It’s difficult to sell new technologies to big manufacturers. If you’ve got a novel way to build things and a fresh startup to market it, you’ll run into all sorts of obstacles: established industrial companies tend to be risk-averse, top-down organizations with long replacement cycles and highly specific requirements. Many industrial startups generate lots of interest but starve as they trek through long sales cycles.
Dayna Grayson sees that changing. She’s a partner at NEA who has invested in several next-generation manufacturing startups, including Formlabs, Desktop Metal, Onshape, Tulip, and Upskill, and she points to three major shifts that have made manufacturing a compelling sector for startups to address:
- It’s become clear that artificial intelligence will have a role in manufacturing, which gives startups an opportunity to develop an entirely new suite of solutions for manufacturers
- Miniaturization and commoditization have made practically any kind of hardware accessible—capable 3D printers, for instance, cost an order of magnitude less than they did a decade ago.
- Software-as-a-service distribution models are making it easier for younger companies to compete. They no longer need to convince a risk-averse CIO to sign a major contract; instead, they can market inexpensive products to end users and then grow as they prove value—the classic SaaS “land and expand” strategy.
“For the first time ever, some of the buyers of these new technologies can be process engineers or plant managers, where they’re buying new technologies that fit into their disposable budgets for $5,000 or $10,000. They can try these things on the manufacturing line and see how they work, and then they can hopefully expand these technologies throughout the organization. That’s really the same model that we saw with SaaS: you get in with a marketing manager or salesperson who starts using Salesforce back in 2003, and then it slowly takes over an organization. That is a huge change in the manufacturing world. It’s still to happen, but we’re seeing the beginnings of that.”
See Dayna Grayson at The Digital Factory, an executive summit for manufacturing leaders, in Boston on May 7, 2019. The program is co-hosted by Jeff Immelt; speakers include the CEOs of Align Technologies, Spirit AeroSystems, Formlabs, and Desktop Metal; the CIOs of FedEx and Baker Hughes, the CTO of GE, and the head of manufacturing of Ford Motor. The day after The Digital Factory, Formlabs will present the Formlabs User Summit, featuring solutions, connections, and inspiration from people working at the leading edge of 3D printing.
🔨 Dayna’s favorite tool: the Coravin bottle opener, which injects an inert gas into a wine bottle in order to preserve leftover wine as it’s poured. “Josh Makower is a brilliant inventor, and I take great pleasure in using it because I know the team that invented it."
Companies mentioned in this episode: