Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail (Part 3)

Sramana: Is it correct to say that your goal was to conduct retail analytics using smaller sets of data points?

Vicki Raport: Quantum came from the idea that we are dealing with a world of small systems, using granular levels of information. That is different from looking at things from the top down. Just as you use a different type of physics when you look at large objects from the type you use to look at small objects, you need a different type of system and technology to deal with the complexities of the hundreds of millions of inventory placement position decisions that are made on a daily basis.

Sramana: This is a fairly complex system to build. What are some of the first things you did when you decided to address this market gap?

Vicki Raport: Our business was founded by five people, and we brought in a sixth person early on. Everyone is still an executive in the company. We all own the company, and we financed it ourselves with sweat equity. We have a fantastic team and could not have built Quantum without the team we have. We brought in people with very broad backgrounds.

Dr. Linda Whitaker is our chief scientist and is one of the premier retail operations and science people in the industry. Chris Allan was a strategy guy at Retek and is our chief strategy officer. Morgan Day is our CTO and did a tremendous amount on the original development of the Retek system. Wyndham Albery came out of Retek as well and used to run services for Retek, as well as some sales and account management. He knows a ton of retailers in the UK. Mike Hrabe came in about nine months into our creation to head up our sales. He worked for Sun Microsystems and Retek prior to joining us.

Sramana: It seems like everyone came from Retek with domain expertise in retail.

Vicki Raport: Correct.

Sramana: How much money did you all put in?

Vicki Raport: The original investment in our company was $125,000 in cash.

Sramana: How did you fund product development?

Vicki Raport: We were very lucky and found a sponsoring customer. We all went to work for the business, and nobody took a salary for the first year and a half. Sweat equity is very important. We built our own first prototypes using our internal skills. We used a lot of open source materials, and we used that prototype to work with a number of early customers to take their data and derive the value we thought we could derive around forecast and inventory placement. We did our own proof-of-concept work free through our industry relationships.

Once we felt we had a working prototype that could deliver value as a standalone, we went to a number of retailers to see if we could get someone to co-fund a development product cycle with us. The company that agreed was Guitar Center. They gave us enough funding in our first round to allow us to deliver a working product which was installed in their environment.

Sramana: What existing systems were the data sitting in that you were able to extrapolate from?

Vicki Raport: We interfaced with their existing enterprise system. We can use direct transaction data. We also integrated into the warehouse management system.

This segment is part 3 in the series : Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail
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