Jiga3D Revenue & Valuation (2020)

hello everyone my guest today is jonathan velski he's building a company called giga3d.com it's an on-demand manufacturing tool that makes this stuff easier ordering parts easier you know you're ready to take us to the top yeah how they're going nathan thank you for having me here you bet so what does the company do and how do you guys make money so what we do we connect manufacturers with uh with clients such as [Music] engineering companies and engineering and mechanical engineering and the real motivation for for getting for getting this done was a software co-founder he used to manage as they see a few 3d companies and then he tried to do something completely different what happened when he started working on the other thing is that people called him from his previous work and told him like okay we want some uh we want some pricing for some model and we'll surprise him for some 3d work and he said like now i'm not interested i'm doing my other startup and after maybe 10 or 15 calls for that you realize there is a little bit of business here um so so what we did the beginning to just validate this idea is was to make a simple online form where people mechanical engineering such would upload their stl stl is like a file for mechanical engineers when they want to print their parts um so they just upload upload it and we will tell them up here with a fancy algorithm that will do the price quoting for you in real time and actually it was just a self-answering emails really really fast after we validated with a few customers we decided we were really going to develop such an algorithm and this is what we did so how many customers are paying for the tool today okay so uh here are some numbers i know you like numbers so we started seeing we started this company in march we launched in mid april with 15 manufacturers uh we have 10 customers 5 of them are returning we have about 30 transactions since april and average cost of order is about 2k uh dollars and we have about 30 30 margin profit on it okay so 30 transactions through your platform that explain what a transaction actually means you know name the actual company i mean you list pepsi and coke on your website as a user maybe explain how they use you okay so we have we have actually uh the mechanical engineering on protocol they're working on new prototype i'm not allowed to talk about this so they want a new prototype and the old way will be to just uh go to some engineering house or or manufacturers and and communicate via email or communicate via phone and this could take days to price just something simple as like 1k dollar to 2k dollar a part instead they go to our platform they just upload the the stl or the the solid part whatever it is and they get instant pricing immediately um after they're happy with the whether they can change a little bit of configuration to make it cheaper or more expensive depends on what what they like and what the configuration is and and then you just check out via paypal or credit card or they just do uh a bank transfer performance so you've done that 30 times and coke is on average or customers like hook are paying 2 000 per transaction that's correct of which you're making 30 percent of your own revenue so that is what about what is that 600 or so that's for it okay and then and and is this a recurring sort of tool or do you keep after you have to drive new transactions every month to keep making money yeah so we this is the marketplace tool so we we have to we have to drive new revenue each time but 10 of our of our customers sorry five after out of our 10 customers are returning so in average we have about every customer makes about two transactions a month so that means you're making what 10 customers at 1200 bucks a month on average means you're doing about what 12 000 a month in revenue that sounds funny like that yeah mm-hmm and how do you use right so how do you scale so you have two places here you have to find the coca-cola like engineering leads on one side and on the other side you have to find the man is it the manufacturer or what's the other side of the marketplace correct so um that's correct that's like a classic chicken and egg problem we are facing now so the manufacturer part is quite easy because manufacturers need work especially now with all the coronavirus uh it's a lot of work that's supposed to be scheduled it's now they don't have it anymore so they need more work so this is the easy part to to get them on board uh the hard part about it the the most of them are a little bit old-school especially when it comes to sheet metal and cnc uh they're a little bit more awesome so you need to show them and then they see the product and it's like wow this is the future i just came back from a meeting with like really old-school cnc guy and he's like wow this is what you do this is completely the future but he didn't really understand how the algorithm worked and so on um yeah the challenging part when i'm sorry sorry can you can you name a manufacturer that you would connect like that coca-cola would connect with through your platform unfortunately i'm not allowed to to provide any of the names of the manufacturers and this is by the contract we have but i i'm just saying that we're operating now in israel and we have we have a few manufacturers most of our manufacturers are in israel and some of them in europe in italy and some of them are in china can you name a manufacturer that you currently don't have as a customer but is similar to customers you do have yes i can think about um [Music] like is foxconn in china is that the kind of manufacturer you're talking about yeah yeah it's more smaller than this smaller than this so someone is not so familiar with so like we have web manufacturer in china with like about 400 employees so in china consider like a small small medium manufacturer i see okay got it so so your key kpi is sort of number of transactions through your platform on a monthly basis because you know you make 600 bucks on average per transaction yes i see okay so what's next how do you drive growth so the challenging part is actually getting more clients what we do we do basic classic uh content marketing and buying media uh so everything we we make from the platform we put into the into the into marketing most of it uh we don't withdraw salaries at the moment we go completely bootstrap how many how many of you are there we are three so it's me i'm the i'm the technical guy and i i developed the algorithm and all the front end and we have adar he's the marketing genius and we have a stuff which to contribute is about 10 years of experience in the field and and when you what are you paying right now to get a new customer so to get a new customer that puts one 2000 transaction through you in a month how much will you pay to get that customer well that's that's at the moment we pay really nothing because most of our effort is not we pay like very little for like buying ads and we do like a lot of like hacking content marketing hacking so we basically we have a lot of content about 3d materials we just did a crazy crazy project we shrouded the internet for all the the 3d materials and the 3d processes and and we we hope this will drive more traffic through through seo and we do a lot of community we created our own whatsapp and and facebook group so mechanical engineers are engaged with us what are you ranking for though right now though right so when i go on ahrefs and i put on giga3d.com it says that you rank for just nine total keywords none of which are manufacturing materials or anything like that it's just your company name i mean have you written blog content on g 3d targeting keywords that manufacturers would be searching for this is what we're doing at the moment like the the last months we're working hard on improvement that's nowhere near okay so it's nice these articles are not live yet sorry the articles are not live yet some of them just got live we just we just releasing it now okay got it yeah they're not showing up yet in search which is why i was curious but okay so that's one of your growth plans and then obviously one of your three co-founders is super connected in the space you're the tech genius and the other founder is the marketing guru um yeah what i mean so four or five years from now if this thing takes off right how much volume do you think you can put through your platform in a month in terms of transactions look like our biggest competitor so to speak is summatry um geometry it's with an axe um so uh we we in israel told them directly i don't know what is the american pronunciation to be honest they make according to the internet they make about uh 100 million uh dollar per year so we we hope we can reach something like that in three to five years yeah they say parts in as fast as a day over four thousand partners uh always open they've probably raised a bunch of money they focus on cnc machines machining 3d printing injection molding sheet metal etc that's correct so why would a company you know they list dell technologies and nasa on there on their homepage as customers why like how do you win over nasa and dell technologies from zometry oh you would think you'd think that like there is a the competition will be hard and competition is hard but there is so much growth and there's so much to do in this market for example we are operating mainly in israel and in europe and most of our customers don't even know about geometry so there is so much more okay so we do not we don't want to get nasa anytime soon but we're going to get other like we work with really really big clients now in israel we're trying to get a deal and this is companies that are like in size uh like maybe maybe quarter of nasa or something like this we're working with uh with medical startups and with with defense startups and and some stuff i'm not allowed to talk about it because my grandfather will kill me if i do um but it's really really really big uh as you know israel is really is really big with all the defense industry yeah and and do you guys have strong are you guys all all uh israelis yes do you do obviously do you have connections to the defense industry everybody needs ready just checking i want to make sure so so do you plan on raising capital or do you want to stay bootstrapped so my my personal perversion is would be to be a bootstrap my last startup which was merged uh by another big company so it was bootstrap all the time and and i really believe in this method but we never say never you know if there's something like some really good vc with like what we call smart money uh will come and give us will it would offer we wouldn't say no because it would really accelerate our growth so something we will do ourselves alone for one or two years with the vc funding it will take us a few months so what do you think zomtree has raised i mean they raise 118 million dollars what do you think they've used it on um geometry is a little bit different uh because they have they are manufacturers themselves so they have they have the machines themselves so um i don't know but i would i would imagine they will do a lot of marketing and i imagine they will do they will do some stuff inside inside their accounting to support their manufacturing and optimize their manufacturing costs and we don't do it and we don't believe that we we should own uh machines because airbnb and boutique they are like the biggest hotel chain in the world and and we we believe that we can be the biggest the biggest manufacturers without without any machines yeah you can keep critical distribution channel uh very good all right let's wrap up here with the famous five number one what's your favorite business book my favorite business mooc um it's called by dan ariely um it's predictably irrational correct number number two is there a ceo you're following are studying okay george uh josh pitford is the ceo of baremetrix and he completely bootstrapped and he's doing a lot of things and i'm really admiring his uh attention span doing like so many things at the same time number three what's your favorite online tool for building your company um uber suggests pointing patel uh number three how many hours of sleep are you getting every night about eight and what's your situation jonathan married single kids single okay no kids no kids and how old are you i'm 33 on sunday oh happy early birthday thank you all right last question what do you wish you knew when you were 20 um be more focused in life guys there you have it ajiga3d.com hoping to be the marketplace that manufacturers at coca-cola or engineers at coca-cola and these big companies go to to find manufacturers to put new parts new prototypes through they're scaling nicely triple threat team of three folks doing this full-time they've got about 10 transactions have gone through their system so far at about 2k a pop uh 10 of those customers sorry 30 transactions i've gone through at 10k at 2k pop 10 customers total so two to three kind of transactions per customer as i look to scale currently doing about 12 000 per month in revenue jonathan thank you for taking us to the top thank you very much nathan for having me here