On the very day that Shapeways announced its latest round of $30 million in funding, an afternoon panel discussion at the Inside 3D Printing Conference in New York tackled the practical business questions of 3D Printing.
In the opening overview presentation before the panel, Jack Schildhorn, Vice President and Director of Operations at LUX Capital, brought the conference back from far-out fashion and Star Trek Replicator dreams to state, “Cool technology alone does not make a business”. Other industries have had to navigate the opportunities and accompanying challenges of emerging breakthrough technologies and 3D Printing is now at that crossroads.
Here are some key trends that were mentioned:
The hot market for personal 3D Printers is getting most of the media hype since industrial applications tend to be boring to the masses. Stories about reduced weight in airplanes due to 3D Printed seat fixtures are not nearly as likely to “sell papers” as the latest gun or robotic hand application. But the panel seemed to concur that production applications are driving industry growth. 3D Systems CEO Avi Reichental had already stated that medical applications were the top reasons for the industry leader’s growth. Many of these were medical device applications such as the Invisalign customized dental brace product which use production machines from 3D Systems.
3D Printing is ideal when a customized one-off part is needed. But when volume increases, production costs using 3D Printing are prohibitive and companies must fall back upon traditional manufacturing. Shapeways Co-founder and CEO Peter Weijmarshausen had earlier described the problems with current batch processing. If something goes awry, the entire batch is ruined. To scale up, 3D Printing needs to provide continuous manufacturing processes.
A hot topic throughout the conference centered on materials. Not only is there expanding need for 3D printing additional materials, characterization and certification of existing material properties is required for any applications with safety implications, including medical, aerospace and automotive.
In addition, current materials often require time-intensive and expensive pre- and post-processing. For example, producing silver parts is expensive as extensive manual processing is required post-production.
3D printer patent expirations opened the way for small start-ups to develop home units. Many of the machines – and the companies that produce them – did not exist 5 years ago. The market entry cost was lowered from $50,000 to less than $1,000. Of course, these machines are not the answer for all aspects of the industry but they have opened new markets and increased media attention.
New Business Models
Perhaps the most conspicuously successful business in 3D Printing is Shapeways. The Dutch innovator created an entirely new business model that incorporates 3D printing services with a marketplace encouraging growth of designers. Distributed manufacturing – centers locally based – is on the horizon in Shapeways business plan, and the New York facility is just one expansion to bring production closer to the consumer.
So what does this all mean for investors?
Well, if you’re looking for business investments with strong growth and higher than average returns, these professionals recommend looking into:
- Companies with Industrial Applications of 3D Printing
- Inventors creating new materials and new ways to produce standard materials
- New business models
While cool new applications like 3D printed chocolate or high-profile personal 3D printers may capture the imagination, the panel essentially suggested investing in areas where sustainability is more likely. Though perhaps less newsworthy, these firms will lead to higher stockholder value and growing returns.
Where to Invest in 3D Printing? by Sarah Boisvert