In the second part of our interview, Essentium CEO and Co-Founder Blake Teipel, PhD, provides perspective on challenges currently facing the company.
As we began our chat, Teipel focused on company updates and the role of innovation for customer progress; you can read part one here.
The course of true love never did run smooth, Shakespeare’s Lysander told his erstwhile lover; the same could be said for innovation.
From its start, Essentium has faced a long road. The company was initially founded in 2013, and took some time to ramp up into the entity we know today — well, entities, as Essentium Materials LLC and Essentium Inc. Focus was first on the materials side, with FlashFuse ‘electromagnetic welding’ technology to enhance Z-strength in extrusion-based 3D printing. As time passed, the company introduced its High Speed Extrusion 3D printing platform, with the recently commercialized HSE 180•S 3D printer.
Teipel noted as we spoke about the recent roadblocks that, “We’ve had challenges before.” So we took a bit of a step back to look at the historical picture.
Teipel’s own history as both an engineer — at Caterpillar Global Work Tools and Services and John Deere Power Systems — and an entrepreneur who’s launched three startups trace his interest and belief in the future of additive manufacturing.
“Ever since I went to grad school, I’ve had a clarion focus to give better tools to innovators; that’s why I went upstream to materials science and design,” he explained of his personal objectives and path to founding Essentium. “That was my goal in 2012 in gard school, and when I launched three startup companies. Essentium is the one that’s really hitting, so I committed fully to that one and have tried my best to uphold to that concept. I felt strongly that that innovation was what was missing from the industry and, from my time at Deere and Cat and in grad school, I’ve been holding to all that.”
With this as his guiding light, Teipel was ready to face the challenges ahead for Essentium. Looking back at the company’s funding history — which early this year saw a $22.2M Series A round that had been in the works with major partners BASF and Materialise — he noted that “it took a long time to raise the money we raised.”
That long time was a lot of work, and that’s work that Teipel says he and his team have been more than willing to put in.
“You should work really dang hard. If you give up nights and weekends that’s fine, do that so customers can innovate. BASF is with us, Materialise is with us, not only in the lawsuit, but fighting for the future of the customer. It’s not just Essentium. And of course there are many other great organizations outside of these three, but I will certainly say the fact we came together on the investment front was very aligned, very serendipitous,” he said.
And of course, the company is facing its biggest challenge yet: Jabil is suing Essentium for alleged trade secret theft.
While this isn’t by any stretch the first lawsuit in the 3D printing industry, it is perhaps one we’ve heard the most about while in progress. Essentium has not been quiet about disputing the claims, with both Chairman of the Board Steve Birdwell and CEO Teipel issuing public statements asserting the company’s stance.
Going beyond statements, Essentium filed a formal court motion this week to dismiss 70% of charges in the suit. On August 20th, Teipel issued this statement:
“Yesterday, Essentium moved to dismiss the lawsuit brought by Jabil (Case No. 8:19-cv-1567-T-23SPF). Our motion seeks to dismiss seventy percent of the claims asserted as being without merit as a matter of law. As for the other claims, Essentium asserts that in due course, it will demonstrate that Jabil had no trade secret or confidential information that could give rise to any claim of theft or misappropriation, nor did Essentium and the other defendants do so.”
Unsurprisingly, when we spoke, Teipel was unable to delve very far into the ongoing legal dispute. He did, however, provide more of a look into the mindset of the company than I’d been expecting.
“One thing I can reiterate is we did not do the things that were alleged,” he told me flat out. “I think you’ll see as time moves on, we’ve put in place the motion we think the courts will agree with, taking out 70% of a wide-ranging case Jabil put together. Our expectation is over time the rest will go away as well.”
The case itself is certainly troubling Teipel and his team, but he was also quite level-headed regarding the plaintiff — though not without some words on market positioning.
“Jabil’s an amazing company; I don’t want to take anything away from them. They’re also helping their customers innovate,” Teipel told me. “As we continue to innovate — that ‘we’ being every player in the space — every player is respecting the right of the others to disrupt. If someone is the victim of disruption, it’s not fair to use litigation to cry out against the concept of being disrupted.”
He quickly ran through the idea that Essentium is “not new to…innovation in hardware, in materials, in the platform space..we’ve been doing that a long time.” This history is evident in some of the recognitions Essentium has taken home from industry events, including awards for FlashFuse, for healthcare applications, and for its polymer system at RAPID + TCT and TCT Awards over the last three years.
These awards and innovations, though, are “all positioned through this lens of: if I make shoes, or trackers, how can I provide a new thing in my business model if that’s my usage model? Essentium’s here to support that.”
“The high notes are, we believe in innovation; our customers are being given the right to innovate; a startup will disrupt,” he laid out. “Startups will disrupt larger companies: that’s what will happen. The rule of fairness applies. We’ve abided by that from the beginning, and that’s what we’ll continue to do.”
Teipel acknowledged that the current litigation is “certainly a challenge” — but that won’t stop them.
“That’s the main message at the end of the day,” he told me. “We’re going to move through this, we’re going to serve our customers, and customers need to be able to continue to have the ability to innovate… We believe that an open model is the way to innovation, that’s what we’re seeing. From the people making appliances that go in your house to those who make shoes, everyone wants more innovation, more access to innovative business models: that’s the future. The company that can latch on to that and provide for that will win. We want to contribute to the ecosystem and move it forward.”
In looking to that building of an ecosystem — not just one solution, not just one supplier or just one customer — he drew back to the academic perspective. In academia, he noted, “you leave your work at a point that others can build off it; that’s what science is.” Essentium is looking to build off of existing work as well as to provide its own work for others to build from.
And of course, there’s the undeniable fact that as the 3D printing industry in general is growing, so too is its workforce. Growing, yes — but still a bit of a limited pool for some time.
“If you’re going to say to yourself, ‘Gosh, guys from Company A went to work at Company B, they’re going to be required to unlearn what’s in their memory,’ [you’re being unrealistic],” he said. “Jabil’s a huge, massive company, and you say any big company that doesn’t like the fact that some folks left and will try to kill whatever pops up next, that’s not right, that’s not American. We’re in this system of law.”
In support of his point, Teipel noted that close partners like BASF and Materialise are continuing to support Essentium.
“BASF wouldn’t have committed to ten months of due diligence, looked through all our papers, left a stone unturned, if we didn’t have everything together,” Teipel said plainly.
Indeed, BASF was an early Essentium partner — and I recall being somewhat surprised the first time I met Teipel, back at RAPID + TCT 2017, when he told me that BASF had initially approached Essentium about working together. Due diligence indeed. I’ll be speaking to BASF in the near future as well to get further into that company’s perspective on current goings-on in the industry and with their partner.
“I think industry will see in time, through time and money, that the truth will come out. We just want to have time to get that through as well,” Teipel said in closing.