This post is the second in a series on the topic of 3D Printing (aka, additive manufacturing). We will continue to explore this area, including topics like the respective roles of hardware and software, crossing the mass-adoption chasm, emerging material science, marketplaces and networked-platforms, and the ongoing impact of industry pioneers and namesake transactions. You can find the full series, here.
The first question any VC gets is, What are your areas of interest? For me, the thing that gets me most excited is less about individual technologies or end markets, but about the portion of GDP that an innovation can address. Sure, its easy to look at any giant markets and see dollar signs, but whats even more important for me, is that it means a disruptive technology can have an outsized impact and improve the world in which we live.
Generally, this means I look for areas that have the following characteristics: (1) huge end markets; (2) big problems solvable through technology; (3) some level of regulatory or standards know-how; and (4) positive impact on the world.
Some industries that check these boxes are obvious: Health, energy, transportation. Others, like food, education, human capital management, and manufacturing, may be less so. But there are opportunities across the board.
My partner Yves Sisteron recently wrote about Upfronts theses around food, and I think its a great example of the kind of impact-anchored thinking that can lead to great outcomes, both in business and socially. Many think of food as a crowded space with news of funding from the likes of Soylent, Blue Apron, and Munchery. But, while these companies may address somefirst-worldpain points, those of us who are fortunate enough eat roughly ninety meals per month know that these optionsare but a small piece of the broader solution to our global food needs. Global issues around water, waste, distribution, population growth, and pollution make food an area ripe for thoughtful investment.
Transportation represents another major segment of GDP. And while the likes of Uber and Lyft have tackled the problems of one segment of the market, others, like childcare-related transportation, remain ripe for innovation. In the United States, there are 34M kids in organized sports. Families make career decisions and feel the economic burden associated with the safe passage of their kids. Its not surprising, then, to learn that the public school bus market is worth over $12B. Add in the estimated 1 million nannies in the US making, and the total childcare transportation market is estimated to be worth $40 billion.
Our investment in HopSkipDrive is rooted in this thesis of companies going after a huge market that has unique regulatory and safety issues and can literally change the lives of enormous segments of the population, overnight (with a side benefit of empowering a heavy base of women drivers and allowing more women to stay in the workforce).
For many of these same reasons, manufacturing is another area where Upfront is spending a great deal of time. Manufacturing contributes $2 trillion in goods and services to the US GDP and $12 trillion globally. A technology that makes manufacturing more efficient, or enables new products that were previously inconceivable, could have a direct impact 12% of the economy, while in the process conceivably increasing the size of this pie significantly. From a venture capital perspective, it doesnt hurt that manufacturing historically over-indexes on private R&D spend and as a driver of productivity growth.
There are many themes within manufacturing that contribute to productivity growth, including: predictive analytics, robotics, industrial internet, and advanced material science. While we spend time in many of these areas, we are most focused today on the impacts of additive manufacturing, and thus, on innovation occurring within that sector.
Additive manufacturing, which is more commonly labeled 3D Printing, has the potential to completely revolutionize the $2 trillion US manufacturing market, across inputs and outputs. While there are naysayers who write off 3D Printing as over-hyped, there are very few technologies that have the potential to transform more industries over the next 5, 10, 30 years ranging from automotive and aerospace, to consumer products and medical.
As we have been digging into the subject of additive manufacturing, we find ourselves spending time not just on the material science and hardware (e.g. printers), but thinking deeply around the impacts of the software (e.g. new design platforms, IP management, workflow management), marketplaces (products, services, and equipment access), and end market vertical goods.
While printing human tissue by using live cells as ink or printing food sources in space may capture the outer reaches of our imagination, the impact of additive will ultimately be felt across most things we touch and feel every day, unlocking productivity and, even more importantly, imagination.
Innovations in each of these areas will no doubt contribute to the 3D printing revolution. Which is why you can expect much more from us on this topic over the coming months.
If you agree and share a similar vision for where additive manufacturing is headed, or if you disagree and think were barking up the wrong tree, Id love to connect either way. Please reach out on Twitter @karanortman.