How Digital Alloys is Persevering Through the Pandemic
April 14th, 2020
Digital Alloys’ team working in the Lab prior to COVID-19
The COVID-19 pandemic has deep and widespread impact on lives, communities, and businesses. Hardware startups, where progress requires people working together in close proximity, building and testing physical things, are strongly affected. It’s hard to maintain a safe distance from each other in the work that we do. And every day that a startup cannot make progress against its business and technical goals diminishes its chances of long-term success.
We at Digital Alloys, a hardware startup developing metal 3d printing technology, want to share how we have reacted to COVID-19 to position ourselves to survive this pandemic, and thrive once it ends. The goal of this post is to update our partners and customers, and to thank those that have supported us during these uniquely challenging times.
Coping with the Pandemic, and Extending Our Runway
We reacted quickly to protect Digital Alloys from the pandemic’s effects. Most importantly, we have been fortunate so far in the health of our employees and their families. Only one of our employees has contracted the virus and has thankfully since recovered. Part of our good health is the result of good planning. In advance of the lockdown, we implemented telecommuting for those who didn’t need the lab, travel restrictions, and an aggressive self-quarantine policy for employees who had traveled. Part of our good health is luck.
We are thankful to have mostly avoided the loss that others are experiencing. Our thoughts are with those of you who have lost loved ones or are fighting this horrible virus.
The health of our company has also been assured. “Runway” is the length of time before a startup runs out of money. When a business is derailed by a black swan event like COVID-19, additional runway helps offset the new risks and improves the chance of a successful take off. At Digital Alloys, we acted quickly to increase cash and reduce spend. We are proud that our actions did not include layoffs, furloughs, or pay reductions for individual contributors. And we have retained everything we need to deliver parts in 2020 to our many customers who are waiting for them.
To reduce spend, we made painful but decisive cuts. Everything was on the table as we looked for any budgets that didn’t directly help us reach our next critical set of business milestones. Examples of our spending reductions include:
- The management team canceled bonuses and took voluntary pay cuts
- The marketing budget was eliminated, including trade shows
- All outsourced software projects were cancelled
- All other contractor positions were eliminated
- We cancelled our paid summer intern program
We were relieved to meet our budget reduction goals without impacting employees. We regret that we had to pause, for now, our work with valued development partners.
Based in part on the commitment we demonstrated with the above spending reductions, we were able to raise additional capital from our current investors and financial partners. A big thank you to G20 Ventures, Khosla Ventures, Lincoln Electric, Silicon Valley Bank, and others.
The combination of increased cash and reduced spending extend our runway by 2 quarters, enough to offset the schedule impact of COVID-19.
Making Progress During the “Shut-Down”
On March 24th, Massachusetts asked non-essential businesses to close their offices. Digital Alloys’ management team predicted this and spent the prior weeks planning how our various teams could continue to advance their work from home. Software projects travel well but the mechanical and printing work was understandably more difficult. Our hardware team brought whatever tools, parts, and sub-assemblies home that could allow them to continue their design and testing work. We re-routed shipments of machine components and prototype parts from our office to the appropriate individual’s homes. We ensured everyone had VPN and web conferencing to use our software systems and stay connected to each other. Our regular meetings continue, including our daily lunch-time hangout where we all enjoy catching up:
We continue to make technical progress but, without full access to the lab, it is slower. Like many hardware startups, we are in a strange limbo until our whole team can be back in the office together. We continue to stay motivated while we anxiously await the day we can all safely get back to our office. We are eager to see each-other in person, and share more evenings and weekends in the lab.
We do not expect it will be completely back to “business as usual” when the lockdown is lifted. We are making plans to work intelligently and safely, doing our part to slow the spread of the virus.
One of the reasons we are so excited about continuing to develop and commercialize Joule Printing™ technology is its potential to digitize manufacturing, making our global supply chains more resilient to future disruptions like Coronavirus. Future Joule Printing factories will be able to run lights-out, anywhere in the world, supplying critical components that are most needed to support society through the next pandemic.
We want to take the opportunity to thank all our customers and partners for sharing this vision with us and for their support during this downturn. We eagerly look forward to picking back up on Joule Printing projects with them and continue to see a bright future on the other side of this. We hope everyone stays safe and healthy.
Your Digital Alloys Team