Debunking the Myth: Are 3D Printing Companies Really on the Decline?

By Kerry Stevenson on December 15th, 2023 in Ideas, news

Tags: corporate, critical, failure, hype, investment, revenue

I’m reading an extremely interesting and critical post about the 3D printing industry by Alex Huckstepp.

The provocative title of the piece is “3D Printing Companies Are Dying…”, and while he’s quite correct in his analysis, I would add a couple of points.

In his whimsical style, Huckstepp’s point is basically this:

“For the better part of a decade, 3D Printing companies have been foie gras-ed with Venture Capital and, more recently, SPAC $. An indigestible amount of money has been forced into the bowels of startups at irrationally stretched valuations – and they’re choking. The growth of these companies has failed to keep up with their appetites and it’s increasingly apparent that they won’t be getting fed much more. Unfortunately, feeding themselves (metaphorical profitability) is beyond their reach.”

He suggests that 3D print firms have received breathtaking sums, despite the overall value of the industry failing to grow or even match the funding levels.

This fact is very true and unsettling at the same time.

Multiple organizations have benefited from significant financial influxes. In an ideal world, these companies would allocate these funds to product development, with the goal of generating a revenue high enough to reimburse the investors.

However, this hasn’t been the case for the entire sector. According to our weekly leaderboard, the worth of these companies has significantly decreased compared to a couple of years ago. In fact, some companies’ values have plummeted by 90% from their initial estimates. Even worse, certain companies have completely disappeared from the leaderboard, representing a 100% decrease.

But let’s not forget about the privately-held 3D printing companies. Although we don’t have detailed insights into their financial state, it’s safe to assume they’re experiencing similar issues as described by Huckstepp.

Here’s my perspective on the matter:

There appears to be a vital missing step in this process: altering the technology, or creating innovative technology that addresses the obstacles inhibiting sales growth. Oddly, many of these companies are unable to make this shift, remaining anchored to their initial concept. This persists despite several of them having significant cash reserves at their disposal to create new things. This is one of the reasons corporate acquisitions are happening: it’s easier to buy than to innovate.

This can be seen as a predictable progression of events. It closely resembles the classic hype cycle, but on a corporate scale. Here’s a quick reminder of what the hype cycle is:

The phase that Huckstepp is describing is the anti-hype stage of the hype cycle. The consumers have had negative experiences with the technology and have developed an aversion to it. Negative things are spoken, and critical stories are published.

There are several points that I would like to emphasize.

Firstly, based on the hype cycle, there are some who will genuinely utilize this technology for positive and valuable applications. These will slowly become popular and widely recognized uses of the technology.

Secondly, Huckstepp’s arguments are only relevant to specific businesses. There are a multitude of enterprises in this sector – far too many, as I concur with Huckstepp, but not all are in such situations. I am conscious of many that are not heavily financed, and some are even self-financed. These corporations are indeed organically building up their business to be self-sustainable. Typically, they are doing exactly what they should be – focusing on certain applications and generating customer value.

Thirdly, the 3D printing industry is far from “finalized”. There are numerous 3D printing techniques currently available, and there will be even more in the future. Part of me firmly believes that we have not yet discovered the truly efficient technologies that will be commonplace several decades from now. Each week I witness the debut of something incredibly innovative, sometimes even groundbreakingly so, that could significantly alter the industry if adopted.

It’s plausible that several of today’s businesses might fade into obscurity as new technology surfaces that makes their older methods outdated.

Via Medium

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Kerry Stevenson, also known as “General Fabb,” has written over 8,000 stories on 3D printing at Fabbaloo since he commenced the venture in 2007, intending to promote and expand the incredible technology of 3D printing worldwide. So far, it appears to be successful!

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