The 3d Printing “Revolution”

I have to admit, when I first heard about it,  the idea of 3-d printing it blew my mind.  “Printing” an actual object in 3d, it was hard to wrap my head around when i looked over at my 8 year old laser printer noisily toiling away.  But for about the last 10-years, 3-d printing technologies have continuously been improving their costs, quality and manufacturing.  Currently you can print in a variety of materials including plastic, metal, wax, and acrylic.  There’s even a 3-d printer that prints stuff out of a stack of  office paper. Its like turbo paper mâché!  Nowadays, your dentist might even have a 3-d printer and print your crown out right in his office; cutting the time of production from 2 weeks to 2 hours and 3 office visits to just one.  A company I own, which makes custom bobbleheads, recently purchased and uses a 3-d printer in place of the old fashioned physical sculpting and molding methodology for making the dolls.

The New York Times even ran a big story recently under the headline “3-d Printing is Spurring a Manufacturing Revolution.” (  It lists a variety of applications that 3-d printing is being applied to, most customization of items such as important as prostheses, ranging down to the mundane iphone cover. A very compelling argument can be made that Western consumers have grown tired of mass produced goods and they now have the money to pay more for customized products that suit their own needs and tastes.

But is this really going to be a revolution? From the inside looking out, I personally find it very unlikely.  In the first place, there are some short term practical barriers, the first being that printing in 3-d is still very expensive.  Material costs for a 3-d printing plastic can be 20x or more the equivalent traditional resin.  3-d printers are also slow, so printing just a few objects on a 3-d printer can take 5-10 hours.  In general they can only print objects that are small as well, ranging up to something like a breadbox in size.  With machines costing $30,000-$100,000, you are really going to have to value customization to make up for the capital costs on each object printed.   The optimist might say that competition and innovation will overcome these barriers, and given the pace at which 3-d printing has advanced over the last 5 or so years, I would tend to agree with them. If these were the only barriers to the revolution, the revolution might almost be upon us.

More practically speaking though, 3-d printers are in general good at printing solid and hollow objects out of a few general materials.  Take a look around your house and figure out what percentage of the items are made of a single material, with few moving parts and have no electronics and are somewhat small in size.  These are the things that 3-d printing can easily produce. So if a revolution constitutes having a drinking glass shaped like your head, an ashtray in the shape of a rhombus, or even a pair of shoes that look like these (, then we may be well on our way.

The truth is, 3-d printing is a somewhat expensive way to offer complete 100% customization of a form.  There are certainly applications where it makes a lot of sense – things like crown-making and prostheses and even custom bobbleheads are perfect examples of where this can be utilized. Probably one of the most promising mass market applications of 3-d printing is anything where customized fit is important and the materials are fairly rigid.  One of the biggest markets for 3-d printing right now is customized hearing aids. It fits the sweet spot of 3-d printing perfectly – high value to complete customization of form (for fit), small size, single material compatibility and a high value object.  There are probably some other applications like this one that are viable, but have not taken off yet.

Overall, the case for using 3-d printing as a basis for mass customization of objects is probably overstated. Even if 3-d printing were able to produce electronic or mechanical items somehow, would you really want to design your own iPod and print it? Most companies that offer mass customization actually generally do so on a modular basis, allowing consumers to build their products from a finite set of option. This in the end is easier for the consumer since for the most part, they are happy to vary their customization on a few dimensions and still consider their purchase to be customized.  Dell is famous for being a trailblazer in mass customization, and I have always heard that in the end a high percentage of consumers end up choosing just a few different configurations, even though the number of customization permutations is practically infinite.  If I had to bet on where a manufacturing revolution would come from, I’d place my money on modular mass customization.

The science fiction like aspect of 3-d printing will continue to attract media attention I think, and I have to admit it’s pretty cool to press print and get an object out of a printer a few hours later.  I’ve even started reading a 3-d printing blog recently called Fabbaloo, and I’ve come to find that there is a whole movement…

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Las Vegas in Crisis?

The Economist struck an unusually pessimistic tone in their recent commentary on Las Vegas, titled “Party Over” (pasted below).

I think things will turn out a bit better than they suspect.  I still believe the world’s ending, but I’m very optimistic about the future of vice, and I think this will work in Las Vegas’ favor.

There are a couple of strange macro factors that have had a strongly positive influence on Vegas lately.  First, the casino business in Asia is on fire, and, as a result, the cash flow (and stock prices) of the Western casino companies (especially WYNN and LVS) are far, far better than they otherwise would be.  Las Vegas Sands would likely be bankrupt without the Asian market.

Second, the emphasis of economic policy in the US over the past couple of years has been asset price support (for Treasuries, mortgage securities, home prices, and equities).  The result is that many of the very rich have stayed very rich, after a brief swoon in Fall 2008 and Spring 2009.   As in the Great Depression, the strong downturn that started in 2008 has acted to exacerbate wealth inequality.   The poorest in Las Vegas, as in the rest of the country, are faring terribly, but the exorbitantly priced food/beverage/entertainment sector has held up fairly well.

Nevada ranks with California and Illinois as having some of the worst state government finances in the country.  Nevada actually makes California’s situation worse than it otherwise would be because, during the long real estate boom, hundreds of thousands of wealthy Californians bought homes in Nevada (Nevada has no state income tax) and established residency there to avoid California state income taxes (many of these people continued to live and work in California).

To me, the big question for Las Vegas is whether it holds the fort socially.  Will people feel safe there?  Will they feel that the police are effective?  Will they feel they can get good health care if they need it?  If it can remain socially healthy, I think Las Vegas will whether any economic storm reasonably well.  A decline in social health (a big uptick in crime, for instance) would be destructive for Las Vegas because it would set off a vicious cycle whereby the ratio of thugs to friendly tourists is continuously on the increase.   Las Vegas has always had its deviants, but in good times their numbers are dwarfed by friendly, rich tourists.  If fewer tourists come b/c they feel unsafe or otherwise uncomfortable, the ratio of deviants to tourists increases, causing fewer tourists to come, and so on.

A big question mark for the long future of Las Vegas is oil.  Few cities are hurt more by a big uptick in the price of oil.  Las Vegas is just  the epicenter of waste when it comes to oil (well, not quite the epicenter — that would be the indoor ski slope in Dubai).   Brightly lit, heavily air-conditioned hotels in the middle of the desert; employees living in desert houses driving twenty miles to work; tourists flying in from all over the world — all of it makes for extremely intensive use of oil.  One would think that an oil price of around $130/barrel (the July 08 price) would be deadly for Las Vegas. …

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