Scott Cunningham had a simple idea: he wanted to carve realistic replicas of mountains. But that simple idea proved anything but simple to accomplish.
As he began exploring the project, a friend told him about CNC Computer Numerical Control) machines which could carve any shape he dreamt up. After researching CNC machines online, Scott purchased a CNC router from a vendor, but the quality turned out to be really poor. This led him to rebuild the entire drive system using surplus parts he found on ebay.
Once he fixed that initial machine, he realized that he could also build bigger and better CNC routers on his own.
Scott worked on the CNC routers for a while, but eventually got into metalworking where he noticed the CNC plasma tables were selling for premium prices. He sensed an opportunity.
“I knew I could build a better one but — more importantly — provide an unmatched level of support,” he said. “At the time, you could read lots of reviews on the internet about how poorly these companies were treating their customers. And many of these customers just didn’t get any education on how to run these tables. It was obvious that these companies didn’t know that negative online reviews could hurt them.”
So in 2009, he started with two prototypes. Out of the two prototypes, one stood out as a potentially viable product — one which looks strikingly similar to the machines they sell today.
Scott used that table throughout 2010 to make metal art which he displayed at the Sunriver Artists Gallery in Central Oregon. This provided a solid trial run, but in his mind he kept pondering if people would actually buy the table.
“At the end of the year I basically threw it up on ebay just to see if anyone would bite, and I sold my first table a month later in January of 2011. That year I built 7 tables in my garage, and sold all of them on ebay.”
With initial sales traction and some market validation, Scott started thinking there was a true opportunity around building the CNC tables. That thinking accelerated when the recession cost him his full time job and he found himself unemployed. That change in circumstances opened the door to the beginnings of ArcLight Dynamics.
“With my small severance pay I rented a shop and hired two of my fellow unemployed co-coworkers, and built a website. From that point on the business took off and I hired two more of my old co-workers within a year’s time.”
That initial website had a high level of focus and professionalism. In all of his market research, Scott realized that many companies had a very limited amount of actual product information on their websites. This was a huge negative in his mind. He wanted potential and returning customers to have the ability to find an answer to any question they might have about the tables. There was an additional emphasis around producing comprehensive training videos that would allow their customers to hit the ground running.
“When we started out I created a series to video tutorials that showed our customers how to program and run our tables and put them up on Youtube for anyone to use. At this time no other manufacturer had done this, but from my perspective it was essential. So a lot of people who use other brands of tables used our videos to teach themselves how to run their systems. As a result we became the authority and source for training. “
The focus on the customer from the outset allowed ArcLight Dynamics to slip in and fill the void.
Developing an innovative product
ArcLight Dynamics tables are complete packages, which means that all someone needs to have for a very functional cutting system are standard components. And while this may seem like the norm, that is far from the case, and another area in which the focus on the customer has paid off.
“Other companies often start out with low prices, but the system won’t cut well until you add on options, which add to the cost. We believe customers will get the best bang for their buck with an ArcLight Dynamics table. We combine solid durable frames, combined with easy to use software, and most important to our success, excellent customer support.”
Scott and his team saw the biggest opportunity for their tables within small to medium size shops and businesses, and to gain traction within these verticals they had to be very conscious of the pricing. By keeping all of the parts and production in-house, they have been able to not only control costs, but also maintain high standards.
“I do all the R&D in house for the design of the tables and develop new product lines. I don’t have formal education in it, but I’ve always had a knack for it. Keeping the overhead low is another reason we have been able to keep prices low. We have been very lucky as we found low cost rental space when we started out, and was able to take over more space when we needed it. But moving forward it is going to be very challenging to find a large enough building to rent or buy in the current market.”
Keeping the pricing low as they were just ramping up was a lot easier than the current production rate of 8 tables per week. So Scott and his team started researching ways to not only maintain their costs, but also create a more efficient process. This resulted in ArcLight Dynamics partnering with the local Fastenal store.
“Fastenal has been a huge help in sourcing and maintaining our inventory. Often I can find the best price on a product on the internet, and they can then match that price or do better. But what is really great is they come to our facility and stock the parts for us, maintain that stock, and often they are able to keep a back stock of our parts at their store. This saves a lot of labor and gives us ”just in time” ordering that helps with cash flow and storage space.”
ArcLight Dynamics started out with four sizes of tables, and just recently added two new larger models. The initial four were identical in design and function, while the most recent tables have larger steel welded frames and a more smoother and precise functionality. The new tables are named the Arc Max series, and are focused larger industrial environments. But new models are not rolled out too often.
“We just came out with the Arc Max table design this year, and so the new product cycle up until this point is about every 5 years. To date our best selling table is our 5’x10’ Arcpro 12000 table, accounting for 30% of our sales.”
ArcLight Dynamics has seen 40% year-over-year growth, which can, in many ways, be directly attributed to the high level of craftsmanship put into each table, along with the high level of customer service. One sector in particular, custom automotive, has really seen an uptick in the adoption and usage of CNC tables. Scott believes the adoption of CNC tables in these smaller shops, not just those focused on automotive work, can be traced back to a combination of things.
“The quality of cut that can be achieved with a plasma cutter has greatly improved in the 6 years, while at the same time, the cost of CNC technology had dropped in price. People have also become comfortable with running computer controlled equipment. They have come to the realization that they need this technology in their shops if they want to compete in the marketplace.”
Connecting to the community
There is a strong connection between ArcLight Dynamics and the Central Oregon community. Scott and his family see not only a place with a high quality of life to raise families, but also one they can help support through providing good paying jobs with benefits. In addition to the jobs, the company pumped $2.25 Million back into the local economy.
Scott also found connections that have been a tremendous help to his business, including Steve Curley from the SBDC.
“I started off taking the two year business development course through the SBDC and that was immensely helpful in getting me to understand how to grow our business. After the completion of that course they told me that we would qualify to continue working with the Grow Oregon program. This is when they introduced us to a new program they were offering,the Entrepreneurial Operating System, or EOS. This system has been very helpful in bringing the rest of our management team on board so they can start running the company independent of me. It has been very empowering for them and helped me grow from being self employed, to being a true entrepreneur/ business owner.”
The training and resources Scott received have helped to shape a great company culture as well. ArcLight Dynamics has been able to consistently move people up from the bottom and into management. This means that every one of their employees started out cutting steel , welding, assembling tables, and lastly, training customers on how to run the tables.
This has resulted in not only a sense of empowerment for the employees, but also created an entire company that has a very deep knowledge base, has a commitment to making sure the table works for the customer the way it should, and knows how each customer can get the most from their tables.
As the company continues to grow at a high clip, one of the biggest challenges facing ArcLight Dynamics will be finding a large enough space to rent or buy to not constrain growth. But taking on challenges like these are where Scott and his team feel most comfortable. They have created a great product, culture, and customer support system, and are more poised to seize on opportunities as opposed to slowing down due to challenges. Scott also has advice for other founders about to take the leap.
“Don’t hesitate, take bigger risks, and don’t be afraid to invest more in your company.”