3D Printing Business Models

I’ve been re-reading lots of old Economist issues these holidays – it’s incredible to see how much things can change in a year. One article I read was titled “Print Me a Stradivarius”. It talked about 3D printing technologies, their uses, and their progress. It’s an absolutely incredible technology, and I have no doubt that it will revolutionize a large majority of physical-good industries on the planet.

Whilst reading this article I found myself thinking about the consequences of 3D printing on brands. Currently, I believe that successful brands are created through two things: creating an image and lifestyle that people find desirable, as well as achieving a scale large enough to produce at low cost and reach multiple markets. A truly successful brand (in the global sense) must be in multiple markets and be able to achieve scale that other producers simply cannot achieve.

It’s easier for individuals, or small companies, to create a desirable image and lifestyle than it is to achieve scale and reach multiple markets. This is why we see many local producers with desirable brands, but which simply never achieve success beyond a specific market.

3D printing changes the second half of this equation to create a successful brand. Specifically, it acts in a similar way to the Internet – it outsources the production of goods and services. A large brand no longer needs to create the products itself – it has the ability to sell the designs and perhaps materials, but then let the customer actually create the good in their own house.

Now I don’t see large brands outsourcing their production to consumers any time soon. But many smaller producers, who are held back through their inability to achieve scale, will look to alternative models. I believe they will focus on designing products, and then simply sell the rights to the design to consumers, who will subsequently create the physical good themselves.

All of a sudden, small brands that have never had the ability to reach global markets have the same capacity to reach global markets as large brand corporations. In fact, there are significant advantages – they can focus on what they’re good at (designing great products) and not have to worry about anything else such as manufacturing and shipping. Consumers will be able to create the product minutes after they’ve purchased the design, meaning they don’t have to wait for a company to ship a product across a country or the entire world. It’s also much cheaper since shipping isn’t needed, and manufacturing on a 3D printer will be comparatively cheap.

Large brands may no longer hold the power that they currently do. Consumers worldwide will have access to brands that better suit their image and lifestyles, and will have more options as to the exact product they can purchase and create. Why will consumers continue to be drawn to the multinational brands when they can get goods that are more precisely suited to them?

This is a huge opportunity for small producers wanting to reach global markets. I believe 3D printers with the capacity to create clothing and static goods will be cheap enough for purchase by households within five years, and maybe even sooner than that.

There are also risks. It opens up all types of static goods (meaning non-electrical, without moving parts) to piracy. Just like movies and music, someone purchases the design, sends it to their friends, and they print it for free. Perhaps a subscription model may make more sense – you subscribe to a brand for a year and get to choose a new product each month for the year.

If you think about it, retailing physical goods hasn’t changed much at all in decades. Sure, a greater proportion of goods are purchased through websites and then sent to buyers, but that’s hardly a change in model – just a change in method of delivery. 3D printing will completely change the industry.

There are surprising parallels with the music and movie industry. The big clothing and product retailers will play the role of the music and movie companies. Small brands will play the role of the upstarts. Heck, we’ll even see a version of Napster or Limewire specifically for pirating physical good designs.

If you’re a small retailer, this is your opportunity. If you’re a big brand, you can either hang on to whatever you have but eventually lose, like music and movie companies – or you can revolutionize and be at the forefront of this movement.

PS: I’d like to give credit to a commenter with username “hatterloko”, who commented on my post about the “Motor of the World”, suggesting I think about 3D printing and what it could do. If he had not commented, I may not have read the article in the Economist. A prime example of why I blog, and why I love you guys commenting – I think about things that I otherwise wouldn’t. Thank you!

Icebreaker’s International Growth & New Zealand’s Brand

About a month and a half ago, as winter was just setting in here in Wellington, I bought an Icebreaker merino undershirt. I’d heard a lot about Icebreaker stuff being incredibly warm, so thought I’d give it a go. A few weeks later, and I own everything from an Icebreaker coat to Icebreaker briefs. Their stuff is so warm, so comfortable, and so breathable that it doesn’t smell at all. It’s really even better than their advertising describes. Anyway, this post isn’t actually a pitch for Icebreaker – although I completely and utterly recommend you buy their stuff. I wanted to just talk about a fantastic Kiwi business success story, and touch on how they’ve successfully used New Zealand’s brand to help them sell their products internationally.

Icebreaker is now sold in pretty much every continent, and they’re incredibly well known for a Kiwi company still owned by its founders and original backers. 1999 was when they decided to do a test in Europe, and since then their growth has been simply astounding.

It’s funny how a couple of the most talked about New Zealand success stories in recent years have both been companies that have heavily used New Zealand’s brand to help sell their products. 42 Below, a New Zealand vodka company that was sold to Bacardi a few years back, also used “Pure New Zealand” as part of their marketing.

And that phrase – “Pure New Zealand” – should not be underestimated. A country’s brand is something very valuable (provided the country has a good brand) because it’s something people can relate to. More than a company’s brand, a country’s brand is in some ways tangible. People can actually walk around a country and therefore they gain a deeper understanding of what values and images are associated with that country. A company on the other hand isn’t a tangible object that people can walk around to better understand. In most cases their images are simply marketing strategies.

So Icebreaker, and other companies utilizing New Zealand’s good brand, are very smart about it. In some ways it’s a free marketing strategy that can’t easily be replicated any other way.

I’ve travelled quite a bit, and one thing that I notice no matter where I go is how responsive and positive people are to hearing “New Zealand” in response to asking where I’m from. I’ve never heard anything negative in response to me saying New Zealand, and usually the next comment is one involving a word such as “beautiful”, “stunning”, “clean”, or “safe”. When you have those kind of connotations to a brand, something is going right.

While some companies like Icebreaker are doing a fantastic job riding New Zealand’s image to achieve international growth, I think more could be doing it. And don’t get me wrong – by no means do I think every New Zealand company should use NZ’s brand. But I do think that a few more could at least use “New Zealand” in their tagline to conjure up images. We just have to be careful not to overuse it, and only let companies who truly can achieve huge international growth use it.

And on top of all the other benefits of using NZ’s brand internationally – it keeps us back home happy. We just get even more passionate about Icebreaker and our country!