Sep 23, 2015
The transition of modern software businesses from an upfront, expensive license fee to a monthly subscription model started over a decade ago. Salesforce led the charge when Marc Benioff declared “The End of Software.” He introduced a distributed software model, making customer information available to salespeople out of the home office, in the field.
This was transformational, adding huge efficiencies to sales processes and, thereby, revenue for many of Salesforce’s customers. The SaaS model has since transformed many sectors from human resources (HR) to word processing, yet one very important space has yet to enjoy the impact of distributed software and a services model: design and manufacturing.
Manufacturing accounts for almost 16% of GDP, and computer aided design (CAD) is at core of this space. Almost every physical product you see or touch has been conceived in one of a few CAD desktop software products available. Yet, there has been virtually no new innovation in these tools in over twenty years. New entrants have tried and failed because the most basic features in CAD are an order of magnitude more difficult to create than typical Office-like applications. Still, the absence of modern day software—with features such as mobile access, collaboration and real time updates—in the CAD space has held back efficient design process and has led to costly errors of major scale. A company called Onshape aims to fix this.
Almost three years ago, I began tracking Jon Hirschtick and John McEleney—the founder of Onshape and the original founders of SolidWorks, the leading CAD desktop software—and a team of early investors around them. We were lucky enough to invest in Onshape shortly thereafter, and last spring this full featured, fully hosted, fully mobile CAD product went live to the public.
We believe this is the first CAD product that truly matches the way products should be designed. It is initially free to use and allows true collaboration across remote design team members and manufacturers alike. Just as sales is a remote vocation, design is also a distributed effort. And, just as Salesforce needed a robust, web architecture before it could serve remote teams effectively, a fully hosted CAD product requires a robust WebGL, processing speeds, full mobile access, and intricate knowledge of how the detailed CAD functions must operate. Jon, John and their team engineering leaders including Dave Corcoran, Michael Lauer, Scott Harris, and Tommy Li saw these technologies converging and knew it was time to build the design product of the future. They recognized the opportunity because they had done it before; two decades ago they introduced the first graphical user interface to the CAD world at SolidWorks.
The beta version of Onshape has been very well received. Designers are finally working together seamlessly and increasingly via mobile devices. The product continues to evolve to improve downstream production. For example, they recently added Drawings capabilities, which is a crucial to manufacturing. Onshape is not just making a better CAD system; they are paving the way for a shortened, tighter and completely disrupted manufacturing process.
Companies like Onshape are the reason we at NEA continue to pursue SaaS investments, building on our history beginning with Salesforce 16 years ago and including more recent successes such as Workday and Tableau. The effect of a transformed trillion dollar manufacturing industry is billions of dollars of value up for grabs. We’ve only begun to think through all of the implications—improved processing, new advances in automated production (3D printing), add-on apps, and even marketplaces for manufactured parts. The team at Onshape is at the center of this and we couldn’t be more excited to be working with them.