3D Printers

Crowdfunding & The Low-Cost Desktop 3D Printer: A Suicidal Race To The Bottom? (Part 5)

In the last four years, the 3D Printing, Additive Manufacturing and/or Digital Fabrication sector (collectively: “3DP”) has nearly tripled in size. In 2013, expansion reached nearly 35 percent.

With upwards of 200 manufacturing players cumulatively swarming the low-cost desktop 3D printer market, the parallel growth of Crowdfunding in—and of—this niche has become a major factor in its (irrational?) boom.

To effectively understand this 3DP desktop “phenom,” we also need to consider a third factor in its hyper-growth. In a kind of self-feeding upward spiral, media (and NOT just 3DPI and our industry-specific publishing brethren) have fallen in love with 3DP. These days, those tasked with producing compelling content—to fill nearly infinite digital column-inches, bottomless “news holes” and endless hours of cable TV “face-land”—have embraced 3DP.

Media editors and publishers have discovered that (like the blandishments of religion or the carnival sideshow) the magic, mystery and gaudy claims of 3DP nearly always garner notice and awareness. And—as 3DP sometimes seems applicable to almost every personal interest—focuses audience curiosity and attention. In a term borrowed from Social Media, 3DP is “sticky.”

For the general public—at least—the desktop 3D printer segment of 3DP is where THE excitement and recognizable action is. (When I tell people what I do, invariably eyes light up…even when subsequent discussion demonstrates that these enthusiasts might NOT have a real grasp of what 3DP is…or portends. This kind of unstructured delight is usually an artifact of undifferentiated familiarity…gleaned from the media’s headlines, pull-quotes or intro-sentence “hooks” delivered by an earnest anchor. Ahh, but in delight is where further wisdom begins…)

This, then, is Part #5 of our series on this topic. (To review the first four, please see my Part #4—which presents direct links to Parts #1, #2 and #3. In Part #4, I also showcase my continuing exegesis on the key role of Kickstarter—in both the dynamism and the danger of Crowdfunding low-cost 3D printers.)

As I’ve already highlighted, KS is—first and foremost—an online business. Aggressively so. This means that the company seems to see itself as able to treat its clients (“creators,” those “kickstarting” within its ecosystem)—and its clients’ clients (“backers,” the actual Crowdfunders)—with tough love. The “online” modus operandi gives Kickstarter both the license and the leeway to deliver a UI (User Interface) that can include a very-long arm’s length—particularly to backer/funders.

As an insistently Web-based company, KS would also appear to believe it can insulate itself from negative UX (User Experience) fall-out—i.e., when that UX is NOT delightful. Perhaps we need a new term of art to describe this last. Let’s consider “UUU” (User Unrequited Unhappiness). Or, the sad events that can cascade when bad experiences with an online company go unanswered—and un-remediated.

The ultimate result of UUU is loss of goodwill—a company’s most valuable commercial commodity.

When early adopters of Kickstarter (founded in 2009) began employing the Crowdfunding pioneer’s “coalesced-VCs” innovations for 3DP products, it more or less coincided with the advent of low-cost 3D printers entering the marketplace. (MakerBot was also founded in 2009—a non-KS’d startup!).

Early on, did desktop 3D printer creator-client-players have better products, teams, biz plans, differentiation, attention from KS, whatever…or simply the virtue of “first with the most” (interesting offer in a fresh field)?

Printrbot Jr 3D Printing in Kickstarter

Certainly, two such creators seemed to have benefited from their unique(?) combination of worthy assets. The first was Printrbot—one of the earliest big KS successes in our niche—with a 3D printer DIY kit (funded on 11 December 2011, with $830,827 pledged, or 3,323% of is goal). The second—at the other end of the then-existing, quality-output spectrum—was Formlabs with its Form 1. This project—a stereolithography, pro-quality printer—funded on Oct 26, 2012, with $2,945,885
pledged, or 2,946% 
of goal.

formlabs form 1 3d printer on kickstarter

These two early 3DP Kickstarter hyper-successes helped to excite the imaginations—and the Crowdfunded-startup impetus—of many of the other desktop 3D printer entrepreneurs who followed eagerly in their footsteps.

Now, KS states, “Since our launch in 2009, 6.7 million people have pledged $1 billion, funding 66,000 creative projects.” (It should be noted that this “funded” number falls considerably short of the 100K projects KS clients actually undertook overall. Or, conversely, should we really be impressed that only 1/3 of the total projects launched actually “failed” to reach self-established goals?)

Perhaps with Crowdfunding now, “The Wisdom of Crowds” may be more like “The Mob May Be Mindless.” At least when it comes to KS’ing (or the equivalent with other Crowdfunders) low-cost 3D printers in the last year or two.

If our low-cost 3D printer segment is any indication, Kickstarter may now be burdened with another exacerbating problem: too much commercial success! Sheer volume—for a relatively new company with just 86 employees and the “hands-off” online business mindset we profiled above—bids fair to reveal inherent problems in this new business model. (Let me opine that MakerBot—with the same nativity year of 2009 AND rocket-like success in a new industry segment—evidences some of the very same symptoms of commercial stress from hyper-growth.)

Probably the signal shortcoming in Kickstarted projects for low-cost 3D printers—and other Crowdfunded product segments—is failure to “deliver on time.” According to a whitepaper entitled “The Dynamics of Crowdfunding: An Exploratory Study”—by a professor at the Wharton School of Business, Ethan R. Mollick, and dated 26 June 2013—“over 75% [of Crowdfunded projects] deliver products later than expected.”

3D Printing and Crowdfunding Ethan Mollick chart
“The Dynamics of Crowdfunding: An Exploratory Study”.

Key to this figure is that the deliver dates are creator chosen and milestoned. (And, these dates are NOT policed by KS.) These delivery shortfalls underline the inexperience (and hyperventilating enthusiasms) of startup entrepreneurs. Especially when it comes to manufacturing timelines. Keep in mind that Material Requirements Planning (MRP) is an entire production discipline—hard enough for professionals to master—in support of meeting projected-process outcomes in manufacturing.

On the backside of this Crowdfunding issue, Professor Mollick also found that 96.4% of founder/creators—in his database of 48,500 projects—eventually “fulfill[ed] their obligations to funders.”

Certainly, the KS approach to these issues can seem rather laid-back—perhaps understandably consonant with the company’s unique worldview, unavoidable innovators’ hubris and a history of raging success. Working from Kickstarter public statements and trustworthy on-background revelations, here’s an accurate (compendium) statement of KS’ thinking (in my words):

Whether or not creators deliver “on time,” keep in mind that every project self selects an Estimated Delivery Date. It’s intentionally an estimate and not meant to be viewed as a hard and fast timeframe. Twists and turns in the creative process are the rule, not the exception. Delays happen when you’re bringing something new to life. That’s not unique to Kickstarter.

That said, many funders DO believe in the milestones erected by creator/founders. And, ironically, the more successful the project funding—100s or 1,000s of percent overrun of sought-after funding goals—the more the danger of delayed delivery!

Too much success puts too much stress on the immature systems of very young organizations—some of which are barely formed. When you were hoping for 100 patient (and maybe even paternal) funders, a 1,000 “money-where-their-mouths-are” enthusiasts clamoring for your success DO have a greater impact than just a quantum leap. Scaling everything up—under the duress of time limits and importuning funders—plays havoc with even the best-laid plans of founding entrepreneurial creators. (See MRP touched on above.)

One of the first casualties of the too-successfully Crowdfunded project is effective communication with funders. And—in another too-often-repeated Crowdfunding scenario—when founders need to be most open and communicative with their funders, they become commercially tongue-tied, dumb (in more ways than one) or even totally incommunicado.

The collateral damage from failure to communicate effectively—especially about unexpected but necessary delays in delivery—includes wounded goodwill among funders. And, comment strings that become more and more acerbic—and even angry.

This is where the collateral damage of serial delays in delivery—particularly—can also threaten a Kickstarter’s own goodwill with funders. AND, thrust the company into the dangerous UUU (User Unrequited Unhappiness; see above) interface scenario of an online company.

There is more to talk about here—and with ancillary issues—in our reporting on Crowdfunding, low-cost 3DPs & commercial suicide. I invite you to return for Part #6.