We have something rather unusual to bring to you today. We have some sad news. This is a seismic event in the 3D Printing industry. We have some really sad news about Pinshape. Pinshape is dying. March 31, their service is being terminated. They have decided they are not going to continue and they are proclaiming their demise.
Listen to the podcast here:
Has the 3D Print Bubble Burst? Pinshape Proclaims its Demise
“To our Pinshape community: Sadly, today, we are announcing the termination of Pinshape, effective March 31, 2016. Over the past two years, we have had the privilege of innovating in an exciting industry. Pinshape has had an incredible journey and support from so many passionate designers and makers for which we are truly grateful. Together, we have grown over 75,000+ active users and had over 1,500+ downloads to our community every day.”
I have to interject here. 1,500 downloads is sad. This is why they are dying. We don’t have to read the rest of the letter. We will have a link to it. If for some reason the site goes down, we screenshotted it.
They have gone out of business. That’s the reality. We are going to talk about why and if this means the 3D print bubble is bursting or not.
They do say, “Ultimately, investor confidence in the consumer segment of the 3D print industry has weakened significantly over the past 12 months.” They are citing that as a significant reason. I think we need to understand and take a good look at what that consumer market means. This really goes to the heart of the issue.
We should say up front here that when we read this blog, we reached out to Pinshape. We have interviewed Lucas on our podcast before and his co-founder Nick. We just recently interviewed their marketing director, Lauren, not even two weeks ago. We had no idea this was coming. Today, when we got the news, I picked up the phone and called Nick. We had a conversation. We offered Nick and/or Lucas to come on and be interviewed for the podcast. What he told us on the phone was that they have gotten a lot of people and companies coming to them with ideas for how to save their community. Maybe they can find someone in the eleventh hour who will acquire it and keep it going.
We told them to use our platform to help you spread the word and make sure everyone is hearing it. We will give you more exposure to help you save this thing. He appreciated it, said he would talk to Lucas, and would get back in touch with us. I got an email just after lunch today, saying, “We really appreciate the opportunity to get the word out on your podcast, but we feel it’s not probably best for us at this point. We have a number of interested parties contacting us, and we will hope to find a new home for Pinshape in the next little while. The blog post says all we really have to say at this point.”
You have to respect what they are doing. We put out an offer because we have to talk about this now. It’s very timely, and I think this is a big issue.
Let’s go back. When we first talked to Pinshape about ten months ago, the thing that struck me was they had an odd strategy. But it didn’t surprise me because it was such a software incubator strategy, which is what we see a lot of right now. That is an issue. We have been very surprised at how much money is being put into certain companies in the 3D printing space for an uncertain return. We know some companies have pitched VCs and said, “If you are in a revenue model and want to invest in a company where you know what your return is going to be, we are not your investment. We are investing in a bigger picture/future thing, and we don’t know what the return will be.”
In Pinshape’s case, this is what happened. They went in and originally had this concept that they wanted to develop a high quality 3D content site. That is what they had originally told us. They got some initial capital that then pushed them into an incubator system. I think they went to Asia to participate in the incubator for a few months. When they came out of it, they came out with this model of the business that they went forward with. That was a model under which instead of being focused on the content, they were focused on developing a membership base. They actually told us that their entire business model was not revenue-based; it was membership-based with the idea that they would sell out to a large 3D print manufacturer with their membership base. Their sole goal was to get those 75,000 users.
That is the issue right there. When you look at that number, 75,000 users who only generate 1,500 designs a day that got downloaded, that’s not a lot, especially when you have that high of an active user base. The other thing that is really telling is that in their blog post, they say that 99.5% of our transactions are free. There is one half of one percent of their transactions are for paid downloads. You are only getting downloads on 2% of your base. Of that 2%, 99.5% is free.
They were never on a revenue model. Clearly their goal was to build a subscriber base to build a community that would be attractive to a big company like HP. They are coming out with a new 3D printer this year. A company like that that is trying to break into the business would be much more likely to acquire a community than build one from scratch. It takes a long time.
It never made sense to me. Don’t get me wrong. I loved Pinshape’s interface; they had a great interface. Joseph Larson, long-time listener, brought our attention to it on Facebook; thank you so much for that. He said he was devastated because he liked the options they had for management of his content. You have to appreciate that. No other site, in his opinion and experience working with a lot of different sites, offers quite the same options that Pinshape did.
I think we’re saying this all around. These free sites are not doing well. They are running out of money. They are running out of a model for how to do business. Even the paid sites are having issues. 3DShook has a nice model of their website, but they couldn’t support themselves. There was no revenue. They seemed to be struggling as well.
One of the things they talk about in their blog post is they are citing MakerBot’s revenue being down in 2015, Stratasys taking goodwill and paramount charges for the MakerBot acquisition, 3DSystems ending their production of the $1,000 Cubify “consumer” printer, and they are citing some of these things that the retail consumer marketplace is not working. Is the bubble bursting? I disagree. I don’t think the 3D print bubble has burst. I think those that were in it for the wrong reasons are panicking.
It’s a misnomer to think that what’s happened with some of the companies in the last year and 3DSystems getting out of their retail consumer printer, here’s the thing. I think there is a huge, bright future for 3D printing in the consumer market. I just don’t think it’s going to be people buying 3D printers to participate in that market. I don’t know that I necessarily believe that it’s downloading free shareable designs either. That’s not the case. We haven’t seen that. It shows a naiveté that 3D printing is easy and it’s going to be fast to learn. We all know that this is not a fast thing. It doesn’t mean it’s not worth it.
We have our business plans and what we want to do in the industry. It involves professional designers designing professionally-designed products for a consumer that could really benefit from having a unique, customizable or personalizable product that they can’t get anywhere in retail. Were we the only smart guys? We decided not to take investment. You and I clearly made that decision. Most people may not realize that. We clearly made the decision that because we couldn’t find a clear market proof on a revenue path that was going to be within 18 months of us going into that business, we decided to take a slower road.
That’s what this podcast is about. It’s how we are building it and growing. The podcast is a means to an end, but it’s also a fabulous means in the process of helping a bunch of people along the way. I certainly really enjoy doing it, and it is helping to solidify our place in this industry, which in the future will involve a serious business that develops products for consumer retail.
But we don’t think the market is ready yet. There is an education that has to go on with retailers and at the consumer level to understand what’s possible. Eventually, we will have to put products out there and essentially build the market. At the same time, we are using our podcast and our position here in the market to gauge when the market is ready. Right now, it is still in the educational stages. This is why we are participating the way we are. That is why we have the shows for you that are education-focused. And I don’t mean that by just teacher-focused or student-focused, I mean learning how to do things or learning about printing and design and business-building in that educational way.
I think that in reality, this is a sign of some overzealous, overheated venture capital and angel investors who got nervous. I actually see the same thing with the pressure on Stratasys and 3D Systems. It’s their investors and the market putting pressure on them to make sure that this isn’t a tech bubble bursting. You better get your operations in line and your finances going. This is a contraction at a time at which more investment is necessary, and if you’re really going to succeed in 3D printing, you better start doubling down.
I agree. I don’t think that this is a sign of any bubble bursting. What I think it’s a sign of is really risky investors who have realized it was a risky play. It was too long-term for them. They just decided, You know what? Maybe another company will want to acquire this user base and this platform, but I’m not going to fund it anymore. That’s what this says. The investors pulled the plug. They have millions of dollars invested in them at Pinshape to build this, and I’m sure the majority of it went into their website, which is very well-designed and robust. It’s very comprehensive and well-done.
Do you remember what I tweeted them when they got that funding? I tweeted them that they should spend some of that money to pay for content, for good designs. Maybe if they had listened to me, they wouldn’t be in the place they are in right now. Maybe so, but I think they still had another fundamental problem.
First of all, I think their fundamental problem was that they didn’t have a revenue model. I don’t care if you’re not making as much money as you wanted to, but you had almost no revenue model. You needed that.
But if you had designs that belonged to your site that were the only place to get them at… When you have 75,000 members, it means you’re on a bunch of sites. I know that because I traffic them. We see the same designers on Pinshape that we see on i.materialise that we see on Shapeways and other places. We see their designs all over the place. When you have that, it says that people are spreading themselves out for as much visibility as possible because there really isn’t anything but that exposure benefit at this point.
But if they had owned designs, if you had spent the money and used some of that millions of dollars to create a design library that belonged to your site that was core to you, you know what you have? You have an asset portfolio right at that moment because every single one of those designs is an asset to be sold off to somebody else.
I still think there is a fundamental flaw in that they weren’t going to reach consumers on their site. How many actual consumers go to Shapeways and traffic those shops to buy products? When we talked to Lauren a couple of weeks ago, that’s exactly what she was saying. Their design guide was set because they needed to attract a consumer model. The design guide was meant to bolster the designers on the site and help them build better businesses and better designs that go for business, but they had to work on the commerce side of things. They obviously waited too long to work on that.
If you want to reach real retail consumers, you have to make product available where those consumers shop today. I think there is a great opportunity with brick-and-mortar retail to continue to make them more relevant in the future because dot-com is eating their lunch. There are ways to do this. We are going to participate in that in the future. When we do it, we are going to be running fast and furiously to do it.
What I’m saying is we are learning from this. We are doubling down on 3D printing because this is a sign of just how wrong the initial ideas were and how right we actually still are with the direction we think 3D printing needs to go.
I’m going to leave a seed of hope, and I’m not a big one to hope because hope is not a plan nor a strategy. I am going to leave a seed of hope that I do think maybe part of this blog post by Pinshape was a last-ditch effort to try to get someone else in the industry to realize that this community is going to go away and in an effort to try to save it. Unfortunately, it’s not a good negotiating position. It may be kind of like a fire sale for Pinshape. But I think it’d be better to see somebody pick it up and keep this community going than it would be to let it completely die, even though I don’t think it’s a consumer play.
I don’t know. I am of the opinion that it should die, but somebody should take their code and buy that and put it on their own site. There are a lot of bad shopping sites out there, and Pinshape is not one of them. That’s the value in it, not that back-end.
But there is a community of people who are participating in it and want to continue to do so. Somebody should pick that up. Yeah, okay.
We will have to update this if any new news comes. But I think this may not be the real end of that community although it may take a hiatus. Maybe somebody will pull a rabbit out of a hat here.
We’d love to hear your thoughts on this. What do you think of the Pinshape loss? And you designers out there who were stuck on Pinshape and now have to move yourself somewhere else, please let us know where you go. We will give you a shoutout
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