Is this Market Research?

January 16, 2009 10:32 AM

I'm looking at some newly affordable technologies and I'm wondering if there are enough people willing to pay for the technology's services to make building a small business around it a good idea. Is this market research and if so, how do I get some?

I've been loosely following developments in the 3-D printer market, and there have been some interesting developments recently. Specifically, there are machines that are user friendly, produce decent size objects (about the size of a bread box), and available for $5k or less. If I could stretch to $10k, the options become even more tantalizing! I say this from the perspective of someone who gets excited about these kinds of things!

I have been a 'builder-of-stuff' for over 15 years (everything from theatre props to kitchen cabinets), but I'm not blind to the advances in technology that eat at the edges of my field. Rather than try to fight the rising tide of machines, I want to try and ride the wave.

I have operated as a freelance builder for the last two years, and if there is one thing I have learned, it's the importance of your business network. If people don't know what you can do and how to get a hold of you, you might as well set your business funds on fire!

I want to know if there is a true market for the kinds of objects that I can produce, both on my own and using these new machines. I understand the importance of having a good understanding of this, but I don't know how to go about getting it... On my own? At the library? Pay some consultant? Too many options!

posted by schwap23 to work & money (3 comments total)

I've thought about this as well as someone interested in constructing a Rep Rap. I'd be doing it mostly for the hobby aspect, though, rather than out of a need to actually construct my own parts for things. Certainly I may grow into that need once I had the machine, but I can't say for sure.
posted by odinsdream at 1:18 PM on January 16

The first step is to define the market, once you've done that, you can try to size it. You might be able to find market research that helps do both, and it might even be worth what you pay for it, but you'll still need to take a first pass at it yourself.

So, what kinds of objects can your produce now, what could you produce if you had one of these wonderful machines? Next think about who would want those things and how they would satisfy the need now. This is the sort of thing that it would help to group brainstorm on. You can throw out your own ideas to help get things started, and then see what that inspires from other people.

Next, you try and estimate how many of those people there are, or find estimates of how much money they are spending with existing suppliers. There are a lot of places you might find information. Business press, trade associations, corporate SEC filings, etc. This is where a great reference librarian might help you.

Actually, the first thing you should do is make a list of all the companies that make the machines you are interested in. Scour their websites for information. They may have press releases or investment prospecti where they explicitly describe and size their target market. If not, you can at least see how they position their product. Who are they trying to appeal to? What kind of case studies or whitepapers do they have, and who might the audience be? Next see if you can find any articles in the business press talking about the companies or their products. Your market is going to be a subset of their market, those who can't justify buying and learning to operate their own machine.

The next thing you should do is bounce ideas off of some of your best, most innovative customers and colleagues you think are unlikely to want to compete with you.

My gut tells me that this could be a good thing to get in to, at least for a while. Since it dramatically lowers the costs of fabrication, it is likely to bring in a lot of new customers and grow the market. For every existing customer for the output of one of these machines, there are probably at least two who would be customers if the costs were low enough, or the availability were broad enough.

I'm sure I'm not the first person to compare them to WYSIWYG displays and laser printers and the rise of desktop publishing. At first, just having the equipment/tools and the required skills should be enough. In time, the tools will get cheaper and the skills will spread, so you need to be planning to move upmarket. Your strategy is to sell some training on the tools, and to set money aside to buy higher-end equipment. Selling training gives you a second revenue source, but, more importantly, each person you train is a possible customer when you buy a newer, higher-end machine. The machine you can buy today is like the first Apple Laserwriter. The machine you save up for is like the first color laser printers, or a high-volume laser printer.

In general, my advice is not to spend too much time or money on market research. Instead, learn by doing. Try and see if you can line up enough business to provide a good headstart on investing in a machine, then go from there. Actually, you could even get started by doing the design work and paying a service to fabricate the objects for you. Then you can figure out when (and if) it makes sense to buy your own.
posted by Good Brain at 3:12 PM on January 16

What kind of stuff can you "build" with a 3d printer? I thought they were only good for doing quick and dirty mock-ups.
posted by gjc at 7:19 PM on January 16