Sramana Mitra: Any other strategic decisions that you made in building SolidWorks?
Jon Hirschtick: One is, we decided to sell exclusively through a dealer channel. We would not sell directly. If you want to buy SolidWorks, you have to go through dealers. That was a huge decision. It had all kinds of implications. It turned out to be a very shrewd idea.
Another key decision we made was technologically, there was a choice of either buying or building some of the key components in the CAD system. Nobody had made one from purchased components. People made systems from purchased components but they didn’t work so well.
We said we’re going to license a geometric modelling kernel from what was then EDS. We were going to license that. We were going to use Windows graphics libraries. People were like, “You can’t build a good system this way.”
One of my co-founders did a ton of due diligence. I spent a year of my life negotiating licenses with EDS. That was another huge decision we made that turned out well.
Sramana Mitra: What about the competition? Can you summarize how you played?
Jon Hirschtick: We did the same kind of 3D modeling power but priced and distributed it like Autodesk. We put it on Microsoft Windows platform.
Sramana Mitra: PTC competition is very clear. What about Autodesk?
Jon Hirschtick: We competed with Autodesk the way PTC had beaten everyone else years earlier, which is our modeller works and theirs didn’t. It’s hard to make a good 3D modeller. PTC had a good 3D modeller. It was just expensive and not based on Windows. Autodesk was cheap, but they didn’t have a good 3D modeller, and it wasn’t based on Windows. It was based on DOS.
Sramana Mitra: Autodesk did catch up though.
Jon Hirschtick: First of all, all the companies stayed very successful. Autodesk was a successful company. It never became unsuccessful. PTC has a billion-dollar plus ARR. We took half a million customers from Autodesk. Did they eventually get their act together? Yes, after years of denial and shipping half-assed products. Eventually, Autodesk built a competent product, but at that time SolidWorks had established itself as a force to be reckoned with. They were and are playing catch up to SolidWorks. Autodesk has a great business in architecture and buildings. They do great there.
Sramana Mitra: It was clear who had traction where.
Jon Hirschtick: Autodesk has great numbers. They’re around. People use them, but they’re not the dominant system in mechanical manufacturing. If you look at a hotshot hardware startup, they’re not going to use Autodesk. I don’t mean to trivialize them. They do have customers.
Sramana Mitra: What else do you want to touch on SolidWorks before we move on?
Jon Hirschtick: We decided to sell it to Dassault Systèmes.