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uTest’s Plans Following its $43M Funding Round
© Image: Shutterstock / Sergey Nivens
editorial

uTest’s Plans Following its $43M Funding Round

Fresh off a $43 million raise from Goldman Sachs and with a re-branding on the way that underscores the company’s growing ambitions, uTest (soon to be known as Applause) is preparing itself for a big year.

We recently spoke with Matt Johnston, the company’s chief marketing and strategy officer, to get a peek at uTest’s plans for 2014.

Related:
- uTest and growing beyond crowdsourcing's "sweet spot"
- uTest Named 16th Fastest Growing Company in the U.S.

Anton Root, Crowdsourcing.org: Can you start by giving our readers a brief overview of your plans for 2014?

Matt Johnston, uTest CMO / CSO: We announced in November that uTest was becoming Applause, and that’s really the vision of the company and the vision that Goldman Sachs bought into. The phenomenal past and present of uTest as an app testing company via a crowdsourced model — Applause is going to be that, plus a suite of app quality tools and analytics. Applause will be everything that uTest was, plus the suite of tools and analytics that are all geared toward a 360 degree app quality.

One of the things that we’ve been flushing out, and that I’m really excited about, is our plans for uTest. uTest as a brand and an offering is going to live on, and instead of being geared toward companies, it’s going to be geared toward testers, the larger tester community. The reason people join uTest today is mostly because they want to receive paid testing projects, and that’s what we call ‘inside the transaction.’ That’s where we invested a lot, in the matching algorithm, the vetting and training, specifically around, “We want you to make money as easily as you can, testing applications through uTest.”

What we’re going to do with the uTest brand and offering is expand it outside the transaction. We recently launched in beta uTest University, which is an entire curriculum dedicated to the training and education of testers, whether it’s usability training, whether it’s really technical things, whether it’s specific to iOS or Android or what have you — equipping testers with the education and training that they need. What’s very interesting to me from the crowdsourcing perspective is that we’re not trying to own the creation of the content. So unlike any other training company on the planet, we’re actually sourcing it from the test greater community — not just the uTest community, but also thought leaders from outside the uTest community. So it’s still got that crowdsourcing ethos — for uTest, by uTest.

In addition to training, there are going to be products and tools used in the testing space that, if your boss comes to you and says to you in your day job, “I really want you to go take a look at these three performance testing tools,” you’ll be able to go in and see what rating your peers gave to the tools, and see the reviews. And then going beyond the purely virtual, [we’ll be] getting into things like regional meetups, and then global events in the future. So, as big as our plans are for the Applause brand, which is company-facing, we have just as big of plans and just as big of an investment strategy around the uTest brand. [We’re] taking it from a place where testers can get testing projects, and aspiring to be the most inclusive and informative brand for a profession of a million-strong testers.

Why did you decide to move in this direction?

On the Applause side, because we were getting beyond just the world of testing and getting more into tools and analytics that were more about app quality instead of just testing, the uTest name — we were outgrowing it. It was going from a great strength in the past, to, increasingly, becoming harder to break away from the gravitational pull of the name uTest. So it didn’t fit our extended vision and offering.

Originally, we were thinking of naming both sides — both customer and community-facing — Applause, to keep things very clean and elegant. Ultimately, we decided that uTest was the perfect name for the community-facing brand. But if we were going to do that and raise the $43 million E round, we wanted to have bigger plans for it. It wasn’t going to be just more of the same. In addition to expanding the offering for companies, how could we expand the offering for the community? So we went very quickly from re-branding it to Applause, then we decided to keep the community name uTest, and then we actually started thinking of [the brands] as peers — as opposed to one being more important than the other. So it really becomes a company with two equal brands with distinctly different audiences.

From a tester perspective, in terms of the day-to-day operations, are there going to be any major changes — for example, in how the find out about a project, or how the log in?

For our community testers, no. It would have if we had decided to re-brand the community to Applause, but frankly we thought that sent the wrong message. If you’re a professional tester, you don’t really want to be told to applaud. In fact, your job often times is the opposite — it’s to point out those things that are missing or wrong or not fully there. So the fact that we decided to keep the uTest brand for the community means that they would log into the uTest platform, get project invitations from uTest.

The biggest change is going to be that we’re going to dramatically lower the wall to joining the uTest community. And by that I mean if you want to get matched up with projects, we need to know a lot of stuff about you: where you come from, what languages you speak, age, gender, education level. You also have to profile all your devices, you have to say that you have an iPhone 5S, and AT&T is your carrier, and this is your OS. It’s about a 10 to 15 minute process to register for uTest, despite the fact that it’s a fairly high bar, we get about 3000 new testers per month. We ended 2013 with about 35,000 new testers, and this year we’d expect that pace would increase to probably 50,000. We still need that information if you want to get invited to paid projects, but because we’re going to invest so much outside the transaction, in training, networking, and career advice, we going to have what’s going to be called the light uTest profile, where you just put in your name, email address, country, and password. The expectation is that because we’re offering more outside the transaction, because we’re lowering the bar dramatically, we expect the number of new testers joining the community to go up dramatically. It’s not just a place to earn extra money, but rather trying to really take ownership of the testers’ mindshare, as opposed to just their wallet share.

We’re going to hopefully usher in a new era that’s not just about the earning opportunity, but is also about equipping testers outside the transaction and in the rest of their professional lives. If I look at the other B2B crowdsourcing players out there, whether it’s oDesk or Elance, who recently merged, or TopCoder, they typically focus on the transaction: so or so wants to engage you for X dollars per hour. It’s very much about the transaction. Yes, we’ll continue to do inside the transaction, that part of our business is growing really, really quickly.

But we also want to get beyond that, and get to the point where [uTest] becomes the destination if you’re in the world of app quality or testing. It is where you go to learn, to network, and yes, this is also where you go to earn paid projects.

Is this going to be almost like a social networking platform for testers?

Yeah, that’s a very good question. As we started to spec some of this out, we’ve had to stop short of that, because it [can be] a bit of a slippery slope. I would say it does start to border on social networking, but it’s for the professional part of their lives, meaning it’s not about music or movies, it’s more about the professional side. Do I think it starts to border to a LinkedIn? Yes, I do, if we execute well. Do I think it starts to border on Facebook, which is more about your personal life? No, I do not. We want to make sure we’re drawing the line [where] it’s about training and certification and career advice, and not about TV shows, and music, and movies, and things like that.

Is this already live for the testers?

There are parts of this that are live. We have possibly the most active forums and message boards in the testing universe, so a lot of that happens today in a message board setting. But this will actually happen in the first few months of 2014 when we re-brand to Applause and the uTest brand is dedicated to the community. That’s when we’ll introduce things like product reviews, that’s when we’ll introduce the light profile, that’s when we’ll be able to dedicate uTest to the community. Right now it’s a shared brand between the community and the clients. We’re still a few month away from that, but we have rolled out pieces of it, like uTest University, which rolled out in December.

In terms of the re-brand, is there a more concrete timeline?

The first few months of 2014 is the company line. In truth, as we get a little more specific — and it’s not just a marketing thing, it’s product, engineering, sales training as we shift from uTest to Applause — realistically, it’s going to be the early days of Q2.

What’s the value proposition you bring to your clients?

Some of it is about cost savings, and that’s often time the case with crowdsourcing models. But I think one of the reasons uTest has had so much success if that it’s not just about doing something faster or less expensive, it’s about doing something new. In our case, that’s in the wild testing. If you look at brands like Amazon, or younger companies like Runkeeper, these are companies that have massive user bases and their users have very high expectations and very little tolerance for crashes or bugs or bad usability. They know that their competition is only a click away.

Crowdsourcing has enabled something really powerful. But nobody writes us a check because we’re a crowdsourcing company. They write us a check because they believe in the concept beyond the lab, in the wild.

I use Runkeeper myself and I’d be pretty disappointed if it crashed halfway through my run.

Yeah, you’d be like, “I ran 5 miles and the app doesn’t know about it!” That’s the reason I think Goldman was so interested, why we raised such a large round, was because we’re moving more and more into this app economy. And it’s not just phones, it’s tablets, readers, connected TVs, smart cars, smart watches, smart glasses. You can’t just test that in the lab and cross your fingers. These brands know their users have very high expectations, they know the apps have become the front door to their brand. And every new touch point, whether it’s iOS, or Android, or smart TV, brands know they have to delight the users. That’s really where uTest, soon to be Applause, comes in.

One thing that Doron [Reuveni, uTest CEO] mentioned in the blog post announcing the $43 million raise was that you’re looking to use some of that money for mergers and acquisitions. Are you looking at any specific kinds of companies?

Yeah, we are. There are three types of companies we’re looking at. Two of them are on the Applause side, and one of them is on the uTest side. So on the Applause side, we’ll absolutely look at tools companies around the application life cycle management space. That could be test automation tools, that could be continuous integration tools; tools that either make the app lifecycle faster or higher quality for the developers and designers and testers that ultimately launch these applications. That’s one area we’re looking at.

The second area is, we’ll look at distribution opportunities, meaning we’re going to be opening foreign offices, and there are two ways to do that. One is to go and open your own office in country X, and the other is to go find a player that’s already there that has a sales operation, already has a footprint, already has a customer base in that market.

And the third one is on the uTest community side. There are a lot of different crowdtesting players out there. [We’re] looking at the product IP, user base, customer base, and the brand footprint. I think we’ll explore all three of those.

One company that you’ve already acquired is Apphance, based in Poland. Is Eastern Europe a market you’re still looking at?

It’s a great location for having an office because of a really good base of technical talent there. It’s a fine market from a demand perspective but it’s not in the top tier. On the demand side of things, you would look more at North America, the UK, Germany, Israel, those types of markets. In Poland, we not only acquired the IP, we did actually acquire the team, and that is an office that will expand but that will be more on the technical side of things than sales and marketing.

I wanted to ask you more about crowdsourcing, as an industry. Especially given your raise, do you think people are starting to realize that building a business based on crowdsourcing can be sustainable and scalable?

I think they are. I think it’s becoming more and more apparent that it’s a matter of fit with the space you’re in, and testing happens to be a very good fit. I think call centers, with a company like Live Ops, is another space where you say, “Wow, that problem overlays very nicely, it’s a very good fit with a crowdsourcing or community model.”

I am pretty unromantic about it. I think crowdsourcing in and of itself is not salvific or a virtue. But I believe within certain verticals or spaces, I think it can be a phenomenal fit. And I think we’re seeing some things, like the merger between oDesk and Elance, like Appirio / CloudSpokes purchasing TopCoder, we’re starting to see the incumbents in this space look at crowdsourcing and say, this can enable something I can’t do through the traditional outsourcing, whether its offshoring or nearshoring, or traditional employee model. And those, I think, are going to be the runaway successes. In the testing space alone, I can tell you [by] the amount of attention we were getting, before the funding, from the traditional outsourcing companies and even the application lifecycles tools companies, [that they] are really starting to have the light bulb come on for in the wild testing. And the only way to achieve that is through a crowd or community model. I think we’re seeing the veil lifted that this is something that could be enterprise-grade, something that can be sustainable, something upon which you can build a large and long-lasting company.

Have you generated a lot of interest from larger testing or tech firms who want to purchase your company?

Yes, and I can’t get into the specifics, but I can tell you that, yes, there’s been significant and recurring interest in either joint ventures, or acquisition, and that’s really picked up in 2012 and 2013 as it’s broken more into the mainstream. And if I’m being perfectly honest, as we start to take market share from some of those tier one players, we’ve entered their radar more firmly.

But it sounds like, from what Doron’s been saying, you guys are looking to go public, which is part of the reason why you took the money from Goldman Sachs, correct?

I would say that an IPO is probably a logical next step. From our perspective, going public is an important milestone in any company’s life, but that’s not our goal. We’ve long operated working toward building something larger and longer-lasting. Any one milestone, whether it’s the E round, or an IPO, we think that there’s a massive market here as software gets more and more appified. And with in the wild testing, and where we’re heading with this notion of 360 degree quality assurance, we think that there’s a vast opportunity. We believe that there’s a lot more in front of us than behind us.

You sound very optimistic, and it seems like you’re doing well, but are there any challenges you foresee and if so, how do you plan to navigate around them?

That’s a good question, there are always challenges. I joined uTest over five years ago, I was employee number eight. Now we have more than 150 employees, so some of that is just keeping up with the growth. That’s kind of the behind-the-scenes stuff that any fast-growing company faces.

In terms of challenges with the crowdsourcing model, we have many testers, over 100,000 from 200 countries, and [that number] is growing rapidly. We realized early on that we don’t have a recruitment challenge, what we have is a challenge around vetting. 3000 testers joined last month — okay, which of them want to participate inside the transaction versus coming here just to find out what it’s all about and hanging out on the forums, and swap stories with peers?

I don’t view it as a challenge anymore because in 2012 and 2013 we created some really scalable and effective vetting mechanisms to ensure not only which testers are interested in paid projects, but also to find out who is worthy of paid projects. We’re dealing with a lot of enterprise clients — more than half of our business comes enterprise clients, these big brands. Their expectations are high. So combining a crowdsourcing model with enterprise expectations is a challenge that we’ve overcome, through not only our community management team, vetting and training, but also the community itself. They’re actually responsible for pieces of that vetting, and saying, “This person deserves a chance, this person is an outstanding tester who should be put on a path to paid projects.” I think it’s always a challenge, but it’s one that we’ve certainly solved already.

The other challenge is around education for a crowdsourcing model. If I’m not familiar with it, you’re asking me to take my intellectual property, my new iPhone app, and putting it into the hands of people I’ve never been in a room with. Again, I think we’ve solved that very effectively. We’ve run more than 30,000 test cycles in five years, and we haven’t had any kind of IP breach. But I think it’s an important one for us to keep an eye on, especially as we work more with enterprises. And, in terms of verticals, if we move into healthcare and financial services, putting those controls in place that enable a director of QA at financial services firm to sleep well at night knowing that they’re getting in the wild testing coverage, but that their IP is safe and locked down. That’s part of our evolution.

Anything else we should know about your plans for 2014 that we haven’t touched upon?

On both Applause and uTest sides, Q1 will be spent, heads down on the rebrand. I think once we get that out the gate, you’re going to see us really amplify our product development efforts, both on the Applause side for companies — that will be more testing tools, building and management tools, analytics tools around how the apps are really performing in the eyes of users. On the uTest side, it really is growing out and not just getting to a place where it’s mostly about getting paid projects on uTest, but [where] it’s a place even for testers who do not have time to do any moonlighting or side projects come to uTest because they want to read the latest article, they want to debate the latest topic, they want to read about the latest version of a new testing tool. Getting to the place where uTest is that important in the minds of our community is going to be a wonderful opportunity and a good challenge. We’re going to have a lot of work to do.

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