When Upverter first launched its Parts Concierge in 2015, co-founder and CEO Zak Homuth saw it as a way to get more people engaged with its design software. The Concierge, a real-time, on-demand, virtual assistant for engineers looking for specific parts, promised to remove the grunt work for engineers looking for unique parts that could take weeks to be delivered.
Just under two years later, the company made a pivot with the launch of EE Concierge, which allows hardware engineers using any ECAD or EDA tool to request any part be built, verified, and delivered on-demand.
While the old Parts Concierge required engineers to use and download the Upverter platform to request and make designs, EE Concierge now allows any engineer, regardless of company or software, to receive customized parts.
“If there was a fundamental learning, it’s just that engineers don’t want you to sell them CAD software, so stop trying to do that.
Homuth says it’s a big shift from the old model, which had the Upverter team making parts for “14 hours a day.” Now, requests for parts are outsourced to engineers around the world, who can log in and build parts for as long as they want — a more marketplace-focused model. The company recognized that customers saw the most value in the Parts Concierge, and not necessarily in a brand new software.
“We realized, what the fuck are we doing? Why don’t we build this into an actual product that non-Upverter users can use, why don’t we build some form of AI, why don’t we actually build a real product, hire a bunch of people, and sell it outside Upverter?” Homuth said. “It’s a very natural evolution, but a huge pivot for us in that 90 percent of revenue comes from Concierge, as opposed to the 10 percent that comes from SaaS software sales.”
EE Concierge can be plugged into, or used with any existing ECAD tool like Altium or Eagle, and uses artificial intelligence to read data sheets. It’s a value add for engineers working in enterprises, who can’t necessarily make the switch from corporate packages. The average delivery time for a part from Upverter is between six to 24 hours; currently, the process of creating unique parts can take several weeks.
“I guess if there was a fundamental learning, it’s just that engineers don’t want you to sell them CAD software, so stop trying to do that. Sell them the stuff that makes their life easier — sell them layouts, sell them manufacturing, and that’s going a lot better.”
Homuth says that while the company had Parts Concierge, they were trending towards break even; since the company started a pilot with three companies — including PCH LimeLab — 18 months ago, Homuth says last year was the first year the company didn’t lose money.
“We lost a million bucks a year for every year before that, and then last year, we actually made a small amount of money. But positive, which is cool. This year we’re on track to make a couple million in profit.”
StartUp HERE Toronto is a publishing partner of Betakit and this article was originally published on their site.