These days, 3D printing start-ups are having a rough time. Despite the growing demand and some promising technological advancements, the COVID-19 pandemic has left a negative impact on the industry.
A shortage of consumables, problems with logistics, lockdowns and closed businesses aren’t ideal working conditions. Regardless, people keep coming up with interesting ideas and, judging by the experience of 3D.ru, the global pandemic may not even be the most severe problem for the start-ups.
All in all, every start-up goes through similar stages, from searching for ideas and like-minded people, to capital raising and scaling. We’ll talk about product creation another time, but for now, let’s focus on the things a start-up should prepare for when it gets too big for the “garage” phase.
As a bonus, we’re going to drop a few pointers on how to prepare a pitch for the 3D.ru open online event for everything 3D printing-related where the winners will get up to $1 million to grow their projects. If you want more information on the event, feel free to scroll to the end of the article.
Where Are We Now
Since we’re looking at start-ups from the perspective of 3D printing, it makes sense to review the industry’s current situation as a whole. Let’s start with the bad news.
It’s true, the demand for 3D printing is constantly growing, but the pandemic has significantly slowed down the entire industry, and the consequences are only starting to rear its ugly head. Now you have to deal with shortages of consumables, materials, various spare parts, wires, microcircuits, boards – and that’s only the tip of the iceberg. The logistics have become more complicated due to closed borders and business shutdowns. These factors combined to make it much more difficult to provide adequate services.
At the same time, the industry played a crucial part in the fight against COVID-19 — companies were printing ventilator valves, masks, safe door handles for hospitals and much more.
The situation is far from perfect, but it doesn’t mean that 3D printing start-ups need to strictly focus on the pandemic and put aside future plans. You have to be resourceful when it comes to your tech. Unlike traditional businesses, the 3D printing industry should be able to quickly repurpose its production to suit almost any need.
Pioneering start-ups are few and far between these days. Most new ideas are just reproduced versions of what already exist, not something innovative. On the other hand, there are way more 3D printer manufacturers with their own sets of strengths and weaknesses. With this newfound diversity, the technology’s price point has become more affordable than ever before. There are a lot of alternatives and 3D printing is becoming more and more readily available to the masses.
As for interesting developments, the Ai Build start-up presented robotic arms with extruders. Basically, it’s the FDM technology, only with an increased printing area and the ability to create more complex projects due to its mobility. This isn’t something completely new and unique, but a steep improvement of existing tech nonetheless.
The industry also needs to shorten the printing time drastically. So far, only Carbon has managed to achieve this with its CLIP technology that prints 100 times faster than traditional FDM printers. If someone figures out how to do the same, the start-up is bound to take off instantly.
Unique materials, improved equipment and fundamentally new directions in printing are in high demand on the market as well. Needless to say, one can’t develop without the other — everything is interconnected.
Unfortunately, most of the ideas focused on improving the old never come to fruition. There are a number of reasons for this, both subjective and objective. Let’s talk about the ones that can be fixed in order to give your project a shot.
Forging a Start-up
The most pressing problem for any start-up is obvious: the up-and-comers often lack relevant experience or money. There are infinite ideas, drafts, theoretical knowledge, and projects, yet a lot of start-ups have no idea how to sell them, or who to sell them to. Even the most promising project can fail without ever seeing the light of day, and it’s usually for one of the two reasons: either no one knew about it or it was poorly pitched to investors.
The first step is learning to present your project correctly.
That’s right, this business isn’t just about invention and production. That’s why a start-up ideally needs at least two people, a smart one and a social one, or a smart one and a rich one. Expertise and knowledge don’t amount to much without investments or the marketing skills required to obtain said investments. Such partnerships might not be vital for the project, but it will ultimately increase its chances for success. The more great and versatile professionals you have on your team, the higher the chance of getting funding. You can sell and defend an idea yourself, but an experienced person can do it even better.
There’s no need to give up on the idea just because there’s only one developer on the team. Investors can take on the partner role if they have a grasp of the project’s specifics (in our case, this means they have to be working in the 3D printing industry). They can help to put the product on the market, sell it to the end consumer, and fill the gaps when it comes to expertise or staff.
When you’re preparing for a pitch meeting with a potential investor, you should always keep in mind that this meeting might be the only one you’ll get. The chances of you getting another one depend on how well you present the project. In fact, there may be an unspoken decision on whether or not your project is worth the investor’s time and effort right after the first meeting.
Let’s say there’s an investor with some “spare” money. A bright mind approaches the investor and presents their idea from a scientific point of view. For example, it’s production technology for aluminum printing material, which, when exposed to certain substances, decomposes waste-free. An investor that doesn’t have experience in the industry most likely won’t be able to comprehend the intricacies of a project like this, which means the bright mind won’t be getting any money.
This case calls for a partner who can efficiently present the idea and talk about things like return on investment and markets. A good specialist doesn’t even have to be some 3D printing industry expert — a few days will be enough to study your specific product and prepare the pitch.
Finding this person is a serious task in itself. There’s a number of ways it can be done: networking, online recruitment platforms, industry conferences, pitch sessions and other events. Don’t be shy when you meet interesting people and exchange contacts. For instance, that’s exactly how HARZ Labs started — from a collaboration of two passionate specialists to being a successful 3D printing polymer manufacturer. The guys were also a start-up when they approached us with a proposal, now they supply 70 countries worldwide with their products and plan to expand. But, that’s a story for another article.
Let’s keep going. You need to understand every aspect of your project clearly. In particular:
- The problem that it solves;
- The field it will be applied in;
- How long will the development take;
- How much will it cost;
- Who you need on the team in order to execute the project.
Whether it’s the consumer sector or the industrial sector, the idea should be well-thought-out, not some “let’s make a printer that prints with dough” type of thing. Like, yeah, it’s cool. So what? If you want to find an investor, the idea alone is not enough. You need a detailed story that has substance to it: the dough printer will be mass-produced for bakeries, you can pour water and flour into it and print products of any shape, it will cost $150 and we’ll sell a million units in three years, I’ll make a catalog of 3D models based on most requested shapes, I’ll also develop different print heads, etc. It’s only an abstract example, of course, but it could become a start-up, right?
Estimating the financial performance of your project won’t hurt either. You should be able to draw a rough number even if the technology is unique to the market and no one has ever made this kind of product before. You can do it yourself if you’re confident in your financial literacy. If you’re not, another person experienced with finance might come in handy.
You need to clearly understand which segment you want to get into. To do this, you have to study the market and compare your product with direct competitors, their pros and cons, printing speed, defining features, prices, availability, and so on. You don’t need a detailed estimate, having a general understanding will be enough.
It’s also important for the product to be interesting in terms of marginality and scalability. HARZ Labs decided to start producing 3D printing materials in Russia, and now they’re shipping them to private clients in dozens of countries while getting certified for the European and US markets.
How to Nail Your First Presentation
A first impression can only be made once. Here’s what you need to get the most out of your meeting:
- Project description: What is it, will there be a demand on the market, is there potential for further development or is it already a finished product, etc. The more details you have, the better.
- Required financial investments: Simply put, how much money do you need according to projections.
- Time to deliver: In other words, how long it will take you to finish the project. For better results, make a rough development schedule broken down into stages: prototype, testing, revision, and so on.
- Business arrangements: This includes legal issues like share distribution, co-founders, or ownership rights, and other inquiries to the investor. Take our company for example: in addition to financing, we can provide almost anything, from expertise to production facilities, our own equipment and materials. That’s why it’s great if a start-up understands what it wants in advance.
You don’t have to come up with binders full of formulas, graphs and spreadsheets in order to make a detailed project description. Stick to a concise 10-slide presentation that will clearly convey all the important points of your project.
In a perfect scenario, a start-up should be able to defend its idea even in front of investors who don’t understand the 3D printing industry. On the other hand, there are start-up aggregators and companies like ours — with internal expertise, interested in everything related to additive manufacturing technologies.
Selling an abstract idea without justifying its value to the industry is difficult, though. Finished products are valued the most, even if it’s only a first prototype. If you’re already started manufacturing your own, have a business model and a clear understanding of what you want to do, you’re basically a perfect candidate for financing.
Starting a Partnership and Getting Investments
A start-up has to negotiate legal conditions and sign a contract. Nobody will finalize an investment before the final arrangements are clear.
Everything that transpires within this process is completely unique and depends on what kind of project it is, state of completion, how much investment it requires, etc.
Partners can get 50/50 tech ownership, the investor can be receiving a percentage of future profits without the right to interfere in company affairs, or it can be a full purchase of technology. It‘s important to remember that all clauses of the agreement can and should be discussed with the investor, because both parties are interested in positive results and long-term cooperation.
At this point, you have the money, the conditions, and the time frame — all you need to do is successfully work on the project. If you need to hire a couple of full-time employees, buy missing components or something else in order to deliver, the decision is completely up to the start-up, but it’s good to have an investor you can turn to for advice or help.
In the case of 3D.ru, the support isn’t limited to good advice. We can also provide equipment, feedback on every development stage, and much more. All of this is additionally negotiated.
Here’s an example of typical workflow stages:
- Legal issues and prototype funding.
- Prototyping.
- Prototype showcase and feedback.
- Iterative improvement.
- Production.
We never interfere with the work process and the technical part, only provide support: including expertise, feedback and production facilities. But if the development is at an impasse and the project isn’t turning out the way it was originally intended to be, then we can offer best practices or help with project management.
Growing a start-up is not a straight path from point A to point B. The development process reveals a huge number of challenges no one could ever predict in the beginning. You’ll have to figure it out as you go, adjust some things, change plans. For many people, this is the first real interaction with the 3D printing industry and tech. This is a major chance for the newcomers to improve their skills, figure out the specifics, and acquire contacts they can leverage in the future.
If the development was a success, everything’s simple: your project enters the market, gets sold, rented or provides services. For all intents and purposes, it gradually pays off. It’s no longer a start-up, now you have a full-fledged company.
Sometimes, the project doesn’t take off. If that happens, no one will demand their money back — the investment is irrecoverable and everyone understands the risks. All that said, failure is not a reason to part ways. If the team is really awesome and has fresh ideas, you can take your new experience, learn from past mistakes, and continue on with the partnership.
How to Prepare a Pitch for the 3D.ru Event
And now for some practical tips for the participants of our 3D printing start-up event. We’re hosting an event where everyone can share their ideas, tech or best practices for 3D printing. The most notable start-ups will get funding and the opportunity to launch their projects on the global market.
If you want to enter the content, you need to submit an application. In other words, prepare the pitch we talked about throughout this article. Here’s a step-by-step of what it should look like:
1. Title: Clear and concise, it should reflect the main feature of your project. For example, “An FDM printer that prints 10 times faster than the existing models.”
2. Short description: Elaborate on the title. Why is your project cool? What special features does it have? You can give us a rundown of how it works.
3. Presentation: Highlight the most important stuff and try to put it all in 10 slides.
Tell us more about your project in this presentation: what it’s about, what the target market is, special features, how long it will take to develop, how much money it requires, and so on. Don’t try to fit everything you come up with into one presentation. Although, if it turns out this way organically, no worries!
We’d also love to hear about your team and see some project footage if you already have something to show. As a bonus, you can tell us how your project came to be, where did the idea come from, or what unconventional solutions did you use along the way.
4. Blog post: Check the box “Allow to publish the project” if you want us to post about your project, you’re more likely to get helpful feedback this way. And don’t worry, no one can take your idea unless they’re fully aware of all the technical detail.