Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail (Part 5)

Sramana: How big is your business in terms of revenue under management, and how strong is your TAM?

Vicki Raport: We have estimated that if we work with only U.S.- and UK-based tier 1 retailers, our TAM in that market based on our current product lineup is around $50 million to $100 million of recurring revenue.

Sramana: Does that mean these are accounts with some type of forecasting and replenishment software in use and you are intending to replace it?

Vicki Raport: We are calculating a fairly tight market. Tier 1 retailers are a billion dollars and up. It is easy enough for us to go through and look at effects of capturing a certain percentage of market share based on our pricing models. We do it fairly granularly.

Sramana: What is your current revenue level?

Vicki Raport: Our revenue for 2010 was $13.5 million. We are targeting between $18 million and $20 million this year. We started generating revenues in 2005, so we have followed a linear growth rate in excess of $100 million a year. In 2009, we had $9.7 million, and in 2010 we went up to $13.5 million, which was the slowest growth we have had.

Sramana: What is it like to build a company in Minnesota?

Vicki Raport: We did not plan on building it there. We actually started our business as a virtual business. The six founders lived all over the U.S. and when we started hiring, we went back to the talent pool that we knew well. The ex-Retek and ex-Oracle people in our space happen to be in Minnesota. Our company did not have an actual office until 2007. We operated virtually but eventually hired enough people in Minneapolis that we decided to establish a collaboration center and an office here.

Our first office was three conference rooms where people could come in and work together. About a year and a half ago, we moved into proper offices with desk space for 60 people. Minnesota is a great place to have a business. There is a great talent pool here and we have a lot of nice folks with very strong work ethics. None of the Minneapolis-based retailers are customers yet, but we are working on that!

Sramana: Is your attrition rate quite low?

Vicki Raport: It has been low. We have been hiring strong since 2009. We were able to get great people in 2010 because the industry was having a tough time. Good people are good people wherever they are. They are hard to find, and you have to treat them well to keep them. Our attrition is pretty low.

Sramana: In Silicon Valley, the talent war is very high. High growth companies are hiring very heavily and competing for talent.

Vicki Raport: In Minnesota it is not difficult, but you are not getting anyone at a discount. You have to recruit and pay good money to get good people.

This segment is part 5 in the series : Bootstrapping A Software Company From Minnesota: Vicki Raport Of Quantum Retail
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