Joe DeSimone is the co-founder and CEO of Carbon which is reinventing how polymer products are designed, engineered, manufactured, and delivered, towards a digital and sustainable future. The company has raised over $680 million from Sequoia, Google Ventures, GE, Adidas, BMW, Johnson & Johnson, and JSR. They’ve also got Fidelity, Baillie Gifford, and Madrone Capital Partners as well as investment from additional international sovereign funds. Prior to this Joe DeSimone was a university professor for over 20 years.
In this episode you will learn:
- Joe’s advice for starting your own company
- How he created a purpose-led company and how he continually fosters that idea
- Building a successful business model
- Putting your customers first
- Future-proofing from obsolescence
ACCESS THE PITCH DECK TEMPLATE
About Joe DeSimone:
Joseph M. DeSimone is a prolific inventor, serial entrepreneur and eminent scholar.
DeSimone is the Chancellor’s Eminent Professor of Chemistry at the University of North Carolina at Chapel Hill, and William R. Kenan, Jr. Distinguished Professor of Chemical Engineering at North Carolina State University and of Chemistry at UNC.
DeSimone is also an adjunct member at Memorial Sloan-Kettering Cancer Center. Currently DeSimone is on leave from the university and has assumed the CEO role at Carbon3D in Silicon Valley.
DeSimone has published over 300 scientific articles and has over 150 issued patents in his name with over 80 patents pending.
DeSimone is one of less than twenty individuals who have been elected to all three branches of the National Academies: Institute of Medicine (2014), National Academy of Sciences (2012) and the National Academy of Engineering (2005).
He is also a member of the American Academy of Arts and Sciences (2005).
DeSimone has received over 50 major awards and recognitions including the 2015 Dickson Prize from Carnegie Mellon University; 2014 Industrial Research Institute Medal; 2014 Kathryn C. Hach Award for Entrepreneurial Success from the ACS; 2013 Fellow of the National Academy of Inventors; 2012 Walston Chubb Award for Innovation by Sigma Xi; the 2010 AAAS Mentor Award in recognition of his efforts to advance diversity in the chemistry PhD workforce; the 2009 NIH Director’s Pioneer Award; the 2009 North Carolina Award; the 2008 $500,000 Lemelson-MIT Prize for Invention and Innovation; the 2007 Collaboration Success Award from the Council for Chemical Research; the 2005 ACS Award for Creative Invention; the 2002 John Scott Award presented by the City Trusts, Philadelphia, given to “the most deserving” men and women whose inventions have contributed in some outstanding way to the “comfort, welfare and happiness” of mankind; the 2002 Engineering Excellence Award by DuPont; and the 2002 Wallace H. Carothers Award from the Delaware Section of the ACS.
DeSimone, an innovative polymer chemist, has made breakthrough contributions in fluoropolymer synthesis, colloid science, nano-biomaterials, green chemistry and most recently 3D printing.
DeSimone is the co-founder of several companies including Micell Technologies, Bioabsorbable Vascular Solutions, Liquidia Technologies and Carbon3D.
DeSimone received his BS in Chemistry in 1986 from Ursinus College in Collegeville, PA and his Ph.D. in Chemistry in 1990 from Virginia Tech.
Connect with Joe DeSimone:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. I think that we’re going to be learning quite a bit today from our guest about the dogmatic side of things, the pragmatic side of things. He has a very, very interesting background. But without further ado, I’d like to welcome Joe DeSimone to the show. Welcome, today.
Joe DeSimone: Thank you. Great to be with you.
Alejandro: So originally born and raised in the suburbs of Philadelphia. How was life growing up there?
Joe DeSimone: It was terrific. Big sports fan: Eagles, Phillies, 76ers, Flyers. It was great. Great childhood. Great, very supportive parents. A good place to be.
Alejandro: Got it. So how did you start to develop this love for chemistry?
Joe DeSimone: It actually started in high school, and I had a knack for understanding it. I had a knack for teaching it. With some of the teachers there, I helped them understand the subject even in the public-school setting. Then like a lot of things, great teachers inspire you, and I had wonderful chemistry and science teachers in high school and really, really awesome faculty at Ursinus College.
Alejandro: Very nice. So you went there to Ursinus College, and right after that, you went into Virginia Tech. Why did you go straight into Virginia Tech instead of maybe a couple of years of working somewhere?
Joe DeSimone: Well, actually, the surprising thing for me is, our family wasn’t that well-off, and I didn’t appreciate that you could go to graduate school, and it would pay you. Like a lot of my friends wanted to go to medical school and were going to incur a lot of debt. I fell in love with the subject, and I realized that they were going to pay me to go to grad school. I hadn’t realized that. I think a lot of kids don’t realize when they’re going to undergrad that you can get paid to go to grad school. I found that out, and I knew I could pursue what I loved to do. Virginia Tech accepted me, rolled out the red carpet, and had a blast.
Alejandro: Very cool. So why did you go into academia?
Joe DeSimone: Well, I had no intent to do that actually. A lot of people when they go to grad school, they want to be faculty members and are pretty clear about that through their entire graduate career. I was expecting to go to industry. In fact, I was expecting to go back to the Philadelphia area and work for DuPont, or Rohm and Haas, or ARCO. Then on a whim, my faculty advisor mentioned that there was going to be a new program in polymer chemistry at one of the Top 10 chemistry departments in the country at the University of North Carolina Chapel Hill, and he thought I could do that. I went down there on a whim and fell in love with the campus and fell in love with the faculty and all I had to do was teach organic chemistry and polymer chemistry, and they gave me half a million dollars to start a research program. I thought it would be a lot of fun.
Alejandro: Got it. What kind of students were you really teaching because you were a professor for quite a bit? How many years?
Joe DeSimone: Twenty-five years.
Joe DeSimone: I taught a lot of kids organic chemistry. Organic is one of those subjects that you take in your sophomore year in college if you’re going to nursing school or dental school or medical school or any pharmacy sciences. I really enjoyed teaching kids about that subject, which is a really interesting topic. It’s not for everybody, but those that love it, love it and help people learn it.
Alejandro: Now, you’re more on the pragmatic side, and you’re leading your own venture, and we’re going to get into that in just a bit. But one of the critical things is listening. I mean, not only yourself but being able to get your point across so that others may be able to capture that and to move along in the same mode. What did you learn about teaching and perhaps others listening to whatever you were saying?
Joe DeSimone: It’s fascinating you bring that up because you’re spot-on. You know, a lot of people have very different learnings styles, and if you want to be a great teacher, I always felt that if somebody didn’t understand what we’re doing, it’s my fault. To try to explain complicated topics three or four or five different ways so that different learning styles could grasp that, I think turned out to be a really important trait for me to be able to explain complicated things. Whether you’re doing it in a classroom setting or talking to venture capitalist or investors or your own employees, recognizing a lot of different learning styles is something that’s – it’s happened to me a lot now in everything that I do.
Alejandro: So, what were some of the qualities of your best students?
Joe DeSimone: Oh, tenacity, interest, innovation, work ethic, being prepared. I had a lot of kids that I would say suffer from the Imposter Syndrome, and I find a lot of people that are doing things well beyond what they thought that they were able to do, get really well prepared for their moment in the spotlight. I had kids that grew up in very different environments. When you see somebody who grew up with not much money, they think about problem-solving differently than somebody who grew up with a lot of money. You get all those different types of perspectives, disciplines, ethnicities, gender coming together becomes a fabric for an amazing innovative program, and it’s something we try to harness and work towards all the time.
Alejandro: So during this time, I’m sure that you met a lot of people. Perhaps there’s one story that shocked you the most. Like where you saw this kid and where you’re seeing her or him now. What was that story?
Joe DeSimone: It has to be my very first Ph.D. student, Valerie Sheares Ashby. Valarie is an African American woman who was an undergrad a UNC. She became my first Ph.D. student. She actually graduated faster than anybody in my whole career. In three-and-a-half years she got her Ph.D. She went and did a post-op in Germany as a NATO Fellow. Came back and she had multiple faculty offers. She was going to go in academia. She had offers from MIT and Georgia Tech, and NC State. She chose Iowa State. I said, “Valarie, I don’t know what you’re doing.” I could have placed my first student at MIT, and she went to Iowa State. I told her I didn’t know where Iowa was. She said the faculty there reminded her of Chapel Hill, a very mature answer. She rose through the ranks at Iowa State. She got tenure. My faculty colleagues at UNC attracted her back to UNC to join our faculty, and ultimately, she became department chair, so she became my boss. So be kind to your students. You never know when they could be your boss. Then she became Dean at Carolina. Now, she’s Dean of Arts and Sciences at Duke University. Amazing academic leader and researcher.
Alejandro: What do you think triggers that determination?
Joe DeSimone: Tenacity and confidence that helped her see her potential, and I’m just really, really proud of when people do that.
Alejandro: That’s amazing. I understand as well, Joe, that you started getting involved with your students with some of the ventures that they were developing. So how was this experience for you?
Joe DeSimone: Well, I think entrepreneurship is a discipline, and instilling confidence that people can do this. We had an entrepreneurship minor in the College of Arts and Sciences at UNC. It’s the ability to bolt the entrepreneurship minor onto over 30 different majors from science-intensive majors, but humanities, performing arts, and the tenants of entrepreneurship – being able to build a business, sustainable non-profit, for-profit, bringing people together, understanding finance, understanding the pitch. All those things were something we did. In my own research group, I’ve always been a firm believer in what I would call translational research, things that can have an impact on society to improve people’s lot in life and whether the health and well-being or the economy. We always try to do very utilitarian research that would have an impact on making a difference.
Alejandro: So I guess you’re probably one of the most equip individuals to answer this question. Do you think that entrepreneurs are born, or is this something that you learn?
Joe DeSimone: I think it’s a mix. I think there are a lot of people that are born with the skills that make a lot of mistakes. So, I think there’s a lot of learning that they can have in a more formal way. Then I think there are a lot of people that can contribute to the entrepreneurial journey in understanding their role in that. They might not be born with those or quite have the leadership potential, but they can absolutely participate in the journey to bring new companies and new concepts to light – a bit of a blend.
Alejandro: Yeah. I hear you. Absolutely. What were some of these exciting companies that you were involved with?
Joe DeSimone: Well, one of the most fun was partnering with an interventional cardiologist at Duke University and developing a coronary stent that was polymeric instead of based on metals that would go away after 18 months. The idea was that after balloon angioplasty, you needed the mechanical support in a blood vessel for a period of time, but you didn’t need it forever, so why have a permanent prosthetic for a temporary healing issue. That was the perspective we had. We developed a stent that after it’s implanted, it gets absorbed after 18 months. Actually, the healing process starts, and the blood vessels can return to be as good as they were. So we launched that company, and on financing, it was acquired by Guidant and then ultimately became part of Abbott. We’ve now had over a couple of thousand people with those stents implanted. What an amazing ride that was.
Alejandro: Wow. Absolutely. What was the name of this business?
Joe DeSimone: It was called BioStent. It became Bioabsorbable Vascular Solutions at Abbott.
Alejandro: Got it. Then there’s another company that just recently went public that you were also a part of. So tell us about this story.
Joe DeSimone: Yeah. One of my Ph.D. students, Jason Rawland, developed a technology for basically using some of the tools of the computer industry to make precision particles that had controlled size and shape, that had the uniformity of an integrated circuit but was a particle. Most particles if you look at them under an electron microscope or a very globular or granular – no two particles are the same size and shape. We developed a precision technique to mold particles so that they all have the same size and all the same size shape, but also their shape would impart function that you couldn’t get at a granular object. So this became a really terrific way to deliver medicines to the airway, and you could get really better deposition into the lungs for treating diseases like COPD and pulmonary hypertension. Those same particles much smaller became really terrific for IV delivery of chemotherapeutics for local drug delivery and oncology, and also some vaccines for infectious diseases and cancer vaccines. So, it became a platform for delivering medicines in a lot of different forms throughout the body.
Alejandro: Got it. And this company went public?
Joe DeSimone: Yeah. The company’s called Liquidia Technologies, and went public last fall and they’re located in Research Triangle Park, North Carolina.
Alejandro: So we were talking about skillsets before and different patterns more in people. But if we’re talking about like more of a group of people and perhaps even a company, you’ve seen many, many things over these years as a professor, many things, many different scenarios of your students going on and going out and building great things. What would you say are the three critical ingredients for a company to be widely successful?
Joe DeSimone: Well, certainly technology that’s differentiated and is patent-protected is a ticket to the game. That’s really important. I think highly differentiated technology would be a second one that was impactful. To me, often the signature of that is like a paper in science or nature as seen in Natural Academy of Sciences. Then thirdly would be the team and having a great team of people that are committed, that are passionate, that are talented. I’ve seen a lot of B and C-level technologies with an A-team win really, really well. And I’ve seen A technology with a B or C team go nowhere. I think you really need both. To me, those are the secret ingredients.
Alejandro: Let’s talk about your own venture, Carbon. You were in academia for over 20 years. Obviously, that’s very stable, a very secure path. First and foremost, how did you incubate the idea and then why did you decide to complicate your life a little bit with the uncertain?
Joe DeSimone: Yeah, and I was just asking myself that this weekend. So look. I’m a polymer guy. Anything you buy polymeric like parts, all the parts in your car, a medical device, or sporting goods, all those parts are molded or casted. In other words, it was a molten polymer poured into a cavity, polymer cooled, parts solidified, you open the cavity, and pull the part out. That general approach was established 7,000 years ago: molding and casting, and it feels very archaic. We figured out how to make polymeric parts with light without using molds. All the sudden now, you’ve got designs that are unmoldable. You have the ability of getting to those amazing designs instantly instead of waiting for months to get your hands on a mold. It just accelerates product teams and the ability to do things. So we saw this emerging and thought, “Man.” Given how much it’s in my wheelhouse, how differentiated it was going to be for my field, having been very comfortable, as you say in an academic institution. My wife and I were just turning 50 and going into the second half. It was very comfortable. I thought I was ready for a new challenge and always thought Silicon Valley would be an amazing place to help drive a company forward, and we made the leap.
Alejandro: Talk to us about the process of making the leap. Like from “I got this idea,” to “All right. We’re going to make this happen. We’re moving, and we’re starting out.”
Joe DeSimone: Actually, to paint it a little bit more clearly, I was hesitant in the beginning, and I was going to hire a CEO like I did for my other companies. I told the investors I was going to do a sabbatical with my company this time. They said, “Look. If you’re going to do all that, why don’t you lead the company?” I said, “Look, Mr. Investor, Jim Goetz. I’ve read all the stories about how faculties screw up their companies. So, therefore, why don’t I do it for a year, give you a really graceful way to get rid of me, and me a graceful way to back out.” And that was six years ago. So there was a lot of trepidation about doing that. But I had taught entrepreneurship, but I was never on the field with one of my companies. It was polymers, and that’s my wheelhouse. So I thought I would give it a shot and made that jump. But look. There are a lot of similarities between academia and entrepreneurship in that you’re basically bringing people along, which is a lot about teaching. You’re painting a vision for the future, how the world can be different. The fundamental differences are the fact that in academia, there’s very little at the end of the day real accountability and responsibility. When you’re leading a company, when I walk into the parking lot, all I see are car payments, and mortgage payments, and people left great companies to come work for our company. If that doesn’t put a pit in your stomach, I don’t know what will. You don’t have that level of responsibility in academia, and it’s a lot of pressure on you to make sure that everything you’re doing, every day, every moment is on behalf of the whole team here.
Alejandro: Of course, and I understand that there are also some family members in the founding team. So, tell us about this.
Joe DeSimone: Yeah, my son is our Chief Customer Officer. He’s an entrepreneur. He also went to Ursinus College. He had started an e-commerce company. It was acquired, and I was just getting this one started. He approached me about joining the team. I thought that would be amazing. Now, he’s leading customer acquisition. I think the investors hired me to get to him. He’s a scout at Sequoia, and he’s doing a terrific job. Yeah, we’re all in. My daughter’s here. She’s an entry-level position in the marketing team, and she’s done a great job. Yeah, that brings my wife in much more clearly. So the weekends and evenings, it feels like it’s 100% Carbon around the clock. You’ve got to be careful about that.
Alejandro: Got it. What are the dynamics of working with your children, Joe?
Joe DeSimone: Well, you know for sure you’re going to hear what they believe and feel. It’s not couched. It’s direct. I appreciate that. We just had a board meeting, and one of our lead investors and Phil were going back and forth about the details of a particular issue. I think there’s a hutzpah association about being able to be really clear. When you can get to that kind of granular real points without being couched, a lot of amazing stuff gets done. It’s really valuable in that context.
Alejandro: Got it. I remember reading the book The Founder’s Dilemma, and this book talks about the dynamics between co-founders and founding teams, and how when sometimes you bring family members into the equation, it is really effective when you can tell it the way it is just like you would do with anyone else, but in many instances, you may want to take the approach, or you take the approach of not wanting to really hurt people’s feelings. So you’re kind of like putting a wall so that you’re not really being transparent with how you would want to say things or how you think things should be different. So I’m just wondering your take on that.
Joe DeSimone: Yeah. I think it’s spot-on. I also think there’s a huge cultural element. We’ve got multiple leaders here that have family members, actually, in the company, including children that are doing interns, that are taking jobs. In this world of having a no-a*** policy and having a culture of kindness and work ethic all melded together, and all the sexual harassment issues that you hear about in so many companies. Having a family-like environment is a cultural element that I think is unfortunately distinguished, and it’s an important part of who we are, and it’s reinforcing of our values. That’s another important dimension that I think it brings as well.
Alejandro: Of course. Tell us about the early days of Carbon.
Joe DeSimone: The early days of Carbon, we figured some stuff out, and we knew we had a breakthrough approach in 3D printing. It was actually a battle amongst the founders about what we wanted to do as a business then. This was in the heyday of the maker movement and desktop 3D printing, and there were a lot of people talking about that. You know, 3D printing as an industry sector is a fairly modest industry. It’s an 8-billion-dollar industry today. It’s half polymers, half metals. That includes the printers, the resins, the materials, the software, and even the parts made. But you know, manufacturing polymers is a 300-billion-dollar marketplace. It’s a very different market, and nobody was doing that. So there was a real battle discussion about where we were going to go as a business and felt that we were going to do the harder thing. There was no road to doing digital printing, at-scale manufacturing. We committed to doing that, and we committed to doing that by owning the intersection of hardware, software, and material science, and not be gated by anybody else that we technologically control our destiny and would go after the whole thing.
Alejandro: Got it. What ended up being the business model that you guys set your eye on?
Joe DeSimone: Well, the technology came through when we figured out how to do this, but probably one of the most innovative things is the business model. We have an amazing board of directors, including Ellen Kullman, who is the Chairman and CEO of DuPont, my lead director, Alan Mulally who is the CEO of Ford Motor Company. Before that, he was CEO of Boeing Aircraft Division, and Jim Goetz from Sequoia, and a few others. But we decided to go with the subscription model. This is the very first piece of manufacturing hardware that’s ever gone out via subscription model. Why did we do that? We did that because we’re staring at, and we know in our heart of hearts, we’re staring at three decades of innovation, and how do you get people, how do you get customers to come into an area that you yourself know you’re constantly innovating and therefore obsoleting what it is you’re doing. A subscription model becomes, I think, the entrepreneurial solution to a whole – when you’re doing physical products to allow you to be future-proof from obsolescence. It becomes the key factor to allow a new wave of innovation without fear of obsolescence. But no one ever had a piece of manufactured hardware ever go out via a subscription model. So we needed to break grounds on that. It’s a connected product. We do over-the-air software upgrades every six to eight weeks. It’s got all the service and support rolled into that and actually rolls out via three-year contracts. That was also game-changing. No one thought we could get three-year contracts. Now, contracts are actually trending towards five and seven years. So, it’s an installed base that’s growing. We have essentially zero churn, and every customer has actually turned out to be a land and expand where they turn from one printer, they figure stuff out, and they’re adding multiple printers with time.
Alejandro: That’s pretty amazing. You were talking about Jim Goetz, and obviously, he’s one of the top investors when it comes to startups. He’s been in the Midas list and all this stuff like multiple times. How did you guys meet?
Joe DeSimone: When I was teaching at the University of North Carolina, I had a number of the women soccer team members taking my class in entrepreneurship. I always would bring in outside speakers into my class. One of their fathers was Brent Jones, Super Bowl champion, tight end, with the 49ers who moved into venture capital, and I got him to teach in my entrepreneurship class. Then my son ended up interning with him in Northgate Capital out here in Silicon Valley. Brent’s really close to Jim, and when we went to get in front of venture capitalists in Silicon Valley there was only one person we wanted to talk to and see if we could get him on board, and that was Jim. We set up a meeting with Jim at Sequoia. What was really interesting, unbeknownst to us, for the previous three years, Jim had been looking at investing at 3D printing and basically wrote off the whole sector. There were no technological innovations that would rise above the bar in his mind, and he passed on the whole sector. But he entertained maybe one last visit and saw our printer. We brought our printer out with us, and he was hooked because he had already done all his homework for the last three years, and we got him on board. That’s how it happened.
Alejandro: That’s amazing. How much capital have you guys raised today?
Joe DeSimone: We’ve raised 680 million dollars since we launched.
Alejandro: Wow! That’s a lot of zeros. Walk us through the different financing cycles and what kind of expectations you were encountering. What was that experience?
Joe DeSimone: Well, you know, in the beginning, when you launch a company, you always focus on what are the biggest risks to the technology and the team, and you have to go after those first. We pitched, and Jim got us out of the gates on our Series A funding along with some North Carolina investors. We quickly got our legs underneath us and built out some more prototypes. Then we were in stealth mode at that point. We wanted to expand, and we got the company set up in California. I went out and did a Series B, and we talked to three groups, and we actually brought in Silver Lake. It’s really unusual to bring a large private equity technology firm into an early-stage company, but we knew a lot of their LPs were going to be our customers, and they saw it. So they came on board. So our Series A and B were all done under stealth mode. Series B had yet another set of technological hurdles we needed to get through to get to our first product including having materials that would have the properties to be a finished good coming out of a light-based 3D printer would also allow us to build a connective product. We were able to hire different people, including our founding Vice President of Engineering, Craig Carlson who was a founding VP of Engineering at Tesla. Everything about the Tesla cars, you know is all electrified and completely and remotely-controllable software, and we built out our printer with the same DNA as a Tesla car, connected product, being able to do our software upgrades. We built that first product out, and then we came out of stealth in a very, what I would call, an entrepreneurial hat trick in that I walked onto the stage as a TED to unveil our technology. At the same moment, I walked on the stage as a TED the embargo on our paper and science was lifted that very moment, and our website went live. So those three things happened within the same moment. We unveiled our technology. It happened to be that Larry Page and Sergey Brin were in the audience at TED, and that launched our Series C financing led by Google Ventures.
Joe DeSimone: And that was used to bring our very first product to market. Once we were able to do that, we got some good traction, and then we brought other investors in including Adidas, and GE and BMW and JSR, a Japanese chemical microelectronics firm. Then once we got traction, and we knew we could start doing manufacturing with Adidas, we did a Series D that was actually a syndicate with some great investors including Fidelity and Baillie Gifford as well as some of the current investors. Then we just did our Series E led by Baillie Gifford and Madrone Capital, which is the Walmart family, Greg Penner, Chairman of Walmart and Temasek, the sovereign funds out of Singapore as well as our current investors.
Alejandro: Got it. Really, really interesting and really exciting as well, Joe. We’ve been talking from Sequoia all the way to Temasek or even Google. So what is the difference, especially for the folks that are listening, the main difference between let’s say a strategic investor versus more like a Sequoia style, VC style type of investor?
Joe DeSimone: One is the genesis of a company and the entrepreneurial tenants. The big decisions we made about having a subscription model, being able to sell resins, the decisions we made on the technology itself, the markets we go after are really, really important entrepreneurial decisions. Now, it’s outlining the metrics for us to be a great publicly-traded company. What are those metrics that allow us to measure and manage our business so that we can be predictable in this new world? For us, it’s the subscription model metrics, including ARR and what markets we’re going after. What are the sizes of those markets? What is our follow-on plan? What are the issues about churn, issues about RPO, Remaining Performance Obligation, and deferred revenue on these contracts? And to really start honing the sequential quarter of a quarter evolution of the company as our install base grows and grows. It’s a really interesting progression. I’m a very competitive person by nature, and so being able to see the things that matter to people as you begin supporting companies, tech companies in particular. And what are the growth scenarios, gross margins been like? We’re watching those metrics evolve in front of us and seeing how we compare to comps in the software world and the subscription world. These are all the things that we didn’t do any of that in the beginning that we’re really honed on right now.
Alejandro: Got it. As we were talking about investors, my understanding as well is that you have something like 200 patents or something like this. How important would you say intellectual property and especially having all these patents in place has been for you guys to get that kind of like, I would say interest from investors?
Joe DeSimone: You know, it’s interesting. There are actually probably two camps. In one camp, we thought patents were really important. There’s another camp, and maybe it’s more of a software camp that was more about just going fast was critical, and they didn’t want to see a lot of equity capital spent on IT. So, as you know, as a leader of a company, you get all different kinds of board perspectives, and you’ve got to make a decision, and the board gets behind it. We decided we needed to be IP savvy. We have over 300 active applications. We’ve got about 60 issued patents now. They come in a lot of different flavors between the hardware and the software and the materials and how we do what we do. I think it’s really, really important in order mostly to give the people, our customers, coming on board with us a clean marketplace to participate in this new approach for making what they want to make. So we’ve been pretty expansive. Being in stealth mode for two years allowed us to be in front of this in ways that caught a lot of people off-guard, including the chemical industry. It’s really important for us to use our IP to have multiple suppliers and making sure that we’re driving the cost per part down by having competition on the chemical supply chain into our network. Those are the kinds of things that we use the IP for.
Alejandro: Got it. How big is the company today, Joe?
Joe DeSimone: We’re about 500 people depending on how you count. We’re located in Redwood City, but we have offices in Atlanta and in Germany and in China.
Alejandro: Wow. Pointing back to what you were referring that the intention at the beginning was to get a CEO and kind of for you to take a back seat. I can’t even imagine the transformational journey that this has been for you. From a leadership perspective, you needed as well to grow at the same pace as the business. So what did you learn in the process of going through that?
Joe DeSimone: Well, I think what’s key is you realize that every moment counts and every issue matters. When you think about things that way, I don’t know that a hired gun would feel that way as intensely as you do as a founder CEO. That saves you lots of time when you operate in that mode that you don’t let things go sideways because you’re guiding it every moment on every issue. I think at that level of tenacity the founder CEOs are distinguished in that regard, and I think that’s been an important thing. I think setting the right cultural elements in a company is really, really important, and founders are uniquely positioned to do that. Look. I hired everyone in the building. I’ve got a huge commitment to them, and it’s nice to see the esprit de corps that we have when everyone sees the vision of where we’re going and the fact that we’ve got the commitments to make it happen. So I’ve grown personally, a lot, but I also realize this is hard work. It’s a lot. When you’re doing important things, it’s not for the faint of heart.
Alejandro: Yeah. I hear you completely. During this journey, Joe, what would you say was – if you’re willing to share. I’m sure that the listeners are going to really be able to learn a lot from it. What would you say was probably the most challenging moment for you? Maybe like a moment that was kind of like a breakdown that led to a really major breakthrough for the business?
Joe DeSimone: You know, I think without being specific, I’ve got a list of those, actually. I literally keep a list. I want to write a book when it’s done more about Entrepreneurship 101 or Entrepreneurship: An Owner’s Manual. I think there’s a lot of stuff that founders and CEOs deal with that you don’t often hear too much about, and it comes in a lot of different flavors. But I would say bringing everybody along on this journey, making the hard decisions is the most important thing. It’s the people side of this. It’s not the tech. Not the money that you’re able to raise. It’s getting alignment on your team and marshaling everybody. When you have the kinds of employees that we have that are very passionate, highly engaged, and a culture where you bring that to the fore, you make better decisions. But it’s not as easy as I think it would be if you were commanding the control and my way or the highway. Bringing everyone along is a lot of work. Those have been critical. And being disciplined and stay disciplined on where you’re going is also really important. Believe in your business model. Believe in the marketplace. Making the right choices about which markets to go after. A lot of dispute about where we’re going to play and where we’re going to win. Going after running shoes with Adidas is the ultimate. Well, it’s a consumer product. It’s a very different profile and medical device. But the tradeoffs on early revenue, the tradeoffs that were like, “If you can make running shoes economically with lights, then the world would be your oyster.” And having the right partner – we’ve talked to a lot of folks in that marketplace, and we are so fortunate to have landed Adidas and a company that believes with us and where we’re going. We made some great decisions that were on the cusp of not being on the right decisions. It’s all about people and the right partners that you bring onto the team, mostly.
Alejandro: Yeah. Absolutely. Just out of curiosity, how do you seek that level of alignment with, for example, at a board level when you’re thinking about direction, and who to work with, or who not to work with, or what direction to take? How do you seek that alignment?
Joe DeSimone: How do you seek that alignment or –
Alejandro: At a board level, everyone has different opinions on the strategy, so how do you rally everyone towards the same, I would say, road or path?
Joe DeSimone: Yeah. Well, boards are all about governance, not about management. I think it’s really great having two former operating company CEOs on our board who understand that viscerally, Ellen Kullman and Alan Mulally, in combination with venture capitalists and in combination with strategic investors. We’ve got a great board. They understand their role. At the end of the day, they’re counting on me to listen, to hear their views, and to make decisions, and communicate those decisions, and create clarity. With a group like that, you’re not going to get everyone aligned, but they understand the decisions you go after and sometimes, they’re good decisions, and hopefully more so than others.
Alejandro: Yeah. Absolutely. Joe, there’s one question that I typically ask the guests that we have on the show an that is, knowing what you know now – you now have been at it for quite some time and an incredible, incredible experience as an operator now. Also, what you saw when you were a professor. If you had the opportunity to have a conversation with your younger self, with that younger Joe, what would you tell him or what would be that one piece of business advice that you would give and why?
Joe DeSimone: I think, generally, that life is short. Make every moment count. You’re going to go at things really, really hard; make sure that you’re enjoying the moments and smelling the roses as they happen. I think there’s an opportunity to – I wish I had spent more time building my network, my personal network. I tell a lot of people now, “Think more about that and cultivating that.” I’ve done well in that regard, but I see a lot of people are very purposeful about it and they’ve done extremely well. I think those are important things. And I would say, believe in yourself and what you’re doing. Enjoy what you’re doing, and the chips will fall where they may. I think a lot of people want to be an entrepreneur, and they don’t know exactly what they want to work on. I don’t think that’s well-aligned. I’ve always been fortunate that the stuff I was interested in mattered, but I was mostly doing it because I was interested in it. I’m glad it mattered, and I’m glad I was able to get resources to make it happen.
Alejandro: Absolutely, Joe. Entrepreneurship is not a job title. It’s a lifestyle. I completely see your perspective. Joe, for the folks that are listening, what is the best way for them to reach out and say hi?
Joe DeSimone: Well, our Carbon website: carbon3D.com is a great resource for people to see what we’re doing. I’m active on Twitter and LinkedIn. Those become great ways. Those that are interested in the future of manufacturing digitally, this is happening. And if you want to advance products faster than you’ve ever done before, and if you want to replace inventory, and you want to join a new way of making things – if you’re a software person and you want to do more than have people click on ads, come talk to us. We’re making a difference in how the world makes things.
Alejandro: I love it. So Joe, thank you so much for being on the DealMakers show. It has been a real pleasure to have you.
Joe DeSimone: Oh, it’s our honor, and thank you for your interest in what we do.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic, and if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.