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Janne Kyttanen: why going beyond the razor and blades business model will benefit 3D printing companies

Imagine you are a large 2D printer manufacturer and you wish to get into the 3D printing game. You will probably think that if you create a great machine, 20% of your revenue will come from the machine sales and the rest will come from the materials. When we are talking about ink for 2D printers, whether you print a Mona Lisa or your shopping list on a piece of paper, the value and cost of the application is the same. In that case, it doesn’t really seem to matter what your customers print.

How does all this translate to 3D printing? Let’s look at two topics that question the traditional razor and blades business model in the 3D printing realm.

First, within this traditional business model, the best applications are obviously the ones that consume a lot of materials. However, your forward-thinking customers may have different plans. A material cost reduction model for the clients who are focused on clever applications is to try to use the least amount of materials possible. This is achieved by optimizing their products with topology as much as possible, creating value through part consolidation and weight reduction and selling them for a premium. What is the result? You risk not making as much money off the materials as you initially planned. Additionally, software has advanced so that your customer is able to optimize the use of material.

Razor and blades business model 3D printing
Janne Kyttanen

Second is the way people are rewarded for success within your organization. For example, if your sales people are rewarded for “machine sales” and have no clue what the customers are actually using the technology for, there is no incentive to figure out the highest profit applications for the technology. In the end, maybe your customers have far better business models in their hands through the right applications and you just became the enabler. What is the result? Loss of potential profit through material, software and application sales.

It is not just the transition from a 2D printing company into 3D that is hard, but the current struggle for 3D printing companies who wish to move away from prototyping and into manufacturing. Figuring out what to make with your fantastic technology and what the highest profit yielding applications are. When the technology was used for just making prototypes, knowing what prototypes were being produced was not that important. However, when we are talking about manufacturing, just focusing on moving boxes is not going to work anymore.

The 3D world is far different and more complex when compared to 2D. In most manufacturing applications, 3D printing plays just a small part in the bigger scheme of things and if you, as an organization, are not able to connect the dots and do not evolve beyond being a technology provider, you are going to miss out on the next wave, which is all about truly understanding the best uses for your technology.

In summary, when it comes to 3D printing, we need to think beyond the razor and blades business model. The smartest approach is one which is three-prong and considers not only machine sales, but also the impact on materials and applications which will support the customers now and in the future. If done in a creative and strategic way, 3D companies will benefit in the short and long-term in both profit and customer loyalty.

If you are interested in learning where your technology adds value in the most interesting ways and need help connecting the dots, let’s get creative and talk 3D!

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Janne Kyttanen

Janne Kyttanen is a visionary and pioneer in the 3D printing industry. As founder of Freedom of Creation, he became one of the first designers to commercialize 3D printed products, including light fixtures, footwear, furniture, and much more. When Freedom of Creation was acquired by 3D Systems in 2011, Kyttanen took up the mantle as the company’s Creative Director, an influential position which he thrived in for 4 years. Now, Kyttanen puts his 3D expertise to another use, as co-founder and CEO of What the Future Venture Capital, a VC firm dedicated to designing tech startups specializing in cutting-edge technologies. One of the first companies, Pixsweet, was created as a pilot for Kyttanen's latest invention 3DTI. An innovative technology which solves all the challenges Kyttanen grew frustrated with in 3D manufacturing - high costs, low speed and lack of scalability. With an abundance of invaluable experience in the 3D industry, Kyttanen is in a unique position to guide and bolster innovative new companies in the field. He is available for consulting, investing, advisory and speaking opportunities.

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