Euclid Labs & Estun Automation : how I was looking to follow Colombo travel and ended up on Marco Polo steps.
Today I have a story to share.
When I started Euclid Labs with my business partner Matteo Peluso in 2005 none of us had ever sold even a lemonade. Anyway we were able to foresee a wonderful future since two engineers without a garage (a software house doesn't need it) is the perfect beginning for a New Great Company.
We followed the manual "Entrepreneurship for dummies": step one write a business plan.
I didn't thought about it for years but the basic idea sounded really reasonable: Euclid Labs will develop an offline programming system for several robot application, starting from palletizing, and will sell it all around the world since it is a clearly scalable software; if one day we will need more money to sustain the growth we will go and select (in between the thousands available) a venture capital (in USA, of course) to fund us. Simple and straightforward.
We had to face a couple uf unexpected "challenges" (which is the business code word for "scary problems"):
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Customers want to buy from someone who has a proven product
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To really prove a software for robot production you need a running robot workcell and a lot of time
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A 26 years old new entrepreneur with a (still buggy) prototype doesn't match the "perfect supplier" description of main manufacturing industries
Learned Lesson n.1 (market efficiency hypothesis): if starting a venture looks very easy your analysis is weak
In the next two years we did not advanced probably a single step on planned path but we had the opportunity to work on many uncommon robot applications and our market segment became "what everyone else think it's insane". One of this application eventually ended up in the official Kuka Roboter presentation video.
I learned a lot by my mistakes, expecially on sales,and I was lucky enough to do them at that time so they were small enough not to kill the Company. We were also conscious that we were getting lost in many activities without a clear future. Finally in 2007 we did a job that looked different from others: our first random bin picking application. It was far away from our current product but it sparked in us the idea to create a unique random bin picking software and we started driving Euclid Labs in that direction. I knew it was not going to be easy (by Lesson n.1) and at that point I got also a second lesson.
Learned Lesson n.2 (werebear project planning principle 1): everyone knows were the Company has to be in one, two or five years; planning is knowing what to do next Monday morning to get there and how to stay consistent with it.
We started growing evey year from 20% to 40%, enjoing new people in the team and finding new customers around the world.
Managing growth was a new experience and, of course, I messed it up a couple of times.
There's a long list of people I should still apologize to and thank for having helped me expecially during that early period: our team for first, our customers, our families (work-life balance has been an hurricane for a while). I got from each of them a lot of new lessons, but the most valuable one I would reccomend is in Kris Kristofferson song I love.
Learned Lesson n.3 (Kris Kristofferson on communication): tell the truth and stand your ground
When we figure out that we were going to sell more than one million euro software in three continents I felt it was hard to keep growing 40% year only with the profit of current projects keeping the team to R&D for 35% of the time. The risk of facing a cash flow problem (ups, I meant challenge) was high and in any case chaches were that at least one between growth target and new products development was going to be sacrified.
As I told we were expecting this to happen since the beginning so I knew were to start. I have contacted some obvious possible partner quickly but I didn't found someone that was sharing our long term vision. Some of them were interested in a partnership but to take out as early as possibile the value we placed in current product but were not happy at all of the idea that the main reason we needed an external capital was not to stop new products development. Automation industry is very different from consumer world: a new tecnology is usually a lot slower to enter the mainstream market, often a lot of customized versions of a software are needed, many external factor out of control are dangerous for profits also on short term.
It took me a while to figure out something that later sounded evident: if China is leading the manufacturing world there is were we should look for a partner and, since 80% of our products are used to drive robots (random bin picking and offline programming softwares), the perfect partner should be a robot manufacturer, the best candidate to share a long term vision.
This idea popped up last year on Monday 2nd of March (I take a lot of notes) and I am happy and proud to announce that on Monday 15th of February Euclid Labs and Estun Automation signed a strategic cooperation agreement.
Estun Automation will enter Euclid Labs capital receiving a 20% stake and increasing its financial power more than enough to go on growing quickly on all markets.
Euclid Labs will own 40% of a joint venture focused in expanding bin picking applications in China.
I want to thank here all the Estun team that helped has through the technical and financial due diligence and expecially Prof. Wang and President Wu for the opportunity we have.
I know we have to work hard a lot from now (Lesson n.1) and I have thought well about what to do next Monday (Lesson n.2), I feel I established a very honest and valuable relationship with our new partner (Lesson n.3) so everything look good for our current target: being the first Company with one thousand running bin picking system in the world.
Learned Lesson n.4 (never ending lessons axiom): there's no safe path and no silver bullet, but the best thing you can do is for sure try to learn something everyday.
Estun Automation has a capitalization of 800 million euro on Shanghai Stock Exchange.
In 1993, Estun Automation was founded in Nanjing which was capital of six dynasties of ancient China. Focus and integrity are our business philosophy. The opening-up market environment has enabled Estun to grow step by step. Nowadays Estun has become a leading manufacturer in domestic high-end intelligent equipment and its key components. Currently Estun Automation has four categories of products which are metal forming CNC control system, electro-hydraulic servo system, AC servo system, motion control system, Industrial Robots and complete equipment.
Euclid Labs designs and develops hi-tech solutions for robotics and industrial automation.
Euclid Labs works to give industrial manufacturing companies flexible and effective software tools to face difficulties related to small batch production, high quality requirements, complex task automation.
Euclid Labs offline programming softwares have been used for lens edgers, panel machines, laser sorting, robot palletizers, robot pressbrake bending, riveting, clinching machines, marble polishing automations, frame painting cartesians, automatic surface scan, creation of trajectories using haptic devices, translation of programs from one robot language to an other…we are ready for new challenges.
Senior Group Manager at Cognex (WE ARE HIRING)
6 年Great story Roberto. Hope to talk again soon!
Sometimes it's very hard to move on, but once you do, you'll realize it was the best decision you've ever made.
8 年Hi Roberto, it is one of the best written stories about the career way :) Wisg you good luck! Best regards from Johann (Yantai)
Area Manager Italia
8 年Good luck, for new business. " Sweaty and earned " .
Trade Agent at Frank Vanin
8 年Great job Roberto. Congratulations!