Rand Technology Inc., an Irvine-based company that has no recurring revenue, notched a 160% two-year growth rate for the period ended June 30. Founder and Chief Executive Andrea Klein, who views the lack of predictability as a challenge rather than a problem, has figured out a way to bring more stability to Rand’s bottom line and boost its revenue amid fears of looming trade war.
Rand, which placed No. 2 on the Business Journal’s annual list of fastest-growing private companies, large category—sales in excess of $100 million—is an independent distributor of electronics parts for Fortune 50 companies. Its revenue for the 12 months ended June 30 was $112 million, up from $48 million a year ago and from $43 million in the fiscal year ended June 30, 2016. The CEO says Rand’s on track to reach $150 million for this calendar year.
Klein attributes the boost in revenue to her team’s ability to anticipate the market’s needs and hedge against the risks, which since last year included increased tariffs on imported goods.
“Rand’s always been the visionary and predictor of the marketplace,” she said. “I have a great team on the ground around the world for sales sourcing, and data analytics and we were able to anticipate the marketplace for our customers as to where they were going to be short and bought ahead on their behalf. And so right now, with the tariffs, because I have a global company I can ship from my warehouses in different parts of the world and I don’t have to bring product in through the U.S.”
Klein founded the company in 1992, after a decade of learning the ropes while working for electronics parts brokers.
“I [brought in] 90% of the sales everywhere I worked, so it only made sense to start my own company,” she said. “I knew that I could do it better and differently and the customers trusted me. I understood the product and how to help solve their problems.”
Her customers are the likes of Dell Inc., HP Inc. and Cisco Systems Inc., tech titans who get 95% of their product components directly from their factory supplier or franchise distributor, and who turn to companies like Rand to assist with the “uncontrolled procurement,” the remaining 5% of the need.
“It’s an imperfect world and they either have too much [of supply] or too little,” Klein said. “So my real job is to balance the inventory around the world … I buy and sell the parts to support every global sector.”
Rand, named after “Atlas Shrugged” author Ayn Rand, uses a proprietary data system to analyze the global inventory and has offices in “nine countries on three continents,” each staffed with sales, purchasing, engineering, testing and logistics teams. It employs about 150 workers, of which about 50 are in Orange County.
Rand’s competitors are “six or seven global independent distributors” that also have “full infrastructure on the ground around the world,” Klein said, adding that “of those less than four or five offer board-level testing for memory and peripherals.”
The group of its peers narrows further she said, with only “two or three” companies “who provide component engineering around the world, and of those, we have the best documented quality record in the world—we have less than a 0.25% return in 26 years and we happen to be the only 100% woman-owned company, global independent distribution company.”
Klein also runs Marrc LLC in Clinton, Tenn., a second-chance stop for discarded consumer electronics, IT and computing equipment. She came up with idea for the facility during the recession, when her customers’ sales were down as consumers prioritized basic expenses over buying electronics. She inquired about the old electronic equipment that’s replaced under new contracts, and was told that it’s usually shipped off to a recycler, for pennies on the dollar.
Klein recognized the value of the parts within the equipment and offered to get a better value by reselling them into the emerging nations. “They sent me a [letter of interest] and I asked them where they wanted [the facility] to be. They said ‘Tennessee’ and I said ‘OK’ even though I had never even stepped foot in Tennessee.”
The move enabled Rand to add “asset recovery” to its list of services and also to have a steady stream of revenue that’s not as closely tethered to market fluctuations, and more often than not, benefits from policy changes.
Marrc, which started operating in 2013 and employs about 50 workers, is on track to reach $40 million in revenue by 2020, about 20% of Rand’s total sales.
“I don’t believe in recycling—I believe in reutilizing,” Klein said. “When I take back the old laptops and servers, I revitalize them and sell them into the emerging markets as entry-level technology for the underserved. It not only helps the environment, but it also creates jobs and opportunities. Technology in America creates convenience—in emerging nations it changes lives.”
