MGMT Boston - W5, Q1 23 - Paperless Parts // Nick Abate, Salsify
Paperless Parts // Nick Abate, Salsify
TLDR:
Paperless Parts - “estimating and quoting software for manufacturers”. A vertical SaaS platform catering to manufacturers of all shapes and sizes
Nick Abate, Salsify - from Connecticut to Bentley to Babson to Boston Nick has worked across a variety of high growth experiences and shares his learnings from Salsify and beyond
As we dive into our next Boston startup, a quick reminder that we’ll be looking at these companies through the eyes of an investor. Because whether you’re investing capital, time (current or prospective employee), or dollars (current or prospective customers) everyone reading this is a potential investor in these companies. I’d like to introduce Paperless Parts, a Boston software company worthy of your time and attention.
Paperless Parts
Founders: Jay Jacobs, Jason Ray, Scott Sawyer, Matt Sordillo, and Steve Lynch
Founding: 2017
Mission: Drive innovation forward by making manufacturing more accessible
Employees: 150+ & 80% Local
Workplace: Hybrid
Stage & Capital Raised: Series B & ~$33.5M raised
Investors: OpenView (Series B lead investor)
Key Customers: KAD Models & Prototypes, Re3DTech, Metalmite, Reata Engineering, Athena Manufacturing, Pindel, and more here
Glassdoor Rating: 4.4
Valuation (estimated): $150M – $300M (assuming they sold ~20% of the company in the $30M Series B )
^ this is a useless number. There is no tangible valuation until the business is sold or goes public. Don’t forget it!
Paperless Parts is “estimating and quoting software for manufacturers”. They’re a vertical SaaS platform catering to manufacturers of all shapes and sizes. They help their customers estimate & generate quotes in order to make smarter, faster & more informed decisions to win new customers and increase revenue. Their goal is to transform operations for “job shops” through software that is tailored to the unique demands of the custom part manufacturing industry.
Sounds pretty straightforward. But to understand Paperless Parts you need to better understand American manufacturing. Paperless Parts customers help build race cars for NASCAR & Formula One, insulin pumps for Medtronic, lab equipment for Abbott, spaceships for NASA, and thousands of other custom parts for large original equipment manufacturers (OEMs). Seriously complicated stuff. These manufacturers, or “job shops”, field endless inquiries competing to make custom parts for large builders across a sprawling supply chain of industries, locations, and well…parts.
Let’s take KAD, a Paperless Parts customer as an example. They build products for Camelbak, Google, Medtronic, Square and Tesla to name just a few. In 2019 they generated 3,140 prototypes on behalf of 35 clients. How do you manage that type of complexity? Historically, manufacturers have patched together physical files, spreadsheets and tribal knowledge to keep all their quotes and pricing history straight. Like every other industry, there is a major need to simplify and host that data in a central place. That’s where Paperless Parts comes in.
Co-Founder Jason Ray was working on a Navy ship and saw up close how complicated it was to buy parts and deal with RFQs (requests for quotes). Co-Founder Jay Jacobs was running the world's largest prototype sheet metal shop. They came together with a vision to simplify the complexity of manufacturing alongside Scott Sawyer, Matt Sordillo & Steve Lynch.
American manufacturing has been sort of overlooked by software companies. Maybe it’s the disconnect between atoms and bits. Interestingly, Paperless Parts didn’t even start as a SaaS company. They launched in 2017 with a marketplace, positioning themselves as the KAYAK of manufacturing. But it stumbled out of the gates. Buyers would see a price they saw on the marketplace and then go compare it with the end manufacturer. Those values didn’t always match. Because pricing is a bit more of an art than science and between materials, demand, delivery windows, etc. prices would change. Trust in the marketplace faltered and they just couldn’t quite get it off the ground. Wrestling with this problem, they had to figure out how to dig their way out.
There was something that was working though.
Manufacturers really liked uploading their parts to the platform and using the pricing engine as a quoting mechanism for their direct customers. Supply side marketplace participants were using the platform to automate PDFs and get quotes out faster to prospective buyers. So Paperless Parts pivoted to a SaaS platform and they were off to the races serving a very important vertical about to be majorly tested.
You all remember the world coming to a screeching halt in March of 2020. Globalization effectively failed us overnight. Global supply chains stopped working and decades of cutting costs “offshoring” manufacturing jobs became a big problem. People were walking around their neighborhoods with bandanas on looking like they were about to rob a bank because we couldn’t get N95s back across the ocean. Ships were stuck at the ports for weeks!
Now, American manufacturing companies are rapidly “re-shoring”. In this Bloomberg article from November, Deloitte reported 25% American manufacturing job growth from 2021 to 2022. 62% of survey respondents said they had started to bring manufacturing jobs back to the U.S. and their data shows that American firms might reduce Asia-originating shipments up to 40% by 2030. That’s a major tailwind fueling some impressive milestones.
Paperless Parts just announced a move from their office in the West End to a new HQ at 60 State Street to kick off 2023. Over the past year the team has…
Doubled its ARR
Increased its customer base by 117%
Launched several major capabilities (if you’d like to read further linked here) including support for multi-component nesting, more flexible Bill of Materials (BOM), collaboration with distributors, Product Manufacturing Information (PMI) on Model-Based Definition (MBD) files in the Part Viewer
Been recognized as a Best Place to Work in 2023 by Built In & became Great Place to Work® Certified™
A few additional notes about the platform & product capabilities. There are specific workflows for different kinds of manufacturing to help identify commonalities in parts based on “geometry driven” insights. They integrate with ERP systems and other customer data platforms like Salesforce, Hubspot or Mailchimp, and even Quickbooks to streamline data entry and help track customer history.
The product is priced as a classic SaaS platform with a great memory too. With 2D & 3D CAD viewing and geometric search, Paperless Parts lets you view all file formats without having to pay for native CAD software licenses. Geometric search lets you know when you’ve made exact or similar parts in the past, reducing duplicate quoting efforts and increasing consistency across teams of estimators.
Paperless Parts also helps its customers achieve CMMC compliance. Security is essential in manufacturing and their platform helps clients who bid for defense contracts host data securely in the cloud. Analytics, file sharing, and customized pricing logic for quote forms fill out their suite of capabilities.
Operators to Know:
Beau Blinder, Sr Director of Product
Nicky Chu, Director of Design
Julia Cipriano, Manager, Business Development
Tyler McCabe, Sr Director of Onboarding and Integrations
Danielle Castronovo, Director of Marketing
Scott Mahoney, Director of Customer Success
Jessica Morris, Head of Product Marketing
Nate Roy, Director of Presales Engineering
Dana Wensberg, Product Manager
Kate Zinsky, Director of Solutions Engineering
My investigative powers continue to need work so apologies to the Paperless Parts team I know I missed many up & coming operators internally
Key Roles To Be Hired:
If I were interviewing here are some questions I’d ask:
What are the biggest areas of investment over the coming year? Whether it’s team, product, or a host of other factors always helpful to hear how they’re positioning for 2023
How have you specifically customized your org chart as a SaaS company to serve manufacturing customers? Org charts are treasure maps and since this is a digital company serving physical customers, would be interesting to learn some ways they've intentionally built the company to help their customers
What are the missing product features preventing you from closing top prospects? How is the industry shifting, what are the biggest competitive levers to growing?
Where is Paperless Parts in 5 years? How do you fulfill the vision of making manufacturing more accessible? For all the core software generalist applicants, this is an ideal opportunity to learn more about the manufacturing customer base and their needs
We’re optimizing for readability here so to learn more about Paperless Parts you’ll have to D.Y.O.R. I’m excited to watch this team bring more manufacturers into the digital age. The re-shoring American industrialists of the 21st century applaud your efforts. See you around State Street!
Nick Abate, Director of Sales Engineering @ Salsify
Nick Abate has always been drawn to high growth experiences. Whether it’s the bustle of a city, the hard work and discipline it took to play soccer at the collegiate level, or the explosion of e-commerce over the past decade he’s always sought bar raising challenges.
Nick grew up outside of Bristol in the small town of Burlington, CT. His graduating class was less than 200 students and, as he surveyed his options, he figured to get closer to a city with enough activity to start a high growth career he could either go north to Boston or south to New York. Juggling the sliding scale of academics, sports, and cultural experiences he headed north to Bentley just outside of Boston to play DII soccer for the university. He majored in Business Management with a minor in Finance, intelligently predicting that he would need to have a good command of numbers if he was going to enter the dynamic world of growth stage companies.
At Bentley, his interest in startups was continuously nurtured. He took business courses focused on entrepreneurship taught by practitioners & operators. He heard their real stories about companies tackling thorny problems with innovative solutions. It felt relatable and he was drawn further into a startup career. Nick even built a business plan one semester as part of an entrepreneurship course for a “construction tech” startup that had external cameras & sensors monitoring properties under construction when the owners or general contractors weren’t there. I’ll let him tell you the name if you want further details on that class project! But maybe he was onto something..
Soon after graduating, he was made aware of a unique opportunity to get his Masters in Management and Global Entrepreneurship nearby at Babson. During the program, studying alongside French & Chinese students, he spent time in Lyon, France consulting for a local energy company before traveling to Hangzhou, China to consult at a hospital before finally finishing up locally on the Babson campus. He sought his Masters to get academic experience with real world context early in his career and naturally, like everything Nick does, the program was accelerated and he finished in almost a year. He learned about entrepreneurship, building businesses globally, and began to look for an opportunity where he could further sharpen his skills. It was time to join the real world full time!
Nick soon found Brown Aviation Lease. The company had less than 10 employees and he was able to work directly under the company’s Founder. At an early stage company with limited resources, Nick learned quickly & up close about sales, marketing, and how to sell value to customers. He got exposure to financial modeling too since it was a “real assets” business leasing aircraft to colleges & universities helping prepare pilots for careers in aviation. After Brown Aviation Lease, he transitioned with the same Founder & group of investors over to the Commercial Drone Insurance space in a Product role.
Nick has always felt strongly about staying close to customers and their challenges.. He joined Burning Glass as a Solutions Architect where he could pair his sales & marketing experience with his newly acquired product chops in a hybrid career as a Solutions Architect. Burning Glass is a private equity backed company in the HCM (human capital management) space and this was Nick’s first growth software experience. He was drawn to the high growth potential and problem solving challenges of this area of startups. He grew from an individual contributor to lead a team of pre-sales Solutions Architects across a couple different verticals servicing Fortune 500 companies. He enjoyed working closely with product & sales teams to determine unique customer solutions that solved client problems and helped close deals..without derailing the product roadmap.
Like any high growth leader in the making, the explosion of e-commerce caught Nick’s eye. An experienced team with venture backed startup experience and previous exits of their own drew Nick in to Salsify. He joined as one of the first 150 employees working with brand manufacturers to help them “win on the digital shelf”. Salsify partners with 1000s of Brands and Retailers empowering them to gather their product content centrally, create engaging consumer experiences, and scalably publish that content out to 1,000’s of commerce destinations. Among many other platform features. Nick serves as a Director of Sales Engineering at Salsify managing a team of 7 Sales Engineers & Enterpise Architects focused on supporting Strategic Global Accounts.
And after moving north to Boston to attend Bentley, he’s made the Boston area his long term home. Growing up near the ocean, Nick has always wanted to stay close to the water and is just a quick drive from the Cape Cod beaches. Living north of the city, it helps to be a couple hours from the mountains too! Nick loves getting outdoors with his family of four. The other thing he loves about Boston is the local tech scene. He feels like he’s built a great local network that’s helped him make friends, grow his career, and continue to access high caliber opportunities.
He shared these 3 insights that have informed his work and growth over the course of his career:
Be Curious: “Be a curious individual. Be extremely curious. Always ask the second and third layer ‘why’ questions to really understand the root of whatever problem or situation you’re in and how you can solve it”. Especially as a sales engineer with customers, but also when you are working with internal teams or even in your personal life try to drive to understand the why. It’s impactful because it allows you to make better decisions around how you react or operate in all facets of business and life.
Link Tactics to Strategy: Nick explained that earlier in his career he struggled to understand the broader context of what he was working on day to day. He didn’t always clearly understand what he needed to be doing to make a big impact and in any startup, resources are limited so understanding what activities are going to be most impactful is critical So, over time, he was able to boil his work down to a simple question when he was in the weeds solving a problem - “how am I impacting or not impacting the business?” Being able to zoom out and see the “50,000 foot view” of what’s going on holistically is critically important to understanding the impact of you and your team's work and how you can help move the needle.
Transparent Leadership: Nick’s witnessed the best leaders he’s worked with over his career lead with transparency. In order to move quickly and as efficiently as possible, which is critical in high growth organizations, the best leaders communicate clearly and as openly as possible. Today, he actively works to coach his team and instill in up & coming leaders those same qualities. Working for people who are transparent about the decisions they make and take the time to explain their decision making process keeps people pulling in the same direction and therefore motivated, which he feels is critical to building successful teams.
Nick’s still optimizing for high growth opportunities. He loves the experience at Salsify and, much later, aspires to be part of the next generation of startups that spin off from a generational Boston company. He definitely sees himself staying in tech, close to and closely aligned with the needs of customers. As for e-commerce, he loves the continued growth of the space and the challenges involved in building for this new frontier industry. And he still makes time for his family with two boys under 4! That’s probably enough under management for now!
For more info on Nick’s career and for getting in touch with him directly you can reach out to him on LinkedIn. Thanks for sharing Nick. See you around town, at the beach, or on the slopes of New England!
Any feedback for me? Local startups or operators to highlight? Just reply to this e-mail!
See you next week!
-Matt