BACK TO SUCCESS STORIES

The revenue generated by a venture does not solely depend on the number of sales

A strong pricing strategy can be instrumental in the revenue model of a new venture

Praveen singh
Praveen Singh
Founder, 99tests
  • Company

    99tests

  • Business

    Software

  • Founded

    2010

  • Headquartered

    Bangalore

  • Founders

    Praveen Singh

THE COMPANY

Praveen had obtained plenty of experience in Quality Assessment as an engineer in several multinational companies, and also as a manager at a startup. He knew the difficulties faced by organizations in dealing with the bugs present in desktop, mobile, and web applications before it reached the end user. This was how he conceptualized the idea of 99tests, a bug testing platform for online portals.

THE CHALLENGE

Praveen broadly buckets his challenges into operational and pricing. The nature of his business model was such that his revenues didn’t linearly grow with the growth in the number of people he employed. In order to generate revenue he needed to price his product according to the market demand. Designing such a model, which increased revenues while ensuring quality service, was his biggest challenge.

THE SOLUTION

Initially, Praveen underpriced his services to build his position in the market. Although this helped him gain a few initial customers, Praveen realized that he could draw a lot more revenue from his venture if he changed his pricing strategy. He attended various NEN webinars on pricing strategies, and also followed the NEN’s online video courses offered on the subject. These courses along with a few very helpful books such as Business Model Generation by Alexander Osterwalder, taught him to adjust prices according to the rise and fall of market price. “Unlike outsourcing where people are paid for the number of hours clocked in, the testers at 99 Tests are rewarded based on the results of their testing effort. This gives software product owners the ability to monitor and consume the testing effort in a result-oriented manner,” he said. This was when he adopted the fixed price technique.

He followed two strategies, the first of which involved identifying and reporting fixed number of bugs for a fixed amount of money, and the second was monthly subscription model, where he would report unlimited number of bugs for a monthly charge of $2500. His main targets are enterprise customers and small companies. “My new strategy is to identify and report 25 bugs for free for any startup which is less than one year old”, said Praveen. Praveen has also put in place a referral strategy of offering companies 25-50 free bug identification if they invite other companies to use 99tests. His pricing strategies paid off dividends right from his first year of operations where he generated profits of Rs.50 000.

 

Outcomes

  • 99tests has a tie-up with Rich Internet Application – Rich User Interface society.
  • Raised a $100,00 in funding.
20102013
CapitalRs.5L$100,000
Employees15
Customers1150
WHAT ARE YOU LOOKING FOR ?