$10 Million in Funding
MakerBot joins Chumby and Bug Labs as an open source company that has VC (venture capital) funding. Usually people associate open source hardware as something that doesn’t get funding since the IP is essentially given away. How did you hook up with these VC folks?
Building your friendship network can help you build a network that can connect to a lot of people, including VCs. If you have a business, have at least one of the co-founders go out and network a lot. Find people who are different than you with different experiences doing different awesome things. Don’t be afraid to ask people you look up to for advice and make sure to thank them for it!
What is the process when pitching for funding an open source 3D printer?
Our pitch was pretty simple. We just told the story of MakerBot! We have a successful business that we bootstrapped to profitability, and the future is bright. With all the website startups out there that don’t have a business plan, many investors were really into the idea that we are already making money and had both a vision and a concrete business plan.
Most investors are people who have done bold and adventurous things that have changed the world. I’m proud that we’ve got a rock star lineup of investors, and we’re excited to be stepping up our game.
Does funding change the commitment to open source hardware?
The funding doesn’t change our commitment to being open source. Why would we change a winning strategy? Being open is the future of manufacturing, and we’re just at the beginning of the age of sharing. In the future, people will remember businesses that refused to share with their customers and wonder how they could be so backwards.
Our commitment to open source stems from our passion for sharing. We know that if we share with our users and the world, there is a natural positive effect.
I think people worry on our behalf that as an open hardware company, we’ll get knocked off and undercut. First of all, that happens all the time to businesses that are not open hardware. In order to be truly competitive, we’ve got to keep rocking it!
What do the investors believe they are investing in? Since open source hardware “gives away” some of the IP usually associated with investments, do they understand that others could make MakerBots too?
The investors are investing in us as innovators and our ability to execute on a vision. Being open source means that our users are our best collaborators. Open source hardware is a viable business model!
The usual goal for VC firms is to have the company they invest in get acquired or go public. Where do they want to see MakerBot go? Where do you want MakerBot to go?
Our plan is to make the world a more innovative place filled with MakerBots. We need a lot more innovation in this world to survive as a species, and having a MakerBot teaches you how to innovate and puts the power of manufacturing into your hands. We’ve got our sights set on empowering creative people everywhere to make the things they need, and we’re putting the pedal to the metal to make the personal manufacturing future a reality for everyone.
What can you do with $10M that you couldn’t do before?
The investment in MakerBot gives us capital to hire people and put more effort on innovative research to make it easier for everyone to make anything they need. Also, it lets us scale. Being a hardware business means that in order to ship quickly, we have to invest in inventory to make sure our customers get what they want quickly.
Is $10M enough to get 3D printers in the hands of everyone?
It’s enough for a great start!
Do you think this round of funding will attract more competitors?
It might — we’ll have to see. We have a lot of fun, but hardware is hard, and starting up a competing business is a non-trivial venture.
Now that you’ve got “real money” at play, are you worried about people coming after you over patents? Is MakerBot mostly patent-free? Or are we going to see a good chunk of that 10 mil go towards lawyers? Before, you likely weren’t worth the trouble, but now?
Recently, we designed a component that we couldn’t bring to market because, even though we developed the idea ourselves, our design was too similar to a patented design. We’ve gotten letters from companies with patents who have let us know that they are watching our every move. If we decide to invest in patents as a defensive measure, we’ll have to figure out how to license them so we protect ourselves but don’t block innovation in the open hardware community. It’s going to be hard to figure out how to be an open hardware company that lives in the open source future while protecting ourselves from the proprietary ways of the contemporary patent system.