Lee-Bath Nelson and Moshe Molcho founded startup LEO Lane three years ago with the aim of revolutionizing 3D printing. Nelson was a partner in venture capital funds and invested in Israeli 3D company Object, which later merged with Stratasys. She also worked at IBM and Orbotech Ltd. (Nasdaq: ORBK), among other companies. Molcho was a manager at SaaS companies, such as Panaya and Mobixell. They met in a living room, and have been married for 27 years.
LEO Lane's (formerly Make it LEO) vision is to improve and streamline production using 3D printing. The company was founded in Ilan Shiloah's TheTime incubator, and raised money from angel investors (one of whom was Eddy Shalev) and from the First Time Ventures fund led by Shiloah, Nir Tarlovsky, and Jonathan Benartzi. The company does not physically produce printers; it creates a cloud service that facilitates uniformity and advance control in the quality of the product. "We're actually a software company," LEO Lane CEO Molcho told "Globes." "We enable companies to print 3D parts, so that they don't have to keep a large inventory of spare parts. Each company can make every product when and where it wants. McKinsey predicts that this market will have a $400 billion turnover in 2025, and the potential is huge."
The dream of a 3D printer in every home is far from coming true, but the technology is beginning to be relevant to the end consumer, not just huge corporations. "Two months ago," Molcho says, "Adidas unveiled shoes with soles adjusted to a person's weight. If a person does a lot of running, they will print a slightly tougher sole in certain places. They can produce a 3D insole for him according to characteristics such as weight and the type of physical activity."
"A virtual warehouse"
"Globes": The big money is still in industry.
Nelson: "That's true. We see it, for example, in a company like Boeing, which no longer has to produce large numbers of spare parts. There is in effect a virtual warehouse saved as files. When the need arises, they print the relevant part. Other entities using this technology include auto manufacturer Daimler and German railway company Deutsche Bahn."
According to Nelson and Molcho, most of the cost (78%) of the many spare parts in the world is not a result of raw materials; it is due to factors such as storage in warehouses, shipping, and scrapping of unused parts. These assumptions make the great potential of a change in the market clear, but they do not take into account the possibility of a given part not being properly printed.
Nelson: "There is a possibility of major savings, but if the part doesn't come out right, you won't want to use it. You can print all the parts on one machine on which you have good control, but you won't save that much. The trick is to produce the parts correctly and with decentralization. Our technology in effect "wraps" the product file, which contains all the information about the component: weight, what material is involved, etc. Our file actually enables manufacturers to enforce their rules and print the parts only in a location in which they will get the precise product."
LEO Lane operates on a software as a service (SaaS) model, and has now signed a cooperation and integration agreement with SAP estimated in the millions of dollars.
In which markets is your service relevant?
Nelson: "We're seeing it in transportation, mainly in cars, where large quantities of parts are involved. It's a lot cheaper to make a car than an airplane, but it's still a very big saving. Another area is white products: ovens, washing machines, and so forth."
Molcho: "We've come across data showing that 20% of the parts in the world stay in inventory for two years. During this time, they are moved from one place to another, someone might come around to count them, take them down, and remove the dust. It's a multi-billion-dollar market. For a company that makes washing machines, for example, it pays to continue offering parts for relative old models. If you look for a part for an old model today, you probably won't find it. The manufacturers want to supply the parts in order to encourage consumer loyalty, but it's simply not worthwhile now because of the related costs. Our solution makes it possible to manage a hybrid inventory - some of the parts will be physical parts in warehouses, and some will be stored on digital files that can be retrieved and printed within a short time."
Where is your technology involved?
Molcho: "I'll use an analogy from 2D printing. If you prepare a documents in a Word file and send it to the printer, it might come out on A4 paper or in a different size. If you create a PDF file, you can't change the content of the document or the definitions, and that's in effect what we do. Before, if you prepared a Power Point presentation on a computer whose operating system was in Hebrew, and then uploaded the presentation on a computer operating in English, it would all jump from one side to another. That doesn't happen with PDF. It's obviously a lot more complicated when 3D is involved."
What happens if I try to print a part on an unadjusted printer?
Molcho: "The file will refuse. For the major companies and brands, it's better not to produce a part than to produce a defective part. Incidentally, this does not necessarily mean an attempt to cut corners; it could be simply human error. If, for example, I send you a color file, you can select the definitions and print it in black-and-white. Our technology eliminates this option."
"We trust each other"
I have to ask this question - what is it like working with your spouse?
Nelson: "The truth is that I was very anxious, but it completely exceeded my expectations. We trust each other and we know each other, so we barely need to talk. I didn't want to do without the best person in the field just because he happens to be married to me."
Molcho: "We were worried about possible quarrels, and also about the economic risk as a household. The telepathy that Lee-Bath is talking about is very worthwhile. She's the one that brought the vision."
Nelson: "I brought the problem, and he brought the solution."
Published by Globes [online], Israel Business News - www.globes-online.com - on May 21, 2017
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