Social Customer

It's a Small World Labs Platform, After All - Small World Labs Reconfigures Product Line

One of the smaller companies we follow, Small World Labs hasn't let its size deter it from landing some large clients, which include the American Heart Association, the Dallas Morning News, Office Depot, and Scottrade (see screen shot below). Over 150 other organizations across equally diverse industry segments also use its SaaS platform to support internal and/or external communities.

The company had has a good 2009 so far the year, adding 15 new clients during the first half of the year to its growing customer base and generating strong results for clients via its Community Management and Social Strategy Services. On the product development front, it also reconfigured its product line and released a variety of new features and enhancements in the latest version of its Small World Labs 2009 platform.

Small World Labs’ platform is a PHP-based, on-demand suite of communication and collaboration components, including discussion forums, blogs, member profiles, groups, ratings and reviews, and a reputation system (User Activity Points). The company releases product enhancements and upgrades twice a month.

Leverage Software Continues to Gain Traction with CommunityConnect Platform

This year has been a good one for Leverage Software. While the company didn’t land quite as many customers as in its gangbusters second half of 2008, its 52 new clients from 1H 2009 represent another solid couple of quarters. Leverage’s revenue percentage from services (versus that from software licensing) has increased steadily over the past year. The majority of Leverage’s revenue still comes from the licensing of its SaaS platform, as well it should. But the increase from services is a good sign that the company is adding value for clients via its domain expertise and not leaving dollars on the table that might otherwise go elsewhere.

Leverage’s marketing communications remains strong. In particular, we like how Leverage’s Web site lays out its use cases and solutions. (This is on its "What We Do" page.) Categorizing online communities is a challenging task. Leverage creates clear differentiation via the following phrasing: “Leverage Your Employees,” “Leverage Your Channel,” “Leverage Your Citizens,” and “Leverage Your Customers.” It’s a terrific breakdown that should help get prospective customers to the right Web pages and from there, ideally, into its sales pipeline.

This breakdown also illustrates an expansion in Leverage’s target market, as it is now looking to find a home for its CommunityConnect platform with governmental organizations and advocacy groups, as well as with corporations.

CommunityConnect is an on-demand platform that includes social networking, group forums, file-sharing, opinion polls, blogs, wikis, real-time chat, and many other applications. In August 2009, Leverage released Version 7.0, which included some strong new features and enhancements, such as:

Telligent Rebrands and Aims at "Platform" Status

Telligent Systems posted strong results during the first half of this year, landing about 200 new customers. This was particularly notable, as it came during a transitional period for the five-year old company. This past February, Telligent went through a 12 percent reduction in force; in May, it brought on board a new CEO; and in May, it rebranded its product line, including its flagship product, Community Server.

The May change in leadership saw founder Rob Howard handing over the reins to new CEO Patrick Brandt. Mr. Howard, now Chief Technology Officer, continues to focus on his expertise and passion, the vision and direction of Telligent’s products. (We don’t know if Intel Capital’s $20 million investment in 2008 had such transitional strings attached; it wouldn’t be unheard of.) Bringing in a more experienced CEO delineates a new and important phase in Telligent’s development as an organization.

In 1H 2009, Telligent also rebranded its product line. We like this decision as well, even though it’s never easy to give up any degree of brand equity. While Community Sever did make a name for itself over the years, renaming its flagship product as Telligent Community is a good move as the company continues making inroads into the corporate market. (Similarly Community Server Evolution is now known as Telligent Enterprise, and Harvest Reporting Server has been renamed Telligent Analytics.)

Telligent is one of the handful of companies on our watch list with a Vision (with a capital “V”) for itself and its product line. While we tend to use the word “platform” more or less interchangeably with the words “application” and “system,” Telligent is looking for its product to become a platform in the sense that the iPhone, Salesforce.com, and Plone are technology platforms. The company's goal is for Telligent’s products to be at the core of an ecosystem of add-on applications, extensions, and integrations developed, marketed, hosted, and implemented by partners.

The upside can be huge, but it takes focus, resources, technical skill, and business acumen (particularly in constructing mutually beneficial relationships with partners). Telligent is off to as good a start as any toward reaching this vision, as its partners have already built dozens of integrations and extensions, including ones for Facebook Connect, event registration, and more.

Awareness Supports 8 Social Media Use Cases with its Best Practice Communities

Awareness has had a good run so far in 2009, driven by healthy influx of new customers. The company has been adapting its go-to-market strategy, looking to rely more heavily on partnerships—largely with marketing and advertising agencies—to identify business opportunities. That’s a distribution channel used successfully by many of Awareness’s competitors, but it remains to be seen if agencies can drive enough new business when they are the primary sales channel.

We remain intrigued by the approach Awareness has taken in productizing eight common community use cases into eight pre-configured and relatively turnkey Best Practice Communities (BPCs) that run off its SaaS platform. Launched this past January, these BPCs are categorized as Innovation, Corporate Voice, UGC Campaign, Loyalty, Enthusiasts, Associations/Subscribers, Peer Support, and Events. We’ll leave it to the Awareness Web site to go into detail on the differences, but we find the naming scheme to be happily self-explanatory. The advantages of such “pre-packaged” communities are in their competitive pricing and quick time to launch—just make your BPC choice, do some graphical branding, define the community’s structure and navigation, and off you go. Of course, in practice there’s more to be done than that, but being able to deploy a community in two to four weeks has considerable appeal. (We should also mention that Awareness also builds communities separate from their BPC offerings. These custom communities will take a longer time and larger financial commitment, but will result in a community built to specification.)

Despite Challenges, LiveWorld Remains a Leader in Social Media for Major Brands

LiveWorld (OTC Pink Sheets: LVWD.PK) is the only publicly traded company on our watch list. So far, 2009 has been mixed for the San Jose-based business. At $2.6 million, its Q1 2009 revenue was down about 13 percent compared to that of the previous year. Q2 2009 revenue was only on the order of $2.2 million. But the company reports being cash-flow positive even amidst these declining revenues, no doubt due in part to last year’s reduction in force (only about 2 percent) and salary reductions. And, during 1H 2009, LiveWorld added five new accounts to its customer base of name brands, released an incremental version of its Community Center platform, and maintained organizational stability after navigating last year’s challenges.

LiveWorld's average deal size, which is at the top of the range of the companies we cover, has pretty much remained constant. We had expected it would have difficulty holding those numbers in this economy, but its clients are apparently finding good value in LiveWorld's platform and service. Partnering with interactive agencies, one of LiveWorld’s strengths, has continued to pay off, as it gives the company a seat at the strategy table and provides an effective channel for acquiring new clients. A new partnership with interactive agency Crispin Porter + Bogusky attests to the attention LiveWorld gives these partnership efforts.

LiveWorld’s attention to its product line has continued as well, with the release of Community Center 2.2 for both Pro and Enterprise Editions. In sync with today’s social media trends, Community Center 2.2 includes integrations for both Facebook Connect and Twitter. We very much like LiveWorld’s LiveBar application (Version 2.0 soon to be released), which cleanly overlays community content on top of any Web page. It’s a conceptual winner, as it keeps business content—say, a newspaper article—and user content in the same place; readers aren’t forced to another part of the site to have a conversation around that content. But LiveBar adoption to date has been disappointing. As the product has so far been in more of a pilot stage of development, we’ll look to see if traction increases with the coming of new releases.

A Good Stretch for Pluck - New Business, a Customer Conference, and the Launch of Pluck 4

It's been a good year so far for Pluck, with nearly 30 new customer accounts and several new partnership deals during the first half of the year, as well a rebranding of its SiteLife platform as Pluck 4 just last month. It has also been a smooth period organizationally, with few of the disruptions that many of its competitors dealt with earlier this year, such as reductions in force, hiring sprees, changes in the executive suite, corporate acquisitions, and so on. That has left Pluck to focus on its product, services, partners, and customers.

The company is solidifying its place as a leader in social media and online communities within the media and publishing industries (such as the Boston Globe reader community at Boston.com; see screen shot below). This is because the value proposition of its technology platform is strongest here, as it integrates particularly well with content-focused sites and more or less seamlessly allows for conversations and other social interactions directly with such content. But Pluck is making definite inroads into its other target markets, as well, including consumer brands and retail.

Passenger Drives Customer Innovation, Insights, and Advocacy

New to our watch list, Passenger was founded in 2005 and is headquartered in Los Angeles, with offices in New York City, Palo Alto, and Bangalore. The company’s Java-based SaaS community platform is built to support branded customer communities for customer collaboration, customer-led innovation, and customer advocacy. While Passenger does have a few B2B clients, its sweet spot is in the B2C space. Its client list, which includes adidas (see below), American Express, Chrysler, DirecTV, JC Penney, and Starbucks, illustrates that its platform can be used by just about any consumer-facing industry.

While Passenger’s clients are indeed looking for community members to act as customer advocates and brand ambassadors outside the community, they are primarily looking to get market research, product feedback, and other forms of customer insights. Its direct competitors are, therefore, Communispace (not on our watch list), HiveLive, and Spigit. It competes as well with the more general purpose community platform providers, such as Jive and Mzinga.

But more than most of its competitors, Passenger has thought through member recruitment and built the relevant processes into its platform. These include identifying, inviting, and registering customers who are the best fit for the community’s goals. While most online communities are largely a numbers game, successful market research communities have the added requirement of recruiting members who fit the desired profile (or profiles). Passenger has operationalized this requirement, which goes a long way toward ensuring its clients’ communities have not only the right number of members, but the right members (there is no value judgment here on the word “right”).