Sramana Mitra: After two years of piloting, it brings us to 2003. What happens next?
James Kane: I decided that I had to get back to what my avocation in life was, which was the design and creation of software. I made the decision to sunset flying and to begin the search for a new concept to build a software company around.
Sramana Mitra: What form did that take? What was that new software company going to be?
James Kane: I didn’t have a vision. I needed to find a validated concept to build my company around. What I did is, I assembled a very small group of two or three developers. We went out and worked as consultants. In particular, we were looking for failed software projects. We’d look for a project that was failing or had recently failed. We’d get the details. We would then go and make an offer saying, “You have a recent failed project. We believe we can repair/replace this failed project. If you let us try and you like the result, you’ll pay us this amount. If you do not, you owe us nothing and we’ll walk away.” We went on to win some contracts like that.
They had a chance of leading to a good idea because, at least, the company had enough need at the beginning to want to initiate the formerly failed project. Our intent was to try to do that until we found a validated need out there. We’d then stop consulting and build a business around the discovered validated need. That is what we did.
Sramana Mitra: What did that turn out to be?
James Kane: It turned out be software for distributing inventory and merchandising information to appliance dealers. It was, I believe, our fourth project that we successfully took on. We probably evaluated about 20 projects and then we took on a failed software project called Retail Deck. It was to produce a program to electronically distribute the inventory levels along with merchandising information to a group of appliance dealers. There, we saw the seeds of an idea that a business could be built around. In the end instead of collecting our fee and walking away, we offered to lease the solution in a SaaS model. They agreed and that was the beginning of the business.
Sramana Mitra: You had this first client because you had spec’d it out based on their needs. Once the software was ready and you had this first client, what did you do to acquire the next set of customers?
James Kane: We engaged in a fairly classical bootstrapped business development methodology. DMI is a warehouse. They serve about 50 retailers. Within the New England region, there are five similar warehouses that serve orders of 500 retailers. We quickly took our SaaS solution to those five additional warehouses and we won all of their business. We kept going like that, expanding across the United States.