On a recent Friday afternoon I ventured to Alewife, that far-flung portion of Cambridge, to visit a startup that I’ve been hearing a lot about, Onshape. Notably, from Mike Volpe. A member of the original team at Boston tech success story HubSpot, I took notice when Volpe tweeted that Onshape, which specializes in cloud-based mechanical engineering software, is poised to become Boston’s next $10 billion tech company.
By chance, on the day I was visiting Onshape to see things for myself, Volpe (an advisor to the company) was doing the same thing. What we heard during an all-company “demo day” gathering is that, while Onshape isn’t quite in the leagues of a billion-dollar company just yet (much less a $10 billion one), they’ve started to see some strong traction on user growth. The "official" number is that Onshape has 10,000 users, but during the off-the-record Demo Day, some far-higher numbers were being discussed. Onshape also just crossed 100 employees after adding nearly 20 jobs since the start of the year.
Getting Noticed
As far what makes Onshape’s opportunity so big, here's the short version: They’re taking something of huge importance—software for computer-aided design, or CAD, which is used to create all manner of products—and making it much better using the cloud. Product design work can now be done collaboratively in real-time between engineers spread across the world (including on mobile devices). One analogy is that Onshape is Google Docs for CAD. And the benefits include faster time to market with products and fewer errors, thanks to the ability for engineers to work together on just one document.
While 3D printing has shaken up the way products can be produced and the Internet of Things has changed what they can do, the way products are designed still remains largely stuck in the ‘90s.
That’s the perspective of the Onshape team, at least. Competitor Autodesk, one of the existing kingpins of the CAD world, disagrees (loudly). “The first claim they make is that Onshape is new and revolutionary – the first to the cloud,” Autodesk CEO Carl Bass wrote in a post on Autodesk’s official site in March 2015. “Such hubris makes for interesting reading, but it’s just not true.”
But Onshape has some serious heavyweights in their corner too—among them Marc Andreessen. His firm Andreessen Horowitz led Onshape’s $80 million round in September following a “long technical debrief” with Andreessen, as Onshape CEO John McEleney recounts it. “Andreessen is a browser-based guy, and his big question was, ‘What kind of plugins do you need to make that work?’” McEleney said. “We were like, ‘None.’”
As for the Autodesk criticism, McEleney suspects it has something to do with the fact that the Onshape leadership team had previously been behind SolidWorks, a major Autodesk rival. McEleney had been the CEO there, while Onshape founder Jon Hirschtick was the founder of SolidWorks (which Dassault Systemes acquired for $316 million in 1997).
In any case, when your startup gets criticized by a huge tech company so early in your lifecycle (the product was in beta until December), that’s probably more of a good thing than bad. Most likely, it means you’re on to something.
Onshape’s investors—who also include New Enterprise Associates, Commonwealth Capital Ventures and North Bridge Venture Partners—certainly believe that: They’ve sunk a total of $144 million into the company since it was founded in late 2012. “To build what we’re building, for such a big market and a big opportunity, it’s not one where you can build an MVP and eke into the market,” McEleney said. “To be a player in this space, you need to be industrial strength.”
Demo Day
During the hourlong Demo Day—which is held every Friday afternoon at Onshape HQ, in fact—dozens of employees crowded into a presentation room to see what some of their colleagues had recently accomplished. Engineers presented new features of the product while members of the marketing team gave updates on how it was connecting with the outside world. The event served to keep everyone in the loop at Onshape, while also fostering some (friendly) competition between staffers. McEleney took a front row seat and joked with the crowd during presentations. While I have talked to plenty of CEOs (who almost without exception will say that their company is doing great), I found during the Demo Day that this optimism is pretty much company-wide at Onshape.
Overall there was the sense that while this company has no guarantees it'll become a big winner—there’s still so much work left to do, for one thing—the design is all there.
Photos by Kyle Alspach for BostInno.
