Case Study: Proto Software, Inc.
1. Overview of Company
Proto Software was founded in 2003 by Byron Binkley after he left an analyst position trading derivatives at Goldman Sachs. As many analysts do, Byron lived in Microsoft Excel. But he found Excel was limited in its functionality to provide effective analysis, data visualization and reporting solutions without having extensive programming experience. Proto Financial focuses on the needs of traders, analysts and investment bankers by enabling these individuals to build their own software in drag and drop fashion. Future market opportunity exists within just about any business environment that maintains a need for the reporting and analysis of data.
Proto Financial is the next evolution in financial analysis tools. First there were slide rules, then calculators, then spreadsheets, now Proto.
2. Company’s Business Problem
In dynamic business workplaces, needs for data management, analysis and reporting come up constantly, and if decision makers don't have the information they need, market opportunities are lost. This is especially true in the fast moving trading floor environments on Wall Street. Employees in need of custom business intelligence tools can not rely on custom software development due to the turn around time and associated costs. Consequently they rely on spreadsheets for all manner of BI. While spreadsheets are flexible and powerful, they are ill suited to address many common BI problems which they are used for every day. Proto fits in between spreadsheets and IT. It allows business users to build more sophisticated and powerful BI tools than they are able to create using spreadsheets.
3. Company’s Search for a Solution
Proto considered a number of options for building its first product: getting 5 college graduates to camp out in a warehouse programming, hiring US developers, trying to license another product and adapt it, etc. Proto was introduced to CoreObjects from a VC in California who said “if you need to get out and test the market in a cost effective way, you should talk to CoreObjects."
Building a technology platform is a different ball game compared to building an end-user application. For starters, understanding the product requirements is a big challenge because many times what we think and what we want is not necessarily what we require! By asking the right questions, during the requirements phase, CoreObjects helped refine the Product Requirements to a large extent. Thereafter, you need to make sure the architecture is robust and extensible as you go about developing applications on top of this platform. CoreObjects understood this differentiation between a platform and an application and had a track record of building commercially deployable applications.
Developing an application is one thing but having a distributed development methodology that can be agile enough to respond to the evolving business needs and still ensure high quality of deliverables is a different thing altogether. You need a company that has done both and the answer was CoreObjects.
4. CoreObjects’ Technical Solutions
Methodology
CoreObjects proposed a 3-phase approach before developing towards Version 1.0 of the software: requirements gathering, architecture and design, and then implementation. For a company with no software development process experience, this guidance helped keep Proto on a measured course to success.
Iterative Development
CoreObjects’ emphasis on iterative development (Core Unified Process) and deep concept and technology validation has provided Proto with the capacity to evolve as the market requirements change. This is critical to a company like Proto that is developing a new solution for an undecided market. Their business model will likely evolve as the demands from the customer pour in. Their technology platform had to support that flexibility and CoreObjects nailed it.
Quality
The most memorable impact to the development phase was the addition of QA. CoreObjects was able to respond quickly when it was time to ramp up the QA process. This was always a challenge in building a platform and there was a need to come up with a very comprehensive test suite.
Proto’s product has a degree of maturity that first-time entrepreneurs rarely get right. You don't think of things like user experience, QA, source-control, developing artifacts, release management, deployment, upgrades when you're excited about developing a company. The software development process and experience CoreObjects brought to the table helped Proto round out a real product the first time around.
5. Helping build our business
Time-to-market
CoreObjects was able to get Proto to market in half the time than they could have on our own. If they had to hire their own team, put together a sophisticated process and infrastructure in place, they would have lost the advantage of getting to the market faster.
It would have been incredibly challenging to hire developers directly into the Company in start-up mode. Additionally, the cost savings of the offshore model allowed Proto to delay building out a formal office space until it was time to invest in sales and marketing.
Proto was able to hit its development benchmarks in half the time, with 30-40% cost savings. As new entrepreneurs having to prove each step in a bootstrap funding effort, CoreObjects greatly impacted and influenced their destiny.
Scaleable Resources
Many software businesses need to work in stages of proof to succeed with investors. CoreObjects assisted in that by reducing overhead and being flexible about resource scaling to help Proto reach its benchmarks.
Infrastructure
CoreObjects has a unique framework established that provides not only proven processes and methodologies, but real technology infrastructure that costs hard dollars in ramping. Any new software company has a certain investment in hardware and particular software licenses that they must make. By using CoreObjects, Proto was able to avoid certain investments that saved an estimated tens of thousands of dollars.
CoreObjects is a strategic partner and stakeholder in Proto’s success in many ways. CoreObjects is an equity holder in Proto and have stock options. CoreObjects made an introduction to a potential key sales hire. The mindset and attitude towards the relationship goes beyond a customer-vendor relationship and makes Proto feel as if CoreObjects is just the Bangalore office, not an outsourced team. CoreObjects firmly believes in the philosophy of an ‘extended development team’ and ‘distributed co-operative software development’. This is truly reflected in the way CoreObjects delivers things and Proto is excited to have the Proto India team seamlessly integrated with Proto NYC team, which is very important if you want to build a successful company.