The Case for User Reviews

When it came to adding user reviews to their website, the co-founders of Capterra were at odds.

Melissa Golden

Team Players Capterra's Micheal Ortner (left) relies on his co-founder, Rakesh Chilakapati, to vet new ideas.

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It was late August 2007, and Michael Ortner and Rakesh Chilakapati, co-founders of Capterra, had gathered a handful of key managers for a meeting in the company's small conference room. As the group assembled around a blue Ping-Pong table that sat in the center of the tiny, windowless room, Ortner made his case for a big step forward. He wanted Capterra, which operates an online directory of business software vendors, to start including product reviews from users on the site. Surveys showed that the site's users were craving the feature, and Ortner figured that providing it would help build community and loyalty.

Chilakapati, Capterra's chief technology officer, with whom Ortner had teamed to launch the company in 1999, listened politely but wasn't convinced. He was worried that introducing the feature would overtax the company's 18 employees, wasting time and money, and that opening the site to nasty reviews would only rankle the very software sellers that are the sole source of Capterra's revenue. Moving forward could invite only headaches and lost momentum. "What if a big company wants to sign on, but they first want a bad review taken down?" he asked. Ortner's response: "So, let them walk."

The two co-founders are friends but don't always see eye to eye. Chilakapati, the introvert techie, is the skeptic -- "the last line," says Ortner, "to make sure my ideas are vetted." Ortner, the extrovert salesman, on the other hand, often embraces risk. After four years of working in the IT departments of Price Waterhouse and J.P. Morgan, he joined a Washington, D.C., Web hosting company called Digex. There, while looking for software partners, he hit on the idea for Capterra. "I saw how fragmented the business software market was," he says. "And it was very expensive for those software companies to reach their target audience. It made a lot of sense to create a website that would connect the buyers and software vendors."

The problem was that when Ortner and Chilakapati launched Capterra, there was no ready-made audience of online software shoppers, and few sellers were willing to sign on. Capterra's model hinges on vendors receiving preferential placement on Capterra's online directory in exchange for paying for sales leads and click-throughs to their websites from Capterra's. It took a year and a half to land the company's first customer and another excruciating 13 months to land the second. By that time, Ortner and Chilakapati had run through the money they raised from friends and family, and Ortner had racked up about $250,000 in credit card bills. Finally, in 2002, Capterra started landing more vendors. Capterra's customers now include IBM, but most are small and midsize companies that sell customized software to help businesses with, say, accounting or logistics.

In early 2007, Ortner began toying with the notion of adding customer reviews. In surveys of Capterra's buyers, reviews were the most frequently requested feature people wanted added to the site. Ortner's first thought was to start gingerly by posting testimonials. That way, vendors wouldn't feel threatened that they may wind up paying for the privilege of getting slammed by some unhappy customer. The vendors would also control the content, taking down any testimonials they didn't like.

Sharing his idea with his core management team and sales and marketing staff, Ortner got some positive feedback, including from the company's product director, Cristina Stensvaag. But soon, Ortner started to have second thoughts. "I realized this was dodging the real issue," he says. "Buyers want reviews and ratings -- and negative reviews are part of that."

Ortner and Chilakapati spent hours poring over review-heavy websites like Amazon, eBay, and online car buying guide Edmunds.com. Both liked the requirement on Edmunds.com that reviewers give both pros and cons, something they agreed would eliminate overly puffy and overly negative reviews. But Chilakapati remained wary that vendors would ever agree to cede so much control of their message.

The pair also agreed that a review feature, should they go ahead, would not permit anonymous reviews -- to protect against competitors posting phony, damaging reviews. Vendors, moreover, would verify that reviewers were, in fact, customers and could respond to any negative reviews. But Chilakapati and several members of his staff were still not convinced that building the review feature would, in the end, be worth the trouble.

The discussion came to a head in the August meeting around the Ping-Pong table. To win over his doubters, Ortner proposed sending a survey to Capterra's 1,000 paying vendors to get their reaction. But the survey simply sowed more doubt. The results showed that although most vendors would encourage customers to submit reviews, about half also worried about negative reviews.

Ortner, increasingly convinced that unfiltered reviews were the best path toward credibility, began working the phones. He started his lobbying campaign by calling vendors who had expressed major reservations about the reviews. Among them was Glenn Martin, president of Promantek, a seller of performance-appraisal software aimed at small and midsize companies. "I recoiled," says Martin about his initial response to the plan. Among his concerns were the possibility that bigger companies would prompt their army of customers to submit glowing reviews, while Promantek would always run the risk of getting hit with negative postings among a smattering of reviews.

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