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Right now, we have this bigger foreboding question over our business about the current challenges of the 3D print market, which we thought we’d address. Maybe it will be similar for other people contemplating what to do in the 3D printing world. And in fact, we’ve been hearing from some listeners who are trying to create a business around selling 3D print designs, so we know there are other people with the same business.
Listen to the podcast here:
Challenges of the 3D Print Market: Needing Market Proof
What our challenge is we are trying to decide whether or not to take in an investment or we should just weed out the market and keep doing what we’re doing. I think this is a problem for a lot of people. Do you go out and take the time and energy—because it takes a lot of work to get an investor. I know this because I have helped people who are structuring their pitches figure out if they have good market proof.
The reality is we don’t have the market proof here. If we follow my normal formula of “Prove it first,” we’d have to say no. But in our case here, I am hedging on my own advice and debating about whether I am just ignoring my advice or because in this situation, this is a high-growth industry, and it’s not mature enough to know its needs.
It’s really difficult. As a cautious business venture, you want to try to grow organically. You’d like to be able to do that. But there is a difference. In today’s market, it’s hard to grow organically because the market is moving so fast. But in this particular case, this segment of the market, the design side of the market, is moving extremely slowly. No one has invested in it. There isn’t a place for us to do the proper market proof tests. Nobody is jumping, and that is problematic.
Challenges of the 3D Print Market: Is the 3D Print Market Even There?
Is the marketplace really even there yet for us to be able to sell our designs? That’s the thing. Do I want to take in a few million dollars in investment and build out all the designs that we believe are necessary for the market and hope that the market will be there by the time we are done and ready for it? I don’t know if I want to do that.
I believe the market is going to be there long-term; it’s just when exactly. Are we still too early for it? If 3D printing is really going to go mainstream, many more people will have them in homes than they do now, but not everybody will print their own stuff. Consumers will have a potentially better shopping experience buying something that is really more specifically tailored to their needs than what they can get in mass market, big-box retail.
I keep sitting back, and I can debate both sides of this. That’s the real problem. This is why this is our challenge. I can say that the real issue is that there is no one leading the market right now and showing them how great it should be and can be. That could be and should be us. That’s where I’m going, “Hmm, maybe what it does take is investment.”
I keep thinking back to our call with Cindy Schulze.. She is a teacher, and she was paid to develop a curriculum for teaching 3D printing that is currently being used in some San Diego public schools. I think that design belongs in the same world. Somebody needs to be paying to have great design done.
We have talked to 3D Shook, and he tried to do that. But he kind of failed. At least, it didn’t succeed at the level which it needed to to sustain a full business. He’s holding out because he has investment, and he can hold out. He’s waiting, and I believe he’s learned the right amount of things to be successful. But the market is still not here yet for him. Is he going to be able to wait long enough? That’s the big question. Are you going to be able to get investment to wait long enough?
You look at companies like Pinshape who said this marketplace thing isn’t going to work. What we’re going to do is push all our energy into building as big of a membership base as we have so at least we have that asset at the end of the day. The asset becomes the community: the number of people you have, the number of emails you have. That’s your value.
I don’t want to have that value. I want our value to be the fabulous designs that everybody wants to be printing. But I have the conundrum that I don’t have time in my day to do that for free. And it’s the same thing that Cindy had. She didn’t have the time to learn to 3D print. Her principal gave her a 3D printer, and she turned it down because she didn’t have the time. It took until someone said they will pay her to develop a curriculum for this for her to say, “I’ll do it.” And she loves it. She couldn’t imagine teaching her class without it, in reality. That’s where I’m sitting back and wondering where we go.
Challenges of the 3D Print Market: Missing 3DP Market Data
We asked questions of people that are out there in the industry today selling products on Shapeways. They are making specific products that they are hoping people want to buy and have 3D printed for them. The model of what we’re talking about with where we see some of the future for consumer America and the world going.
For a while, we were not getting anybody who could give us data on how much they were really selling. We have a general number from most of the sites that offer free versus paid that the paid is less than one percent. But that is the only information we have. What does that mean?
In a consumer world, Tom and I know very clearly that when you have a bad selling item on Amazon, it sells 400 per year, and when you have a good item, it sells 4,000 per year. That’s just organic. That’s not you driving traffic and pushing it or having a big brand. That’s also conventional consumer products. That’s not necessarily 3D printed product.
A couple of weeks ago, we put some feelers out into the community. Eduardo Martini had asked the question, “Hey, I’m interested in selling my designs. How much is anybody making on this?” We finally had someone write in, who we are trying to organize for a specific podcast episode to interview him in great detail. We can share a couple highlights.
He is in Brooklyn, and he has a company shared with a partner. For 18 months, they have been selling products on Shapeways. In his first email, he said quite clearly that nobody selling products has quit their day job yet.
That’s the reality of it. It requires investment. We have never done that for our design business before; we have done it in other areas where we had our T-tools products and things like that. But not in our design business. I am still on the fence about whether or not we should do it. Is now the right time, or is a year from now the right time?
What I would love to have is some market proof projects under my belt to do some test markets. That’s what I coach people to do in business. Go out there and market proof that there is a fit between what you have to sell and what the market wans to buy. You can do it in the lowest cost way, and you do it conceptually before you prototype anything.
Challenges of the 3D Print Market: The Consumers are Unaware
The tough part is, it’s not just do we have the right products, and are the right consumers there to buy them? It’s really the conduit to those consumers, the marketplace. How do they know it’s there? You can’t expect them to go and search on Google and find it because they don’t even know they need it or that they can get it. That’s really the issue. The market that we want to design for doesn’t buy in the marketplaces that exist today. That’s the reality of it.
What we’re talking about is designing products that appeal to a market that doesn’t even know about 3D printing yet. They could seriously benefit from it, and once they understand what they can get that is different from vanilla products—big-box retailers don’t step out there with color. They keep it very middle-of-the-road so it appeals to the most number of people. Putting things in big-box stores is risky. Making a 3D printable file is not terribly risky in terms of money on that scale. You don’t have to tool for it. The only risk is on the designer to spend time creating the right product.
It’s a philosophical problem that I have with those in the tech industry in general. They go out there and get the investment, and at the end of the day they have air. They have nothing to sell, nothing of value. That’s been my fundamental problem with why I am against investment.
At the same time, I keep sitting back as I have been developing our business plan and our pitch deck and looking at it. At the end of the day, the reality is there is value because every single moment that we design something is actually an IP asset to the business. It’s a tangible asset to the business. Whether or not it gets used in the intended method of being part of this downloadable library where you can stream these designs to someone’s printer they have in their home or office or if it goes to a Shapeways/Sculpteo, it actually doesn’t matter where it goes. Or if some retailer picks it up and wants to make it in production, it’s possible. Although it would be modified, most of our products are made for 3D print only. But it could be made for 3D print production. It could be made to be in production under that model. The reality is it still has extreme value. Each one of those assets. Maybe I have to rethink my idea that it’s not air-created.
It certainly is not air. I agree with you. We have met many people who have gotten investments as software companies. Even with some people in the 3D printing space but on the software side, if it’s online or operating systems or other aspects for 3D printing. They are getting a lot of money to develop this software. Sometimes they don’t even know where it’s going to go, and they have told their investors, “If you’re wanting to have proof of ROI, you’re not the right investor for us. We’re not building this company on a known revenue model at this time.” They’re telling people that they don’t know when they are going to make money or if they are going to make money. But you’re going to invest in us because you believe in us.
People should believe in us because we have done this so successfully before, but I do not want to enter a business model under which I am not delivering a probable ROI as physically possible. I don’t know that I have a greater likelihood for success because we have an 86% commercialization rate on our designs and our products and our patents. I am not about to do something that messes that up. But my normal process of doing it doesn’t work because the market is in its infancy.
I do have confidence that we actually know what we’re doing, that we will develop the right kind of product that consumer Americans want to have printed. I think you’re right that those designs are tangible assets, are IP, and are licensable. There is a return. The question is when is that return going to be? What will it take? If we spend a year or two developing shoppable product designs for people to be able to shop and find what they want and have custom printed for them and then we get all that done. Maybe we develop 2,000 of them over a year or two at most. That’s a good quantity of product. When are consumers going to start buying them? When will we get to the volume where the return is realized? Is it as soon as we’re done? Is it over the course of the next year? Is it over the course of the next five years? I agree with you. But do I believe that over the next five years we will get a return on that? I absolutely do.
Do we need investment in that? I think we do. The reality is that we would be giving a piece of the company we don’t maybe need to give a piece of because we are going to sit around and wait for that anyway. But to create a couple thousand designs, it will take a very serious, dedicated design, development, and testing effort. Yeah, it’s bigger than us. It’s bigger than you and me. So we are going to pay out of our own pocket a bunch of employees to do this and wait a year or two or more to get a return. No, I’m not interested in doing that. That is why the organic method is not good. I agree with you on the test projects. I think we can cherry-pick projects for this retailer and that retailer and certain companies here and there.
Our Challenge to Other Designers
Let’s throw this out to our followers. I am curious. You designers out there who are interested in making money designing for 3D printing in the future, if we all banded together in some kind of crowd-funding model—I don’t use that in the Kickstarter term but rather in the serious investment realm. If we crowd-funded our investment and invited all designers out there who wanted to be a part of it to invest money into a pool and then we took that pool of money and all supported the design efforts and then shared the library—shared both the revenue from it and the use of the library—that could be an interesting model. We’d love your thoughts.
If we banded together as designers for a change in an interesting model, I am more than willing to develop a training module to make sure that we’re all clear about how that has to happen in this market, to be retail marketable. That’s the tricky part. There are a lot of great designers out there, no question, but do they have enough consumer retail product experience? No, probably not. But that doesn’t mean we can’t teach that. I think we could teach that, and everyone could come along together and be ready for it. We would have a so much better group of freelancers than ever imagined before, where everybody is out there on their own. You wouldn’t be on your own anymore. Wouldn’t that be amazing at the same time? We would centralize a way for everyone to get the exposure that is needed to the right market and how to monetize it properly and have everyone share appropriately and proportionally in that.
Interesting thoughts. We are throwing out our business ideas. Our challenge to you guys. We want to hear what you have to say.
- Market Proof expertise
- Cindy Schulze – 3D Print Curriculum
- Eric Ho – 3D Printed Memes
- Austin Robey – 3D Print Sales
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