In Stay Sharp Episode 107, Digital Engineering’s New Frontier: Innovation Across 300+ Startups, co-hosts Jonathan Scott and Juliann Grant welcome returning guest Michael “Fino” Finocchiaro. Fino is a true PLM influencer, the creator of Demystifying PLM, and a recognized voice on PLM, CAD, digital thread, and agentic AI. After his recent work to find and categorize more than 350 startups across PLM, CAD, simulation, MES, and industrial AI, he joins the podcast to discuss the basics of his research and dig into some of the interesting trends he’s seeing.
Explaining His Groupings
Of the eight categories of startups Fino researched, the group he calls Design Intelligence is one of the largest, with more than 70 CAD vendors including nTop, Shapr3D, Gravity Sketch, Neural Concept, Leo AI, and more. The label reflects what he sees as exciting transformations happening in that domain. “A lot of really, really bleeding edge, exciting companies are creating new forms of modeling that never existed before,” he explains. “You add AI to some of these things, you come up with new mathematical concepts that we couldn’t do before.”
Extreme Analysis represents a group that Fino defines as being primarily what they used to call computer-aided engineering (CAE)—companies are still using the traditional meshing technique, as well as ways of doing finite element method (FEM) without meshing. He reports, “You’ve also got electromagnetic stuff. You have a frequency analysis. Things that were really reserved to some small office with two guys with a PhD are now being democratized in a way because they’re just pieces of software now.” The category also includes companies doing quantum work, like Quanscient, using quantum computers on CFD and other mind-blowingly complex problems.
Fino’s Cognitive Thread category covers both PLM and MBSE and centers on materials intelligence. “These are things that are still before the manufacturing on how we develop products, but they cover multiple areas,” Fino says. “They have a little design, a little simulation, a little bit of preparing the MBOM, but they’re not just one of those areas. Model-based system engineering. There’s only a handful of them, but they don’t just cover design. MBSE by definition is the whole caboodle.” Another group, Factory Futures, includes MES, IIoT, and more that reflect work on the entire factory. As Fino puts it, this is “More of a time-series problem than the physics of material-meeting-another-material problem.”
Other categories Fino mentions are companies doing Adaptive Manufacturing, which accounts for both additive and subtractive manufacturing; Engineering Education, focused on raising the next generation of engineers; Augmented Operations, describing work to maintain machines inside the factory; and Bleeding-edge BIM (building information modeling), such as efforts to build sustainable structures.
What the Research Tells Us
Part of what surprised Fino about his research was the discovery that innovation is really happening all over the world. The United States is obvious, but he also found innovative, interesting startups in the UK, Canada, Germany, France, Korea, Japan, and India. Fino was also amazed at the market share this collection of startups represents: over $6 billion total VC investment with roughly $1.5B of revenue. “How much will that market be disruptive to the big three over time?” he wonders. Of course, that number will continue to grow, just as Fino’s list keeps growing. “You blink, it’s already changed,” he marvels. “New model, new this, new that. It’s crazy. But it is super exciting and I think that we’re just conceiving more innovation over time, which is cool. It’s nice to be in an area where we’re seeing new cool engineering happening.”
One of the conclusions Fino has drawn from the data is that people are innovating because they’re not getting what they want from the big three vendors, who aren’t moving fast enough incorporating new technology and processes. “A lot of these startups, the founders are like, I could do all this cool stuff. And it is still an environment where there’s a lot of investment money to go for it,” he says. “I think you’re seeing a lot of ideation and a lot of creativity. They want to have their independence and do a startup adventure, and they’re able to access that stuff without all the baggage and the technical debt that those bigger companies carry.”
Learn More About Innovative Digital Engineering Companies
The full podcast contains more discussion and details on a variety of topics, including how AI may help people stitch together the patchwork quilt of startup-company services they need, what Formula One racecars has to do with the current rate of technology change, what kind of market disruption might come out of all of this startup innovation energy and investment, and more.
Be sure to check out Stay Sharp Episode 107: Digital Engineering’s New Frontier: Innovation Across 300+ Startups and join us each week for a new podcast.
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