You may have noticed that last year I blogged a couple of times about 3D printing. Since the beginning of this year I’ve stepped up my interest in the area in the hope of finding an investment opportunity in the short term. Below are my emerging thoughts on what makes 3D printing interesting, some of the challenges today, some of the end markets, how the 3D printing value chain breaks down, and where the investment opportunities might lie.
What is 3D printing good for
- Cost effective short runs, one offs, customisations, prototypes
- Highly accurate 3D objects
- 3D models are difficult to create –
- Finishes are not great
- High prices for one off prints
- Low quality plastics on home printers
- Customised objects
- Medical implants
- Replacement parts
- Market places
- Enabling software
- Printers – home and bureau
My gut tells me that there is a big market opportunity opening up. 3D printing technologies will make it cost effective to manufacture a whole range of items that weren’t economic under the mass production paradigm. 3D printing for proto-typing has been around for a while and key to this hypothesis is the assumption that costs are falling and quality is improving. I think we can say with confidence that those trends are in place (look at $1,000 3D printers from Makerbot and the burgeoning market for 3D printed medical implants), but the million dollar question is when the price and quality of 3D printed goods will cross the threshold where new mass markets are opened up.
Timing is everything for venture capitalists and I am still working to figure out the answer to this question. In addition to the price of the printers and the quality of the objects they print it is important to consider the design costs. The software tools available to designers are still primitive which both drives up the cost and keeps a lot of would be designers out of the market. It could be that the next important innovation is in the software rather than in hardware or consumer services. Either way I think a pre-requisite for making a call on the market timing is a clearer picture of some high volume (or possibly high value) end user use cases.
This thinking is very much work in progress for me and thoughts on any of the above would be much appreciated.