A large crowd convenes at a Maker Faire for the full scale mouse trap.
This maker movement puts power in the hands of the people to fund, design, prototype, produce, manufacture, distribute, market and sell their own goods. This movement impacts global manufacturing as creation shifts geographically to local, philosophically to sustainability and legally to force the adaptation of new IP laws as people move from consuming to creating and sharing.
The following material features links, sources and dates, sorted in logical orders, to help you find key data that you’ll need to make informed decisions. Additionally, I’ll link to other listings and indexes that will provide further context. One of my goals is to serve as an industry curator to advance our collective knowledge, research, and in addition to own personal understanding. If this is truly a sharing economy, then we must be willing to share what we learn and know with others. If you would like to read an overview that includes three distinct business opportunities for corporations, read the full report on the Collaborative Economy Value Chain. Please leave comments with your input and URL. I’ll be happy to add and credit you.
Scope: The practice of individual people or non-traditional groups creating physical goods and products.
Market Capitalization and Value
- Economic boost: “Makers pump some $29 billion into the economy each year.” USA Today, Oct 2013
- 3D printing value: “The overall market for 3-D printing products and services hit $2.2 billion in 2012, a compounded annual growth rate of almost 29 percent compared to the $1.7 billion the industry recorded in 2011.” Wired, May 2013
- Revenue of 3D printing: “North America & Asia-Pacific accounted for more than 68.0% of the 3D Printing Materials Revenue in 2012.” MarketsandMarkets, Nov 2013
- Surge in sales: “MakerBot [a 3D printer manufacturer] had sold approximately 7,500 machines from 2009 to 2012, generating an estimated $10 million to $15 million in revenue.” Wired, Apr 2012
- Breadth of the movement: Approximately 135 million U.S. adults are makers: “People who employ their creative skills in craft activities, such as making clothing, jewelry, baked goods or works of craft or art. That’s 57% of the American population age 18 and up.” USA Today, Oct 2013
- 3D printing projected growth: “3D printing market is expected to grow at a CAGR of 23% from 2013 to 2020 and reach $8.41B in 2020.” MarketsandMarkets, Nov 2013
- 3D printing projected growth: “3D Printing Industry to Grow to $4B in 2025” IDTechEx, March 2014
- 3D printing growth projections: “World demand for 3D printing is projected to rise more than 20 percent per year to $5 billion in 2017.” Reports and Reports, Dec 2013
- 3D printing historic growth: “There was a 35,000% increase in 3D printers sold from 2007 to 2011, with 66 3D printers sold in 2007 and 23,265 sold in 2011.” Yahoo Finance, Nov 2013
- Increased material demand: “The market for 3D printing plastic materials in terms of revenue was worth $70.5 million in 2012 and is expected to reach $209.6 million by 2018.” Ciol Bureau, Dec 2013
- Europe growth: “Europe is expected to be the second-fastest growing market, with a CAGR of 15.7% from 2013 to 2018, owing to rising consumption in this region, where end-user markets of 3D printing materials are growing steadily, especially in manufacturing industrial and consumer products. The ROW market is expected to grow the least, compared to other regions in terms of revenue.” MarketsandMarkets, Nov 2013
- European position: “Europe is poised to pass the Americas, in terms of revenue in 3D printing, by 2020.” MarketsandMarkets, Nov 2013
- Global demand for 3D printing: “World demand for 3D printing is projected to rise more than 20 percent per year to $5 billion in 2017.” RnR Market Research, Feb 2014
- Global demand for 3D printing supplies: “Global 3D Printing Materials Market to Reach $408.5 Million by 2018” MarketsandMarkets, Nov 2013
- Aerospace growth projections: “Much of the growth in 3D printing from 2014 to 2020 will come from the healthcare and aerospace industries.” MarketsandMarkets, Nov 2013
- North American and Asia Growth: “North America & Asia-Pacific Accounted for more than 68.0% of the 3D Printing Materials Revenue in 2012.” MarketsandMarkets, Nov 2013
- Regional growth: “The North American region dominated the 3D Printing Materials Market revenues in 2012. Asia-Pacific is expected to grow at a high CAGR from 2013 to 2018, followed by the North American region.” MarketsandMarkets, Nov 2013
Venture Capital Investing
- Andreessen Horowitz invested $30M in Shapeways, putting its confidence into the 3D printing industry. Wired, Apr 2013. Previously, Shapeways raised $5m to spin out of Philips. Shapeways Blog, Sep 2010
- MakerBot raised $10M in Venture Round funding. TechCrunch, Aug 2011
- Shapeways raised $48.5M. CrunchBase data from 2014
- CustomMade raised $25.25M. CrunchBase data from 2014
- Etsy raised $60M. CrunchBase data from 2014
- Maker’s Row raised $1M in seed funding. CrunchBase data from 2014
Startup Valuation and Growth
- “CustomMade grew from 350 makers in 2009 to more than 12,000 makers at the end of 2013 with $25.7M in venture capital funding.” Sacramento Bee, Dec 2013
- “TechShop, a maker co-working space, has experienced 798% revenue growth in the last 3 years.” The Verge, Sep 2013
- “Etsy is valued at $600M and has 263 employees. $2.28M per employee. Etsy increased sales by 71% in one year: 2010 – $307M to 2011 – $525M.” BitRebels, Jun 2012
- “Etsy has 875,000 shops; 13,000,000 items; 2,900,000 items sold per month.” BitRebels, Jun 2012
- “There are 15 million Etsy DIYers in over 150 countries with 690,000 new members joining every month.” BitRebels, Jun 2012
- Etsy sellers don’t identify as hobbyists. 74% consider their Etsy shops as businesses. 91% aspire to grow their sales in the future. Etsy sellers are 88% women, 97% run their businesses from home, and they’re geographically dispersed around the US. Income earned on Etsy makes a real difference in people’s lives. It is used for household expenses, discretionary spending, savings and investment. Etsy sellers are characteristic of a larger shift to flexible work. 18% sell goods full-time. Only 26% have other full-time traditional jobs. Etsy shops are a new kind of “start-up” that aren’t run by stereotypical Silicon Valley entrepreneurs who want to grow as big as possible as quickly as possible. Etsy sellers are independent, self-sufficient and they want to stay that way. Survey of 5,500 Etsy sellers, Etsy, Nov 2010.
Mergers and Acquisitions:
- Stratasys acquired MakerBot for $403M, TechCrunch, Jun 2013
- Materialise acquired 3D prototyping firm e-Prototypy, TechCrunch, Feb 2014
- 3D Systems acquired Xerox’s Solid Ink Engineering & Development Teams, WSJ, Jan 2014
- Maker Faire has had over 50 events globally, with flagship events across key cities. Wikipedia, 2014
- Google and MAKE Magazine held the Second Annual Maker Camp, with over 1 million kids participating in the online camp teaching teens to build, hack and explore.” TechCrunch, Jul 2013
- “With its two flagship fairs in San Francisco and New York and 86 worldwide mini-fairs, Maker Faire had 280,000 attendees in 2013.”
Photo used within Creative Commons Licence, by OnInnovation. Please leave a comment and URL with your stats, and I’ll quote and credit you. I’ll be updating this on a regular basis during 2014.
Uber redefines transportation by tapping new business models.
This age-old pyramid diagram above is the basis for many business models. Companies typically choose only one or two of the following qualities: Cheap, Fast, or Quality. To apply this model to the Collaborative Economy, let’s analyze how Uber’s products are fitting into the value propositions across various segments of the triangle. Uber continues to roll out new products, to take on new business opportunities and to combat opposition. To date, Uber is locked in a bloody war with the city of Paris, managing marauding taxi protesters, city regulations that require an Uber to wait 15 minutes before picking up a passenger and increasing bureaucracy at every turn. To combat the latest set of obstacles, Uber has just launched UberPOP, a low-cost, ride-as-a-service, offering smaller cars and cheaper rides than their other products or their traditional taxi competitors.
Uber’s business model is low inventory, high transaction, and high margin.
Uber’s business model is quite simple. They’re a web app, an advanced computer program and a marketing and PR machine. Founder and CEO, Travis Kalanick, said at the recent LeWeb Paris (where I launched Crowd Companies, a brand council for this movement) that Uber is at the intersection of lifestyle and logistics. So why is their business model receiving over $300 million in funding, with a majority of it coming from Google Ventures? Uber is a simple, two-sided marketplace of buyers and sellers. They own no inventory, warehouses, distribution centers or other ancillary overhead required for most traditional business models to operate. Uber hasn’t gone without challenges. Critics point out that Uber is disrupting taxi business models, city taxes and traffic. Even Uber workers had a relatively quiet protest over lost wages, followed by, of course, controversial surge pricing.
The above graphic breaks down Uber’s more popular products, including:
- Uber Town Car. They’re best known for this mode, which birthed the company. Drivers must maintain a 4.6 star rating out of 5.0.
- Uber X. Regular cars owned by regular people who drive. Some are former taxi drivers. Cars must be no more than a few years old and clean. Drivers are also rated.
- UberPOP. Recently launched in Paris, this offers smaller, lower-priced cars, which look nearly like ride-sharing business models.
- Uber SUV. This larger version offers more room to take a group of folks around town or to a destination.
- Uber Helicopter. Last summer, wealthy Manhattans who loathe hours in traffic could take a town car to a helipad and be whisked away to the Hamptons in minutes.
Seven lessons from Uber’s business strategy.
What can large corporations learn from Uber’s successful business model?
- Don’t be afraid to disrupt someone else’s business flow. Uber’s CEO shared on stage that he prints and tapes “cease and desist” letters on his office walls.
- Owning inventory is a liability, because being the middle marketplace is lower risk and higher margin.
- Tap the internet of everything, by applying sensors via mobile devices to find idle resources in a local area.
- Map those idle resources to buyers, using prepaid mobile apps.
- Deliver, and take at least a 15% commission from the transaction.
- Surge pricing is free market economics, the purest form of unregulated capitalism.
- Embrace bad PR as a marketing windfall. Bad press is still better than no press.
What else is Uber up to? This week, for Valentine’s day, you can order skywriting (nothing says I love you like 1200 point font), special deals for Vegas, including a stay at the Cosmo hotel, ice cream on demand, Super Bowl celebrations on your street with Pepsi, Christmas trees via Home Depot, and of course, kittens on demand. Purr.
Question: When the crowd gets what they need from each other, who will monitor, regulate, ensure, and even insure?
Olivier Blanchard, a leading voice for digital business, posed a great question to a Facebook group in which we participate, asking how the sharing economy will contend with jerks that will mess with the sharing space. I’m paraphrasing his excellent question: “There are millions of jerks out there who will either resist this outright or try to twist it into something else if they get a chance.” He’s right. There are incidents that have already happened where someone visited an Airbnb and trashed the house, a car-sharing driver killed someone, crowd-funding has been used to commit fraud or, in the gift economy where people share goods for free, haven taken all and given little. This important topic was addressed at yesterday’s Resilient Summit, an event in Kansas City that I’m co-hosting.
Four Ways the Collaborative Economy Weeds out the Jerks.
I’d like to share the ways I’m seeing these crowd-based systems develop that are helping to identify jerks, and purge them from the system, as well as reward behavior that the community is seeking. Here’s what I’m seeing:
- Background checks to vet out bad players. First of all, some of these startups provide a form of screening, although quality widely varies. Airbnb for example, requests that hosts, and often guests, provide driver license screenshots which can aid in background checks. Companies like Scoot Networks (electric scooters on demand) conduct background checks for driver records. I’ve read, and heard, that Lyft and Uber conduct very light checks on safety of cars, but due to scale likely can only confirm if a car is newish model. There’s an opportunity for more rigorous background data to be shared across the industry and from traditional players.
- Tapping the social graph as a form of trust. I frequently make the case that the first phase of sharing is social media, and that the collaborative economy (the physical world) is the second phase. I studied a sampling of 200 sharing startups and found that 74% of the startups had integrated some form of social profiles, recommendations or even Facebook Connect. For example, Airbnb offers Facebook Connect, so you can see which of your friends (or friends of friends) is offering a place to stay – or which of your friends has actually stayed there. Since we don’t have the trust mark of a brand like a major hotel logo, the crowd leans on real world personal profiles, like Facebook.
- Two-way ratings, where buyers and sellers rate each other. Traditionally eBay, Amazon and others have enabled customers to rate the selling company’s goods and performance. Now, because trust marks (brand logos) are not readily apparent in the peer-to-peer collaborative economy, we’re seeing new rating models emerge. We already know that buyers are rating sellers. For example, unlike Taxis, Uber riders can rate their drivers and cars. I’ve learned that Uber drivers must maintain at least a 4.6/5.0 rating or they are booted. On the flip side, the drivers are rating the passengers! If you don’t maintain a high rating, you may not get picked up on that late night out on the town. So, do as our moms taught us. Behave.
- As a failsafe, new insurance products are emerging. This new market is complex and risky. The rules of liability are unclear as we shift “to a lifestyle of access over ownership,” as Lisa Gansky refers to it. Consequently, we’re seeing new forms of liability coverage emerge. When I rented out my car, RelayRides promised me a $1m coverage. But I still felt somewhat uneasy, as I wasn’t clear about to what extent this would protect me. Also, ride-sharing services like Lyft have announced that they’re expanding their insurance coverage.
- Update Feb 2015: Uber has now introduced a “panic button” on the app.
The system will break, then fix. Accidents will happen and jerks will game the system. Then the system will self-correct. Expect this self-healing process to go on for many years. The process of self-correction is a component of nearly anything systemic. On a similar note, in the social media space, we saw the rise of trolls. Then Facebook, Twitter, Wikipedia and eBay launched reputation, purge and block features to try to rid of jerks. It’s working, but it’s still not perfect. Of special interest for me, my legal contact, Kyle-Beth Hilfer, just published a relevant paper with Collen IP discussing branding and IP usage in the Collaborative Economy, citing some of my work on the subject.
The Uber NYE accident is a landmark case. While I’m not suggesting anyone in this case is a jerk, on NYE a few weeks ago, a young child was struck by an Uber driver and killed; the family injured. There’s uncertainty, as the driver was an Uber driver, but was in-between rides and didn’t have a paying customer in his car. Furthermore, many groups could be liable, including the city, the driver, the drivers insurance, the family or Uber themselves. This is a landmark case and will set precedent on future incidents.
The crowd will develop its own insurance products. Expect a crowd-designed and crowd-funded insurance product to emerge that covers individuals as they traverse the world in in a sharing and access lifestyle, one that protects both the buyer and seller for this P2P transaction economy. We might also see a hybrid version where a traditional insurance company resells their coverage to an organization in the crowd, creating a “pan-coverage” plan. Imagine how two-way ratings could actually reduce your liability and, therefore, your rates in a crowd-funded insurance plan.
Photo used under creative common license by Mark Atwood