Could the democratization of tech-based entrepreneurship be both a boon and a bane?
Our Four (STEAM-driven) Disruptors (the PC, the Internet, Social Media and 3D printing) have certainly assured that every startup-minded, kitchen-table eTinkerer, CompSci undergrad and Boomer with a digital passion has the tech-tools to remake niche, network or nebula.
There’s a big focus on STEAM (Science, Technology, Engineering, Art/Design, Math) — and, the most important of these may well be the analog-minded, right-brained, French-curved Art/Design element. Steve Jobs — Climax Technologist — proved that design IS the new black, after all.
But, today’s demi-god/dess is the TechPreneur. S/He can step into the coffee-roaster hangout in your local ultra-urban creative community (think DUMBO, Brooklyn) and lay hands — literally — on the all-important human assets that can align those tech-tooled disruptors in novel (and profitable) ways.
Let’s see: the TPreneur now has easy access to four of the five basic business assets. Those are people, information, technology and time (of course this last is like quicksilver: both beautiful and dangerous).
Ahh, BUT the fifth: money! THERE has always been the rub. Until now…
Today, we have crowdfunding — crowd-sourced venture capital. (Actually, another artifact of our disruptors.) Kickstarter, IndieGoGo and dozens of focused crowd funders in niches of geography, interest, intent, modes and means. (And, I could add, value: high and low.)
So, we the Demos (the People) vanquish another barrier to creativity and innovation — via the crowdfunding paradigm. More democratization of the assets of business success. Forget those ‘Preneurship hurdles to entry like credentialled organisations (banks? law firms?) and the fickle gate-keepers (VCs).
For (would-be) 3DPers everywhere, crowdfunding now seems akin to the Holy Grail — realized online. The gladsome quest pursued — and won! — not with lance, charger and religious fervor, but with great positioning, a dynamite video and a planet-wide social media network. (Although: here, too, it helps to possess “religious fervor!”)
The dominant player in the crowd funding business is Kickstarter (known widely as “KS”) of Brooklyn. Here’s their five-year history in one self-proclaimed sentence: “Since our launch in 2009, 6.6 million people have pledged $1 billion, funding 65,000 creative projects.”
The most successful “project” — as KS calls them — to date continues to be the “Pebble” E-Paper wristwatch: 68,929 backers for a take of $10,266,845. The Pebble’s modest goal was $100K. It was fully funded on 18 May 2012 at 10,000%+ of its funding objective. (Before you ask, KS’ take was 5%, just as it is for every successful KS project.)
As I write, eight 3D printer projects are active on KS. Three of these have exceeded their goals by 173% to 1,326% — and will undoubtedly garner further “income” before their self-imposed project completion date.
Now, how could any of this be bad?
Well, as we’ll investigate across this series of articles, many 3DP ‘Preneurs vying in the 3D printer crowd funding arena exhibit the same human failings as other, more-conventional business people. Including opportunism, failure to plan, unfounded optimism, greed, functionality bait and switch, delivery misses and — horrors! — gaming the entire system.
What happens when a 3D printer startup employs a crowd funding strategy of maximum hype via ultra-low prices WITH amazing functionalities and specs? And, after collecting — mirable dictu — fail to deliver?
The issue of crowd funded, ever-lower-cost, desktop 3D Printers — and their (predictable) problems — is very much of interest to our 3D Printing- / Additive Manufacturing-interested audience. You are often the ones who are supporting KS’d projects in this segment. Some of these projects are running into trouble —in matters of promised functionality, delivery, communications and plain business competence. Pirate 3D of Singapore — on which I’ve reported —(KS’d around $1.4 million) comes to mind… they are not alone.
This is the first of a series on this important topic. Come on back…
AMEN! Someone finally brought to light the reality of a major issue. Crowdfunding vs manufacturing. Two different animals with each its own agenda. I predict KS and many other crowdfunding sites will get bad reviews and bad credibility when the broken promises start overwhelming them. I am all for crowdfunding but only for individuals who truly have an idea or product that needs the backing and have REALISTIC goals. Nowadays KS and the “other” sites have turned into a free for all. We now see established companies using crowdfunding as a marketing scheme and a way to recoup money from R&D. But hey, afterall, KS and the “other” sites are a business as well, right?
But manufacturing is the elephant in the room. Just because you have a good idea/product does NOT mean that you can successfully reproduce that product in good quality, on TIME, and without bankrupting yourself or others even. I also predict many of these 3d printer “manufacturers” to fall. I do not wish that upon anyone but the buzz of making 3d printers to sell has lured many into a web they are not aware of.
Only time will tell now. We shall see…
The Peachy Printer has become a sore example of a KS disappointment – in spite of a hugely successful funding ($651,000). One month before first production models delivery they announced that they will be at least 4 months late and still do not have a viable product!
Yep. Everyone needs to be prepared to either not get their machine or get it 6-8 months later than promised.
When a Kickstarter is doing “research” the way Peachy is, you shouldn’t be surprised by delays, changes in specs, or even outright failure.
If the Peachy folks had said that everything was done and they just needed money to ramp up production, then the expectations would be different. But given that they said up front that they had a prototype working, but needed to work on the software, redesign to scale up manufacturing, etc., I’m not surprised at all that there are delays. Remember, 90% of R&D projects miss dates or costs (or fail completely), in industry, so if anything Kickstarter of an R&D project by startups should be worse. So it’s best to have low expectations, or you’ll be cranky all the time.
There are plenty of 3D printers doing real R&D, and driving the real costs down by being clever, such as Peachy and Micro3D. So they genuinely could be that cheap, but there’s associated risk.
The 3D printers that aren’t really R&D, but are taking a proven design and cranking units out (and there are too many to count) don’t have the risks of real R&D, and so if they “miss” it’s because they didn’t plan well. Fairly often it looks like they underestimated actual costs, because they only accounted for “hard” costs (i.e. parts bought in bulk) and ignored all of the other costs of running a business (rent, staff, taxes, packaging, shipping, support, marketing, QA, etc.). So they end up selling for 1/2 what they need to sell for to run a business.
Sometimes I suspect that this is intentional. In that case, it’s not really a $299 printer (for example), it’s a $299 Kickstarter bargain, to get early customers will to take the risk of paying in advance for an unproven product from an unproven company, and use that money to launch a company and learn what their real costs are, and then the price will go up to $499 (or whatever it needs to) for “normal” customers. That’s a fine strategy, but they didn’t figure out how to make a cheap printer, they just decided to take a loss to jump start the business with crowdfunding instead of taking investors that take equity.
You are correct. We have 3 years combined research, 8 months of building and testing, months of beta testing, and thousands of dollars later we have a machine and working on our production system now.