Crump utep feb 2010 final

FDM Innovation & Entrepreneurship

Scott Crump

BSME, Co-Founder & CEO Stratasys

Stratasys & UTEP Partnership

• 10 years of business & partnering• UTEP has twelve Stratasys FDM Systems• UTEP has been a Beta Site and they do joint

development in R&D including:– research

– mechanical strength properties & characteristics

– build parts for customers

FDM Innovation & Entrepreneurship

Scott & Lisa Crump set out to automate the

gap between the CAD blueprint and the

final manufactured product ….

now called Rapid Prototyping

CO-FOUNDERS

The “Start Up”

• Built “Toy Froggy” with 2 yr. old daughter - 1988Realized layered beads could build a part

with a glue gun

• Added glue gun to a 2D Pen Plotter = 3D

PlotterFor Proof of Concept In our garage

Vision

• Offer Engineers a 3D Printer for desktop 3D CAD:

Easy to use - one “build button” from CAD Automatic build of prototype Use in the design office $12,000 Price Real production grade plastic parts

• We kept with the vision

3D Plotter - Vision

Operating 3D Plotter prototype

The “Start Up”

• “3D Plotter” for AutoCAD run on IBM PC Tested Proof of Feasibility & it worked

• We had spent $10,000 so far - the big question: Do we take the risk of a start up Quit my job with good income - for no income Or just forget the idea Looked easy - but it wasn’t an easy decision

• Started up Stratasys on 2nd shift – working 1st shift

• Follow your dreams

• Clear vision is more valuable than a detailed plan &

have faith in your vision

• Take as high of a risk as you can stomach and

control

Lessons Learned for Engineers

• I filed for a FDM Technology Patent

• It was granted in 1992

• FDM - Fused Deposition Modeling:Lower acquisition price vs. competitionProduction grade plastic partsOffice friendly environment

Emerging History - FDM Technology

Emerging History - Patented FDM Technology

Support Material Modeling Material

FDM Filament Spools

• Get Patents to protect global proprietary position• Start ups are a lot about survival and persistence• The entrepreneur is persistent • Cash is KING - you’re in business as long as you

have cash

Lessons Learned

• Keep focused on what value you add to your customer

• Price your service and product to the market - not cost

• Work with a seasoned Mentor that has done it

• Try to have variable cost & low fixed cost

Lessons Learned

Funding - Sold equity as needed - to grow

• Lisa & I invested in 1989

• My family invested in 1990

• Talked with 74 Venture groups & we found one

• Battery Ventures (VC) invested $1.2M in 1990

• Lisa & I invested again 1992

Funding - Sold equity as needed - to grow

• Serious problem funding high growth!! We were growing at 125% per yearUnsuccessful getting $5M private offering Difficult decision - do IPO or shut the doors

• We contacted 23 IPO underwriters nationally

• Successful $7M IPO in 1994East Coast UnderwriterWe had Sales of about $3 millionStratasys publicly traded on NASDAQ

• Stock options help employees focus & gain

• Don’t be afraid to sell equity - 100% of nothing is nothing

• Don’t fund long term risk - with debt

• We thought we could grow Stratasys with $90,000, it actually

required $20M

- Hey not all plans work

Lessons Learned

FDM can build working assemblies

$25,000

3D Printer – Stratasys First to Market

IPO funded 3D Printer

development

Enormous Growth Potential

Global Engineering

Population

28.5 Million

Engineers

5 Million MCAD Users

Source: Stratasys, CADigest, engineeringtalk.com, Deskeng.com

AF Systems Today37,000

5 Million CAD

Workstations Worldwide

3D Printer Opportunity>500k Systems

at the right price!

3D Printer Opportunity

SSYS

• Currently shipping 2,000 Units per year

• We have a plan for 5,000 per year

• My vision is 10,000 per year

3D Printing Vision

– The question is, how to do 10,000 per year?

– For this expansion, we need to:1. Improve system quality & our culture2. Growth of sales channel

SSYS3D Printing

• It’s really all about your team of employees• Hire the right employees the first time

– If you don’t know how to hire, use a head hunter

• Don’t be cheap with employee salaries• Measure and share critical business metrics

Lessons Learned

The 3D Printer fits a Traditional Technology “S” Curve

Traditional Technology “S” Curve

Stratasys Sales Growth (in Millions)

$0

$20

$40

$60

$80

Industry Overview

RP Products & Services Revenue($ in millions,worldwide) $1,190

$926

$705

0

200

400

600

800

1000

1200

1400

1600

1993 1995 1997 1999 2001 2003 2005ESource: Wohlers Report, 2004

Industry Overview

RP Products & Services Revenue($ in millions,worldwide) $1,190

$926

$705

0

200

400

600

800

1000

1200

1400

1600

1993 1995 1997 1999 2001 2003 2005ESource: Wohlers Report, 2004

$0

$20

$40

$60

$80

$100

Cross the Chasm with a Whole Product

Whole Product Criteria

• Correct price

• Correct ongoing operating cost

• Product reliability

• Ease of use

• Correct sales channel

• Product speed

• Part quality

• Correct market application

• Competitive positioning

Correct street price for current application 8Proper user operating cost 8Acceptable product reliability 9Acceptable product manufacturibility 8Acceptable product servicability 8Acceptable ease of use 9Efficient sales channel 8Acceptable product thru put 6Acceptable RP part quality 8Acceptable modeling material 10Correct application 9Correct competitive position 9Acceptable manufacturing capacity 9Acceptable AE & Machine Capacity 7Proper Launch Budget 7

Whole Product Criteria - FDM-3000

Scale: 10 = High to 0 = Low

HP Agreement

Stratasys and HP Agreement:Taking 3D Printing Mainstream

HP Agreement

• HP will sell our 3D printers as HP brand.

• Stratasys will develop and manufacture for HP based on proprietary Stratasys FDM technology.

• Part of $24 billion HP’s Graphic Solutions Business

• HP’s goal is worldwide distribution of 3D printers.

+Right Solution Right Channel Millions of Potential Users

3D Printing Opportunity

+

FDM Medical

Application Success Story

For Medical Tools, Functional Prototypes Improve Design – Ratchet for Spinal surgical procedures

“At Medtronic – Sofamor Danek, cutting edge medical technology takes new shape, thanks in part to FDM prototyping technology, forward-looking companies seek forward-looking partners.”

says RP designer, David Freeman.

So how will FDM expand in the future?

FDM Future

Futuristic FDM

• Architectural models

• FDM for the home hobbyist

• Metal FDM parts

• Nano and composite build materials

• FDM fabricated semi-conductor chips

Direct Digital Manufacturing

• Fully automatic touch-less labor products

• Production of end use parts

• Hydro forming sheet metal fixtures

Sheet Metal Hydro Forming

FDM Hydro-form Example• Male mold with intensifier• FDM trim tools for sheet metal

blanks or formed sheet part• Coordinated structure removal

and installation tooling

3D Production Systems

200mc™ 360mc™ 400mc™ 900mc™

Direct Digital Manufacturing

End Use Parts(EUP)

$100,000 tool savings using DDM process for one part

Questions