Podcast: Desktop Metal’s comeback and the future of binder jetting in manufacturing

RS: You elevated the long-time Chief Operating Officer up to the CEO role, so he’s been with the company a very long time, knows everything intimately—there’s not going to be a learning curve there, obviously.

BW: Yeah, and more importantly, I think if you can just think about going through this from the perspective of somebody who’s been at DM for five, ten years—right?—through an IPO and two potential acquisitions, I think we would not have done this without this almost universal, to-a-person belief that Tom, you know, really put his neck on the line to make this happen. We wouldn’t be here without his leadership. So having that out of the gate, you know, it doesn’t get you all the way there, but I don’t think you could deal with a situation like this without that confidence in the leadership. Because there’s just some real talent that would have gone on to other things, since, obviously, there’s a lot going on and moves people can make laterally. So, very, very excited about seeing Tom at the helm.

RS: That’s great. You mentioned earlier the idea that because of all the things going on, there wasn’t the ability to do this standard sort of knock-on-the-door purchases—pick up a piece of software company over here or a niche company over there. Do you see room for acquisitions to complement Desktop Metal in the near future?

BW: I think that’s one of the things we’re trying to get away from right now—the sort of buy-and-build model. And, you know, there’s really only one key word at DM right now internally: focus. We’ve been pretty clear—we’re not distressed debt investors or private equity. We’re really deep growth investors, and we’re looking to focus on the core technologies that we bought.

That said, if there are transactions that would just be easier to acquire because they’re complementary and help in that process, we’re certainly open to it. But the core focus is on organic growth. And there’s a lot—I mean, I think there’s a really great business there at the core. So just refocusing the spotlight on that is, I think, pretty exciting.

RS: The blog post you put together comparing the opportunity here to Bell Labs—I also think about Xerox PARC, or several of the Skunk Works-type programs over the years, like Lockheed with the original Skunk Works—these very effective small organizations that have been able to really drive innovation. How do you see Desktop Metal being that sort of company over the next several years in manufacturing? What did you see that felt like an innovation hub to you?

BW: Yeah, and, you know, the comparison is purely a personal opinion—just my view of fitting that in. It’s not in our business plan to build, you know, another Bell Labs. But I’ve always been fascinated by how so much innovation could come out of one place over the course of the 20th century. Is there something in the water? Is it the way that people interacted? So it’s always been sort of a passion of mine to look at that.

One of the conclusions I drew from that is, you know, AT&T had a 90-plus-percent monopoly in long-distance telephone wires, right? So there was an ability to give R&D this whole mandate: we need to move the signal from New York to San Francisco faster. Not, “Wouldn’t it be great if we were at the dawn of the information age and invented a transistor?” It was more, “We need a better repeater so we can extend the signal in less time.” And it just so happened that it was a material scientist, a quantum physicist, and, you know, all these people—it wasn’t one apple falling on the head and you discover gravity. I think that’s kind of a myth.

I wanted something pretty visual, if you will, to get people to understand that we have this new business model where we’re going to work backwards from the application. So instead of a technology—a solution in search of a problem—we’re asking: is there anything with this technology that could solve the problems we’re already investing in? We’re doing a lot of stuff in energy transition, semiconductors, and advanced manufacturing. So that was the initial approach. I think Bell Labs is the right conceptual framework for how the company can think about that end-market problem and then pull the technology innovation to help get to that solution.

Then you can really start to rationalize the budget you put behind it and begin to quantify and measure the ROI—to be a lot more systematic in the approach, versus the other model, which is really like, “Wow, wouldn’t it be great if binder jetting could do this?”

RS: There's always sort of a criticism of the additive market as a whole — as a solution in search of a problem. Not every company, not every application, but it was, “Can we do this in additive?” Well, the answer was usually yes, but why should you? There are definitely use cases. You look at hearing aids, you look at certain high-tech — like you mentioned — energy. There are a lot of these really unique, niche applications that absolutely wouldn't be possible in any other way. There was also a lot of work being done on, “Well, can we stamp car fenders out of this one?” Yes, you could. Why would you want to?

BW: We’re really moving away from that. And so, if you look at, again, you know, sort of going back to coming out of biotech, it’s just basically, you know, all about the new chemical formulations and things like that. Then you take it through this long development cycle, through multiple trials, and then ultimately to an FDA approval.
I see this really as a material science company. If you look at what’s happening in academia with this technology in various ways — which the Nevent X platform, I think, we want to get out there more into the university setting — you’re seeing a lot of problems being solved that only binder jetting can do.

And binder jetting isn’t unique to that. There are other additive manufacturing technologies that are really strong in other applications that binder jetting just isn’t appropriate for. But I think the key interest for us is that it’s one technology that’s already been sort of proven out — not specifically binder jetting, but additive in general.

Looking at Tesla or SpaceX — or the mentality of “how can we greatly increase the shots on goal and lower both the cost and the cycles of learning, while increasing the number of cycles of learning and decreasing the time?” — I think a lot of traditional large Fortune 500 manufacturing companies aren’t even kind of aware of how a lot of those problems got solved. You just see the rocket coming back down and landing, but you’re not realizing, wow, all of these little tiny tweaks and innovations and problem-solving that additive has to play a role in.

There are a lot of core engineers inside DM that were very much involved in the beginning of that — helping the Teslas of the world sort of game this out. So if you accept that, then if you can create a platform that can systematically iterate through different formulations, different binders, different ways of moving the process from the printer to depowdering to the furnace — because all of that goes together — there’s a tremendous opportunity to extend the work being done in academia and test if it can be scaled into production.

And you don’t have to put all your eggs in one basket and say, “Oh, we need something that can be scaled into production today,” like you were saying with the car part — you know, an aluminum door for GM or something like that. You can go out there, and if the TAM is big enough for a Northrop or a Hitachi or whatever the company may be, you can set up joint development agreements to explore that.

You can do it more as a service with this technology and just be the best at running those processes. The old model was, “Okay, let’s take all this equipment, put it at the customer site, and support them with it.” But they’re the ones tinkering with it, modifying it, and doing all of that stuff — and that’s a difficult business model to scale.

RS: Other than being metal, I thought that was one thing that always separated Desktop Metal from some of its competitors — its focus on material science, its focus on working with clients to come up with unique alloys, things that could only be sintered in the machine or only be bound in the machine. So there was that tradition of pure innovation — customer-facing innovation — that existed in the company before. So it sounds like…

BW: That’s what we saw in it. That talent is still there and intact, and it’s just like, can you put a process around that — how do you do one and not the other? Like, you can’t just be some sort of open-ended, “Let’s look at the world today and say, well, how do you know if you should be focused on titanium or on some applications in silicon carbide?” How do you go about building a framework for evaluating an ROI around each of these things?
So I think pulling that from an application gives you that, “Okay, if this works, here’s the present value of what our economics to that invention would be long term.”

The companies we’ve spoken to through this process don’t want to be the ones making the tweaks with the machines and all that. And if your customers are doing that, right, you can’t scale that benefit to other customers without then licensing your own technology back to yourself.

So it creates this — I think what’s really interesting about this space is that everybody’s trying to get awareness up, because there just isn’t awareness of what this technology can do and what it’s capable of. So everybody’s in the same boat in that sense. If you can get that up, there’s this positive feedback loop between the people who’ve already bought into the technology and their customers throughout the world.

We’re not going to be going out and seeking to work — you know, we had a call yes terday with a healthcare-focused titanium implantables company that has relationships with spine surgeons in Australia. We’re not going to be the company that takes those guys out to dinner and talks to them about 3D-printed titanium parts.But we definitely want to be at the table to say, “This is why the equipment that our customers believe in can deliver in a reliable and repeatable way to that end market,” together with our customers. So that’s kind of been the new approach.