Dana Wensberg was an early hire at Paperless Parts and their first Product Manager. You can learn more about his career here
In May of 2017, I joined Paperless Parts as the first hire outside the founding team. Paperless Parts caters to custom part manufacturers, offering a quoting and estimating platform that marries the precision of CAD, versatility of Excel, and the organizational power of ERP systems. This platform simplifies and scales the complex processes of quoting custom parts by automating the extraction and application of data from part files into cost and pricing models. I’ve journeyed with the company from its pre-revenue stage to its current status as a market leader, through numerous pivots and product enhancements, as both an engineer and product manager. I’ve distilled four key learnings that I believe are essential for anyone venturing into the Manufacturing SaaS space.
1. The Challenge of Displacing Excel
Many shops run much of their quoting process on Excel. Given each shop floor is different and there are so many ways to manufacture parts, Excel emerged over time as the only tool adaptable enough to meet the wide variety of formulas and inputs required to quote custom parts. At its core, our solution automated many manual data entry tasks, such as inputting part size and weight, but we quickly learned that onboarding new customers meant effectively replicating and enhancing their existing Excel sheets. This was not straightforward. No two shops had the exact same approach and very few were willing to start over from scratch. The lesson here is to be weary of customization overhead, especially in an environment where Excel is the incumbent and there is little standardization of approach across the industry. If you cannot deliver your product in a cost effective and timely manner, you won’t acquire customers fast enough to survive.
2. The Complexities of Integration
Manufacturing is an old yet highly nuanced field, leading to a diverse landscape of software solutions, each slightly different from the next. This diversity makes integration a challenging task, as no two systems model processes in exactly the same way. Moreover, the dependency on ERP systems for business operations means that seamless integration is non-negotiable for any new SaaS offering in this domain. The lesson here is clear: effective and automated integrations are crucial, especially as businesses grow and more people touch a workflow, in our case the quote-to-cash cycle.
3. Crossing the Chasm in Manufacturing
The adoption lifecycle in manufacturing is real and challenging. It took us four years to move from engaging innovators and early adopters to making significant inroads with the early and late majority segments. The transition required developing and maintaining more sophisticated business features, especially integrations. Also, the need for reference customers in similar businesses becomes critical past the early adopter stage, highlighting the importance of building a strong referral network to secure deals with larger clients.
4. Scaling Intentionally
Transitioning from early growth tactics to scalable strategies is a deliberate process. It demands focused attention on defining your Ideal Customer Profile (ICP), refining sales and onboarding processes, and evolving product development practices. For Paperless Parts, achieving meaningful integrations with major ERP systems marked a turning point, enabling us to streamline our focus and significantly improve our market approach and product offerings.
Conclusion
The journey from a startup to a market leader in the Manufacturing SaaS space is fraught with challenges, from the intricacies of displacing entrenched tools like Excel to navigating the complex web of industry-specific integrations. Understanding and crossing the market adoption chasm, coupled with a strategic approach to scaling, are crucial. Hopefully these lessons can offer valuable insights for the next generation of Manufacturing SaaS startups looking to make their mark.
If you’re making the leap or want to compare notes, reach out to Dana!