Hi welcome to the Eev blog an Electronics engineering video blog of interest to anyone involved in electronics design. I'm your host Dave Jones Hi no I'm not in the lab today. Beautiful day here in Sydney so I thought I'd get out into the park and film something out here. There was a big news item today which I thought I'd comment on it Some pretty big news today.

Make Aot who make the 3D open source printer that everyone knows and loves? You might even have one. Well, they've just got 10 million bucks in Venture Capital funding Beauty So you've got to take your hat off to Bri and the other guys at Uh, make Aot and give you congratulations for a pretty good score. 10 million bucks in Venture Capital funding Unbelievable! Now it's not really surprising cuz the makot sold like over 5,000 units and that's well over uh, 5 million bucks in income I believe it could even be double that or something I'm not sure but it's around about that figure and the scor all this money. It's not just one investor though, it's actually a group in of investors including I believe uh Bree's parents or something like that.

but I think most of the funding comes from one Venture Capital firm called The Foundry group and uh, they have a they have a history of investing in in this sort of stuff and and they apparently really know open source and they're behind it and all that sort of stuff which is fantastic. but uh, now somewhat unsurprisingly, the Foundry group have actually tried to compare the Uh 3D printing uh Revolution to the early micro computer uh hobby startup with the Al and the Apple 1 kits and stuff like that. and they've also tried to compare it to uh, the early days of the all the success of Uh Hp's LaserJet printer which made uh, really laser printing um, and you know, personal printing uh in this case 2D on paper. Um, commercially viable with the laser jet, but that was done much earlier with Xerox Park and not a bad comparison I guess.

but I Don't necessarily totally agree with it because the 3D printing uh industry is is always going to be several orders of magnitude more Niche than the Uh Micro uh than the early micro computer industry and the boom of micro computers. But I think it was still a brilliant move on their part to invest in Maabot. They'll make their money back in buttloads. So what can we expect from this? Uh Venture Capital Funding Well, I Think it's going to be a brilliant thing for Makot and for the industry in general terms that is now.

Uh. Makot are working on a third generation make Aot machine and this funding will, uh, be able to. They'll be able to make that Absolutely brilliant. Uh, lower cost, higher performance.

Everyone wins. That'll be in the first year or so, maybe first two years. Things like that, things will go pretty much the same as they always have. You won't notice much difference except better products at lower prices.

But what'll happen after that? Well, I Think you'll see the death of the do-it-yourself unit. The kit will vanish. Why? Cuz real businesses and real corporations don't sell hobby kits. If that's for kids and amateures, give me a break.

I Think it's just inevitable that the kit is going to die because one you start actually producing more advanced product to try and reach to a bigger. Market It's going to come to a point where you're just going to be able to manufacture it cheaper and it's going to be cheaper and simpler to sell it as a finished product than it will be to make the kit and keep it as an open- Source Hardware project Now I'm not going to make any uh prediction about whether or not they'll drop it as open- Source Hardware but it'll just become I Think too difficult and too much trouble and too expensive and not worth anyone's while to build their own MakerBot Anymore that's I Think it's just inevitable now. I'm not saying that the players involved don't have their heart in the right place. I'm sure they do, but I think they'll find that eventually.

It's just not a viable model if you want to grow the business and they have to grow this business cuz these Venture Capital firms are there for one reason and one reason only is to make a return on their investment. and to do it reasonably quickly and not only just make a return on their investment, they want to make a shitload an absolute buttload of money in return for their investment. So the uh, you know if the MakerBot is now a $5 million uh business? they want to turn that into a $50 million business, 100 million, even $500 million. They want to dominate the industry and then it gets on to the end game.

Currently, a Maabot second generation kit sells for about 1,200 bucks or or so and the fully assembled unit is about 2500. Now I think their goal will be to ultimately get a sub $1,000 3D printer fully assembled and I think that'd be fantastic. Heck, I'd buy one I'd jump at it. maybe even 500 bucks.

That would be my goal if I was, uh, investing in something like this and trying to, you know, uh, trying to sort of jump on the early bandwagon of some 3D printing. Revolution once it hits that sub ,000 Market $500 Market it almost becomes like a consumer toy, not just a niche engineering thing, but at that sort of money. You get every engineer on the planet buying one just to play with. It's just one of those no-brainer decisions once it gets to that point.

And I think that will be their goal because they'll want to increase margins. and they'll want to, uh, increase their market share and stuff like that. You can't really do that at $2500 I Don't think that makes a revolution. So just look at the numbers for this thing.

If you're talking about, turn this into, say, a $50 million business for example, and you got a $500 Make Aot? Well, how many fully assembled? Of course, how many do you have to make? Well, simple math. you got to make it and sell a 100,000 of these things. And if you want to make a $100 million business 200,000 Etc You start talking serious volumes and you're not going to get that with kids. so it's going to have to go fully assembled.

And of course, you can't really start making these sort of volumes and meeting these price points without getting it made in China. So look out for the Chinese make Aot movement drop shipped. So where does that leave us in three, maybe 5 years time? Well, the VCS will start getting very Twitchy and they'll be looking to play the end game and cash in on this thing cuz they'll want to make a buttload of money out of this and they'll probably try and do it in one of two ways. either, uh, sell it to somebody who that is have no idea the market could be totally different in 3 5 years time time.

Or maybe they'll uh, look to float make Aot or something like that. That's the old model. You can still make money from that. Who knows.

But either way, once that happens, well, that'll probably be the end of. uh, sort of. you know, the open source MakerBot uh company that we know today. Not that there's anything wrong with that I guess but it's just a bit of a shame.

really. Now don't get me wrong, I don't think this is really a bad thing at all. and I think it's great for make Aot and it's great for the industry. It's a huge score.

And I think it's great that these VC companies are actually willing to uh back, uh, you know, small companies like Maabot and actually see these revolutions coming. It's fantastic. That's what VCS have always done. That's what they'll continue to do, which is great.

I Just think, well, there's nothing unusual about it. You know that's really my only problem. Bit of a shame, really. I thought uh, maybe that uh, makot might have chosen a different strategy and just gone on on their own, just capitalizing on the money they've made, but they've decided to take Venture Capital funding.

Best of luck to them I have no problem at all and I hope I can buy a cheap MakerBot soon. It'd be fantastic anyway. Catch you next time Woo!.