3DPrinting

Quora Answer : When, if ever, will 3D printing stocks rise again?

Mar 4, 2016

As everyone says, we're in the "trough of disillusionment". But what does that really MEAN?

It means we've passed the point where people said "Wow! I didn't know that could be done. That's amazing!". We've passed the point where people said "look, we can make one of these for you, to have in your home". We've passed the point where people have said "This is going to be big!".

But we haven't yet arrived at the point where it's actually starting to be big.

In other words, we understand the technology. We've proved it can work and we know how we're going to make it do more cool stuff soon. But we haven't figured out the business model for how anyone is going to make significant money from it.

That's the trough of disillusionment. The point at which early adopters / investors (investors of money, time, attention etc.) have jumped in because of the promise of the technology. But haven't discovered the specific applications or business models under which the technology can work.

Basically what you're looking for is someone who DOES have a business model.

I've long argued that the main effects of 3D printing will be to

a) increase the number of designers of physical objects. 3D printers will lead to an explosion of people and startups making new things, just as the laser printer led to an explosion of graphic designers and new magazines and print products.

b) start cutting the length of supply-chains. In other words, retailers or other companies closer to the end customer will start to add on-demand fabrication into their supply chain as and when it makes sense (eliminates either having to hold stock or wait for a slow or unreliable supplier).

I still believe that this is the big picture. Small startups will invent and prototype new products, using 3D printing and other fabrication technology. They'll turn to crowdfunding and other accelerator platforms to help turn those prototypes into the first round of (semi-)mass produced products for their first batch. If the product turns out to be a success, they'll then go looking for more funding for larger batch fabrication. At this point I'd expect to see large retailers like Amazon step in to fund this scaling up of production or even to buy the rights to be able to continue to manufacture designs on demand. (Just as they already cut deals directly with popular authors to make eBooks, squeezing out publishers.) Amazon can hold a very long tail of stock if it's all just designs, ready to be fabricated when the customer wants it.

So the big business models will be ones that address one of these two areas. And most likely coordinate with other players in that part of the ecosystem. For example, the most important company in home 3D printing may actually be Kickstarter. It's Kickstarter which has allowed so many 3D printer startups to actually find their first customers and make their first product. And this has led to rapid evolution in 3D print technology. It's Kickstarter that enables all those other small startups who use 3D print to prototype or even make their first products. Other platforms like CrowdSupply or HWTrek are taking the crowdfunding model but adding more support for those early maker startups to plug into the industrial ecosystem. One of them, or similar could well become a major player. The people who make the most money from 3D printers may not be the people who design and sell the printers at all, but the people who orchestrate the new manufacturing ecosystem that 3D print (and other fabrication technologies) enable.

Like I say, that may be Kickstarter and HWTrek etc. Or it may be Alibaba and EBay (if EBay was strategically smart). Or perhaps Uber will just steal the Ponoko model, and scale it up.

Off-topic, but not entirely unrelated. Did you notice that McDonalds is poised to become the world's biggest seller of specialist Virtual Reality equipment? ( McDonald's Is Turning Happy Meal Boxes Into VR Headsets )

People ask if 3D printing is a threat to Lego. If Lego embrace it, it's the biggest opportunity ever. They can mass produce generic pieces, but put high quality 3D printers into Lego stores to let people print custom or short-run pieces. That gives Lego a great base from which to provide all kinds of local 3D printing services.

If McDonalds can be VR company, Lego can certainly be a custom manufacturing company. OTOH, so can IKEA.

You get the idea. Somebody will figure out how to make money from 3D printing. Through creating platforms, supporting all those new designers and makers, and integrating it within viable markets and supply-chains (existing or new). Those are the people to find and invest in.