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!

Respect for the Motor of the World

I ordered some clothes online on Tuesday from a British retailer. They arrived in the mail this afternoon (Friday). I haven’t thought about mail companies or courier services in the past – they’ve always seemed a bit boring and unimpressive. But for some reason today I started thinking about how it all works and became amazed by it.

For a little parcel to be sent from a warehouse in Maidstone in the UK to my home in Wellington in just three days is just incredible. It was sent by DHL, and I could track it every step of the way. From Maidstone, it was sent to London Heathrow, then to Leipzig, then to Singapore, then to Auckland, then to Wellington where my house is.

Think about it. At each of those places it had to be transported on the ground as well, and scanned so that they could track its progress and update it online for me. It likely passed through at least six ground transport vehicles and was presumably handled by a similar number of individual humans on the way. That’s on top of the five flights it made (two long-haul).

DHL probably has tens, if not hundreds, of thousands of parcels being sent simultaneously across the globe to an almost equal number of individual destinations. And DHL is just one of the courier companies in the world (albeit one of the biggest).

Companies like DHL literally make the world go around. Without them we wouldn’t have economies or really be considered a globe. It’s a huge feat to deliver a product from one building on the top of the world to another building at the bottom of the world in three days. For fifteen pounds. This happens every single day, with millions of items (and people) and I’m embarrassed to say that I’ve never felt in awe of this machine before. In it’s broadest sense, that’s what the collection of global companies is – it’s a machine, or a motor, that makes the world function as we expect it to.

I’ll admit that I take most of the modern world for granted. Computers, mobile phones, skyscrapers, airplanes, supercars, and, yes, the ability to buy things from the other side of the world and receive it within three days. I’ve expected it without thinking about it in the past. Recently, however, I’ve been noticing how complex so many of these systems are and how great a feat they are.

There’s a couple of ways to look at all of these incredible things that the modern world gives us, in my opinion. The first is we can look at it all and say “It’s such an incredible world and individual humans are such a small part of it”. Or, the way I look at it, is we can say “It’s such an incredible world, and all of this incredible stuff was created by human beings”. Yes, it’s a machine that makes the world go around. But the machine was created, and is maintained, by humans. We’re pretty impressive creatures.

I’m gaining a healthy respect for most of the things I’ve previously taken for granted. If you take them for granted too – I hope you’re thinking about them in a slightly different way, like I now am.