Doron Reuveni met Roy Solomon at a party in Israel in 2007. Both worked in tech businesses and discovered they shared a view on a critical pain point for many companies: they have to build apps to reach millions of people in thousands of locations on hundreds of devices, and it all has to work perfectly.
At the time most of the software testing was done internally by these companies. Reuveni and Solomon envisioned pool of testers who could do this work, similarly as what was being done in open source software. Between their list of actual clients and tech contacts, they had enough customers for launching a new service company. In just 3 weeks, they contacted 100 testers in different parts of the world, creating a startup they called Utest (which was changed to Applause in May 2014). With this, they raised $2.3 million in a first round funding.
Applause’s value proposition (unique in those days, even for companies like Elance or oDesk), was to test software “in the wild”, using real life conditions to put each software and platform under stress, beyond a basic functionality level.
Consider a company that needs to test their product in the shortest time frame possible. This software needs to work perfectly in multiple platforms, countries, devices, network qualities, and usability behaviors, among others. With a crowdsourcing model, Applause is able to give these companies high coverage in an easy manner, reaching thousands of people all over the world in a fast, organized and secure way.
To join the community, testers have to fill out their location, languages spoken and technical experience. They have to complete at least one unpaid work and impress the company, in order to be applicable for paid assignments. Then they are classified into 3 categories, and they can move up in the ranks by creating value for customers.
Compensation is based on a pay per bug model: you get paid according to how many failures you discover and how critical those are to the customer. This model creates the adequate incentive to testers to focus on finding as much bugs as they can, resulting in a high quality service for the customers. Applause generate revenue though charging a percentage of the commission paid to testers, and manages the process with project managers for each software that is being tested.
As of today, the company has access to over 140,000 testers from 200 countries and territories, and has worked with thousands of clients, including Google, Coca-Cola, Amazon, Evernote and Netflix. It has raised $80 million in funding, and has grown to 160 employees across North America and Europe.
The biggest challenge for Applause is to keep growing and still maintain control over the expanding pool of testers. Success of crowdsourcing testing highly depends on the success of a company that engaged with this mass. Pace of growth of clients has to come together with growth of the talent pool, in other to keep delivering quality. On the other side, Applause has to keep being an attractive work source for the thousands of testers, with competitive compensation and exciting projects. Could this industry be disrupted with new payment standards? Is paying by bug still the most efficient strategy?
So far, Applause has been very successful, but they have the challenge of keep being a solid intermediary, managing talent, intellectual property and security for their clients. And you know… many companies want to cut down the middle man.