Stratasys Primes Market for 3-D Revolution; Executive Jonathan Jaglom talks about demand for three-dimensional printing, and the company’s business in Asia

Stratasys Primes Market for 3-D Revolution

Executive Jonathan Jaglom talks about demand for three-dimensional printing, and the company’s business in Asia.

THOMAS DERPINGHAUS

Dec. 15, 2013 1:01 p.m. ET

Once confined to highly specialized applications, 3-D printing is making an impression on a wider market. Stratasys Ltd. SSYS -1.71% is one of the companies preparing for a jump in commercial and consumer demand.The company, based in the U.S. and Israel, has been expanding in Asia, where so much of the world’s 3-D manufacturing occurs. The printers, which build physical objects from thousands of layers of liquefied plastic or other materials, are especially useful for making prototypes and other design-related work.

Jonathan Jaglom, the company’s general manager for Asia Pacific and Japan, said Stratasys is looking to expand its business beyond prototyping and has employees in the region focused on manufacturing applications for its customers.

Stratasys has 1,600 employees world-wide and posted 2012 revenue of $359 million. Mr. Jaglom recently spoke to The Wall Street Journal in Hong Kong about the company’s business in Asia and the market for 3-D printing.

Edited excerpts:

WSJ: Give us a breakdown of the Asian business.

Mr. Jaglom: The operations we have in Asia are mainly front-oriented, so sales, marketing, customer support and the back office related to that effort.

[We have a] very strong local presence, we [will] have eight offices by the end of the year, roughly 140 head count by the end of the year, purely to address local needs and channel.

WSJ: Do you have specific mandates as far as financials or the number of clients you would like to acquire in Asia? What are those goals?

Mr. Jaglom: Well, Asia today represents roughly 20% of the overall business for Stratasys, and fast growing. It’s the fastest subsidiary within Stratasys in terms of geography, so our targets are the highest. We set targets based on multiple [criteria], but the main one being revenue.

WSJ: Are those revenue targets something you disclose?

Mr. Jaglom: We disclose it on a global scale and we disclose the percentage coming from Asia. This year’s guidance is for $470 million to $490 million; of that, approximately 20% is coming from Asia.

WSJ: Describe the 3-D printing process.

Mr. Jaglom: Normally, we go to the prospect and we tell the potential customer that you can print that [product] on a 3-D printer because they don’t really know that they can do that. And that’s the biggest challenge. We’re in the business of educating a market, especially in this part of the world.

One of the main reasons why we’re very local here is because there’s a lot of efforts needed to provide all the tools and know-how to support the channel, to educate the market. Overall, there’s still a lot of work to be done on educating the market and understanding the value that 3-D printing can bring.

WSJ: How many countries in Asia have your sales channels?

Mr. Jaglom: All countries in Asia, subject to a few exceptions.

WSJ: Describe the benefit of 3-D printing versus doing it the old way.

Mr. Jaglom: We talk of four fundamentals that drive 3-D printing as an industry. The first being compressing time to market.

The second is called cost of error. Again, printing [a model] is really not expensive once you have the machine at hand; we’re talking about a few dollars to get that out.

We talk about creativity as a third fundamental. Say we’re all part of a big team of designers, the six of us, and my goal would be that everyone has a say, an ability to communicate to the team what he or she wished to design. So we can be more creative and the six of us can print something out and have it in our hands. And lastly, confidentiality, the fact that I can have this technology in-house. I don’t have to compromise outsourcing my future products to services outside the company, I can do it internally through buying a machine.

WSJ: The prototype stage is such a big part of manufacturing. Is there any idea that [3-D printing] would move into the actual manufacturing stage itself?

Mr. Jaglom: Well, we’re already there, roughly 10% of all our applications are in the manufacturing sector.

There’s actually a department at Stratasys that wakes up, goes to work every day and comes home at night thinking only of manufacturing and are measured on that.

WSJ: Those people focused on manufacturing, how do they do their business?

Mr. Jaglom: As challenging as it is to educate customers about the use of design, like we talked about before, it’s even more challenging for manufacturing. These people are really taking the role of consultants. We’re walking into big firms and consulting with them on how they do manufacturing today, how they do their jigs and fixtures, how they do their tooling equipment when a new product goes to market. And we’re sort of trying to guide them to make use of 3-D printing in that space. [We use] small teams, very highly mature, consultant-driven and targeting high corporations and trying to work with those corporations to address these applications.

WSJ: Are there forces of resistance?

Mr. Jaglom: You do have elements of resistance to any change.

Here in Asia, government involvement is tremendous, whether it be in China, Japan, Korea, Singapore. There has been a lot of government involvement in this region this year. And that helps, of course, because it tells basically that they’re projecting the message that 3D printing is the future of manufacturing, the future of product design. And by doing that, they are helping us promote this approach, and that helps a lot.

It takes time to teach anyone how to do things differently. There’s time and effort needed for that. And that’s what we do and we do it very well. We’re growing very fast in Asia, we had fantastic success this year, so I would say that we’re on the right path.

WSJ: Who are some of your clients?

Mr. Jaglom: 3D printing addresses any company dealing with product design and manufacturing.

The biggest markets tend to change as you look at different regions. In Japan, I would say that the automotive [industry] is huge for us, consumer electronics is very big for us. China and Korea are very heavily invested in education, they’re very focused on gearing up their future generations in making use of 3D printing.

WSJ: What do you like most about working in Asia versus where you worked before?

Mr. Jaglom: I love the speed, the pace. It’s so vibrant, it’s so exciting. Honestly, the growth has been phenomenal for us. Even Hong Kong, which is such a cool city—how efficient, how fast moving. And the pool of talent here, which is great.

WSJ: Do you do a lot of traveling? How often are you on the road?

Mr. Jaglom: On average, I’d say probably two to three days a week, or maybe three to four every two weeks.

WSJ: What are the countries you find yourself visiting the most?

Mr. Jaglom: I’d like to see all countries in Asia, but I get to see more of Japan, of China and Korea, which are the dominant markets for us. And then Southeast Asia, Australia, India. But primarily a large chunk of my travels are around China, Japan and Korea. Those are our biggest markets.

Résumé

Education: Bachelor’s Degree in Humanities, Tel Aviv University, 2003; Executive M.B.A., Northwestern, Kellogg Business School of Management, 2010.

Career: Started in Objet in 2005 as Regional Manager of East Europe. Held several positions at the company before being named General Manager of Asia Pacific and Japan of Stratasys after its merger with Objet in 2012.

Extracurricular: Swimming, hiking, history.