uTest Redefines Application Testing by Utilizing the Power of Crowdsourcing

While most traditional business models like print, banking, and car manufacturing are floundering, new breeds of community and crowdsourced driven startups are flourishing. "I have a feeling that 2009 will be the year for crowdsourcing." Remarked Doron Reuveni, Co-Founder and CEO of uTest , in our interview.

Recessions have their way of weeding out market inefficiencies and providing room for innovative business models to bubble up. uTest, a startup that provides on-demand software testing through a global community of professional testers, is one of them. They're utilitizing the power of communities through a "combination of competition and collaboration to provide value to the customer."

You can think of uTest as crowdsourced bug testing for web, desktop, mobile and gaming applications. Their platform enables a company or individual to post a project, define testing requirements, build a virtual team of testers from around the world, and track progress with real-time bug reporting and application feedback. The amazing part is that you only pay for the bugs that get fixed. This pay-per-bug pricing model, that they launched in February 2008, enabled them to double revenue, number of customers, and software releases last quarter.

The model works because it creates scalable efficiencies that drive down the cost of traditional software testing. Originally, a firm would either have to bid out the work for a large fixed sum or hire a full time employee. Now, that same firm can do it for fractions of the cost by launching quality assurance initiatives only when they need it and only pay for tangible results. It's a perfect way for for startups to save money and release better products.

On-demand virtual communities can provide tremendous benefits:

1. Immediate feedback from thousands of professionals testers. It's simple, more brain power is able to crank out answers faster than 1 employee or a small team.

2. Reduced time to market. Immediate feedback enables you to finish your project quickier with testers that are always available.

3. Maximized budget. Pay for Performance enables you to only pay for valuable bugs and feedback. You don't pay for time lost.

4. Reduced number of post-release bugs. Not only will your product be ready sooner, it will likely have fewer bugs. More eyeballs help find more issues.

5. Increased customer satisfaction. A reduced number of bugs means that your product will function the way its supposed to. Fewer bugs equates to a more stable application.

6. Reduced number of customer support calls. If a customer is satisfied, they're less likely to need to call you...further reducing your costs.

7. Flexibility on different platforms. The community is comprised of a broad range of skill sets that enable the crowd to take on a wider range of applications. You don't have to limit yourself to a set of technologies.

The model is clearly working. In less than 6 months, they've cleared over 10,000 bugs for their customers. But, how do you build such a successful model and grow the community?

Although, "crowdsourcing is already changing the way things are done," not all crowdsourcing companies will be successful. Doron Reuveni believes that there are certain lynch pins that are critical for building a successful community, business model, and company with a crowdsourced model.

Key Success Factors for Crowdsourcing Models:

1. Compensation: Individuals in the community need to be appropriately compensated for their work. Crowdsourcing companies need to almost over compensate those who provide the most valua and highest quality of work in order to create a desire for others to reach that level.

"As you grow within the tested community, your rates increase over time."

2. Goals: Compensation creates incentive, but workers need more than that. You need to give them goals and positions that they can aspire to. Likewise, companies need to be able to identify key players and "Rockstars" within the community so they know who to compensate and at what level.

3. Ratings. Metrics are important for measuring the quality of work, who is contributing that work, and at what level. This enables you to compensate the right people. The integration of ratings helps facilitate quality assurance within crowdsourced platform.

4. Community: Without the community, you have nothing. Identify with the crowd, understand their needs, and work with them to turn the "crowd" into an actual community that works together.

"In some levels they compete, but on other levels they communicate...Only by working together they can bring value to the customer."

For the most part, the uTest community has been able to grow organically and by word of mouth. Ironically, it wasn't too difficult to grow the community in the beginning. The initial stages consisted of a simple tester signup with profiles followed by marketing on social networks like Facebook and LinkedIn . Now, they are expanding by investing in educational tools to provide lessons learned, webinars, and best practices. The goal is create a synergistic relationship between the crowd, startup, and customers.

Interesting uTest Facts:

• Bugs are discovered at a rate of 2.6 per hour, or 1 bug every 23 minutes.
• Average of 55 bugs found and reported per software release.
• uTest's community grew by more than 50% from August 2008 to January 2009.
• 13,000 testers in 149 countries worldwide.
• 672 bugs were found in "Battle of the Browsers" for IE 8, Firefox 3.1, Google Chrome
• Their new Bug Battle on February 11th, will test the three most popular social networking sites; Facebook, LinkedIn, and MySpace.
• Top contributors can make around $500-700/week in their spare time.

Throughout 2009, we'll see leaders immerge in the crowdsourcing marketplace. I have my bets on uTest.