5 paradigms that will shapeshift the marketplace

The commercialisation of new technologies is accelerating the pace of marketplace democratisation. This thought piece delves into the emerging paradigms that C-suite needs to ponder on.  

March 2015 may not go down the annals of Hollywood trivia for spectacular releases or box office records. Yet Hollywood found itself in the spotlight on two momentous occasions that month.

At the TED conference in March, Joseph De Simone of 3D Carbon, while unveiling his stealth project for layerless 3D printing, made no bones about the fact that he was inspired by Terminator 2. A few days later, Mike Abrash, Chief Scientist Oculus Rift, waxed eloquently from The Matrix while sharing his vision of Virtual Reality at the Facebook F8 conference.

This throwback to the 90s sci-fi films is not coincidental as both 3D printing and AR (augmented reality) and VR (virtual reality) have been around for more than a decade. Back then they enjoyed their fair share of media hype only to be follow it up with disappointing performance which begs the question whether the hype is justified this time around

An evolving ecosystem

On a conservative basis, the 3D printing industry (or additive manufacturing as it is called) has witnessed upwards of 100% annual incrementals in disclosed investments from VC firms over the last three years. This growth does not account for stealth VC funding of projects like 3D Carbon which alone has raised USD 41 mn since 2013. In Q1 2015, Autodesk announced USD 100mn fund Spark to spur innovation and collaboration in the 3D printing industry. M&A activity in the sector has been hotting up too with increases in the no of deals and deal sizes. On the revenue side, the industry has demonstrated a 35% CAGR since 2012. 2020 revenue forecasts for the global 3D printing industry range from USD 7bn (source: JP Morgan) to USD21.3bn (source: Morgan Stanley). Global giants like GE, HP, and Amazon to name a few, have forayed into 3D printing.

The story is not too different for the AR & VR industry. At the beginning of the year San Francisco based Rothenberg Ventures initiated River an accelerator program aimed specifically at VR startups. Facebook’s USD 2bn acquisition of Oculus Rift is only too well known. Gaming M&A advisory firm Digi-Capital forecast AR & VR revenues to grow from less than USD 10bn at present to a mind boggling USD 150 bn by 2020. From Facebook, to Google, to Sony to Samsung & Qantas,virtually all have hopped on to the AR&VR bandwagon.

But beyond all this noise what’s perhaps more significant is the fact that both these technologies have received considerable investment push from crowdfunding initiatives like Kickstarter; indicative of a pre-existing affinity towards (if not an outright latent demand) these technologies.

The point that still needs addressing is whether at a macro level these technologies have niche applications & appeal or do they truly possess disruptive potential with an ability to cause seismic shifts at a mass scale with viable business models to sustain them along the way. Consider the 3D printing industry. From tech specialists to management consultants, the overall consensus seems to be that 3D printing will initially find its purpose in industrial applications (prototyping, tooling and spare parts) and amongst hobby based or bespoke consumer industries (toys, crafts, jewelry etc.) While supply chain agility and production run efficiency advantages have been cited at one end, legitimate concerns have been raised about limitations concerning scale economies, material, cost & time constraints. Consequently the idea that 3D printing is likely to follow Moore’s Law has been dispensed with.

However, the premise of 3D Carbon’s CLIP technology seems to be game changing in that respect as it eliminates the material, time and cost constraints associated with 3D printing. Even if 3D Carbon’s delivery trails behind the promise, it is now realistic to assume that future refinements or other technology breakthroughs will ensure these constraints become a thing of the past rather rapidly. Admittedly the 3D printing industry faces huge challenges on the IP legislation front too and as is usually the case, regulatory policy frameworks will lag behind technology here as well. Given this scenario, while the jury is still out on the mass adoption of the technology, the disposition towards 3D printing is more optimistic than it has ever been.

The adoption trajectory of the AR & VR industry is largely fueled by mobile and gaming on the mass market end. Given the universe of gamers & smartphone consumers, the AR & VR mass adoption is less debatable in comparison to 3D printing. Sales projections of AR & VR software, hardware and projections of their integration into mobile, gaming and social platforms from various industry authorities indicate that the AR & VR industry is at the inflection point of what is arguably is a hockey stick curve. It is important to note that this happens to be the case even when a game changer like Apple has not made any significant announcements about their play in this segment

Given this evolving ecosystem, the following 5 paradigms will shapeshift the marketplace over the next decade.

1) From “Content is King” to “Design is King ”