In this continuing series, I’m having a look at how value networks can be used to shape the future of industries as well as fundamentally disrupt them. Previously we looked at 3D printing concrete and open-source construction.
Recently I sat down with Robert Acree (of Unilever, Ben & Jerry’s, Yasso etc.) to discuss the challenges within the ice cream industry and why this industry has been lagging behind in technological developments for the last century. Yes, a century. High tooling costs, long lead times for introducing products, narrow sales channels, commoditized pricing,…are just a few of the challenges the industry faces. But like in most industries, the industry insiders take things for granted and this results in the status quo. Given this stasis, innovation has to come from outside the industry in order for anything to change.
If you care to understand what 3D printing has to do with this and how an effective value network can enhance this industry by bringing thought leaders together from various other fields for a common good, tune in through the video above.
This is a part of a series where 3D printing pioneer Janne Kyttanen explores value networks and 3D printing. He explains what this is here. Essentially the key point is that Janne is trying to explore established businesses through in-depth interviews with market participants. He then wants to see if he can line up significant players in these sectors to together disrupt the businesses. Janne believes that by working together through value networks, long-lasting consortia can play a part in transforming industry sectors. The cool thing is that he will be doing this right in front of our eyes. This is live entrepreneurship and quite the gamble on his part as he shares his explorations and discovery. Janne is trying to explore the world of concrete something superabundant and quite problematic. The first interview was with BAM’s Jeroen Nuijten on 3D printing concrete and another with Robert Niven of Carboncure can be found here.
Now Janne will look at the always exciting topic of…change management? Janne talks to Stephan Mansour. Stephan is a man of many talents and finds himself at a very exciting intersection of fields with a rather unique skill set. He is a developer, project manager, and consummate IT guy who then worked for years for construction companies exploring amongst other things, 3D printing for construction.
Janne says of the conversation,
“Let’s talk about change management! In this episode of 3D value network that’s exactly what we did when I sat down with Stephan Mansoor. Many times great ideas die because the organization is not set up for being receptive to adjustments. The organization would need to go through an immense change management curve in order for them to make these ideas a reality. I can reflect on my younger self about this very topic on multiple occasions and I believe we have all fallen into this trap. Whether the teenager version of you is misunderstood by his parents or your peers at work don’t see the value of your revolutionary idea, you own the communication part. It is your responsibility to give a presentation, which sticks, hits the benefits for all the stakeholders, is timed right for the organization, etc. Change management is a game of song and dance with politics and it is very complex to an old industry like construction to adapt to 3D printing concrete. Tune in to hear from Stephan Mansour what is at stake when trying to introduce 3D printing inside a very established construction company.”
We hope that you enjoy the journey that Janne is taking you on in this emerging series!
Pioneering 3D printing designer and entrepreneur Janne Kyttanen was one of the first people to mass-produce 3D printed design goods, was one of the first designers to engage with 3D printing, had one of the first 3D printing startups and has shaped the 3D printing world. Now as a VC and an advisor he is looking where he expects 3D printing, entrepreneurship, and the future to intersect. Janne thinks that value networks of cooperating companies will be key to unlocking value in the future. He will report to you as he investigates the emergence of value networks and tries to create his own. Through a series of interviews, you’ll see entrepreneurship, partnering, and research unfold before you live. You can learn more about Janne’s Open Source efforts, or listen to his 3DPod interview or his look into the future of 3D printing.
Janne explains that,
“Value networks, simply put, are people openly working together towards a bigger common goal. It has been my long time belief that this method has, by far, the best opportunities for success. In the capitalist system, which we have created, it is very hard for most people to see beyond their own slice even though creating a bigger pie altogether would reap the biggest benefits for all.”
“This series will unveil how value networks could be created in 3D printing, but I also openly share the reasons for them to fail. It is ironic when I started planning for this series last year, I could only give people examples from the past about how a crisis has forced people to openly work together instead of worrying about their own profits first. I am astonished by the solidarity of how the 3D printing community has risen together during the COVID epidemic. Just imagine what the world would look like if people worried about their share of profits before sharing 3D files online, which could save lives.
My series starts from the perspective of the construction world and my first interview is with Jeroen Nuijten from construction company BAM – Nederland. Let’s hear from him about what value networks could mean when scaling 3D printing in concrete.”
We really hope that you enjoy this innovative series through which Janne will week by week update us on his progress in researching and creating value networks. Can value networks unlock real progress in the nascent promising but untried world of 3D printing concrete? Watch the video above to find out.
Janne Kyttanen is a pioneering designer in 3D printing who has brought us some of the world’s first 3D printed furniture, lamps, consumer objects and textiles. As an independent designer and working with Materialise and later 3D Systems to whom he sold his company FOC, Janne has left his mark on our industry. Right now Janne is onto the next big thing and he believes that to be value networks. Instead of focusing on one business taking all of the initiative, cost and reaping all of the benefits of a project, technology or development Janne envisions more of a cooperative business model. He believes in looking beyond the firm and harnessing the agility of 3D printing to co-create innovation alongside partners. This is something that I’m intensely skeptical about. Can you really get partners along the value network to work together to innovate? How do you effectively get firms with diverging interests to work together? Won’t the whole thing collapse in a meetings morass or under reams of contracts?
In order to show us what he means and demonstrate that value networks could be used to create innovative businesses we will be doing a series together with Janne. For the duration of the year Janne will be showcasing his business ideas, teaching the concepts of value networks and actually trying to get some value networks innovation off the ground. He will then share with us his steps and progress. He’ll interview leading executives to see what they think, share his business ideas with us and seek out partnerships. We’re calling this series Live Entrepreneurship since Janne will be sharing his continued progress. In order to kick this off, we interviewed him so that he could tell us what it was all about.
So what again are value networks?
It really boils down to one understanding that collaboration creates more abundance for everybody rather than looking at each other as competitors or transactional customers. When one compasses that mindset, blue ocean strategy ideas start flooding in.
What is the current state of 3D printing markets?
A lot of excitement going on, but I see a lot of incremental developments going on and when one has an incremental mindset, don’t expect any exponential opportunities to arise.
What do you hope to change? And, how will you change things?
People to start thinking beyond engineering solutions, think bigger, across boundaries and blend categories which open up new blue ocean markets. Hopefully through leading by example.
Why are value networks important?
They are nothing new, but they are still very new for the 3D printing industry. Give you an example. If I have an application for something, which can create an exponential scale, but if the material cost is too high, nobody makes anything and the industry won’t progress. It only makes sense for the parties to come together in a collective manner and creating value together for a new market rather than focusing on narrow minded transactions between parties.
Why should I care?
If you wish to create exponential abundance, you should. If you wish to create the next incremental engineering improvement, look away and carry on.
When are they advantageous?
When there is proven scale for a new product or service and an equity share creates more profit for everybody rather than transactional business between two parties.
Does this mean that I could raise less money and work with others?
Yes indeed. Let me give you an example of how 3 parties can come together and create a blue ocean value network business together.
Party A has a factory, which makes machines with 5x margin
Party A sells the machine to Party B, which creates things with 5x margin to a channel.
Let’s assume, I have an application, which can create 100x value for both Party A and B, but it doesn’t make any sense for me to start raising money for building a factory, which already exists or in building a channel, which somebody has spent decades creating. Nobody really has to make big investments, but it all boils down to connecting the dots and parties coming together around a round table in a transparent manner.
In the course of this series, I will openly lay down examples how it can work, but also show how linear thinking and companies not being able to flex around their existing business models, will also kill a lot of good ideas.
My tagline for 2020 is: Your expertise. My creativity. Together we create value for your 3D printing business and the industry at large. What this means, is that I used to know nothing about the construction world or food production for that matter. When people with totally different perspectives and backgrounds come together, you create magic. As one of the big ice cream producers literally told me, “the disruption had to come from the outside”. You just gotta draw a fine line between when to listen and when to fight. These ice cream makers saw what we were trying to do and their initial reaction was: that’s not how you make ice cream. We have been making ice cream for 100 years. We know how to do it.
So this is already happening?
It’s the same thing in 3D printing too. Makerbot is a classic example of a company, which carved out a new market in an old industry.. Stratasys could have created a plywood 3D printer as a weekend project, but since their channel didn’t see value in low price – low quality machines, why would they make such device? Makerbot managed to sell a dream to the makers.
Aligntech is a good example of where and why I would like the industry to open their eyes for. While dental may seem like a killer market for the 3D printing industry, it actually makes little on teeth, if you compare to Align, which generates 1.5bln in annual sales with just one product…”selling smiles”, not selling technology.
What I mean is that when people have the ability to dream big, things happen. There is a good quote in the Moonshots book by Naveen Jain, where he asks which is an easier business: a business with an incremental growth potential, say a corner café or a mission to mars. Most people would say that the corner café is an easier business, where in his opinion most get it wrong. A corner café has X amount of seats and your growth is limited and one is cut throat from the start. Whereas getting finance and big people behind your big plans going to Mars is far easier than getting finance for your corner café.
We’re really looking forward to hearing more from Janne in this series!
Janne Kyttanen is a whirlwind of innovation, ideas and designs. The pioneering 3D printing designer was one of the first to couple design and 3D printing, the first to sell 3D printed design goods and is a leader in creativity in our space. Janne thinks that we need more creativity in 3D printing. Previously we interviewed Janne whose also the nicest VC in the world on investing in 3D printing, we had him on for our 3DPod podcast as well and we have another interview with him here on his own background in 3D printing. Yes, we’re huge fans of Janne and his work here and we thought we’d let him shine a light on creativity as well.
So why is creativity important?
Without creativity, you simply won’t be able to come up with anything new.
Should companies all be creative? Even in space or medical device?
All areas require creativity.
How does creativity help my bottom line?
Many mathematical models can be created for this how it helps your bottom line, but in my articles, I am using a basic correlation between starting a company with “an idea” to what that idea is worth. All those metrics are well known and the reason why I am making the connection between creativity and starting a company, is because a disruptive idea for a startup pretty much boils down to creativity. No disrespect to cafes or bakeries for example, but if your startup idea revolves around starting a basic corner café, I don’t put that in the category of a creative startup, which could generate astronomical value. You have X amount of seats in a café and your café is open for X amount of time per day. The absolute maximum revenue your café is able to generate is already pre-defined. I put that kind of company in the bucket of “innovation”…aka an incremental improvement to what is already known.
Should everyone in the organization be more creative or should we have key creative people?
Everybody should be creative in their roles. Even creative accountants. On top of that, every organization should have a chief creative officer, who is accountable for measurable creative throughput.
I think design thinking is for idiots. I don’t take a two-day first aid course and then apply “medical thinking” to my business nor do I then think I can do what a doctor does. Please don’t tell me you’ve gone over to the design thinking dark side?
I am not talking about design thinking here. Where most companies go wrong is in change management and implementation. You can hire a “design thinking” guru to give a lecture to your staff and after that lecture, everybody will think: that was interesting and they return back to doing what they were going 30 minutes ago. If proper metrics are not put in place, nothing will stick.
Why is it difficult for large companies to innovate?
Innovation is fairly straight forward for companies, but due to a large amount of red tape, even changing small things, gets difficult. I am really referring to creativity here, which is practically impossible for companies if they don’t even have people in the ranks who are accountable for results. Companies think, it all somehow magically happens, but what is more magical is that your star people are using your money and resources in order to work on their own business under your watch, whilst they can do their existing job with their left hand. Recipe for disaster.
Sofa so Good Fully functional lounger coated in high polish copper and chrome by Janne Kyttanen
How can I innovate better?
Read my Forbes article. Download the 6 step printout. Sticker it on your fridge and you are onto a flying start.
Isn’t lack of innovation a lack of budget and responsibility?
It’s a lack of intelligence.
Which teams should innovate?
Whether you are an accountant or lawyer, you can always innovate on how to do your job more effectively.
If everyone starts innovating will we be able to keep to our processes in check?
Voila…and there comes the chief creative officer who is the gatekeeper. If you don’t have it in place, all ideas just circulate in the air and nobody is catching them.
How do we know we’re on the right track with our innovations?
Nobody really knows before you start, but the trick is to implement it in your system and start building metrics behind it.
Won’t innovations lead to lots of silly side projects and trial balloons?
Yes. Such things as the internet, the computer, the relativity theory, the wheel, the satellite or electricity.
Janne Kyttanen is a pioneering designer in 3D printing. The first to develop a whole host of end-use products, he was also the first to set up a design label in 3D printing and sell tens of thousands of lamps. He really brought design to bear on what was then an industrial technology and created many applications as a result. Janne has been a real inspiration to me for many years and it was great to talk to him for our podcast. Now he is exploring investing and in helping to create 3D printing startups with WTFVC. We asked him to talk to us about what it is like to invest in 3D printing right now.
How is the world of investing in 3D printing?
I think we have learned a lot from what happened between 2012-2014. Companies are getting smarter and investors too and everybody is gradually learning to ask the right questions. I wrote blog post about this a while back and for me the questions circle around: Who are you creating value to, how and how does it scale? I think the days are numbered where investors blindly just invest in a particular technology without a clear use case.
How do you see the future?
The most value will be created by what the technology does and not how a particular machine may look like in your workshop.A lot of people talk about 3D printing disrupting the $12 trillion global manufacturing industry. I don’t see it replacing or disrupting anything, but its just a new kind of hammer with its’ own pro’s and con’s and the applications it enables are just going to be new and new industries will be created. Bear in mind that in most manufacturing sectors the machinery generates the least amount of revenue. Let’s say on average 2-5%, so we have 0 interest investing in companies that are just creating machines. At least, I have not yet seen a deck yet, which would change my mind on that.
Where do you invest into and why?
We invest in crazy. If it makes sense, most likely its incrementally making something existing just better. We are drawn to companies and ideas, which connect proven and existing technologies in the most interesting ways. I like to tell people we want to take existing technologies, put them in a blender and see what happens.
Do you go for the end to end tooling only? So printer plus software and materials? Or not?
End to end is a new trendy phrase in the industry. There things have been figured out in every functional business already, so this phrase is a bit of an oxymoron. It’s a bit like a car sales man needing to pitch you on the sequence of events that are needed in order for a car engine to run.
My interest is in creating new value chains for new products all together. If you backtrack from the user using a product to its’ raw material, adding value to each point in the chain is what interests me the most. Smile direct club is a good example of a company, which benefits from most points of a value chain. By going direct to the consumer and cutting the dentist out of the equation completely, they are creating on top of an already proven product, but for far less money. Well done.
Is there a 3D Printing cluster emerging somewhere in the world?
Dunno. But I am happy its’ all happening all around the world. It’s also fascinating to see how the adaptation happens with the late bloomers in a very similar way as it happened in the western world first. That creates also quite predictable investment opportunities when you can map the human psychology before things are even happening yet.
Are you still optimistic about 3D Printing for consumers?
I think it will have its place in a home in a similar manner as a Peloton bike or the drill bench. What I mean by it, is that by the time the novelty factor wears out, it really boils down to value creation or the lack of it. No value or excitement and it just lands in your garage. I have not had a printer in the house for quite a while now. It is just far easier to just upload stuff on a 3D platform and get it all delivered by courier for me, but now that we have small children, I am going to install a few printers here again. The value for me will be to introduce my kids to the tech hands on very early on and build a narrative in their brains that they can make whatever they want and whenever they want. How they will create further value with it all, I am so excited to see.
What investments are you excited about?
Not many to be honest. 90% of the decks I see are “me too products”. Most startups are focusing on the same superlatives as their neighbors. Faster printers, bigger printers etc.
What companies would you love to invest in but you’re not seeing?
I am excited to see companies building tools specifically for a niche product or a service and owning the entire value chain and brand for that. I think what we are seeing is the hangover from prototyping. When your tech is geared towards making prototypes, it being able to make “everything” is great. When it comes to manufacturing, that paradigm is a pest. The clever ones lock their machines to do one thing really well, hammer on that and ignore the rest.
How important is it for founders to have 3D Printing experience and knowledge?
The less you know about 3D printing, the better, so your brain is not clouded by nonsense. I am interested in founders who have the ability to ask the right questions at the right time. All business is the same and you will be able to get to the root of it in 5 minutes of it, if your brain is tuned in the right way.
Where is the opportunity in 3D Printing?
As a “machine”? 2-5% of a particular manufacturing sector.
Today Max and I spoke with Janne Kyttanen. Janne is a great guy and a true 3D printing pioneer. Janne was one of the first designers active in 3D printing. He pioneered end-use products, lamps, 3D printed fabrics, 3D printing design in and of itself and much more. 3D printed goods would all look very different today if Janne didn’t show us a way to design them. We really liked listening to Janne recount his journey and talk about some of the things he is involved with now including mass customization of ice cream and investing. We hope that you enjoy this episode as well. As ever please give us feedback and suggestions.
We had a chance to catch up with 3D pioneer, Janne Kyttanen, to talk all things 3D, and a little bit about fatherhood too. Janne has been behind the scenes quietly working on several 3D related projects that he can now share with us in more detail. In addition to co-founding a VC, Janne consults to companies to help with the ever-changing landscape of 3D in order to prepare for digital transformation and avoid 3D confusion. Janne also tries to add value to a brand with design solutions, identifying new 3D technologies or simply coming up with new tech strategies to disrupt the industry. Janne was instrumental in making some of the first design jewelry, lamps, and furniture in 3D printing. He also started 3D printing’s first design label .MGX and the first design studio FOC before leading design at 3D Systems. In addition to leading in design and tech development, Janne has also made some of the most iconic 3D printed design pieces to date which are in the permanent collections of museums worldwide. It is always a good time to find out what the pioneers in our industry are doing.
How did you get into 3D Printing consulting?
Perhaps I have grown along with the industry. The truth is 20 something years ago, when I first got into 3D printing, I was focused more on selfish goals. After joining 3D systems in 2011, I woke up and started to realize how many companies and people are confused about 3D. Whether it is a 3D printing company not maximizing their tech in creative ways or companies wanting to get into 3D but making horrible purchase decisions in order to achieve that goal. I became tired of watching from the sidelines and decided to do something about it.
Plus, 10 years ago when people started buying in-home 3D printers, the level of consulting was more about of the best filament to use or printer to buy in order to make Yoda heads. The 3D printing industry is now at a place where it is starting to create a real FOMO effect for big companies if they don’t get involved. It’s not hype or some distant future promise anymore, but there is real data to back it up.
Why did you get started in 3D printing and what makes you tick after all these years?
In general, I love how technologies constantly make our lives better and more efficient. 3D printing is no different. However, as previously mentioned, what is not efficient – big corporations’ and their adaptation to change. They have the people, the money and all the resources under the sun, but still seem to make poor decisions when it comes to adopting tech or digital transformation. The main question for me is “why does history repeat itself even if the signs are written on the wall?”
I suppose what makes me tick is helping organizations adapt to new technologies by creating the right strategies and thinking through effective steps for implementation to support the inevitable changes before they experience disruption.
Many reading this interview might be able to relate to this picture. A CEO puts their fist on the table and insists the company gets into 3D printing but fails to first require his executives to present a thorough implementation plan which answers key questions. For example, what will these printers do and who will they serve, who will operate and service them, how will we buy software and materials, do we have the right skills in-house and if not, what and how do we acquire them, is now the right time or is the market ready, etc. It’s a classic example where companies may have the right vision but fail with the strategy and execution. My goal is to be in that meeting room before they get into the 3D game.
Will you still offer design services?
People probably know me mostly from my design work within the industry and as a result, I still get requests like: “Can you design our new machine, how long will it take and how much does it cost?” My general answer is: “it takes 25 years and 5 minutes.”
For me, the design is the simplest part of the equation. My true interest lies in connecting the dots and providing the right network: materials, software, applications, distribution and connecting them all into the final product. So I am not just interested in designing “things” for companies, but rather designing the structure, processes, and resources which support the company to sell their products effectively.
A good example of this is a recent project with Nexa 3D.
You were absent from the industry for a few years and now it looks like you are back in the game. What have you been up to after leaving 3D Systems?
I may have appeared quiet and absent, but I never really left, I was just perhaps not as visible. Even though the industry was still collecting its marbles after the stock market plummeted, I found an opportunity to co-create a VC fund, WTFVC, where my partner and I design and invest in our own ideas. We start companies from the ground up, providing interim management, and then hire kickass CEOs to run with them in return for equity. We also do some external investments too, but only when they add value to the family of companies we are creating. So we are creating 3D ventures for highly specific applications.
One of those companies was Pixsweet, a business-to-business solution offering custom 3D ice pops as edible marketing magic for brands and events alike. At the core of it all is technology we invented, 3DTI or 3D thermoform injection, where 3D printing is used as a tool in the overall additive manufacturing process as opposed to the mean to an end. It’s a classic example where technologies collide, and the result is the unexpected. Its part search engine, part food science, part 3D printing and part food packing tech. The vision was to empower everyone so that they could Taste the Internet by turning any image into 3D food in a matter of seconds in the cloud.
And if you are wondering – why ice pops? My quick sarcastic answer is why not. The longer answer is that the application hadn’t changed in over 100 years and it seemed like a simple way to disrupt three ancient industries at the same time: 3D printing, food distribution and thermoform packaging tech. The reality is that 3DTI can handle any liquid, paste or gel type substance. We just decided to first focus on food. On average, the food packaging industry runs businesses in the 5% EBITDA range (e.g. meat or cheese). In a nutshell, they make a few cents per product, which at the end of the day is a cutthroat business. And they only have one channel, which is high volume retail, meaning they are pretty much cornered. We can make their lives a lot easier through 3D.
We are talking about massive industries here, which have not changed for decades, so, unfortunately, it’s not a fast process, but we are happy with the progress and will soon be announcing new large-scale partnerships with our technology.
What was the reason for starting the VC?
I saw a void in the investment world where some people have the money and others have the ideas. My goal is to help these two worlds collide. We are busy creating a family of ventures, which all add value to each other. Somebody might be creating software, which adds value to a new manufacturing tech we are creating and vice versa. Somebody might also approach me for consulting for them, but we might end up investing in them or become board members.
What kind of startups do you guys create?
We are focused on the unexpected disruptive 3D innovations, which nobody else sees. The kind of oddballs, which at first seem so strange, that they are interesting. Unless your organization is structured with a separate skunkworks unit, blue sky innovation hardly ever happens from within organizations. It hits you in the back of the head when you least expect it. It’s the classic innovator’s dilemma within big organizations, which keeps on repeating itself time after time. Most companies are simply structured to make money as fast as possible, incrementally improving what they have, streamlining their channels, automating processes etc. It is not in their interest to deliberately disrupt what they have built, even if it would provide longer term success or more competitive advantage. If we take an example from the 3D printing industry, Stratasys didn’t create a $100 plywood FDM machine 2009, which became the catalyst for disrupting the industry. 3D Systems didn’t create a tabletop SLA machine until very recently. Both of these companies could have created these machines in their sleep, but they didn’t. It simply didn’t make sense, since it would have cannibalized existing channels. Rest is history.
What’s next for you?
How much time do you have? LOL.
On the personal side, my wife and I are busy raising our toddler son, Aiden. Who happens to be very organized, independent, hyper focused (wonder where he gets that from) and is obsessed with all things cars (he did not get that from me). Becoming a father has been the hardest and best thing I have done in my life. I am constantly amazed at the speed of development, overwhelmed with the love I have for him and anxious to start creating and building things together, especially with all the new tech entering the market in 3D, AR and VR.
On the professional side, the VC is busy finalizing a few investments in software companies while looking for new opportunities. We are also on the lookout for more 3DTI applications. And in the consulting world, I am busy with some existing projects and in discussions with several other opportunities that I can’t wait to get involved with.
