John McEleney, former CEO of SolidWorks, discusses how the 3D design company became a market leader. He reviews how it is easy to start a company but hard to build a business, offering an instructive view of the approaches he took that led to his success and the company’s ultimate acquisition by Dassault Systems.

1. Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
Hi
1
#innovationlab @mjskok #startupsecrets www.mjskok.com
MICHAEL J SKOK
Hi Harvard innovation lab
Turning Products into Companies
By Design & Architecture
twitter: @mjskok mjskok.com
North Bridge Venture Partners
STARTUP
SECRETS
Case Example: John McEleney
Former CEO of SolidWorks

2. Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
Hi
2
#innovationlab @mjskok #startupsecrets www.mjskok.com
For context and more information:
• The entire “Turning Products into Companies”
presentation can be found here.
• For more on the Startup Secrets series, visit
www.startupsecrets.com
• Related Startup Secrets presentation recommendations:
– Building a Compelling Value Proposition
– Go To Market Strategies

3. Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
Hi
3
#innovationlab @mjskok #startupsecrets www.mjskok.com
John McEleney, CEO Belmont
Solutions
- Previously CEO SolidWorks
- @johnmceleney

4. Turning Products Into Companies
J. McEleney, CEO Belmont Technology Inc.
April 2013
4/1/13BelmontTechnologyConfidential
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5. Background
• Former CEO of SolidWorks (2001-2007):
• $600M supplier of Windows 3D CAD software
• Acquired by Dassault Systemes
• Former CEO of CloudSwitch (2009-2012)
• Enterprise cloud software
• Acquired by Verizon
• CEO of Belmont Technology (2012)
• $9 M Series A (North Bridge, Commonwealth)
• $25 M Series B (NEA)
• Based in Cambridge
4/1/13BelmontTechnologyConfidential
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6. 4/1/13BelmontTechnologyConfidential
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CAD is the Basis of Every Product

7. Does anyone know what this is?
4/1/13BelmontTechnologyConfidential
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1-5-0-3

8. Where to sell?
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0-3 4-6
11+
6-10
1-5
1 2
3
# Units
# Months

9. Why did we care where VARs sold?
• Under-capitalized
• Need profitable, quick
sales
• New account penetration
was critical to our long
term success
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+ $
- $
Making Money
Losing Money

10. “1503” = Execution Philosophy
• From 1st customer touch -> product delivery:
• Minimize friction
• High touch, low cost
• Broad, stable revenue predictability
• Upgrades became an optimization challenge
• >500K boxes to be shipped
• 15.9 oz vs 16 oz (different UPS pricing schedule)
• “Land and Expand” sales strategy for major accounts
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11. Eco-system “CATCH-22”:
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Partners only want your customers, but…
You can’t get customers without partners

12. So how did we break the cycle?
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Marketing Cold
Fusion
Leaders Set The
Pace
Followers Will
Follow
Step # 1 Step # 3Step # 2
Credibility through #’s Get one partner, make
them successful
The others (including
leaders will join)

13. Meet your enemy:
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1. Events force action
2. The perfect is the enemy of the good

14. What you think vs. What you know
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Important MORE Important

15. Subscription: What price to charge?
• Situation:
• Competitors charged 18%
• Wanted VAR’s to provide end user support
• SolidWorks always wanted to take calls->help customers get into
production
• Action:
• Start with the VAR:
• How many customers could a support person handle?
• How much would they cost?
• What % margin does VAR expect?
• How do we make sure they call VAR first?
• Statistical Process Control
• Today this generates $300M (all of the profit of the company)
4/1/13BelmontTechnologyConfidential
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16. Some Other Things I have Learned:
• It’s easy to start a company, it’s hard to build a business
• Events force actions
• The perfect is the enemy of the good
• Hiring is the most important thing we do
• It should be part of your culture
• You are going to make mistakes, fire quickly
• Sales people:
• Look for the coin slot
• Look for people who want recognition
• Your job as the CEO: create the culture
• Hand written notes – go a lot further than you think
• Celebrate victories, anniversaries…
• As a leader NEVER take credit, give it to the team
• You will get enough, don’t worry
• If you’re doing your job, they did the work
• Have Fun – it’s the journey NOT just the outcome!
4/1/13BelmontTechnologyConfidential
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17. Thank You
4/1/13BelmontTechnologyConfidential
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18. Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
Hi
18
#innovationlab @mjskok #startupsecrets www.mjskok.com
For context and more information:
• The entire “Turning Products into Companies”
presentation can be found here.
• For more on the Startup Secrets series, visit
www.startupsecrets.com
• Related Startup Secrets presentation recommendations:
– Building a Compelling Value Proposition
– Go To Market Strategies

19. Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
Hi
19
#innovationlab @mjskok #startupsecrets www.mjskok.com
MICHAEL J SKOK
Hi Harvard innovation lab
Turning Products into Companies
By Design & Architecture
twitter: @mjskok mjskok.com
North Bridge Venture Partners
STARTUP
SECRETS
Case Example: John McEleney
Former CEO of SolidWorks