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Growth Studies

[From the Breakout Growth Podcast with Sean Ellis]

As the Covid-19 pandemic spread, the world learned just how important the mobilization of on-demand manufacturing can be. When a potential shortage of ventilators became a concern, a slew of companies including automobile manufacturers like Tesla and GM put their teams and machinery to work to save lives. At the same time, when a lack of protective masks threatened the safety of healthcare workers, thousands of companies, and even individuals in their homes started sewing. While this pandemic has highlighted the incredible might of global manufacturing, 3D Hubs is a company that had already recognized that there was a huge opportunity to leverage digitization to make manufacturing more accessible and less expensive. 

Speed-to-value is the force powering 3D Hubs, a B2B platform that simplifies on-demand manufacturing, as it disrupts the largest industry in the world. Traditionally, when an engineer designed a part or prototype it would take weeks to find a supplier and get a quote, but using a fully automated process and an artificial intelligence algorithm, the 3D Hubs platform identifies potential manufacturers and predicts an accurate price for delivery within moments. What used to take weeks or even months, now takes just seconds.  

Ask Ferdinand Goetzen, Director of Marketing and Growth why he joined the company and he will tell you it is because he is “wholeheartedly convinced this company will be a unicorn.” His confidence stems from a belief that 3D Hubs has a truly revolutionary product poised to disrupt the $13 trillion manufacturing industry and that they are properly funded to make that happen. Ferdinand will also tell you that it will not be easy: “with such a technical, niche audience if you can figure out things like customer development, user experience, etc, you can be successful, but it’s really a hard fundamental challenge.”

Ferdinand has built and organized a team to meet this challenge by building a deep understanding of 3D Hubs users, and by optimizing growth around the speed-to-value the platform delivers. In this growth study, we will learn more about this approach to understanding users, how the company’s B2C roots have helped drive success, and we will see how a test/learn process helps the business continuously improve value delivery for users on both sides of the platform.

 

B2C beginnings

Originally, 3D Hubs was built as a peer-to-peer marketplace where people with 3D printers could connect with makers in need of 3D printing needs. An interesting concept for sure, but obviously as 3D printers become less expensive and more available to consumers the need for that kind of service diminishes.  Two years ago, the company started looking at the bigger picture and shifted to a B2B model, which included adding new manufacturing technologies to their network and offering solutions to an audience of small and medium-sized businesses.

While the pivot required new approaches to marketing and growth, there was still value to glean from the company’s B2C roots. They already understood the challenges of building a marketplace business and the importance of driving value across the funnel. While finding the channels and tools to speak to a much more targeted audience of engineers would be difficult, 3D Hubs already had a starting point from which to begin this journey and realized this would be critical to their success.

In B2C the end-user is the decision-maker, but in B2B that is not always the case, which often leads companies to employ a long-cycled, sales-driven approach. 3D Hubs faces this challenge every day: The person testing the tool may not be the person using the tool, and neither of those people may be responsible for making or approving the purchase. 3D Hubs knew they would have to understand each stakeholders’ unique role in the decision-making process to be successful, but kept a B2C-like focus on creating value for the true end-users--engineers looking for efficient solutions to production and prototyping--to drive growth. 

By over-indexing on value delivery for this persona, 3D Hubs did not have to create sales relationships with the ultimate decision-makers. Engineers, immediately armed with accurate quotes and delivery timelines, would do the convincing of other stakeholders themselves. However, truly learning how to engage these engineers is a large and continuous challenge.

 

Learning to speak to a clearly identified niche, target audience 

The companies winning their markets in B2B today have clearly identified target audiences, and 3D Hubs is no exception. However, showcasing value for its niche audience of end-user engineers comes with its own set of unique challenges. Ferdinand explains:

What makes this industry different from what most people working in growth deal with is that we have a very specific target audience: engineers with a very technical, no BS attitude, who are not very wordy. We had to understand how these people think and work and how does the product actually impact them? Lots of traditional tactics just won’t work with this niche audience.

While Ferdinand and his team understand that the final decision-maker may not be the end-user engineer, they have found that the aha moment that drives their acquisition cycle is the moment when that engineer is wowed by an instantaneous quote where they had expected a lengthy process. Having now facilitated the production of over 4 million parts, the platform’s AI-based algorithm can accurately quote prices automatically to consistently drive these aha moments.

Certainly, 3D Hubs does take the needs of other players in the decision-making process into account. They create content, for example, that speaks directly to these stakeholders, but equipping the end-user engineer with the information and solution to their specific problem is what drives the 3D Hubs growth engine. The engineer experiencing the aha moment has what he or she needs to convince the decision-makers to move forward with the manufacturer 3D Hubs has sourced for their project. 

Leveraging this dynamic where the engineer drives the sale is a critical part of the network effect that powers this marketplace business, but speaking to that audience in a way that resonates is complex. 3D Hubs uses digitization to create value but exists in a manufacturing world where digitization is in some areas still a developing concept. Ferdinand says, “Lots of our most potentially valuable leads and customer and audience as a whole are in countries and sectors that are quite traditional -- so we find ourselves using the most modern experimentation methods, but the experiment itself is to send a flyer in the mail!” Access to diverse manufacturing facilities with varied capabilities is game-changing for these audiences, as it creates new opportunities for them to bring ideas into production, but communicating this can be difficult as Ferdinand explains:

Here is the thing: We have this huge audience, but 90% have the pain, 80% are aware of the pain, 70% are aware and willing to take action, 40% have all of those and are open to a solution like ours. So educating and penetrating the markets is so important.  

 

In the next section, we will learn how Ferdinand has built a team and approach to growth to tackle these challenges.

 

Building and organizing for growth

3D Hubs derives its revenue from a standard platform model, taking a percentage of each sale. To drive those sales, Ferdinand has hired 12 new teammates to join his growth and marketing efforts in just the last six months. To maximize metrics across the funnel he has then subdivided his team into three core areas:

The Demand Generation Team is responsible for driving awareness for the service through branding, PR, content, and inbound marketing initiatives. The Lead Acquisition Team, which is staffed by growth marketers, nurtures prospects and maximizes conversions through efforts that focus on both acquisition and activation. All channel marketing responsibilities fall within this team’s purview. Finally, the Product Marketing and Growth Team focuses on increasing stickiness, making sure that if a company is using 3D Hubs, then as many engineers within that company as possible are taking advantage of the platform. This team handles retention, returns, and product communications.

Each unit contributes directly to specific areas of the funnel. As Demand Generation pushes the top of funnel engagement, Lead Acquisition builds mid-funnel demand, and Product Marketing and Growth work to make an impact deeper down towards the bottom of the funnel. This has been an effective setup that has supported the company’s breakout growth over the past several months, and Ferdinand intends to continue to expand and strengthen these teams. 

Ferdinand himself is relatively new to the company, having joined just 9 months ago. Coming from Recruitee, one of the fastest-growing SaaS companies in Europe, he started his tenure by getting to know the industry, then building the team and setting up the testing process for data-driven experimentations, which he hopes will fuel the company’s European expansion strategy into Germany, France, and beyond. In the next section, we will explore how their test/learn approach is supporting breakout growth. 

 

A data-driven, test/learn process built for speed

As 3D Hubs pivoted into the B2B space they had to disentangle some of their B2C legacies, but they also were able to take advantage of valuable infrastructure. Ferdinand credits having a strong data team in place as part of the “surprisingly good setup” when he arrived.  This has allowed the team to use data to inform actions as they nurture prospects through the conversion funnel. The team works in bi-weekly growth sprints and takes a very intentional approach to outline experiments and creating and testing hypotheses.

The process works to involve the entire department, which is a consistent trait we find across most high-growth companies. Everyone in the department is always welcome to join the growth meetings, 5 - 6 strategic people are always involved, and 3 - 5 other team members often attend. These meetings set the testing agenda, as experiments are listed, prioritized, and queued into action. The inclusive testing culture takes advantage of the idea that just because you are in one department doesn’t mean you cannot have input into another department; a concept most high-growth companies seem to embrace. 

This open, but disciplined, approach allows the team to test new ideas, consistently iterate, and build playbooks as the business rapidly scales. Ferdinand explains that the challenge is to be data-driven in this approach but to not let “data perfectionism” negatively impact decision making:

Making a bad decision or mediocre decision is usually better than making no decision if you are in a fast-paced environment. Decision making is crucial, perfectionism in many cases is death, and you don’t need to choose between speed and quality. You have the luxury of that choice.

That decision making seems to revolve around a fundamental understanding that their growth approach needs to be shaped around the marketplace model specific to 3D Hubs business. Ferdinand explains, “This is not a Saas product so optimization within the product really comes down to optimizing the checkout flow. So that really lives within the product and we have really good data and metrics to support that.”

 

A platform of the future making an impact today

Manufacturing is a huge industry that is in some respects dated. In areas of the world, and in specific categories, it has not yet fully leveraged digitization. For 3D Hubs this offers the potential for massive disruption, but the company has many difficult challenges to overcome. With fewer channels to tap than their B2C counterparts and a very specific target audience that is difficult to understand and decode, they will have to constantly innovate both in their product and their growth approach to succeed. 

Having an awesome product is at the core of their breakout growth. For manufacturers, this is a platform that seamlessly allows them to extend their services to global markets, and for medium-sized businesses, the platform allows them to compete with industry giants on a more level playing field. To reach these audiences the company must sell two things; an online platform driven by AI that appeals to end-user engineers, and manufacturing services facilitated by that platform. 3D Hubs is methodically approaching both sides of this effort with a growth mindset fueled by a data-driven, test/learn process. 

3D Hubs sees a distributed, digitally-driven future for manufacturing, and Ferdinand says, “We want to be the company leading that change.” 

In response to the global pandemic, 3D Hubs has launched an initiative to help produce face shields for Covid-19. To learn more about 3D Hub’s explosive growth story in Sean Ellis’s Breakout Growth Podcast interview with Ferdinand Goetzen Click Here.

This growth study was created by Ethan Garr & Sean Ellis.

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