How we launched the startup in the US and Europe
Putting as an example the project for 3D business DigiFabster.com, Dmitry Maslennikov described how the MetaBeta Accelerator launches Russian startups in new markets.
At first glance, the MetaBeta Accelerator task may seem a very bad idea, especially in the current geopolitical conditions. We help Russian companies to enter international markets. I would like to share a case about a new product development from the portfolio company of the accelerator 3DPrintus.ru, the cloud digital business management system Digifabster.com.
3DPrintus.ru is the first Accelerator MetaBeta project and its leader is my longtime business partner and friend Konstantin Ivanov. For two years, the company made a long way from printing my mom’s dachshund to creating Shapeways in Russia, and as a result has become a steadily growing business that aggregates orders for 3D printing production, laser cutting, injection molding and distributing orders for more than thirty manufactures in Russia. During that time, we got in touch with the majority of venture investors, and none of them believed in the success of this technology in Russia. But my partner Evgeniy Ginzburg and I occupied some important roles in this company from time to time, helping it grow and develop.
All this time, the main competency of the team was to develop attractive IT-products in terms of design, which corresponded to the Kostya’s background. While working, we faced a number of problems that we solved by developing various product modules. We spent a lot of time correcting mistakes in the models and calculating the cost, communicating with customers and contractors, converting the leads into the paid orders. At the end of last year, we realised that our business system could be in demand in other similar companies. So that’s how the future digifabster.com appeared.
By that time, we already knew that the 3D printing market in Russia was very small and the growth rate was not grandiose. This fact saved us time in advance and made us think about developing the company in the international market. And all this happened in the midst of geopolitical conflicts, which were obviously not increasing our chances.
Couple of years ago, we would have started with product development and subsequent marketing to bring it to new markets. But, as followers of the lean startup methodologies, we decided to carry out Customer development, which, incidentally, none of us had previously carried out abroad.
How we entered European and US markets
We formulated supposes and calculated the size of European and US markets; the main hubs of 3D-production and bureau were California, England, Germany and Holland. It was necessary to determine the number of companies in each city and check them out. To this end, we contacted more than one hundred companies in the US and Europe, asked them to meet to discuss a number of assumptions and ideas that we had as the founders of the “leading 3D-printing service from Moscow, Russia“. To our surprise, people began to respond and confirm the meetings.
At the end of January of 2015, we went to Los Angeles to meet customers and visit the 3DprinterWorld exhibition in Burbank, CA. This is a small exhibition in the US, but even there we found the necessary contacts and clients.
The most interesting places and companies we visited:
- Autodesk (Pier 9) provides equipment and good conditions for engineers and designers in San Francisco;
- Type-A-Machine, a manufacturer of very interesting 3D printers for organising the whole production;
- Moddler, the first 3D printing office in San Francisco;
- TechShop, large FabLab with equipment for all types of production, from CNC to laser cutting.
Everyone was happy to receive us, communicate, share opinions, and we managed to enlist the support of the first clients we needed.
Speaking about the US market, it is worth mentioning that there are both companies with a very long history (the 3D printing technology itself exists for three decades) and completely new FabLabs, prototyping services and software projects. There are few events dedicated to connect these companies, but as there are places where engineers, designers and inventors meet (FabLabs, Hack spaces, tech shops), it allows the market to grow and new companies to look for both employees and technology.
After leading customer development in Los Angeles and San Francisco, we went with the same goals to Amsterdam and Berlin. Along the way, we caught a small (comparing with the Euromold 2014 in Germany, where we were a year ago) consumer exhibition 3Dprintshow and a much more thematic B2B-oriented exhibition the RapidPro. This one took place in a small Dutch town Eindhoven, where the grandee Shapeways.com comes from.
Despite the fact that the European market is quite large and the number of companies with a long history is also significant, it takes long time to adapt any implementation solutions.
It is good if there is a possibility to find “your person“ on the spot, the one who lives there and is familiar with cultural peculiarities and just causes much more confidence because of his or her age, for example (as it is accepted in Europe). During the trip, we managed to find and later hire an excellent Head of Business Development Europe who speaks five languages, so we were extremely happy about it. This provides direct access to local customers and facilitates our communication with them.
While testing our supposes, we discovered competitors in Europe and the US who were developing solutions that were similar to our product and business model, such as Additively, Fabnami, Protocow, Netfabb and the more famous 3DHubs.
The fact of having competitors only confirmed that there was a demand, and their in-depth study allowed us to find a niche for positioning.
Speaking about the market in general, an excellent picture, which reflects almost the entire 3D printing market, comes to my mind (find below).
Our segments are 3D Print Applications and 3D Printing Marketplaces.
DigiFabster is related to both areas, since on the one hand, we are a SaaS service that provides online software for business, and on the other hand, we implement the internal marketplace functionality for business owners in the 3D printing market.
I would highlight the following companies in the 3D printing field:
- 3dhubs.com, the largest aggregator of 3D printer owners which allows to order something near your place.
- shapeways.com, a marketplace and a 3D printing service, one of the largest consumer projects. It aims to develop what I call “handicraft 2.0“, when designers will develop, create and immediately sell small (or individual) lots of their products using 3D technologies.
- sols.com, 3D printed, personalised insoles for shoes.
- shapify.com, 3D-scanning booths, soon in all Stamples.
- carbon3d.com, a new turn of home printer development
- supplybetter.com, a service for professionals for selecting the right production (not only 3D)
- The work we done allowed us to engage pre-seed investments literally in a month from the first investors from 3DPrintus, who believed in the development of this technology in the world. Everything was like Steve Blanc’s textbook said: we developed MVP and went to meet our customers again, so we signed the first 15 agreements of selling our system when it was ready.
In fact, at the time MVP could hardly be called a valuable product, but a good understanding of customers concerns, coupled with the future device work scheme description favoured us. For example, among our clients were the first 3D printing office in California, Moddler, a startup of new A-Type Machine printers developers and a number of small and medium 3D printing services and FabLabs from Amsterdam, Eindhoven and Berlin.
Since the idea of the new product appeared, 3DPrintus has been increasing income and expanding new types of productions to fulfil orders. Digifabster.com made its way from the idea to the product and got the first twenty sales in the US, Europe, Israel and Brazil.
What we do to enter new markets
- We carry out the primary market customer development and get an interview with the first clients;
- We commit them on our product trial;
- With the help of local business development, we lead them to the purchase, attracting them with good customer service and other treats;
- We actively use exhibitions and conferences for PR and direct communication with the US and European customers;
- We get access to the local journalists pool and begin to communicate with them so they can write about us;
- We know almost the whole market and all the customers we can reach. We have previuosly segmented them and, as the product develops, we begin to communicate to engage them.
Everything is based on meetings, reputation, word of mouth and a little bit of PR on specialised media.
But the most important thing is constant communication with the clients. They give us feedback and we prioritise product development on this basis to engage these clients as soon as possible.
Now we are flying to Moscow from Los Angeles, where we have participated with Digifabster.com in the additive technologies exhibition Rapid2015 in California, and we want to say that there is nothing complicated to launch the company in international markets.
The crucial abilities are to find your clients concern, to determine the market size, to carry out customer development, to develop a product and be able to sell it before it is ready.
No, after all, there is something complicated here!
Speaking about the 3D printing market and related technologies like CNC, I would like to emphasise that we have almost no funds that would focus on this kind of companies. There are several key funds that invest in 3D not for the first time. These are Balderton Capital (UK), which invested a few rounds in 3Dhubs.com, and LuxCapital (USA), which invests in Shapeways and Sols.
Everything else is mostly private angels who are willing to believe and to go for 3D printing together with the team and the company. It is the same for the US, Europe and Russia. There is no big difference between these countries, except that in the US and Europe there are funds that are ready to take risks with large amounts of money and build solid companies in the 3D world.