Issue #15 - The Future of Manufacturing
👋 Welcome to Issue #15 👋
Topics this time: VR in cars, startups by former employees of German industrial companies and assessing early traction of startups.
👉 Hannover Messe presentation 👈
Come & join me for my presentation Manufacturing the Future at the AWS booth next Wednesday, 3rd of April, 12:25, in Hall 6, F46 (at AWS).
💸 How to escape the pilot purgatory workshop
I still want to do a small workshop or webinar about how to escape the pilot purgatory. The date isn't fixed yet but please let me know if you would like to participate here.
As always, I hope you enjoy reading it and if you do so, any feedback, shares or links are much appreciated!
Many thanks again for the feedback on the NL - I will work and iterate on it.
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I enjoyed reading
#VR#
👓Surely but steadily the adoption of AR and VR applications is growing. One of the most common use cases is using VR for training purposes (e.g. Innoactive). Entering Holoride. I recently met with one of the founders of Holoride that spin-off from Audi and is working on putting VR in cars to entertain and reduce motion sickness. They are doing this by connecting the VR content to the vehicle's movement and since launching at CES this year they're getting lots of positive feedback such as this article from TechCrunch titledHoloride’s in-car VR solution is the best thing at CES 2019. If you want to get a preview, here is a showcase video.
#automotive#
🚓 Continuing on automotive, this article gives you a glimpse of what the automotive industry is currently adopting. Some companies such as Ford are even creating new organizations for scouting new technologies and products such as its advanced manufacturing organization. The article highlights especially 3D printing and the decrease in lead time and engineering effort that comes with it. As an example, Volkswagen plans to use the new metal printer by HP to produce parts for electric vehicles in 2020. Besides 3D printing, the article underlines the use of collaborative robots to increase the productivity of workers on the shopfloor.
#PE#
💰 I think the (German) Mittelstand is a great opportunity for many Private Equity (PE) funds. The Mittelstand is the backbone of the European economy and there are many businesses that are very profitable and have a high market share in their core market - yet, many companies haven't really changed the way they are manufacturing and selling their products. According to PitchBookthere have been 379 deals by PE firms in Mittelstand companies last year. More interesting, PitchBook is predicting that an upcoming recession could lead to a "dealmaking bonanza" so I'm sure this is a development we should watch closely.
I strongly believe this is a big opportunity, also for building new funds. If you are working on this, I'd love to have a discussion with you!
#robotics#
🤖 Following up on the PE activity, I think a very good example here is Summit Partner's investment in OnRobot. OnRobotis led by Enrico Krog Iversen who also founded Universal Robots before which is a global market leader for collaborative robot arms. The money is used to scale OnRobot to a market leader for collaborative applications and the company is pursuing M&A as one of its growth strategies. One of the first acquisition has been Purple Robotics that has developed an innovative vacuum gripper.
About industrial Startups and Companies
#fromcorporatetostartup#
🇩🇪 I recently took a look at startups by former employees of German industrial companies. The list is for sure not complete but it looks like there is an "Audi Mafia" in the making:
#fundraising#
🤑3DHubs just announced that they closed an $18M Series C led by Endeit Capital. The company originally started as a p2p marketplace for 3D printed parts and completely shifted to B2B recently. Customers can upload their digital design and specify their requirements and one of 3D Hubs providers will manufacture the part and ship it directly to the customer. Part of the money will also be used to go from 3D printing to CNC machining - something that other players such as Shift or Kreatize are offering already. Interestingly, 93% of the orders are completely automated and they have produced more than 2 million parts by today.
#fundraising#
🤑 Rever which is working on a continuous improvement software just scored an investment by Sequoia- I think one of the first investments by Sequoia in the manufacturing industry. The investment is co-lead by Zetta Venture Partners, an AI-focused fund. The platform helps its customers to engage and recognize all employees for implementing improvement ideas and adopting best practices at other sites operated by the customer. Here is an example: a worker at Grupo Bimbo, one of Rever’s customers, might hypothesize that switching from a 1-centimeter pipe to a 5-centimeter pipe would speed up a tank refilling process. She could log the idea on Rever, test the change in a small-scale experiment, and use Rever to estimate the impact of making that change to her workflow. The ROI for any idea tested on Rever is clear, making it easy to decide which ones to implement.
#Mixedreality#
📟 Microsoft recently launched a new version of the Hololense- which is supposed to be better in any aspect: a more comfortable, much larger field of view and better able to detect real physical objects in the room. Noticeable is that Hololense is designed for "first-line workers" which includes people in factories and operating rooms. Going after corporates and not consumers with a second edition sounds familiar if you remember what happened with Google Glass. I still think it will take some time until we see the first Hololense in a production environment that can also prove its ROI.
Additional thoughts on recent development
What kind of traction do we expect at the seed stage?#fundraising#
I get a lot of questions from founders what kind of traction we expect at the seed stage for manufacturing startups (I'm actually working on a blog post on this). Most of the companies at the early stage usually have a few pilots that pay some money, show some usage and it takes more than 6 months to get into the production environment.
So I think you can look at the traction from 3 different angles and personally,I would like to see that you can be an outlier in one of these. That means:
1) Either you can show that you can charge a lot for your solution e.g. pilots that pay north of €50k+.
2) Or you can show that you get into the production environment very fast, within a few months.
3) Or you can show very high usage of your product, i.e. a high number of daily and weekly active users.
Obviously, it's awesome if you can be an outlier in all three areas but I think this is close to impossible 😊
Industrial Landscape#landscape#
I'm still working on a new update to my industrial startup landscape. There are now in total ca. 250+ companies in the landscape - here you can see the changes within one year:
Again, 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