Full-stack startups and why 3D printer manufacturers are acquiring software teams

Full-stack startups and why 3D printer manufacturers are acquiring software teams

full-stack-startups

I was catching up on news during the weekend. One of the articles in Boston Globes caught my attention – Somerville 3-D startup buys Canadian firm. The article speaks about Formlabs – a startup company manufacturing table-top 3D printers. Initially raised $3M with a Kickstarter, the company later on raised up to $21M in venture cap according to the article and Formlabs CEO Maxim Lobovsky.

Formlabs acquired Pinshape – the website and marketplace of 3D designers to share their work under CC license. Website allows to people with 3D printers to browse the selection of designs and print it. According to Boston Globes article:

Pinshape has built an online community of more than 90,000 3-D printing enthusiasts, who use the platform to sell original designs, interact with each other in forums, and collaborate on projects.

pinshape-formlabs

However, I found the following passage from Wikipedia interesting:

Designs found on Pinshape can be directly downloaded if the designer allows, or they can be sent directly to a user’s 3D printer using a direct browser-to-printer experience that removes the need to access the design source file and thus, increases intellectual property (IP) security.[1] Utilizing a cloud slicing and file streaming technology, designers have the option of charging per print, so that 3D files aren’t stored on a customer’s computer. Pinshape also allows its users to review designs and share the settings they used to print off the files.[1]

It made me think about few other software acquisitions made by 3D printer manufacturers.

Less than 2 years ago, Stratasys acquired GrabCAD, a leading 3D CAD collaboration platform. It includes GrabCAD community for free 3D CAD sharing and GrabCAD Workbench – cloud CAD data management tool.

grabcad-community

Here is a passage from the press release:

The acquisition is expected to enable Stratasys to provide its customers with enhanced collaboration tools and improved accessibility relating to 3D CAD content. The addition of GrabCAD Workbench provides Stratasys with an opportunity to drive communication and ease of use throughout the 3D printing process and grow its technology solutions and user communities. The addition of GrabCAD provides Stratasys with a leading cloud-based collaboration platform for engineering teams to manage, share and view CAD files,” said David Reis, Stratasys Chief Executive Officer. By increasing the collaboration and accessibility of 3D CAD files, we believe we can further accelerate the adoption of 3D printing solutions and Stratasys’ product offerings. Together with GrabCAD, we believe that we will accelerate innovation and provide increased value to a growing universe of customers seeking to utilize 3D printing solutions.

As I learned from GrabCAD website, the team is  working on a new software for 3D printing.

grabcad-3d-printing

Another example is the acquisition of Geomagic by 3D Systems. According to 3D Systems press release:

The combination of Geomagic’s powerful sculpting, modeling, scanning and inspecting software tools with 3D Systems’ portfolio strengthens its 3D authoring platform and positions the company for accelerated growth in the fast-growing, 3D content-to-print space.  The transaction adds complementary products and technology, increases the company’s reseller coverage globally and is expected to be accretive to its non-GAAP earnings in the first full year following the completion of transaction.

Of course, we know that software is eating the world, but I can see here something beyond just acquisition of software teams. It made me think about Full Stack Startup theory. If you haven’t heard about it, read a16z blog by Chris Dixon about the same topic.

The old approach startups took was to sell or license their new technology to incumbents. The new, “full stack” approach is to build a complete, end-to-end product or service that bypasses incumbents and other competitors.

Another article by Chris Dixon can give you even more explanation:

The challenge with the full stack approach is you need to get good at many different things: software, hardware, design, consumer marketing, supply chain management, sales, partnerships, regulation, etc. The good news is that if you can pull this off, it is very hard for competitors to replicate so many interlocking pieces.

What is my conclusion? It looks like 3D printer manufacturers are recognizing the limits of selling “printers only” and looking how to build end-to-end 3D printing service for specific customer communities. It requires a diverse set of skills. Manufacturing is becoming distributed and connected. Software is a one of the key elements these days to make it happen and to deliver 3D printing solutions to customers. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain.

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