Xometry: Aaron Lichtig, on Custom Manufacturing On Demand

IndustrialSage

Aaron Lichtig of Xometry shares how custom manufacturing is more prevalent than people might realize– and how they’re changing that game.

Danny:

So you can think about us as a two-sided network or marketplace like an Uber or an Airbnb where we’re matching a lot of this highly-skilled capacity that’s out there with the demand that is out there in the marketplace.

Aaron:

Welcome to IndustrialSage, a free video podcast series all about digital marketing for industrial manufacturers. Hear interviews with your peers, and find out how they’re solving the same challenges that you might be facing in your own field. Coming to you from the Optimum Productions studio in Atlanta, Georgia, this is IndustrialSage.

Danny:

Alright, so let’s go ahead and jump in today’s episode. I’ve got Aaron Lichtig here from Xometry. Aaron, thanks so much for joining us on IndustrialSage today.

Aaron:

Thanks for having me, Danny. It’s great to meet you, and we’re big fans of IndustrialSage.

Danny:

Awesome, we love to hear that. So for those who aren’t familiar with Xometry, can you tell us a little bit about who you guys are and what you’re doing? You’ve got a really cool story.

Aaron:

Yeah, for sure. So Xometry, we are a custom manufacturer. We manufacture custom parts on demand for a variety of customers, mostly within the United States, within North America. Now, when a lot of people think of the manufacturing industry, they think of large factories like a Foxconn or someone producing hundreds of millions of parts or finished products for sale to consumers. But actually a big chunk of the manufacturing industry in the United States is in custom manufacturing, and these are prototypes; these are smaller and medium-sized jobs that are done not necessarily in enormous factories or enormous plant facilities, but in smaller shops. There are actually 190,000 small shops around the US who do great work but have less than 20 employees. And so our business was founded back in 2013, and it was launched into the marketplace in 2014.

And there are really two parts to what we do. One is our instant quoting engine, so customers, anyone who has a 3D CAD file of any part he or she wants to make, you can upload that into our instant quoting engine which is a machine learning-driven technology that scans that part, looks at the dimensions as well as other things like materials and finishes that the customer specifies. And then, it instantly comes back with a price for that part based on the quantity that’s desired. And we do this across a range of custom manufacturing processes, 3D printing and additive manufacturing which is how we got our start when Xometry first began. We were focused on that industry. But now we do CNC machining, sheet metal fabrication, urethane casting, injection molding, basically the whole slate of custom manufacturing processes. So the customer comes in, gets that quote from our instant quoting engine. And then, we make that part for them and get that to their door. And a big part of how we do that is through our network of manufacturing partners. So we have over 2500 manufacturing partners that are qualified to manufacture on behalf of Xometry. And when the jobs come in, we post those jobs on a job board that our partners are able to see based on their capabilities along with a price, what we’ll pay them to do that job. And then, they take the jobs; they make it. We guarantee the quality; we inspect it, and then it goes out to the customer who has initially quoted it.

So you can think about us as a two-sided network or marketplace like an Uber or an Airbnb where we’re matching a lot of this highly-skilled capacity that’s out there with the demand that is out there in the marketplace. So let’s say you’re a really skilled CNC shop that’s based in Ohio, but you’ve only got 15 people. You don’t have the big marketing and sales force. It’s going to be hard for you to get jobs with some of our bigger customers like BMW and GE, both of whom are also investors in our business, as well as NASA, US Army, customers of that scale. But we can bring those jobs to you and help the partners make more revenue. And we actually now have multiple partners who are making over $1 million a year just on Xometry jobs.

Danny:

That’s awesome.

Aaron:

Yeah, we take great pride in our ability to help customers make what they need to get made as well as to deliver revenue and jobs and more opportunities to the facilities that are a part of our network.

Danny:

That’s awesome. I love the analogy, the Airbnb of custom manufacturing. And I think, one of the things that I love about it is you’re saying, for me anyways, you hit the nail on the head with, I know a lot of custom manufacturers that are like you mentioned, the 190,000 and the less than 20 employees. That whole sales and marketing effort can be really challenging in terms of getting their name out there. And so I think that’s awesome how you guys are stepping into that void to be able to help provide value and visibility to be able to offer that service offering. And I love the fact that on the front end, from a customer standpoint, that you’re making it really easy. So if I’ve got a part that I need that we can just go online and, on demand, put the CAD files up there, and boom, turn that around, I think that is really awesome. I would imagine that the time that you’re able to minimize that time from the traditional experience of saying, hey, calling up a custom manufacturer, let me send you over these CAD files; get back to me in a couple days or whatever on what this might look like. What’s that time that you’re seeing, that reduction in terms of the turnaround time?

Aaron:

It’s a big reduction. Literally for hundreds of years, custom parts manufacturing required you to deliver some kind of design or file to a specific shop or spend a lot of time on the phone going back and forth, time spent quoting each job manually. But with the rise of digital and our platform–and there are some other platforms that instantly quote or give fast quotes out there as well. But what we’re able to do is, we can shorten that quoting time. There’s no back and forth; there’s no sending Excel files and CAD files around. You just upload your file to our secure site. That price comes back to you literally within seconds, and that’s a price that we’re going to stand behind.

Danny:

Okay.

Aaron:

Yeah, so you get that price. You know what it is. If you want to get it, we have, in some cases with some of our 3D printing processes, we can get you parts in as fast as one day, usually within a couple days. And so when you take out that time that you’re saving on the quoting as well as the fast production time that we have, you’re getting those parts in hand very quickly. As innovation and iteration cycles have gotten a lot faster in general over the past few years, our goal is to enable companies to do that as fast, as cost-effectively as possible with very high-quality work. And the companies that are able to do that are going to be the ones that win in the market because their products can get out there faster.

Danny:

Yeah, and really jumping on the whole digital transformation train, if you will, but a sense that you guys didn’t have that transformation; you were essentially born in that, born of that. And I think it’s such a great value that you’re providing, and to promote from a supply chain perspective, how fast we can help all of these other manufacturers to be able to get to market faster and help to solve the challenges they have for their clients and really shorten everything across the board. I think that’s absolutely fantastic as well as also opening up the opportunities whereas I would imagine that sometimes it can be a little difficult or a little challenging, instead of talking to one custom manufacturer, and they’re not a fit; let’s talk to these guys. Okay, they might not be a fit; let’s talk–hey, we’re able to send that out to a whole list of qualified companies and do that much faster. And so the name of the game, obviously, is speed. Iterate faster, better, cheaper, right?

Aaron:

Definitely, yeah. We want to do it faster, and we also want to give you, with our machine learning-driven model, the instant quoting engine as we call it, it gives you a price that should be very fair and very efficient out of the gate. And within custom manufacturing, there’s a wide variability in terms of the kind of quotes that you get for a particular job. But what we do, our model trains on existing files that we have. And the more files it sees, the better it gets and the closer it gets to what we think the real market price is. So when you come to Xometry, you know you’re getting a really good price. It’s not a swag that somebody is making up. It’s something that’s actually driven by technology. So there’s more efficiency on the pricing front as well. It could save you some time there. But yeah, our goal has always been to help folks manufacture great parts as quickly as possible and have them there on demand.

Danny:

I love that. I love that model; I love the technology and how it’s all digital from day one, from the input and making it a lot easier. So bearing that in mind, we were talking a little bit about digital marketing. How are you guys–because I imagine, you essentially have, if you think about it, you really have two people that you’re reaching out to. You’re reaching out to A, custom manufacturers to help to build that network, so that’s one outreach in sales aspect. And then, another one is, obviously, the other manufacturers who need custom manufacturers. So what does that look like for you guys?

Aaron:

Yeah, so we do think about those two audiences differently. On one side, our target is design engineers, mechanical engineers at all levels. We work with some of the biggest companies in the world. We also work with individuals who are trying to prototype ideas. We welcome everybody. There’s no minimum order quantity or dollar amount on our platform. Anyone can quote work from us. So on one hand, we’re trying to reach that target as efficiently and effectively as possible at great scale, at national scale. We’re primarily in the United States. We have some business in Canada and Mexico as well. And on the other hand, we’re trying to reach high-quality partners. We call them partners. These are the shops that qualify to be a part of our network, so we want quality leads coming in. We then qualify them; they make a test part. We do an assessment of their capabilities, and then they start off, if they pass that, with smaller jobs and work their way up as they prove that they’re able to deliver for our customers.

So there are two separate channels; there are two separate targets. So there are different tools that we use for each of those. In both cases, the majority of our marketing mix is digital. But we’re really looking at how can we– we think about the See-Think-Do-Care model which is a model that we use. I worked at Google for six years on the marketing and sales side. That’s the model we used there. Looking at, within each of those audiences, at people who are in the See audience are ones who don’t really have any awareness of what we do. How do we introduce our concept and our value? The Think audience, those are people who, they may know of us, but they need to be persuaded. They’re thinking about their decision; how do we effectively influence them? And then, Do, these are the people who, I’m ready to buy right now. How do we get in front of them as efficiently and effectively as possible in order to make them a part of the Xometry franchise, get them to come on board? And so we’ve got plans for both of those audiences across those dimensions.

Danny:

Okay, so we’ve got these two audiences there. And you mentioned you’re primarily digital. Are you able to share what your martech stack is or what you guys have done, what you’ve had success in or failure? What does that look like?

Aaron:

Yeah, I can speak in general terms.

Danny:

Sure, yeah.

Aaron:

Some of that–like I said, we launched back in 2014, and we’ve been slowly scaling up our marketing since then. We now have a team that’s focused on growth marketing which is my team. And what we’re charged with doing is bringing more customers in the door, the people who have CAD files and want to make parts and will ultimately be good customers for us, people we can help. And then, on the partner side, we’re also trying to bring in those new partners. And we also recently launched a business called Xometry Supplies where, actually now we have an ecommerce storefront from which we sell aluminum. We sell machine tooling, and we’re going to expand into other types of supplies as well. So in addition to becoming partners, they now also can buy supplies for their shop from us to help make their shop more efficient. A big thing for us is making our partners as well as our customers able to manufacture more efficiently. That’s the growth side that we are constantly using tools, a wide variety of tools to bring people in the door and then to move them down through that See-Think-Do-Care funnel and get them to order from us.

And then, there’s also a team that we have here led by my colleague Danny Chang who is the relationship marketing team. And what they do is they are focused on how do we work with the companies and customers who have ordered from us before, using the toolset of relationship marketing. Again, much of that is digital as well. So how do we get people who have already ordered with us to come back and use us some more, as well as on the partner side; how do we get our partners to continue to be active, to take more jobs from Xometry and start to grow their revenue with us? That’s how we think about marketing. And as we’ve scaled up–as I mentioned, we’ve been a digital company from the beginning, digital in our DNA. So for us, it’s not really a transformation so much as who we are. Digital is our essence. We are a digital manufacturer.

Danny:

In your DNA.

Aaron:

It is, absolutely. And as we’ve grown, we continue to look at a wide range of digital tools and building out our CRM programs for folks who have engaged with us in some way in the past.

Danny:

Yeah, because we all know the digital tools, there’s only a few of them out there. They never constantly change. Well, one thing that I thought was interesting, and I was hoping that you could elaborate on it a little bit more, there’s all kinds of different terminology you’re hearing. We had actually an episode with the chief marketing officer–well, that’s not the official title, but that essentially was the old titles– chief marketing officer for ABB’s Electrified Products Division. She was sharing with us, well, now we’re a lot more customer-focused. And so my title used to be CMO, but now it’s global experience officer. And so I think your title is VP of growth marketing. You were talking about growth marketing there. Talk to me a little bit about, what is growth marketing for those out there who aren’t, they’re like, okay, another term. What is that?

Aaron:

Yeah, I’ll talk through how I got to this spot as a growth marketer here at Xometry. I started my career as a traditional brand marketer. I worked at Procter & Gamble for about seven years.

Danny:

A little, small company.

Aaron:

Yeah, yeah, a little company in Cincinnati. There, I did primarily brand marketing and brand management. So I worked on teams that managed very large brands, Tide, Downy, Bounce, Gain, mostly in fabric care. Then at Google I held a number of roles; worked in industry marketing and then, worked on the direct sales side, the media side for a while helping to build the digital marketing programs for mostly larger companies. What I found throughout my career is what I really enjoy most is growth and innovation and helping brands grow, helping businesses grow, helping companies grow. And I think that the reason why the title of this role specifically is growth marketing is, we’re at a stage in our company right now where growth is very important. We are a venture-funded startup. We raised $25 million last July, so we are continuing to grow. Our growth trajectory has been really strong, especially over the last year or two. And so my team, why we define it as growth and relationship is so my team and the folks that I work with, what falls under growth are PR, content, all paid media channels, that type of thing, anything that is bringing people in and helping us to grow our business.

And then relationship marketing, the real strong focus on that is so that team can really get in deep with our customers, understand their needs, and really focusing on doing what’s right for them. Now, there’s certainly areas where these overlap. For example, a promotion could work just as well for customers as it could for growth and acquisition. But I think we are here at Xometry very focused on how can we grow and scale quickly to serve more people. And it’s not about us. Every company wants to grow, but we believe we really have a great offering, and we want the maximum number of people who are within our target, engineers, mechano engineers who are designing products who have their CAD files ready to go. All of them should be trying Xometry, and all of them should be checking us out. We really believe that, and that’s the mentality we bring to what we do every day on the growth side. And growth, it encompasses many of the things that other companies use to segment their marketing departments. A big part of growth is direct response marketing. A big part of growth is brand marketing. A big part of growth is content creation and storytelling. So that’s why we think about it that way instead of saying, okay, this group does brand; this group does direct response. We really want people to be thinking about how do we reach more people or how do we better serve and learn more about the people who are already buying from us.

Danny:

No, absolutely. That makes a lot of sense, and I always like hearing these stories because you’re like, what’s the method behind the madness or the methodology there? And by the way, I like the logo there.

Aaron:

Oh yeah, I’m trying to make sure everybody see this.

Danny:

Yeah, so it’s very good. No, but it’s very–it looks, I guess from a branding perspective, it’s modern and fresh, and it’s different. It’s engaging, and I think that’s something that we—

Aaron:

This is actually—

Danny:

Oh, sorry?

Aaron:

This one here, this is the Xometry vintage t-shirt.

Danny:

I like it.

Aaron:

We have a vintage one as well as the one with our traditional logo, which you can see on our website. I’m rocking the vintage today.

Danny:

I like the vintage.

Aaron:

If you want one, or if anyone in the audience wants one, just have them send me an email; we’ll get one out to you shortly.

Danny:

Oh, my gosh, love it. I’ll be sending you an email. We’ll send you an IndustrialSage one. But we don’t have vintage IndustrialSage; we need vintage IndustrialSage ones.

Aaron:

Let’s do it. Let’s make it happen. I know a guy.

Danny:

Yeah, that might–no, but it’s, I just think the idea of just, you see that more with tech companies. That’s a very–you said you were from Google prior. That’s a very tech company kind of thing, and I think that that, we’re going to be seeing more of this coming into the manufacturing space. And I love it; I really like that feel, and it’s exciting along with the whole business model and the vision that you guys have, that’ll really help to really grow these companies. You guys are really invested. Obviously, you will grow, but then help these custom manufacturers and just really solve this gap and really help people to get their parts faster. That’s awesome.

Aaron:

Yeah, we’re in the manufacturing space, but we are a tech company. That’s why we’re located where we’re located. When the founders of the company, Randy Altschuler and Laurence Zuriff were looking for locations for it, part of the reason that they moved it to the DC area–we’re headquartered in Gaithersburg, Maryland. We have offices in Bethesda, Maryland, as well. And part of the reason they headquartered it here was because of the tech talent that is available here. We have to design our machine learning models. We have a software engineering team; we have a data sciences team that creates these, and they are knee-deep in technology every day. Now clearly, being experts in manufacturing is a core part of what we do as well. But we think about everything we do through the lens of technology. Xometry is a tech company. We’re a marketplace platform that’s enabled by technology.

Danny:

Awesome, love it. Aaron, thanks so much for coming on IndustrialSage and sharing some information across board about Xometry, what you guys are doing, the growth marketing. I almost said growth hacking, but growth marketing and just how you guys are viewing things and really looking to completely change the world of manufacturing, custom manufacturing and really bringing that essence of technology to market for manufacturers. So thank you so much. If anybody would love to learn more about you guys, where should they go?

Aaron:

Yeah, so we–first of all, thank you for having us. It’s been a real pleasure to be here. It’s an honor to have a chance to talk to you and share our story with your audience. If you’d like to learn more about Xometry, the best place to go is xometry.com, X-O-M-E-T-R-Y.com You could also email me any time. My email is alichtig, [e-mail]. You could also find me on LinkedIn, Twitter. You could also follow Xometry on, we have Facebook, LinkedIn, Instagram, Twitter, so check us out there. And when you come to the site, make sure if you’ve got some 3D CAD files, check out our instant quoting engine. Upload your files; it’s always free for anybody to use. Get your pricing, and play around with it. See what we do, and we’d be excited to work with anyone in your audience.

Danny:

That’s awesome. Thanks so much for that. We’ll definitely be checking you out. I’ll be sending you an email for a t-shirt. We’ll send you a t-shirt. Thanks for coming on.

Aaron:

Alight, thanks, Danny.

Danny:

Alright so another great episode here with IndustrialSage. There’s a lot of different things that you could pull out from this. And I think that one thing that, it just screams to me is, yeah, digital transformation, we keep talking about it. This company is coming in and taking– Xometry is, I think it’s an awesome business model on what they’re doing. I think one of the very first takeaways that I had was just that whole customer experience that they’re bringing in at the very beginning, just thinking about, how can we make it really easy? What do we want? We want information very quickly and on demand. I want to run my business, and I may need these parts, and how quickly– I submit some CAD files, and boom, I get an instant estimate. Obviously we know how quick that is making the process better so that we can have the lead times a lot lower, and I can get back to my customer. Think about the customer. Think about how we can make it easier for them. Think how you can use digital means to be able to do that. I love the whole growth marketing thing; that aspect, instead of having everything siloed as brand and content and whatever. It’s all together. This is really the vision and that goal there.

So a lot to unpack here, so I hope you enjoyed this episode. And we’re really thankful that Xometry was able to come in and that Aaron was able to come in and share some of his experience and what they’re doing over there. So thanks for listening, as always. If you have any questions, we’d love to answer them on the show. You can reach out to us, IndustrialSage.com/questions. If you’re listening on any of the podcast channels, whether it’s iTunes or Spotify or Stitcher or all the other half a dozen ones that we’re on, we’d love a review. Obviously we’re on social media; share our stuff. We’d love it. And thanks for listening or watching, however you’re consuming this. And we’ll catch you next week. Thanks.

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