S. Kent Rockwell positions ExOne for growth by focusing on the greatest opportunities

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S. Kent Rockwell, chairman and CEO of ExOne, knows more about losing than winning when it comes to business.

During his nine years at Rockwell International, as president of the energy products group from 1973 to 1983, he learned what makes businesses grow, as well as what makes them fail.

As a venture capitalist, he’s been involved with more than 20 businesses in just the past four years, and says a good success rate is probably 25 to 30 percent in the high-tech investment environment.

“And so if you’re successful 25 to 30 percent of the time, the corollary of that is that you’re going to be wrong 70 to 75 percent of the time, and so you better know a whole lot more about losing than you do about winning,” he says.

He uses his study of human psychology — and playing poker — to help him understand how to manage failure.

“The important thing in managing a portfolio of high-tech investments is to be able to stop pouring good money after bad so that you have enough money to invest in what’s good,” Rockwell says. “Learning when to stop something is a critical requirement of high-tech investment because if you were successful 50 percent of the time, you’re not probably taking enough risk.”

But in a few cases over the years, Rockwell believed enough in the technology to become more involved in the operations — like with ExOne, a 3-D printer manufacturing company he’s poised to take to the next level.

 

Focusing down, not out

Rockwell first got involved with ExOne at the end of 2007.

A friend started the company as a conglomeration of 26 different investments in a variety of technical environments, but then died suddenly. The heirs didn’t have the funds to keep the business going.

Rockwell had just retired from his latest project, and seeing potential, he negotiated for the sale.

As the new CEO, his first step was to focus the company.

“I reduced it to six different investment opportunities and concentrated on those six investments with my capital and hiring … pulling the business back together,” Rockwell says. “And then in two years we actually reduced it to four of those investments, and one of the key ones of those were the 3-D printing technologies that the company had developed into a prototyping business.”

ExOne had a global presence from the outset — the company’s biggest machines are made in Germany and one of the first marketplaces it went to was Japan.

“I don’t know if I were starting this company I would have said, ‘Gee, I think I’ll go open something in Japan first off,’” Rockwell says.
It would have been better to focus on what the company was, do it well and then expand off of a profitable implementation. He says you don’t want to make major investments on the hope that the business will be there.

He says it’s been a challenge to manage a global sales force, although it has certain advantages. Industrial 3-D technology, at first, was more readily accepted in the European and Japanese communities, which made ExOne a global player early on.

“The fact that we’re global makes it expensive,” Rockwell says. “We have to maintain a worldwide sales force and development effort going forward, and that’s not an inexpensive undertaking. But the opportunities to get exposure worldwide are much better and working, I think, for us.”