RTFA. In the interview, it's mentioned that most of the expense was in infrastructure on the company's end for handling the call switching technology. This part of the investment would probably work as is when they announce the BlackBerry and Android versions of the client app. They just chose to try and deploy on the iPhone first due to its buzz and early adopter momentum.

When they say 1/2 millie they count salaries, server costs, advertisement, VOIP costs, cost to register x thousands of phone numbers, PR (which can easily eat up 3/4 of that) and all that other stuff. I would not be surprised if two guys in a dorm room find a way to make it work for less than 1/10th.