Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail (Part 4)

Sramana: When you built your prototype, did you target a specific enterprise management system to interface with?

Vicki Raport: No, we just started with Guitar Center. We focused on what they had. We knew the industry very well, specifically Retek and Oracle. That made future integration easy. It is actually straightforward to integrate into enterprise systems.

Sramana: How long did it take you to get to that first customer?

Vicki Raport: We signed an agreement with Guitar Center in our tenth month. We did not really go out into the market and sell to other retailers until we had been in business about a year and a half.

Sramana: What was your next major milestone after Guitar Center?

Vicki Raport: At that point it was the middle of 2005 and we had grown to have 10 people in the company. The next opportunity that presented itself was a fashion customer in the UK. We left hard-line retail and got an opportunity to enter soft-line retail. That was fantastic because it proved that our application worked for both types of retailers. The notion until that point was that solutions which worked for hard-lines would not work for department stores or soft-line retailers.

We started working with New Look, and it was a tremendous application. They were live and running with our applications within 20 weeks. They achieved complete ROI on their investment within five months of the operation. The value we were able to deliver to them was $100 million, and they are a $2 billion retailer.

At that point we had Guitar Center and New Look, both with tangible results. We started building the company from there. After that we landed a Tier 1 account with Kohl’s. After that we landed Marks & Spencer. We made our breakthroughs, and our process since then has been adding customers and expanding our footprint. We now have a platform that supports three different key retail processes. One is allocation replenishment, another is forecasting and order planning, and the third is assortment and arranged planning. Customers can take one or multiple modules at a time.

Sramana: What is the competitive landscape for this?

Vicki Raport: Most of our direct competes are enterprise deals against Oracle, SAP, JDA, and sometimes SAS. They are typically larger enterprise footprints, and their overall platform will have one small aspect that directly competes against ours. Oracle has a replenishment module. We beat them hands down. JDA has 10 different ways they do replenishment and allocation. We have continued to be successful competing against them because of our unique approach to solving the problem and the breadth of the solution that we have.

Sramana: What is your business model? Are you selling licenses?

Vicki Raport: Our model is a recurring annual license based on revenue under management. Customers do not have to use our software for their entire business. It can be hosted or provided on-premise. We are aggressively moving toward hosted. All our customers have hosted at one time because it takes out a lot of unknowns while working on a deployment.

This segment is part 4 in the series : Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail
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