3D printing may not have found the cache it hoped for with consumers. However, it has become a cost efficient and rapid manufacturing process for producing models for design in architecture, the medical field, toys, shoes and everything in between.
Be it prototyping products or creating end consumer products with 3D printing technology there is a major market opportunity across industry verticals for a 3D printing solution. That is where Jerry Ropelato and his team at WhiteClouds come into play.
Now in their second Wefunder raise, he and his team have built the first 3D Printing in the Cloud for businesses that need access to 3D models and products without on-house capabilities. With several Fortune 500 clients, and growing capability, this startup has some terrific potential.
Learn more about the deal in our founder profile with Jerry below.
Jerry, can you tell us a bit more about your background and how you decided to start WhiteClouds?
Jerry: With 35+ years in the technology sector, my last startup Purch, was a very successful company – with 10 acquisitions, it is one of the largest internet technology media companies in the world in terms of monthly unique visitors. When we started WhiteClouds, we were looking to build a company that fit my love of building things – 3D printing was a natural fit.
The co-founders and I thought this would be an exciting thing to do with plenty of upside potential, and an easy process to get started. We were wrong on the “easy” part. It took us a few years to figure out how to get good quality 3D prints and how to drive demand for our offerings, but we did accomplish both. Doing our Wefunder crowdfunding campaign will help us get to the next progression in our growth.
How do you define WhiteClouds as a business?
WhiteClouds is 3D Printing in the Cloud for businesses. We provide an ecosystem for businesses to enable the creation of personalized end-products for their customers.
What are some examples of the types of things you produce on your 3D printers?
We work with builders, architects, and developers to create extremely detailed, physical architectural models for each customer’s new home or building prior to construction.
In addition, we work with hospitals to create personal anatomical models from their patients’ CAT-Scans/MRIs to be used for pre-surgery planning and patient education.
Gaming publishers use us to offer their customers the ability to better connect with the video game by creating a phys ical model of their personalized avatar/characters.
Many tradeshows and display companies utilize us to build unique model displays for their customers, both large and small.
WhiteClouds is now the largest full-color 3D Printing facility in the world.
Who do you consider to be your core customer and what is the typical use case of your service?
With over 500 customers, we work with a lot of brands as well as many Fortune 500 companies including Walmart, Microsoft, Siemens, Target, Wolverine, Autodesk, Sony, and many others. Most of those companies are in the infancy of 3D printing and how it will impact their businesses.
Here is an example of how we work with one of our customers – Microsoft. In it’s Halo Waypoint interface, Microsoft allows players to create their own Halo avatar. Using our software, players add armor and weaponry that they’ve earned in the game and can configure the avatar to a specific pose.
We then 3D Print their model with a custom gamer tag on the base. It’s a very personalized print job based on their avatar. Under the deal with Microsoft, we pay them a royalty. The 3D Print offer is in the software, but when the player buys, the order comes directly to us. We fulfill the order and ship it in a very nice package with the Halo branding.
As you think about scaling the business, would you ever think about moving to more of a SaaS platform type offering or will you always produce the 3D pieces in-house?
The simple answer is “yes”, but the marketplace is still extremely immature and fragmented. We have found many of our potential partners still struggle with quality issues which is a big concern with our customers.
We believe that over time with new equipment, materials, processes, and quality improvement we will be enabled to scale more effectively and not be so reliant on in-house production. Currently, our focus is to acquire the customers, educate the customers, and build-upon the customer relationship.
Who are your core competitors and how do you differentiate from them?
There are a number of competitors in each of the verticals we participate in. We believe we lead the particular vertical segments we are in. Many of our competitors have actually turned into our customers. They realize with our quality and capacity it is better to partner with us than to compete against us. There are a lot of smaller companies that are trying to enter the marketplace.
The barriers-to-entry are quite high. Most of our competitors focus more on 3D Printing prototypes as opposed to end products which is the bulk of our business. There are a number of different 3D printing technologies – we focus our efforts on the technologies that produce full-color prints.
Another differentiator for us is our design team – 3D design is very different than 2D design and typically our customers need help in designing their 3D products. Another differentiator that has developed more recently is the “size” of the 3D objects we are creating. Years ago, we used to think in terms of inches. Now, we are finding more and more demand in terms of feet.
If we think about a couple of years ago, the 3D printing market was very on trend with investors, but has fallen off a bit. Has this presented a challenge for your business, and how are you growing through this downtrend?
When 3D Printing was introduced to the public about 6-7 years ago, there was a lot of artificial hype and unrealistic expectations that 3D Printing would revolutionize human existence, from the Star-Trek replicator to 3D printing of body organs. 3D Printing was oversold and 3D printing companies paid a price for that. Now that expectations have been more realistically set, businesses are now trying to determine how to use this new technology.
I liken 3D printing to the evolution of computers – we had giant mainframe computers for decades before personal computers were introduced in the late 70’s. 3D Printing has been around for over 3 decades and we are now starting to see penetration in all types of industries and sectors just like we did with personal computers. 3D Printing is still in a state of high-priced equipment, limited types of expensive consumable materials, limited design capabilities of 3D objects, and general expertise of how to use and implement these technologies.
You have several use cases and industry verticals that you sell into. What challenges does this present, and why does it ultimately make sense for you to be so diversified on the customer side?
We have built our company with software, systems, and processes that allow us to work with multiple vertical industries. We acquired two companies to build-out our ecosystem, our 3DaaS platform.
There are differences in different verticals, but our platfor m allows us to quickly apply our platform to the nuances of the particular vertical. Whether creating a 3D printed patient-specific medical model or a 3D printed architectural model, the process is very similar.
What is your current customer acquisition strategy and how long does it take to sell through to these large Fortune 1000 companies?
Recently, we began acquiring our new customers through Search Engine activities, both SEO (Search Engine Optimization) and SEM (Search Engine Marketing). Our sales cycle went from 6-12 months a year ago, now it is down to days and weeks. Our focus has changed to making sure potential customers find us when they are ready to purchase instead of WhiteClouds having to endure through a year-long customer education process.
We have now picked up close to 50 of the Fortune 1000 companies as our customers in the last year. Most of these larger companies are still in the infant phase of what 3D Printing can do for them, but we are in that process with them.
What is the average wallet spend of a customer and how are you driving repeat customers?
Our average invoice size is $4,223 with our recurring customers. That has increased year-over-year as our company grows. Great customer service, education, and creativity consultation has been key to driving repeat customers.
This is your second Wefunder raise. What has attracted you to the platform, and what do you hope to accomplish with this raise?
We had a great experience with our first raise using the Wefunder platform. The support was phenomenal and we were oversubscribed. Our 626 investors are now part of our team. This year, we are excited about having additional investors join our team and to hit the maximum $1.07M raise amount under Reg CF and then to raise some additional funding through a Reg D (506C).
As we think 5 years out do you see this being a strategic acquisition for another organization or do you want to see WhiteClouds be a standalone business?
Our current goal is to build a great company that could be acquired or could be a stand-alone company. We anticipate being acquired at some point in the future.
Thank you Jerry for the in-depth discussion and uni que 3D business that is building a formidable business. If interested in this highly experienced management team be sure to invest