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Company: Clarizen
Started: 2005
Located: San Mateo, California
Geography: Global
Market: Online work and project management software
Products: Online work and project management software
Key Customers: AutoDesk, Clara, Enlaso, Fortinet, Lenovo, NBC Universal, NEC, O2 and UPS
Website: Clarizen Website
Blog: Clarizen Blog
Twitter: @Clarizen
Recent News:
Clarizen Secures $8M in Financing From Leading VCs
More than 100 Service Providers Enrolled in Clarizen’s Vendors Connect Initiative
Clarizen Reports More Than 100 New Customers in Q3 2009
I asked Guy Shani, Clarizen’s vice president of Sales a few questions about his business and his view of the SaaS market as we start 2010.
Did you start out as a Software-as-a-Service company?
The company was started four years ago by a group of executives who had come from a company called SmarTeam, that specialized in enterprise Product Lifecycle Management (PLM) solutions.
The idea for Clarizen came after SmarTeam was acquired by Dassault Systemes and IBM. During the 10 years we all worked at SmarTeam, we built very expensive, heavy, customized enterprise project management software solutions. But after talking to our clients over the years, we began to realize that they were looking for lighter weight enterprise solutions on a different platform, and this is when we started looking into Web 2.0 technologies.
At Clarizen we began to evolve project management into work management. This involved a more active way to manage both structured and unstructured work activities. Work management revolved around resource loading, document management, and all types of communications involving wiki’s, bug tracking, expense management and time sheets. The traditional way to do project management was more related to planning and less about activities and execution.
During our transition away from an on-premise company mentality to starting Clarizen we learned many lessons the hard way. One of the core beliefs of the company is that we have to measure everything, and in my area of sales, we track all campaigns, conversion rates and gates, average sales cycles, adoption and churn rates just to name a few of the metrics we monitor. We also track all of our costs – costs per lead, customer acquisition costs and many other metrics. The on-premise model of sales was all based on relationship selling, where as the SaaS model is much more about endless testing and monitoring what works and then doing it again and again.
We have been funded by very well-known venture capital firms including Benchmark Capital and Carmel Ventures who is based in Israel. In December 2009, we announced our ‘C’ Round of funding of $8M, which was led by our newest investor DAG Ventures, who is based in Silicon Valley.
Why do your customers buy from Clarizen?
Main reason was our new idea around a lightweight work management solution, that no provider was really focused on delivering. The market has been traditionally dominated by Microsoft Project, which is a very static way to view projects, with little or no collaboration capabilities. Clarizen was developed to be collaboration-oriented. This worked well with our customers who are working in a cross-organization frameworks, especially outside just their own organization, which is challenging for a standard on-premise software solutions.
Our competition breaks into three different market segments; High-end enterprise solutions, that are highly customized like Primavera and Computer Associates; Lower-end unstructured collaboration tools like WebEx, BaseCamp, Zoho, many which are free; and Mid-market products that embrace both on-premise and hosted deployments, solutions like Daptiv and @Task which are targeted toward the professional project manager.
Clarizen is a scaleable, mid-market SaaS solution that is easy to use, serving the needs all employees who are involved in projects inside the enterprise.
The SaaS lessons we learned included that in order to be successful we needed to have wide user adoption, so our solution needed to be easy to use. This was also important because we would have a hard time training everyone who might want to use the system, so it needed to be a product that could be learned in five minutes. The other reason adoption was critical is that you wanted users to update their project status and completion, so we developed techniques like our email notifications that look like Microsoft Outlook invitations that encourage users to update their status. This type of interactivity makes the systems not only easy to use but the reporting much more reflective of how work and projects are actually progressing.
What do you see as the key trend emerging in the SaaS industry?
Many companies have tried to run a thin client, Web-based project management application solution over the past 10 years, not many have been successful. 2010 enterprise software buyers are now really looking at SaaS – for a serious and scaleable work management solution.
As we learned over the years, work management is an entirely different market, with different buyers, than trying to sell high-end, customized engineering solutions. Customers would always complain how long it took to implement our software, which was painful and a big business challenge we were constantly dealing with at SmarTeam. Things needed to be simplified. Our realization was that it wasn’t the solution that we were delivering but how we were delivering it that needed to change.
Based on our experience with on-premise approaches to project management, we definitely liked the Web-based approach and that’s why Clarizen started out as a SaaS company, which is what the market is looking for in 2010.
What is your outlook for 2010?
Customers are looking for real business savings, for friction-less solutions and functionality that is broader than today’s current on-premise offerings. Clarizen can offer a more flexible work management solution that addresses this unique business opportunity in the market.
Now with our recent funding, we have proved that we not only know how to build a SaaS machine but also by running our business by KPI’s and performance indicators as I mentioned earlier, we can fine tune and logically expand our business. This is why we have experienced a 400% growth in our subscription sales, since last year, even in this very difficult economy.
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