Personalization is more customization

One of the most touted use case for 3D printing is personalization. Now personalization can mean many things and you see different executions of the personalization vision on the internet. For example the Statement Vase or MixeeMe. At the core, personalization enables the user modify a base design to fit to their personal taste. This sounds fantastic and can open a new world where people design their own products within a set of constraints. But when you talk to people about it, they are only mildly interested. The question is why that is?

 Design your own dress at Constrvct
Design your own dress at Constrvct

In essence I think is that most people are not really interested in personalization. There are many reasons why people detract from personalization products. There is fear about their own capabilities and if they are capable of making a desirable product on their own. Another reason is that they lack inspiration. But the major reason is I think is that people are just not that interested to make their own products. In 99% of cases people just buy something off the shelve and they are happy with that. Why bother changing the design at all? Is it not the role of a product designer / company / brand to provide you with the best solution?

If you turn the question around and give people an off the shelf product they are interested in and you ask the question “Are you satisfied with this product?” “Would you like to change anything to the design of the product?”. Then you get interesting responses like I do not like the color or the material. Or they would like the item to be smaller or bigger. And here lies the opportunity. People are not that into personalization but more into customization. They would like to modify some generic features of the product to make it better fit their specific requirements.

A great example to me is clothes. I rather not design my own clothes. I am not even into designing a custom pattern or changing the color. But I am interested in my EXACT size. If you are big like me you always run into the issue that you are size is out. Or what happened to me the other day is that some clothing brand decided to make XXL to be XL. I ended up with a bunch of clothes I could return.

I can think of many examples where customization would make sense and would appeal to a consumer. It is just not the same as personalization. It is customization. Now I know there are many examples of successful and very useful personalization products on the internet. I particularly like Constrvct from Continuum Fashion. But I yet have to meet the person who is not a (aspiring) fashion designer who made the majority clothes themselves. For most people it is just not worth it and it only make sense when it is very special and appealing.

Can supply chain made simpler with on-demand manufacturing?

One of the challenges for launching products by individual designers and small firms is to setup and manage their supply chain. Launching a product from an idea is not easy. There are many things to take into account. A short list in context of 3D printing and on-demand manufacturing:

  • online fabrication services are useful, but cover only part of the process
  • a product needs to be assembled, finished and packaged before it is ready
  • order fulfillment and distribution is a lot of work and very repetitive
  • to get orders you need to have sales channels.

What I wanted to get across in that post is that beyond a product idea, to launch an actual product into the market is quite some work. You need to be prepared to contribute a significant amount of your time to bring a product to market.

That is looking at it from the individual designer perspective. For larger companies on-demand manufacturing gives opportunities to simplify their supply chain. I wrote about that in my post Impact of 3D Printing on Supply Chain.

One of the major challenges for individual and small companies for launching products is supply chain. To find, select and manage a small number of suppliers to manufacture and assemble your product is a challenge.

To get a product manufactured parts need to sourced. This could either be off-the-shelf parts or custom-manufactured parts. These parts are manufactured and shipped to the assembly point. At the assembly point, the product is put together, packaged and shipped. In each step of the manufacturing process, the reliability and quality of parts and product needs to be checked and monitored.

When the manufacturing and logistics of the product are set up, there are stock levels to monitor. The manufacturing of products overseas can take up to 6 weeks before the actual product arrives. The product designer needs to make choices on how much stock to keep and the size of production batches while taken into account the lead time of each of his suppliers.

Even for simple products like porcelain cups, this can be quite an undertaking.

It is a well-known secret that lots of product projects at Kickstarter fail just for that reason. Even though, the projects are successfully funded, the project owners can’t get the production up and running. It proves that many product designers just underestimate the amount effort necessary to setup and maintain a supply chain. According to a study done by professor Ethan Mollick 75% of technology and design-related projects at Kickstarter fail to deliver on time.

The interesting aspect is that every product designer / small firm is doing the same work and repeating the effort across markets and products. Even with the advent of on-demand manufacturing, the supply chain still exists and needs to be managed. The amount of effort the product designer needs to put in into the supply chain goes beyond the effort of designing the product itself.

There is an opportunity in the market for making supply chain simpler for product designers and small firms. There is a definite need for full-service manufacturing and logistic companies who take over the effort and let the product designer outsource the supply chain.

The mono culture of 3D printing

Today I came across a couple of renderings on Behance called No Limit, which are an artist impression on how the future of 3D printing could look like. Below is one of the pictures.

What struck me in this rendering is the clear separation of parts to create a whole product. I think it is also one of the biggest challenges in 3D printing. There is a tendency with 3D printing to print a whole product as a single continuous product. But in real-life products are not a single part and there are good reasons for that. The requirements for individual parts are different. No single material is able to match all of the required properties — especially in the limited offering of materials available for 3D printing. It is also one of the reasons why many products made using 3D printing are just not on the same level — visually and functionally — as mass-produced products. The exception is mono-material products like jewelry or ceramics.

It is interesting that there are not many articles available on combining 3D printed parts together to create a product. It is certainly necessary because properties like production tolerances and tensile strength are different for each material and 3D printing method. You cannot just design different parts and expect them to fit. Even made using the same printer with the same material.

It would be awesome to see more compounded parts to create new products. I think it will open much more opportunities to create and manufacture meaningful and useful products using 3D printing.

Online 3D printing services should watch out

The rise of home 3D printers should make the 3D online printing services somewhat nervous. Especially when you look at the quality of new products like Form-1 — although not yet on the market. In an earlier post, I wrote that I am not a firm believer in home 3D printers, but I do believe there is a market for them. The same market where a lot of the online 3D printing services are focusing on.

When online 3D printing services became available around 2008, the availability of home 3D printers was very limited. Certainly, no commercial home 3D printers were on the market.

Fast forward to today and the choice for home 3D printers is exploding. Not only that, but also their capabilities and performance are increasing as well while prices are dropping. Now this is the standard pattern for any new major new consumer technology, but it is a threat for the existing online 3D printing services.

I expect a significant drop-off of early adopter at online 3D printing services. These users are buying their own 3D printers and print most of their parts on those printers. They still do 3D print parts via online 3D printing services when they want a professional 3D printed part or a special material, but much less frequent. New users will still come to these services and have parts produced. But the question is how fast they will decide to either buy their own 3D printer or go to a neighbor, friend or family member with a 3D printer.

This behavior will pose challenges the current generation of online 3D printing services. They will need to position themselves beyond being a online 3D printing service. Even with their professional machines and better materials, the difference between the immediate and “free” competition of a home 3D printer is in my opinion not enough to survive. Each of them needs to try to find their own way of adding value on top of providing the 3D printing service. There are many options available like post-finishing or services.

The next 2 years will be important. I expect the home 3D printer market to mature quickly leading to major changes at the current generation of online 3D printing services. I cannot wait to see how this is going to unfold.

No 3D printer for you :)

Most media attention in 3D printing currently goes to home 3D printers. MakerBot just released their new Replicator 2 3D printer and opened a MakerBot retail store in New York. A year ago, they received $10M funding mostly from the Foundry Group.

3D Systems have introduced their Cube 3D printer aimed at consumers. And a new 3D printer called Form-1 is getting a lot of attention on Kickstarter because it overshot its funding goal by 2000%.

Often I read the expectations that there will be a 3D printer in every home in 5 years or a decade. I do not believe that. The applicability of the technology today is very low for consumers. I have a few reasons why I think that. In the next paragraphs, I will elaborate why I think 3D printing for consumers will not happen soon — if it happens at all.

The first reason is that the material quality of the current generation of printers is not that good. Even professional 3D printed parts need post-finishing to resemble a material which looks and feels good. And even when the part is post-finished, it is still a part and not a product.

Most printers just print in a single material. Please look around and see how many products are made of a single material? There are not many. Jewelry comes to mind and kitchen ware. And of course trinkets and gadgets. This pretty much sums up the inventory of 3D printed products available today.

There are definitive reasons to buy a home 3D printer. Many hobbyists use them to print parts for their hobbies ranging from remote controlled airplanes to Warhammer pieces. For these hobbyists to own a printer makes sense. The instant satisfaction and seeing your part build in front of your eyes right in your home is irresistible. Another reason is as a kids’ toy. 3D printers could definitely be the clay of the 21st century for kids. The ability to create and design on a computer and make those designs real on a home 3D printer is a very powerful concept.

So some people will own and buy a home 3D printer. I expect that those printers are also used to print parts for others — neighbors, family and friends. Another reason why I think home 3D printers will not be a huge market. The need to 3D print a part is not very high. It will become a machine like advanced power tools which most people do not own but lend from the neighbors or a friend.

As an educational tool home 3D printers are very powerful. I think the manipulation of physical form will become more prevalent in our society. It is good that our kids get the opportunity to start exploring and working with these concepts.

To me home 3D printers will not come into every home until they reach the status of a replicator — I mean the Star Trek one and not Makerbot’s new product. Until then, it will remain a niche tool owned by a small community of users.

3D printing over its top?

In August, Gartner released their yearly report called Hype Cycle for Emerging Technologies. 3D printing is part of this report for the last couple of years. This year Gartner’s analysts have positioned 3D printing at the peak of inflated expectations. It certainly feels as that 3D printed cannot be hyped more than it is today.

Gartner’s Hype Cycle for Emerging Technologies 2012

I can remember a few of the larger technology hypes of the past. At the end of 90s, ecommerce was definitely a hype. Online internet stores would be the end of all malls. Everybody and all goods would be ordered over the web. Ecommerce has gotten big, but it has made no real dent in physical retail. Tell me how many shopping malls have closed due to Amazon?

A little more specific example was the opening of the Amazon bookstore. The consensus was that all bookstores would fold. That never happened. Now Ebooks are actually causing bookstores to close.

Another one was open source software. The expectation was that open source software would replace all commercial software. Companies like Microsoft made it even their number 1 threat at the time. Today open software is indeed ubiquitous, but Microsoft still exists, kept its monopoly on desktop OS and office software and is doing financially quite well.

I can also vividly remember the hype on 3D on the web. In the late 90s, VRML was a definitely hype. According to mainstream media and experts 3D on the web would be the future. Everybody would browse and shop in 3D in a few years. Today we see a small revival of that hype with the introduction of WebGL. But 3D on the web is still not ubiquitous — and besides for some specific applications like games and visualizations — there is no real use of it on the web today.

To me, 3D printing is definitely overhyped. The media generally lacks details on the actual capabilities and performance of 3D printers. If you take those into account, the picture is much more sobering than how they would like to portray it.

3D printing is fundamentally interesting technology, and it will bring many advancements in manufacturing. I have written about this before, and I remain a huge believer in 3D printing. But it is not all what the media tries to make it.

Amazon’s platform for products

Lately, I have been thinking a lot about platforms — platforms on the internet. They form the basis of many prominent and successful internet service. When you can create a successful platform, it becomes part of the fabric of the internet. Platforms like Google, Facebook and Amazon provide, are excellent examples. If you turn one of them off today, it will have a substantial impact on the internet. Whenever Amazon’s AWS service is down, it has become a news item. That is how essential and powerful platforms can be. Any internet service which is not a platform can easily be disrupted by a newcomer. But platforms are services which will stay forever. In that context and for some other reasons, I have been looking into Amazon’s platform and their API stack recently.

When you are unfamiliar with the Amazon API stack, you will be amazed on the amount of APIs this company makes available to her users. It is truly a platform. I have read somewhere that Amazon is religious about using APIs between systems on their own network. That approach is called a Service Orientated Architecture or SOA for short. The powerful side effect of such an architecture, it is only normal to expose this ability to the outside world.

Here is a list of the powerful Amazon APIs for e-commerce:

  • Product Advertising API
  • Fulfillment Web Service (Amazon FWS)
  • Marketplace Web Service (Amazon MWS)

It allows companies to fully integrate their own systems with Amazon’s. Products can be fed and updated, order and sales information can be downloaded, fulfillment and inventory management of stock, etc. The opportunities to use Amazon’s sales platform are almost limitless. And it does not end here. Amazon offers more APIs for their other product categories. A complete list of their other APIs can be found at http://aws.amazon.com/products/.

In 2002, Jeff Bezos send around the following within Amazon. He realized that Amazon needed to be a platform to be grow and scale. He did not use the term Service Orientated Architecture, he did not care, he just wanted to move Amazon as a company in a certain direction. He summarizes it in 6 points:

  1. All teams will henceforth expose their data and functionality through service interfaces.
  2. Teams must communicate with each other through these interfaces.
  3. There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no backdoors whatsoever. The only communication allowed is via service interface calls over the network.
  4. It doesn’t matter what technology they use. HTTP, Corba, Pub-Sub, custom protocols — doesn’t matter. Bezos doesn’t care.
  5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
  6. Anyone who doesn’t do this will be fired.

It is truly amazing, and it shows that Amazon is really a platform from the ground up. This interests me for two reasons:

  • ability to fully automate feeding products on Amazon’s marketplace and leverage their worldwide audience for selling products
  • options to leverage Amazon’s massive product inventory outside the realm of their own marketplace
  • visionary architecture of a true platform for products — be it either selling or creating

The rise of accessible and affordable manufacturing technology

The last 5 years I have been working in the 3D printing space. I have seen 3D printing rise in popularity. It went from a niche technology primarily used for prototyping applications to relatively well known manufacturing technology. You know that a technology is entering mainstream when publications like The Economist start writing about it. In a previous post about what excites me about 3D printing, I wrote that especially the digitization of manufacturing technology and the approach of building parts from the ground up are one of the most interesting aspects of 3D printing. It is a paradigm change in production, which is mostly still subtractive. Basically “beating the material into submission” to get what you need. In this post, I am revisiting that vision.

While watching the rise of hobbyist makers and independent designers / artists making their ideas, products and arts a physical reality, it becomes clear a new market is developing. This market could be described as one-off and small series of products developed by an army of independent designers. Their motivations are between solving a problem they have to the creation of new products or art forms.

The true innovation of which 3D printing is just a part lies in the fact that it enables people to make and manufacture products with relative ease. The setup costs are low, the design-to-manufacturing process is simple, and the manufacturing costs are low for small series. Anybody can basically do it. And it is not only limited to 3D printing. The same applies to laser cutting or CNC. On top of that, standard components of any kind — from charger ICs to lighting fixtures — can be easily bought off-the-shelf via a multitude of web sites.

When taking a broader view, you could say this applies to manufacturing as a whole. Whereby standardized components can be used and integrated into other products to make new products. The manufacturing process is simplified for a lot of products. Even when you open a Macbook Air nowadays, it is wealth of standardized components. The integration and procurement of these components is still quite complex, but it is getting simpler over the years. It is not inconceivable that, at some point, any knowledgeable hobbyist is able to produce his or her own Macbook Air for a relatively affordable price.

While manufacturing is getting simpler and more accessible, the true innovation of products will be in design and manufacturing of the components itself. The design and production of computer chips is a good example of components, which are not easy to design and manufacture — let alone customize. But at the same time mass-production does commoditize these components and they are available to all to buy and use. Remember how many people buy their own computer components and assemble their own computer?

I expect that integration and design of products will be further commoditized over the years. The same applies to software. The first shimmers of this change are starting to appear on the internet. Hardware startups are becoming more common. Pure hardware products pop up on a daily basis on Kickstarter. It is no longer the exclusive domain of large corporations. There is a huge opportunity developing here to enable product designers, hobbyists and entrepreneurs to design and sell their products.

The infinite tail

Some time ago, I attended a partner meeting at a VC. At some point during the meeting one of the partners proclaimed that YouTube is full of useless and pointless content which nobody really cared about. I will never forget this rant. He did not understand the power of the internet and it’s distribution mechanism.

Chris Anderson introduced the term “Long Tail” in an article in Wired magazine in 2004. Later in 2006 he wrote a book about it called “The Long Tail: Why the Future of Business is Selling Less of More”. In short the long tail is a theory where companies increase their relevancy by offering large numbers of products even though they sell only limited number of items per product. This became possible mainly because of the internet as a distribution mechanism. The cost of stocking and distribution costs have gone down significantly because of it. Examples of companies employing this strategy are Amazon and Netflix.

The world has changed since 2004. The long tail has been successfully employed by a number of companies, but the tail is getting longer. Way longer. Self-publishing and online creation have changed that. The internet has moved beyond making available what existed or created outside the internet. The internet has become the place of creation itself. YouTube is a good, early example of that. Self-publishing of videos have inspired and entertained millions of people and is still doing that today.

But self-publishing is beyond many of the frivolous videos on YouTube. Services like Lulu.com have over 1 million creators who published millions of books. Using Amazon’s CreateSpace service creators can distribute their book, music and movies to Amazon’s worldwide audience.

Since a couple of years, online creation and self-publishing of products became possible using services like Thingiverse and Shapeways. On demand manufacturing made possible using 3D printing, has moved self-publishing beyond the realm of media and into the world of physical goods. These services still have not reached their full potential and others will join this segment in the coming years, but the change is significant.

The basis of the theory of The Long Tail is underpinned by the fact that the internet lowered distribution costs, and thereby making it possible to offer large inventories to customers. But the rise of self-publishing has changed the distribution mechanism itself. The net effect is that the tail is getting longer each day. It never gets shorter, and for that reason, I would like to rename it to The Infinite Tail.

Products will never go out of stock, and their availability is infinite. Digital shelf costs are low, and they go down each day. The internet has made it possible to distribute individual creations to large audiences. For each creation, there is a potential market — sometimes as small as 1. But with new production technology and distribution mechanisms, the cost of producing and distributing a single item is not prohibitive anymore. That is what I call The Infinite Tail.

Value creation in 3D printing

3D printing has been around for decades, but the technology has gathered more mindshare and media attention in the recent years. Still the state of the industry is in its infancy and is tiny ($1.7B) compared to the making industry as a whole ($280B) [source]. There are a lot of opportunities in the market. In this post, I will explore where I think those opportunities are.

Although the 3D printing industry and products reside in different segments, for the purpose of this article I will focus on 3D printing to manufacture goods / products. In this context, it does not really matter if it is a semi-office printer or a manufacturing-grade machine.

In general, I see 3 areas for value creation in the 3D printing market. These are:

  • Marketplace
  • Manufacturing
  • Equipment

Marketplace
The top of the vertical is the marketplace. It is the interface to consumers. It adds value on top of manufacturing by selling and distribution of products to customers. The essence in this area is empowering consumers to cope with the wealth of products and variations of products. These will become available due to endless product life cycles and the extremely low barrier of entry for product designers. The ability for limitless options for personalization and customization will also have a significant impact on the marketplace for 3D printed goods. Personalization and customization are new features and attributes to products which will be unlocked thanks to 3D printing.

Current market places are rigid and focus on in stock items. They will not be able to easily adapt or tap into this new market. The market place needs tp be redefined to enable the new way to select and buy products made using customized and one-off production.

Manufacturing
With regard to 3D printing, you see different types of business models at work currently in manufacturing. Most of them are geared towards low volume, high margin opportunities. Not many companies specialized in 3D printing are employing the high volume, low margin business model. Though that is where the value in manufacturing is created. Essentially it is chicken and egg problem. As long as there are no real 3D printing factories, then there will be no demand. With no demand, nobody will build a factory. The technology — speaking of machines and materials — is still immature to a certain extent and relatively unknown in its application to a lot of manufacturing engineers. I expect the industry to bootstrap itself in the next 5–10 years.

Another challenge is the lack of off-the-shelf solutions and tools necessary to support 3D printing and one off production. Most equipment and software for 3D printing is delivered and operated as an isolated island. Integrating them into a larger environment or finding specialized equipment to support the 3D printing process is hard or it does not exist at all.

I expect that significant value creation is going to take place in both tools — meaning hardware and software — and in building and operating manufacturing plants.

Equipment
Obvious as it may sound, there are huge opportunities for equipment manufacturers. The current state of affairs is that the current systems are relatively limited in their applicability, and do not yet meet requirements necessary to mature this industry for manufacturing. For instance, the reliability and fault tolerances still leave things to be desired. Next to that, the choice of good, relevant materials is limited. Current equipment manufacturers are very much focused on capturing the SME market for prototyping and understandably so. There is a real world demand in this market segment for making prototypes fast and easy. Cool as it is, that is not manufacturing.

The oil of the industry
Around — or between if you will — these main areas, there are opportunities as well. For example, tools and service companies providing support to companies in the main areas. I see them as the oil smoothing the value creation in the vertical, making it easier to build and extend the main companies. Although it seems niche, I think major opportunities lie in this area as well.

A great example is what Kiva Systems is for ecommerce and distribution with their specialized warehouse management and automation systems. They have been recently acquired by Amazon.

Design and creation
I don’t believe there is a lot of value creation possible in design tools. Although it receives significant mindshare in the industry. Of course, design software will get better and some companies will make money of it. But it will be a crowded market with large market share for a few off-the=shelf software packages and lots of small home grown solutions. The competition in this market will be fierce. It is an important aspect to enable consumers to access the capabilities of 3D printing, but the value creation in this area is hard.

Materials
Materials are interesting too. But the equipment manufacturers resist that at this moment. They try to emulate HP’s business model by monopolizing and protecting their own market for materials. Though this could make sense in the consumer and SME markets, it does not make a whole to of sense in the manufacturing market. I see this as a major hurdle the industry need to overcome to open up the market to real world manufacturing. It will allow for bigger innovation on materials, and it makes the technology a more viable option. Companies can tune the materials to their requirements instead trying to fit the existing materials on their design requirements.

Conclusion
There are lots of opportunities in the 3D printing market. I expect that the existing marketplaces like Amazon will move into customized and one-off manufactured products when the industry starts to mature. These are great exit opportunities for current market places. At the same time, you could perceive it as a threat to these market places. The consolidation may not happen, and maybe they will enter the market on their own. Time will tell which direction the market places will go.

Manufacturing has major opportunities. But it can only grow and foster when the equipment manufacturers start to build systems and platforms to allow manufacturing. An important prerequisite is that they open up their equipment for new materials and stop monopolizing the material market for their equipment. Both the manufacturing industry as well the equipment manufacturers are going to benefit from that. Given the fact that the manufacturing market is so much bigger than the 3D printing industry is today.

An important part of the 3D printing industry ecosystem are the companies who tie the different segments of the vertical together. There is room between all segments for new opportunities and a lot of innovation is going to happen in this area. I think this is one of the exciting space to watch over the coming years.