Geo Week News

March 23, 2004

Briefing: Eric Hoffman, CEO, Quantapoint

With over 500 projects completed to date, Quantapoint, Inc. is among the world’s most experienced providers of services for capturing and managing existing-conditions data. A pioneer in the use of phase-based scanning technology and management of the resulting high-density data sets, the company is also something of an industry maverick in developing proprietary hardware and software technologies, but addressing customers as a service provider. We interviewed CEO Eric Hoffman to understand why his company made the business and technology choices it did, how it’s faring, how he views the industry’s current state of development, and what he believes practitioners need to
know to make intelligent decisions.
Your company has a sterling reputation in the industry for delivering quality work. You’re also known for not exactly being the lowest-cost service provider. How is that? What do you do to command the prices you get?

The low bid isn’t always the best value. Bid pricing should be a secondary consideration to whether it will help customers get their work done. In fact I would advise customers to look at two bids separately – a technical bid, and an economic bid – and to tell bidders that they have to pass the technical proposal stage before their cost proposal will be considered.

The technical proposal should be a very careful examination of what you’re trying to achieve. For example, are you looking for tie-in locations, volumes to avoid clashing equipment, vessels that need to be replaced – what is the purpose? That will help you specify the kind of technology you need to use. And in some cases that will reveal that laser scanning technology is not even appropriate.

For that matter, what does the vendor’s price really mean? Is the quoted price just for data collection, or does it include everything you need to get your job done? Just collecting the data alone won’t let you get your work done. The end purpose of the data is to improve your work process. Does the service provider support the data afterward? Will they train your people in how to use it? Will they provide phone support if you have a problem with the data? Just scanning is not all of the business. If that’s all we did, we wouldn’t succeed. We spend a lot of time trying to be sure we’re satisfying the core need of the customer. We ask, “What are you trying to achieve?” Then once we’ve determined that, we help them do it.

Quantapoint uses its own hardware and software technologies, yet your business model is to sell services, not product. How did you come to that decision?

We are unique in the industry in that we build our own hardware and software, but do not sell them. Back in 1996 and 1997, we went into laser scanning commercially. In fact Cyra and Quantapoint entered the market at substantially the same time. The two companies clearly took different paths, came to different conclusions about the market, and went different ways. At Quantapoint, we came to our conclusions after doing intensive market research, as I’m sure others did too. In our case, it was
years worth of market study, and an unbiased approach. We didn’t care about what the answer was. We weren’t trying to prove a particular answer. We were trying to decide what the best business model was going to be – the best for our organization, who we are, what our passions are, what we’re most comfortable being.

To us it was fairly obvious. We didn’t really see any alternative other than to be a service provider. It’s a function of a lot of things – the economics of the industry, how the industry works. We felt it was in our best interest to be a service provider rather than a software or hardware provider. We
are quite comfortable with our business model. It works for our organization.You’re a service organization, but you also develop your own software, PRISM, which some customers have said is central to the value you deliver. How do you keep up in all three areas – balancing the investments in hardware, software and service resources?

We’re very focused on what we do. We don’t try to be all things – we try to be the best at very specific things. We don’t do civil work, for example. We focus on things we know we can be good at, and provide value to the customer. We augment that with value-added hardware and software that matches customers’ needs.

Then, having a technology and a work process that’s blended together is very important. The fact that our equipment and software are designed to our work process is an important factor. For example, we have patent-pending work processes for how we register our data. We don’t use a separate survey instrument for registering data – we do it on the fly using just the scanner.

All the things we’ve done to our equipment to make it work in the Gulf Coast in the heat of summer, or in Canada in the dead of winter – that’s not recognized by someone who’s simply selling scanners to
companies that want to get into the business. Unless you spend a lot of time out in the field, understanding what needs to go into collecting the data, it’s difficult to appreciate the work involved.

Time and again, we’ve seen that successful industries are not based on technology alone. If you rely on technology at the expense of other aspects of the business, you’ll be disappointed. Unless we manage the business as well as the technology, then the customers will not ultimately be happy. If the customers are not happy, this will go the way of photogrammetry. There are a lot of lessons in photogrammetry for the laser scanning industry to heed.

You have a practice in the architectural field, and one in process and power. How are those two similar, and how are they different?

They’re substantially different businesses. You’ve got different kinds of customers, different value propositions, different deliverables, different work processes. For example, value proposition – what’s the cost to you if an interior wall on a typical office building is six inches off? It won’t cost lives, it won’t cause a crane to be sitting idle for days on end, as it would in process and power. The values are different. In AEC the drivers are completeness, accuracy – though not always metric accuracy;
architectural accuracy is somewhat different – and thoroughness. Plus conformity to architectural standards – which may actually destroy metric accuracy. Architecture is a very expertise-oriented profession. It’s not an offshoot of survey. You’ve got to know the architectural profession to serve it well. Architects have a much different expectation of what they’re going to get out of laser scanning than process and power. We’ve been successful in both areas, through a lot of focused effort in each.
Why did you choose architecture and not civil infrastructure?

There are a lot more buildings in the world than bridges. And we believe the application of this technology is much more useful to buildings than to civil. Buildings are a very large industry. When we first developed our technology, others were out selling scanners for process plants, but we recognized the technology wasn’t ready for that yet. We started in AEC, then once we had our technology fully developed to solve their problems, we went into the process industry. We took the time to understand what we were about first, then we went into process and power once we felt we had developed the right product.

How did you first get involved in this?

We came out of the robotics business. Our core technologies were originally developed as vision sensors for robots. The first time we were exposed to the technology was in the mid- to late 1980s, working on vision systems for autonomous military vehicles. As a company, we built our first laser scanner in 1992. We started by building 360-degree scanners so the vehicle could see all around itself – we were building vehicles that had to go forward and backward. And you had to take all the
data and process it very quickly, because you had to keep moving the whole time. It could not be slow. And it had to function in a very harsh environment – the first 360-degree scanner we built was put into service in Antarctica. We’ve built harsh-environment equipment for a lot of years.

Has laser scanning crossed the threshold from being a market mainly for the technologically curious, to one where customers are driven by the business benefits? Where are we in that evolution?

I don’t think we’ve crossed the chasm yet. I think there are a few companies that are strong early adopters, but even those have not adopted it fully. Within those organizations there are strong individual
adopters, but the industry is still at an early stage.

Another sign that we’re still at a very early stage – everyone has made a big deal about competing with each other, but in fact the real market is all the people who haven’t heard about this. Because clearly there’s still not a lot of work being done with laser scanning, compared with other methods.

What’s your greatest frustration today?

What we’d like to see is for the industry to grow faster. I don’t consider that a frustration, though. I think you have to be patient, because any growth that goes too fast tends to become out of control. My biggest frustration is the hype, which we don’t care for. This is still an industry that needs a lot of hard work, that requires a lot of good attention to customers, and where promises are being made that don’t necessarily reflect reality. That can turn people away from the technology. If there’s a frustration, that’s probably it.

In our view, the more knowledge people have, the healthier the marketplace will be. An informed customer is a good customer. I really believe that. The more that our customers understand what we do for a living, the more value they’ll see in it and the more this will grow into a real industry, and leave behind the hype that’s out there today.

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