Jeff Moe [Image: LinkedIn]
We speak with Aleph Objects Founder and Owner Jeff Moe for an update on what the future looks like for LulzBot 3D printing.
The last week has been a tough one for Aleph Objects, its employees, and the LulzBot community. The popular open source desktop 3D printing company laid off the large majority of its employees last week, and new details emerged to indicate that the end of this month could be the end of operations.
We’ve been speaking to many employees who have been impacted by the changes, including some who had left the company some time ago, to gain insights from the inside. Following our most recent publication, we heard from Jeff Moe, who founded and owns Aleph Objects.
I spoke with Moe for clarification on his side of the story and verification of some of the goings-on to take a look at what the near future might hold for LulzBot.
As Moe had indicated in other statements, the primary issue at play in the decision to severely reduce staff was cash flow, he confirmed.
“The main thing for business is cash flow,” Moe told me. “It fundamentally comes down to that, and as a business person you’ve got to call the shots. If in two weeks you won’t have the money for payroll, you can’t have them back in on Monday, right? That was really driving the call.”
It’s very much an “it’s not personal, it’s business” stance — and that’s a line that every business owner needs to keep in mind.
“What put us in that position was basically the product launches went a little soft… It took us a long time to get the [TAZ] Pro and the Workhorse out, and those kinds of delays meant more delays. It was costing us so much to make them, and the ones we made cost us over $400 apiece in labor. Prusa’s retail printer is less than that, though it was announced after this,” Moe laid out. “We got up to 150 people with temps, which we hadn’t used that much in the past, and it just cost us a fortune to do that. We were losing money on the machines, and we didn’t make that many machines. We’ve got about $5 million tied up on the shelf.”
The company, he added, “didn’t have cash in the bank,” but rather had that money on the shelf in finished and in-the-works products. The products, though, “didn’t turn into cash” once they were made.
“On the one side it’s money going out and what we’re producing; on the other side it’s income,” Moe said. “We’d been talking with a reseller we’d expected to place larger orders than they did, and we were expecting money we didn’t get. All those add up to not having the cash on hand. At that point, we have to pull the plug; you can’t have people working who you can’t pay.”
He did take a minute to clarify this point, though: all employees have been paid all wages due. “We don’t owe anyone for payroll, that all got paid up,” he confirmed.
And that, he said, is “basically the position where we landed.”
After The Layoffs
That’s how they got there — so what’s in store?
The “streamlined” operations still employ 22. And those people all still need to be paid. Operations are currently focused on selling existing inventory and looking for a buyer who might be interested in taking over the LulzBot line.
“We’re looking for a buyer before the 31st and we have a few people we’re talking to; there are a few people on the hook we’ve worked with for years, so that’s certainly a possibility,” Moe said.
Is a sale likely?
“It’s hard to place odds on it. We are talking to people every single day,” he said.
What if, I asked, no buyer comes through by the 31st of this month?
“We’ll have to look at it on the 31st,” Moe said heavily. “It’s a tough call on what to do then. I don’t want to understate it; I think you realize the seriousness of it. It’ll be tough.”
Here we also took a brief detour to discuss another factor of the still-operational aspects of Aleph Objects: service.
“I should also mention the warranties,” Moe interjected. “We are working to make sure all warranties are honored. We’re lining up a company that has been repairing our parts for years, and will be able to continue to honor all warranties.”
So fear not (on this count), LulzBot owners, warranties remain in effect.
Potential For Purchase
We spent a bit more time discussing the particulars of what a buyout might look like.
What, exactly, would a buyer get if they were to approach the sale? This question was raised by more than one former employee we spoke with recently, and I was glad to have the opportunity to pose it directly to Moe.
“What all would be included in the sale would be determined by the deal we make, and that can vary widely,” he explained. “There are many assets of the company, which does include, for example, the copyright on the Bio’s extruder… That would presumably be part of it as well. It would all vary though depending on whatever the specific deal made is.”
The point about that copyright was interesting, given Aleph’s strong attachment to open source — but there is always room for business decisions to be made, such as copyrighting important aspects of work done.
[Edited to add clarification; this quote added 10/17:]
“We…have copyright on everything we’ve designed since day one (including the Bio printer). In the USA, copyright goes into effect upon creation. You don’t have to register it or anything like that. We have copyrights and then put the item we have copyrighted under a libre license. Patents are a whole different story. We don’t have patents,” Moe says to clarify his remark on copyrighting.
I asked Moe what he might say to a potential buyer.
“For me, I’m not looking to make any money, for what it’s worth,” he said.
“The main thing is they’re going to need capital to keep it running. I was estimating they’d want to bring $3-5 million to the table. Grant [CEO and President Grant Flaharty] is estimating closer to $10 million. This is not to pay us, but what they’d want in their pocket to continue operations. If they don’t have that level of finance, they probably wouldn’t be able to make a go of it. We’d want to talk to people capable of that — and
the people we’re talking to, quite a few of them, they’ve known our company for years, and they know what they’re capable of and what we’re capable of.”
A buyer could also inject new life into paused projects.
One highly anticipated project was announced just ahead of the layoff shock: the LulzBot Bio.
The bioprinter, a first from a company best known for plastic extrusion 3D printing, is indeed quite advanced. Developed in concert with technology from partner FluidForm developed with researchers from Carnegie Mellon, the LulzBot Bio is an intriguing piece of technology to bring open source bioprinting to researchers.
“The other big thing is the bioprinter, which is 100% amazing,” Moe said of the project. “I’m sure you saw Joel Telling’s video — and that video understates what’s possible. They’ve already printed beating hearts. I’m reading comments about ‘someday they’ll be able to do this,’ but it’s more like, ‘someday was yesterday, we’re doing it.’ There’s work from Carnegie Mellon folks, where muscles are moving as they’re working on them. As amazing as the things in that video were, I think it’s understating what the printer can handle and what it can do.”
Joel’s video, available here, does highlight an impressive look at an impressive system — and one that, as Moe pointed out, has already shown some proven promise in creating functional tissue structures including a beating heart made over the summer.
“The project is on hold right now. I feel like all of medicine’s on hold with it, it could make such huge strides,” Moe said.
Were a new cash influx to come LulzBot’s way, the Bio could be taken off pause and moved into market. It does sound like an impressive project, and one with promise in lab work already being done.
So what’s next for LulzBot?
We’ll join Moe in looking to the calendar and hoping that a dedicated buyer might be ready to commit to a revival before Halloween ends.