We chat with Simon Papineau, founder and CEO of Crowdsourced Testing, covering Chile’s startup ecosystem along with launching his company from Start-up Chile, Chile’s largest government backed startup incubator.

Simon, please introduce yourself…

My name is Simon Papineau. I’m originally from Montreal, Canada. When I was a child, my house was one of the first to have Internet in Canada. My father knew nothing about computers (it wasn’t until 2002 that he learned to use email) but he figured it would be something I would like.

Long story short – I began my entrepreneurial journey when I was 18. At the time I was reselling server space. It was more of a hobby really, but it gave me a taste of what it was like to run a business.

A few years later I started working in the video games industry, where for many years I was a producer and a production manager, mostly in the mobile space. In 2009, I founded a web and mobile development company, which I sold in 2011.

Currently I am the founder and president of two companies, one in Canada and one in Chile, both in the software testing industry. I came to Chile in October 2012 as part of Start-Up Chile and I’ve been commuting between the two countries since.

What’s the story behind creating Crowdsourced Testing?

In all my jobs, quality assurance (QA) testing was a pain. As a project manager, you either had testers on standby waiting for developers to finish their work, or you didn’t have enough testers available as your deadline was getting near. The result of this situation was that we were shipping web and software products that contained bugs. That not only infuriated our clients, it made us look very bad as a company.

So after exiting my last venture, I had all this money and all this time, I started thinking about what I wanted to do. I reflected on the pain points that I had experienced in my previous jobs and how I could address them through an entrepreneurial venture. Testing was at the top of my list.

I asked myself “In a perfect world, how would QA testing work?” and they answer was: “I would have access to a large number of testers at any given time, on a moment’s notice, whatever the time of day.” At the time, I hadn’t even heard the word crowdsourcing, I was just going on the notion that there’s a lot of people looking to work from home, and testing is something that is well-suited for at-home employment.

So that’s what I set out to do.

I first launched a website called QA on Request. It was a platform designed to send test requests to a large number of registered testers and have a single tester perform the work. On paper it sounded like a good idea, because you had a component of accountability, but the design of the platform was flawed and it didn’t really work. (That was my fault entirely.)

The good thing however is that the phone started ringing and we started getting many consulting offers. QA on Request became a traditional software testing consultancy that now employs 12 people in our Montreal office. We work with many of Canada’s largest media companies, helping them design their QA processes and testing their web and mobile products before they go live.

But despite the success of QA on Request as a consulting company, I still had crowdsourcing in the back of my mind.

Armed with Start-Up Chile’s grant and the many lessons learned as we experimented with our MVP, I went back to the drawing board and designed a whole new system to better leverage the power of crowdsourcing in the context of software testing. We experimented, kept working at it, and after many months it seems that we’re on the right track.

Why should software companies consider outsource the testing of their products?

Honestly, there are so many reasons, but I’ll give you 3.

1) One of my mentors, Ricardo Salas, says it best: “wishful thinking pervades the whole software industry.”

A lot of companies focus on building products and neglect testing. They do so because they assume that their developers did a good job and their products don’t contain bugs and/or because they are under a lot of pressure to ship their products. They launch, and later find out via their users that their products contain all sorts of defects.

Your support costs go through the roof, and just that should be reason enough to consider proper testing before launching.

But there is also a strategic consequence. If you launch a malfunctioning product, you alienate the early adopters who could’ve become passionate advocates for your product. There’s so much competition when it comes to websites and mobile apps that you don’t get a second chance after making a bad impression. Users expect flawless experiences.

2) Having an external, unbiased team evaluate the quality of your product can be extremely helpful. When developers test their own code, they are so accustomed to how it works that it’s sometimes hard for them to “see” how it can be broken. As an external user, we provide a valuable perspective about a product’s quality and usability.

3) There are just too many different combinations of devices, operating systems and browsers on which users will experience your product. It’s unrealistic to think that a company can effectively test their app or site on all of them. That’s why I believe that crowdsourcing is the way of the future.

Think about it: if you build an internal team of testers, or you work with a traditional software testing company, you are limited by the devices at your disposal, and you pay for the testers’ time on an hourly basis.

With crowdsourcing, we can have 25 testers test the same product on 25 different platforms in a much shorter timeframe. That’s pretty exciting when you consider that there are literally thousands of different Android devices on the market.

To give you an idea, we hired traditional outsourcing companies to compare the results of our service against theirs. What we found is that crowdsourced testing is 2 to 10x as effective in terms of number of valid bugs found.

What’s the business model and how is traction working out so far?

We charge companies based on the number of testers that they need, the number of devices on which a project needs to be tested, and the complexity of the project.

For example a company working on a small project can have a small group of testers testing on the most popular desktop browsers for as little as $343, and we’ve had some cases where some companies needed up to 200 testers to test their apps on different Android devices in different regions of the world – it’s very flexible.

In terms of traction it has surpassed our expectations. Ours is a service that is tremendously useful but sometimes neglected by development companies, I think because they view it as somewhat of a pain to deal with. We’re working now with many startups as well as larger companies, and it’s picking up very fast these last few months.

We have some very high expectations for 2014, especially that now we’ve proven the model many times over now. After launch, we needed a few months to work out the kinks, but now the process is smooth, the platform solid, and more and more companies are taking notice.

What we’re the primary challenges you faced when launching, and what did you do to overcome them?

As it is the case with any crowdsourcing platform, our main challenge was to coordinate the work of a large group of participants.

After launch, we quickly realized that we had to provide more guidance and structure to our community of testers. So a lot of our recent work has been developing tools to help ensure that every aspect of products are thoroughly tested as well as help testers be as productive as possible when engaged in testing projects with us.

How do you get testers on board?

You would be surprised the amount of testers worldwide who are looking for additional income through part-time work. We’ve had some successes with LinkedIn and Facebook ads, but even just organically our growth is on par with our needs.

What is your affiliation with Wayra and Startup Chile?

I was a part of Start-Up Chile’s fifth cohort, and I really made the most out of the program. My team and I worked really hard to build and launch the first version of Crowdsourced Testing.

Right when our time in Start-Up Chile was ending, we were invited to join Wayra, Telefonica’s accelerator. Wayra is like Start-Up Chile but on steroids. They take an equity stake in your company (5 to 10%) and they’re a for-profit company so they push you to get into high gear and they kick your ass if you don’t grow fast enough. It’s very motivating. We are still in Wayra’s offices until May this year.

What 3 tips would you share with fellow entrepreneurs that are considering joining Startup-Chile’s program?

1. Have a plan and launch your MVP as early as possible, that’ll never be said enough.

2. Socializing is a big part of Start-Up Chile and your peers are an endless source of knowledge but remember you’re there to jump start your business, so that should be your priority. It’s not a vacation to an exotic country; you should be working harder than back home.

3. Hire permanent staff. Too many participants take their grant money and outsource the development of their MVP. I think that’s a big mistake. If you’re building a technology company, the development of the said technology should be something you do internally. It’s the heart of your business, do you really want someone else responsible for it? Finding talented developers or technical co-founders is hard, but the pay off is worth it.

How do you see the startup (and investment) ecosystem developing in Chile?

To understand the Chilean startup ecosystem, you must first understand the political and economical context of Chile.

Chile is the fastest growing economy in South America and the Chilean government wishes to keep it that way. So there is a big push around entrepreneurship nationwide.

Start-Up Chile is perhaps the best known initiative outside of the country, but when you dig a little deeper there are dozens of other funds, accelerators, and programs designed to help entrepreneurs get their projects off the ground.

There are new co-working spaces opening all the time, new entrepreneurship contests, university programs, etc. It’s definitely a big deal right now, and you can get a lot of help if you go looking for it.

It’s much, much easier to get grants and other types of non-equity funding in Chile than say in Montreal. Although there are questions as to whether this will continue given the upcoming change in government, I think so because the various initiatives have been successful so far.

I would say that the later stages of the entrepreneur’s path, such as the VC/Angel stage, are probably not yet as developed as they are in american hubs, but it’s getting there and it’s normal that it takes time.

Fortunately high-quality teams like SaferTaxi and Nubelo are leading the way with great VCs such as Nazca Ventures and KaszeK Ventures.

What advice can you share with entrepreneurs wanting to start their startup in Chile?

Starting a business targeting the Chilean market and starting a global business in Chile are two different things.

If you want to do business in Chile, the first thing I would say is learn some Spanish, or hire someone who is fluent. Local presence is a must. Contacts and personal relationships are very important here. The tech scene is still somewhat small but booming. If you hang around the different events, you’ll get to know the key players quickly.

If you want to start a global business in Chile, I would definitely recommend Start-Up Chile as a springboard. If you truly have an innovative project and a good plan, you’ll most likely get in.

Build an MVP as fast as you can and go from there. Seek help – there’s plenty. Base your company in Santiago. Attend the usual meetups, events, etc. Leverage the location to penetrate the latin american market.

One thing you do need to know is that administration is a bit heavy in Chile. Paperwork takes time, and a lot of things are unnecessarily complex. Getting a bank account as a foreigner is a difficult process.

It’s also somewhat complicated to work with and pay foreign companies, and you might have to pay a hefty tax if you do so, as we’ve discovered recently when the Google Adwords story came to light.

But it’s all part of the game. Nobody said it was going to be easy.

Beside product testing, what startup opportunities are you currently getting excited about?

I try not to think about too many startup opportunities simultaneously so as not to lose my focus. But if I had to bet on something else right now, it would probably be in the M2M space.

I also like 3D printing but my friend Brian Salt (founder of Thinker Thing) is already on top of things in this space. Actually if drunken promises have any value, I seem to recall that I own 1% of Thinker Thing. I’ll have to talk to Brian about that.

What’s next for Crowdsourced Testing?

Lots of things. We’re constantly improving our system and we’ll be releasing a major overhaul in the next few months.

Shortly after that we’ll release our bug tracking software, called Damn Bugs, free of charge for development teams who wish to use it internally. It’s a first step into publishing a suite of tools designed to facilitate the QA testing process of development companies.

Partnerships will play a key role in our business in 2014. I don’t want to spill the beans just yet but there’s a few interesting opportunities in the pipeline.