Makerbot Industries: Building and Leading a Technological Enterprise

This is an essay I wrote for uni (23rd March 2011). I seem to remember it receiving a good mark and it kinda fits with the blog. Haven’t read through it or updated it though so – you know – take it easy.

I’m not apologising for NOT linking the references, either. It would’ve taken aaaages. Bite me.

Makerbot Industries is based in Brooklyn, New York and was founded by Bre Pettis, Zach Smith and Adam Mayer in January 2009. (1) Inspired by the RepRap project, they design and build desktop-sized affordable 3D printers, known as Makerbots, allowing customers to print physical objects from ABS plastic.

“Right now, you can download books and movies. Someday you’re going to be able to download things.” – Bre Pettis (2)

Bre Pettis is “passionate about invention, innovation and all things DIY” (2) and has founded a Brooklyn based hackerspace called NYC Resistor (2007) and co-founded Makerbot Industries (2009) and Thingiverse.com (2008) which allow users to share digital designs, often suitable for reproduction on a Makerbot. He is also an international speaker at several conferences and has, in-the-past, worked as a school teacher, artist and puppeteer as well as producing many tutorial videos for Make Magazine and Etsy.com. (3)

Zach “Hoeken” Smith and Adam Mayer are both members of NYC Resistor. Zach has previously founded the RepRap Research Foundation (RRRF) (2007), a non-profit corporation that provides a support base and a cheap source of RepRap parts for researchers interested in the project. (4)

Opportunity

The idea first arose when the team realised their need for a 3D printer but couldn’t afford one. In order to turn this into a business opportunity the team “decided to use off-the-shelf parts, and make it accessible, so anyone could have one,” (2) in addition to the realisations discussed below:

In terms of experience, skills and interests (5): Bre had previously founded or co-founded several organisations, such as NYC Resistor; Zach had worked on the RepRap project and as well as having a good knowledge of 3D printing had founded the RepRap Research Foundation; whilst all three had extensive DIY skills and a passion to reach their goal. It is argued however that “an ideal team for a seedling enterprise is the entrepreneur, four cornerstones and the mentor” as “three people are a marriage plus an outsider.” (6) Whilst it is not clear whether the team had a mentor, Bre had many contacts in the DIY industry that could have filled the role.

Resources weren’t a big issue for the team as, through NYC Resistor, they had access to equipment, tools and people who were willing to help sort out any problems, while also being able to use the space as a temporary office. They had also managed to secure $75,000 from friends and family to fund the venture (2) and had Dr. Adrian Bowyer, accredited as inventor of the RepRap machine, as an angel investor. (7) In addition to this, through watching some of Bre’s videos and his general ‘web presence’, he fulfils many of the qualities: confidence, charisma, energy, ambitious, ‘in a hurry’, typical of an entrepreneur. (6)

Regarding timing of the opportunity, Bre had been working at Make Magazine for two years and was likely looking for a new project as is typical of entrepreneurs who “lose interest too soon.” (6) Zach may also have been looking to realise his project, the RRRF, on a larger, more commercial scale as currently the website seems to have expired with speculation supporting this, while he moved his focus to Makerbot Industries. (8)

New York is also undergoing a technological uprising which provides the perfect platform for integrating this project into the “publishing, advertising [and] media” industries already woven into New York (9) with more technology venture capital being invested here than in Massachusetts, (2) home to the MIT. This project was also completed just in time for the South by Southwest (SXSW) festival which promotes music, film and interaction, attracting a lot of media attention as well as bloggers, record labels, agents, filmmakers etc. While it is not clear if it was the intention of the team to launch their product here, the potential media coverage, coupled with Bre’s charisma was likely to draw attention.

‘He went on a pub crawl and parked the machine on the bars. “I started printing out shot glasses,” Mr. Pettis said. “Bartenders love robots.”’ (2)

In order to make this opportunity scalable and saleable, the team pursued an open source model. By using an open source model, specifically an open hardware model, the team must: provide any design files; allow modifications and redistribution of said files; allow manufacture, sale, distribution and use of devices based upon these files; and publish any documentation and/or software it has developed that are essential to the functioning of the device. (10)

While this appears to give away all assets for free, any redesigns or manufacturing of these devices must be attributed to the original designer and also released as open hardware. (10) This not only provides, essentially, a free global design workforce as people are happy to share what is already free but also retains trademarks and copyrights so that the original designer always gets accredited allowing a brand to still be established. To this end any cheaper knock-off products cannot be attributed to Makerbot Industries unless under licence.

This open model has other benefits too. It is important to be competitive in order to drive innovation (6) and by making all of your intellectual property freely available, if you don’t build upon your designs, a competitor soon will, without risk of being sued. Also by utilising the community that builds around your product, including any competitors, you can achieve expansion without the overheads, by essentially outsourcing research and development for free.

Market

The market Makerbot Industries are concerned with largely deals with the “maker culture” that has seen enormous growth in recent years and in this respect it is more appropriate to consider the broader descriptor of “desktop manufacturing” over 3D printing.

“Maker culture is a term that refers to a growing community of hobbyists and professionals dedicated to making their own functional devices, whether it be technological gadgets, open source hardware and software, fashion apparel, home decorating, or nearly any other aspect of physical life. The movement stems from a direct reaction to a consumer culture in which most products have become steadily homogenized and local industry has given into big box retailing of dull products made with cheap foreign labor.” (11)

In this example Makerbot Industries originally were not just a business but also the customer as the idea was born out of a need for a low-cost alternative to commercial machines, for use by themselves. Couple this with the numerous hackerspaces in existence and they can really get “close to potential customers” which can take a “business idea to the next hurdle” (6) in a similar fashion to the Farfield case where they relied on Personal Relations with customers not expensive advertising. (12)

Expanding from hackerspaces, other potential customers include the many individuals involved in the “maker culture” which is ideal for schools, where the Makerbot, shipped in kit form, is a great learning tool for students to build, hack and use. The open source nature of the product also ensures that proprietary restrictions are never encountered and more importantly that modelling objects in plastic has, until now, relied upon expensive manufacturing processes or machinery.

“They are in a unique position to own the educational segment of the market.” (13)

Competition in this market comes in essentially two forms: direct and indirect. Direct competition can be seen from organisation such as RepRap and BitsFromBytes who offer very similar products, where as indirect competition comes from companies such as Shapeways, Ponoko and BatchPCB who provide outsourced manufacturing to individuals.

Whilst the former offer essentially the same product, they don’t provide the same user experience or packaging that a Makerbot does. The form factor of the Makerbot fits comfortably on a desk and is aesthetically more mature, bringing almost a sense of fun to the feel of the machine where as a RepRap is well designed but still looks and feels too advanced to make it attractive. They also focus on usability rather than compete with directly with commercial machines, for example, recently releasing a computer-free interface board and an automated build platform to allow users to leave the machine running for days or weeks printing multiple objects.

Indirect competition is perhaps not a fair comparison as the services they offer provide significantly more professional results than a Makerbot is capable of achieving and so is aimed more at the serious DIY market.

The Makerbot has also managed to receive a reasonable amount of press attention with links to popular culture. One article, for example, relates the Makerbot to Star Trek’s replicator (14) and several mentions Jay Leno’s use of a commercial machine to keep his vintage cars in parts that are no longer manufactured. (2)

Growth

Makerbot Industries started taking orders for their first iteration, the CupCake CNC, in March 2009 and within a couple of months their first batch of 100 had sold out. Since then they have released an upgraded model, the Thing-o-Matic. To date they have sold over 4000 kits and at approximately a thousand dollars each, have made over $4 million worth of sales. (2)

While, on its own, this is fairly impressive for a start-up business to achieve in 3 years, taking into consideration the lack of advertising and community-supported research and development, a significant proportion of this is profit. This provides them with cash they need to grow as a business.

Evidence of growth can be seen by the continued development of their products and the release of upgraded parts, some of which were mentioned earlier. This includes the development of other products to compliment the Makerbot, such as a 3D scanner and a machine to recycle old models.  It is also most evident, perhaps, in that they now employ over 30 staff.

“The next phase of your business’s life covers the period when it grows from a five-person business to one with 20 people on board.” (6)

Summary

In terms of building and leading a technological enterprise, it can be said that Makerbot Industries have managed to achieve that title for a number of key reasons:

Firstly, by working with the customer throughout the development process they have guaranteed a product that meets the customer requirements but also by implementing an open model the customer is free to improve upon the design further and feedback into the thriving Makerbot community.

Secondly, they recognised what was needed to give their product the edge, by making it user friendly and appealing to consumers. By choosing a compact and attractive design, they took 3D printing out of the workshop and onto people’s desks while providing them the tools they needed to create objects and designs simply and then share them with other users.

Thirdly and perhaps most importantly, the role Bre Pettis has played, as an entrepreneur, in providing contacts and influence within the market as well as a charismatic personality, has decidedly gained the support and subsequent success of the entire project.

It is worth mentioning that while Makerbot Industries owns the rights to their brand name, their free-to-use/free-to-modify designs limit their value in terms of equity but act to greatly increase their social capital if only for the reason that people like “free stuff” but more probably as a strong community has built up around the product and the company which attracts attention in much the same way as a hyped, well-advertised product launch.

By Adrian Lodge (23/03/2011)

Bibliography

1. Makerbot Industries. Wikipedia. [Online] 9 March 2011. [Cited: 19 March 2011.] http://en.wikipedia.org/wiki/MakerBot_Industries.

2. Dwyer, Jim. From a Brooklyn Startup, Makerbot, a D.I.Y. 3-D Printer. NY Times. [Online] 4 March 2011. [Cited: 19 March 2011.] http://www.nytimes.com/2011/03/05/nyregion/05about.html.

3. About. Bre Pettis. [Online] 2009. [Cited: 19 March 2011.] http://www.brepettis.com/about/.

4. Jepson, Brian. Reprap Research Foundation: get yer Reprap parts here. Make: Online. [Online] 6 June 2007. [Cited: 19 March 2011.] http://blog.makezine.com/archive/2007/06/reprap-research-foundatio.html.

5. Cave, Frank. Opportunities. [Presentation] s.l. : Lancaster University, 2011.

6. Mike Southon, Chris West. The Beermat Entrepreneur. s.l. : Pearson Education Ltd., 2002. 0273659294.

7. Makerbot Lineage. Makerbot Industries. [Online] [Cited: 30 March 2011.] http://wiki.makerbot.com/lineage.

8. The RRRF is broken. RepRap Forums. [Online] March 2010. [Cited: 20 March 2011.] http://forums.reprap.org/read.php?58,38343,38343.

9. Wortham, Jenna. New York Isn’t Silicon Valley. That’s Why They Like It. NY Times. [Online] 6 March 2010. [Cited: 20 March 2011.] http://www.nytimes.com/2010/03/07/technology/07reboot.html?_r=1.

10. Fruit, Ada. HOPE 2010 – HOW TO RUN AN OPEN SOURCE HARDWARE COMPANY. slideshare. [Online] July 2010. [Cited: 20 March 2011.] http://www.slideshare.net/adafruit/hope2010-4790096.

11. McCall, Logan. What is Maker Culture? – DIY Roots. Associated Content. [Online] Yahoo!, 19 March 2009. [Cited: 30 March 2011.] http://www.associatedcontent.com/article/1528122/what_is_maker_culture_diy_roots.html.

12. Farfield: illuminating the molecular world… Cave, Frank. 2009.

13. Flaherly, Joseph. MakerBot Math. Replicator Inc. [Online] 18 January 2010. [Cited: 30 March 2011.] http://replicatorinc.com/blog/2010/01/makerbot-math/.

14. Cascio, Jamais. The Desktop Manufacturing Revolution. Fast Company. [Online] 9 July 2009. [Cited: 30 March 2011.] http://www.fastcompany.com/blog/jamais-cascio/open-future/material-issue.

15. Instructables. About Instructables. [Online] [Cited: 30 March 2011.] http://www.instructables.com/about/.

16. Wilhelm, Eric. How many members does Instructables currently have. Instructables. [Online] 27 February 2009. [Cited: 30 March 2011.] http://www.instructables.com/answers/How-many-members-does-Instructables-currently-have/.

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