Gartner’s Hype Cycle describes five distinct phases of a technology’s life cycle. We start with the innovation trigger, in which the media initiates the diffusion of a technology. Subsequent success stories fuel a spike in inflated expectations. When expectations deteriorate, we find ourselves in the trough of disillusionment. After that, the slope of enlightenment sees more adoption. Widespread adoption happens when we hit the productivity plateau. I really like the Gartner model, it’s a useful tool for thinking about trends that seem either freezing or incomprehensibly choppy.
watering hole of disillusion
Welcome to the watering hole. SPAC frenzies have turned sour, even credible SPAC companies are now trading in single digits. 3D Systems (NYSE: DDD) stock is at a 52-week low, even though the company’s pivot to healthcare and bioprinting is lucid and has been done with aplomb. Materialize (Nasdaq: MTLS), which is a de facto monopoly on the software used to manage 3D printing, is also trading near a 52-week low. Shares of solid Stratasys (Nasdaq: SSYS) have halved in a month. Voxeljet (Nasdaq: VJET) shares make the company look remarkably cheap. Its market cap is around its earnings last year. That’s an incredibly low valuation, considering they’re profitable and were up 22% in the fourth quarter of last year.
Head spinning is the best way to sum up the fall in 3D printing stock valuations. Funding for startups has also evaporated. Unnecessary chatter about raising millions and tens of millions has caused despair for some who missed the sauce. Indeed, the tens of millions generously donated to corporations in recent years will not be repeated any time soon. I told friends to increase rounds A, B, and C to one, because we were never going to be so loved again. But, the speed of our disgrace surprised me.
The low valuations of 3D-printed public stocks mean that funding demands from banks and investors for potential future earnings tomorrow under the threat of real inflation now look riskier than before. At the same time, exits are threatened by our now catastrophic public record. Companies might have expected an injection of market excitement if they invested in 3D printing, but now that effect is questionable. We are very likely to be transplanted by nanotechnology or quantum or something even newer as a source of media excitement. Yes, there are 3D printing stories, but these are no longer the ones where you can feel the gleaming eyes and the wonder shining through their words. So there has been a 3D printing revolution, apparently.
Not everyone has a 3D printer. In fact, very few people have one. Of these millions, few use them every day. Many projects and business optimism have soured on the limitations of our expensive technology, which hasn’t really improved much over the past decade. We are only used sparingly in manufacturing. And, if we’re used in manufacturing, it’s a guy dusting parts that he just cut a build plate with a saw. You might think that we are hanging around in the trough of disillusionment.
But, don’t mind the electric sheep, the poor herds have only their greed and their algorithms to guide them. The stock market looks dire and we may not be the flavor of the month with investors in general. But we are fine. If we look at the signals from the market itself, our industry is slowly but surely extending its tentacles into manufacturing and trading.
Slope of Enlightenment
We are an evolution of 3D printing, not a revolution. We are slowly but surely responding to the needs of more and more businesses in more and more ways. More and more companies have printers that are used to avoid all kinds of problems. We resolve business issues as they arise. There are cases where the improvised use of 3D printers to solve crises – to create parts in the blink of an eye – has more than offset the investment in them. AM is becoming the standard in the commercial space industry, widely used in the manufacture of satellites, drones and defense. Our growth in orthopedics continues apace, and it’s a revolution that took 30 years to happen. I see more and more examples of highly optimized industrial components that are made with 3D printing and can only be made that way. AM is also gaining popularity in the dental field and is pretty much standard in many jewelry and hearing aid applications.
For many applications, 3D printing is actually a very useful technology that shows real ROI and real value as it grows. From the growth I’m seeing in private companies and in the industry as a whole, we’re not bottoming out. We are actually very far down the path to enlightenment. Industry adoption is growing, but perhaps not in the way we would like. This is what can cloud your vision.
Now don’t get me wrong. I would prefer some kind of Google – where the masseuses are millionaires – some kind of scene. Snacks will be better and everyone will have pools. And I want you to have a swimming pool. I would hate to see the number of people I know with Lamborghinis stabilize. I’m rooting for you. But what if we took a step back and thought.
We also drank the Kool-Aid. Now we have to wake up. We have to realize that just because some journalists have started using the term “3D printing revolution” doesn’t mean it’s the right way to think about the development of our technology. A revolution is built and then suddenly changes. It breaks, shatters and divides a timeline into a definite before or after. Nobody has printers and then everyone has 3D printers. Did you really think this was going to happen?
Doctors still write prescriptions on paper. 134 years after contact lenses were made and 74 years after LASIK was developed, people still wear glasses. The world’s fastest car was electric in 1899. The first two successful Channel crossings were in a balloon, as was the first air crash. The QR code was invented in 1994. However, in Spain where I live, it took a pandemic to trivialize them… like stickers that link to menus.
The world rarely works exactly like a metaphor. Rarely does a technology develop the way you think it will. Some of the smartest people on Earth thought the Segway was going to be “bigger than the Internet”. Now it is something that occasionally carries tourists. However, children’s scooters equipped with electric batteries are common and are used by millions of people to commute to work.
Dean Kamen, the inventor of the Segway, also developed a revolutionary way to purify water. He sold his invention to Coca-Cola, hoping the company would use it to provide cheap drinking water to billions of people. Instead, the beverage giant uses it to power your local Five Guys Freestyle machines. And even not all fast food restaurants have Freestyle.
IBM Chairman Thomas Watson often lands on “world’s dumbest quotes” lists because he said, “I think there’s a global market for maybe five computers.” First, he said that in 1943. Second, with cloud computing becoming the norm, he could very well be right, in the long run.
In short, we are mistaken about the future. And thinking of 3D printing in terms of revolution is wrong. 3D printing is a virus, not a revolution. 3D printing is something that is spreading in a very directed way. We are the perfect way to make a part that solves a problem. If this problem is costly enough, then we can supplant existing technologies that are better known and less expensive. For this perfect host, we are a perfect virus. But, if we try to infect thousands more, we may not be able to get away with it. But, for that one, we can be everything and everything for them, we can define them.
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