Regarding your first question, I suspect a capital constrained Quirky would have pursued a much different strategy. The cost of vertically integrating and of taking on inventory risk would likely have been too daunting. To that point, the business might have landed on a model closer to the one they are pursuing now.
By getting out of the business of manufacturing, it seems to me that Quirky has essentially become a marketplace for consumer product innovation. I wonder if Quirky has spent enough time building demand from the manufacturer-side of the market. It seems that will be crucial if Quirky 2.0 is to succeed. Thanks for sharing!
Interesting article, thanks for sharing!
While Two Sigma seems to have developed models which have historically outperformed, there are hundreds of other systematic hedge funds (with PhD employees) searching for the same signals which Two Sigma is trading on. For that reason, I do not believe the competitive advantage is sustainable.
To your question on if machines will every fully displace humans, I believe it’s highly dependent on the type of job:
• Barriers in the private markets (i.e., lack of data for machines to train on) will keep humans employed so long as there is information asymmetry.
• In the public markets, I expect the transition to (mostly) machines to happen much quicker.
• Jobs that require negotiation (i.e., structuring of esoteric securities) will be more defensible.
• Back/middle office jobs might be most at risk, due to automation and distributed ledger technology.
Fame, glory and royalties! This package has been successful in motivating external innovators for more than a decade and I believe it should be sufficient to keep the ball rolling.
I like your idea of allowing creators to make their own kits to drive engagement. By restricting the kits to existing parts, I’d imagine the incremental cost of producing a custom kit would be related only to sorting/packaging and would not be too onerous.
In addition to Lego’s traditional product line, the company has built a toy line focused on teaching kids basic coding skills. I’d suspect an open innovation contest around this product line might also yield interesting and marketable ideas.
Thanks for sharing, AEG91.
Would be curious to know how Google defines a successful investment. Oftentimes an exit valuation will only be announced to the public if it’s a strong valuation or an IPO (i.e., databases like Pitchbook and Crunchbase are extremely susceptible to survivorship bias). Further, valuations which funds invest at are often not publicly disclosed. Without these goal posts (i.e., the ability to calculate an investment return), how can GV know which investments should be given a green score?
It’s particularly interesting to think about how “The Machine” might help combat biases investors have. Women, unfortunately, have a tougher time raising venture capital and I’d imagine having an objective check on human investors can only help in this regard (so long as the algorithm isn’t taught biases, of course).
I agree that vertically integrating with a manufacturer would likely help on costs for Adidas and wonder if robotics could be applied to the post-processing steps. Although Under Armour and Nike are also experimenting, I suspect Adidas is at least further down the learning curve and that their close partnership with Carbon has helped in that regard.
One question I’m left asking myself is related to the product. You list several operational benefits Adidas would enjoy at scale due to additive manufacturing (i.e., reduced labor costs, lower inventory costs, lower lead times). However, if the product is not superior at the same cost, of similar quality at a lower cost, or much better at a higher cost, the shoes won’t sell. Beyond customization, which Nike seeks to achieve from a design perspective with Nike ID, are there product/design benefits of additive manufacturing?
Thanks for sharing!
Fascinating article! I agree that quality of housing will be paramount no matter what go-to-market strategy Contour chooses. To win a government-sponsored project, the Company will need to demonstrate a minimum level of quality. Similarly, if a developer is going to license the printers for construction, they will be putting their brand on the line and will demand high-quality.
Related to your question on if construction can be a DIY market, I’m skeptical. In the medium-term, I suspect most construction decisions will continue to be made by homebuilders who will build cost and benefit analysis of traditional projects vs. printed projects. Even if printing catches on in a big way, a home will still be a major investment for an individual, so I suspect an individual’s desire to utilize an expert will still be high.
Thanks for sharing!