103 Hassold FINAL Main Comp

[00:00:00] David A Rosen: I am pleased to introduce, Rob Hassold. Rob started with a technical background and career as an engineer and started his company now named Cimquest in 1990. During his 30 plus years, he has accumulated many first in industry, along with interesting and compelling inflection points.

[00:00:19] David A Rosen: As he grew his business from a desert start reselling one product to being the number one reseller for several brands, including Stratasys and master cam for the manufacturing industries. His company has also been the largest seller of podcasts for, of products for the east coast and Northeast for other companies as well.

[00:00:43] David A Rosen: You are unique in that you have made some really bold moves in uncharted markets , that most leaders would avoid. They were really critical and important for you to be able to sustain your growth in your revenue and your profit in your business. But also it’s important that they were critical to retain your business momentum as some of your products were reaching maturity, margins from your suppliers were squeezing your profitability, and the industry’s profitability. Tell us more about Cimquest and what you’ve done there and where you are today.

[00:01:19] Rob Hassold: Sure. I’ll start off with a little bit of an overview of Cimquest. We’re what’s known as a VAR or a value added reseller. So for the most part, we don’t produce the products that we sell. We’re basically a representative or agent for companies that produce the hardware products or software that we represent.

[00:01:39] Rob Hassold: And the specific markets that we sell into are the manufacturing and engineering spaces. And the products we represent are manufacturing, software, computerated design, and manufacturing products, as well as Reverse engineering and 3d scanning technologies used for inspection and other applications.

[00:02:04] Rob Hassold: And then of course 3d printing as well, which many people think that’s only been around for several years, but we’ve been involved, heavily involved in representing 3d printing technologies for over 25 years. That’s the basics of our business. And as far as the first I think one of the things that really sets syst apart is the fact that we were very early adopters of new technologies and products.

[00:02:34] Rob Hassold: Back in the early days, 30 years ago, we represented a product called pro engineer, which was the first company to create an innovative CAD technology for cell modeling called parametric cell modeling. And we were one of the early resellers of that product and that’s really grown to be an industry standard.

[00:02:57] Rob Hassold: And then from there we transitioned to a product called solid works, which at the time we picked it up, we were the first reseller globally with solid works and we displaced the pro engineer software, which was about 27% of our business. Those, that kind of talks a little bit to some of the bold moves that you’re talking about.

[00:03:21] Rob Hassold: And we can certainly delve into those changes that we’ve made over the past 31 years.  how that was accomplished. In most cases successfully, I won’t say it always went smoothly, but in most cases successfully. And and then of course being very early into the 3d printing or additive manufacturing space as well.

[00:03:43] Rob Hassold: We’ve really led the industry in a lot of areas

[00:03:45] David A Rosen: That’s amazing, Rob. You’re a primary vendor now for a lot of the major players in 3d printing and additive manufacturing. Can you talk more about those you’ve actually are in the lead in some of the global spaces as well?

[00:04:01] Rob Hassold: Yeah. So again, talking about some of the major pivots we went through, we were in the early days of additive manufacturing or 3d printing, and even back then, it wasn’t even called 3d printing. It was called rapid prototyping. We. Tried unsuccessfully twice to enter into that space, really picking the wrong vendors, the wrong partnerships, the wrong technology, and of got beat up a little bit with two, two trials and picking up the technology.

[00:04:36] Rob Hassold: But eventually we eventually, we got it right. And we were able to successfully start a relationship with a company called Stratasys. And that went very well for many years. And unfortunately, because of many different reasons, we felt that we had outgrown the partnership. One of the reasons was really to address the evolution of 3d printing from more of a prototyping technology to production.

[00:05:08] Rob Hassold: And just about. Four and a half, a little over four and a half years ago, we pivoted from a single vendor, which was Stratasys to several different vendors. And at the time we did that Stratasys was over 50%, five, 0% of our business. So imagine flicking a switch and losing 50% of your business overnight and the recurring revenue stream that goes along with that.

[00:05:40] Rob Hassold: So it was quite a risky maneuver, but we wanted to address some of the positive changes occurring in the market and being able to address that more high level production manufacturing capability that was hitting the streets through other technology providers, such as HP desktop metal and others.

[00:06:01] Rob Hassold: That was a little bit of a challenging time. And then, a year and a half, two years after doing that, we get hit with COVID. So yeah, it was, it has been an interesting four and a half years. ,

[00:06:11] David A Rosen: I think we met around that time and it was really interesting to hear how you were thinking.

[00:06:17] David A Rosen: Can you talk a little bit more about, because I’ve seen this in a, and I’ve been involved in thousands of companies, but I’ve seen this in some rare occasions in the occasion of EMC early on in its business. A guy that I worked for went over to be the chief operating officer of EMC at the time, and they were about 170 million.

[00:06:36] David A Rosen: And one of the first things that he did within his first 30 or within his first three or four months, was he PA he charted a path that said that we’re gonna get rid of 30% of our business because that business line is not as profitable as our current main product line. And that our future main product lines are going to be growing even faster and more profitable.

[00:07:02] David A Rosen: Therefore, this is diluting the value of the total business and that a dollar spent not putting into that business was gonna be great value. And by the way, Mike was the guy who became CEO and for 20 years and turned it into a multi-billion dollar global business. But he started off with doing that.

[00:07:22] David A Rosen: So tell us a little bit more about that process. What were you thinking? What drove the decision that you can share with us and Tell us what you learned from it and what, what would you do again? What would you not do again?

[00:07:34] Rob Hassold: Yeah. So I’ll even back up a little further, and it goes with how do you define success and what do you want your success in business to be?

[00:07:42] Rob Hassold: For me, I wanted to really stay with the state of the art technology. I really wanted to keep things fresh in the company. My, my family’s background was they own a small chain of five and 10 stores. And, I always taught to make sure that you have the end caps of the displays with rotational fresh merchandise to keep people interested, keep the staff interested.

[00:08:07] Rob Hassold: And maybe I have ADHD or something, but I always felt that, I wanted to keep things fresh and maybe that’s not the right course of action for everybody because quite frankly it’s very hard to do. It’s very disruptive. It, you, you lose traction, you take, a step back to hopefully make two steps forward.

[00:08:29] Rob Hassold: And, a lot of my counterparts in the industry just picked up their products and stayed the course for the past 20, 30 years. And through many acquisitions grew their businesses far larger than my company and got venture capital investment into the company and became wildly successful doing that.

[00:08:49] Rob Hassold: And that’s not quite the route I decided to take. But the transition from a single 3d printing vendor to multiple vendors was very challenging. Part of what I’ve learned through this process, having gone through it a couple of times in the life of Cimquest is you really have to do a a very targeted methodology for making that change less painful to the staff, right?

[00:09:21] Rob Hassold: Because different people react to change differently. And, if you’ve ever heard of the innovation adopters curve or it’s actually the Rogers diffusion innovation theory curve, Talks about how you have those early adopters, those innovators, and then at the tail end, you have the laggards. And I, I think of people with change in that respect that there’s a small segment of the company that will actually innovate and make change happen within the company.

[00:09:52] Rob Hassold: And then there’s the vast majority in the middle that are very uncomfortable with change. And then of course at the tail end, you have the ones that soon as they find out about an announcement, they go running out of the company meeting, never to be seen again. And I actually had that happen once. When I announced a change when we decided to end our solid works business and focus mainly on manufacturing.

[00:10:18] Rob Hassold: Making sure that you introduced that the change slowly and. And have the trust in your company that they’ll keep some of these some of this information confidential, right? Because you’re not really able to disclose that to the outside world. So managing that change process is very important and very critical in success because, we’re all on the same team, we’re all on the same boat.

[00:10:42] Rob Hassold: And if you’re trying to make this change happen and people aren’t aware of it, they’re not gonna be necessarily rowing in the same direction. You’re right.

[00:10:51] David A Rosen: It’s interesting because we’re working with a lot of companies that are dealing with inflection points in their business, dealing with cash flow problems. And as we, as a team, we’ve thought about this because the, whether you’re doing incremental change or whether you’re doing something transformative where you’ve gotta change the way you, the people you’re talking to as customers, or the way you’re working or the way you’re delivering service from a software product to a hardware product in those differences that when it comes to change, we’ve realized in our experience that the people issues far outweigh any smart business process or logic or rationale does that resonate with you as well?

[00:11:35] David A Rosen: Rob, it sounds like it does.

[00:11:37] Rob Hassold: Oh, absolutely. Yeah. I Prepping the team for this change or whatever change you might be going through is extremely important. Even though I’ve had many people over time. Warn me about, bringing the company into the fold and for fear that that information’s gonna be disclosed on the outside because, you don’t want to, you wanna start that disruption internally, but you don’t wanna start that disruption externally.

[00:12:04] Rob Hassold: You got, there’s a lot of things that have to be done to, to prep the company and operations, and you don’t want, you don’t wanna stop doing what you’re still supposed to be doing. And if everybody de focuses on what’s bringing in the revenue currently and giving up on that prematurely, that could be devastating to the business.

Four Pillars: People, Market-Customer Intimacy, Product-Service Viabilty, and Business Finance, Economics, and Operations

[00:12:26] David A Rosen: So when you look at the people issues, those dominate the business and the a lot of the other issues in business, the logic, the process The materials we’ve looked at and found that tho the people issues when I’ve done acquisitions and when I’ve done investments.

[00:12:43] David A Rosen: And when I’ve looked at changing large organizations, I’ve looked at people as the number one issue followed by market intimacy. How well do you understand your customers and know them and where they buy, where they learn, what their buying cycle looks like, what their compensation is, what risk tolerance do they have?

[00:13:03] David A Rosen: What risk tolerance does their company have? So market intimacy and customer intimacy are critical. The third area is product viability and do. How, can you actually do something with this? Is there a value proposition that fits with the market that you’re focusing on? And is it very clear and is it easy to understand?

[00:13:24] David A Rosen: And then the fourth area is really managing your business from an economic and a financial and an operational viewpoint. If you consider those four things, did these foundations play a role in your leadership and management over the last 30 plus years? And besides for the people?

[00:13:41] Rob Hassold: Yeah, from the financial aspect, you, can’t just, you gotta prep the company financially for these pivots, right?

Pivots, and a lot of them…

[00:13:48] Rob Hassold: You just, you can’t be running the company paycheck to paycheck and all of a sudden try and produce one of these major pivots. You kinda have to build up a war chest in some ways to make sure that you can weather that storm. And that’s a very important aspect to, to make it through these changes.

[00:14:07] Rob Hassold: Yeah. And again, going back to the people side of it that’s very instrumental. I will tell you though, that, from the market acceptance side of it, sometimes when I’m doing these pivots it’s I’m doing, ’em a little bit premature, which maybe isn’t the best route to do it. For example, when we first did this pivot, and I was looking to embrace technologies that were going do more of the high production or moderate production edited manufacturing.

[00:14:39] David A Rosen: This is moving away. This is the Stratasys

[00:14:41] Rob Hassold: moving away from prototyping, right? More towards production in 3d printing. We did that simultaneously with both the plastic side, so printers that printed plastic, but also started the process on the metal side. And the metal side was really not ready for prime time.

[00:15:01] Rob Hassold: A lot of what I knew was going to be happening. Wasn’t gonna be happening for a couple of years, but we started the relationship specifically with, at the initially with desktop metal. And when you’re an early adopter into a startup like that, not everything goes right from the get go, there’s right.

[00:15:22] Rob Hassold: Product introduction, delays, there’s technologies that’s released. That’s not ready for prime time. And this is not just with one single vendor. We ran into these bumps in the road with several vendors and we wound up really, some of those relationships really were not profitable for the first couple of years.

[00:15:43] Rob Hassold: And as an example with desktop metal, now they’re in a position where, they’re delivering on the technology. The technology works extremely well. Their shop system is a great system to be, 3d printing metal parts at moderate volumes of, thousands to tens of thousands.

[00:16:01] Rob Hassold: Great. For a segment of our customer on the software side, which is the typical job shops. And we also have a relationship with exact metal, which is a more traditional. Direct metal laser centering process. And these are all relatively young companies that weren’t around several years ago.

[00:16:24] Rob Hassold: and fostering those relationships them trying to figure out exactly what the right go-to market strategy is. And working through that relationship is very challenging, sometimes extremely painful. But what I will tell you, it, it can pay off. For example, just this past year, we were the number one global reseller of desktop metal.

[00:16:50] Rob Hassold: And additionally, we were also the number one global reseller for exact metal as well. So metal 3d printing, which was an insignificant part of our business just two years ago is 40% of our business today.

Pivots – What did you expect for returns and what actually occured?

[00:17:05] David A Rosen: Wow. And you, so you recovered from letting your Stratasys or selling your Stratasys line. Interesting. Good for you, Rob that’s.

[00:17:16] David A Rosen: So how long did it take you from the time in which you thought about making this change and the time, and actually you started making the change. And then the second question to that is how long did it take you to, what did you ex, what timeframe did you expect to break even, and get back to normalcy with the new products, the desktop metal and the other one.

[00:17:41] David A Rosen: And what did it really take?

[00:17:44] Rob Hassold: Yeah.

[00:17:45] David A Rosen: And thank you for sharing this. You’re giving

[00:17:46] Rob Hassold: me some. I know it’s hard. See here on that question.

[00:17:49] Rob Hassold: So I would say, I started thinking about making this change about three years before I did it. And one of the biggest challenges is as a company representing vendors or technologies,

[00:18:03] Rob Hassold: typically, if you’re gonna get any value from it. And we did get value from the Stratasys side of our business, through a customer base swap. But very typically when you exit a relationship, you’re usually prevented from selling into that space. So what I was trying to do is figure out, okay, how am I going to exit this relationship?

[00:18:28] Rob Hassold: Get value for it, but at the same time, not being shut out from the 3d printing market for two years.

[00:18:37] Rob Hassold: And it took me a while to figure that out. I I was lucky enough to find another reseller who was interested in our 3d printing business and had a smaller master cam customer base, which we represented.

[00:18:56] Rob Hassold: So at the same time, one of the other vendors that they were representing competed in that same space as master cam. So they weren’t going to put a non-compete clause against me on the 3d printing side, because then I would’ve asked them to do the same on the manufacturing or manufacturing software side.

[00:19:19] Rob Hassold: So you wound up being an ideal situation. To make this pivot and get some value out of it. But at the same time, be able to continue to sell 3d printing technology. So that was one thing. And then the time I expected it to take to at least start turning a profit, I wouldn’t say profitable because, when you become cash flow pro positive, you’re not necessarily profitable from all the effort you put in the previous years.

[00:19:51] Rob Hassold: But when I became, I expected to become cash flow positive in about a year and a half. And I expected to recoup and become profitable in about three, three and a half years. But seeing as two years into this we went up being hit by a pandemic that stretched out the timelines a little bit.

[00:20:13] Rob Hassold: So last year was really our fourth year into, it was really when we became profitable. So towards the tail end of my expectations. And we became cash flow positive a year before that. And mainly that was because of because of the pandemic. I think if the pandemic hadn’t occurred, that it would’ve been more in line with my my optimistic view of what would’ve occurred.

[00:20:40] David A Rosen: wow.

Embrace Partners and Good Relationships. They are few and far between

[00:20:42] David A Rosen: Any other lessons that you learned from all of this that you could share?

[00:20:46] Rob Hassold: Yeah. I will tell you that if you have. Business partnerships that work and are fair and profitable. Embrace those relationships, take care of those relationships because those are far and few between. It’s really hard to find good relationships in the business world.

[00:21:11] Rob Hassold: Throughout the course of history with Cimquest of 31 years, we probably had major relationships with, a dozen and a half, two dis two dozen companies, minor relationships with maybe 50 companies. And, I can look up my one hand and count the number of relationships that were truly ideal.

[00:21:35] Rob Hassold: For Cimquest. And part of that is it may not be that they’re wrong, but they’re wrong for us. And I’ve come to really appreciate the relationships and partnerships that I have that truly work for syst. And as you can, as you’ve heard with our position in the market with some of our vendors, it’s truly worked for those vendors as well.

[00:22:00] David A Rosen: Yeah. Be, and to your point, when you work with early stage companies that are NA with a nascent technology coming into the market, they may not know how they need to be organized five years from now or two years from now in terms of how to get to market for their business. One of the things that I’ve always observed from the manufacturer’s side of the business is that they often shift their their focus on the channels that they use to go to market. And some companies have gotten burned because they’ve gone from a heavy distributor and agent model to a direct sales model. And then all of a sudden they realize their mistake and they go back to a channel model. In the meantime, they’re not as they’re not as effective in their partnering and their compensation and their relationships.

[00:22:53] David A Rosen: I is that partly what drove some of your decisions as well, where the vendors changing their interest in keeping good partners and the way they compensated them versus their own alternatives.

[00:23:07] Rob Hassold: That, that is one of the key criteria that I look for in a partnership. That there’s. That they’re a company that is channel centric, right?

[00:23:18] Rob Hassold: That they are embracing the resellers for the distribution of their products. And it may not be all their products because, quite frankly, if you’re selling a product that’s a thousand or a couple of thousands, or maybe even several thousands of dollars, that might be ideal for, a direct web store, a Shopify site or whatever.

[00:23:38] Rob Hassold: Then there’s the real high end of the market. The systems that sell for several hundreds of thousands of dollars where the volume isn’t there it’s next to impossible for a reseller that’s local to a specific territory to gain enough knowledge and experience about the products to, to do it justice.

[00:23:59] Rob Hassold: And certainly for the manufacturers, enough meat on the bone for those really high end expensive products to sell those products direct. So there is definitely a sweet spot in the market in that I would say that 15,000 to $300,000 space where you really need a channel, developing your own distribution, not only nationally, but globally is extremely expensive.

[00:24:33] Rob Hassold: Plus I I tend to feel that when you have your independent reseller, whose heart and soul goes into the business and looking for every efficiency they can get is a more efficient system and structure. For both the company, the manufacturer and the customer so that the customer gets the best level of service and everything.

Challenges in the 3D Printing, Additive Manfuacturing Space Today

[00:24:58] Rob Hassold: So it’s really been interesting and challenging in the 3d printing space, because one of the, one of the things that has done a lot of damage to the industry, I really think is the easy money that’s flown in. That’s basically been put into this industry and invested in this industry.

[00:25:20] Rob Hassold: One, because 3d printing is a hot commodity and a hot topic. There’s a lot of buzz going on in this industry, but also simply because of the the M and a activity. The investment activity is really hot right now. And I think that’s caused problems. For the vendors, it’s caused product problems for the resellers, and it’s caused problems for the customers and prospects. In a normal environment where money isn’t being pumped in so freely into a space, innovators have to really have a good, solid business plan and in place, and they’ve even bootstrapped their own organizations.

[00:26:08] Rob Hassold: And they may think twice about trying to completely reinvent a wheel where they’re. Creating their own hardware. They’re creating their own software to support it, their go to market strategy, their marketing teams, their software, to everything that goes into building an organization. And we’re seeing so much of that happening in the 3d printing space, where companies are popping up right, and left.

[00:26:37] Rob Hassold: Now, the problem for that is there’s only so many independent resellers, like a inquest around to absorb those product lines. And many of the preexisting resellers are bound by noncompete by the one manufacturer point that representing. And that’s a really good point. Therefore, there’s a problem out there because these companies that have a new twist on the technology that would’ve been better off, just licensing that to the.

[00:27:06] Rob Hassold: Other preexisting companies are starting up their own companies and looking for distribution. And they’re finding that there isn’t enough reseller in, in the pool of resources to, to sell their products. And now they’re in a situation where they have to sell direct because they can’t find the resellers to sell those products.

[00:27:27] Rob Hassold: And it’s an uncomfortable situation. It’s also creating an environment where customers are completely confused because there’s so many me too products out there that have only minor S nuances to themselves. And they’re confused about, what is the right technology for my company and for my application.

[00:27:49] Rob Hassold: And that’s something that’s causing a lot of problem.

[00:27:52] David A Rosen: Interesting. So you’re speaking to a classic evolving market, but maybe one that’s maturing and being replaced. But my understanding is how much progress is being made. And this is a little industry geeky question, but how much progress is being made towards 3d printed products, not just being used for prototyping anymore, but to the point you were talking about earlier where they’re actually being put into production, because the one thing I know about.

[00:28:20] David A Rosen: Additive manufacturing, 3d printing, and the light, the leather laser centering is that the economics are completely different than traditional subtractive methods, where the economics of 3d printing that cost stays the same across all parts. , you can put 10 on a bed, you can put 50 on a bed, but the cost is still the same because the cost is mainly in the materials in the machine and the hours it takes to do it.

High Growth 3DPrinting Marketplace is booming…

[00:28:46] David A Rosen: So is it evolving now to where more 3d printed products are being put into production use?

[00:28:53] Rob Hassold: Yes. That’s a, that’s truly the exciting part for me. That was something that’s been talked about for, the past 15, 20 years, because 3d printing’s been around for 35 years. And in the beginning, the technology was extremely slow.

[00:29:11] Rob Hassold: The material inputs into the process were extremely expensive and the end results of the parts were not for end use applications, they were extremely brittle. But, and that was even true up until, five, 10 years ago. But real, really the nice situation today is that material science is greatly evolving.

[00:29:35] Rob Hassold: The speeds of the machines are greatly evolving. What you can do today in a day, only a couple of years ago, or several years ago, took a month or two. So the throughput is much greater. But and the advantage to 3d printing is you don’t have as much of an upfront investment. So that’s why 3d printing has always been a great solution for very low volume production, right?

[00:30:05] Rob Hassold: Because you don’t have to invest in any of that hard tooling, to produce a part and may have to invest $50,000 into a mold, to produce your first part

[00:30:16] David A Rosen: and the, just the material cost for the mold, much less the engineering of it, machining of it.

[00:30:21] Rob Hassold: exactly. Exactly. But once you scale up to, hundreds of thousands of parts and you’re amortizing that initial tooling investment into that process, that’s all of a sudden when it makes sense.

[00:30:33] Rob Hassold: 3d printing has been making advances leaps and bounds into the material science, making the parts great for end use applications. The speed performance throughput of the technology is greatly increasing. So yes we’re seeing a lot of adoption of this technology. There’s companies like smile direct, right?

[00:30:55] Rob Hassold: Where you know, that technology really wouldn’t be in existence without 3d printing, 3d printing using the HP multi jet fusion technology. Those forms to vacuum form the clear plastic over ’em, that’s what you’re putting in your mouth. And they’re producing these custom tools to do the thermal forming in mass production.

[00:31:22] Rob Hassold: And you’re seeing sneaker insoles that are customized. So a lot of mass customization, a lot of parts that are otherwise very difficult to produce because 3d printing gives you a lot more flexibility in the designs. You’re able to do design consolidation where maybe using traditional manufacturing processes, you’d have to have an assembly of several parts that then can be 3d printed as one complete part.

[00:31:54] Rob Hassold: So there’s definitely a lot of advantages to it. But what I will tell you is that 3d printing is just like any other tool in the manufacturing world. It’s just one tool that has specific applications. It’s great for, but there’s still other tools that have been around for many years, like molding thermal, forming, CNC, machining.

[00:32:16] Rob Hassold: Di forming casting, whatever that, have their strengths and will still be continued to be used for the foreseeable future. So 3d printing is not gonna replace all the other manufacturing methods. It that’s correct supplement. Yeah.

[00:32:34] David A Rosen: Just like a lot of people who think that the internet was gonna, crush, retail, there’d be no more retail.

3DPrinting works great for Prototyping, but not a first choice for medium to large scale manufacting.

[00:32:39] David A Rosen: So there’s always a balance that, that forms and whether it’s 50, 50 or 70 30, it doesn’t matter. But nothing like that typically goes away. And, I’ve been watching for as an investor, I’ve been watching companies like Protolabs and Shapeways, and they have been very challenged at trying to get into manufacturing volumes or higher volumes and production, because they’re only thought of at the top of mind as people who can help in the prototyping phase.

[00:33:11] David A Rosen: But when people want to go into manufacturing, regardless of the volume, they don’t think of these companies as a first channel for manufacturing and ideally thinking about, Hey, I can manufacture locally because they’ve got laser centering, they’ve got metal working equipment, but they just, the approach to getting production work is a lot different.

[00:33:36] David A Rosen: And it sounds like that’s one of the hurdles that you’ve been able to get over as you move from a Stratasys machine, into your desktop metals that are being used more in production,

[00:33:46] Rob Hassold: correct? Correct. And that’s awesome. And part of the challenge is just I think especially here in the us, people like to take the safe route, right?

[00:33:53] Rob Hassold: If you have a widget that’s been molded out of a certain type of plastic, and that’s how it’s always been done for the last 20, 30, 40 years. They don’t wanna venture from that. Nor do they have the expertise. What we call design for additive manufacturing or D a what, how do you design a part for these 3d printing technologies?

[00:34:20] Rob Hassold: And the design for additive is not the same across all the technologies, right? What, the way you may design a part for one technology such as dar lithography may be different than how you would design something for FFF or in the case of HP, the multi jet fusion or MGF technology. So we’re a little bit behind the eight ball, as far as educating the N engineers on how to, properly design and then getting the companies that are using these products or parts in their products to accept this new technology and these new materials.

[00:35:03] Rob Hassold: So it’s a kind of a long drawn out process that I fear may have to be generational in learning to adopt that. So it’s taking some time, but that’s of why we are here. And what we’re trying to do is move the needle on this process a little bit.

[00:35:17] David A Rosen: And, but that’s a tough situation to put yourself into, but you’re being very successful around it because, look at auto at autonomous vehicles, right?

An Analogy on Market Adoption: 3D Printing and Autonomous Trucks

[00:35:27] David A Rosen: Everybody’s, the politicians are thinking it’s gonna be here tomorrow. The same with, a hundred percent electric car use, but the reality is these things take 10, 20, 30 years to be adopted. And especially things like trucks, trucks are being tested autonomously, but only on a highway where they’re typically only going forward, but because the challenges of them having to back up and turn or anything else is going to be so much greater that’s going to take a long time.

[00:35:56] David A Rosen: And the people in the trucking industry are really saying we’re just doing this to be in the know, but the reality is we don’t think it’s gonna be there for 30 years. And so I’m keeping this economic model and we’ll. We’ll get there when we hit certain milestones. So has, so we’ve talked a lot about, you’ve had a product portfolio and some of those products the vendors change their direction or they change the way in which you can make money and don’t make it as, as successful as it has been as they get more mature.

Dealing with Inflection Points

[00:36:26] David A Rosen: And as new competitors come on the market as a business leader, have you faced other inflection points in your business that were based around either industry changes or based around the fact that you went from a million dollar business to a $5 million business and, has have things changed for you and have, how have you dealt with those inflection points as a business leader?

Keeping Up with Market Trends

[00:36:50] Rob Hassold: Yeah. So one of, one of the changes that we went through is, we were from the inception we were very CAD focused or engineering focused computer aided design. That was always a big part of our business. In fact, our first two products were master cam and CAD key. Even if you’re from the industry may not have heard of CAD key because it’s got bought out and is now called something else.

[00:37:16] Rob Hassold: But, really we felt that CAD was becoming a commodity and it was more about price. And the value of the value added channel was becoming less important because kids were in high school now they’re learning CAD. Running it through college and they’re coming out. They already know how to use the tools.

[00:37:36] Rob Hassold: They’re already proficient in it. They don’t necessarily need to take training. And another change that was occurring was that software was starting to pivot towards a software as a service business model. So rather than buying the software, like you would your car, you could essentially rent it.

Rapid Shift in On-Premise Software to the Cloud

[00:38:00] Rob Hassold: Okay. And that is something that’s becoming extremely popular. If you use any, CRM package like Salesforce or NetSuite, you’re using a software as a service product, which the entry price for that product is quite low compared to buying it. But typically once you get three years into it, you’re paying a lot more on an annualized basis for the product.

[00:38:27] Rob Hassold: That disruption that was occurring in that space was a little disconcerting to me, the commoditization of the CAD software. So I really felt that I wanted to focus more on the manufacturing side of the world because I felt that’s where a lot of the innovation was occurring at.

[00:38:47] Rob Hassold: Cause the CAD had really matured for the most part. And so that’s we were the number one, I would say, not the number one, but let’s say the first reseller of Solidwork in the world in 1995 and just seven years ago, we divested that because of those very reasons and felt it was time, really to get out.

[00:39:12] Rob Hassold: Whereas I mentioned earlier, a lot of my, peers in the industry were just, acquiring reseller after reseller and really becoming, a huge organization for solid works. And I wanted to really pivot more to towards the manufacturing side because the CNC equipment was becoming more sophisticated, needed, more support additive manufacturing or 3d printing, as you know is even though it’s been around for 35 years, it’s still considered a very immature industry.

[00:39:42] Rob Hassold: A lot of confusion in there where we can add value. So that’s something that comes to mind when you ask that.

[00:39:48] David A Rosen: And, I have some questions here around change, but I think we’ve talked a lot of it. It seems your organization and you are very nimble at getting through these things.

[00:39:57] David A Rosen: Maybe not as fast as you’d like, but I don’t think anybody ever achieves things as quickly as they’d like, because they’re always optimistic and but unfortunately hope is not a strategy. So you’re doing the best you can with your strategies. That’s amazing. Let me shift gears a little bit.

Rob Shares his Leadership Dynamics and Values for Success

[00:40:12] David A Rosen: What attributes do you think are important for a successful leader that you see and how do you apply that to your role?

[00:40:19] Rob Hassold: I really believe in leading by example, I tend to treat myself as more of an employee of the company. Than an owner of the company.

[00:40:28] Rob Hassold: So I try not to take liberties that, I wouldn’t necessarily offer my own team. I’m in there getting my hands dirty every day. Maybe not at the pace I used to 30 years ago but certainly I’m out there trying to get my hands dirty. I’d say another area that’s important is really transparency.

[00:40:47] Rob Hassold: Most of the people who come to Cimquest cannot believe the information that I share and that, that goes back to, some of the comments I made about managing change and making that successful and having that level of transparency. I really believe going back to the statement. I said that if you’re all gonna row in the same direction, you need the same information.

[00:41:07] Rob Hassold: And if you’re not gonna supply that information, you can’t expect the team to row in the same direction and row as hard as you’re rowing. So that’s important. And I think trying to be fair, looking at things from the perspective of the employees and not just from a management perspective, they’ll, it’s fair, being fair is a very gray issue.

[00:41:28] Rob Hassold: It’s not a black and white issue, so I’m sure there’ll be people that have worked for syst or who worked for syst today, who feel, I haven’t been fair to them. So it’s very subjective, but it’s something that you should strive for. So those are some of the key important factors that I try and keep in mind.

Speaking of Heroes…

[00:41:51] David A Rosen: What figures or people have had the greatest impact on your career and your style and leadership roles. I do know that you met David Copperfield at some point in time in your past. But who are the people that you look up to that you said, oh, I really like that thinking, or I’m gonna apply that and learn more about it.

[00:42:09] Rob Hassold: I like a lot of things that Jack Welch just said from, GE one of, one of the, my favorite sayings of his is when the rate of change outside the company is greater than within the company. You’re basically slowly going out of business. So being able to embrace change a more recent somebody who I really am impressed with is Elon Musk.

[00:42:35] Rob Hassold: As I think, I have a very early model of the model S at serial number 1 94, I put a deposit down two and a half years before I got my car, but my wife found out about it. She wasn’t too happy. And she’s who’s this Elon Musk guy, what are you doing? You haven’t even seen the car.

[00:42:55] Rob Hassold: You haven’t even driven the car. I’m like, yeah, but he’s Elon Musk. And this is the future of of of the car industry. And that was almost 13 years ago. I really am impressed with what he’s able to achieve and the chances he takes, which. Is impossible for any normal human being to live up to.

[00:43:16] Rob Hassold: But certainly if you take bits and pieces of what he does has done and learned from them he does work his people hard, but I think he creates a passion that a lot of people can key into. And that’s one of the things I look for when I’m hiring people. I really look for people who are gonna be passionate about what we do and what they would be doing at Cimquest.

[00:43:37] Rob Hassold: And, I also from a hiring, just not to go too far off topic, but from a hiring perspective, I have a saying that you know, to hire on hire on your cap, your capabil, not on your capabilities, but your abilities to learn. And improve yourself. That’s very, I important as well, because I think a lot of times people get too tied up into their past experiences and what I’ve found looking at people’s resumes that you can plug thousands of people into that same resume.

[00:44:11] Rob Hassold: And that’s very true in the 3d printing industry. There’s been a lot of people who have benefited greatly from being at the right place at the right time. And a lot of people in our industry are just trying to rehire the same people that really we’re successful, not because their own capability, but because they’re in the right place at the right time.

[00:44:35] Rob Hassold: And sometimes you may wanna look at, look for the people who were in the wrong place at the wrong time and are really good quality people, but maybe haven’t. Shine as well as they probably should have because of those situations. So that’s something that I look for as well,

[00:44:55] David A Rosen: That’s really good, Rob.

[00:44:56] David A Rosen: And I’ve had a similar experience where, what turns me on as a leading a business is watching people do things that they never thought that they would do, but they’re happy doing it. And that’s what gets me excited when I feel people pushing themselves in an area that they are good at, but don’t want, but don’t know how to admit it to themselves because they think they need to be 99% of the way there.

[00:45:23] David A Rosen: But they’re 90% of the way there. And it’s probably doing better than anybody who’s 99 and three more nines.

[00:45:29] Rob Hassold: yeah. And the saying, I was trying to think of earlier that I came up with was higher end potential and not credential.

[00:45:37] David A Rosen: I like that. I like that a lot. I’m gonna move to a couple more questions and then we’ll wrap it up here.

Private Company Governance and Value

[00:45:43] David A Rosen: But so what role has a board of advisors or a board or other advisors had on your learnings over the past 30 years? And can you tell us, do you have a board and is it of value to you and how, what value does it help the business with?

[00:46:04] Rob Hassold: We’re a small company. We’re less than 60 people.

[00:46:06] Rob Hassold: And I certainly believe that we’re probably close to the size where we really should be considering a board, but I’ve up till now. I’ve taken a different route and I think I’m open minded individual who likes to hear ideas. and I’ve found that, if you have 50, 30, whatever quality people in your organization and you set up a structure that can cultivate, the ideas and opinions of your staff, that is a great board for you.

[00:46:40] Rob Hassold: I think a lot of times companies shut those doors and don’t cultivate that information that’s internally within the company and that’s to their own demise. So doing that I think is very important. One of the things that you really have to do, if you’re gonna go that route is make sure that people understand that every day, I come up with, a hundred different ideas that I should consider or might wanna consider.

[00:47:10] Rob Hassold: And. After trying some and thinking things through, on some of ’em 99 of those are really horrible ideas. So when somebody has an idea and they bring it to you, you have to educate them that, coming up with those good ideas is extremely difficult and you don’t wanna be too quick to shut down those ideas.

[00:47:34] Rob Hassold: You don’t wanna say, oh yeah, I tried that, five years ago and it didn’t work out, take, if you wanna cultivate that culture within the organization, you want to basically ask them why they think it would work. and then say, based on your own experience as well, what, if this happens, wouldn’t that create a problem and kind of talk them through the process, even if in the end they realize their idea.

[00:48:00] Rob Hassold: Isn’t so great, but you can learn from them. They can learn from you and you appear to be much more open minded than saying yeah. That we tried that five years ago and it didn’t work because for them to take the courage, especially if they’re a low level person in the company to come to the CEO or founder of an organization with an idea that takes a lot of guts.

[00:48:21] Rob Hassold: And if you’re gonna instantaneously shoot that down, you’re gonna shut down that knowledge.

[00:48:26] David A Rosen: Interesting really good point. So switching gears for a minute, just thinking forward. So we’re hopefully after two years of this pandemic and hopefully we’ve got the endemic Boston finally just took down the mask policy on Saturday.

[00:48:41] David A Rosen: I was ready to do a whole mask burning program, like the women did in the sixties with their bras. But I found out that I wasn’t the first to think about that because there’s a fire pit right on the waterfront that was gonna go have a mask burning, but somebody else already did it first.

[00:48:56] David A Rosen: But if you think about what’s going on today, that was not predicted or not considered like increasing employee worker churn a change in the work environments from everyone in person to. Most remote, and then there’s gonna be a hybrid depending upon whether you need to be in the office or not need to be in the office.

[00:49:19] David A Rosen: Demand shifts are changing. Customers were changing what they were buying. Look at our habits. Our habits changed, I only buy, I buy probably half the deodorant I used to buy. And I think about my wife, we’ve saved so much money on cosmetics because she doesn’t have to go in the office every day.

[00:49:36] David A Rosen: So demand is shifting. You’ve got supply chains that are upended and shifting because of buildups in the, on the, and access to capital is changing and shrinkage is growing. People are stealing more. What are your reactions to this list as a part of the manufacturing industry and a part of as an industry leader, what can you share with others about what do you see going forward from here?

[00:50:02] David A Rosen: What do you see happening? That’s on the horizon? That is exciting.

Post Pandemic Consideration

[00:50:06] Rob Hassold: Yeah. I think the pandemic definitely has changed a lot of things. One of the things I will say is that about seven years ago, we took an industry leading position on remote training. And we really put a lot of effort into making sure we had the technology and the trained staff to offer our training classes in a hybrid mode where people could come and take the class at our office where the instructor was teaching.

[00:50:43] Rob Hassold: they could opt to take that training at one of our other offices using our equipment and facility, but, being live streamed into the class. And then of course they could stay at home and attend the class and have their bunny slippers on and everything like that. so they could really participate in the training three different ways.

[00:51:07] Rob Hassold: And, I would say we got to the point prior to the pandemic where about 10% of our students were remote. But obviously once the pandemic hit and everybody was shut down, a lot of our, a lot of our industry peers were all scrambling to say, Hey, how are we gonna train?

[00:51:28] Rob Hassold: Our customers and we were all set to go. It really didn’t take much for us to do that. And obviously there was a point at which a hundred percent of our students were all taking training remotely. Today it’s close to about 50%, five, 0% of our students are remote. So it seems to be sticking.

[00:51:51] Rob Hassold: And it also benefits the customers because they don’t have the travel expenses. They are able to take a class more readily because maybe, we have a couple of different offices, so they had to wait through the rotation until the training was being offered more locally to them. So instead of having the training available to them in a couple weeks, they maybe had to wait two months for that class to be in their area.

[00:52:19] Rob Hassold: but now there is a lot more acceptance to taking the training remotely. And we’ve gotten great feedback from it where people are literally sending comments in our survey saying, you know what? This is, just about as good as taking the class in person. There’s still a preference to be in person for most people, but it’s truly effective.

[00:52:40] Rob Hassold: So that’s one change that has occurred from the pandemic, which I think is positive. Quite honestly, I’m hoping that the us educational system learns from this and starts offering more training in this manner because I think educationally we’re not as efficient as we could be when there’s, an expert at teaching, physics.

[00:53:02] Rob Hassold: on the west coast and some high school somewhere that could be teaching everybody in the country at the high school level. Good point. Hopefully those changes continue to propagate and improve things. Obviously there’s the, work from home issue, which has been an extremely challenging issue to work with, right?

[00:53:20] Rob Hassold: Because people are hearing our employees are hearing about a lot of companies that are offering work from home or hybrid business model. And I think one of the, one of the smart things I did was when the shutdown happened, I was quick to point out that eventually when the pandemic is over, everybody will be returning to work.

[00:53:43] Rob Hassold: Okay. Because I felt that if I opened up that floodgate and I allowed certain people who truly could be trusted to work from home efficiently or have the right position within the company to be effective remotely. And I start allowing them to do it, it was gonna create ill will for those who are not in that situation.

[00:54:06] Rob Hassold: So I felt that bringing everybody back to work for a certain period of time, which we’re at that stage right now, but then creating, solid guidelines as to how the work from home and hybrid model is going to work and be able to put thought into it and roll that out as a perk and not something that happened because of a.

[00:54:30] Rob Hassold: I think is a better strategy for us. And we’ll start rolling that out within the next two months or so

[00:54:37] David A Rosen: very well put Rob, I think that’s very effective way to set expectations so that they’re not, so that everyone will be treated fairly and equally, but then realize that you need to put things in place for this hybrid model or for this, three days a week or one day a week, whatever you want to do to provide flexibility for your workforce so that they appreciate what you’re doing for them.

[00:55:01] David A Rosen: That’s really good. Yeah.

[00:55:02] Rob Hassold: And there’s a lot of issues around that and it’s interesting with the younger generation and even with my own kids that, if I had the opportunity to work at SpaceX or Tesla. And I knew my cubicle was going to be 50 feet from Elon Musk’s office.

[00:55:21] Rob Hassold: Would I even consider wanting to work remote at all? Even if I had an hour and 15 minute commute, I’d be in there every day. And I think that’s something that the younger generation just doesn’t have a good appreciation for. And it’s gonna hurt them. Because one of the interesting situations with work from home is prior to work from home, you were competing against, the five talented people in the office.

[00:55:54] Rob Hassold: But now if you can work from anywhere, your company can hire anybody anywhere. So now the pool of talent. That you’re gonna be competing against is extremely greater than what it would be. So that also works against you. So if you have the opportunity to go into the office and work and be seen and interact with management, that’s a huge advantage.

[00:56:22] Rob Hassold: We are definitely gonna go the hybrid route. There are some people in the company that absolutely need to be in the office every day, because they’re operating the 3d printers or handling shipping or logistics or whatever. It’s we have to figure this out and we’ll try and create fair rules and guidelines.

[00:56:41] Rob Hassold: So everybody understands and that’s part of, creating a good culture is communicating and being fair.

[00:56:47] David A Rosen: Yeah. And, trying to accelerate the learning curve. Is more difficult to do remotely than it is in person. And so in those environments where you’re trusting people to back to our earlier point of having potential, they’re not gonna reach their potential as fast as if in a remote situation, if they have a lot to learn.

[00:57:10] David A Rosen: And so I agree with you on that. And I think that it’s a tough balance, but there’s a lot of people with expectations. One more question here and then I’ll, we gotta wrap it up. I think. But one of the things I’ve been finding is some middle market owners have actually appreciated.

[00:57:27] David A Rosen: Working from home as well. And I’ve met a number of people. And again, this is just analogous. It’s not, it’s not statistically valid or anything, but there’s a lot of owners that have realized that they enjoy working from home. They enjoy spending more time with their family and maybe working in their business or on their business in isn’t as much of a priority.

[00:57:49] David A Rosen: And that, they’re starting to spend less time with their companies. And in some cases it’s great because they’re prepared and they’ve learned how to delegate and they understand how, the hit by the bus scenario where the bus, the business should be able to continue to run without them because they work on the business, not just inside the business and in the business.

[00:58:10] David A Rosen: Have you been finding that as well in the manufacturing sector and the people you’re dealing with is that happening where they’re starting to spend less time on their businesses and are there businesses doing well for that? Or are there businesses starting to starting to be concerned because of the owners wanting to spend more time with their, on their other parts of their balanced

[00:58:30] Rob Hassold: life?

[00:58:31] Rob Hassold: Yeah. It’s tough for me to speak to about other companies on that point. I can certainly talk about it from my own. Perspective, there’s obviously different types of personalities in a company. I’m the type of person that I really enjoy face to face. Time is very important for my quality of life and motivation and happiness.

[00:58:55] Rob Hassold: It’s nice to be able to shake people’s hands. It’s nice to be able to hear things going on around the office that I otherwise would not hear. I felt more detached from the company during the during the shutdown. So definitely my preference is to be at my office in the company. I think I’ve come to appreciate the ability to be more flexible and certainly.

[00:59:26] Rob Hassold: As we go more hybrid, I’ll be a participant in that in that model. But there are some people that are just happy putting their noses to the grindstone and not interacting with people and not needing to be in person with people. And they get their excitement from, their day to day job and they don’t need that social aspect of being in person.

[00:59:50] Rob Hassold: So there’s all different types of people. And all this also it’s different with different size organizations, right? If you’re running a, a thousand person company, you have to learn how to manage remotely because you’re remote. Even if you’re in the office, you’re remote to majority of your company.

[01:00:09] Rob Hassold: And I’m probably at that point with, close to 60 people where I’m at that stage as well, where I have to probably learn how to do a better job managing the company remotely because we have other offices. I used to go to those offices, every couple of months or so. I haven’t been to our Sterling mass office in two years.

[01:00:32] Rob Hassold: It’s definitely affected things and, it’s, that’s the great thing about being in a company and running a company is every day is a learning, learning opportunity. And that’s an area where I probably have to get a little bit more comfortable myself.

[01:00:47] David A Rosen: That, that’s a great lesson in itself, Robin, I appreciate your humility and sharing.

[01:00:52] David A Rosen: And I really, this has been a great discussion with you and dialogue and I just have always admired what you’ve been doing in growing your business and taking market share, and then realizing that it’s time to get out of a certain product for whatever reason and able to shift and be nimble with your organization.

[01:01:11] David A Rosen: So thank you for sharing all that. Tell us how can we get in touch with you, Rob? And by, by the way, your all the information will be below the video cast and the podcast, and I’ll edit this out, but how can people get in touch with you and and follow you? Yeah

[01:01:27] Rob Hassold: I’d say I’m not in a lot of social platforms.

[01:01:30] Rob Hassold: I think my primary platform that I’ll I use and I try and post only when I have something significant to say is LinkedIn. That tends to be my platform of choice. And, certainly if you want to email me and open up a dialogue, I’d be happy to do that either through email or LinkedIn.

[01:01:52] Rob Hassold: And just like to hear from people and hopefully learn from others as I’ve continued to do over the past 30 years.

[01:02:00] David A Rosen: And can you, so can, do you want to share your email address and your website address?

[01:02:05] Rob Hassold: Sure. Website address is syst-inc.com. That is C I M as in Mary Q U E S T hyphen Inc. That’s in c.com.

[01:02:21] Rob Hassold: And my email address is R Hassold that’s, R H A S S O L D simps dash Inc. Dot com. Please feel free to reach out to me and David, I really appreciate the invite to participate in this and hopefully people get something out of this.

[01:02:39] David A Rosen: Thank you. This has been a great experience for me and I hope it will be for our viewers.

[01:02:44] David A Rosen: And thank you for your time. It’s been really greatly appreciated.

[01:02:49] Rob Hassold: Thanks so much, David. Appreciate it. Thank you.