Welcoming Identify3D — thoughts on unsexiness, defensibility through experience, and protecting the trillion dollar industrial manufacturing industry
(and a brief interlude regarding collaborative partnerships)
Most VC firms talk about how collaboratively their partnership works together — after all, it’s a team effort, right? However (particularly in large firms) it’s easy to take this as nothing more than lip service — you often hear about how each partner acts like her or his own firm, sourcing and closing deals on a strictly individual basis.
One of my favorite things about working at SoftTech VC (other than the string cheese and, of course, the wine) is how collaborative our partnership is — we share and discuss deals on a daily basis, and the partner who brings a deal in isn’t necessarily the person who will end up taking point. I attribute this to a strong sense of honesty about which of us is best suited to help a given company, and very little ego about handing off a hot deal to someone else on the team.
With all of that said, I’m pleased to announce our investment in Identify3D, a San Francisco-based company building a platform to secure the next generation of industrial manufacturing. The company was originally introduced to Stephanie by Garrett Goldberg of Bee Partners (the company’s pre-seed lead) but after an intriguing first meeting I picked up the baton and ran with the deal.
Identify3D ticks a few boxes for me. Firstly, it isn’t sexy. Indeed, it’s really rather unsexy — helping some of the largest and slowest-moving corporations in the world protect their valuable IP through DRM (digital rights management) and encryption technologies probably wouldn’t excite many people but I was immediately captivated. Sexy might garner column inches but unsexy is often extremely hard, generates significant sticky revenue and hence can be very valuable. Unsexy is good. I like unsexy.
Secondly, the founders have a ton of industry experience. We like to look for a defensive moat in every business we invest in, and I believe that many years of relevant experience in an opaque, slow-moving, old-fashioned vertical can provide just that: the understanding, connections, process and patience this team bring to the table simply can’t be replicated by a bunch of smart twenty-somethings.
Thirdly, it felt incredibly timely. Around the time I was looking at the deal I read about how the new Chinese J-20 jet fighter which very closely resembled it’s American F-22 counterpart, prompting many to claim the designs had been stolen via hacking the US military’s computer systems. I also read about a cyberattack to sabotage the design of a drone’s 3D-printed propellor, causing the propellor to break at speed and the drone to crash. It’s not a great leap to see how this same “full chain of attack” could be used to sabotage the designs of commercial vehicle parts with fatal results.
The Identify3D platform protects the process from initial design to eventual manufacturing, preventing designs from being stolen or tampered with. We’re excited to have invested alongside Next47 (formerly known as Siemens Ventures) in a company which we believe can reshape the next generation of manufacturing, and proud to welcome Joe, Stephan and their team to the SoftTech family.