If you follow software markets for long enough, patterns start to emerge. More than just the boom-and-bust cycles, you see what begins as niche investment hypotheses transition into zeitgeists that define markets.
Right now, we’re witnessing one such transition in the industrial space. For a long time, spaces like manufacturing, supply chain and logistics, and industrial operations have lagged behind others with regards to software and digital infrastructure. For nearly two decades, many of the world’s industries have transitioned to the cloud, and the software tools available in these industries grew more sophisticated and easy to use. Industrials, however, have just begun this transition in earnest in the last five years, with COVID-19 representing an inflection point. Now, some of the largest providers in the world are racing to flesh out their offerings in the space.
Large organizations, however, often mask the dynamics of change at work. For that, you need to look at the next generation of innovators. For us, one such innovator is a company we’ve had the opportunity to steward at critical stages, Tulip Interfaces, the only no-code platform designed for frontline operations. This is why we had invested in the company’s Series A with New Enterprise Associates, led by Dayna Grayson, and served on its board of directors.
In this piece, we want to summarize what we think will be one of the defining trends in the next decade by recapping what brought us to Tulip. In doing so, we hope to share our insights about the future of software in foundational industries.
Tools for Frontline Operations
To understand how Tulip’s trajectory has presaged broader developments in this sector, it helps to give some context to my initial 2017 investment in the company.
At the time, Tulip was an early-stage startup with less than 30 employees. They had some impressive logos and a strong product, but were still in that rocky stage between product-market-fit and truly validating their concept. That said, Tulip had a novel approach to solving problems in one of the most expensive and intractable areas of industrial software, operations solutions, and automation.
Specifically, they were building a cloud-based platform for workers on the shop floor. This was a far cry from the large vendor and IT-owned MES and ERP systems common to the industry, and a huge advancement over existing systems, which ranged anywhere from outdated to unusable to paper.
Targeting process engineers and frontline staff was a gamble other companies weren’t making at the time. Most of the large no-code/low-code vendors focused their offering on office jobs and IT teams. Other cloud-based offerings in manufacturing focused on tightly constrained problems or set their focus on equipment and assets. To be focusing on this space, these types of workers, was a novel concept worth exploring. It helped that Tulip fit the model of several of NEA’s other investments I had led, including Formlabs, Onshape, and Desktop Metal.
In the last few years, Tulip has made good on their early promises, and the market has caught up. They’re poised to create one of those rare macro events, where a single concept can inflect how an entire industry operates.
One way we’re marking this maturity is with changing of the guard.
Why Now is the Moment for Frontline Operations
As Grayson leaves Tulip’s board to continue transforming foundational industries with her visionary firm Construct Capital, it’s my pleasure to fill the vacancy on Tulip’s board.
Here, I want to outline why I joined the board of a company like Tulip now.
Early in my career, I’ve had the good fortune of joining a company (Oracle) with a mission to disrupt an existing industry. Since, I’ve chased opportunities that bring a decidedly better value proposition to market.
At Intuit, for example, we helped small businesses spend more time running their business by simplifying their accounting. When I joined Salesforce, I was excited by how a simple browser interface could radically reduce the amount of time reps spend on non-selling activities. In both cases, these companies were focused on disrupting an industry and creating a category. Crucially, they did this by changing the way people worked.
But this isn’t just to rehash my CV. It’s to note that what I saw in those spaces is precisely what I see happening in manufacturing right now. It’s why I think Tulip is set to lead the next wave of disruption. The link, here, is that I see Tulip providing a level of transformational support to frontline operations workers comparable to what Salesforce did for CRM organizations.
For one, frontline operations jobs exist in a space underserved by software. While there are other no-code/low code platforms, none meet heavy industry’s unique needs. No-code for Operational Technology requires an integration between the worker, their physical environment, and their digital systems. It takes a special team to build this kind of tool, which brings software, hardware, interfaces, machines, and devices into a cohesive ecosystem. When I joined the board of Tulip, I did so because I saw a company that was able to transform operations work while successfully straddling that divide between digital and physical worlds. To me, manufacturing looks ripe for disruption in the same way that databases, CRM, and other industries I’ve helped disrupt have looked at critical moments in their history.
This, to us, is the story of manufacturing’s next ten years. The industry will continue to race to the cloud. SaaS is becoming the norm. COVID-19 showed us that the companies that could pivot fastest were the most resilient in the face of a crisis. Importantly, this move to the cloud is the beginning, not the goal. Manufacturing and frontline operations will continue to require software that serves the needs of its workers.
Manufacturing will only be as successful as its frontline workers, and those workers need to control their software to remain competitive. This is the vision we see in Tulip, and the defining narrative in the years to come.
When we choose which boards to join, we do so based on a number of factors, not limited to the vision and capabilities of the founder, the probability for success, and the size of the opportunity. At this moment, all signs point to the fact that industrials is ready for its software moment. We’re excited to shape the future of manufacturing at this critical moment.