Theo Saville has a vision of the world in which one-click manufacturing is the new normal. His startup has already raised tens of millions of dollars to make that happen. The venture, CloudNC, has acquired financing from top-tier financiers like Episode 1, British Patient Capital, Autodesk, and Atomico.
In this episode, you will learn:
- Why stories are better than advice for growing as a leader
- Why to hire specialists instead of generalists
- Theo’s interview process for securing the most effective talent
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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Theo Saville:
Theo Saville and Chris Emery cofounded CloudNC, which enables CNC milling machines to operate autonomously on new production runs, drastically cutting costs.
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Connect with Theo Saville:
Read the Full Transcription of the Interview:
Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We have a pretty exciting you know founder that is joining us. We’re gonna be talking about freelancing building scaling financing. You name. It. Everything everything in between all the good stuff that we like to hear so without further ado. Let’s welcome. Our guest Today. Teo Sail welcome to the show. So originally born there in El London so give us a little of a walkthrough memory lane. How was life growing up.
Theo Saville: Thanks, great to be on the show. Alejandra.
Theo Saville: And sure so I was ah born and raised in London till I was about six years old which was enough to remember a little bit and you know consider it really my home but not um, not long enough to to really get used to us from 6 to 18 I lived in the countryside in deepest darkest Kent. About half an hour away even from a bus stop. So no internet. No nothing. It was ah there was not an awful lot to do besides build things in the garden um or or try and start businesses as it turns out. And from there I went and did engineering at warwick and then finally moved back to London to starc cloud and see when I was must have been 23.
Alejandro Cremades: Hey but you had it in you because you were doing door to door cells you know, like early on.
Theo Saville: Yeah, yeah, yeah door-to-door sales was actually my very first job. Um I was ah for a few months troping around the around the Uk in the middle of winter trying to sell people government-backed to insulation so £400 get your house insulated. And so I learned to convince people to let me into their houses to drill holes in their walls and let them into their lofts to you know, um measure how thick the insulation was from quiet early age and that skillset was extremely useful as it turns out I spoke to about 4000 strangers on the doorstep over a few months
Alejandro Cremades: Ah, what did you learn there about not being shy or not caring. What people are gonna think of you or or that kind of stuff that as human beings we typically deal with where when we go out and try to sell something.
Theo Saville: So yeah I mean ah cold sales is a hard gig as your as your first job but being my first job I was so incredibly enthusiastic just to have a job that I didn’t really didn’t really care.
Theo Saville: So I’d say that speaking to so many thousands of people on the doorstep. Um, it definitely built up my confidence to be able to speak to people face-to-face and you know it taught me that the the fastest way to solve almost any problem is to speak to somebody either face-to-face or on the phone and you know the next job that I had which was in an ebay equestrian warehouse. That involved me speaking to strangers on the phone for hours and hours every day and like you know, most young people at the time I was terrified of picking up the phone I’d much rather send texts to people so that was another seminal experience in more ways than 1.
Alejandro Cremades: Now for you I mean it was quite an experience or a journey before you when at it and and started your own company which we’re going to be talking about in in just a little bit here but but it cannot It was a transition from freelancing to consulting and then to like building your own thing. So. Walk us through all those sequences of events until you know you finally came up with the ad and said hey let’s let’s go.
Theo Saville: And sure well the entrepreneurial journey for me actually started when I was fifteen One summer I was desperate for a laptop but I couldn’t afford one and couldn’t get a good one with good specs and so I was then desperate for a gaming pc but again couldn’t afford 1 and so I gardened for a year to build up the capital to you know, go and buy my own computer and I realized hang on if I buy all of the components individually then I’ll be able to get a better one and I’ll be able to get it faster and then once I’d done that I realized hey this is worth more than the sum of its parts. So I sold it to get a better computer and then I did that again and and again. Then I realized hey hang on I can sell computers before I even have the parts for them and then I can do two-day shipping just get the parts in put it together out the door and that’s actually faster than dell’s putting together computers I only realized that many years later and um, that turned into my first business which was building and selling custom gaming vcs on ebay. Probably built 30 or 40 over the course of a couple of summers and yeah, know that that was definitely and financially helpful. But I learned a little bit about most things about running a business from an incredibly early age. Yeah, how to do financial forecasts and projections in excel I won’t comment on to the quality of those projections from the time. Um, how to do you know marketing how to use Photoshop all about ecommerce dealing with customers. You know on the phone by email etc Paypal um, all of these things I was very lucky to get access to that knowledge from a very early age. So when I started my second little venture when I was 18 and then when I left university.
Theo Saville: And started Cloud Nc It wasn’t a decision. It was just the obvious thing to do because of course I was going to start a business. It wasn’t even the first one that I’d done.
Alejandro Cremades: So then so then what was you know like that the triggering point that led you to Cloud and see that you were like this this is it. This is the one that I want to that I want to go for now.
Theo Saville: And again, it just seemed really obvious at the time. Um, when I was still at university um, a startup call. It startup factory called entrepreneur first approached me and said hey would you like to come join our program. We’ll introduce you to a cofounder around you don’t even need an idea to join. I pitched them on what was a 3 d printing idea I’d been working on at the time and had been trying to patent but between the period of being accepted onto the accelerator and actually walking through the door I fell out of love with the 3 d printing industry and I fell in love with essentially disrupting traditional manufacturing I’d realized that all of the. Most serious and capable manufacturing equipment that is out. There was still manually controlled and I had grown up being used to 3 d printing and high-grade you know consumer software. And I was expecting to be able to click a few buttons and get what I wanted out of manufacturing equipment and I was astounded by how manual everything was once I really got into the nuts and bolts and so I threw away the 3 d printing idea lots of people were doing that and I didn’t believe it anymore and instead took on this. Why don’t we just make cnc milling machines 1 ne-click devices problem. And entrepreneur first loved that and I stood up on stage on day. 1 of the accelerator I pitched out that these machines should be entirely autonomous, not totally manual and my cofounder Chris thought that was a great idea said let’s work together and that was day one of cloud and.
Alejandro Cremades: So what were the early days like.
Theo Saville: And ah, the early days were fantastic. You know when you’re ah when you’re a first time founder founding your first business and you’ve got you know, just like enough enough cash to pay your own way. Ah you have to do everything yourself and everything is a new and exciting lesson. You know. Doesn’t matter if you’re fixing the coffee machine or putting up shelves or you know filing with companies’ house and sorting out your shareholders agreement. Everything has to be done by yourself. So if you like ah solving dozens and dozens of totally unique problems. You’ve never seen before on a daily basis. Then it’s an incredibly exciting time period. So the early days were very much like that twenty thirty new problems in a day have to solve the bowl and then the next day is going to be completely different. So.
Alejandro Cremades: Now for the people that are listening to get it. What ended up being the business model of Cloud and see how do you guys make money.
Theo Saville: So there are two ways that we make money but 1 is by selling metal components such as this this comes out of the first class cabin of a Singapore airlines. Um I want to say um at triple 7 and um. From our factory network and the other way is about to be licensing our software and what our software does is it makes it very much easier to produce highly precise metal components like the one that I’m holding here in my hand and if you can make them in something more into a 1 ne-click manner with no expertise rather than an incredibly expert man requiring dozens of hours of expert effort then you can lower the cost whilst increasing the quality of delivery and speeding up the period in which it takes to get parts to customers. So.
Alejandro Cremades: Now how did you go about capitalizing the business because obviously once you go through an accelerator they they help you all across the board. But obviously they they give you access to to financing to really understanding what needs to happen from 1 financing cycle to the next. So how do you go about. Capitalizing the business.
Theo Saville: And so we approached it in I want to say ah but manner similar to how starting a business goes in that we always had a fundraising problem in front of us and we always just found a way to solve it and that has led us through a fundraising journey that has seen us take on. Angel capital family money family office money Venture Capital Corporate Capital Venture debt um every conceivable type of capital except for private equity I think that we’ve we’ve now taken on and so we went out and did a traditional seed round raise which is um at typically backing the people more than the idea. Um, but that netted us our first £2000000 aside from a few hundred k that we managed to raise through our accelerator in a family and friends network then a couple of years later 2018 came our series a led by Atomico £9000000 that was enough to really start scaling up the tech team and start striving for product market fit. Um, then. That landed us actually right to do our series b just as covid hit I was actually due to get on a plane to the states. Ah one day before sorry one day after the us travel ban came into effect and so suddenly I wasn’t going into the states anymore and we had five months of runway and an enormous burn rate and no one was writing checks anymore. So that threw us into um, a pretty extraordinary state of survival mode where we need to massively slash our burn and find capital in a market where nobody was writing checks and that was when we discovered the family office market. Um, and the ultra- high net worth market and we put together a series of convertible notes.
Theo Saville: Led by our existing investors and then bringing on family office capital who at that time were writing checks even when vcs weren’t and that took us to the point where the technology has sufficiently matured that it caught the attention of the biggest corporates in ourpace um on the software side Autodesk and on the manufacturing side Lockheed Martin and Autodesk let our series be with many again family office and existing investors following through um ah to take us to where we have today. Oh and government funding. Um, how could I forget the government both through grants and direct investments. So it’s really a full-spec fundraising journey. Which we’ve had the opportunities to raise from every conceivable kind of capital and.
Alejandro Cremades: So. What’s the um of all these different sources I mean for I mean there’s probably a lot of people that are listening now that maybe are only used to Angels or only used to vcs So What have you learn or how would you describe the experience of all these different. You know profiles of of investors that you’ve dealt with I mean what is the difference between one another.
Theo Saville: For example, so that’s a really interesting question. Um, if I had I’m just wondering how to break it down. Ah I think that there’s a really key difference between say ah venture capital and. Family office and ultra high net worth money and corporate money. Those are probably the 3 really important buckets that I would stack them into I think an entrepreneur going to raise Angel Capital um, ah needs to understand that Angels are looking for different things compared to say a venture Capital Investor. Ah, Vc is looking for a fund Returner. You know they’re looking for their £1000000 investment in you to net them £30000000 that will cover their entire fund because the gains in say seed stage are so geared towards those massive wins that cover all of your losses. As you get to a much later stage say Series B or growth that expectation becomes more like we expect you to return 3 to 5 X but it’s going to be a lot less risky and all of the companies in our portfolio are broadly going to be doing something like that and so you’re going to be raising a lot less off vision when you’re in growth. And a lot more off your financial model and your customer references and just the fact that you have a machine that if they pump more money into then even more money will very reliably come out whereas at the seed stage and this is probably the better way to break it down the seed to series a stage.
Theo Saville: Betting on you as founders and then they’re betting on your business model working even though there’s probably many things that are not yet figured out. You don’t need a complete functional business before you can actually start going out and raising that kind of capital raising corporate capital is very interesting because it takes such a long time. You can raise a seed round in less than a month. Um, if you’re really really quick or probably it’s a few months to get to a term sheet and then another 2 to three months to close whereas the process from raising capital from a corporate can be a 2 or three year effort where you’re gradually building up a relationship. You’re learning how the business works who are the key stakeholders. Who needs to sign off with corporate m and a in order for them to write a deal of x amount and then the due diligence and the legals will be much lengthier as well. Um, that is a really long process but it can be very fruitful, especially for a deep tech company such as ourselves and angel money and family office money. There’s a. Hundred different flavors. Everyone has their own motivations. Everyone has their different levels of diligence expected. Everyone has their own return profiles and the best thing is simply to find the ones who fit the particular stage of the journey that you are at okay.
Alejandro Cremades: Now for you guys How much capital in total have you guys raised to date.
Theo Saville: And at this point if we include our government grants then that’s about $72,000,000 so
Alejandro Cremades: Okay, now in terms of you know to to get a good understanding of the scope and size of Cloud and see today I mean how big are you guys I mean anything that you can share in terms of number of employees or anything else that you feel comfortable sharing.
Theo Saville: Sure so we’re 105 employees today. We’ll probably cap out at around 150 employees by the end of next year so we’re on a reasonably aggressive growth trajectory even as the market is shedding talent.
Alejandro Cremades: And in that regard I mean it sounds like you guys are growing very fast on the on the team. What have you learned about developing yourself at the same rate or the same speed in which the company is you know also going because you know in many instances you see that. Founders are outpaced by the growth of their own business. So How do you do you know?? um in order to avoid that from happening.
Theo Saville: And that’s a great question and I’ve actually been reflecting on this ah over the weekend. So. It’s great timing. It is so easy to be outpaced by your business because as your business grows you start hiring increasingly experienced people who’ve had the decades to know what to do. And it’s unreasonable to expect you know, ah early founder to have that kind of experience because there’s just no time to build it and what that means is we need to learn from the successes and the failures of others and the best way I’ve found to do that is to have a very broad network of peers. Um, in several entrepreneurs sort of ah societies which meet up multiple times per year say eighty sixty to 80 entrepreneurs all on a four day trip somewhere where you are networking with and discussing with your peers people who are on the same journey as you are who are multiple stages ahead. You on that journey and can reflect and share their own experiences and those who are also earlier on the stage who you have the opportunity to explain what you know to and it’s that very act of explaining what you know which often sharpens your own thinking to the point where you can deploy it more easily yourself. So to me, it’s always about find people who have a lot of relevant experience about where I am going and speak to as many people as possible who are on that journey and in that way I can collect all of their experience and I can deploy it within the confines of cloud andc.
Alejandro Cremades: And any a specific methodology that they that that that you typically have learned to apply when it comes to collecting all that info in a way that is easy to digest for you and then I’ll show in a way that is easy to implement you know for your own journey and for what you’re dealing with.
Theo Saville: Sure so the format that um the societies that I’m in which are um ice snowball and founders. Ah, one of the key things is. We do not give each other advice. We only share stories because advice is um. Is often devoid of very important context. Um, as to why a decision was made but a story that includes experience that is relevant will often include all of that background context in a way that is really really easy to absorb. If I ask a founder you know what is their philosophy on hiring and they say only hire experienced people that’s kind of useless because I don’t really know why that statement exists. But if they were to say oh I only hire people with you know 30 years of experience and specifically what I need that person to be doing and I don’t take risks on generalists. Because I hired a bunch of generalists and they made all of these mistakes but they looked like they were working very hard. Um, even though they were creating lots of problems see that kind of story is very very memorable like I I heard this from someone many years ago and I can just you know, call it out just like that and it’s embedded in my mind. Um, but but advice is not memorable at all. So.
Alejandro Cremades: I Hear you I hear you now imagine if you were to go to sleep tonight and you wake up in a world where the vision of Cloud and C is fully realized what does that world look like though.
Theo Saville: It’s a world in which let’s say this I want to design something and I want to get it made. Let’s say that it’s this water bottle pretty easy. Um I would be living in a world in which I can use a natural. Language processing way of designing 3 d objects a bit like Dali can make paintings for us based only on our language input I would expect that to exist for 3 d design I would expect whatever that software designs to automatically design components that are. Manufactureable and relatively inexpensive and well- optimized to make and then when I actually want to make the thing I would expect to just press a single button. Having said this is how many I want this is when I want them and this is where I need them to be and I press that button and then they turn up in days. Ah and they are of course perfect because. Wouldn’t they be perfect manufacturing has become simple, easy and invisible and I’m then able to sell them or perhaps I never even touch them. You know maybe I even never even see the product that I design myself it simply gets dropshipped directly to my customers effectively a world in which I can create whatever physical object I want. As easily as I can build a website from scratch in a day today that is the world of manufacturing and engineering that I want to live in one in which it’s possible for anybody to realize their real-world dreams and our mission is to make that world a reality.
Alejandro Cremades: And.
Theo Saville: Ah, the unfortunate reality behind that is it is extraordinarily difficult to build the technology to achieve that very simple goal. For example.
Alejandro Cremades: Yeah, no kidding now the industry as a whole I mean where do you think it is you know with regards to being able to wake up in a war like that.
Theo Saville: And I think we’re probably 3 to 4 decades away from being able to wake up in a world like that one in which generative design simulation and manufacturing technology have taken so many leaps that we have 1 ne-click generic manufacturing with automated supply chains where we click the button. And the software service that we’re in queries the global you know network of factories finds an assembly factory that is suitable and then that factory queries discrete component factories. You know an injection molding factory for example says I can make these parts and then it queries a machining factory that says I can make your molds and. Our requirement progresses through the world manufacturing network without anybody actually needing to speak to each other because the software is orchestrating the entire supply chain that is a really long way away and it requires some massive technological leaps and but the most important leap that starts everything off that makes it all possible. Is. You need to be able to take a 3 d file and you need to be able to give it to a piece of software that can tell the machine what to do in order to make that that kind of software does not exist today. Everybody assumes it does but it definitively does not exist and that is the type of software that we are building here at cloud nsy.
Alejandro Cremades: Now One of the things that is a very important is for for any company. You know it’s so about people and when it comes to people and to vision and to what we’re talking about here is to make sure that people you know continue to be excited about the future that they’re living into so. When it comes to vision. How do you make sure that that that it really gets embraced by the team in a way that everyone knows in which direction you’re all rowing towards.
Theo Saville: I find it’s very important to be able to boil down one’s mission into a simple snappy statement or a single sentence 1 ne-click manufacturing so that anybody can make anything as easily as it is to make a website today that is very easy to absorb. It’s very easy for the layperson to understand what it means and it’s very easy to remember and if I start repeating it everybody in the business starts repeating it. It makes it into our all hands into our marketing materials a statement like that very quickly becomes pervasive through the business. Everybody knows that they are heading towards the goal of making manufacturing a single click process I press a button I get 1000 of these easy. Everyone will have a slightly different interpretation of what that means inside their head but it’s correct enough that it will do the job.
Alejandro Cremades: I Love it now. Obviously you know you’ve been a founder for some time you’ve you’ve had multiple gigs. So if I was to put you into a time machine and I bring you back in time I bring you back in time to perhaps that moment that you are still a university. You know and you were wondering. Okay, let’s see what what’s going to be next. No and you had the opportunity of sitting down that younger teo and giving that younger tail one piece of advice before launching a business. What would that be and why given what you know now.
Theo Saville: So that an interesting question and the thing is if I had the ability to go back in time that wouldn’t actually be the point in time that I would go to I’m pretty happy with my school and university career I’m really happy with the outcomes I’m very grateful for the luck that. Took me to entrepreneur first and then took me into found in cloud and nc sorry cofounding cloud nnc where I would I think go back to would be just after raising my seed round and I would take a book on hiring called the a method. And I would beat myself around the head with it until I promised to read it 10 times over because all of our greatest successes and all of our greatest failures have typically revolved around picking the right or the wrong people. Um a business is ultimately just a pile of money. With a bunch of people to deploy it and depending on the quality of the people. The quality of the outcome and the quality of your business will be so vastly different and so to me the founder Ceo’s job is only 3 things. It is defined the vision for the business. It is raised the capital in order to enable the vision and it is hire the people to execute on the vision. Those are the only 3 things that actually truly matter everything else is secondary and so all effort as I see it for myself goes into vision strategy.
Theo Saville: And sorry fission fundraising and talent anything else comes behind that and I’d say that it was the talent area that I should have increased my skill set in the fastest. So.
Alejandro Cremades: So let’s double click on that. So let’s say you were able to go back. You know again to that younger tail and give that younger tail maybe like 3 questions that you should ask someone? you know when you are you have to be in front of you for the first time and you want to know whether they are the right fit. You know for you and for deploying that capital and for execution what we those 3 questions that you would hand over to that tale so that you know that younger tail can always ask those questions.
Theo Saville: And okay so I’d say that it’s it’s not 3 questions but that’s actually part of the problem. Um I think I probably assumed that it was 3 questions and it’s not um, our hiring philosophy is that for every role that I bring on now I don’t write a job description of responsibilities.
Alejandro Cremades: Okay, go for it.
Theo Saville: I write a very short document of what are the outcomes that I need this role to achieve. For example, it could be triple r manufacturing revenue every year for the next five years whilst raging raising margins by a factor of 3 at the same time that is a black and white measurable goal. That only the top five or ten percent of candidates in the world would be able to achieve so I will then make a list of another maybe 2 or 3 things a bit like okay Rs that I would expect that candidate to be able to pull off then I would sit them down. Um, in a critical second phase interview where we go through their cv and we look for evidence that these things have been achieved by the candidate before preferably on more than 1 occasion because if the candidate has. In previous roles tripled manufacturing revenue year on-year whilst increasing margins. Ah as long as ah, well as a host of other things then probably they’re going to be able to do it for us as well. They’ve got a playbook. They’ve got the experience and they just need to a new place to unleash their talent and creativity and deploy it again. Um, but that is the. Very high-level philosophy. It is find people who have already done exactly what we need done because they will probably be able to do it again and the classic mistake that startup founders make especially early stage ones make and I was absolutely no exception.
Theo Saville: Is hiring extremely smart capable generalists who can figure out any problem but how quickly will they be able to figure it out slower than someone who’s already done it before will they make expensive mistakes along the way or most definitely and will those mistakes possibly sink your business. It may happen and it probably will happen. So. That’s why I consider it so important to hire people who have that experience Now. So.
Alejandro Cremades: I Love it so tail for the people that are listening. What is the best way for them to reach out and say hi.
Theo Saville: Ah, probably via Linkedin message yeah Linkedin message. Um, and if it’s ah something that’s say industry specific that I may really be able to help with then happy to chat? thanks.
Alejandro Cremades: Amazing! Well hey tale thank you so much for being on the deal maker show today with that is it has been a truly an honor to have you here.
Theo Saville: You know, likewise really thrilled to have had the opportunity to be on the show. Thank you so much.
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