Thinking of Starting a Business? Print Profits in 3-D Printing
Imagine you hit a button on your printer, and out emerges a prototype of a prosthetic leg or a component for a space shuttle. The moment has arrived, and it means big things for 3-D printing companies. Though the industry has been around for decades, 3-D printing is gaining momentum. In a recent report, Goldman Sachs named 3-D printing as one of eight technologies that will “creatively destroy” how we do business.
Indeed, companies in many fields are getting creative with 3-D printing technology. One Dutch architect has plans to print a 1,100 square-foot house. The European Space Agency is looking into building a lunar colony with a 3-D printer that uses moon dust. NASA wants to take a 3-D printer into space. In March, a British company, Oxford Performance Materials, printed new bone that replaced 75 percent of a man's damaged skull. Another company, Organovo, based in San Diego, is building a 3-D printer that can create new organs. Meanwhile, the majority of hearing aids are now made using 3-D printing technology.
Looking to get started? Design your products for the aerospace industry and the medical sector: Those will drive the most growth, with the greatest profit potential. "Companies are going after markets where the volumes are relatively low and the value and complexity of products are high," says Terry Wohlers, president of Wohlers Associates, a consulting firm.
How big will it get?
By 2017, Wohlers Associates estimates that sales of 3-D printing products and services could hit $6 billion worldwide. It forecasts that by 2021, industry-wide sales could reach about $11 billion.
The market segment that has experienced the greatest growth recently is the personal 3-D printing market, which includes printers such as 3D Systems's Cube ($1,299) and Makerbot's Replicator 2 ($2,199). Sales in this space grew an average of 346 percent a year between 2008 and 2011. However, growth slowed slightly last year, according to Wohlers, with sales up 46 percent in 2012.
How much do I need?
You'll need capital. How much depends on your ambition: It can cost from $20,000 to $600,000 for a commercial printer if you want to make aerospace parts or prosthetics. For the DIY-crowd and 3-D printing hobbyists, the low cost models fall into the range of about $5,000 and less. A simple $500 version may suffice for making toys and jewelry.
Who's in it?
There are big incumbents. Stratasys controlled 56 percent of the market in 2012, and venture capital-backed Shapeways is the leader in on-demand printing, but the field is getting more and more crowded as the industry shifts to producing real parts and products rather than just prototypes. Wohlers reports that finished parts now account for about 28 percent of sales in the 3-D printing market.
The Quick and Dirty on 3-D Printing
How much? The 3-D printing market grew 28.6 percent in 2012 to $2.2 billion, according to Wohlers Associates.
Barriers to entry: Some 3-D printing businesses can be launched relatively cheaply. Printing products for the aerospace and medical industries will require more start-up capital, technical knowledge, and industry contacts. But those fields have the greatest growth potential.
The playing field: There are some large players in the industry--Stratsys, 3D Systems, Ponoko, and Shapeways--and the space is beginning to get crowded. But there's certainly room for a newcomer with an inventive approach. One start-up, Occipital, is creating a 3-D scanning device, called Structure Sensor, that snaps onto an iPad. Occipital's Kickstarter campaign reached its $100,000 fundraising goal in just a few hours.
Ideal prior job? Professor of mechanical engineering.
Buzzword: Makers--the industry's community of DIY-ers and hobbyists.
Abigail Tracy is a staff reporter for Inc. magazine. Previously, she worked for Seattle Metropolitan magazine and Chicago magazine.