What the Kickstarter Hangover will do to the 3D Printing Industry

Kickstarter has been transformative for many companies, and for the last year or so, the 3D Printing industry has in particular been benefiting greatly from it with over 80 projects and a healthy 50% fund rate (even higher in the last 6 months). Unfortunately, like having too much of a good thing to drink one night, we’re headed for a painful hangover in the 3D Printing industry thanks to Kickstarter.

We’ve seen the data before. Only 25% of KickStarter projects deliver on time, and for wildly successful funding projects it’s even lower at about 16%. This means a lot of waiting and a lot of disappointment for those that may never receive the project at all. There’s no reason to believe 3D printing would be immune to the issues other projects have faced.

So what are the consequences of these delays?

Impatience:  Many users are going to get their printers 6 months to a year after they ordered it. This slows the adoption rate of the industry as people tie up funds they’d invest in a 3D printer they could use immediately. It’s unlikely people are going to buy another printer while they’re eagerly hoping for their Kickstarter one to arrive. With no printer, users won’t be able to start experimenting with the technology.

Obsolescence: While users wait to receive their printers, the technology is evolving and improving rapidly. Will someone who bought a RepRap-style, assemble-yourself printer be happy with it when they see others buying better printers as theirs (finally) arrives? When the other printers have more advanced features like multi-extrusion, out-of-the-box functionality or has a significantly larger build size, how will users feel?

Disappointment: There is something truly magical about watching an object being built right in front of your eyes. Many of the videos on Kickstarter do a great job of highlighting this and the great story behind whomever is making the product. Unfortunately, when you actually get your printer, getting the magic to work for yourself isn’t always easy. These videos don’t show the 6 steps it may take to actually get your design to print or the steep learning curve for design software. They also don’t account for what many of these first-time hardware startup founders are going to face with manufacturing a quality, reliable product. And this ignores greater challenges like the unfortunate IRS issues Printrbot faced, which are bound to strike some campaigns.

The Hangover

Most of the major 3D printing projects funded over the last year are still within their delivery time period, so we’re likely to start seeing some of the delays and pains soon. Like the slow growth in intensity of a hangover’s headache, as the months proceed, people will get anxious for their Buccaneers, Rigidbot (which was due starting in September and likely coming this fall) and Peachy Printer.

Like the blaming of Tequila for your worst hangover, I expect these issues will lead to buyer’s remorse and a black mark for the greater consumer 3D Printing industry; the current market offerings may have solved many of the issues that the Kickstarter projects had, but the wounds from problems with a campaign a user funded will deter them from buying another printer for awhile (as will the financial ties). This is exactly the kind of events that can contribute to the predicted bottoming out of the hype cycle Gartner talks about.

The Hangover Cure

Like a large bottle of water, 2 Advil and some greasy food, I expect there will be a few tactics that will help the market overcome these issues:

1) Feature bonuses

In its early days, Microsoft was notoriously late on projects. They would placate angry partners by promising (and delivering on) new, additional features in exchange for a pushed delivery date. If Kickstarter projects are late, those companies may try a similar tactic to placate their users. This opens up 3rd parties to supply those solutions like I hear the guys at DGlass3D are talking about being an OEM supplier for 3D printing companies that found them on KickStarter.

2) More help with manufacturing

Finding manufacturers is a scary, risky proposition.  On top of the challenges of choosing the right one, a company’s initial design isn’t always easy to manufacture, which requires redesigns and negotiations. Fortunately, there are a growing number of programs to help first time hardware founders like the Highway 1 program in San Francisco. There is also an ever expanding group of people to learn from that have successfully set up their first manufacturing as more hardware startups launch and grow.

3) Shift in models

The early days of the PC industry saw computers sold by mail order pre-orders in Popular Science Magazine and other publications, which isn’t that different from the crowdfunding on Kickstarter today. After a few years of pre-orders, specialty stores started opening where you could see computers, there was real inventory and friendly help. Those stores can provide a much better experience than a pre-order, but they require a greater sales volume, which we’re just starting to get to a market state to support. Such stores are just starting to open like HoneyBee3D in Oakland and MatterHackers in Lake Forest, California.

4) Deliberate marketing to differentiate from Kickstarter printers

If Kickstarter printers are viewed with increased skepticism, then experienced, growing 3D Printing companies will want to differentiate from them. These companies can focus their marketing on being a team of experienced engineers and manufacturers with the latest technology and no wait time for delivery.

5) More evidence of deliverability on Kickstarter

Kickstarter is still an unparalleled way to get press, partnership opportunities and most importantly, paying customers for 3D printing companies. Showing more progress and possibly even manufacturing already fully planned could go a long way to being the “responsible drinking” solution to the Kickstarter hangover.

In general, I expect that a shift away from Kickstarter will occur as there is an industry shake out and consolidation; there are over 300 3D printing companies now and so there’s no way they will all survive in the coming years. As they consolidate, user bases will also, lending itself to sales and marketing being done by each company without the need of Kickstarter (or their 5% cut).

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