»It’s All About Engineering«
Text: Thomas Masuch; Photos: Desktop Metal, Thomas Masuch — 2019/05/30
Consistently built up as a »tech company«, Desktop Metal combines the additive world with the modern entrepreneurial spirit of Silicon Valley.
Thirty kilometers north of Boston, $438 million seems to have disrupted the usual flow of time in the business world: Just three years old, Desktop Metal already employs around 270 highly qualified engineers at its enormous single-floor facility. »You can develop a lot of technology this way,« explains co-founder and CEO Ric Fulop. When you listen to Fulop’s ambitious plans with Desktop Metal, it seems that a tech giant is set to leave childhood behind, skip its teenage years, and make big strides in shaking up the market for industrial metal production.
Desktop Metal’s headquarters are located in a young industrial area of Burlington, Massachusetts. The 80,000-square-foot building is packed with numerous departments for the development of printers and furnace and debinding units. Here, laboratories and material testing facilities operate in close proximity to an area only accessible to select employees, behind whose doors the concepts for the company’s next product lines are created.
»Everything is product development, engineering and R&D. We outsource as much as we can.«
In an open-plan office of remarkable size, engineers work almost elbow-to-elbow, many of them with electrical components, circuit boards, or other components right there on their desks. A collection of innovation trophies and technical journals adorns one wall, but attracts little notice from the employees here – probably because their PCs or laboratories have more exciting tasks to offer. Somewhere, a foosball table serves as a reminder that a little more than three years ago, Desktop Metal was a start-up with just 11 employees.
About 40 months and several investment rounds totaling $438 million after its foundation, Desktop Metal can boast of hundreds of reservations for its two systems in both the United States and the rest of the world. The company has been shipping its Studio System to large numbers of customers in the U.S. since late 2018 (the first was shipped to Google’s ATAP in December 2017). »The Production System for mass manufacturing will see broader shipments in 2020,« reports Lynda McKinney, Head of Global Communications. While Desktop Metal does not reveal its exact sales figures, CEO Fulop is proud to announce that the company has now caught up with the world’s leading manufacturers of metal 3D printers in terms of delivery figures and is setting its sights on becoming number one.
closely aligned with technology companies
Desktop Metal’s ability to become a global player in the AM world in just three years has also been due to investments that are currently only being made in the U.S. From the outset, Fulop has thus formed an organization that is closely aligned with technology companies from Silicon Valley. »That $438 million has allowed us to engage in product development that very few players can do,« Fulop adds.
Of Desktop Metal’s 300 employees, some 270 are engineers. All its internal departments apart from product development – including marketing, manufacturing, HR, and accounting – have either been boiled down to the required minimum or outsourced entirely. »Everything is about product development, engineering, and R&D; we outsource as much as we can,« Fulop explains. The company’s service providers and outsourced areas are overseen by channel managers.
THE CHANNEL PHILOSOPHY
These channel managers also coordinate Desktop Metal’s sales efforts, all of which are handled by 90 sales partners in 48 countries. According to Fulop, this is a big advantage compared to having a conventional sales department because a very small team ensures »that we have 1,400 sales people on the streets, selling our products«. In Germany, for example, Desktop Metal is represented by the AM specialists Solidpro, Alphacam, and Encee. Fulop explains that channel sales are the better solution in the long term while citing the CNC industry, where this form of sales and service is becoming more and more popular. The manufacturers of plastic 3D printers have also gradually switched to this technology in order to achieve higher quantities. In the metal sector, Fulop sees Desktop Metal as the first company to have built a channel. »All AM laser manufacturers manufacture and sell directly,« he points out.
At Desktop Metal’s headquarters in Burlington, several systems are in operation to further develop its technology. Photo: Desktop Metal
First delivery of the »Production System«. Photo: Desktop Metal
»WE’RE A TECH COMPANY«
According to co-founder Fulop, its strategic organization clearly distinguishes Desktop Metal from traditional industrial companies. »For a tech company, the key differentiator in the U.S. is that you just focus on your core competency and outsource everything else,« he says. »Our core competency is developing products and making things easier to use. That’s the main difference to the European model, where companies are used to doing everything.«
When Ric Fulop talks about Desktop Metal’s strategy, he often makes comparisons to Apple or Google. The Boston entrepreneur only mentions the company’s competitors in additive manufacturing to point out differences – as if the other established AM companies out there were already old-fashioned. Fulop is convinced that »his« business model will prevail in the long run. «It’s superior to the traditional approach,« he asserts.
For the production of its equipment, Desktop Metal cooperates with companies like Jabil, a contract manufacturer with $20 billion in annual turnover. Jabil produces according to Desktop Metal’s specifications and delivers directly to its channel partners. Desktop Metal employees are embedded in the supply chain to monitor the corresponding production quality. »We do all our manufacturing the same way that Apple, HP, or similar companies are doing it,« Fulop reports, who goes on to describe its manufacturing partners as »best in class« and capable of raising Desktop Metal to another »level of excellence«. It’s clear that this is the right path for modern companies. »With the traditional model, you do everything, but don’t excel at anything – and you’re very slow,« Fulop reveals.
»IT’S A DIFFERENT TECHNOLOGY«
»Additive manufacturing in the metal sector is currently too slow, too inaccessible, and too complex for mass production,« Fulop continues. When he talks about current additive metal production, he means the powder bed process. By comparison, a binder jetting process like the one used by Desktop Metal is many times faster. When this is combined with material costs that are 80 percent lower, Fulop says that additively produced components become significantly cheaper; in fact, he anticipates manufacturing costs of less than $50 per kilogram, while powder bed components would cost 10 to 20 times as much. »It’s a different technology,« he says, one that is giving rise to new areas of application – in the automotive industry, for example, where »seven of the top 10 car makers are using our technology «. For this price-conscious sector, cheaper AM production is obviously a future field, as BMW and Ford’s investments in Desktop Metal indicate.
According to Fulop, another advantage of binder jetting relates to the experience the industry already has with MIM technology. This process is used in automotive and electronics applications, and ASTM standards for binder jetting already exist. »We’re standing on the shoulders of giants,« Fulop admits. »Big customers are familiar with the microstructures that come out of our machines, so there’s an immediate sense of understanding from the customer base.«
Fulop is certain that Desktop Metal’s technology will be broadly adopted. »I think our technology will outsell laser powder-bed fusion in terms of units in 2019,« he affirms.
FOUNDERS AND EMPLOYEES WORKING SIDE-BY-SIDE
At Desktop Metal’s open-plan office in Burlington, co-founders like Ric Fulop and Jonah Myerberg can be found working among the rows of PC workstations. The company’s founding team of MIT professors and material and engineering experts knew Fulop from other projects or from his studies in Boston. Myerberg, for example, had already worked with him at the nearby battery company A123 Systems.
As an investor and »tech entrepreneur«, Fulop spent many years building up young technology companies. »We invested over $130 million in various companies,« he says. Fulop was also one of the first investors in the AM company Protolabs. »The company is now worth $3 billion, so that was a good investment, « he concedes with a smile.
It was in 2011 that Fulop – whom Forbes magazine describes as a »charismatic serial entrepreneur« – first came into contact with metal AM, at which point he decided to »make the complex process and technology cost-effective «. From 2012 to 2015, he brainstormed with contacts he had made over the years. The result: »We developed a fast new approach to binder jetting that we call single-pass jetting,« Fulop explains.
While Fulop’s old contacts have »certainly not hurt our search for investors, the product does the talking in the end«. In addition to strategic investors such as BMW, Google, and Ford, Desktop Metal has received support from major venture capital firms like NEA and Kleiner Perkins. »We all share the same vision of where we want to take the company,« emphasizes Fulop.
For Ric Fulop, Desktop Metal is different from his previous investment projects. He has no exit strategy this time, either. »The plan is to stay here for the next 20 years. That’s longterm – none of us have other plans,« he adds. To underscore his commitment, Fulop also describes how he withdrew from all his previous positions upon getting involved with Desktop Metal. He feels comfortable in additive manufacturing, and like in his previous investments, he remains active in advanced production. »That’s kind of the area I enjoy,« he offers in summary