Ask any IT organization, and you’ll find that QA is often a bottle neck in rolling out products. I know, as one of my early jobs in the IT industry was as a QA tester. It had its perks: I was able to poke around the system and learn its each and every corner, working both the business and the technology groups. But we were always pressured under strict deadlines and often understaffed. That’s the old model of Quality Assurance, that the Israel and Massachusetts based start up uTest is working to change. VC Café had an open conversation with Doron Reuveni, uTest’s Chief Exec, to learn more about uTest’s disruption in the testing services industry.
In its own words, uTest is the world’s largest marketplace for software testing services, through their community of 14,000+ professional testers from 151 countries around the globe. Their vision is ambitious: to deliver the most cost-effective solution to test any application, anywhere, anytime.
VC Café: Hi Doron, we love the idea. Can you tell us how it all started?
Doron Reuveni: I formed the company on April 2007 and launched a beta a year after on April 2008. The adaptation from ecosystem was easy because the message was polished, and right. We started with a pilot to only 10 companies that were different in size and nature. We listened to them closely and spent 3-4 months on implementing quickly.
We knew what is important to the buyer. Keeping a large QA team in-house is expensive, so we offered a pay-per-performance model. The community of testers was built as a pyramid scheme. As a new tester, one has to prove himself through online tests (created by uTest) as well as small projects, that build his initial ranking. Payment to the testers was also offered for performance (Pay-per-Bug).
VC Café: How do you compare uTest to QA Outsourcing Agencies?
Doron Reuveni: Outsourcing agencies will try to assign to a project the cheapest person they can get to increase its margins. We give clients a cost effective model that they could never get with contractors or full time employees. And indeed, one client has been bringing the other and our tester community is growing.
We don’t lead our value proposition with costs. That’s a side benefit. We lead with the fact that we do stuff that an internal QA team can’t do. Like the ability to utilize 50 different testers over the course of a weekend, before a big launch is about to go public. They test the applications in different environments, especially on mobile networks.
VC Café: Most businesses suffered by the economic downturn. How was uTest affected by the global recession?
Doron Reuveni: In 2009, we planned to build our presence with start ups in the consumer market. What happened is that established companies have to now look at us to continue running their business. In other market conditions they would probably wait so overall, the situation helped us penetrate big companies and raised our awareness.
VC Café: Crowdsourcing is the heart of uTest’s competitive advantage. Can you tell me a bit about it?
Doron Reuveni: In my opinion, 2009 is the year of crowdsourcing. See 99designs, Elance, Rentacoder. and other successes in the field. But the thumb rule”the more the merrier” does not apply to all businesses. In QA it happens to work perfectly – the more testers a client has, the more bugs are getting caught and the client has a piece of mind. Other verticals where crowdsourcing works well are translation, design and small website developments.
VC Café: What services is uTest offering these days?
Doron Reuveni: Today we offer three main services: 1) Proper QA testing 2) Usability testing and 3) Load and performance testing. We try to stay focused. This is our core strength.
VC Café: How much funding have you raised to date?
Doron Reuveni: We’ve raised $2.5 million in 2007 and a second round of $5 million in Nov 2008.
[Note: Investors include Longworth Venture Partners and Egan-Managed Capital, as well as Mesco and Massachusetts Technology Development Corp. see our post: One bug less: uTest Raised $5 Million for SaaS QA ]
VC Café: What kind of partners are you looking for?
Doron Reuveni: Today we have two types of strategic partners: Outsourcing services, who run their projects on top of the uTest’s platforms and technology partnerships with automated QA software, security and vulnerability testing companies. They bring the software, and we add the expertise.
VC Café: What do you see as your exit opportunities?
Doron Reuveni: There are numerous potential exit opportunities. Acquisitions by any of our large partners, outsourced QA companies, and all the large players in enterprise software. Amazon, Google and EMC can also be a fit. They have access to the cloud virtualization and are looking for execution on the client side.
VC Café: One of the important aspects of QA is documentation. Do you provide the necessary documentation to your clients?
Doron Reuveni: We give our clients test scripts and test scenarios and the execution is made based on our test plans. We also have clients who give us their test plans and ask for additional exploratory testing.
VC Café: what are your biggest challenges today?
Doron Reuveni: 3-4 months ago, the challenge was marketing and lead generation. Now I’m focused on execution. Seeing all the tears working together. We close sales with 10-15 clients a month. I need development to continue working on features. We are also going to invest more in our community and plan to hire a community manager.
VC Café: Looking ahead, what are your goals for uTest in the near future?
Doron Reuveni: We are looking to increase the content on our site. We put together qualification tests for QA engineers and are starting to see testers who put their uTest projects as part of their professional experience on their LinkedIn profiles. Eventually, I would like to become a leading destination site for the QA world.