Issue #10 - The Future of Manufacturing
Welcome to Issue #10 👋
This issue focuses on the increasing adoption of VR and the new company from the ex co-CEO of Autodesk. Besides that, I keep on exploring how to solve the pilot purgatory, diversity and engineering tools.
📮Together with our friends at Atomico, we’re doing an event with ca. 100 people about Manufacturing the Future in Munich on the 15th of November. Speakers include the VP of Production from Lilium and CEOs of Oden Technology, Workerbase, 3D Hubs among others. We have a few spots left for Entrepreneurs – please hit me up if you want to be part of this. I think it’s a great opportunity for knowledge sharing with your peers. 📮
I hope you enjoy reading it and if you do so, any feedback, shares or links are much appreciated!
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I enjoyed reading
#diversity#
👩🔧 Unfortunately, diversity is a big issue in the whole manufacturing space. It’s striking me that I meet so few female founders in this area and it’s hard to change this. Only 25 companies in the Fortune 500 actually have a female CEO so it’s a great sign to see that General Motors has a woman both in the CEO and CFO roles now. It’s also interesting for the company’s strategy because Suryadevara who was leading the investments into Lyft and pushed the Softbank investment of $2.25bn into GM’s self-driving car project became the new CFO. So I hope we will see more of this in the future.
#robotics#
🤖 The $775M acquisition of Kiva Systems was probably one of the smartest acquisitions by Amazon until today. In this interview, Brad Porter who is the VP of Robotics at Amazon lays out that he focuses a lot on how they can come up with more flexible solutions and rethink traditional processes by leveraging robots and embracing a culture of failure. In total, Amazon has more than 100,000 drive units across its fulfillment network from the small units such as the Kiva robots up to a robot called RoboStow that can move pallets of products up to 24 feet high. He also highlights - which I think many entrepreneurs in robotics underestimate – that it’s a huge challenge to make robots that can work in larger environments and are robust enough. In a factory, the robots might run 24/7 for many weeks or even months and it's hard to test new robots under these conditions. Here is Amazon’s RoboStow:
#fullstack#
📚 Chris Dixon who is a partner at a16zexplains in this article why full-stack startups can create magical experiences if done well simply because they own the whole experience and can bypass incumbents. I think there are many similarities to manufacturing startups. If you only try to inject software to an industry it can be hard, e.g. selling “AI to factories”. You need to build a solution to a problem and maybe that means that you have to offer some sort of hardware as well (you don’t have to manufacture it yourself). Chris makes the example of Uber and Lyft vs. startups that tried to sell software to Taxis which didn’t work so well. It’s definitely hard to build the whole stack from hardware to marketing but if you can pull it off you can create a big moat according to him.
#engineeringtools#
🔧 There is an increasing amount of new companies that are trying to make the design phase of manufacturing more collaborative. However, the switching costs for big companies are very high. To put things into perspective, Daimler made this move and switched their CAD software from Dassault Systems to Siemens PLM’s NX (10y agreement). The whole project took around 5 years and affected 6000 employees that had to be retrained. This is a huge undertaking but especially the compatibility issues made Daimler switch. Here is a longer write up about all the implications for Daimler which I think is good learning for entrepreneurs how complex these transitions can be.
#pilots#
🏭 In a recent study, McKinsey found out that for many companies “digital manufacturing” is a top priority but less than 30% of organizations that participated in the survey have actually rollout relevant solutions. This is very interesting since it echoes exactly what I see at startups, i.e. that getting a pilot is fairly easy but the rollout is very tough especially if startups end in the “innovation-friendly zone”. According to McKinsey companies should focus on establishing a phased roadmap, a comprehensive target-state technology stack and build the skills and culture for change among others to be successful.
About industrial Startups and Companies
#VR#
👓 Many investors wonder when the timing is right to invest in VR and AR solutions and I think opinions differ – some say now, others say in a few years – and nobody really knows.
Virtual Reality can be an interesting technology for training employees, especially as training gets more important due to the digitization of the work environment. Walmart has made a bold move by providing more than 17.000 VR headsets to all stores in the US with the goal to bring VR training to more than 1 million (!) Walmart employees. Early results have shown that test scores were 10-15% higher by training with a VR headset. The Software for the OculusGO VR headsets is provided byStrivrthat raised $21M from GreatPoint Ventures and BMWiVentures among others.
#investment#
🤑 Atomico and Siemens Venture arm Next47 are investing $31M into the Finnish startup Varjo that is creating virtual reality systems. The company has raised up to $46M today and is collaborating with companies such as Airbus, Volvo, and Volkswagen to help them during the product development process. Varjo will launch its VR headset at the end of this year.
#investment#
🤑 There were quite some rumors in the last months about this company from the ex co-CEO of Autodesk that already employs 100s of people but nobody really knew what exactly they are working now. Just a few days ago, Bright Machine launched publicly by announcing its whopping $179M round led by Eclipse Ventures. It's definitely interesting that the company is founded by people from designing items (Autodesk) and manufacture items (Flex), so you have knowledge about the whole end-to-end manufacturing process. The description of the product is still a bit blurry: “We bring together intelligent software with flexible factory robots and machine learning to help our customers meet the growing demands of the next generation of manufacturing”.
#acquisition#
💸 Have you ever heard of Livorno (IT), Swindon (UK) or Nabern and Neuaubing (GER)? Well, Apple at least has since it is buying a stake of Dialog Semiconductor which has offices there to develop high-performing chips. 16% of Dialog’s workforce will join Apple and the company is investing a total of $600M into that deal. Apple is already working with Dialog from the first iPhone on and it’s a great sign that they will expand their chipmaking in Europe.
Additional thoughts on recent development
Inside the buyer's head #conversion#
I think one of the biggest challenges for entrepreneurs in Enterprise SaaS is understanding the buyer. Enterprise Sales are very complex and the faster you understand why somebody buys, the faster you can scale that probably. David Skok from Matrix Partners has given a talk at SaaStock about exactly how to get there and I would recommend every founder to go through the slides:
Industrial Landscape #landscape#
I made a big update to my industrial startup landscape just last week and added 30+ companies. There are now in total ca. 250+ companies in the landscape - it's getting hot in here.
Thanks to everybody for supporting this newsletter and for sending me interesting links. As always, any input, shares, and feedback are always warmly welcome 🙏
Robin