December 4, 2019
A few months ago, the website for the Philadelphia-based startup, Relay Network, was adorned with smiling children and glowing testimonials from parents, illustrating how the $50 push-to-talk device would enable parents to chat with their kids and track their whereabouts as an alternative to the cellphone.
But, Fast Company reports, despite the family-friendly façade, companies in the hotel, amusement, and concessions businesses saw huge potential in Relay: Instead of using the small, squarish, screenless devices to help parents communicate with kids, what if they could be used to replace bulky and expensive walkie-talkies?
Some of these businesses—among them, Comcast, AAA, Citizens Bank, and DentaQuest—started placing orders, and Relay took note.
“Demand sort of showed up at our doorstep,” Chris Chuang, Relay’s co-founder and CEO told the business news outlet.
Now, Relay is rolling out a proper enterprise version of the product, with staid black and white color options and features specifically for business use— particularly for companies that have large numbers of employees who are out and about; not sitting behind desks.
Relay’s push-to-talk button serves as a quick way for workers to get in touch, and it even doubles as a panic button, letting construction crews or housekeepers rapidly send an emergency message. Relay also now offers a web app for businesses, so managers can communicate with their team’s Relay devices through a laptop.
Instead of just targeting an audience of worried parents, Relay hopes to take a piece of the nearly $3 billion walkie-talkie market, Fast Company says.
Although it doesn’t look like a smartphone from the outside, the Relay is similar on the inside, with 4G LTE radios, Wi-Fi connectivity, GPS for location tracking, a Qualcomm chipset, a headphone jack, and a battery that lasts roughly two days on a charge. The main difference, of course, is that it trades a touchscreen for a big button, which users can press and hold to talk with fellow Relay users over a cellular or Wi-Fi connection. Parents could then talk to their children through their own Relay devices or through Relay’s mobile app, which would also let them monitor their children’s location. The idea was to provide the connectivity of a smartphone without the addiction of yet another screen.
Chuang says Relay has “tens of thousands of customers” for the family version, but it turns out that the same properties that made Relay work for kids—durability, simplicity, cost-effectiveness—also appealed to businesses. While walkie-talkie apps do exist for smartphones, the touchscreen requires “active workers”—that is, those in fields like construction and hospitality—to stop looking at what they’re doing..
This helps explain why walkie-talkies have stuck around in the smartphone era, but they have their own problems. Most of them are large and heavy, so they’re impractical for workers that don’t have an easy way to tote them around, and the costs are as steep as those for a smartphone, ranging from several hundred dollars to over $1,000 per unit.
“These devices, they haven’t changed much from the Nextel days,” Chuang told the magazine.
And at $50 per device, the Relay is a lot cheaper than a traditional walkie-talkie, even when you factor in $10 per month for cellular service.
“The price point enables people to now arm more of their workforce,” Chuang says. “Our vision is really to connect every active worker, whereas today where you have to ration out the walkie-talkies.”
And although the walkie-talkie business is unglamorous, it’s arguably ready for some disruption. According to Maia Research Analysis, the market has grown in revenue by over 8% every year for the past three years, and the group expects that trend to continue through at least 2024, at which point revenues could exceed $4.8 billion. Despite being more than 75 years old, the walkie-talkie isn’t slowing down.
Relay’s Chris Chuang argues that major vendors such as Motorola—which alone has 50% of the market—don’t have the expertise in smartphone-like hardware, software, and networking to make a product like Relay. But perhaps more importantly, walkie-talkie makers currently enjoy gross profit margins of over 40% on devices that can cost hundreds of dollars; they may not want to cannibalize that business with hardware that sells for a tenth of the cost. He notes that while Motorola has started offering cellular connectivity in some of its radios, the feature is only available on high-end models as a profit booster.
“A disruptively priced product like Relay would threaten their existing revenues greatly,” he says.
Still, Relay may not need to completely upend the walkie-talkie business to succeed. By virtue of being lighter and cheaper, it may appeal to workers who otherwise might not use a walkie-talkie at all. Schools, for instance, might want to equip their teachers with something lightweight for emergencies, and housekeepers could use them as protection against abuse, especially with a wave of state laws mandating panic buttons for hotel staff.
Chuang doesn’t like to say it publicly, but internally Relay thinks of itself as a Slack for active workers, the implication being that it’s a platform whose usefulness will extend as more businesses get on-board.
“As we get with customers, they brainstorm almost as much as we do,” he says.
Research contact: @FastCompany