How do startups create value with 3D printing?

3D printing (also known as additive manufacturing) is a quickly maturing technology that offers the potential to revolutionize part designs, production processes, and even entire supply chains. Consequently, many startups have positioned themselves along the AM value chain to capitalize of this emerging technology. Yet, their business models and sources of value creation have never been carefully analyzed. We took a closer look at how startups create value with additive manufacturing.

Why 3D printing is much more than a printer

When we speak about making AM work, it is important to understand that there is much more than just the printing hardware. There is a need for an entire ecosystem that is required to work together. Generally, we differentiate between enabling technologies and execution services. Enabling technologies cover hardware and software components, such as printers, materials, design software as well as data management systems that ensure data exchange between all parties involved. Execution services focus on the services required such as designing printable parts, pre- and post-processing activities like design optimization, quality control, and finishing or the fulfilment of the manufacturing.

The four types of start-ups

How do startups select their focus against this huge pool of potential activities? To answer this, we identified 160 firms with a clear AM focus on Crunchbase a leading crowd-sourced database on entrepreneurial firms Next, we classified all activities of each firm in multiple dimensions to analyze in which AM value chain activities they engage and into the value drivers following the principles of novelty, lock-in, complementarities, and efficiency.

We find that startups can be loose grouped into four different segments: hardware providers, software and data experts, full-service providers, and manufacturing orchestrators.

The largest group of startups (46%) fall into the hardware providers, that primarily focus on the provision of AM manufacturing equipment and aim to offer novel and complementary products, aiming to provide more efficient and effective AM solutions. They aim to add value to customers by reducing running costs, improving ease of usage, and increasing production speed and quality. This segment of startup has received the most funding.

The second largest segment are full-service providers (32%) that offer customers seamless processes along the entire AM value chain, from design to production and post-processing. They differentiate themselves by offering novel services, such as part design optimization recommendations, software tools to analyze and prevent build failures or the integration into online marketplaces for file sharing to attract new business opportunities. The two remaining segments are data experts (17%) and manufacturing orchestrators (6%) While data experts offer software to create printable files and provide data management solutions, manufacturing orchestrators coordinate and facilitate the provision of printed objects without utilizing their own machine capacity.

For us, it was interesting to highlight the existence of four distinct segments of startups that differ in their offered activities as well as their sources to create value along the AM value chain. Next, it will be important to understand how viable the different business models and how dynamics in the industry change.

Based on:
Heinen, J. Jakob, Kai Hoberg, and Tim Schlaich. "Creating value from additive manufacturing: An analysis of entrepreneurial firms along the value chain." International Journal of Production Economics 269 (2024): 109146.

Published on 28 March 2024 by Prof. Dr. Kai Hoberg