Shortest market research in the world!

After the success of CADTOOL in the vocational education system, I had to take a decision regarding the next step. Although we were making good money, I knew that I could not stay only in the educational market – it was too limiting with small potential for growth. I decided that we have to go to the industrial market.

There was a newspaper called: Computers and People, that was quite popular in the computer applications market. I put an ad there, in the main page, about our 3D wireframe CADTOOL program. I wanted to see who would be interested. I got three phone calls from interested people, with whom I set a time for demonstration. I was still working from my apartment, although I had already left my job at Israel Aircraft Industries to concentrate fully on the CADTOOL business. I was still the only full time programmer for CADTOOL, working with my 2 part-time student-employees.

I set the time for the three demonstrations for one morning, one-hour apart. I told Linda to leave the apartment that morning, and I put a small sign on the door of the apartment, with the company name.

The first potential customer arrived at 10 am. He said that he is an architect and is looking for a 3D CAD system for architectural design. He wanted me to draw in 3D a whole building, put furniture in one of the floors and give him a section showing that floor in detail! Quite a request from the wireframe 3D CADTOOL! It was clear to me that his requests were completely not in the realm of CADTOOL. Also as an architect, his only investment in equipment was a drawing table and some drawing tools. So obviously he would not probably be ready to pay much for the architectural software he was dreaming about! I just wanted to get rid of him, as what he wanted was nearly mission impossible for the current CADTOOL.

The second potential customer arrived on time and was a civil engineer. He wanted me to use CADTOOL to draw for him in 3D a complete dam and to calculate for him the amount of material needed to build the dam! Another fantasy request! I just wanted to get rid of him as fast as possible.. To add insult to injury, after he left, he knocked again on the apartment door and handed me the company sign that I have stuck on door – it had fallen when I closed the door!

After the strange and challenging experiences with the first two potential customers, I was now really in an apprehensive mood what would the third potential customer request. He arrived on time at 12 am. He had work clothes on. I asked him what he wanted me to draw. He took a paper and pen, drew two circles, one big and one small, at some distance from each other. He then drew two tangent lines, at top and bottom, between the two circles. He then said: I just want you to find for me the coordinates of the four tangent points! The most simple request that could have been! I asked him what was his business: he said that he has a CNC machine shop and he has to program the toolpath for his CNC machines. He said he often has to make such calculations and it is difficult for him to make them! In 15 seconds I drew the two circles, the tangents between them and gave him the coordinates he needed – so simple and yet so valuable to him!

At that moment, I made this quick calculation – this guy has bought CNC machines that cost him a few hundred thousand dollars and he only needed from me something so easy and trivial, but very valuable to him in his work! So he would be ready to pay a good sum for the software! And since there was probably tens of thousands of CNC job shop owners worldwide who needed similar software, then this potential market could be quite lucrative! At that moment I decided – I am adapting my software specifically to the needs of this machining market. That is the moment NCTOOL was born! It was probably the shortest market research ever done in the word, with only three people – but for me its results were ground breaking and defined the future of my company! Obviously this third potential customer eventually became one of our first actual customers of the integrated CADTOOL/NCTOOL product.

Since my main expertise was in CAD and not in CAM, I had to find somebody with experience in the field to define the NCTOOL product. I knew a teacher by the name of Bukai who worked in one of the ORT vocational schools and was using the CADTOOL program. I had become friendly with Bukai and he had told me that he had worked in CAM for some period in Israel Aircraft Industries. They had developed there a program called NC PART for internal CAM use. So I contacted Bukai and asked him to work with me part-time to define the specifications of the NCTOOL program, based on his experience with the successful NC Part program. This is how the first screens of NCTOOL were defined by Bukai.

Money was now flowing in from the successful sale of CADTOOL to the vocational educational market in Israel, mainly in the ORT and AMAL vocational schools. To develop NCTOOL fast, I knew I needed to add additional full-time programmers. I asked one of my part-time student programmers, if he knew somebody to recommend. He suggested a fellow student named Doron Ossovlanski. I knew Doron as one of my students in the Microprocessor course I was giving at the University. He had an interesting combined, smart, studious and mischievous look, with his round glasses, sitting in the middle of my class. I talked to Doron and he agreed to start working for me full-time, as he had just finished his computer science and mathematics degree at Bar-Ilan University.

This was one of the most important decisions I took in building the company, as Doron turned out to be a programming and mathematical wizard, who nearly single-handedly was responsible for all the complicated NCTOOL toolpath algorithms, that we had to develop through the years. It was and still is a pleasure to work with him, as he combined seriousness with funny light nature, including ability to do pranks, when needed.  He looked at his programming work as a piece of art – and it actually is, standing the test of time and thousands of satisfied users!

Another programmer I took was Rafi Barat, who was one of my Master’s students. He was a quiet, serious and organized person, capable of managing the programming  team. So with Bukai, Doron and Rafi we started developing the NCTOOL program. It went fast as we had good definition and programming team. We had also some consulting from Haim Deckel, a manufacturing expert, who has previously developed his own simple CAM program.

I then found out that in the technical educational market, ORT has bought a few systems of another English CAM system, called Pathtrace. What impressed them immensely about it was that it had a solid simulation of the machining process. Since most schools did not have a CNC machine, this realistic simulation provided a cheap alternative to the real thing. I brought to Doron a brochure of Pathtrace – it had one small picture, showing their solid simulation. I asked Doron to do something similar. It did not take him much and Doron was able to do it. Now the Pathtrace distributor in Israel was quite confident that the Solid simulation in Pathtrace was something so unique, that nobody can do something similar – he thought he got the market hooked and he was charging a lot to the educational market for each Pathtrace seat.

There was an exhibition for educational market products, including software. Both Pathtrace and us were exhibiting there. Every night I had to carry all the computers we had at the exhibition back home and then take them back the next morning – there were our precious working tools and I could not take the risk of leaving them overnight at the exhibition hall, with all the source code inside! The IBM PCs at the time were quite big and not so light to carry back and forth to the trunk of my Volvo car!

We showed our NCTOOL new solid simulation at this exhibition. The Pathtrace distributor was shocked! I still remember him passing quickly in front of our booth, turning his head to throw furtive glances at our gorgeous simulation! He realized that he had lost his advantage on us, but he was not ready to give up! Desperate people do desperate acts – a few days after the exhibition, I got a letter from his lawyer, stating that the colors we used in our simulation were similar to the colors used in the Pathtrace simulation and we had to cease and desist!

It was probably the funniest letter his lawyer had to write – as if you could have a patent on color combinations! Obviously I threw the letter to the garbage and we marched on! We crushed Pathtrace and I arrived to an agreement with ORT to sell them the NCTOOL system to all their schools for $870 per seat, in addition to the $450 cost for a CADTOOL seat. The Pathtrace distributor could not sell any single seat anymore and he even did not pay Pathtrace their part of the money he collected for the few Pathtrace seats he sold already – so Pathtrace fired him as their distributor and that was the end of Pathtrace in Israel.

We were selling hundreds of combined CADTOOL/NCTOOL systems for technical education and I did not know what to do with the money flowing in. We were still crammed in my apartment room. One day Doron came to me and said: when Linda is cooking in the kitchen, the fumes are causing my eyes to burn! I realized it was time to move out – I had grown comfortable working from home and I forgot that I had already a full team in this congested room.

I looked for a place to move to and I found this big villa, very close both to my apartment and to Bar-Ilan University, where I was still teaching part-time and my staff were doing course work. I bought the villa, with generous financial assistance from my father, but I somehow was still reluctant to move from the comfort of my home! Then Doron made his move – he simply took his computer and moved there. A small time afterwards, we all followed him and the company had its first serious office!

Additional staff joined, nearly all Bar-Ilan computer science and mathematics students, who finished their BSc and were going towards their Masters. My teaching at the University and the very close proximity of our villa to the University made it convenient for them to work in the company and do their studies. As the staff grew, the costs grew and the money flowing in from sales to the educational market, were running dangerously low and were not enough anymore to cover our expenses.

NCTOOL was getting more and more powerful and the time came to sell it to industry. I hired an engineer who worked previously in Israel aircraft industries and had done a programming course in Bar-Ilan. He turned out to be a natural salesman. We finally sold our first CADTOOL/NCTOOL system to a job shop in industry. That was our modest start in the long and steady march to conquer  the CAM market worldwide…