Apr. 20, 2015 | By Alec

Makerbot has been the poster child for success in the FDM 3D printing industry for years, but it looks like their fairytale is also bound by the laws of economics. For last Friday they posted an announcement on their website that essentially confirms the rumors that have been circulating for weeks: that Makerbot has failed to hit certain economic targets and is forced to close down its three retail stores and lay off a fifth of its personnel.

While this is in no way a foreboding of bankruptcy or anything like that, it is certainly shocking news to say the least. After all, Makerbot has been growing at an explosive rate since being founded in 2009, but therein is exactly the cause for these measures. In the years following the release of their first 3D printer in April 2009, demand for their machines grew so explosively that the sky seemed to be the limit for its developers. Arguably, their success even kickstarted the very notion that a 3D printing business is a sound entrepreneurial venture.

As you might recall, The success of MakerBot even induced 3D printing market leaders Stratasys to acquire the Brooklyn-based business in 2013, in a stock deal worth more than $400 million. That takeover, and especially a series of gigantic bonuses and additional funds (up to $201 million) that Stratasys promised to MakerBot’s top brass if certain targets were reached, seemed to be double edged sword.

The MakerBot Replicator Z18 unveiled last year.

Certainly, it encouraged a rapid expansion. MakerBot quickly rolled out several new products, including an online store for 3D printed products and three new 3D printer models. It also opened new retail stores in Boston and Greenwich, Connecticut (next to its initial location in Manhattan), and also hired about 200 new employees, according to an anonymous source. And all this certainly seemed to be a success; according to their own website, they have grown with more than 600 percent from 2012 to 2014, with shareholders being given a $10.8 million payout in late 2013.

However, all this had to translate in sales as well, and it seems that wasn’t entirely the case. Especially results in late 2014 seems to have been disappointing, inducing Stratasys to record a tremendous write-down on MakerBot, worth $102 million. Essentially, this meant they overpaid for the company. In a recent filing, Stratasys has stated that the company grew at a slower pace than expected. ‘[We have seen a]slower growth of MakerBot product and service revenues in the fourth quarter, challenges associated with the introduction and scaling of its new product platform, changes in timing of implementation of certain initiatives and changes in MakerBot’s distribution model.’ Unsurprisingly, the financial targets attached to the Stratasys bonuses were not reached.

So what does all of this mean? In a nutshell it seems as if MakerBot was simply too optimistic about their growth opportunities; while very successful, 3D printing has just not caught on enough in mainstream society. As one anonymous employee, who wasn’t laid off, told Buzzfeed: ‘It’s a painful day, but we know why it had to happen. They were just recklessly growing this company, bringing on people at a rate that was just insane.’

MakerBot’s own announcement has remained cryptic. ‘As a company that’s focused on leading-edge innovation, we’ve learned to embrace change in order to stay focused. Today, we at MakerBot are re-organizing our business in order to focus on what matters most to our customers. As part of this, we have implemented expense reductions, downsized our staff and closed our three MakerBot retail locations,’ they wrote on their website.

Their language is thus carefully positive, using terms such as ‘focusing efforts’ and ‘shifting focus’ or ‘expanding’ into different directions. David Reis, chief executive officer of Stratasys, simply said: ‘These organizational moves are part of the continued scaling of MakerBot.’ The fact of the matter is, however, that MakerBot was in dire need of readjusting their plans. The previous CEO Jenny Lawton was replaced by Jonathan Jaglom after just six months, suggesting that things were definitely not going well.

Let’s just hope that this company – which in many ways is a flagship for 3D printing – has stopped the rot on time and can continue to build on its future. The Manhattan retail store, which was one of the three locations that has been closed down, simply featured a note on the door: ‘We appreciate your patronage. Please check us out at www.makerbot.com.’

 

 

Posted in 3D Printer Company

 

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John wrote at 10/29/2015 11:42:43 PM:

Sadly I didn't get to the wall in time to see the writing. I bought the makerbot2x,completely sucked in by the hype, only to find out the real truth about the quality issues and resultant time loss and frustration of failed prints and those costs. It was to be my little factory for my own inventions and projects and instead turned out to be a depressing run of do this and do that and this should work and then replacement machines that also had issues and then being told it was my models but finally finding out by buying a laser temperature gun the problem was incorrect readings on the machine....the stated temperature was off by 16C or 28.8F which makes all the difference in the world when getting a print to stick to the bed in my case covered in Kapton film. The replacement plastic extruders work okay if you don't push the feeder tube into the socket at all so the heat doesn't build up and pre soften the filament and cause an extrusion failure. The original printer couldn't/wouldn't print a true circle and so the problem must be with MY model I was told by my dealer. The replacement printer could but with Sailfish firmware so is this an admission of Maker firmware inferiority by one of their own dealers?

Karma wrote at 10/24/2015 4:31:17 AM:

As everyone before me wrote. They deserve this for being sellouts. 3d printing is the future but they all got way too greedy. Also steering the company towards an acquisition was the worst thing to happen to makerbot. This industry is experiencing the same bubble burst than the .com bubble back in the day.

wayne wrote at 9/5/2015 11:48:31 AM:

as a purchaser of the 5th gen this is bay far the worst pile of shite i have ever owned £2800 + vat my £500 up mini prints way better with less curls & without extruder failure or issues makerbot you are a bunch of wankers

Noname wrote at 7/16/2015 7:18:36 PM:

Correcting some misconceptions in some of these comments: Growth was completely driven by Jenny, who was injected into MakerBot by a major investor to steer the company towards an acquisition. Stratasys bought themselves a hip brand, eliminated some competition in the IP space, and filled in a gap in their low end market. Bre and Jenny got paid, got out, and now young Jaglom has to clean up the mess.

An Ex-Makerbot Employee wrote at 7/16/2015 4:01:23 AM:

So much truth about these assholes. Killed their production staff with pointless overtime hyper-strict attendance policies just to cut over half of its employee back in April. Of course those mainly in the entry level and right before a measly 3% raise afforded to employees who had survived a year in that hell hole. Everyday leading up to that was littered with returned and broken down machines that needed to be "reworked". Even their largest machine the Z-18 priced at over $7,000 didn't make proper sales, I think no less than 1,000 of those machines alone are sitting in the warehouse right now Some being there since the model's inception early last year. Sorry but that turned from a promising electronics company from when I started 2 years ago to nothing but a bunch of cut-throat liars that took advantage of their employees...and now some millionaires were pulled in for that ride (boo-hoo).

An Ex-Makerbot Employee wrote at 7/16/2015 3:59:33 AM:

So much truth about these assholes. Killed their production staff with pointless overtime hyper-strict attendance policies just to cut over half of its employee back in April. Of course those mainly in the entry level and right before a measly 3% raise afforded to employees who had survived a year in that hell hole. Everyday leading up to that was littered with returned and broken down machines that needed to be "reworked". Even their largest machine the Z-18 priced at over $7,000 didn't make proper sales, I think no less than 1,000 of those machines alone are sitting in the warehouse right now Some being there since the model's inception early last year. Sorry but that turned from a promising electronics company from when I started 2 years ago to nothing but a bunch of cut-throat liars that took advantage of their employees...and now some millionaires were pulled in for that ride (boo-hoo).

Rasser wrote at 4/23/2015 3:26:20 PM:

They just got greedy......

Alex Neu wrote at 4/22/2015 5:39:48 AM:

Maybe this is why I didn't get that Makerbot engineering internship. (probably not but it helps me to sleep at night)

Jay wrote at 4/21/2015 6:15:32 PM:

As an early adopter and one who loved every model...up to the 5th gen...Andy's right. The 'smart extruder' is the stake in the chest. And...after the sellout they abandoned the Google Groups...which is the main reason they did so well with the 4th generation machines. Fully 80% of the fixes 'invented' by MBI were first designed, produced, and tested by regular posters on the GG. The first extruder 'fix' was a complete rip from a open source design made by a regular poster on there. Like everyone else has said..."they got what they deserved" Jay

mattio79 wrote at 4/21/2015 11:29:25 AM:

this is what they get, the sellouts!

O wrote at 4/20/2015 6:27:11 PM:

Check out who was responsible to approve Makerbot with such personnel growth (it was not Jenny). And no one mention that the new CEO of makerbot is the son of the Stratasys chairman.

Ken Cummings wrote at 4/20/2015 5:22:19 PM:

Last I heard Printrbot was hiring and could be open to the Takerbot refugees. having been a refugee at one time, from an unloved Country, I used the experience I got there to start a career in the good old USA soi there is hope. "Forgive them for they know not what their masters did."

Andy wrote at 4/20/2015 5:19:54 PM:

They would have been fine and could have grown like crazy if the latest printers would have been any good. They really managed the smart extruder issues in such a bad way...pretty much everybody that has some experience in 3D printing recommends to stay away from the 5th gen Makerbot because of the stupid extruder! I think that the low sales are only caused by their now screwed up reputation. Just look at the reviews on Amazon. A 3K printer with 2.5 stars... even a complete noob stays away from that! Even the Dremel printer has better reviews. Sorry for the rant. I think they deserve to be in the situation they are right now.

Dr. Ph.D. von Rasen wrote at 4/20/2015 4:55:51 PM:

Stratasys overpaid and then felt the pressure to make Makerbot grow too big and too fast? It's a disruptive innovation, you have to be impatient with profit and patient with growth, not the other way 'round, eh?



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