Software Simulation & Start-Ups

I was introduced to a really interesting company the other day. The name of the company is iRise and they have a very interesting product that is bound to have implications in the start-up arena once they penetrate it. In fact, I had the chance to speak to Tom Humbarger, a Senior Strategic Projects Manager at iRise, who is working on a "skunk-works" project to do just that. However, before I get into that I would like to discuss the company and product a bit.

iRise started like many software companies, as a consulting outfit, back in 1996. Their core offering to their clients was website programming. Throughout the years and many websites that the company churned out they realized that there was a missing piece in the development life cycle. No one was focusing on the business analyst. Eureka! The idea of software simulation was born and now the only thing left was to figure out how to fund the new software venture (oh, and figure out how to build the software). The company decided to bootstrap the software into existence by doing consulting work and they gained a strong foothold in the market by obtaining about 70 Fortune 1000 companies as clients. iRise took its' first and only round of funding to date, a $15.8mm round led by Morgan Stanley Venture Partners, in January 2005 to expand the company.

Now, to the software. iRise has developed a solution that allows a user to simulate a website or other program without having to do any programming. All the user has to do is drag and drop items into and iDoc in the iRise studio and away they go. In honor of iRise's "a picture/simulation is worth a thousand lines of code" approach I will be using pictures for the first time in one of my posts. Here it goes...

First, the user can sketch out their page flow:

Second, the user can create scenarios to test the software:

Third, the user can layout the end user interaction and business logic:

Fourth, the user can incorporate sample data:

Last, the user can create master templates which, when updated, will update all templates in the project keeping corporate branding integrity intact:

The latest development with the release of iRise 5 was the introduction of an iRise iDoc reader. iRise took a page from the Adobe book and created a reader than anyone can download (it comes with a sample iDoc to play with). This way, users of the iRise studio can send their documents to people without iRise software. The recipients of the document can view the design, use the simulation and make notes on the iDoc. I believe that this functionality is key to the adoption of the software by start-ups.

Two things start-ups want to do is be able to shop their ideas to funding sources (unless bootstrapping) and get their software developed with the least revisions (change orders) as possible. iRise addresses both of these issues with an easy to learn application.

A start-up, using iRise, can model their entire idea at a substantially lower cost than programming a prototype. After the model is created, they can send it out to VCs and other funding sources via e-mail who can open and use the model in order to get a crystal clear idea of what the start-up is going to do and how they are going to do it. This will give the start-up a better chance at getting a meeting where they can use the model in their presentation to hammer home their key points. However, there is another key thing that has already got VCs buzzing about iRise. A 70% reduction in change orders.

The trend with a lot of software development these days is to send it overseas. There are a lot of pluses to doing things that way. The main one is the significantly lower cost of production. However, you do end up with a lot of communication issues when you send software ideas overseas for development. The developers may not speak English well or at all and they may not be used to certain ideas and terms that we take for granted. This can cause problems in the development of the software, which cause change orders. These change orders can be reduced (by up to 70% iRise states) by providing overseas developers with an iRise model of the software that needs to be built. The iRise model allows the developers to "use" the start-ups' software via the simulation in the iDoc which gives them a much better idea of what they need to build. The iRise model will also act as a visual contract between the start-up and their developers.

The reduction of change orders and, subsequently, cost is not the only thing that is getting the VC community talking about iRise. VCs (I know, but can't mention who) love iRise because they view it as a very cheap insurance policy for their portfolio companies. iRise prevents portfolio companies from missing delivery dates, coming up with software users don't want (iRise can be used in focus groups and in usability testing) and coming back with wrong requirements in their product. All of these are issues VCs face every day and issues that can make or break their portfolio companies. The lowering of risk facilitated by iRise is a welcome relief.

I think that software simulation is going to be standard in start-up situations in the future because of all the benefits it provides. iRise is leading the way now and, with its' move to target start-ups, should solidify itself as the software simulation standard for years to come.

A note to start-ups: Tom told me about a program for start-ups that he is working on. For qualified start-ups (pre-funding), iRise will provide a free license for 60 - 90 days in order to allow the start-up to shop their idea to VCs and find funding. Once the company finds funding they will be asked to purchase the program. The pricing for start-ups has not been determined yet. It will either be subscription based or the "traditional" license model with recurring maintenance fees. The only catch is that you have to purchase a three day training seminar for $3 - $5 thousand off the bat and work with iRise on some joint marketing efforts (mentioning them in press releases, a "powered by iRise" icon somewhere in view, etc.). If you are an interested start-up please e-mail me and I will give you Tom's contact information.