💡 Founder Spotlight: Juan Carlos Munguia

Hi folks. Welcome to another episode of our Founder Spotlight series on Cloudflare TV. My name is Jason Kincaid. I'm on the Strategic Programs team. And today it's my pleasure to welcome Juan Carlos Munguia. Juan, welcome to the show. I'd love to get started by asking you a little bit about yourself and your company. Could you introduce us to the startup you run? Yeah. Thanks Jason for the introduction. So hi everyone. My name is Juan Carlos Munguia. I'm the co-founder and CEO of AIM Aerospace RTC. We're a startup company that focus on developing affordable, large 3D metal printers. And also we provide 3D printing service to the industry, mostly on the aerospace, but we have customers on the automobile and also on the medical division as well. Awesome. And can you give, just to make it a little more tangible, like we're talking about 3D printing. What is something that your customers are coming to you for help with? Are we talking like a big, you know, a big piece of machinery or is it like a small part they need that custom printed and that sort of thing? Yeah, we have a wide variety of applications for 3D metal printers, but most of the customers comes because of our capability of producing very large metal parts, like big structured parts. We currently can print on stainless steel, aluminum, Inconel. So, and we can even combine materials. So we have a lot of serious applications going right now, like heat exchangers. Also, we have developed some prototype for processes. So the applications is pretty, pretty large, but also like I've mentioned before, usually customers come to us when they don't find any suppliers that can manufacturing very large parts. We can currently print up to two by two meters long parts. Awesome. So I'd love to rewind a little bit, like to hear a little bit about your journey. So I know you've got an engineering background. Can you tell us a little bit sort of what was your path that led you to starting this company? Sure. Well, I'm an aeronautical engineer. Like you mentioned, I have a master's on aerospace design with focus on 3D printing technology or additive manufacturing. And I have been previously working for a lot of aerospace companies like Hollings Aerospace, like Safran Group. And basically all my background has been on the aerospace industry. But working with the other co-founders, the other co -founders, Jesus Arturo has also an aeronautical background. He has also a master's and he has been working a lot on the aerospace and also on the automobile industry and the other co-founders. Most of us have worked on the aerospace and automobile industry, but working around the industry, we start seeing that 3D printing has been growing very, very fast and more companies were trying to adopt the technologies. But when we start looking at the 3D printing, especially on the metal side, it was very expensive. And that's when we started figuring out like we should start doing something for ourselves and not develop technology for other companies. Right. So that's why we gather around and we started the company in 2018 with the focus on developing affordable 3D metal systems. It has been an up and down road, but then we started the manufacturing facility in Mexico, in Mexicali, Baja, California. But nowadays we have our facility in Austin, Texas. We have our headquarters and we're a 15 engineers group right now growing 200 percent year over year, with more customers coming to the company. And yeah, it has been very, very interesting. And the pathway has been always studying because most of the team are engineers. Right. So we know a lot about 3D printing technology, how to optimize parts, how to build parts. But a lot of the challenges have been on the financial side, like which will be the best financial model to develop and to keep growing the company. But thanks to a lot of mentors that we have been approaching and a lot to the International Acceleration Program, which is part of what take us to Austin. Thanks to all those mentorships, we are currently scaling up the business. Awesome. So that's all fascinating. Here's a question just sort of and I want to come back to your path in particular. But as I think about 3D printing, or I should say, when I think about 3D printing for the sorts of customers you're talking about, there's a part of me, it's like, well, aren't there already these big manufacturing companies with like these giant facilities where they, you know, they're already making this big equipment. So can you talk to me about this opportunity that you've seen where you're developing? It sounds like you're you're working on 3D printing and then you saw, you know, we don't necessarily need to be part of a bigger company to figure this out. It seemed like you saw something that you could you could still have a competitive advantage just by the fact that you're not one of these large incumbents. So can you tell us a little bit about that opportunity? Yeah, of course, there's competition, especially on the metal site industry. And like you mentioned, we have big players on the market, like 3D Systems, General Electric, which are big. But most of these companies currently focus on small metal parts. They want like good quality metal parts, but at a very high cost, right? So we were not targeting that market. We were targeting like, well, companies try to change forging and castings, but every time people want more larger metal parts. And that's when we saw the opportunity. So and we actually start working with these big companies, proposing them like they should start focusing on large metal 3D printings. But with that comes a lot of concerns about distortion of the parts and also concerns about, well, when you start building a very large metal parts, you have a lot of concentration of stresses. And that thanks to our patent, which is the heat in their chamber, it allow us basically to start building very large parts at a fraction of a cost. And we see like these big competitors, like even like our investors, because I actually when we came to them and we show our technology, they were very interested. And currently, I mean, it's part of a growth strategy. Maybe in the future, we can be acquired by some of these other big companies. Right. And we don't see them like competence. Obviously, there are other startup companies like Melt 3D, like Speed 3D, which actually they are also on the path of manufacturing very large metal parts. But I think that we're ahead of them because we have already done the technology developed. We already have a brand that is already positionalized in the industry, at least on Latin America. But but again, yeah, that's the path that we are currently following right now. Awesome. And and I correct me if I'm wrong, but it sounds like you have no intention of selling to those folks. But it's a good thing that there are potential acquirers in the market. Yeah, for sure. I mean, we're we're still so early and we we are not talking about selling the company right now at this stage of growth. Cool, cool. OK, so I'd like to hear a little bit more about you. So what led you into engineering and then also sort of what gave you this this inspiration to to become a founder? Right. So this is the founder spotlight. And it'd be great to hear sort of like what were the things earlier in your in your life where you're like, you know, maybe I want to run my own company or was there an inflection point later on where it seemed like something you might want to do? Yeah, all my all my life I have been passionate about the aerospace industry. Like since I was a young kid, I basically love aircraft and the air and the aerospace industry. But again, what has approached me to to develop my own company with the other co -founders, I can tell a lot of stories. But I think that what has been the key of success has been my family. Right. I have a wife and I have two kids and all my family has supporting me to keep growing and to keep focusing on developing new technology, especially being a Mexican founder. Sometimes it's very hard because, well, Mexico is not like a hub for developing technology. Right. Not like countries like the US or where you have a lot of opportunities for developed technology. But we were trying to develop something unique, something that can be reminded for the future. And working on the aerospace industry, it gave us a lot of opportunities because we saw a lot of different technologies changing and we saw a lot of opportunities on a new market that is very challenging. But obviously there's a lot of economic impact. Right. So when we start with the idea of creating Emerald Space, we start seeing that we want to, well, become more wealthy. Right. That's the correct thing. Like we want to have our own incomes and not to be depending on a company. Right. Because when you are an employee, yeah, you have a fixed salary and you can be you have your own things. You can have your wife, you can have your kids, but people want to have more for themselves. Right. So that's that was the idea of creating Emerald Space, creating growth and not only economical impact, like to create a real impact on the society, to create more jobs, to create more technology and not only on the Mexican region, also to become worldwide renowned. Right. Like right now we're penetrating the U.S. market and in the future we're trying also to penetrate Europe and Asia as well. So that that was a great answer. I appreciated your candor, your candor in there. And I imagine a lot of it's sort of controlling your own destiny. Right. It's you know, it's you don't have to convince. I mean, you got to convince investors, you got to convince customers, at least fine customers that are interested. But I imagine you're having to deal less with. They don't want to do this thing. You can sort of navigate your own path. So, yeah, very cool. So I'm curious. So you said the company started twenty eighteen and how big is the team now? Fifteen engineers working right now at the company. Fifteen engineers. So tell us a little bit about what is the day to day experience been like, like in the midst of the pandemic? Did you have to sort of radically change how? Yeah, well, that was a horrible experience. I mean, yeah, not everything has been good to the company. Actually, if you ask me these questions at the beginning of this year, well, we were about to broke. That's that's that's the thing. Actually, we were shut down three months, actually continually paying payrolls. So it was a pain, actually, as a manufacturing company, it was something from the government. The government say that every company needs to shut down for two or three months. So we need to continue paying. We obviously let need to let go some employees. Fortunately, we already hire them back. Well, not all of them, but but yeah, we most of the team has already been reestablished. But yeah, it was very hard coming up after a pandemic. Definitely, especially as a young co -founder. Well, we don't have any experience about how to handle a pandemic crisis. Right. Obviously, when you go to big companies, they have like A, B and C plans. But we only have like one single plan. Right. So having a pandemic approaching to us was very, very bad. Like I told you, we were about to shut down the facility. We were running out of money. But thank thank everything. Like we we were part of math challenge program. Also, we were part of the Babson Entrepreneurship Growing Program. And also we were part of Santander Bank program. And everything led us to start our manufacturing facility and headquarters at Austin. Thanks to the International Acceleration Programs. Some investors joined the company. So that gave us a lot of exposures and new projects. And also, well, that that was like the point of break even. And we were able to scale up. But this was just something that happened just recently on September. Right. So for September, we were probably broken down. But again, like right now, we're closing the year very, very fast. We have new customers coming very soon and new contracts also. So, yeah, but but again, everything changes so fast. That startups for you, right? Yeah, I mean, you think you're like, yeah, and then you're like, wait, we got we got some lift coming up. So I'd love to to dive a little bit more into that. So it sounds like there is there is this inflection point this year. Earlier this year, it was at the math challenge. Well, yeah, it was a combination of everything. Like the acceleration program of math challenge help us a lot on the on the visualization, especially talking with other co-founders that were currently challenging the same thing. Like, how do we keep growing? Right. And we start changing our mentality because one of the best ways of selling 3D printers is going to events. Right. But when it's a pandemic, you cannot you cannot go to trade shows. That's that's the point in like like trade shows went virtually. But it's not the same thing about showing technology through a Zoom link like we're doing right now as actually seeing the technology there. Right. So we start asking a lot of other co-founders, mentors, like what can we do actually to keep growing? And we start focusing more on inbound marketing strategies like how do we digitalize more the company and how do we shift a little bit our business model? And that's actually what it helped us. The acceleration program definitely help us on mentoring on how to achieve the sales process and how to become more aggressively in growing. Right. So and that's part of the growth of the company. We change basically 85 percent of all our process to be more digital. And thanks to that, we use now inbound strategies of marketing to penetrate more the market. And thanks to that, we're continually growing our customer growth base. Wow. And again, it sounds like so much of that happened just in the last however many months, right? Yeah. Yeah. It has been changes in a couple of months. The team actually cannot believe how many we have changed in the last six months. Right. That's great. Well, you know, that's one of the things about being a startup is you can be nimble. You're improvising. And, you know, necessity can be the mother of invention. Right. Yeah. Or a trite and true phrase. Well, it's great. I'm glad to hear that that it sounds like you've you've made it through one of those, you know, pressure, pressure cooker moments for the startup. And it seems like you're coming out of it for the better. So I going back to the awards, though, you mentioned and we were talking briefly before we went live that your company has won sort of several of these awards. Can you tell a little bit more like what what was involved for the company to get involved in that sort of process? And what were the awards for in particular? Yeah, well, actually, something I didn't mention before is that we're part of a university said this university here in Mexicali, Baja, California. So they have always support us basically in everything. Actually, our manufacturing facilities inside the university facility. And thanks to the university, we have been gathered around a lot of programs and acceleration programs. One of the one that we are very proud to be part of the finalist was the math challenge program. Like I mentioned before, it helped us grow a lot. Also, we were part of Santander X platform and we were awarded last week actually by Santander Startup Building Program, which was an acceleration program. It was challenged. It was like 500 startups that participate on the event. And we were the winner of that. Previously of that, we also participate on Rice Business Competition on April. That give us a lot of visibility. We participate with a lot of other universities like Johns Hopkins University, MIT, Stanford. And we were one of the finalists at that competition as well. Also, well, previously on 2020, we won the intellect program at Dubai, which is a very good acceleration program focusing on business developing for focus on the aerospace industry, especially Abu Dhabi and Dubai are industries there are very well known for the aerospace industry. And also we were we were the award winners of that program. Also, we were nominees by Forbes 30 under 30 magazine last year. We also won the North America Business Award in 2020. And we have also won other prizes like the Fondo Gallego Monge, which is an award from Setties University Entrepreneurship and Innovation. Right. So but it always has been like searching, which is the best competition for us and also to push it, position as the branding. Right. Because that's something that we are currently trying to do, that people know more about aerospace, about our technology and obviously about how can we help them change their current process using 3D printing technology. Wow. Well, that is a long list of accolades. So congratulations. Again, I want to I want to sort of double click on one of those. So you're in this competition. There's 500 other companies. You wrote your number one, right? You won the whole shebang. Yeah. What was the thing? So first off, were there like judges? I imagine there were judges. Right. So what was the the thing that you think helped set you apart from the rest of the competition? Well, all of these competitions focus on the pitch, actually. Obviously, you need to have a good business plan and every competition is different because especially the judges are very different. There are a lot of judges who may be very technical and they just want to focus on your technology and what's unique about our technology, what's your value proposition. But other may be investors, actually. So they want to know more about your traction or about your business idea or what are you going to take to the next level? Or others can be a financial guys who actually want to focus on your on your downstream or your value proposition or what are your attractions or what are your revenues? Right. So every competition is very, very different one from the other. But what I think that has make us being a good company is the pitching, right? Like knowing what exactly does the judges want to hear about? That's the hard part. And obviously put a little bit of what the program or incubation or acceleration program has bring to you to the table. Right. So, for example, on MassChallenge, which focus a lot of growing sales. That was the focus of that program. And thanks to MassChallenge, we grow 200 percent over the last year. Obviously, it was a year of pandemic. But again, we were growing. Right. If we go a little back on the intellect program, we focus a lot on the business model, like how are we going to make money? Because at the beginning, we were just engineers who just want to develop technology. But again, if we want to make a company, we need to start focusing on generating revenue because without revenue. Well, there's no company unless you are an organization without profit, obviously. But but, yeah, again, that that's the part that you need to figure out as a founder, like what's going to take you to the next level. Right. And what are each competence like? What are they looking to have? So let me ask you this. So let's say and you just went through this experience, you were going through tough times and it sounds like you were talking to other founders. Do you have mentors that you you work with or anyone else you turn to? And those in those moments who and how important is that for you? Is mentors mentors are always important. Right. I think that, well, as a founder, you do not know everything about about all of the things. Right. So you can be very good on technology, but you may need help on sales. You may need help on marketing. And we have pretty good mentors, actually, to all these awards that we have won in all the acceleration programs. Right now, one or four other investors and actually mentors called Angel's Angelou, he has helped us a lot on the financial sides about how to scale the business. Then we have Francisco Freyer from the marketing perspective. He has helped us a lot on the on the digital marketing strategies that we need to follow up. And we also have on the investment side, like Slim Hassan, who has helped us a lot on practicing for new pitching. And the list goes on. Right. Like this is just to mention some of the mentors that we have found over the years. Right. Mm hmm. Awesome. So I want to come back to sort of the founder experience stuff in just a moment. I also wanted to ask you a little bit about the technology that you've built and sort of if you want to speak to like what is what's unique about it? I was doing a little bit of reading and you have a five axis robot arm, I think. Yeah. But I could not tell you what that exactly, you know, means in this context. So could you just sort of expand on that a little bit? Yeah. The technology already exists. I mean, the 3D printing technology is called laser cladding technology. So it's basically a five axis robot arm, which what we do is actually through our patent, which is a heat in their chamber, which actually allow you to control in real time how the parts are going to be melt. So basically, we just through a laser, we start melting the metal. But just before the melting point and then we start building up the material. So it's very similar to a welding process. But what is unique, again, is that all this is done inside the chamber and with an inert gas like argon or nitrogen that will depend on the metal you want to print that will start building up the large part. And basically, you can start building several layers of different materials. But again, that's thanks to our heat chamber, which basically is able to control that temperature inside the chamber and also to keep the temperature of the different melting temperatures that you require to start building the metal part. Very interesting. So as you look sort of five years down the road, do you see one of your differentiators to be around the technology? Are you developing sort of new processes and approaches for this kind of thing? Or what's sort of going to help differentiate you from the incumbents we were talking about a little bit earlier? Yeah, well, definitely the material combination is quite the unique point of our technologies that it can be used even for repair applications. So, for example, on the military side, it has a lot of applications, legacy parts. Also, a lot of customers doesn't want to build a part from scratch. They just want to repair a part. And it gives us a lot of benefits, especially on the financial side. So we always focus on the on what the customer needs, actually. So we always are constantly talking with our customers. What do they require? Most of the cases or scenarios are basically to build very large metal parts at the fraction of a cost. And that's basically what it's putting on top of the competition, because like I mentioned, most of the metal companies are focusing on small metal parts and we are focusing on building very, very large parts, right? Like rockets, like heat exchangers and applications that actually can you get very beneficial with our technology? So here's a silly question. You said rockets, though, I have to ask. So if Elon Musk called you up like and said, hey, we need this new booster thing, is that in the cards? Do they have this? Do they the SpaceX have their own 3D printing? I'm sure. Yeah. Yeah. SpaceX is a huge fan of 3D printing technology. Actually, I cannot talk a lot about it, but yeah, we definitely have have them on the pathway of the of the growth of the company. One of the main things of famous spaces were located at Austin. So they are building a gigafactory. They're not SpaceX, but other company. And yeah, we have them there on the loop because we see our technology can have a lot of applications, especially on all these companies and also with other startups, not not only Elon Musk startups, like other other on the on the market that are there that can be very beneficiary with metal 3D printing, because obviously when you design new things, you want to approach new technologies also. Absolutely. And a related thing. Are you actually selling printers to people or or they give you the part or they expect for the part they need? Yeah, we have two prongs of revenue. The first one is from the 3D printer sale, but not everyone wants a printer that starts in the hundred and fifty thousand, which is a is very economic. But obviously there are not other companies that doesn't want to spend that kind of money on a 3D printer, especially if they don't know how to use it. So we have also that 3D printing service because a lot of companies just send to the 3D files and we print the files to them. And also we help them like which will be the best orientation or how to optimize the part for being ready for a 3D printing. Right. So those are the two prongs of revenue that we currently have. Got it. Now we've only got a few minutes left, so I want to make sure to come back to sort of your experience as a founder. And a question that I'd love to ask is looking back at your time or your journey over the last few years, if you could go on a time machine and say like, hey, Juan, I have one piece of advice to give you as a founder. What would you give yourself? What would that piece of advice be? Well, the advice of I always give to entrepreneurs is basically to to try it, like never give up of your idea. I know that the entrepreneurship is challenging sometimes, but you need to try it. Like if you want big rewards, you need to work for them. In my advice as a young entrepreneur, probably to be starting sooner. Right. But like I want to become more successful sooner than than I am. I'm a young I'm 28 years old. Right. But if I have the opportunity to start that company when I was recently graduating, I definitely will will be doing that. Obviously, everything has put me where I am right now, because probably if I haven't worked in the industry, we haven't found what the industry wants. But again, always keep learning. That's that's my advice. Also, like I know there's a lot of entrepreneurs that may may be looking that you shouldn't go to high school or even to a college. But I truly recommend to go to college to have a degree. That's something very important as a founder to have those credentials. And again, well, something probably be healthy. Right. Because usually we don't are that healthy because of everything that's going around on the entrepreneurship. So but yeah, my my advice would be also be well, it would be healthy. Yeah. I think that's a really important message. I do think that people can sometimes neglect some of the important things, whether it's nutrition or just getting outside, getting some sunlight, that sort of thing. And it really pays dividends. So I guess a quick follow up question, and we only have about a minute left. But let's say that that a founder has started on their journey and they hit a rough patch and they're like, I don't have a good mentor, but I need to do something. Is there like a book or a podcast or anything you turn to in those moments to sort of help give you that boost of energy or confidence or just wisdom? Well, the foundation, I always have heard lean startup. That that's like the like the path for starting like lean startup book is basically like the foundation. But from there, I will truly recommend to get into an incubation program or even an acceleration program, because, again, every founder needs advising. Every founder needs coachability. And yeah, we are not alone in the world. There's a lot of entrepreneurs. There's a lot of mentors. There's a lot of investors out there. So just keep searching for your dream and make it come true. And again, thanks to Internet, we have access to basically everything. Like there's a lot of podcasts, right? I hate to cut you off. We've only got four seconds. Thank you so much. This has been awesome.