Waterblast cleaning technology
Founded by Colorado School of Mines graduates John Wolgamott and Jerry Zink with a self-rotary waterjet invented in a garage, StoneAge has evolved with the times.
"I think the interesting thing about our company is the amount of times that we've pivoted and really made a significant and important change in the organization," says Siggins.
An initial focus on uranium mining shifted to industrial cleaning in the wake of Three Mile Island -- which took place in the company's first year of operation.
StoneAge again shifted about 15 years later. "In the mid-'90s, they began to sell internationally, which was a significant shift for the company as well," says Siggins. "Quickly, our sales became half domestic and half international."
The employee-owned company adapted with another reinvention in 2012. "As we saw automation was coming to fruition in our industry, we pivoted and changed our entire business model to come up with semi-automated equipment," says Siggins.
As the technology has grown increasingly sophisticated, the focus -- high-pressure waterblast tools for industrial cleaning contractors -- remains the same, with applications in shipyards, refining operations, and other heavy-duty industrial and manufacturing environments.
A Colorado School of Mines graduate herself, Siggins joined as director of operations in 2007 when the company had 33 employees, advanced to GM in 2008, and took over as CEO in 2009.
She's guided the company to substantial growth in her tenure, but there were significant headwinds right off the bat. The 2008-09 economic crisis led StoneAge to invest in product development and international expansion. The idea? "Let's not slow down. Let's keep our foot on the gas with product development," she says.
It worked. The company grew by 35 percent in 2010 and continued to grow as it introduced more automated tools "and not just tools that screw on the end of hoses," says Siggins. "These products are a lot more expensive. Automated equipment might cost $50,000 where a tool might be $2,000. That really helped fuel our growth as well."
In March 2020, StoneAge acquired Reno, Nevada-based Breadware, an IoT-focused services and product development firm after hiring them for a couple of projects. These collaborations led Siggins to recognize "unlimited potential together," she says. "We're at heart mechanical engineers, and we've been expanding into electromechanical, but we really didn't have the expertise to develop wireless products."
The acquisition is already bearing fruit in the form of an upcoming Breadware product -- communications board that's slated for launch in summer 2021 -- and continued consulting work for the 14-employee Reno office.
It also represents yet another big pivot for StoneAge. "We'll have IoT-enabled products and we'll have subscription sales for our customer-facing apps and a whole software platform," says Siggins. "Our business model is shifting quite dramatically."
The new Sentinel represents StoneAge's first wireless product. "It's automated heat-exchanger cleaning equipment," says Siggins."We're very excited about this, because it will make the heat exchanger so much more efficient and you'll be able to collect real-time data that will give you more information on repeatability and cleanability over time. I think it will really help our customers improve the service that they give to their clients, which are plants for chemical-refining companies and things like that."
The owners of the plants themselves are also very interested in StoneAge's new technology, because it reduces downtime. "Refineries have to have heat exchangers to turn crude into gasoline, end every time you have to take that down to clean, you lose money."
Siggins says the Sentinel products give StoneAge's customer's "expanded reach" and could catalyze growth for both parties. "In the past, people would just have their hands on a hose and shove a tool down a heat-exchanger tube, which is incredibly dangerous," she explains. "Automated equipment in our space really is a hose feed device that can drive the hose without having to touch it."
About 110 of the company's 150 employees work at the 80,000-square-foot headquarters in Durango. The company also maintains offices in Louisiana, Texas, Ohio, the Netherlands, and the U.K.
"Our IP portfolio is growing pretty dramatically in terms of understanding electronics and motors and now motors and mapping technology," says Siggins. "We are definitely getting educated in a whole new world of IP patent prosecution as we're developing this new technology."
StoneAge works with machine shops across the U.S. to produce components, then a team of 10 employees assembles equipment in Durango. "We outsource about 85 to 90 percent of our manufacturing," says Siggins. "There's no one particular supply-chain partner that we have that makes an entire product for us, partly for IP reasons and also capabilities -- not all machine shops have the same kind of skill sets."
The strategy is largely based on local logistics. "It's hard to find machinists in Durango, and real estate is expensive here," explains Siggins. "The heart of what we are is an engineering company, and so we decided to outsource the manufacturing to the experts. I think that's been a really good move for us."
After a run of "double-digit growth" for five years, COVID-19 put an end to the streak in 2020. Siggins forecasts a return to the norm in 2021 and "really stellar" numbers in 2022.
Challenges: "Our biggest challenge is shifting from being a hard-good manufacturer to software," says Siggins of the company's upcoming IoT-enabled products. "You sell it differently, you position it in the market differently, it requires an entirely different skill set to develop that product. There will be a learning curve for us to go through as we launch these new products, and there's always the risk of launching the wrong product, especially when we're new at this."
Opportunities: "The shift to automation was very slow to ramp up, like most disruptions in the industry, and it's speeding up quickly," says Siggins, noting that automated, IoT-enabled equipment like the Sentinel will likely broaden the market. One example: "The sewer industry is significantly bigger than the waterblasting industry."
Another opportunity, she adds, is "[l]everaging Breadware. I think Breadware has the opportunity to do real big things, and I think that company can grow quickly."
Siggins also points to further international expansion, "particularly Asia." The company's sales are currently about 40 percent exports, but she projects potential to push that past the previous benchmark of 50 percent to 60 percent. "We have big international growth plans."
Needs: "Talent, definitely," says Siggins. StoneAge is looking for software developers and engineers as well as "salespeople who can sell software."
"We're always looking for supply-chain partners," she adds. "Right now, for our most important product line, we have a sole-source supplier, and that is not a comfortable place to be. We are looking for people who do precision machining and grinding at a reasonable cost."