Just a little heads up. In the long run there is no money in 3D printing. Sure, great mountains of wealth await as do IPO’s and even more hype. Don’t worry I’m sure lots of people will get private jets out of this yet. But, if we speak of the future of this technology than ultimately there will be no money in it.
What is the world market for a Universal Making Machine? A machine that could make circuits, LCD screens, cars, airplanes, glasses, hearts; everything. How many machines that can make everything could you sell at what price? Well, theoretically such a machine could be worth billions but actually you’d probably sell a few to research institutes and then one to a commercial company and then it is game over for you. Because all of your customers could use this machine to make everything including your Universal Making Machine so everyone would just undercut one another and keep on making Universal Making Machines until the price point will be barely above the cost of materials.
You might be able to in the near term make money off of service but again once there is a Universal Making Machine once something is broken you will just print it again. You might then think that the right thing to do is to develop a Near Universal Making machine that makes only 80% of things and can not make a true Universal Making Machine. But, once you sell that then all your customers could potentially out-innovate you by being more ambitious. This is apart from your existing competition which will compete by making more things than you can and apart from those nice people at the Rep Rap project who don’t care about money just about self-replicating machines. As long as the Rep Rap projects stays alive then these guys will eventually make UMM’s reality.
The way to sustained profitability then is to make a machine that is very good at making certain things but not all things and surely not UMM’s. A 3D printer that is really amazing at hearing aids but not good at anything else,for example. This would keep your market alive and be profitable. Unless of course someone releases a UMM which can spread its development costs over many more markets and applications. In so doing it will become a better and cheaper device. In this way 3D printer manufacturers will be locked in a perpetual game theory group hug.
3D printing is any process by which something is built up layer by layer. As the market grows more and more researchers and companies are going to find that their technology which is not being used for 3D printing can be applied to 3D printing. If there are investment inflows into 3D printing these researchers will enter the market. There are many thousands of these possible technologies and they could all come out of left field at any time. This will propel existing companies into more product development because they can be wiped out at any moment if they don’t.
The reality of 3D printing is that people enter the market by realizing the potential this technology has in changing the world and once they enter the 3D printing business immediately do all they can to throttle this potential by making it artificially more expensive. Good news is that inevitably 3D printers will be free or very close to the cost of the material used to make it.
3D printing material
Mexicans dissolve one another in vats for the same material margins that some people are making on 3D printing materials. It looks like a nice fat and happy business to be in. But, the plastics mayors are waiting on the sidelines looking at this business and waiting for it to become big enough for them to bother. Arkema, DSM and Evoniq are already involved in some way because they see the potential and derive a tiny bit of revenue from this industry. But, the margins on this stuff are surreal for these guys. I was once discussing a particular 3D printing material with a manager at a plastics company and there was a moment of confusion where he mistook the price I was willing to pay per Kilo for the price per ton.
The market is fragmented and there are many different colors and grades needed for the different materials. Each 3D printing process is a completely different technology requiring a completely different material. Even between machines and similar machines from different vendors there are differences in the optimal material and things such as additives. This is helping to insulate the market from low prices. But, any significant lowering of material price will make everything made with this machine cheaper. If this market comes to a point whereby there are several hundred thousand printers worldwide and material volumes increase then it will be transformed into a slaughterhouse. As soon as individual grades, colors and materials all correspond to the run cost of ABS lines, development costs of polyamides or the costs of developing additives. All of a sudden 3D printing material becomes a cost effective and incredibly high margin activity for these plastics companies. Overnight it will make sense for all.
Machines can be repurposed for different materials and the more capable the machines become the more of their own material they can process. At the same time (,) the ultimate dream is of course to have recyclebots that could at home simply turn unused or unliked things into new build material. Machines could be made to recycle all sorts of trash into build material.
Plastics is a nice and lovely scale business as are all the build materials for 3D printing so it will naturally evolve from a high margin business to a low margin one. Recyclebots are also inevitable and will greatly reduce the demand for materials as well as the cost of materials for the user. Ultimately materials manufacturers will be caught up in a damned if you do, damned if you don’t scenario and the costs of materials will approach zero.
3D printing software
So many companies want to be a platform that for consumers it is a bit like living in Donkey Kong. There are 3 categories of 3D printing software: creation software, platform software and the 3D printing toolchain.
At the moment, 3D modeling and CAD applications are high cost and complex. A new generation of creation software such as 3Dtin is emerging that is easy and free. This will be the paradigm for the industry with everyone trying to become a YouTube/Adobe Reader/postscript for the industry on the file creation front. Competitors such as Aviary, Google and Autodesk will keep things lively and in the long run it will be a clash of the titans whereby the AGAM companies (Apple, Google, Amazon, Microsoft) will look at all this juicy 3D content and see it as yet another dataset to be swallowed up in the battle to organize all information and sell all things. This will ensure that good free tools will predominate.
Thingiverse/Shapeways are clearly winner takes all businesses and very comfortable business models for Venture Capitalists to invest in. At the same time, all service bureaus are a community and toolchain away from being good competitors for either. The competitive threat should ensure that these platforms remain low cost and might be profitable for a while. But, in the long run with software becoming lower in cost and more accessible even the margins of these businesses will evaporate.
File repair, 3D printing slicing and 3D printing service bureau management software is currently expensive as are many of the other elements of the 3D printing software toolchain. With Netfabb, the industry has a real free player on their hands however it will be a matter of time before Materialise has to respond to this especially since Autodesk is also getting involved. Although high-end repair software will still be sold decades from now in companies the software for the consumer will be free. More files means better software and a bigger installed base on the software front will lead to more 3D printing orders and lots of other business models. Being the second biggest 3D printing toolchain company, being the second biggest 3D print platform or being the second biggest 3D creation software company will suck. Go to Tom and ask him about that on MySpace.
Files & Designs
How about design files and the designs people make? Sure you could make money if people like you or want to support you by giving you a tip of some sort. But, with the world being flatter than ever before and with better software the wages of designers will be lowered across the board. Star designers could still command high prices since they would be a brand but eventually everyone that is not a star will feel the same pressures that professional photographers now feel. Amateur activity will replace professions. Better software will also make possible widespread generative design, automated design, collaboration as well as making designing and engineering accessible to everyone. Remixing files and mass customization will make 3D printing easier and more accessible. This will slowly but surely move from being an activity that few can do to something that many can do. Somewhere somehow someone is working to Twitter design. And with this I mean: we could all publish on the web with HTML but few did; we could all publish on the web with blogging tools but few did successfully; we could all publish online with Facebook and Twitter and hundreds of millions did. At one point there will be a software tool that will make design and engineering for 3D printing similar to Word, Twitter or Facebook. It won’t mean we will all make good things, it won’t mean we will all make beautiful things but we can all make things and millions of people will do it.
Eventually, all the 3D printing software, all the machines, all the material and all the files will be free. This means that 3D printing will be poised to suck the value out of manufacturing. This sustainable ecosystem of complimentary tools will, much like Craigslist did for newspaper classified ads, drain the value from the manufactured world. With more things being 3D printed and less things being mass produced mass manufacturing will, imperceptibly initially, become less economical and viable. It is in this manner that eventually there will be no money in 3D printing or any other manufacturing, design or distribution.
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Dear HP, Brother and Seiko, please make a 3D printer.
Punished for producing quality.