Solidworks has an infallible growth plan: engaging with startups at a very early stage
An early entry into the startup ecosystem in India generates long-term benefits for various stakeholders, be it investors, accelerators, incubators, or corporates. Solidworks, a global leader in 3D computer aided design (CAD) software, has been walking this path since the last two years and is now reaping rich dividends.
Solidworks, part of France-based Dassault Systemes, is engaged in India with close to 300 startups, primarily in the hardware segment. It expects this number to cross 1,000 this year.
Their strategy is simple: Solidworks provides its stack of software to these startups at an early stage for almost no cost for a period of 12-18 months. The idea behind this is simpler: once these startups reach a certain maturity or scale, they will be become customers for life.
Suchit Jain, Vice President, Strategy & Business Development, 3DS.COM/Solidworks, says, “They (startups) do not have the time or money to invest in software as they are focused on building their products. That is where we come in to provide the necessary tools at almost no cost.”
The price range varies for paying customers. It starts with as low as Rs 10,000 for the student edition and goes all the way up to a couple of lakhs for a corporate account.
Connecting with entrepreneurs
Solidworks connects with startups largely through the incubator and accelerator route where they are able to choose companies that fit their profile. This has been the model it has followed in the US and China for the last three years as well.
Demonstration of 3D design software at the Solidworks World 2019 in Dallas.
The company provides its software products to 11 different industries. The top three categories are industrial equipment, hi-tech, and consumer goods.
The engagement with startups also includes support such as training, co-marketing opportunities, and design guidance. The goal goes beyond linking up with startups as Solidworks also becomes the “via media” to help the startup connect with the investor community.
In India, Solidworks has - over the last two years - been engaged with 21 incubators and accelerators, including the Nasscom 10,000 startup initiative.
PM Ravikumar, Senior Director, Solidworks India, says, “We engage with startups that are more into the hardware segment or those in the area of product manufacturing solutions.”
According to Ravikumar, they have put in dedicated resources to look into incubators and accelerators. At the same time, Solidworks also scouts for startups that fall outside the ambit of the accelerators or incubators with dedicated networks.
The long-term benefits
Solidworks does not believe that their task is over once they provide their software product to the startup. Their reseller network then engages with these startups to educate them and provide the necessary technical support.
“Once they are successfully out of the incubator, say for a period of 12-24 months, they are able to buy our software,” Ravikumar says. The conversion rate of startups becoming their customers is generally in the range of 50 to 60 percent.
Initially, Solidworks did doubt whether it would be able to find the right kind of incubators or startups, but the team is now finding that growth is taking place exponentially.
“Our basic principle is that if they (startups) have the ability to pay, then they can do it. Otherwise, they can start (paying) once they are successful. This way, they become our customer for ever,” Suchit says.
The engagement with startups also helped Solidworks see a parallel in India’s education sector and try and tap it. The company provided its software products at a very low cost to educational institutions and gave them free to students. This helped them tap early into a large talent pool, and potential customers in the long run.
Growth and the future
Solidworks entered the India market through the distributor channel with a single distributor in 1998. Today, it has a network of 38 channel partners, 400 technical resources, and 250 sales personnel. The company also has a research and development (R&D) centre in India, employing around 2,800 people.
Ravikumar says Solidworks has doubled its business in India over the last four years with a CAGR of 21.2 percent. Their target now is to double this number in the next three years with a CAGR of 24.2 percent.
“Our focus on startups is going to push us drastically up; this is the segment that will give us huge growth,” Ravikumar says.