GrabCAD Shifts to Collaborative Software for Design Firms, Looks to Go Big
A local startup appears to be building something like the “GitHub for CAD.” Does that mean anything to you?
Well, GitHub is the open-source software hosting company that raised $100 million from Andreessen Horowitz earlier this summer. CAD is computer-aided design, which the Boston area is famous for (see SolidWorks, Parametric Technology Corporation, and others). And the startup in question is Cambridge, MA-based GrabCAD, which is backed by Matrix Partners, Atlas Venture, NextView Ventures, and other investors to the tune of over $5 million.
GrabCAD was known for creating an online marketplace for connecting mechanical engineers with people who wanted stuff built—automotive parts, furniture, mobile devices, you name it. Well, it turns out the Estonian-born company has been heads-down with a different focus since the beginning of this year. GrabCAD has closed its marketplace—though it still has companies hosting design challenges—and is working on a collaborative CAD product for businesses.
Hardi Meybaum, GrabCAD’s co-founder and CEO, didn’t give a lot of details about the new product, which he says will be out late this year or early next. But he did say it represents a strategy shift for the company, and its goal is “to make collaboration more efficient for engineers.” He also hinted that something like a hundred companies are already testing an early version of the product (mostly product design and management companies, from what I can tell).
My sense is that GrabCAD’s collaborative software is about helping companies keep their CAD models and discussions in one central place—without having to do things like download different CAD programs, share designs via Dropbox, and then have a separate e-mail thread about it.
“We’re closing the gap between the engineer and consumer,” Meybaum says. “We are taking what we learned from the [GrabCAD] marketplace”—about building a community of engineers and solving design problems with social tech—and applying it to help designers manage “the process and the product.”
The company plans to charge companies for the software—and presumably make a lot more money than it would with its old marketplace. Strategy-wise, this move touches on a few broader issues. One is the decision to pivot away from existing customers. “Walking away from 200 customers was not the easiest thing to do,” Meybaum says, especially as a young startup.
A second issue is the “consumerization of IT,” which in this case means companies taking a consumer-facing concept like the social Web and applying it to enterprise software (see Yammer, recently bought by Microsoft for $1.2 billion). We’ll be seeing more of this trend in the future, says Meybaum.
The third issue has to do with what’s the best way to make money with “big data,” ultimately. GrabCAD is looking to host all the data it can on product design, while it helps businesses manage that data. Although a lot of companies are working on the analytics side of big data, making sense of increasingly huge amounts of information, Meybaum says it could well be that “the winners will be those who are owning the data.” He adds, “In five years, they’ll be big and they will find new revenue streams.” (Locally, think Carbonite and other storage and backup firms; also companies like uTest and Care.com in various niche sectors.)
Something to think about, in any case. GrabCAD currently has 18 employees, split between Cambridge and Estonia. It recently hired CAD veteran Jon Stevenson, formerly a senior exec at Veracode and previously with PTC and Computervision (and one of GrabCAD’s angel investors), and Grant Thomas-Lepore, an early employee of Gemvara on the product customization and rendering side.
The company is clearly getting ready to go big once its new product is out there. We’ll be keeping an eye on it.