Crocodoc Raises Cash, Upgrades Web-based Document Review Service

7/14/10Follow @wroush

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a different beast, and the group had to solve “some pretty hairy technical problems” to allow users to collaborate on so many different types of documents through a single Web-based viewer, Damico says.

But it didn’t have to reinvent the wheel. “Luckily, there is a bit of a saving grace in that we are able to cross-convert between file types,” says Damico. “We are not actually creating native Doc or PowerPoint or Photoshop viewers.” Once a file is sent to Crocodoc, “We do a quick conversion process that makes it easier for us to handle all of the file types,” he says. Markups, comments, and revisions are saved in what amounts to a new layer of information on top of the original document. Collaboratively reworked files can then be exported as PDF documents, or embedded in Web pages.

To make Crocodoc flexible and easy to use, the company had to come up not just with an easy way to import and export documents, but with a highly polished user interface. In fact, much of the company’s work since the February launch, Damico says, has focused on beta testing with real users. “We had some elementary school teachers who had students submitting their homework through Crocodoc—striking out text and fixing grammar and adding notes in the margins—all the way up to graphic design shops using this for high-caliber presentations.”

Damico is careful to say, though, that Crocodoc is not a full-fledged document editor. “You can’t yet save [edited] documents as native Word or PowerPoint files,” he says. “We don’t intend this to be the place where you go to author documents, but rather to review and share comments.”

For now, “90 percent” of Crocodoc’s features are free to all users, Damico says. There is a paid “Crocodoc Pro” version of the service that provides an extra layer of security in the form of document encryption and password protection, but “we are not really pushing the Pro version at all,” says Damico.

Like many Y Combinator companies, Crocodoc is instead focusing first on building a product that people like, and plans to figure out later how to charge for it. “We want to make sure we really understand who our best users are and what their behaviors are before we add a paywall somewhere,” Damico says.

The risk there, Damico admits, is that users will become so accustomed to paying nothing that they won’t want to pony up once the startup imposes fees for some services. “But the way we look at it,” he says, “is that we learn amazing things from our users almost daily as far as how people are using this—we see use cases we never expected. Only when we have a super-deep understanding of what pain points this is solving—and what people are willing to pay for and not pay for—will it be time to discuss putting up a paywall or changing the business model.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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