When I started my third fund, Haystack III, back in August 2015, I thought I was so organized — I would build a portfolio that was evenly split across three areas of interest: SaaS, the backbone of many portfolios; consumer products and services, which are risky, yes, yet always promise the highest beta; and the world of industrial robotics, manufacturing, and sensors. Little did I know back then that, as the year unfolded, I couldn’t find the right consumer-facing opportunities for my specific tastes, while I started to go deeper into the industrial side. The result so far has been a portfolio weighted toward the industrial sector, and I’m excited to share more about the stories behind those investments as the companies begin to get their sea legs.
One of these areas is 3D printing. To those who follow, 3D printing and startups isn’t something entirely new. Companies like Shapeways and MakerBot have attracted some of the best investors in the world, and thanks to their efforts, have created the space for startups to continue to innovate in the space. Over the past year, I have met with over 30 startups focused on some angle of 3D printing, and as I started to imagine every industry potentially being transformed by having 3D printers on every shop floor, it opened my eyes to other opportunities in world of ubiquitous 3D printing.
That path inevitably led me to finding software creation and collaboration platforms for industrial 3D printing, otherwise knowns as “additive manufacturing.” I am lucky to have found and made investments in two companies: Origin, based in San Francisco; and nTopology, based in New York City. You can learn more about each company on their sites (links above), but I’ll spend a quick minute talking about each one.
Origin is a 3D printing software platform that empowers other companies to rapidly prototype products with true commercial-quality and other advanced capabilities. This is just scratching the surface for what Origin hopes to accomplish by freeing industries from having to use specific printers and/or specific materials in their additive manufacturing processes, leading to dramatically lower printing costs. Overall, the Origin Platform is designed to make manufacturing easy and inexpensive instead of the difficult and capital intensive experience it currently is. They’ve found that making manufacturing easier, as well as breaking down many of the barriers from traditional manufacturing (for example, minimum unit quantities for a product design), their customers have been able to develop entirely new business strategies. On the 3D-Printing front, Origin even “pilot” manufactures many products in-house on their own process to help inform platform development. Going forward, they’re going to release a lot of the tech they’ve developed on the actual printing process front so other manufacturers and companies can use their platform to manufacture real products.
nTopology is software company that helps engineers design better 3D printed parts. Specifically, the company makes CAD software for designing complex, engineered lattice structures. While lattices are difficult to create inside CAD systems, lattices are critical because they allow for the creator to manipulate material performance by changing the structure of the lattice. To start out, nTopology targets design engineers at industrial companies who are looking to harness 3D printing for production. In most cases, these designers have already been using 3D printing for prototyping and have felt firsthand the pain in developing lattices for printing. nTopology has attracted interest from some of the most technical industries worldwide, including aerospace, medical implants, and chemical processing, and has helped traditional companies (such as footwear and apparel) leap into the 21st Century by bringing them the power of 3D printing faster and more efficiently.
Companies are moving from using additive manufacturing for prototyping to production because of the performance improvements the process allows, mainly that with 3D printing the user can make parts that were impossible to make before. In industries where highly complex or custom parts are the norm, dramatic increases in performance lead to massive economic value. Tons of investment dollars are going into printer hardware and printing materials, causing printing costs to slowly drop. However, one of the major problems is that the software that’s used to design and print parts today was never intended for mass production. This means that trying to make better performing parts is extremely time consuming, if not impossible, with current solutions. It should be no surprise, software is the key to the explosion of 3D printing as a manufacturing process.
For me, these two investments also go beyond the analytical. I’m proud that two friends helped me find both Origin (thanks Hunter) and nTopology (thanks David), and that I get to work with syndicate investors who are great friends and easy collaborators. On top of this, working with the leaders of each company — Chris and Joel at Origin, and Brad and Spencer at nTopology — is pure joy for me. We text and talk all the time, we have real conversations, they listen to my perspective, they’re really focused on building long-term relationships in all aspects of their businesses, and they are patient in teaching me how their industry works. By now, folks may think of me as someone who writes and invests, and maybe before worked on mobile apps, but way back in my high school days, I was living in math and physics classes and (now antiquated) CAD systems, perhaps dreaming one day of doing what these CEOs are doing. Instead in college, I went down a different educational path, and I’m very fortunate that somehow I can meet and work with folks who took those CAD classes all the way to the point of reinventing how major industries manufacture. Lucky me!