Desktop Metal team, Savitz on Smart Lunches, LevelUp grows up

The case for Desktop Metal, the next big Boston innovation company

This past week, Ric Fulop was awarded the “Entrepreneur of the Year” at the New England Venture Capital Associations annual NEVY awards for the VC community (A good event for networking and celebrating the Boston innovation community, but also a bit of a surreal experience, since, you know, it gives out awards to venture capitalists.)

I believe that Fulop is most definitely one of the top entrepreneurs in the Boston-area, but I think a better title to bestow upon him is the “Best Executive to Lead the Startup with the Most Potential for Unimaginable Success.” He is a visionary and a great leader, but what he has built at Desktop Metal, the cutting-edge metal 3D printing developer, is bigger than Fulop alone.

This was quite evident on a recent trip I made to Desktop Metal’s headquarters in Burlington.

Sitting down with Fulop as he went through a presentation of what exactly DM is up to was an enlightening experience.

Fulop is best known as the founder of A123 Systems, the lithium-ion battery maker, and for five years as a VC with North Bridge. While at North Bridge, he led the firm’s investment in Markforged, which at the time was developing a carbon fiber 3D printing system. Fulop even sat on the company’s board for a while. In the past couple of years something interesting happened, Fulop pulled together a team of experts to go after the metal printing space at around the same time Markforged expanded its machines to also print metal. When I asked him about the two companies, Fulop told me that they are a “very different technology” from Markforged. I’m not sure what the exact nature of the relationship between the companies is, but Fulop included Markforged in his slide presentation as one of the companies he has backed as an investor.

The move to conquer the 3D metal printing space is a shrewd one for Desktop Metal. As Fulop pointed out, most of the hardware already being used for this type of fabrication is expensive, cumbersome, slow, and have an array of safety precautions that add time, cost, and instability to the process. The genius of Desktop Metal is that, as its name suggests, it is safe, affordable, and small enough to be used in an office.

The two products that the company announced, one that allows for fabrication on a small scale and one that is geared from the mass-production of printed metal parts have already made massive waves in the industry.

But more than Fulop and the product, it is the people that make up Desktop Metal that, from my experience touring their facility, will push this company into the same conversation as companies such as iRobot, and potentially beyond.

From its VP of software, Rick Chin, to its metallurgists to its lead engineer of sintering, Mark Sowerbutts, everyone I spoke with was giddy with joy to be working on this project. The passion that was evident for what they were building is unparalleled in my experiences engaging with local companies of all sizes.

Sowerbutts in particular, standing in a room surrounded by older sintering hardware — massive kiln like machines used to heat and coalesce the metal — was like a kid in a candy shop showing off the differences from what currently exists in the industry to the products that Desktop Metal has devised for the process.

More than the impressive numbers for the financial opportunity that exists in the industry that Fulop showed off, the 138 patents that Desktop Metal has filed for their innovations is incredible. And that is the product of those outside of the C-suite.

For Desktop Metal, how big they can grow depends on the people involved, and, in my experiences, what Fulop has pulled together is impressive.

As Fulop told me, “Nobody here is wearing training wheels. They’ve gone through $1 billion IPOs and have Ph.D.’s.” While that is impressive, their obvious love for what they are creating will be the defining feature as Desktop Metal grows into one of the areas potentially next big companies.

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This week,  DataPoint Capital’s Scott Savitz said that the company in his portfolio that isn’t getting the type of love it should is Smart Lunches, a fresh and healthy lunch delivery program for school systems.

The reason they are so under-the-radar, according to Savitz is that Smart Lunches’ CEO David Morris is “probably as modest and heads down as it gets and just doesn’t look at all for media attention.” In an email conversation, Morris concurred with Savitz’s assessment.

“All he cares about is providing the best service and killing it,” Savitz added. He also said that Smart Lunches is “somewhere around a million dollars a month in lunches with the start of the new school year.”

Savitz has a ton of praise for Morris, who he said “has built a great business, team, and product.”

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What went down this week…

$50M – That’s the funding number for LevelUp, the payments company that many people I’ve spoken to in Boston over the past few years had worried about. Many of the concerns had to do with the space — the payments space is highly competitive — as well as concerns a few years ago about CEO Seth Priebatsch’s readiness and maturity to lead the company.

While there were a couple public issues a few years ago, over the past four years, Priebatsch and the LevelUp team have been heads down, building out the product.

And that worked as it was it just got a $50 million lift from the likes of J.P. Morgan Chase, Highland, and GV.

I asked Priesbatsch if this was validation to prove the naysayers wrong, but he wouldn’t bite, showing just how far he has grown as a CEO.

What he did say was that “Boston’s a great place to build and grow a fintech startup. A huge amount of talent, a growing hub of activity and 6 long months of winter to force us to hunker down and actually get work done.”

“We’ve really appreciated the support we’ve received from the community here and look forward to using our new space in the financial district to host events, hackathons, learning nights and more.”

BIG Evolution – One of the most important networking events that helped promote some of the biggest up-and-coming startups in Boston was Webinno, which was run by NextView’s David Beisel. Companies like Dropbox and Crashlytics showed off their nascent products at the events that were always packed with a who’s who of tech and innovation leaders.

Webinno evolved recently to become the Boston Innovation Group, or BIG for short, and it just announced that it is shifting yet again to be more subject matter oriented. You can read more about it in Beisel’s blog post on the matter.  It was announced that the first of these will focus on voice computing. Should be interesting.

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Investing in a few key startups alone won’t save struggling American cities

Beyond Boston

Earlier this week, it was announced that Steve Case, AOL founder and chairman and CEO of Revolution LLC, would be bringing JD Vance into Revolution in a special role.

Vance, a principal at Mithril Capital Management, is best known as the author of Hillbilly Elegy, a highly-regarded account of life growing up in the Rust Belt.

The move to add Vance, who will reportedly “focus on the firm’s initiative to identify and back infant companies in cities far from the tech capital of Silicon Valley,” aligns with Case’s current thesis about where innovation can be found. Basically, Case believes that the non-traditional tech towns —Detroit, Cleveland, etc. — are where the most impactful next generation companies will be found; this is something he touches on in all his public appearances as well as in his book, The Third Wave.

Supporting non-traditional tech centers can have two outcomes. One, an investor could find the proverbial “diamond in the rough” startup that has less overhead and greater long-term potential — think Shinola in Detroit (image above) or Zappos in Las Vegas. Second, is the other, more meaningful impact that supporting startups in places like St. Louis, Austin, Milwaukee, and others, could have.

The reason Vance’s book has garnered so much attention has been the focus, after the election of Donald Trump, on how to support these struggling — and often ignored — working class communities across America. People like Steve Case and others believe investing in a few companies in these cities could turn around the downward spiral caused by the loss of manufacturing jobs.

Well that is all well in good in theory, the reality is a bit more nuanced.

If the focus is on building more startup-centric communities, investment in the top tier companies in these locales sounds like a positive shift, but from folks I’ve talked to who are working on projects to support entrepreneurship outside of New York, Boston, and Silicon Valley, that approach is a bit short-sighted. While finding — and supporting — a few winners in places like Baltimore and Cleveland could start a chain-reaction of innovation, the argument is that to create more employment and more opportunities in these developing clusters it takes a wider community of startups.

Which is why CIC St. Louis and whatever new initiatives MassChallenge is quietly undertaking could be better and more meaningful in the long run to helping solve the issues Case and Vance seem to be targeting.

Arguments have been made that it is not worthwhile to build a company outside of Silicon Valley (and New York/Boston to a lesser degree). This argument is built off the idea that only established tech and innovation clusters can be beneficial to founders and growing companies. Which is exactly why Tim Rowe’s CIC expansion and Scott Bailey’s stealthy work to grow MassChallenge’s programs in North America are so necessary. It will not be by the establishment of “pillar” companies alone that will make or break the next wave of growth in non-traditional innovation centers, but by the creation of thriving and supportive communities.

Beyond programs and investment, another opportunity rests with the initiative of a few individuals to bring what I’ll call “grassroots” innovation community building to non-traditional areas. A great example of this would be what the former leadership of Dyn, and, more specifically, what Jeremy Hitchcock and Grey Chynoweth are trying to do to support entrepreneurship in Manchester.

Closer to Boston, another example of this is Ben Pleat, a Harvard student and the founder of a community building startup Doorbell, wrote a long treatise about why he is working with Worcester to jointly test his company’s product and support innovation as that city tries to shift from its working class roots to a more innovation-fueled economy.

As Pleat puts it, “Worcester presents not only an exciting city expansion for our real estate technology startup based in Boston, but also an opportunity to work directly with some of the largest stakeholders in the city’s urban revitalization initiative, ranging from local business owners to energized political leaders looking to transform the Downtown landscape.”

The success of all these initiatives is vital to the continued growth of the US economy, especially in the Rust Belt and former manufacturing centers. However, there are two competing lines of reason on how to do that. There is the Steve Case model of investing in a few potential winners and hoping that there is a trickle down effect. Or, there is the community building and municipal partnership approach that the CIC, MassChallenge, and others are taking.

After observing both the CIC and MassChallenge‘s impact on Boston as well as the potential that individuals can have to make change on a city-wide scale, I’m not so sure if the “spray and pray” method favored by investors is the best way to impact change where it is most needed.

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Under-the-radar

This week, I reached out to Peter Boyce II, VC at General Catalyst and the co-founder of Rough Draft Ventures to find out who he thought wasn’t getting enough love.

The company he pointed me to is LogRocket, a “customer experience platform that helps companies build better online experiences for their users.”

Co-founded by recent MIT and Columbia graduates, LogRocket enables development teams to playback user sessions to identify any issues and bugs that are causing problems with applications.

“They’re testament to what talented young technical founders can build here in Boston as a solution for enterprises and SMBs,” Boyce said. “They are focused on product and helping more of their community go deeper in understanding how UX and software decisions influence impact their businesses.”

All the while, Boyce added, LogRocket is “Quietly learning and building.”

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What went down this week…

Bi-Coastal – Matt Brand is one of the top startup tech guys in Boston. After making his bones at Tabblo, the photo printing company founded by Antonio Rodriguez and acquired by HP, he has gone on to play an integral role in various other local startups. Most notably, he was the tech head (and often the lone leadership in Matt Lauzon’s absence) for Dunwello. Now, Brand has a new gig as the CTO of MoveWith, an active lifestyle application that is based in Boston and San Francisco.

  • According to Brand, MoveWith recently launched audio classes in addition to its in person classes in Boston and San Francisco. “Teachers love it because it allows them to spread their brand and skills far beyond their physical studios while still being able to offer in person classes and connect with their students,” Brand said. “And the rest of us get a way to workout how/when/where we want with great teachers from all over the place.”From what I gathered, Brand is really enjoying his new gig. “What I think is cool and different from a lot of the other players in the space,” he said, “is that we’re not just yoga or just meditation or just running.”