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Stratasys Acquiring MakerBot

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Re: Stratasys Acquiring MakerBot

#31

Post by milkshakes »

46Bit wrote: post #28
milkshakes wrote: post #25

Earlier quoted context omitted.

it's definitely not a talent acquisition. most of the valuable employees left in the past few years.

Do you have a lot of knowledge of their team's background and what Stratasys wanted from this deal? Without a clear definition of what's valuable here that's a sweeping judgement.

it is quasi-public knowledge that Makerbot has been hemorrhaging engineers for the past few years, and continues to suffer a high turnover rate due to a toxic work environment. you're right, i have firsthand knowledge about what exactly Stratasys wanted from this deal, but what i do know is that it doesn't make very much sense to acquire the company for its engineering team.

Re: Stratasys Acquiring MakerBot

#32

Post by msds »

gregpilling wrote: post #30
msds wrote: post #23

Earlier quoted context omitted.

If an acqhire, it's not for the engineering team. As addressed above, it's more likely for the brand recognition - given how finely tuned their propaganda machine is, they may be worth it.

It is certainly not for the engineering. I purchased a Makerbot and was horrified at what passed for engineering in the design of their product. They claim some absurd accuracy in the Z axis, when on my machine (Thing O matic) the Z axis carrier would flex a 1/4 inch while printing. How can you have .00? accuracy when the whole platform flexes .250?

That is basically my experience with them as well. I've assembled or performed significant maintenance on every printer model they've put out, except maybe the replicator 1, and I've never been impressed. Their extruders are especially nightmarish, even in comparison to the standard reprap setup.

I've also had the pleasure of looking at disassembled Stratasys machines, and the design and workmanship are pretty impressive.

Re: Stratasys Acquiring MakerBot

#33

Post by gaadd33 »

aray wrote: post #26
tmuir wrote: post #13

What sort of IP does MakerBot have? Its a reprap (fully opensource) that needs slightly-less-constant maintenance, and they've iterated on the extruder about 10 times. There's also some software. If $400,000,000 (possibly $600,000,000) isn't a big enough budget to develop a low end 3D printer, what are the development budgets of their industrial grade printers?

First off, it was $200M cash and $400 newly issued stock. They'll have to get the shareholders to approve, but seeing as they're pretty well up in after-hours, I don't think that will be a problem. Also they had a $10M round just recently, so those investors are going to want to cash out. After that, theres rumors that their last year broke $70M in revenues (after $10M in revenues the year before), and they're not re…

Isn't it a 200M earn out after 12 or 18 months and 400M in stock right away? 200M cash is likely more money than Stratasys has on hand right now given their balance sheet.

Re: Stratasys Acquiring MakerBot

#34

Post by cschmidt »

milkshakes wrote: post #31
46Bit wrote: post #28

Earlier quoted context omitted.

Do you have a lot of knowledge of their team's background and what Stratasys wanted from this deal? Without a clear definition of what's valuable here that's a sweeping judgement.

it is quasi-public knowledge that Makerbot has been hemorrhaging engineers for the past few years, and continues to suffer a high turnover rate due to a toxic work environment. you're right, i have firsthand knowledge about what exactly Stratasys wanted from this deal, but what i do know is that it doesn't make very much sense to acquire the company for its engineering team.

I assume you meant "I don't have firsthand knowledge"

Re: Stratasys Acquiring MakerBot

#35

Post by ChuckMcM »

I think what Makerbot had, and others don't have, is a product as opposed to a hack. I love the RepRap, it's cooler than cool, but my Dad would never buy one. The Replicator 2 is a refinement over four years of iterative offerings which each informed on the next iteration. From the initial 'cupcake' (which I help beta test the build instructions on) to the Replicator to the Replicator II, each step along the way has explored materials vs handling vs control schemes vs build flow. I'm sure a few have shown up at Stratsys' customers where they give an engineer one to 'punch out' the basic concept they are working on before sending it to the expensive machine. They have also made good strides in reliability and repeatability.

In Q1 they had more revenue than all of 2012 according to some stories. So Stratasys, the current leader in 3D printers had a choice, buy them or kill them. It's pretty clear Makerbot wasn't going away.

Killing them would involve coming out with something to compete with them. That would cost, conservatively, in a company like Stratsys, about $50M and 24 months. Maybe 12 if they did the 'crack team in an off site location without interruptions and poaching.' Let's be optimistic and say there is a 50/50 chance of hitting a product that is competitive with the product that Makerbot will announce in 2015. How big will Makerbot be? 2x, 4x, or 10x their current size? If the competitive product fails what will it cost to acquire Makerbot? $1B? $2B? Will it even be possible?

Looking at it from a pure engineering play it makes little sense, after all Stratsys could use the RepRap stuff and make their own RepRap clone right? But that only validates the market which invariably favors the market leader, in this case Makerbot.

So if you think 3D printing is going to be 'the big thing' in manufacturing going forward you're kind of stuck. Stratasys had to buy Makebot or risk losing to them.

I got to live through a very similar situation at Sun. When it got big enough DEC had a problem, do they buy the upcoming workstation vendor which was using commodity Microprocessors or try to kill it? DEC chose poorly and paid for it with their own existence which let Sun move into that spot until it died. I remember reading a great article when Sun posted a $1B in annual revenue and an analyst wrote "What would DEC do with a billion dollars?" Talking about the lost revenue because DEC was avoiding open systems and commodity hardware like the plague.

Trying to guess the future is hard, very hard, but I don't doubt for a moment that Stratsys has always had the goal that if one of these hobbyist 3D printing companies threatened to break out they would buy them before they couldn't afford it. Makerbot triggered that particular outcome by building a successful product.

Re: Stratasys Acquiring MakerBot

#37

Post by Kliment »

46Bit wrote: post #28
milkshakes wrote: post #25

Earlier quoted context omitted.

it's definitely not a talent acquisition. most of the valuable employees left in the past few years.

Do you have a lot of knowledge of their team's background and what Stratasys wanted from this deal? Without a clear definition of what's valuable here that's a sweeping judgement.

I happen to have first hand knowledge that two extremely good engineers fucked off when things started going closed and ugly and immoral.

Re: Stratasys Acquiring MakerBot

#38

Post by Kliment »

makomk wrote: post #22
tmuir wrote: post #13

What sort of IP does MakerBot have? Its a reprap (fully opensource) that needs slightly-less-constant maintenance, and they've iterated on the extruder about 10 times. There's also some software. If $400,000,000 (possibly $600,000,000) isn't a big enough budget to develop a low end 3D printer, what are the development budgets of their industrial grade printers?

MakerBot have at least some patents, including a patent on a conveyor system for automated building.

Which never worked correctly, and was silently scrapped.

Re: Stratasys Acquiring MakerBot

#39

Post by makomk »

Kliment wrote: post #38
makomk wrote: post #22

Earlier quoted context omitted.

MakerBot have at least some patents, including a patent on a conveyor system for automated building.

Which never worked correctly, and was silently scrapped.

Yeah, though if someone else does manage to come up with one that works it'd let Stratasys sue them and probably even buy it off them in bankrupcy.

Re: Stratasys Acquiring MakerBot

#40

Post by makomk »

rakeshsharmak wrote: post #27

I am no expert but I believe Stratasys paid for the brand and community. MakerBot is the most well-known 3D printer out there but not the cheapest or most well-designed (in the prosumer category). My guess is that the infusion of cash will help MakerBot manufacture more printers at cheaper costs and, thus, enable them to target additional market segments (beyond the prosumer category, where they already face competit…

Also, Bre Pettis has a lot of supporters who'll stand by him no matter how self-serving his actions. For example, people supported him using his blog to to publicly humiliate newbies to Open Hardware for not opening up their derivatives of his designs sufficiently. The same people later insisted there's nothing wrong with him closing off his derivatives of other's designs and that anyone who complains about this is hostile and inflammatory, even comparing them to terrorists - because of course, holding someone to the same standard they hold others to is far less inflammatory than calling someone a terrorist fundamentalist. I am sadly not kidding.

Edit: I wouldn't even be surprised if Stratasys managed to get away with patent lawsuits against open 3D printer manufacturers with him on board.

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