Businessmodel of Applause

Customer Segments

Applause has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

Applause offers five primary value propositions: accessibility, convenience, innovation, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. Its clients can use its solutions to test on all device, operating system, and carrier combinations for Android and iOS. Also clients‘ code can be tested in-house or “in the wild“, wherever their customers live.

The company offers convenience by making life simpler for clients. Its testing cycles can happen on their schedule, with the ability to run at any time on a 24/7basis, and with any frequency (daily, weekly, or on occasional basis). Lastly, test cycles can be completed on a same-day basis, with test results being delivered in real-time.

The company has embraced innovation from the beginning. It developed crowd testing, an alternative to standard software testing in which the quality assurance (QA) function for clients‘ websites/mobile apps/connected devices is outsourced to an external community of testers. The option gives clients a scalable, unbiased workforce providing real-world test results.

The company demonstrates strong performance through tangible results. Specific positive outcomes for clients include the following:

• Fonteva used Applause’s solutions to resolve more bugs in its software than were reported by its customers and drive down cost-per-issue from $2,111 to $190
• Fox Broadcasting Company used Applause’s solutions to achieve a 30% to 50% decrease in critical defects and reduce release cycle time by 25%
• MessageLOUD used Applause’s solutions to identify 100 bugs in its software over a six-week period and address numerous critical issues before its initial release
• Syus used Applause’s solutions to achieve a significant decrease in cycle time and a reduction in the amount of bad data reaching customers

• BMW used Applause’s solutions to avoid several costs related to maintaining a large test vehicle fleet and gain coverage beyond typical customer use cases The company has established a strong brand due to its success. It bills itself as the global market leader in crowdtesting/crowdsourced quality assurance. It has a community of more than 250,000 testers in over 200 countries and territories. It has over 3,000 clients worldwide, with prominent customers including Google, Coca-Cola, Nike, eBay, Delta, Staples, PayPal, and The Container Store. Lastly, it has won many honors, including the following:

• Recognition as the “7th Most Promising Company in America“ by Forbes Magazine
• A Gold Stevie Award in the “Fastest Growing Tech Company – Up To 2,500 Employees” category
• Recognition as a “Cool Vendor in Mobile Marketing” by Gartner
• Recognition as the “#1 Pacesetter in the Boston area“ by the Boston Business Journal
• Recognition as “Private Company of the Year” by the Massachusetts Technology Leadershp Council ### Channels

Applause’s main channels are its sales and business development teams. The company promotes its offerings through its website, social media pages, webinars, summits, and conferences.

Customer Relationships

Applause’s customer relationship is primarily of a personal assistance nature. The company assists clients by providing testing services for their software products. It also provides phone, e-mail, and social media support.

That said, there is a self-service component. The company’s website features a “Resources” section that includes research reports, case studies, eBooks, and webinars.

Key Activities

The company’s business model entails designing, developing, and delivering its products and services for customers.

Key Partners

Applause maintains the following key types of strategic partnerships:

• Strategic Partners – Partners include IBM, Cognizant, Accenture, and Intel
• Reseller Partners – Partners include Qualitest, PointSource, Prolific Interactive, Hathway, Founder Therapy, Endeavour, Syrinx, and Awesome
• Technology Partners – Partners include Microsoft, GitHub, Pivotal, BlazeMeter, FluidSurveys, Jira, HP, and Rally The company also maintains a referral program through which it partners with firms that promote its solutions to their customers. If the customers make a purchase the partners get a referral fee of up to 10%. Partners receive training and marketing support.

Key Resources

Applause’s main resources are its human resources, who include the testers that evaluate customers’ software, the sales employees that promote its services, and the customer service employees that provide support.

Lastly, as a relatively new startup it has relied heavily on funding from investors, raising $115.8 million from nine investors as of September 2016.

Cost Structure

Applause has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of customer support/operations and sales/marketing, both fixed costs.

Revenue Streams

Applause has two revenue streams: revenues it generates from services (project-based and subscription-based) and revenues it generates from the sale of technological products.