Management Question

Anonymous
timer Asked: Nov 7th, 2016

Question description

Case Question: Using the concepts from this week’s chapter and case, how is the 3D printing industry likely to emerge and what factors will affect this emergence? 250 words max.

For the exclusive use of W. Ali, 2016. Entrepreneurial Leader Collection BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry MakerBot CEO Bre Pettis chuckled when he saw the Robot Chess Set, the latest addition to MakerBot’s online platform where customers proudly displayed and shared 3D printed objects. Thingiverse, as the site was called, boasted over 9,000 files. From the whimsical (wizards and dragons), to the practical (Sonicare toothbrush holder), to the serious (a clip to hang and cool insulin on a car’s air conditioning vent), here was where MakerBot customers shared digital design files so others could enjoy and build on their creations. Pettis and co-founders Adam Mayer and Zach Smith all shared a deep passion for robotics. When these self-proclaimed hackers initially came together in Brooklyn, New York, they set out to create a robot company. According to Pettis, “We were sitting around trying to decide what we should name our company, and we said OK, we are going to make robots that make things, so we are going to make making robots. What shall we call it? What about MakerBot?” And so in 2009, MakerBot Industries was born, which quickly became a leader in the personal 3D printing industry. While 3D printers, or printers that printed physical objects, had existed since the early 1980s, they were large machines costing several hundred thousand dollars. In 2009, as Apple had done in 1976, MakerBot offered its first product in the form of a kit. Enthusiasts who wanted to build their own 3D printers and enter the brave new world of personal manufacturing could do so for under $1,000. In 2012, having shipped over 10,000 units, MakerBot’s founders were on their way to achieve their goal of putting a factory on hundreds of thousands of customer desks. However, they also faced strong competition from start-ups like themselves who targeted consumers, large 3D printer manufacturers targeting the industrial/professional market, and cloud-based 3D printing service companies. In addition, since MakerBot’s printer was based on open-source design, there was the ever-present threat of copycat machines. As Pettis turned his attention back to issues of the day, he grew serious as he contemplated the upcoming company-wide meeting, knowing his staff would be looking for guidance on how to move forward in this fast-evolving industry. Could MakerBot continue on a growth trajectory with its current target market and open technology strategy? This case was prepared by Lecturer Ruth Gilleran and Assistant Professor Erik Noyes of Babson College as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Funding was provided by the Teaching Innovation Fund (TIF) at Babson College and the case was created using secondary information. Select segments of this case were adapted from Teaching Entrepreneurial Action by Erik Noyes and Candy Brush. Special thanks to Matt Muller for his research assistance. Copyright © 2015 Babson College and licensed for publication to Harvard Publishing, Inc. All rights reserved. No part of this publication can be reproduced, stored or transmitted in any form or by any means without prior written permission of Babson College. This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Founding MakerBot Industries MakerBot Industries was created based on Smith’s early experience launching the RepRap Research Foundation. MarketBot’s primary objective was to build an inexpensive, open-source 3D printer. (See Exhibit 1 for an explanation of the RepRap Research Foundation. See Exhibit 2 and Exhibit 3 for a definition of open-source.) Instead of taking the conventional path of crafting a business plan, Pettis, Mayer, and Smith began by demonstrating proof-of-concept. Severely resource-constrained, the team fashioned prototypes from readily available open-source hardware and software. In a sense, MakerBot’s founding venture team included the whole open-source community, which was committed to innovation and the excitement that comes from making things transparent, accessible, and modifiable. Eventually the team approached a mutual friend, Jake Lodwich, for a $50,000 seed investment. Lodwich allowed them to occupy a small corner in his office building to handle inventory and shipping. Soon after, Dr. Adrian Bowyer, an acquaintance from the RepRap Research Foundation, contributed an additional $25,000 to help develop the first round of prototypes, bringing the total initial investment to $75,000. Making the first working prototype, nicknamed Eve, was a challenge, as were all the next iterations to get to Dolores, a production-grade machine which later became the basis for MarketBot’s first product. According to the team, “During the early development of MakerBot, we went through an intense, iterative design process where mistakes were made and fixed. We came up with a host of improvements.” Exploring the concept’s viability dwarfed the typical trappings of launching a venture, such as developing marketing materials, setting up an advisory panel, or forging broader relationships with investors. Without a breakthrough affordable device that could be used by the masses, the venture would never get off the ground. Their first product, CNC Cupcake, a homebased 3D printing kit for do-it-yourself (DIY) enthusiasts, helped MakerBot share its passion for what the team called personal manufacturing, a non-existent industry at the time. Game-Changing Technology In 1984, Charles Hull invented 3D printing technology when he developed a technique he called stereolithography. The process consisted of laying down successive layers of media, usually plastic, to build up 3D objects. The technique became known as additive fabrication or additive manufacturing to distinguish it from the former subtractive technique that involved starting with raw material that was cut, drilled, and cleared away until an object was formed. The 3D printing process involved using a digital image file obtained in one of three ways. First, an image could be created using computer-aided design and manufacturing (CAD/CAM) software modeling tools, such as professional-grade Autodesk or freeware such as SketchUp or Blender. Second, a 3D scanner could be used to create a model of an existing physical object to replicate or modify. (Click on the following link to listen to talk show host Jay Leno describe how he used a 3D scanner to create a digital image of an old car part. http://www.youtube.com/watch?v=cmijRV-qlvc&feature=relmfu) Third, individuals could download digital image files from community sites such as Trimble’s (formerly Google’s) 3D 2 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Warehouse (http://sketchup.google.com/3dwarehouse) (http://www.thingiverse.com). or MakerBot’s Thingiverse With the digital image saved in the industry-standard stereolithography (STL) file format, the user opened the model in the 3D printer software, where it was sliced into digital layers in preparation for the additive printing process. The most common 3D printing method, and the one used by MakerBot, was Fused Deposition Modeling (FDM), which was patented by Stratasys, a 3D printer manufacturer targeting the professional market. In the FDM method, the material in the form of a wire was fed through a heated chamber and the melted material deposited onto a build platform in very fine layers. After printing, post-processing included removing the raft, or support, from under the printed object. This was done either manually using one’s hands to break away the base and excess material from the product, or chemically by placing the item in a separate unit containing a dissolving solution. 3D Printing Innovations According to Terry Wohlers, president of Wohlers Associates, a technology and strategy consulting firm that specialized in additive manufacturing, the 3D printing industry was expected to reach $3.1 billion worldwide by 2016 and $5.2 billion by 2020.1 Only 28% of the money being spent on 3D printing was for final products, but this expenditure was expected to exceed 50% by 2016 and 80% by 2020.2 This suggested 3D printing was evolving from a prototyping tool to an end-manufacturing platform. Even though toys and gadgets had dominated the consumer 3D printing landscape, academic researchers and enterprises had been experimenting with serious practical applications. In September 2011 at a TEDxWinnipeg event, Canadian based transportation and engineering firm KOR EcoLogic unveiled the Urbee (Urban Electric with Ethanol), the first 3D printed car. The body of this two-passenger hybrid vehicle was fabricated by RedEye on Demand, a business unit of 3D printing company Stratasys providing rapid prototyping and manufacturing services to a wide variety of industries. The Urbee Source: Image provided and approved for reproduction by KOR Ecologic CEO Jim Kor, whose firm is developing the Urbee vehicle. 1 T.J. McCue, “3D Printing Industry Will Reach $3.1 Billion Worldwide by 2016,” Forbes Magazine, March 27, 2012. 2 “Solid Print; Additive Manufacturing,” The Economist, April 21, 2012, accessed via ProQuest Central, June 15, 2012. 3 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Other early adopters of 3D technology were the medical and dental industries. At GE’s new additive manufacturing facility in Niskayuna, New York, 3D printers were being used to print ultrasound devices. Bespoke Innovations, a subsidiary of 3D System Corporation, helps individuals with congenital or traumatic limb loss, printed prosthetic coverings for artificial limbs. Medical researchers had printed 3D knee implants and replacement jaws for years, and patients were being fitted with 3D-printed hearing aids, crowns, bridges, aligners, and dentures, all made using a variety of materials. Dr. Anthony Atala, a surgeon from the Wake Forest Institute for Regenerative Medicine, printed human organs using living cells. (Click below to hear Dr. Atala describe this process. http://www.ted.com/talks/anthony_atala_growing_organs_engineering_tissue?language=en) To illustrate how manufacturing technology could create complex structures such as that of a violin, German technology and manufacturing firm EOS (http://www.eos.info) printed a replica of a Stradivarius violin. (Click below to listen to British violinist Simon Hewitt Jones play this unique instrument. http://www.youtube.com/watch?v=bJA6J5girlo) In 2011, Time Magazine included prominent Dutch fashion designer Iris van Herpen’s 3D printed dress in its list of 50 Best Inventions. The ready-to-wear dress was printed using a polymer material. Escapism Dress by Iris van Herpen © Victoria and Albert Museum Source: http://www.scoop.it/t/arslog?page=3 accessed June 2012 Finally, 3D printers increasingly had been exploited for darker criminal pursuits. They had been used to make ATM card-skimming devices to capture data from bank card magnetic strips, as well as keys to unlock police handcuffs. In 2011, an illegal firearms magazine (or storage and feeding device) for an AR-15 rifle was shared on Thingiverse.com. 4 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry An Open Approach From an ideological perspective, Pettis, Mayer, and Smith had always disdained existing “closed” platforms of industrial 3D systems that used proprietary hardware and software. Their vision was to launch and grow MakerBot using only open-source technology so that their first customers could understand, tinker with, and improve their products. Because everything was open-source, MakerBot owners could modify and share not only software adaptations, but also new hardware innovations. For example, the Frostruder was an early hardware modification that enabled MakerBot printers to extrude frosting, thus providing customized 3D edible creations. Over the years, other MakerBot owners had also created more broadly useful tools and add-ons, such as laser-cutting heads and computer-controlled drawing tools to expand the printer’s capabilities. In a 2010 interview, Pettis explained MakerBot ideals, which contradicted those of the existing 3D printing industry where business models were built on proprietary hardware and software. We’re open-source nerds. We want people to feel like when they get our printer, they actually have it. I recently got a 1970s KLH record player. And you know what? It came with a manual, and in the manual were all the schematics for the electronics, because if it broke, you should know how to fix it! Somehow, since then, people got into the idea that, oh, you just get a box, and it’s going to do something for you, and then you are going to throw it away. I want people to know how things work so they can modify it, they can fix it, they can really own it! Also consistent with an open-source mentality, MakerBot’s 3D printers used only nonproprietary consumables to build objects. This allowed MakerBot customers to buy printing consumables from a wide range of plastics distributors, unlike with the lock-in strategy most 3D printing companies pursued. Specifically, MakerBot printers used industrial ABS plastic, the same plastic used to make children’s Lego blocks. MakerBot sold plastic spools in an array of colors. These materials could be sourced through locations and distributors worldwide. By making printing media nonproprietary and therefore low cost, MakerBot encouraged its customers and the open-source community to print and experiment extensively with its machines. These software, hardware, and consumables decisions changed the historic business model for both 3D and 2D printing. The aim was not to make each customer a captive of the system, but rather an innovator, with potential to shape the newly forming personal manufacturing industry. The Maker Community Because of its open approach, MakerBot shipped most of its machines to DIY (do-ityourself) enthusiasts and members of the so-called maker community. Working in garages and basements late into the evening, these individuals formed a subculture of independent tinkerers 5 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry who liked to create and share technological inventions. Makers were motivated less by money than by a sense of personal accomplishment, group creativity, and community. Some called Make magazine the bible of the maker community. Make’s publisher, O’Reilly Media, sponsored Maker Faire, an annual public event part festival, part science fair, and part playground. Here the maker community met to create, explore, and share innovations using new technologies. In 2006, the first Maker Faire took place in California and drew 20,000 attendees. The 2012 festival in California attracted over 100,000 DIYers who tried the latest 3D printers in the 3D Printer Village. Not to be outdone by Hollywood, the maker community bestowed its own award, the Makey, given out by Make magazine at the fair. A MakerBot artist designed the trophy, and in the true spirit of the award, it was produced on a MakerBot printer. The 2011 Makey Awards Source: http://blog.makezine.com/2011/09/16/and-the-makey-goes-to/? accessed June 2012 Interest from Big Industry and Government The maker movement attracted support from powerhouses such as GE, Ford, the Kauffman Foundation, and the White House. All saw makers as a vital source of future innovation and economic growth. GE partnered with TechShop (http://www.techshop.ws) to fund free innovation and manufacturing spaces called GE Garages (http://www.ge.com/garages). Anyone could go to a garage to learn about the latest manufacturing techniques. Garages were fully equipped with 3D modeling software, printers, and materials, as well as traditional manufacturing tools such as mills, cutters, welders, molders, and saws—all with the aim to help generate home-grown innovation. GE’s partner, TechShop, was a membership-based workshop and fabrication facility where for approximately $99 a month, DIYers had access to over $750,000 worth of equipment. TechShop had recently opened a new location, TechShop Detroit, in partnership with Ford 6 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Global Technologies, a division of the Ford Motor Company. To spark creativity within its organization, Ford encouraged employees to use the facility for either company or personal projects. Startup Weekend (http://www.startupweekend.org), a not-for-profit organization based in Seattle sponsored by the Kauffman Foundation, focused its recent San Francisco event on creating physical goods instead of software products. Entrepreneurs taking part in this intense 54-hour competition were provided with 3D software and hardware tools and were asked to develop a business plan and a prototype. The strongest signal of support for the maker movement came from the White House. In March 2012, President Obama announced the creation of the National Network for Manufacturing Innovation (NNMI) which created the National Additive Manufacturing Innovation Institute (NAMII). The NAMII brought together leaders from industry, academia, and government to educate and train workers in advanced manufacturing techniques—all with the aim of generating new industries, jobs, and international leadership in this area. The U.S. government allocated $30 million over the next three years to help fund this program.3 From Hobbyist to Entrepreneur Feeling both encouraged and supported, many makers turned from hobbyists to entrepreneurs. With 3D printing, economies of scale did not exist, as the same per-unit cost applied whether one made a single item or several hundred. Therefore, makers could cheaply run a series of experiments. Also, because the 3D object was built up layer by layer, little material was used or scrap produced, thereby helping to lower material costs. Thus, when makers were ready to introduce new products, they no longer had to worry about purchasing molds, ordering large lot sizes, or carrying excess inventory. Instead, they were able to address uncertain demand by initially targeting small markets. If they met with success, they could then use traditional manufacturing methods for mass production, since these methods produced a higher quality product with lower unit costs.4 Markerbot’s Competition When MakerBot opened its doors in 2009, an established ecosystem of companies made 3D printers. Each year new companies sprang up targeting the DIY market. Since most of these companies were an outgrowth of the open software and hardware movement, it was fairly easy for them to enter the marketplace. DIYers were also expected to be an attractive future target market for established 3D systems manufacturers. In 2011, signaling a partial shift from large industrial customers to makers, 3D Systems announced it would pour a third of its R&D budget into the consumer market.5 "Call for Proposals to Create Additive Manufacturing Innovation Institute." M2 Presswire: n/a. ProQuest Central. May 16 2012. Web. 14 June 2012. 3 4 Interview with Chris Anderson. Disruptive Technology. How new Technology is Affecting the Traditional Business World. Perter Hopkins. 2010. HP input/Output. 5 Yu, Roger. "A New Dimension of Printing." USA TODAY: B.1. ProQuest Central. Feb 21 2012. Web. 16 7 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry MakerBot also faced competition from the growing ecosystem of 3D cloud-based companies.6 Cloud platforms had emerged to support the use of productivity and business applications, and cloud-based 3D production service companies had sprung up anticipating the predicted growth of this new industry. Two such start-ups helped bring 3D printing technology to the masses, Shapeways (http://www.shapeways.com) and Ponoko (http://www.ponoko.com). Vertically integrated making chains, a term coined by WIRED magazine editor-in-chief Chris Anderson, allowed customers to design, print, share, and sell their creations. The process was simple. Customers either uploaded a digital model, or instead of designing an object from scratch, searched through these websites for models to customize. Next, they selected from an array of materials such as polymer, stainless steel, sterling silver, sandstone, ceramic, or glass. After the customer received a price quote, the item would be printed and shipped, or the customers could elect to sell their 3D printed objects on these sites. After a series of mergers and acquisitions, only two major 3D printing leaders, 3D Systems and Stratasys, targeted and served business professionals. These companies had two major revenue streams: printing devices and consumables. In industrial 3D printing, the ideal customer locked in to a particular system and printed abundantly, guaranteeing a healthy stream of consumables revenue. To operate and grow, an industrial 3D printing business needed relationships with industrial designers and new product managers (in corporations and industrial design firms), as well as steep investments in technology R&D and intellectual property protection. (See Exhibit 4 for a list of MakerBot competitors.) Enter Hewlett-Packard (HP) In 2010, California-based HP, the company that dominated office printing, entered the 3D printing industry, albeit quietly. HP signed an agreement with competitor Stratasys to manufacture a 3D printer under the HP-branded name DesignJet. Boasting simplicity, reliability, global support, and an intuitive interface anyone could use, the 3D printer was marketed only in Europe. With a price tag of about $17,000, the machine targeted engineering, R&D, and product development professionals, as well as educators who taught model-making and prototyping. In contrast to MakerBot’s open hardware and software technology, the HP printer exploited proprietary hardware, software, and consumables, which fit HP’s historic 2D printing strategy. As 2D printing consumables (ink) yielded billions to HP yearly, there would be significant pressure to maintain its proprietary consumables strategy. In August 2012, Stratsys announced it would discontinue its manufacturing and distribution agreement with HP at year-end, approximately three years after the agreement had been signed. HP had no comment at the time of this announcement. (See Exhibit 5 for a revenue breakdown of 3D printing companies targeting professionals) 6 Robert Kross, “How 3D Printing Will Change Absolutely Everything It Touches,” Forbes Magazine, August 17, 2011. 8 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry MakerBot Takes Off In September 2010, shortly after shipping over 2,000 Cupcake model printers, MakerBot released its newest product, known as the Thing-O-Matic. Compared to other models, the machine had higher print speed and greater reliability, and it was billed as a user-friendly, clickand-print solution. Early in 2011, MakerBot’s technical and marketing achievements drew the interest of Bezos Expeditions, the personal investment fund of Amazon CEO Jeff Bezos. In August 2011, Bezos, drawn to its disruptive technology, committed $10 million to MakerBot. The Foundry Group, True Ventures, and RR committed additional funds. This capital infusion helped MakerBot grow. In November 2011, MakerBot shipped its 6,000th unit. In January 2012, MakerBot announced its next printer, the Replicator, more powerful than previous models and capable of printing in two colors simultaneously. It enabled printing with multiple materials on an enlarged build platform, so one could print objects about the size of a loaf of bread. According to Pettis, the machine targeted “industrial designers and engineers, parents and teachers, or any ordinary person who wants to live in the future.” Unlike its predecessor, the Thing-O-Matic, the Replicator was not sold as a kit. The fully assembled product cost $1,749. (Click below for a video on the MakerBot Replicator. http://www.youtube.com/watch?v=DY6VSu-oOws) With the success of the Replicator came the need to expand. MakerBot printers were selling worldwide and employees had difficulty meeting global demand while working in cramped quarters. In May 2012, having grown to over 125 employees, MakerBot announced it would move to MetroTech Center, a business and educational site in downtown Brooklyn (New York City), where it would occupy the entire 21st floor or 31,000 square feet of office space. According to Pettis, “The new space appealed to the company for ease of transportation, views of the bridges, and proximity to Five Guys and Shake Shack eateries that had opened nearby."7 It was anticipated that by the end of 2012, the company would hire for a broad range of new positions so it could continue to pursue agressively its vision of affordable home and office 3D printing. (See Exhibit 6 for a timeline.) MakerBot: Key Challenges Ahead As Pettis prepared for his staff meeting, he couldn’t help but be pleased with how far MakerBot had come in a short period of time. The past three years had been exhausting yet exhilarating for the team. Long hours had resulted in shipment of over 13,000 units. Venture capitalists and industry investors had shown that enormous potential lay at the nexus of the maker movement and emerging technologies. Clearly 3D printing was evolving from a prototyping tool to an end-manufacturing tool for printing final products. MakerBot had taken a lead role defining a new industry with countless possibilities. The company and its products were being featured in newspapers (Wall Street Journal, New York Times, Washington Post, Los Angeles Times, and USA Today), in magazines (Time, Forbes, The Economist, and WIRED), on major TV networks (ABC, CBS, and NBC), and on radio stations 7 Laura Kusisto, “Putting the Tech in Metrotech,” The Wall Street Journal, May 7, 2012. 9 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry (BBC and NPR). Pettis had even been a guest on the late night television show, The Colbert Report, where he printed a 3D image of Stephen Colbert’s head.  As Pettis and his team pushed ahead, they faced some daunting questions:  How could MakerBot lead growth of the new personal manufacturing industry?  Long term, how potent was MakerBot’s open innovation strategy focused on crowdsourcing, in the face of rising competition?  To what degree were larger established players from the industrial/professional markets a competitive threat?  Were makers and DIYers a big enough market to fuel future growth? 10 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706 APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 1: RepRap Project An important milestone in the history of 3D printing was the creation of RepRap, or the Replicating Rapid Prototype printer. The RepRap was the first open-source 3D printer, and many 3D printing company start-ups had their roots in this project. The RepRap printer was not designed for the general public, but for people with technical backgrounds. Since the printer was open-source, individuals downloaded RepRap designs from the project website and made rapid prototyping machines commercially available. MakerBot was the first company to do so. The RepRap project originated in 2004 at the University of Bath in Bath, U.K. The U.K. Engineering and Physical Sciences Research Council and Bath University’s Innovative Design and Manufacturing Research Centre provided funding. Dr. Adrian Bowyer started the project with the goal of building a printer that could replicate itself. The vision was to put a “factory” in every home, and because of the printer’s replicating capability, a factory that could make more factories. This goal was achieved in 2008 when the initial printer printed the majority of its parts. The RepRap team wanted the machine to be accessible in developing as well as developed countries, so they mandated that non-replicable parts be inexpensive and available worldwide. Started by 16 individuals, the RepRap project (http://reprap.org/wiki/Main_Page) comprised developers from around the globe. As with all open-source projects, product enhancements were expected to come from individuals similarly committed to the cause. The RepRap printer was licensed under the General Public License (GPL) (http://www.gnu.org/copyleft/gpl.html), the most widely used free software license. It required individuals who improved the machine to make public their improvements under a similar free license. In accord with the GPL, MakerBot’s distributed its RepRap-derived machine free and open-source. Because the RepRap was self-replicating and open-source, estimating the exact number of machines was impossible. However, the RepRap website asked community members to display locations of their projects on a website map. Based on this map, it was clear the machine had widespread, global adoption. (See Exhibit 7 for map display of locations.) Source: Valero-Gomez, A.; Gonzalez-Gomez, J.; Almagro, M.; Salichs, M.A.; , "Boosting mechanical design with the C++ OOML and open source 3D printers," Global Engineering Education Conference (EDUCON), 2012 IEEE , vol., no., pp.1-7, 17-20 April 2012. http://www.reprap.org/wiki/Main_Page accessed June 14, 2012 11 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 2: Open-source Software At the core of the open-source movement was a community of developers who came together with the shared goal of building a product that anyone could enhance. Often laboring for free, these individuals willingly contributed their software development expertise in order to be part of something greater than the components they contributed. Because the open-source development effort leveraged the collective skills and intelligence of many, the end result was often a product superior to the popular mainstream alternative. As proof, most modern-day websites were built using the LAMP software stack, four applications that worked together to help power the web: Linux (operating system), Apache (web server), MySQL (database), and PHP (programming language). Unlike most purchased software for which the code was proprietary, with only object- or machine-readable code provided to the user, open-source software was published under licenses requiring the source code be made available to everyone to inspect, change, download, and explore. Its governing license ensured that the source code for derivative works was also made available. (See Exhibit 3 for the definition of open-source provided by the Open Source Initiative, a non-profit organization with the goal of educating the public about its advantages and encouraging its use among software developers.) Open-source was an outgrowth of the Free Software Movement started by Richard Stallman, a developer, software freedom activist, and original author of the GPL. In 1983, Stallman began developing the GNU Operating System on which Linux, the UNIX operating system, was created. Open-source proponents stressed development methodology, whereas the free software group was more a social movement. Because open-source leaders focused on practical benefits of free software, the term open-source grew in popularity among business professionals. When either group used the term free, neither referred to price. Richard Stallman was famous for saying, “To understand the concept, you should think of free as in free speech and not as in free beer.” Companies developing open-source software typically charged for premium packages, add-ons, or technical support. Sources: Free Software Foundation: http://www.fsf.org/ accessed June 14, 2012 GNU Operations System http://www.gnu.org/philosophy/free-sw.html accessed June 14, 2012 12 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 3: Open-source Definition from the Open-source Initiative Open-source did not refer only to access to the source code. The distribution terms of open-source software were required to comply with the following criteria: 1. Free Redistribution The license shall not restrict any party from selling or giving away the software as a component of an aggregate software distribution containing programs from several different sources. The license shall not require a royalty or other fee for such sale. 2. Source Code The program must include source code, and must allow distribution in source code as well as compiled form. Where some form of a product is not distributed with source code, there must be a well-publicized means of obtaining the source code for no more than a reasonable reproduction cost preferably, downloading, via the Internet without charge. The source code must be the preferred form in which a programmer would modify the program. Deliberately obfuscated source code is not allowed. Intermediate forms such as the output of a preprocessor or translator are not allowed. 3. Derived Works The license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software. 4. Integrity of the Author's Source Code The license may restrict source code from being distributed in modified form only if the license allows the distribution of "patch files" with the source code for the purpose of modifying the program at build time. The license must explicitly permit distribution of software built from the modified source code. The license may require derived works to carry a different name or version number from the original software. 5. No Discrimination Against Persons or Groups The license must not discriminate against any person or group of persons. 6. No Discrimination Against Fields of Endeavor The license must not restrict anyone from making use of the program in a specific field of endeavor. For example, it may not restrict the program from being used in a business, or from being used for generic research. 7. Distribution of License The rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties. 8. License Must Not Be Specific to a Product The rights attached to the program must not depend on the program's being part of a particular software distribution. If the program is extracted from that distribution and used or distributed within the terms of the program's license, all parties to whom the program is redistributed should have the same rights as those that are granted in conjunction with the original software distribution. 9. License Must Not Restrict Other Software The license must not place restrictions on other software that is distributed along with the licensed software. For example, the license must not insist that all other programs distributed on the same medium must be open-source software. 10. License Must Be Technology-Neutral No provision of the license may be predicated on any individual technology or style of interface. Source: http://opensource.org/osd accessed June 14, 2012 13 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 4: MakerBot’s Competition for Additive Manufacturing 3D Printing Target Market Current Company Model Product Launch Date Consumers (Hobbyists, Enthusiasts) RepRap ProjectBath University Fab@HomeCornell University MakerBot RepRap 2004 Fab@Home 2006 Cupcake CNC Thing-O-Matic Replicator™ RapMan 2009 2010 2012 2009 BotMill 3D Touch 2010 2011 Cube ProJet™ 1500 Shapercube Utlimaker Soliddoodle 2012 2011 2010 2010 2011 Zprinter ProJet™ Series 3500 and beyond Dimension uPrint Mojo Object 2003 2012 HP DesignJet 2010 3D Systems ProJet™ Series 6000 and 7000, iPro, SPro, VX Fortus 2010 3D Systems Previous CompanyAcquisition Date Bits From Bytes2010 BotMill-2011 Bits From Bytes2010 Shapercube Utlimaker Soliddoodle Professional 3D Systems ZCorp-2011 Stratasys Object-2012 Production Stratasys FDM Group 2002 2008 2012 1998 2007 Source: Compiled from multiple materials and media based on author research. 14 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 5: Revenue of 3D Printing Companies Targeting Professionals Company Year End Revenue Net Income HP Oct 31, 2012 $120,354,000,000 $12,650,000,000* 3D Systems Corp Dec 31, 2011 $230,400,000 $35,400,000 Stratasys Dec 31, 2011 $155,900,000 $20,600,000 * Total HP Revenue, not 3D printer revenue Source: Thompson One https://www.thomsonone.com/Workspace/Main.aspx?View=Action%3dOpen&BrandName=www.thomsonone.co m&IsSsoLogin=True accessed January 2013. 15 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 6: MakerBot Timeline 2009 January 2009 - Company Founded February 2009 – First prototype (Eve) created March 2009 – Second (Sarah) and third (Dolores) prototypes created December 2009 - MakerBot version 1, Cupake CNC ships 2010 February 2010 - 500th Cupcake CNC shipped April 2010 - 1,000th MakerBot shipped September 2010 - MakerBot version 2 released, The Thing-O-Matic October 2010 - 2,000th MakerBot shipped 2011 August 2011 - Foundry Group, Bezos Expeditions, and more invest $10 million in MakerBot November 2011 - 6,000th MakerBot shipped 2012 January 2011 – MakerBot version 3 released, the Replicator April 2011 – Over 10,000 MakerBot’s shipped Source: MakerBot website http://www.makerbot.com/press/ accessed June 2012 16 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016. For the exclusive use of W. Ali, 2016. BAB706C APRIL 2015 Revision MakerBot: Challenges in Building a New Industry Exhibit 7: Google Map Displaying Location of RepRap Machines Source: http://maps.google.com/maps/ms?ie=UTF8&hl=en&msa=0&msid=117099291054388532447.0004409098b1c5b71 2553 accessed June 15, 2012 17 This document is authorized for use only by Wafa Ali in Business Government and Society taught by Gregory Theyel, California State University - East Bay from September 2016 to December 2016.

Tutor Answer

(Top Tutor) Studypool Tutor
School: UC Berkeley
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors