#1 Theo Saville of Cloud NC on Transforming Manufacturing
By Nasos Papadopoulos, EF Head of Content
Theo Saville is the Co-Founder of Cloud NC, whose mission is to make the CNC milling machines used in many manufacturing processes one click devices that can produce a part easily and efficiently, effectively halving their cost.
Theo and his co-founder Chris met on EF5 and have gone from strength to strength since founding the company, expanding their team and raising funding to develop their technology further.
Theo studied Engineering at Warwick and gained a masters in manufacturing, working in a range of fields including 3D printing research and freelance engineering before joining EF.
In this conversation we dive into Theo’s personal story, everything he’s learned about finding product market fit, hiring and funding in the process of building Cloud NC and what he’s learned about himself along the way.
I Would Make a Terrible Corporate Employee
How I Found My Co-Founder
Why I Applied to EF
Making Your First Hires
Nasos: 01:23 Theo, welcome to the show.
Theo : 01:59 Thank you very much Nasos, great to be here.
Nasos:02:01 It's a pleasure to have you on. You were just telling me beforehand now that you've come from your workshop where you were trying to avoid breaking a very expensive piece of machinery. Tell me what you've been up to earlier today.
Theo : 02:11 It's a constant struggle that has lasted the last eight months and will probably continue for the remainder of the company's life but we've just been essentially making components to prove that we can on our equipments because what we're all about is automating this particular piece of equipment.
Nasos: 02:27 Tell me, what's the 30 second pitch for CloudNC. What do you guys do? If you were explaining it to someone in a bar, what would you say?
Theo : 02:33 I would say that there is this machine, it's called the CNC milling machine and very few people have ever seen these or heard of them before and yes they are responsible for the manufacturing of more than a hundred billion dollars worth of components every single year. They make everything from iPhone bodies to jet engine turbine blades, injection multi-plastic components, bits of car, aircraft, absolutely everything and right now there's a very big problem with these machines. How they work is they're essentially very powerful robot arms that carve blocks of metal into useful shapes with spinning cutting tools. The issue is that they should be automatic but they are not. Today if I want to use one it's not like walking up to a 3D printer and just plugging in a 3D file and pressing go, what I must actually do is hand my 3D file to a very highly skilled human operator called a machinist who will then use their years of experience to figure out how to cut that block of metal into your final component.
Theo : 03:33 This can take anything from 20 minutes to more than a hundred hours and then once that program has been generated and given to the machine, what we typically find is the components are being made less than half as fast as they theoretically could be. It's very hard to figure out how to cut a block of metal into a shape when you have a trillion ways of doing it so that means two things: if I want to make one unit of something with this process it's more than 10 times as expensive as it should be. And if I want to make a thousand units it's still more than twice as expensive as it should be. So we are essentially building software that completely automates this task.
Theo : 04:06 You just give our software a 3D file, tell it what machine and tools you have and then we run a vast artificially intelligent mathematical optimization trying to find us the fastest way of making that part. This takes minutes rather than hours, no skill versus years of experience and when you get your outputs the program that the machine will use to cut the part much much faster than what I would be able to come up with just by thinking about it.
Nasos:04:31 When you think about your vision for the company playing out, how does the world look different when CloudNC has achieved what it wants to achieve? What do you hope to see?
Theo : 04:41 Sure, if in 10 years' time we achieve everything that we want, and that's a big if, the way the world would look, if I want to buy a component then I would be able to simply upload a 3D file to a web service. I'll get a price instantly regardless of how many components I want. I'll get instant automatic design for manufacturability analysis and I should be able to get either one or 10,000 components of that in one to 10 days and I just don't need to worry about it. I never need to talk to a factory, it is smooth, it's simply like using Amazon. Getting from what we have today to that is just immensely challenging. There are so many technological and market barriers in the way. If I actually wanted to buy that off a factory really I'd probably have to email a hundred factories to find seven that would be interested and able to do it and then it would be a six week lead time so we're a very long way from that today.
Nasos:05:43 Circling back to when you started CloudNC, tell me a little bit about the thoughts that you had in mind in terms of taking on entrepreneurship as a career path and the decision to apply to EF - what were you thinking and what was going through your head?
Theo : 05:57 For me at least I think entrepreneurship was always going to be the default path. It was never a decision process it just happened and it felt completely natural as it did. Going and working for a corporation, applying for jobs and things like that that was the thing that felt unnatural so when I came across this concept and when I managed to find EF, it was just the most obvious thing to do. It was a one second decision process to apply to and join EF.
Nasos:06:25 Talk to me about the process of finding your co-founder. Were you looking for specific qualities when you came onto the program in terms of the kinds of people that you wanted to work with and how did the whole process unfold of you and Chris working together?
Theo : 06:39 I didn't have a list, if anything I really didn't know ... I didn't have a clue who I was looking for. All I knew was that I had this problem, I didn't even really know how hard it would be technically to solve and I just thought, "Hey, I'll pitch and I'll see who's interested." As it happened, I'd actually met Chris six months before. He was doing EF4 whilst I was interviewing for EF5 and at the time we were both working on 3D printing ideas and Alice just said, "Hey, you work on 3D printing you work on 3D printing you guys should talk." And so we did and over that six months I think we still have some of the Facebook conversations where I pitch him and we start talking about it and we both think that this is much easier than it's ultimately going to be. When the day came, the process of finding a co-founder took over 15 seconds and we've been working together ever since.
Nasos:07:28 So, there was something there before then.
Theo : 07:31 Yes, we've had a slightly easier journey than most I think.
Nasos: 07:34 Talk to me a little bit about the process of how you’ve navigated and growing the company with Chris your co-founder, did you have an idea pretty early on in terms of how you were going to sort of organize who took charge of what since you started working together?
Theo : 07:51 I'd say the split between the kinds of work we do is immediate and very natural. Chris is 95% computer science and technology and I am 95% manufacturing and business and we overlap a little bit in the middle so the roles were instantly obvious and that has worked out extremely well for us and I think it's very important that you have that broad coverage in a co-founding pair. Someone with a lot of business acumen and someone with incredible computer science skills and some knowledge of the market in the middle. If you have that you're constantly looking at all directions at all times and it is very hard to be taken by surprise by some huge technical risk or some huge business challenge and that will make your startup life an awful lot easier.
Nasos:08:40 Speaking of the market, obviously a big part of building a business is making something that people want, making something that the market wants, solving a problem. What's been the main challenge that you found in taking your technology and what you guys do at CloudNC to market?
Theo : 08:57 The first and largest challenge always remains building this technology is just phenomenally complex. If you go and look back at that first Facebook conversation Chris and I had, we thought that it was going to take two working years to get to the point where we will now be in eight months. We thought it would just take the two of us that little bit of time, actually it's taken a team of 14 software engineers two and a half years and we're not done yet so the technical challenge is absolutely immense but that is mostly solved now. The other challenge we faced at the beginning was it was very difficult to convince factories to talk to us because we had this totally racky zany idea.
Theo : 09:43 As far as most factories are concerned the concept that this job could be automated is ludicrous and it is almost ludicrous because it is so challenging for a computer to do so finding factories who would talk to us and furthermore finding factories who would talk to us and then talk to investors to say that hey we might be able to do it and if we do it will be incredible, that was very very difficult. An awful lot of cold calls before we found some people who were willing to take a chance on us and back us. That was probably one of the biggest early challenges. In fact we only just hit the point where it is relatively simple to get introductions and be taken seriously by the manufacturing industry by virtue of being able to actually cut metal and having a working prototype but that was a very long journey.
Nasos:10:29 I want to come back to how you've expanded your team to basically develop this technology but before we go into the hiring process you were recently on stage with Reid Hoffman the events EF run walking into London temporarily. Talk to me about that, was there something that you took away from being on stage with Reid and being coached by him that kind of really stuck?
Theo : 10:52 Hearing answers to my questions from him directly that was fantastic because whilst I've listened to the Master of Scale podcast, you're always going to be left with some question you have which isn't answered there and just being able to ask directly that was a great opportunity.
Nasos:11:09 Yeah, absolutely. Did you have some time to hobnob with him before and after the event?
Theo : 11:13 Unfortunately not. He is a very busy man.
Nasos: 11:15 Maybe some other time when CloudNC is offered many billions of dollars hopefully. Talk to me then about the hiring process. You've now got to a point when you said you've hired an initial 14 software engineers to build your technology. What's the main thing that you've learned about the hiring process?
Theo : 11:33 That it is absolutely crucial and it is incredibly difficult. It is one of the most important things that you will do as a founder possibly even the most important thing assuming that you can gain funding to make those hires because ultimately your company is its people, it's the people who builds the product. If the people are wrong, everything will be wrong and so for us the start of the hiring process was quite difficult and painful. We've almost only hired software engineers so far which falls mostly into the domain of my co-founder. I think we interviewed people for maybe three or four months before we finally made that first hire and we were getting a little bit of pressure from our VCs and from our advisors quite rightly saying, "Your standard's too high." And we were very lucky that that Chris didn't give in to my requests for, "Come on, hire someone please. Anyone at this point." But no we stuck to it and then we made our first hire and that turned out incredibly well.
Theo : 12:47 Through that very painful process of finding that first person we started to learn how to hire and that is ... how to hire how to recruit, that is a highly skilled profession all on its own. You should know a bit about how to do it as founders but you should also be aware that you're going to hit the limits of your recruiting capability incredibly quickly. The other thing I'd say is it is very very difficult to hire for a startup if you don't have enough money and if you don't have interesting work. In order to make the absolute top quality hires you need to work in a deep tech company, you need to be able to pay really ideally above market average at least for software engineers and really for everyone actually but you need to be able to pay above market even if it's just slightly and you need incredibly interesting work.
Theo : 13:33 We were very lucky that we raised a large enough seed round to pay slightly above market and also the work is absolutely fascinating algorithmic stuff. It's really really good stuff to work on. When we tried to hire for roles that weren't that interesting, then suddenly we found that we were going an entire year without making a hire and it was then that it became clear that we needed to bring someone in who was really truly expert and so we did. We brought on a head of talent and that had the double army of massively improving our recruiting capability as an organization and it took that workload off myself and my co-founder and that's something that you must be seeking to do as a founder constantly it is to automate yourself. You must run around all of these company things that are going to be in total chaos and leave behind organization and automation as you go and that is your constant job.
Nasos:14:27 You touched on the skill of recruiting, the skill of getting the right people and for someone who hasn't spent a lot of time hiring people it might seem pretty obvious from the outside - as in just go and get the best people for the job. Make sure they have the right skill set, make sure that you like them and then do it. You mentioned that you understood experientially from doing it that you get to a point when you reach the end of your limit so what would those, I suppose they must be quite intangible but what were those aspects of recruiting that kind of surprised that you weren't aware of that were involved in the process?
Theo : 15:00 This is tough to think back to because I haven't done it for ... or been steeply involved for such a long time. What probably surprised us was firstly how incredibly difficult it was to find anyone, to convince anyone to come for a job interview with us. It was really hard and then once we got good how easy it was to find a certain class of software engineer that loves working on algorithmic problems and how difficult it was to find the people that we thought would be easy to find. You can expect to be surprised by just how much more difficult it is to find certain people than you were expecting.
Nasos:15:40 You mentioned when we were coming up the stairs to the interview as well that you're in the middle of placing your funding round towards the end of it. What has been the main thing that you've learned about that process having now done it a couple of times?
Theo : 15:52 I'd say we're probably in the middle rather than closing. It's going quite well but not far from closed. What have I learned? I think we voided a lot of mistakes in two ways firstly by SWOTING up considerably by reading everything we could get our hands on and two by having great advisors. I'd say that we avoid most mistakes that ... we've had a very easy journey as a startup. We haven't had that oh shit moment that is talked about constantly. We haven't had any of them so far touch wood and that's mainly because of what I talked about where Chris and I we both have that 360 degree vision on the business and we repair that with we are constantly talking to our advisors. We are very acutely aware that we are first time founders we've never done this before and frankly we have no idea what we're doing regarding most of the stuff.
Theo : 16:45 What we have is an incredible network of advisors who we can go to at any time, day or night about anything and we talk to them on almost a daily basis so I think that's one of your biggest roles as a CEO is to be the focal point through which all of this incredible advice is deployed in the building of your business.
Nasos:17:04 How do you go about cultivating the right relationships with advisors, did they come about by chance, did you actively seek out people that you thought would be valuable to give you that insight in the business, how did those kind of develop?
Theo : 17:14 I'd say a tremendous amount of that came through EF. We had a very small network of advisors before EF but EF set us up with Chris Mairs who was our mentor and now sits on our board and then we have anyone who we wish to speak to within EF and there is tremendous expertise and all sorts of things here, we have our VCs, we have our other investors, I'd say 90% of our advisors have come through either EF or through our investors or in a convergence of both.
Nasos:17:46 We've spoken a lot about obviously the process of what you've learned by building your business you and Chris, what have you learned about yourself over the course of this journey of building CloudNC, what have been the main things that you've learned?
Theo : 17:57 I would make a terrible corporate employee, absolutely awful. Can't sit still, I can't do what I'm told. Have to be solving ... if you're not solving problems you're bored so being given some kind of repeatable process to do that's just not interesting at all. Creating a process, that is a lot of fun but that has an end point then you need to move on to the next thing and I think if you're an employee, you're not going to have that constant stream of incredibly complex problems where you have to relearn everything. As a founder you need to know, figure out how to do everything to a basic level. You need a basis in technology and manufacturing and sales and marketing and law and PR and accounting and finance and don't forget fundraising as well. You have to learn all of these things from scratch and that was a very exciting journey.
Nasos:18:50 If you could go back in time and speak to yourself before you started, would there be anything specific that you would say, any piece of advice?
Theo : 18:59 Sleep more.
Nasos:19:01 Theo thank you so much for coming in the show it was a real pleasure chatting.
Theo : 19:04 Thank you Nasos.