Mobile payments are the hot new thing in our digitally connected world.
Twitter founder Jack Dorsey was one of the first to enter the space with Square. (Square recently revamped its app in a bid to capture a larger chunk of the market.)
E-commerce giant PayPal recently launched its own mobile payments platform with PayPal Here.
And now Rochester has a horse in the race: Quantum Loop Solutions' NuSale.
"We're not going head-to-head with them at all," says Quantum Loop Solutions CEO Sam Weiner. "The way you approach a giant is not to attack their head, you attack their toe."
NuSale's opportunity is the app's "end to end" experience, says Weiner. "It helps small merchants run their entire operation on a mobile device."
Mother of invention
Weiner used to run a sailing store.
"But the old saying is, 'The way to make a small fortune in the sailing industry is to start with a large one'," quips Weiner, an avid sailor.
The sailing store may have run aground, but along the way Weiner stumbled upon the impetus behind his new startup: Keeping track of product was way harder than it should've been.
"This wasn't a case where I dreamt up an idea in an ivory tower and went out looking for a problem," Weiner says. "I was actually trying to figure out how to manage inventory when we were selling on eBay, and selling in a store, and selling out at regattas."
Weiner has a background in software development. He keeps a notebook with ideas for cool apps. And when a friend approached him about starting a business around one, they quickly knew which app had the most promise.
How it works
In the sharp-looking loft space that is Quantum Loop HQ, Weiner is holding a barcode scanner that's wirelessly connected to an iPhone.
"You just scan the barcode and the item will be automatically deducted from your inventory and added to your cart," Weiner says. From there, the merchant just swipes the customer's credit card through an iPhone-attached card reader and the transaction is complete.
But that's not all.
"[With each transaction], you're updating your e-commerce site, you're updating your point of sale, you're updating your whole operation," Weiner says.
Small merchants get the app and the card reader for free, while the Bluetooth-connected barcode scanner costs extra.
Either way, Quantum Loop Solutions makes money by taking a 2.7 percent cut of every transaction - a rate that slightly undercuts Square's 2.75 percent.
Weiner says the app will be in the iTunes store by mid-April.
After that, Weiner and his two partners will hit the Rochester festival circuit, trying to woo clients.
Fierce competition
Quantum Loop Solutions is a semifinalist in a regional business plan contest sponsored by High Tech Rochester. The company is gunning for a $25,000 top prize.
But more than the prize money, Weiner says the contest has focused his company on what's next.
The process sets them up well for a forthcoming $500,000 investment round, Weiner says. So far the company has raised $60,000.
That figure pales in comparison to Quantum Loop Solutions' deep pocketed competitors.
"Certainly a risk going forward is that some of these bigger, better financed competitors are going to innovate and try to do some of the things we do," says Weiner. "We just feel like we'll be a step ahead of them."
Weiner has big plans for his company. In five years Quantum Loop Solutions is forecasting $175 million in revenues, some 120,000 customers and 357 employees.
Weiner argues the numbers support his projections.
"It's a huge market," says Weiner, citing U.S. Census data. "Even if you focus just on small merchants that are at trade shows, street vendors, it's $40 billion that they're doing in a year."
And with past retail experience in tow, Weiner is convinced that his company will hit its goal - by helping retailers hit theirs.
"Almost everybody fails," says Weiner. "And it's mainly because they underestimate the challenges involved in all of the logistics that we're talking about.
"That's the kind of perspective a lot of the competition doesn't have."
Still, on a brainstorming whiteboard affixed to an electric blue accent wall is handwritten a note:
"How are we better than a 2 billion dollar company"
Weiner admits they haven't completely answered that yet.
