SocialEngine Launches New Cloud Solution to Better Manage Interest-based Communities

By Michael Carney , written on September 26, 2012

From The News Desk

For a tech startup that is more than five years old, has 10,000 customers, and is operating profitably at $1.4 million in 2011 revenue without raising nearly any outside capital, Los Angeles-based SocialEngine has been decidedly old school. To date, the white-label social platform provider has only offered locally hosted software solutions (aka SocialEngine PHP). Today, it’s launching SaaS-based SocialEngine Cloud, it's first ever hosted solution.

SocialEngine’s existing clients, which include Apple, EA, NASA, MasterCard, and Shell, rely on the company’s platform to manage online customer communities. The newly redesigned SocialEngine Cloud product takes this experience a step further, allowing brands to offer customers more immersive social experiences. Along the way, the brands are empowered to collect valuable user data, like email addresses, in ways not directly possible on Facebook, Twitter, Pinterest, or elsewhere on across the social Web.

“SocialEngine Cloud lets anyone build an interest-based online community in minutes,” co-founder and CEO Alex Benzer told me by email. “It's SaaS like Ning, but with a vastly updated format that pulls together Reddit-style microsharing and Pinterest-style curation. Our customers get a more modernized, more customizable site than they can get with Ning, and their community members can geek out about whatever it is they're into without feeling self-conscious about it on Facebook.”

In other words, SocialEngine facilitates branded “interest graphs,” or networks of people with shared interests. This is far different than the “social graph” delivered by Facebook and to a lesser extent, Twitter. SocialEngine Cloud offers two themes, either a Quora-like voting-based “Feed,” or the Pinterest-like photo sharing and curation focused “Board.”

The new cloud product solves a problem facing many of the company’s current customers, who are looking to move their businesses into the cloud and eliminate the need to maintain software hosted on local servers. Similarly, the company has knowingly missed out on acquiring potential customers who were unable or unwilling to do the same.

More powerfully, the new SocialEngine Cloud opens up the possibility of a wide variety of API integrations with other cloud platforms, such as Salesforce, Zendesk, Instagram, and others, that were previously not possible. Although the company has yet to commit to any such integrations, Benzer tells me that this is very much on the roadmap.

SocialEngine Cloud is offered at a single introductory tier, currently priced at $54 per month, with a 14 day free trial available. This is compared to an average, one-time purchase price of $440 for its PHP solution (ranging from $300 to $700 depending on features), although the legacy system price does not include associated IT and support costs. The company will likely offer multiple tiers of its cloud solution in the future, including premium tiers based on increased features and capacity, and possible even a limited capacity free tier.

SocialEngine actually soft-launched its new cloud solution one week ago to both gauge organic adoption and troubleshoot any unexpected issues. With zero promotion, the company signed up an average of 11 customers per day, representing an annual run rate of $2.6 million in new revenue per year – a pretty impressive number under the circumstances.

This is not to say, however, that the announcement wasn’t met with user concerns. Benzer was forced to quickly publish a blog update following the soft launch to reassure worried users that the company has two dedicated product teams and will continue developing its PHP and Cloud products in parallel.

The company is competing with a variety of white-label, turnkey services including Ning, Bloomfire, and Backplane. Each fails to deliver in one way or another, the company argues, either because it’s best suited for small social-graph groups or because they deliver an experience analogous to the first generation of social networks – think MySpace 2005. The idea of developing and maintaining an interest based social network is far too demanding of both time and resources for most companies to even consider.

As part of the rollout, SocialEngine launched a pilot community in partnership with startup maven and investor Brad Feld, in conjunction the launch of his upcoming book “Startup Revolution.” The site highlights “hot,” “new,” and ”top rated,” conversations, as well as new and popular members, and recent social connection activity. Both Feld and Benzer hope that the site will soon become a public resource for entrepreneurs everywhere.

The connection with Feld stems from the fact that SocialEngine is a graduate of the Summer 2011 TechStars Boulder accelerator. The program’s $12,000 investment is the only outside capital ever accepted by the startup who joined nearly four years after launching, more for the network than the capital. Given the much broader market available to the new cloud solution, and the opportunity to dramatically accelerate growth, Benzer says that the company likely will revisit the idea of outside funding in the near future.