the Web,” says Damico. “If you are a user of Dropbox, you can view PowerPoints, Word documents, PDFs, and the app doesn’t slow down—it’s all in HTML5. As desktop software starts to dwindle, companies are turning to us as the online place for these things.”
Having raised just $1 million from Y Combinator, SV Angel, 500 Startups, and a handful of Silicon Valley and East Coast angel investors, Crocodoc is now in a position most Web startups would envy: It earns cash every time one of its partners’ users converts a document into HTML5, whether the conversion takes place on Crocodoc’s cloud servers or within the partners’ data center. “White labeling is a very simple business model,” Damico says. “It starts at pennies per document, with volume discounts for large customers. It allows us to grow along with our customers.”
As I’ve explained in previous stories, the core of Crocodoc’s technology is a rendering engine that can reproduce pixel-perfect versions of native documents in a format that any Web browser can understand. You’ve probably seen a Word or PDF document displayed in a Google Docs browser window; that’s actually just a big, fuzzy, graphical image of the original document. “It loads slowly and it doesn’t look very good,” says Damico.
To create high-fidelity version of a native document that still loads quickly, you have to understand the structure of the document at a deep level, Damico says. “What is a heading, what is a paragraph, what is the kerning, what is the spacing?” Then you have to tell the browser how to reconstruct the document using nothing but style sheets and the other tools of HTML5. “We think everyone is going to be using HTML5, so we are focused on building the Ferrari of HTML5 document viewers.”
Even so, the switch to making a white-label product that would run inside enterprise Web apps like Yammer or Dropbox was something Crocodoc “didn’t expect at all,” he says. Three things happened in 2011 to spur the shift. First, the Crocodoc team noticed that desktop software’s downswing was accelerating: Developers were creating browser-based version of everything from tax preparation software to image and video editing suites. “HTML5 apps were mimicking desktop apps, but no one had done that for documents yet,” says Damico.
Second, “social enterprise” companies came into their own in 2011, mixing document sharing with collaboration and social networking functions. Dropbox and Box raised enormous venture rounds, Yammer grew exponentially, and Jive went public. (Now Google and Microsoft are chasing after the same market.) “It didn’t take a rocket scientist to see that documents were a key part of social enterprise software—and if you could just bring Word, PowerPoint, and Acrobat into all of these apps popping up in that space, there would be huge value there,” Damico says.
Finally, the social enterprise companies themselves came knocking on Crocodoc’s door. “The thing that really pushed us over the edge was we got e-mails from all these companies who liked our consumer products, and wanted to know if we could build something for them,” Damico recounts.
Yammer was the first big enterprise customer: Crocodoc built an embedded document viewer that resembled the other tools inside the company’s Facebook-like collaboration system. “It wasn’t clear at first if that would be just a one-off thing, but it turned out to be
