Clear Thinking on 3D Printing—
and Why We're Doubling Down on Shapeways

April 23, 2013 by Zack Schildhorn

Arthur Clarke’s Third Law states: “Any sufficiently advanced technology is indistinguishable from magic.” 3D printing is certainly deserving of that description. Conjuring objects on-demand – at once functional, fanciful, and important – this is a technology that captures the imagination. But amidst ascendant attention, investor interest, and pundit predictions, there’s been scant insider insight on the real drivers underlying this new manufacturing paradigm.

As venture investors we are always hunting for technologies with the potential to create or disrupt markets, but we never forget that breakthroughs alone don’t make a business. Great technologies matter only if they yield great products, sold by a great company, in the context of an investment owned at a great price. So when we sought years ago to pick a winner in the world of 3D printing, we sought an edge—a variant perception. What follows was our playbook.

3D printing isn’t a new technology. The first 3D printers were invented decades ago in the 1980’s, and these tools found homes in top companies all over the world, used to make mockups of product designs. The technology was (and remains) well suited for prototyping – complex forms are easy to produce since structures are built layer-by-layer (“additively”) instead of carved from larger slabs. Printing directly from digital files, companies can iterate quickly on designs, making better products and bringing them to market faster.

Over time, printers improved, demand and competition grew, acquisitions and consolidation followed – and the industry value is now in the billions. High-end machines keep improving and boast greater accuracy and lower prices. The materials they employ, once limited to simple single-color plastics, now include hundreds of different substances including titanium and steel alloys, ceramics, advanced polymers, hybrid multi-color materials, and even living tissues. Recently introduced low-end machines are competing to put basic 3D printing capability on the desktops of consumers and hobbyists. The software tools used to create 3D models – the digital designs needed to make physical objects – have evolved from esoteric, expensive desktop packages to (in their most modern incarnations) apps capable of generating 3D models from just a few photos.

Combined, these changes have positioned the industry for the most important shift in its history. Once an expensive niche technology for making product mockups, 3D printers are now affordable tools capable of making the products themselves.

Nowhere is this shift from prototyping to production more evident than within the industry itself: traditional lingo of “rapid prototyping” has been replaced by terms like “direct digital manufacturing.”

Put in context, modern manufacturing began when the steam engine replaced human labor with machine power. Huge amounts of energy and ingenuity have produced factories and supply chains capable of churning out millions of objects with amazing efficiency. We’ve come a long way from Henry Ford’s declaration that you could have any color car so long as it was black—but mass manufacturing still has its restrictions. So while this ecosystem has brought great consumer benefits, it has an Achilles’ heel: the costly preparation and tooling required to spool up a mass-manufacturing line makes it very expensive to begin producing something, and it only makes economic sense to produce lots of something, so as to spread large fixed costs over many units. It’s why manufacturing is usually done by companies, not individuals, and why companies must commit to selling only a few varieties of any given item.

3D printing changes all of that. Because complex objects can be produced on-demand, directly from a digital design, there is no up-front expense required. Tooling and inventory disappear, and suddenly we can produce one of something – or thousands of something – without risk or even knowledge of how traditional manufacturing or supply chains work. And since product iteration is as simple as digitally editing a file, we can experiment with many new ideas and give individuals much more input into the products they buy – making products truly personal instead of mass produced. We don’t support the belief that 3D printing will replace mass manufacturing – there are still many situations where you’d like to make lots of goods inexpensively. Rather, we contend this technology opens up countless possibilities and entirely new markets where traditional manufacturing wasn’t even an option before.

How Shapeways is Using 3D Printing to Build a New Manufacturing Platform...

Shapeways sits at the forefront of this shift, enabling individuals and small businesses for the first time to have access to real production capability through the power of 3D printing. The company operates the world's largest marketplace and fulfillment engine for 3D printed goods. Shop owners upload item designs for sale to the Shapeways website, and when a shopper clicks “order,” Shapeways does the rest – printing the product in one of over 30 different materials and shipping to the buyer. The company boasts over half a million unique products for sale in its marketplace – ranging from high-end housewares, to personalized puzzles, to designer jewelry. Product designers have no up-front expenses and get paid every time someone makes a purchase. Shoppers can find one-of-a-kind items and now, with the launch of new apps, even design or personalize their own with infinite variety. Shapeways gets paid to fulfill these transactions, leveraging sophisticated software and state-of-the-art 3D printing facilities to efficiently produce objects on-demand.

When we first learned of Shapeways, we saw a company well positioned to succeed in an evolving industry. As 3D printing technology continues to become less expensive, more capable, and more accessible, Shapeways and its community will benefit from the ability to offer more products, in more materials, at better prices. So when we decided to become partners in the business, we were confident that the company had a bright future ahead. What we weren’t expecting was the tremendous growth we’ve witnessed – in 3D content, community, traffic and sales. And today, we’re thrilled to announce we’re expanding our investment and also growing our investor roster, as Andreesen Horowitz joins our existing partners Union Square Ventures and Index Ventures to help Shapeways realize its next phase of growth. A testament to the team and their mission, Shapeways is pioneering a transformative opportunity to make products (and production) personal. We can’t wait to see what we’ll be 3D printing next...