The Current State of 3D Printing Companies: A Decline or Survival?

Share this story

I’m perusing a remarkably intriguing and critical write-up regarding the 3D printing enterprise by Alex Huckstepp.

The contentious title of the script is “3D Printing Companies Are Dying…” and although his assessment is fairly accurate, I would incorporate a few observations.

Expressed in his characteristic whimsical manner, Huckstepp’s argument boils down to 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 businesses have been flooded with staggering amounts of funds, and yet the overall valuation of the sector has neither grown, nor even matched up to the investment.

This is indeed quite factually true, and simultaneously worrisome.

Giant stacks of cash have been channeled towards numerous companies in this field. Ideally, these companies would want to utilize that capital to engineer products that generate income exceeding the investments made.

Looking at the overall landscape, there hasn’t been a significant increase. The valuation of various firms on our weekly leaderboard has considerably plummeted compared to a few years ago. Some businesses have even seen a loss of 90% from their original value. In fact, some have completely vanished from the leaderboard with a 100% drop.

The ones mentioned above are only publicly-traded companies. There are still numerous 3D printing firms that are privately owned. It’s conceivable that many of them are experiencing the same difficulties as described by Huckstepp; only, we can’t know for sure.

I perceive this situation in the following manner:

  • The preliminary stage has technology development
  • Investors get drawn due to the potential of breaking into massive industries
  • These investors flood the company with money
  • Eventually, the company realizes that their technologies are not as useful as they initially expected
  • Although sales are conducted, they don’t hit the projected targets
  • Thus revenues stay stagnant
  • In a bid to increase growth, companies resort to strategies like reduction, amalgamation, or procuring
  • In the end, some of them cease to exist

There’s a noticeable gap in the strategy here: modifying the technology or creating new tech that could resolve the hindrances to sales growth. Interestingly, many of these firms have failed to achieve this, staying anchored to their initial ideas, even though some have substantial financial reserves that could be invested in innovation. This stasis is one driving factor behind corporate acquisitions: the preference to purchase rather than innovate.

In a sense, this succession of events is predictable. It resembles the time-honored hype cycle but on an enterprise scale. To recap, the hype cycle progresses as follows:

  • Early adopters
  • The hype bandwagon anticipates incredible outcomes
  • Increase in adoption
  • Recognition that the product doesn’t live up to the hype
  • The onset of counter-hype
  • A few persist, eventually discerning the actual, beneficial application of the technology
  • The technology becomes the norm in certain sectors

Huckstepp’s observations reflect the counter-hype stage of the hype cycle. Most people have had negative experiences with the technology and have developed a dislike for it. Unfavorable comments are voiced, and pessimistic reports are published.

There are a few points I’d like to make.

Firstly, following the hype cycle, technology will inevitably be co-opted for progressive and beneficial objectives. These innovations will progressively rise to prominence and define the new norm for applications of the technology.

Secondly, Huckstepp’s insights pertain primarily to particular entities. In this landscape, there is a surplus of players – an observation I concur with Huckstepp. Nevertheless, not all find themselves in such positions. Numerous entities, bereft of extravagant resources, have survived even by self-funding and are in fact building their corporates from scratch, reaching a self-sustaining stage. Usually, they have their priorities right: focusing on specific implementations and customer value creation.

Finally, the world of 3D printing is a long way from reaching its pinnacle. Presently, there are myriad 3D printing techniques, and we can anticipate even more in the future. I am of the persuasion that the truly game-changing technologies that will become commonplace in the coming decades are yet to be discovered. Each week, I come across something innovative, sometimes even subversive, which, if incorporated, could potentially revolutionize the market substantially.

It could be that a large number of today’s companies become extinct as new technological advancements make their old technology obsolete.

Through Medium

Original source


Share this story

Leave a Reply

Your email address will not be published. Required fields are marked *