Global Report

Unexpected demand turned this company into an exporter on the fly

Successful crowdfunding campaign gave Matter and Form lots of orders to fill

Matter and Form's 3D Scanner

(Matter and Form)

Drew Cox was an exporter before he’d even set up a company. In the spring of 2013, Cox, a former ad agency designer who had segued into video-game design, launched a crowd-sourcing campaign to see if he could drum up orders for an intriguing device he’d invented: a 3D photo scanner.

Using high precision optics, a photo scanner (it looks a little like a drip coffee maker attached to a turntable) can create a three-dimensional digital image of an object placed inside it. The scanned image can in turn be read by a 3D printer, which then makes a copy. The invention solves a problem that has bedevilled 3D printer fans, which is that these devices read graphics files that are not easy to generate for those not trained on the software that generates the images.

Instead of simply cutting a licensing deal with a venture capital firm, the 32-year-old Cox turned to Indiegogo for crowdfunding. Within days of launching, he and his co-inventor had raised almost half a million dollars, and had orders in hand for 1,000 units, with most of the customers in the fast-growing “maker” sector (groups of people who jointly rent work shops and share tools and equipment). The orders, moreover, had come from all over the world—the U.S., Europe, Asia and Australia. “We had no idea it would be this successful,” Cox marvels. “I was an art director and a programmer, not a business guy.”

Almost a year-and-a-half later, Matter and Form Inc. is a going and growing concern. With a dozen employees jammed into an industrial space in Toronto’s west end, the firm is hiring (it expects to have 20 employees by year-end) and looking for larger premises. It has since sold another thousand units, raised $2 million in financing from private and public sources, and attended the Comdex trade show in Las Vegas. Cox has also hired a young IP lawyer, Paul Banwatt, to take over the day-to-day operations so he and his development team can focus on enhancing the product to keep up with the rapidly changing 3D printing sector.

READ: Crowdfunding: more than a financial flea market

From the very beginning, Cox and his team have been contending with the fact that they were thrust immediately, and unexpectedly, into a global market.

Pricing was one of the first dilemmas. For simplicity’s sake, and so the company doesn’t have to deal with currency hedging, they decided to sell the scanner through the website at a single retail price of US$579, even though, as Cox observes, they’re over-pricing in some markets and underpricing in others. “I don’t think individual pricing [in each market] would work,” he says. “[But] in some places, like the U.K., the price is going to be too low.”

As for filling orders, they’ve had to scramble to make the devices and then work out the shipping, tariff and sales tax issues for individual orders. Consequently, some customers have had to exercise a lot of patience while they wait for their scanner to arrive. “We’ve had some bad mistakes,” Cox acknowledges. “That kind of thing can go badly for a company but we were honest with out customers.”

Looking ahead to larger volumes and even more international orders, Matter and Form has begun to sign up distributors to represent the product in a variety of overseas channels. The firm, says Cox, has finalized a few distribution agreements in the U.S. with large wholesalers, but it also did another deal with a tiny 3D print store in Tokyo, which has agreed to distribute the scanner in Japan.

Along with those logistical considerations, Cox says the company knows it needs to move beyond the social media-fuelled word-of-mouth momentum that generated the initial tranches of business. That will mean translating tech support materials and adding editorial content to the website with an eye to building an online community of current and prospective 3D scanner users. “That will grow naturally,” he predicts. “If we’re producing interesting content, people will rally around us.”

Cox, interestingly, acknowledges that he and his fledgling firm learned all of these lessons about selling internationally on the fly. Indeed, he muses that it was probably best that he didn’t know just how much detail sweating would be involved in shipping electronic devices all over the world, one at a time. “Globally, our ignorance actually helped us out a lot. We didn’t realize when we went into Indiegogo that we were selling to the world. I think not knowing removed a level of fear. We were forced into [exporting] and we had to make it work.”