four of the best that he told me about:
"Audio has always been up to 1,000 participants," he said. "We have so many broadcasters, prayer groups, multilevel marketers. It goes on and on."
"We've seen truckers use it when they're out of reach of CB radios, and taxicab guys running networks--a small group where they can give hot tips where the business is."
"I'm in Chicago standing outside of a hotel, and I told a guy I worked for FreeConferenceCall.com. He said one of his family members died, and I thought maybe a conference call would work [to make arrangements]. He started using, got the family together for planning--and now [his] 60-year-old sister and 70-year-old sister use it to talk with their grandkids."
This one is probably my favorite: "We heard undercover cops were using it so they just look like they're on their cell phones, and they're not on a radio that can be scanned."