Well, after less than three months effort with the fabshub project, we have decided to close it down.
The main reason is that the two partners have a different view on how to approach the startup seed phase. And we are then blocked.
However I want to share what I’ve learned with this project.
“Fail fast and fail cheap” is really a good advice that we have put into practice, so now we are in a position to start new ventures. In fact, I am already starting something new with new people, of course still in 3d printing. If you want to know more you just have to follow the blog.
Things that I’ve learned. The famous lessons learned thing:
You have to spend more time with the name, or use someone with the right skills for this. Our name was decided in few hours mainly checking available domains than anything else, and that it sounded like our concept “fabs” for fabrication and “hub” for network. But truth is that nobody can pronounce it in Spanish and even in English it is difficult to remember. You find this when you face reality as soon as you start sharing your name with people. Better to start sharing before you register because it is more difficult to change it later. General advice is to check it with your grandmother.
It is to provide service without a system in the background, so you are the system by managing everything by email. You learn a lot as it lets you have a lot of communication with the customer and it is not rigid so you can find things unexpected in your future web design. On the other hand, it is a lot of work!!
Keep as long as possible without costs or with minimal ones. In these three months we have only spent in business cards and the domain. The rest has been covered with our own time or with resources we already had (computers, 3dprinters, etc..). It is also recommended to settle the company when you start getting income. In our case the process of shutting down only took us the time to have a drink together, sign a document to end the partner agreement, and continue as friends. None of us will continue with the project.
Use your community
The logic tells you should do a project dedicated to a topic you love. If this is the case you are probably part of a community already. It’s really a good point of support and helps to start. People have supported us a lot. If you don’t have a community, better start with this. Internet is too big and you don’t have money for advertisement. Of course, it depends on the type of service.
Revenue per transaction
The revenue per transaction were really low and I was worried about this. With average transactions around 25-30 eur the 15% commission only represented 3-4 eur. If you also substract PayPal commission to this, almost 4%, there is not much left for you. the break-even was about 40,000 transactions, and it’s a lot!
In this model you have to ensure that both parts grow at the same time, so 3dprinters on one side and makers/consumers on the other side. If you have too many printers, the problem of the platforms with more success, you will have people waiting anxiously to get orders and they will get discouraged with the platform. If you have too many customers then you will not be able to fulfill demand and they will go somewhere else with their printing requests. In the peer-to-peer 3dprinting model the main problem is the lack of demand. Maybe it will grow with time when people understand the 3d customization potential, but it is not the case and if you want to evangelize you need a lot of money. Or maybe everyone will end up with a 3d printer at home, and then this business has no reason to exist.
Always look for the simpler. People do not waste time, if it is complicated -unless you have a high motivation- just abandon and go to something else or another service.
In fasbhub we had complexity on different aspects. First, the number of services offered. It is always recommended to focus, but we wanted to provide a set of services for makers, and this brought us to include 3dprinting, CNC, laser cutting, vinyl cutter, 3d scanner and 3d design. too many things too start.
In addition to 3d printing, CNC router cutting worked well and the 3d design, location independent, was even better. Laser cutting was the most difficult part, because no one has a piece of hardware for hobbyists, and you end up with professionals. If the customer looks for price you are only adding your fee to the product, so no real value added.
The other aspect of complexity sits in the 3dprint requests. Majority of customers bring objects that are not 3dprintable and require repairs or even in some cases changes suggested back to customers. I was doing all these checks and repairs before sending them to the printer owner, but in a scalable model it should be the recipient himself dealing with it. The best you can do is what 3dhubs has, an agreement with netfabb to access his API that provides automatic repair and provides the volume to be able to rate request properly.
But this is not enough to cover all the possible issues in a design. In addition FDM (plastic) printing is not friend of overhangs. You have to build supports and then take them out, more manual work to do that nobody likes.
we also find price calculation in the complexity topics. There are several factors that affect a 3dprinting cost for the printer owner. But everyone uses the price per volume. For example 0.50€/cm3.
But imagine you request a cube of 10x10x10 cm. This is 1000 cm3 and it will cost you 500€. The object is simple and almost void inside, only a fool would pay 500€. Here I considered a way to negotiate or a mechanism to adjust prices over 100€, to put a limit. The infill is also important. The more infill percentage, the more material used and the more time to print.
Another topic that worried me…if there are players in the market it is better that you do at least the same things they do (those valued by the client), and something else better.
The normal customer wants quality finish, this is an assumption I did not validate in fact. For this there are platforms like shapeways or imaterialise that provide objects with quality finish in different materials at your choice, and with competitive price.
The best advantage of p2p networks is the leadtime. you can get the object in 48h while other online printing platforms need 2-3 weeks. So, where I see more options is in the rapid prototyping for non-professional level, since the finish is not important but cheap and fast counts. In addition, there is the option to make adjustments through dialog with the printer owner. 3dhubs say people print iPhone cases in softPLA, a flexible material. But the truth is they don’t usually publish numbers about their transactions, just the number of printers in the network.
Another challenge is how to keep quality, you can make it autoregulate if you add reviews and feedback with ratings coming from customers, but currently there are no options to track non experts.
Make the client come back
Also known as Retention. This is a big challenge in a marketplace like this where the service is local, so it is normal to repeat transactions with the same people that delivered the first time. If your platform does not provide any additional value apart from discovery of printers, people will bypass you. Why pay a commission if I get exactly the same by contacting directly?
I think this is not solved right now. So your LTV (Life Time Value) is the equivalent to one transaction. If your CAC (Customer Acquisition Cost) is lower you may have a viable model, but it does not seem to be like this for p2p printing.
Ok, already enough info. I think this model needs that 3d knowledge spreads more. if the current market players can stand it may work for them, but the online services are improving their costs thanks to economies of scale. The other big risk is that 3dprinters become another commodity and everyone has one at home. End of business.
In the meantime, I will focus my efforts to make 3dprinters 😀
I start a new project! Web under construction here: ClarityFab.com