Co.Design

Backer of Twitter, Foursquare, and Etsy Dishes on 3-D Printing Revolution

Can Shapeways, a 3-D printing startup, become a household phenomenon like Etsy?

Recently, famed venture capital firm Union Square Ventures anted up $5 million for an investment in 3-D printing company Shapeways. The partner leading that investment for USV is Albert Wenger.

Wenger has a decade of experience as a venture capitalist and entrepreneur — prior to joining USV, he founded or co-founded five separate businesses in fields ranging from management consulting to online reading. And USV's own investments include some of the most buzzed-about startups working today, including Twitter, social gaming company Zynga (the makers of FarmVille), location game Foursquare, and handcrafted wares site Etsy.

Etsy in particular bears a lot of similarities to Shapeways. Both online businesses provide portals where designers can upload their work to have it 3-D printed. Like Etsy, it also offers "stores" for each designer. When someone buys something, Shapeways prints it out and send it to them. That's a radical departure from how design usually works — here, designers don't have to actually make anything themselves or carry any inventory. Moreover, as we've pointed out before, 3-D printing allows any regular Joe to wade into some massive markets, such as that for iPad and iPod accessories.

We recently spoke with Wenger about why USV invested Shapeways, and where he thinks the 3-D printing market is heading.

How did the investment first come about? Have you guys been looking at 3-D printing for awhile?

I wrote a blog post awhile back talking about disruptive technologies in production, and one of those was 3-D printing. We're pretty convinced that mass-market consumer products are now so cheap and widely available that they've lost a lot of their appeal. We think people are looking for something unique and customizable. That said, we're not that interested in the technology itself, because everyone knows that it's going to evolve and become cheaper and faster. We're more interested in the social fabric — bringing people together that design things, and people who want to buy them.

How did you guys reach this conclusion about mass customization? Is that an investment thesis you guys are working with these days?

Well, mass produced goods are dominated by a few large brands. But everywhere you look there are movements seeking to bypass those brands, whether it's the locavore movement in food, or something such as Nike I.D., which has seen double-digit growth year over year. The growth of Etsy is really a testament to that as well.

[Some of Wenger's personal faves from Shapeways.com: Mathematical sculptures by Bathseba Grossman. From left to right, a Klein Bottle, a Menger Sponge, and a 120-Cell.]

A company such as Shapeways or even Etsy really has two different markets — the people designing stuff for the site, and the people buying the goods. Do you have a view on which one will ultimately be more promising for Shapeways?

There's always going to be more people with an idea than there are people who can make it a reality. But only aiming at people who want to make things for themselves doesn't beging to capture the opportunity out there. Take Etsy for example. In the early days, a lot of the people who were buying were also the ones making. It's going to be similar here on Shapeways. But eventually the ratio is going to be much different.

How did you guys actually find the investment in Shapeways?
[Laughs] The internet. Basically, once we figured out that 3-D printing was an area of interest for us, we started looking around for companies in the space. The internet really has made being a VC so much easier, because 9 times out of 10 when you have and idea, there's someone else who has already done that idea.

And so why did Shapeways stand out?
There's obviously lots of businesses out there, but in terms of having a community-building model there's nothing quite as good as Shapeways. One person can be the designer, another person can be the printer, and another can be the buyer. THe appealing aspect is that it allows everyone to do what they want to do. But I will be the first to say that this is very much in its infancy. On the other hand, my two kids, who are 10 and 12, were telling me that in class they other day, they were learning how to use Google Sketch Up [a 3-D drawing program]. From there, it's pretty easy to upload to Shapeways and print your drawing out.

How will Shapeways change, now that you guys are in the picture?

Well, the headquarters are going to be coming to New York [laughs]. But one of the things we very much like is that there's not a lot we need to do differently. Our interest in Shapeways aligns with what they're trying to do — making new 3-D printing technology available as soon as possible, driving down cost, speeding up turnaround, fostering the community, and providing better tools.

[Schwartz's D-surface, a gyroid, and a 3-D Voronoi Network]

The community part in particular sounds a lot like Etsy. So does Etsy offer any cautionary advice for Shapeways?

The hardest part about any site built on a community is figuring how what things you need to provide new members, and then striking a balance with what the early adopters want. Because they're two very different types of user. So you have you to strike the right compromise between listening to the pioneers and broadening in the market.

In some ways, that challenge of broadening the market is going to be bigger for Shapeways than Etsy, because Etsy was a market that already existed. Shapeways, on the other hand, is creating something that never existed before. Today, no one wakes up and says, "I'm going to do some 3-D printing today." 3-D printing is still time consuming and expensive. But things that get mass adopted are cheap and fast.

Will Shapeways be a strictly web-based business, or can you imagine a future when there's actually stores, like Kinko's or something?

We've found that the more atoms you add to anything, the more complex things are. There's already plenty of atoms involved in 3-D printing. But, I will say there's a great number of interesting things such as tech shops that make their tools available on a membership model. Those are obviously complementary to what we do, as are companies such as Makerbot. For me, what's the most fun is that we're starting to see New York become a kind of center for this culture, because Makerbot is here, Quirky is here, and now Shapeways.

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