Opportunities in 3D printing

By March 15, 2012Uncategorized

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

Challenges

  • 3D models are difficult to create –
  • Finishes are not great
  • High prices for one off prints
  • Low quality plastics on home printers

End markets

  • Prototypes
  • Hobbyist
  • Jewellery
  • Customised objects
  • Medical implants
  • Replacement parts

Value chain

  • Designers
  • 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.

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  • Dave

    I visited the Baselworld watch and jewelry show yesterday to see what 3D printing stuff there was there. It’s all hidden down in the basement but there are some pretty impressive 3D printers designed for Jewelry (either printing metal “dust” directly or wax to be used as moulds for casting) with an accuracy of 0.01mm. No real indication of what realistic pricing per item would be.
    For designing stuff Rhino CAD is a very interesting platform. It’s very extendable – for example with the Rhinogold extension http://www.rhinogold.com/ you can select a predefined parametric model and quickly customise it without any real CAD knowledge . The videos on their site don’t do it justice. Plus you can create a clean 3d printing file directly from it

    Overall this is a very different approach to the Makerbot opensource hobbyist ecosystem – instead these jewelry machines are starting with high quality and a higher cost which will then come down. There was no evidence of this “infinitely customisable” jewelry making it upstairs to the stands with the high value brands – so I don’t know how it’s going to make it to market except online only.

  • http://www.theequitykicker.com brisbourne

    Thanks Dave.

    I have heard talk of instore kiosks for personalisation of jewellery and watches.
    It seems to me the top down high quality/high price but falling price might be the interesting place to be for now. I say that because I’m not sure the hobbyist end of the market produces items that many people will really want.
    What do you think?

  • http://twitter.com/hoopeekoo Petteri Koponen

    Nick, I agree that the 3D printing market is growing rapidly and getting increasingly relevant for VCs. The printers are getting cheaper and better, the initial patents have expired and naturally the category rides on the emerging DIY wave. I also agree that the software tools for “would be designers”, i.e. practically everyone out there, are the bottleneck for making 3D printing mainstream.

    If you’re interested in the space, try out http://Tinkercad.com: The founders have background from Google and Crytek, combining distributed computing and games design, and they are attacking the very problem of enabling everyone to become a designer. Behind the intuitive, browser-based UI they have a very advanced backend; they have, in fact, built the first new solid kernel since the 90’s, and the World’s only distributed solid kernel, enabling them to process all the operations on hundreds of parallel server-side processes. (We were the first investor, True Ventures and others joined in their seed round).

  • http://www.theequitykicker.com brisbourne

    Hi Petteri – thanks for the comment. As chance would have it I’m speaking with Kai at Tinkercad later today.

  • http://www.theequitykicker.com brisbourne

    Hi Dave,

    Even if you had the designs, would your Makerbot be able to print a dishwasher bracket and suitcase foot that were fit for purpose?
    The models I’ve seen have been brittle and rough edged.

    I’ve been meaning to browse the thingiverse – will get round to that now.
    And I think the Shapeways creator type tools might be the way forward. The average consumer/designer doesn’t need the flexibility that CAD offers and can’t live with it’s complexity.
    And finally, your questions at the end are on the money. My guess is that the best prospect for a short term ‘yes’ is (1) – that people will want custom objects. The success of Nike’s personalised trainers and other limited personalisation offerings suggests the demand is there.

  • http://RogerEllman.com/ Roger Ellman

    As all new technologies develop from their early market appearance I see clear reasons 3D Printing will also. My gut also agrees..tremendouis future and great opportunities.
    Best, Roger – Thankly.net 

  • David McGahan

    Interesting, but I think your research is rather poor as far as the challenges for 3D printing you’ve discussed in this article… 
    3D models are difficult to create
    Currently Shapeways, Ponoko and others are working on API’s for their systems to allow non-designers to customise other’s designs. As others have mentioned there is software available that isn’t hard to use such as TinkerCad and Google SketchUp.
    Finishes are not great
    Finishing should be thought of as an additional manufacturing process (as it is in mass production). I.E. You can polish the 3d metal prints on a buffer wheel, or paint plastic. Also I’ve used 3D wax printing which is incredibly high quality (think fractions of a mm) although it is too fragile to be used by itself, it is possible to cast plastic or metal parts from wax.
    High prices for one off prints
    This has and will continue to come down in price, but there is a reason 3D printing is commonly referred as rapid prototyping in industry. It has traditionally been used for and by industrial designers like myself to check parts to be used in higher volume production processes. But I do agree with you on this point that the price needs to come down.
    Low quality plastics on home printers
    Really? I think if you actually looked into what ABS and PLA plastics are also used for, you’d find at least ABS is fairly ubiquitous in mass production and has been around since at least the 40’s or 50’s. ABS is used in Lego bricks, household appliances, car parts etc… PLA is much newer and a biodegradable plastic, however as far as I’m aware it has similar high quality properties to ABS.

    I think what you’re referring to with the home 3D printers, is the low resolution that is currently available with the FDM (fused deposition modeling) process of 3D printing. Commercial printers sinter small particles of metal or plastic together with a fine laser, which is why they have a much higher surface resolution.

    Personally, I think the big challenge to 3D printing are more likely to be the strengthening of IP laws in the USA, Europe and elsewhere that may stifle the emerging industry. Established manufacturing companies need to see 3D printing as an additional value creation tool and a way to develop closer relationships with customers than as a disruptive threat. Thingiverse is a community of hobbyists who freely share and develop one another’s ideas into fruition. They have even created a working mechanical clock. I’m worried this sort of innovative community would be made unlawful by scared businessmen and legislators. 

  • http://www.theequitykicker.com brisbourne

    Hi David – many thanks for the comment. One of the reasons I write is to improve my understanding by having my thinking challenged.
    Let me have a go at responding to your points.

    1) I think that services like TinkerCad and Sketchup are the answer, but unlike you I don’t think these tools are user friendly enough yet. Tinkercad is getting their though, as is 3dtin in India. This software layer is a key enabler and one of the big opportunity areas in 3D printing.
    2) Finishes as a separate part of the manufacturing process – you make a good point here. Some use cases will be high enough value that an extra process step to improve the finish will work (Jewellery, implants, some hobbyist) but I suspect others won’t (spare parts, home printed novelty items). The resolution is still a problem on affordable home printers though (as you mention)
    3) High prices – prices are dropping fast and will continue to do so, and I believe they will reach a point where price isn’t an issue. My point relates to market timing, which is important to me as an investor.
    4) Low quality plastics on home printers – I was wrong to say low quality. The issue I think is that it is one type of plastic, whereas to many replacement parts require different levels of rigidity and I suspect hobbyist use cases would benefit from variety in flexibility and texture. You are right that I was mixing resolution with quality.
    IP will be an issue, as it was with music. I’m hopeful that it won’t be a big one though because people won’t be 3D printing other people’s objects to avoid paying for them in nearly the same volumes as we saw people making illegal copies of music files.

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