4 Surefire Tips to Strengthen Your Startup
MIT is well-known for educating engineering geniuses. But Somerville, Mass.-based 3D printing startup Formlabs’ fast growth suggests that MIT may produce some business geniuses as well.
Formlabs, which makes $3,299 3D printers using stereolithography, was cofounded in 2011 by Max Lobovsky, a graduate of MIT’s Media Lab, and Natan Linder, a serial entrepreneur born in Israel who worked at Samsung and is currently earning his PhD from MIT. Linder--who helps FormLabs raise money and recruit talent--got wind of a project initiated by Lobovsky and a classmate, David Cranor, to build a better 3D printer.
Formlabs thinks it has met that challenge with its Form 1 3D printer. Now, the company is growing fast. It now employs about 42 people and its offices occupy some 15,000 square feet of space.
Investors are eager to get in on the action. Formlabs’ Kickstarter campaign for the Form 1 raised $2.8 million from over 2,000 backers. And in October 2013--by which time it had shipped over 900 Form 1s -- it raised $19 million from DFJ Growth, Pitango Venture Capital, and Innovation Endeavors.
I met up with Linder and Lobovsky, who offered four tips for getting your startup on solid footing.
1. Exploit good luck.
Luck happens--sometimes it’s good. When you get good luck, move aggressively to take advantage of the opportunity.
Consider the story of how Formlabs landed Lotus Development founder Mitch Kapor as an investor. As Lobovsky explains, “Natan and I were pitching a venture capitalist at Legal Seafood in Harvard Square. Kapor sent a tweet ‘I am overhearing two entrepreneurs pitching 3D Printing.’”
Formlabs saw the tweet and realized it was about them. So the cofounders pounced. “David found Mitch’s email address and told him that we would like to talk with him the next time he was in the area. He said he didn't know anything about 3D Printing but after we spent an hour with him, he realized that 3D printing was at the same stage as PCs were back in the 1970s. He was in,” Lobovsky says.
2. Hire great people.
If your startup is growing, you soon realize that you can’t do all the work yourself. Instead, you need to hire great people and shift some of the work to them.
But how do you know a person is great for your startup? And how can you convince a great person to take the pay cut that usually comes with working for a fledgling company?
As Linder says, “We're hiring great people in hardware, software, engineering, sales, and marketing. We want people who are hardworking, diligent, and smart. And they should be so passionate about what they do that they’ve got, say, a side business from their full-time job that proves their interest and ability.”
Formlabs believes it’s in a solid position to attract top talent. “Why wouldn’t someone want to work here? We're in an industry that is growing fast--to help companies do rapid prototyping--and we're getting tremendous media attention,” says Lobovsky.
3. Make each employee a leader.
Once you’ve hired great people, how do you keep them motivated?
Linder and Lobovsky strongly reject the top-down hierarchy that Linder disliked so much when he worked for a big company. As Linder explains, “I hate the word management. We don’t have a CEO. I don’t believe that the co-founders should create a culture and make sure that everyone fits.”
Formlabs wants each employee to be a leader. “We want our people to figure out what they ought to be working on and how to solve problems. We think that each person brings values and culture that get blended together into the Formlabs culture. And we want all our employees to be so busy that they can each hire their own interns,” explains Linder.
4. Motivate different talents.
If your startup has different functions, like engineering, sales, and marketing, each arm of the operation is motivated and manages itself differently.
Formlabs--which employs engineers trained in software, electrical, and mechanical fields as well as personnel specializing in materials, marketing, and sales--figured out that people whose work was mostly in their minds would operate differently from those who function more in the physical world.
According to Lobovsky, “One of the things I learned is that we have to get the most out of different people who are working together closely on location in a fast-paced environment. Our teams are small, and it becomes clear who is contributing and who is slacking off. And we change the teams fast if needed.”
Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.