In current news for the 3D printing industry, MakerBot now has a new CEO. That’s 4 CEOs in 4 years. Tom and Tracy Hazzard discuss their thoughts on what caused this and what it means for the company moving forward. They share their opinion on what went wrong and what needs to change for MakerBot.
Listen to the podcast here:
4 CEOs In 4 Years For MakerBot
Hi everyone, this is Tom and Tracy on the WTFFF 3D Printing podcast. We got a bit of current news to talk about today. It’s another seismic shift in part of the industry. Or maybe not seismic. We’ve been seeing it all along. It’s little bits of activity and obviously it’s still not going well. What we’re talking abstract today is four CEOs in four years, less than four years really, three years, at MakerBot.
We got the news this week that the current CEO is resigning to spend more time with his young family. That’s fine. That’s what you would say. You didn’t get fired. You stepped down. In our experience, you wouldn’t leave being CEO of a company like that honestly if you weren’t being forced out. I think quite honestly, he’s saying he’s resigning to save face and they’re letting him resign instead of being fired. If you did well, you’d be promoted somewhere else. You’d be running a bigger division and a bigger part of the company.
Going back to when we watched Print the Legend, Bre Pettis imagines himself as Steve Jobs. He thinks he’s going to be that. He wants to be this legend. He’s set up to do that. He’s set up to swoop back in. I hope they actually don’t do that, to be honest with you. That’s just my opinion. I don’t think Bre would do it at this point probably either. He’s off doing other things that are more important to him. It sounds like that, at least.
Print the Legend | Official Trailer [HD] | Netflix
But how many times do you say, “Oh my gosh, my company is just doing so well. Look at all this stuff we’re focused on. We’re focused on the high end, we’re doing all of these great things.” When the reality is you can barely pay the bills and keep the lights on. Companies say that all the time, especially people who had great successes before. They’re not about to admit that they’ve fallen off the face of the earth and they’re not doing well. You’d never know that. This was your baby at one point. Wouldn’t you come back in? If they give him enough money, maybe he would. I think he’s got enough money that he certainly doesn’t need to. I don’t know, if I were him.
When you ran that company, it was not a big corporate culture, big company. It was this young startup renegade culture built out of the RepRap movement when it was still an open machine before they closed it up. I think it might drive him crazy to come back and be CEO of this company now. I think that says that you didn’t have the vision of actually taking it somewhere. I don’t think that I necessarily got that vibe from his view of himself. I’m saying that from the commentary that he made on Print that Legend and of subsequent interviews he’s given various places. I think he was pretty full of himself and thought that this MakerBot was the best thing to ever happen to 3D printing ever. Definitely at the time, I thought it was. I think that he envisioned it being a household good. If you’re going to be a household good and a household name, then you’re going to have to have a big corporation at some point.
Whether or not he had the skills to do it, clearly that’s what Stratasys didn’t believe in and that’s why they replaced him with Jenny Lawton back in August of 2014. But that was short lived too. She came in form a different part of the company to try and sort some things out. I don’t necessarily think she did a bad job. I just think that it wasn’t in her plan to stay there. Probably pretty smart for her career on that part, to not stay at some place that was so risky. Once you got into it, if she saw she had a stack decked against her and wasn’t going to be able to make it happen, maybe she didn’t want to stay around long enough while the ship started to sink.
I don’t know. We don’t really know if that’s the case. Maybe she got forced out also. The interesting thing is this seems to be now a pattern. Several CEOs in a row. They give it about a year, a year or less or a year and slightly more. They give it about a year with a CEO. What it really says to me is that they just don’t have their act together in terms of a strategy. They don’t understand. I think that what we’re going to see is, I think mistakenly, I think they’re not being patient enough. I think they haven’t sorted out the mix between Thingiverse and what that means and owning that. I’m sure it’s a drain of expenses. Mix between that and what you’re doing with 3D printing in terms of Stratasys’ goals and where they’re going with things. I think you’ve just not got a lot of patience for waiting for the market to be where it needs to be and for what it’s going to do.
Jonathan Jaglom had given an interview where he talked about the difference between 3D Systems and Stratasys. Really looking at it between the two and really saying that 3D Systems had obviously focused on the manufacturing route and high end prototyping. They were really focusing more on the small business low end, prosumer, education market. That was a clear differentiator. If he’s out, is that mindset out? If that mindset is out, does that mean they’re shifting back to 3D Systems? Because honesty, I don’t think it’s working so well there for them either.
I don’t pretend to know what’s going on in 3D Systems. Certainly they’re a much bigger company and a commercial market that’s entirely different. We’re really focused on the desktop 3D printing market for the most part. I’m not going to speculate on Stratasys there. MakerBot, I got to tell you, we absolutely do not know what’s actually going on inside this company, but we understand big business. We’ve been working our whole careers as consultants and a couple times as employees.
The thing is, when you have this kind of thing happen where you have multiple CEOs in a very short period of time, it really speaks toward the board of directors is not happy, and maybe not being patient enough, perhaps. But there’s a restlessness. If things were going well, achieving what they wanted to, or if the board was all in line with their vision and where they’re going and the CEO was responding to that board, this kind of stuff wouldn’t happen. You’d have some more longevity here and really be going toward a bigger goal.
I think that may be the problem right there. A lot of times, when a company gets bought out, and MakerBot was undoubtedly very small when they got bought out. They probably didn’t get enough board seats if any at all that were of value. Bre was on the board for sure. But that’s it. You get one board seat. That doesn’t do you much good. Maybe one of their VCs or something that gave an early investment in them got a board seat. But they’re investment focused. They’re not business focused. When you don’t have that representation on a board … I know this because I’m personally working on getting onto a couple of boards coming up in this next year. That’s one of my personal goals. I’ve been working with an agency to do that.
As we’ve been researching and looking at that, when you look at the dynamic of a board, of the makeup of a board, when they clearly have tons of experience working with Stratasys year over year and where it’s going and its trajectory and all of those things. Then you bring this young upstart into the group, it just doesn’t have the kind of dynamic that you need it to have and the understanding that you need it to have to make the difference, to be patient, to figure out the right strategy, to hire the right CEO. Clearly the company is struggling. It’s disappointing in many ways because they’re such a big name, such a market leader. They’re seen that way rightfully so I think.
They just came out with new products in late 2016. We’ve been working with one of them. We have a review coming out very shortly after this airs. We have a written review on the MakerBot Replicator+. They made a huge improvement with the Smart Extruder+. That was huge. Plus we have an upcoming interview, a reinterview with Mark Palmer, who’s one of the industrial designers at MakerBot, to talk about some of the redesigns that they’ve done with the machine and other things. Clearly, this was important to them. I’m worried. I’m worried for MakerBot’s longevity. I’m worried that they’re either going to sell them off or get rid of them altogether, just like the Cube. It may go the way of the Cube.
I worry a little bit also, when you try the read between the lines of some of the statements that Stratasys makes. Then you also see some of the other things going on. I think it would be a shame if they went away because now they’re getting to be such an installed base in a lot of schools around the country. Fortunately these printers are pretty robust, lasts a long time. The only part maybe you’d need to replace is a smart extruder, but those Smart Extruder+ are lasting so much longer now. I’ve had great results with them. The thing is, when you see some of the other things that they’re doing, like they have this promotion right now. If you buy two Replicator Plus+, you get a MakerBot Fifth generation for free. They’re doing that promotion right now.
That’s a get rid of inventory, get them off my books because we have to improve our books. This is what we know. We’ve seen that company. We saw it happen with a couple companies we used to work for. What do you do? You start getting any pending lawsuits off your books, you close any deals, you make any settlements you can. You get rid of employees, especially high paid ones. You get rid of long term contracts. You dissolve and get rid of inventory levels so that you aren’t carrying long term inventory. You move all of that stuff to clean up your books for acquisition. They’re going to spin it off and sell it if that’s the case. That may be an indicator of that.
Also, the guy that they brought in, this new guy, Nadav Goshen, is known for being a turnaround guy. What does he do? He cleans up the mess and he brings it in. One of those ways is to sell off a division, sell off a poor selling division. Turn it around, make it profitable otherwise. I don’t think that they can make it profitable when you’ve spent so much time reinventing in new design, new development, new manufacturing and not given a chance to start selling yet. That’s too fast. They haven’t been selling the new product all that long so far.
To me, they’re like, “We don’t want to find out how this is going to go. We’re going to go on, we’ve got the best new thing going, let’s clean you our books really fast and maybe let’s spin off and get sold.” Then get it out of there. That’s speculation. We got to admit, that’s speculation. I actually hope that doesn’t happen unless somehow it gets sold to another company that helps take them in a better direction, maybe that would be a good thing.
I’m offering myself up. I would like to have at them. I’d like that job, to be the CEO of the new company going forward. But I’m sure the board would never approve me because they wouldn’t want to do it my way. You’re going to have to let me do some things that they don’t know how to do at Stratasys, that they’re not comfortable in. Like for instance, this whole thing with Thingiverse makes them really uncomfortable, I guarantee you. They don’t understand it, they don’t get it. They think this is just a nice to have, maybe must have, have to support it. It’s just this community support. It’s not actually useful to them. They haven’t turned it in to something useful.
It’s certainly not a big revenue generator. That’s probably a big time suck too. It’s going to be gone. There’s no way I would keep it. It can’t do enough for you interest community. It really can’t. Every one of those other file repository sites are gone or shifted off to somewhere. I just don’t imagine that it’s going to really work for them long term. They’ll send it to somewhere else or relegate it to some low level support. You got to do that.
I think it’s a mistake. I think the mistake is that you should really dive deep and heavy, heavy, heavy into a content strategy. Teaching people how to use these machines, making sure that they use them every single day. That’s why people aren’t upgrading, that’s why people don’t care, that’s why they don’t turn inventory, that’s why they only sold 100,000 units at the big announcement they made late last year. It’s not enough if you don’t continue to build long term support for them or you don’t charge a super high dollar amount, which is what Stratasys is used to.
To me, one of the big danger signs is the fact that they’re doing this two for one promo. What does that tell you? It tells you a product line that was obsolete as of last October maybe when the new ones were announced, the Replicator+. Really, why would anybody buy a fifth generation machine when there’s the newer one that has more capability that’s out. You’re not going to sell very many of them. It means that they have too much inventory on hand that they’re going to give them away. They’re giving them away for nothing. If you buy two Replicator+, you get a fifth gen.
Can you imagine how many fifth gens are going to flow through private label, Amazon, eBay, all these places that never get used, never get touched. Now people are going to be making profit off of them. It’s like the old iPhone model when the new iPhone comes out. You really don’t sell very many of them and you can’t sell them for very much anyway. It suffers from that. They’re giving them away. They have too much inventory on their books. It’s a little scary to me. I got to tell you, when you see a review on this Replicator+, it’s a great printer and it’s a big improvement over the existing one. I’m very impressed with it. I’ve ran more than a hundred prints on it since we’ve had it. It’s very impressive. Certainly, as a machine that’s easy to use, very predictable, reliable, it’s definitely there.
We’ve seen this happen. I think we talked about this on the podcast a couple weeks ago maybe. We were talking about this in terms of what goes on when you have a company that gets bought out, like Fitbit buying the Pebble. They completely got rid of Pebble and only kept their IP. They completely got rid of it. The problem with Pebble was that they saw themselves as a tech company and not as a consumer product company. I think that’s the same problem here. Stratasys sees them as a technology and platform and 3D printing tech company.
The reality is that they’re a consumer product company. You’re selling a consumer product really. It’s desktop something, it’s a small appliance in a way. You’ve got to be thinking in a consumer product world and you have to be thinking with consumer product metrics. They don’t have any of that. They don’t have that kind of people probably within their organization to even look at it like this. You’ve got to bring somebody in that knows retail in a way to really understand how that works. Which is why again, I’m saying I am up for the job if they’re interested in someone who could actually make it work.
I’m sure Tracy would shake the heck out of that place up. She’d shake it up big time, and in a good way because you do understand retail and product. The reality is they have gone down the consumer road. Yes, they’re pitching it to engineers, professionals, professional designers, to everybody who has a 3D printing on their desktop. But they’re selling in Staples, they’re selling in Fry’s.
Even go back and look at what happened in Apple. When Steve Jobs came back in and Apple went down the road of the colorful iMacs and all of the those things that had been going on, you head into a place where you understand that you are a consumer product good and you better appeal to mom. The minute you do that, what do you do? You explode as a company. You’ve convince moms that this is worth putting in your house, that it’s worth giving to your kids, it’s worth letting your spouse use it in the garage as much as they want because it’s useful. It’s being used every single day. Until you can show people and give them the things they need to print every single day, you haven’t done what you need.
They’ve got the machine dialed in. It’s all about the content. If it was professionally generated content where there was something new I will say every week. I don’t think you need to have something every day. You have something every week that people who buy these 3D printers or are using them in school or whatever, at home, at school, anywhere, even at work. Something new that you could printer every weekend. By Friday it’s out and it’s your weekend project type of thing. If you engage people in that way and do this content strategy, it’s incredible stuff to do content marketing and social media as well as give people that are buying your printers, they don’t have to think about or wonder.
What am I going to do? What am I going to print? What could I do? They’re like, “That’s so cool. I have to print that. I have to do it now.” Then your printer is running and it’s running constantly, which means that it becomes invaluable, which means you replace it or you upgrade it. Or you need more material, you need more smart extruders. Even though they last a long time, they do wear out. I think I’ve been through one, but after tons and tons of hours. Much more than I got out of the older kind before the Smart Extruder+.
Anyway, I don’t know. Some alarm bells are going off. I don’t like seeing this in early 2017. But if you’re bored and you’re trying to make changes for one reason or another in the year, you got to do it early. And they did. Investment groups are out there thinking about buying MakerBot. I think it’s going to be up on the block. That’s my prediction. I think it’s on the block. This wasn’t in our predictions for 2017, but this news hadn’t happened yet. I think this needs to be inserted in the 2017 predictions. I think there’s going to be an acquisition, either the board is planning or orchestrating it. One way or another, we think it’s going to happen. If you’re going to sell someone, take a lesson from our friend Michelle Seiler-Tucker, who does hundreds and hundreds of businesses, small businesses every day. You have to prep them for sale. They sound like they’re being prepped for sale.
There’s a lot of really good people there. I hope that if it does happen, that a lot of these good people, many of whom we’ve talked to or we’ve had guests on the show, we hope that they all have good futures and jobs ahead of them with a company that going in a good direction. I’m absolutely sure they would. We’ve seen the people who’ve lost their jobs over the last year go someplace that was an improvement in their careers and a higher level movement. I don’t think we’re seeing that in that sense. I think their education there at MakerBot and their career trajectories are going on. Unfortunately they’re going to have a little hiccup.
Stay tuned. We’ll hear about it. For our listeners at WTFFF, tomorrow we’ve got a great interview with Lucy Beard of Feetz. That was so much fun. It really was. If you are really into the details and tech of 3D printing, this company is printing FFF 3D printed shoes. They’re really doing it. They’re not just prototyping. It’s end use product. Boy, have they had to innovate a ton to do. That’s all I’m going to say. I’m not going to give you too much. Come listen tomorrow to that episode. It’s a good one. You’re going to love it. I really enjoyed talking with her.
If you guys have any ideas, comments, your thoughts, your predictions on what’s going on with this whole MakerBot move, please make a comment below. Find us on Facebook. We may be all wrong. I don’t know. It’s just our thoughts, our opinions. Tracy would be awesome running the company. They just picked a new CEO so that’s not really going to happen right now. But they moved somebody from internal. That’s why I think it’s’ a mistake actually. I think if you were really serious about it, you would have done that external. Time will tell.
Anyway, please comment. Give us a comment at 3DStartPoint.com or reach out to us on social media @3DStartPoint. Thanks again for listening. This has been Tracy and Tom on the WTFFF 3D Printing podcast.
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