The Rise of the 3rd Party Manufacturer in 3D Printing

There’s a lot to be learned about the present and future of 3D Printing by studying the rise of the Personal Computer. Today we have hundreds of companies building supply chains from scratch to sell 3D Printers out of garages, co-working spaces and tech shops, not unlike Steve Jobs’s garage and the motel in Albuquerque that spawned Microsoft. However, this part of the journey did not last forever.

As the market and individual companies matured, 3rd parties began supplying various components to the PC makers as they built more sophisticated manufacturing processes. The PC makers welcomed this so that each one of them did not have to reinvent the wheel for each component as well as get better prices from suppliers who could gain volume advantages by selling to many of those PC makers.

Today, we’re seeing the very beginning of such opportunities emerging with a handful of really interesting companies becoming the first 3rd Party Manufacturers (also known as OEMs). Here’s a few I’ve been tracking:

The Rise of the OEM

Extruders:

1) DGlass3D: You may remember these brothers from previous blog posts and the 2nd edition of my newsletter, when they were on Kickstarter. While they did not fund successfully, they were able to connect with companies interested in their technology. Given the challenges of dual extrusion caused by the decreased build area, added weight for the stepper motors and quality of prints when switching back and forth between heated materials in each extruder, I expect more than a few companies may be interested in the technology to shortcut adding this pivotal feature.

Why this matters: Many use cases open up when you add the second extruder including printing your support structures in a water soluble material, multi-colored printing and printing in multiple materials with complimentary properties (like part hard, part soft or part conductive, part insulated).

2) The Prusa Nozzle: Josef Prusa is one of the most prolific contributors to the RepRap movement, which includes the Prusa Mendel, one of the most popular RepRap printers. Recently, he unveiled the Prusa Nozzle, which allows you to print at up to 300 C and is a much easier to use, single piece. See more about the Prusa nozzle in edition #4 of my newsletter.

Why this matters: Printing at temperatures as high as 300 C allows additional materials to be printed like polycarbonite (bullet-proof glass) and food-safe stainless steel materials are better than the past use of brass.

Materials:

1) Proto Pasta: Another new Kickstarter entrant, these guys are working on reliable, high quality filament for your FDM printers. On their Kickstarter, you’ll find a carbon fiber reinforced PLA, high-temperature PLA and an experimental polycarbonate material. They’re testing and certifying their materials, which is rare in the current materials market.

Why this matters: Stronger, more reliable materials allows users to print for more applications. Combine this with dual extrusion (ie- multiple materials in one print) and it really gets exciting.

2) MadeSolid: This Oakland-based materials manufacturer recently completed a successful Indiegogo campaign which expands the color options for FormLabs printers from gray and yellow to the full rainbow. They’re working to make quality resins and filaments to make higher quality prints. They have some very cool technology in their pipeline I’ve seen some parts (hint: the days of PLA and ABS may be numbered).

Why this matters: Component makers have not fared as well as many 3D Printer companies on crowdfunding campaigns. It’s good validation that people are hungry for new, better materials that MadeSolid hit their goal. It also means that they do not need the distribution channel of any printer manufacturer to be successful, which provides huge negotiating leverage should they talk distribution with one.

Build Plates:

1) BuildTak: If you spend much time printing, you quickly run into issues with your printed material sticking well to your build plate and also being easy to remove after the print finishes without damaging the print. BuildTak works with both ABS and PLA and is more durable than kapton tape, which has a habit of tearing as you remove objects. This company is just starting out but is already being evaluated by some 3D printing companies.

Why this matters: Reliability is one of the most important aspects still needing dramatic improvement in the 3D Printing space especially for novice users. If this works as promised, it could address one of the major causes of failed prints: poor adhesion to the print surface.

2) Automated Build Plates: Unfortunately, this technology doesn’t exist…yet. Makerbot tried and failed in the past to create this system for automatically removing parts. For those looking to print items in a queue, they currently have to manually remove every object upon completion. That’s why Hack a day put a call out for work on such a project recently.

Why this matters: The development of a process for removing prints would be very valuable for any organization sharing a printer with multiple users and wanting to leave prints unattended and still have multiple items printed. Of course, the printers need to be used enough for that to be a key pain, which is only an issue for a small percentage of users right now.

Even a company with a large engineering team and an unlimited budget would struggle to keep all this innovation in house. It is only a question of when, not if, 3D Printer manufacturing companies at the low end of the industry move from an integrated solution to a more modular approach*.  This opens up many opportunities for individual OEMs to emerge to produce key components that supply many of those companies. (* Note: Patent-heavy, unique processes will keep the industrial printers closed for the foreseeable future).

What other great OEMs have you seen emerging? Leave a note in the comments.

[Ed Note: A version of this post originally appeared in my bi-monthly Observations in 3D Newsletter. Sign up now to get more in depth analysis like this at http://bit.ly/Observe3D]

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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How 3D Printing Companies are using Kickstarter to Accelerate the 3D Revolution

In January 1975, Popular Science magazine ran an article on the first consumer computer: the Altair. Ed Roberts, the founder of the company making the Altair, ran ads in the magazine for pre-orders of his device for a then-shocking $400. He needed to sell 200 to break even, but ended up selling over 2,000 instead. There were many challenges in actually delivering the device and plenty of upset customers due to delays and limited functionality, but it marked a key moment at the start of the PC revolution. A small company named Microsoft would work closely with them to run BASIC software on it and many other hobbyist computers would emerge in coming years.

Today, the chosen pre-order crowd-funding source is Kickstarter and once again early adopter backing is funding a new revolution: consumer 3D Printing.

A quick search shows there have been over 75 projects posted on Kickstarter related to 3D printing. Of those, 5 are currently active and 35 have been funded (a 50% fund rate on completed campaigns). Since the start of 2013, 38 of these projects have launched, with 17 funded and 16 failed (the other 5 are still active). Some projects have even raised millions of dollars like the Buccaneer ($1.43mn, 3,520 backers), RigidBot ($1.09mn, 1,952 backers) and the 3Doodler ($2.34mn, 26,457 backers). All 3 of those projects launched in the last 6 months.

So with all this funding, how is it affecting those that post? To find out, I spoke to a variety of companies currently crowd-funding, planning to crowd-fund and already completed both successful and failed campaigns.

Preparation matters

The first thing that stood out for all the companies that I spoke with was how important preparation was for their projects. No matter how much time they spent to understand the work ahead, there were always surprises and new challenges. Those that hadn’t figured out the finer details of their project before launching the Kickstarter were significantly more likely to fail in funding.

The preparation also extends to marketing. Designer Todd Blatt, creator of the funded Google Glass project, GlassKap, observed, “[Many projects] think you just make a Kickstarter and people come. You can’t count on that.” I asked companies what the ratio was for backers that came organically from Kickstarter versus their own efforts and it was usually 60% their efforts. Getting ahead in their marketing meant thinking about press and forums to post to at launch and building lists in advance. DeltaPrintr, a delta-style RepRap design launching in the fall, is smartly already collecting signups on their detailed website which explains their product’s benefits and differentiators.

Screen Shot 2013-08-28 at 12.12.21 PM

The value extends beyond funds

Like a good angel investor, many of the backers on Kickstarter add more value than just their money. File2Part, a 2012 campaign for better 3D printing software, found that about 15% of their backers were tremendously helpful in debugging their beta release of their software as the backers were also software engineers. Meanwhile, DGlass3D, a current campaign to create a better dual extruder for 3D printers, has already gotten great feedback from hobbyists and hackers backing the project.

With so much traffic and attention given to many of the Kickstarter projects, it can also be a signal to those in the market that your company is someone they should work with. Volumental, a current campaign for browser-based 3D scanning and printing, has received numerous business opportunities because of the attention around their Kickstarter. They’ve also turned the campaign into press that extends beyond the project and helped raise the visibility of their company.

Even more impressive is how a failed campaign by 3Dagogo actually inspired them to start their business.  Their May 2013 campaign to sell 250 useful 3d printing designs did not fund, but many members of the 3D community reached out to them saying they were working on an important problem. That was all the encouragement they needed and they’re now working towards a site launch.

Critics can be harsh

While Kickstarter tries to manage backer expectations on projects, there are still times when users can be difficult or even angry. In the case of DGlass3D, some potential backers were upset with the way they planned to handle their IP for their design (a hot button subject in the 3d community). After some passionate discussion, it led to DGlass3D changing their IP plans and updating their description of it on their Kickstarter page.

Meanwhile, File2Part has had a number of delays on their project enraging some backers. Co-founder Eugene Giller told me that when they launched the campaign, they had a prototype of the software working with the printer they owned. Unfortunately, there are many variations on the firmware for other printers and some companies not only change them, but sometimes make them closed to 3rd parties (most notably, MakerBot). It has put them in a endless loop playing catch up, which unfortunately not all backers empathized with:

angry kickstarter backer

Stories like File2Part’s is why when I spoke with DeltaPrintr, they told me they are trying to have everything in line, even suppliers and manufacturing, before they launch their campaign. They hope that Kickstarter can simply then be the platform to connect with their first customers and add the funding needed to fulfill orders with their manufacturer, without delays and drama.

Funded projects do not guarantee success

It would be great to say that every campaign that funds on Kickstarter has a fairy tale ending of delivering on time and launching to ongoing success. Unfortunately, we know that’s far from true. 

Going beyond the disappointment of the end user who may receive their orders late, below their expectations or sadly, not at all, companies can face struggles as well. After the costs of making his video, marketing and adding the cost of printing the objects, 3D designer Todd Blatt found he didn’t make any money on his funded GlassKap project. He did tell me, he will likely do another project in the future based on his learnings from this one.

File2Part, who had the aforementioned firmware challenges, actually hired a consultant to help them with those issues. Unfortunately, the cost of that consultant exhausted all their funds raised which led them to take a loss overall on the project.

Understand your audience

The stories of success on Kickstarter have spread far and wide, which is why all of the people I spoke with turned to the platform for their company. However, it’s important to realize that like any website, there’s a specific audience that is generally found on Kickstarter. They are often consumers, with a bit of an early adopter and hacker edge to them. Some will back many projects, showing more allegiance to Kickstarter than any of the individual companies they back.

This proved a solid audience for GlassKap, as Todd was able to fund his project even though there are only 10,000 Google Glasses in the public now. Similarly, the consumer-friendliness of Volumental’s browser-based scanning also funded well with the Kickstarter audience.

Screen Shot 2013-08-28 at 1.46.31 PM

Meanwhile, 3Dagogo’s 250 3D print designs failed to fund, as many Kickstarter backers are still waiting for their Kickstarter-backed printers and many of the hackers and hobbyists with printers already have proven to be less interested in the pre-made designs.  And while File2Part did fully fund, they found many of their backers were not who they were hoping for; their goal is to build an industrial-grade 3D printer to sell and were not expecting to have so many consumer printers to support.

Kickstarter is an amazing platform for discovery and funding of great projects. Like the pre-orders of the Altair, it doesn’t always go as planned, but great things can come of it. Two 20-somethings from Harvard moved to New Mexico to write the software for the Altair. We may not have had Microsoft today if early adopters of the Altair hadn’t sent those checks to get their first consumer computers.

What new industry titans will come from crowdfunding like Kickstarter and the ecosystems they help create?

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Sources:

Thanks to all of the companies that spoke with me for this article: