Hardware startup increases revenue 4 times during the pandemic.
For us, 2020 started in a very positive manner. We just announced an industrial 3D printer PROM IS 500, sealed deals with our fist distributors in Asia, at last, signed the term sheet on €4 M after six months of negotiations with German investors, made plans to expand in Europe, and even hunted a really cool top manager from the industry who was eager to develop our business in the European office.
Then COVID-19 happened, all the major events got postponed and people locked down, eventually, our production in Germany closed too, investors asked to “slow down with signing the main papers”, and our top manager wanted to wait and see as well. All the transactions were practically frozen. While customer engagement was still very active, there were no sales. Everybody started to work remotely. During the two months of working from home, when business seemed to be paralyzed, we focused on our main asset — distribution network. There has never been a better time for it: sales have stopped, people stay at home, resellers get plenty of time to review their portfolio and search for new brands.
Within a month we developed a new application for distributors, new legal and marketing materials, a new engagement model. During the next two months, we signed agreements with more than 20 resellers — several times more than a year and a half before. We got new partners in China and India, a couple of new large distributors in Europe made our position there stronger, and by summer the sales level started to restore. In Europe, summer is a dead season, but we saw that business started to come back to life.
At that point, our investors offered to close the deal with completely new (and extremely unfriendly) terms, which we declined. They explained this decision by the liquidity crisis, revaluation, and higher risks. While for our resellers and us it was obvious that due to the pandemic 3D market should grow as the technology can help diversify or substitute for the disrupted supply chains, simplify and expedite launching new products that are demanded in new conditions. All that allows companies in crisis to change their production and product models and be more efficient to keep afloat.
Besides, most 3D technologies are automated, do not require manual input, and are more clean and safe. Also, there is some hype around 3D printing in fighting the virus: masks, probes, pump parts for ALV, — all that was actively 3D printed by enthusiasts and companies around the world with broad and shiny media coverage.
In April 2020 Google Trends showed that the number of 3D printing requests almost doubled in an instance. We had great expectations from the second half of the year. But truth be told even we did not expect that revenue in Q3-Q4 2020 would be 2.5 times greater than total revenue in 2019 and estimated 4.5 times greater for 2020 in total.
Coronavirus second wave has not brought any substantial changes yet — this time, unlike in spring, there was no global lockdown, most industrial companies continue operation. Besides that government support measures for business (mainly EU) slowly start to take effect, Asia already combated covid and it’s economy keeps growing.
To support that growth we open our first Asian office — in Japan. How did we achieve that?
First, focus. While on lockdown, in absence of business trips, meetings, exhibitions, and other distractions we had a chance to focus on an essential thing for our business — a network of partners. It had an almost instant effect.
Second, the 3D printing market turned out to be one of the few hardware segments that actually benefited from the crunch.
Third, the lack of investment made us review our plans and focus on sales.
Fourth, the team. When all our plans for growth were wrecked in just a few weeks, we were left without investments, and then our new production base did not manage to handle a large number of orders as there was not enough needed experience, during several months the whole team literally without a break solved a bunch of logistic, production, legal, and other issues. Yes, we also launched several new products at the same time, but that was part of the plan.
