Monday, December 24, 2007

Startup uTest to pay testers by the bug

By Christopher Calnan

A new Ashland company is creating an online marketplace for software testers, based on a unique business model.

The firm, uTest Inc., plans to assemble by 2009 a global army of 20,000 testers that developers can enlist via the Internet to identify bugs in software using a novel "pay-per-bug" method. The model allows software developers to pay testers based solely on the bugs that testers identify, which saves the developer money while providing an incentive to the testers.

Unlike existing web-based marketplaces for technology contractors, such as Elance and oDesk, uTest authenticates its testers and classifies them in one of three possible categories: professionals, experts and consumers, uTest president Doron Reuveni said.

UTest would generate revenue through a percentage of commissions paid to the testers, he said.

The company is developing a platform for a three-month pilot test with 10 companies scheduled to start in February. Reuveni plans to create an online "community" of 200 to 300 testers by February and grow that number to 20,000 testers by 2009.

Reuveni, previously a senior vice president of engineering at Enigma Inc. in Burlington, raised $1.2 million from Mesco Ltd., a Ridgfield, Conn.-based consulting and investment firm, and he expects another $500,000 from a Boston investment entity.

Mesco founder Joel Mesznik said he expects uTest to ramp up its business with a low cost of operations, making it a good investment. "I thought this has a wonderful risk-reward ratio," he said.

Outsourcing may be appropriate for testing widgets and add-on features, but sophisticated software should be tested by workers who can then parlay their testing experience into serving customers, said Matt Douglas, founder of Natick's Punchbowl Software Inc., which last January launched the party-planning website, MyPunchbowl.com.

"Customer support and technical support are the flip side of quality assurance," he said. "It has to be a core competency of the organization."

Once completed, uTest would be geared toward consumer software companies, Reuveni said.

UTest employs two workers but Reuveni plans to increase that number to 12 during 2008.

Peter Falvey, managing director of Revolution Partners, a Boston investment bank, expects distributed work-force businesses like uTest to grow in popularity to satisfy the need for specialized technology workers.

"I think you're going to see more of these types of things created," he said. "You're tapping into a really interesting talent pool base."