SNW -- Aug 13 --Leverage Software can help you build a social network to connect your company, association or group. Clients include Apple, HP, Microsoft, Hilton, The New York Times and Reuters. Here's a list of features. And here's my interview with the CEO and Founder, Mike Walsh. - Mark Brooks
What is Leverage Software’s founding story?
About four years ago, I was running a boutique consulting firm that helped large software companies, like Oracle and Microsoft, more effectively convey their value proposition through an ROI business case. As the founder, I was always trying to network and partner with other companies to recruit new candidates and consulting gigs. But, this was before LinkedIn and other social networking sites and there just didn’t seem to be a great way to leverage relationships for the purposes of doing business together.
So, we launched the company essentially to build an environment where a bunch of people could more effectively collaborate with one another. Having sold a bunch of software myself, I realized this wasn’t just a communal problem, but also a problem that companies have in communicating with their customers, their partners, their developers and their own employees. We wanted to launch an open community a la LinkedIn or Facebook, package it up, and offer that same type of solution to corporations.
What does Leverage Software do?
We provide a white label social networking platform for high-tech companies, media firms, services firms, and now some large consumer brands. Our tech companies are enabling customer communities so customers can engage more effectively with them and with each other. By giving the customer a voice and allowing one customer to solve problems for another, this decreases support costs and customer attrition while increasing customer loyalty. Our media industry clients are giving their readers a place to collaborate with each other and develop partnerships. And then some larger consumer brands are using our solution to get product feedback from their audience, intended audience, or target market.
Who are your clients?
We’ve got about 250 clients. Our tech firms include Microsoft, Oracle, Salesforce.com, Sun, and HP, and our media clients include Nielsen, The New York Times, InfoWorld and Fortune. We typically sell to a group publisher at a media company or an online marketer. In a tech company, it’s typically a chief marketing officer or someone responsible for customer loyalty.
More companies, though, are now using our products to launch a company around a community. They’re a new company or a growing one and they want to use the community as a major source of lead generation, partner creation and ad revenue. In that regard, I kind of think of us as a white label Facebook.
What kind of costs would someone be looking at to start up a community with 5,000 people?
We’re a software as a service only model. There are two pieces to our pricing structure. One piece is a configuration fee, which takes advantage of the best practices we’ve gained from the 300 or so communities we’ve already launched. It’s a start up fee of $7,400 and very quickly gets the community up and running within a week or so. However, someone can go to our website today, use the wizard, and build a community for free that they then customize for themselves.
The second piece is the subscription model and that number varies depending on the number of users. We have different levels for 100, 1000, 5000, and 10,000 users. For a 5,000-user community, we charge $2,800 per month with no minimum monthly commitment. If somebody wants to try it for a month and see how it goes, we call it a beta. They could do a month-to-month or longer term – 6 months, 1 year, or 3 years. There are all different kinds of contracts we have and clients can receive discounts for longer-term commitments.
Who are your closest competitors and how is Leverage Software superior?
We have a couple of differentiating features that make us competitive with different types of companies. We have the ability to build and configure the solution from our website. We also have a unique, built-in ad or recommendation engine that people can use and/or they can integrate with their existing ad engine such as DoubleClick or AdWords. When individuals use our ad engine to generate revenue and build this from a website for free and just pay the monthly subscription fee, we’ll overlap with Ning to some degree. That’s primarily on the consumer end.
Another big differentiator is our focus on enterprise social networking. The larger corporations who want deep control of their brand are looking for a full set of functionality that can be integrated and customized to meet their very specific needs. With those companies, we overlap a bit with Small World Labs and maybe Prospero.
There’s a patent-pending PeopleMap, which is a representation of one’s best matches based on their interests. This lets community members very quickly find the people that they want to reach out to whether it be for a job, a partnership, or just getting a question answered. On top of that, we do releases every 10-12 weeks.
The software is only maybe 30-50% of the value that we provide. We possess a very deep understanding of what has made communities successful or not and can deliver that knowledge as a service. In short, we have a great platform architecture, we can scale very rapidly, we can make and deliver changes very rapidly, and we provide our communities with the richest features and knowledge available.
What are your goals for Leverage Software for 2007 through 2008?
Many of them center around growth. By the end of 2007, we’ll have 500 clients and we want to increase that to about 2,500 clients by 2008. So, some pretty rapid customer acquisition growth. We also want to strengthen our partner network. We’re currently on Salesforce.com’s AppExchange and WebEx Connect. We want to continue building relationships with technology partners, interactive agencies, and consulting firms who need a white label social networking solution for themselves or their clients.
Those are some of the key metrics that we’re looking at. The other is international expansion. There’s a great opportunity in Europe right now, so we’ll expand for sure into Europe and likely other countries next year.
