YouDazzle Wants to Be the Avon of Online Collaboration

How do you sell a new online collaboration tool? For startup YouDazzle, which officially launches today, the answer seems to be by enlisting a social marketing force, along the lines of the model used by Avon and Tupperware to sell real-world goods. YouDazzle also thinks it has the right mix of integrated services, something it believes the competition so far has yet to deliver.

YouDazzle is a combination screensharing, web meeting, virtual presentation tool, data room provider and Dropbox client all in one, with tiered pricing levels based on user needs. It resembles solutions like WebEx, Box.net, or even Google’s suite of Apps in some regards, but is designed to be completely platform agnostic (users can host or view meetings built around PowerPoint presentations just as easily on an iPad or a computer, for instance), offer all the tools an average business user needs in one place, and also to appeal to existing Dropbox users.

But YouDazzle’s main distinguishing trait is really its business model; company CEO and co-founder Cary Cole said the company is hoping to kickstart adoption using a tried and tested marketing tool, albeit one that hasn’t been used much in the online space. “Here’s an opportunity I have to capitalize on the cloud, by selling services on to your network,” Cole explained. “I sell to you, and you sell on to someone else, and we both make money on top of that.”

The idea, Cole said, is based on the fact that so few cloud-based tools get taken up by users long-term. Much more often, people sign up, take a look around, and don’t convert to paying customers. By employing YouDazzle “Independent Consultants” to demo the product to members in their network, Cole is hoping his product can get over that initial sign-up hump and convert more trial users into long-term customers.

As with other similar setups like Avon, consultants pay a one-time fee of $49 for marketing materials before they can start reaping the benefits of earning revenue on sales of YouDazzle to their network contacts. It’s an approach Cole says hasn’t been workable for online services before now because it requires high margins, but the price and availability of solutions like Amazon’s EC2 cloud computing platform make it viable now.

YouDazzle’s product competes with a lot of other companies, including not only Cisco’s WebEx and screensharing/meeting tools like Skype, but also private data room companies like Firmex and Intralinks, as well as secure document services providers like WatchDox. YouDazzle is targeting small to medium-sized businesses specifically however, and hoping that its more broadly-focused offering, which also includes a usage analytics component, will help it attract users looking for a way to simplify.

Maybe more challenging for YouDazzle than the ample established competition out there for its various component services will be overcoming the negative perceptions that can accompany network marketing sales strategies. Amway/Quixtar has faced numerous allegations of being in fact a pyramid scheme, for instance, as have a number of companies employing multi-level marketing strategies in which members are rewarded not only for who they sign up, but also for who their sign-ups then recruit in turn.

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