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
 CO-FOUNDERS

Scott & Lisa Crump set out to automate the

gap between the CAD blueprint and the
final manufactured product .

now called Rapid Prototyping

 The Start Up

Built Toy Froggy with 2 yr. old daughter - 1988

Realized layered beads could build a part

with a glue gun

Added glue gun to a 2D Pen Plotter = 3D
Plotter
For 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 wasnt an easy decision

Started up Stratasys on 2nd shift working 1st shift

 Lessons Learned for Engineers

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
 Emerging History - FDM Technology

I filed for a FDM Technology Patent

It was granted in 1992
FDM - Fused Deposition Modeling:
Lower acquisition price vs. competition

Production grade plastic parts

Office friendly environment

Emerging History - Patented FDM Technology

Support Material Modeling Material

FDM Filament Spools
 Lessons Learned

Get Patents to protect global proprietary position

Start ups are a lot about survival and persistence
The entrepreneur is persistent
Cash is KING - youre 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
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 year
Unsuccessful getting $5M private offering
Difficult decision - do IPO or shut the doors
We contacted 23 IPO underwriters nationally
Successful $7M IPO in 1994
East Coast Underwriter
We had Sales of about $3 million
Stratasys publicly traded on NASDAQ
 Lessons Learned

Stock options help employees focus & gain

Dont be afraid to sell equity - 100% of nothing is
nothing
Dont fund long term risk - with debt
We thought we could grow Stratasys with $90,000,
it actually required $20M
- Hey not all plans work
FDM can build working assemblies
3D Printer Stratasys First to Market

IPO funded
3D Printer
$25,000 development
Enormous Growth Potential

Global Engineering
Population

28.5 Million 5 Million

MCAD
Engineers Users

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

3D Printer Opportunity

AF Systems Today
37,000
5 Million
CAD
Workstations
Worldwide

3D Printer Opportunity
>500k Systems
at the right price!
 3D Printing Vision SSYS

Currently shipping 2,000 Units per year

We have a plan for 5,000 per year

My vision is 10,000 per year

 SSYS
3D Printing

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

For this expansion, we need to:

1. Improve system quality & our culture
2. Growth of sales channel
 Lessons Learned

Its really all about your team of employees

Hire the right employees the first time
If you dont know how to hire, use a head hunter
Dont be cheap with employee salaries
Measure and share critical business metrics
Traditional Technology S Curve

The 3D Printer fits a

Traditional Technology S Curve
Stratasys Sales Growth (in Millions)

$80

$60

$40

$20

$0
90

92

94

96

98

00

02

04
19

19

19

19

19

20

20

20
 Industry Overview

1600

1400
RP Products & Services Revenue
($ in millions,worldwide) $1,190
1200
$926
1000

800 $705

600

400

200

0
1993 1995 1997 1999 2001 2003 2005E
Source: Wohlers Report, 2004
 Industry Overview
1600
RP Products & Services Revenue
$100
1400
($ in millions,worldwide) $1,190
1200
$80 $926
1000
$60
800 $705

600
$40
400
$20
200

$0 0
1993 1995 1997 1999 2001 2003 2005E
Source: Wohlers Report, 2004
93

95

97

99

01

03

05
19

19

19

19

20

20

20
 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
Whole Product Criteria - FDM-3000
Scale: 10 = High to 0 = Low

Correct street price for current application 8

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

HPs goal is worldwide distribution of 3D printers.

 3D Printing Opportunity

+ +
Right Solution Right Channel Millions of Potential Users
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.
 FDM Future

So how will FDM expand in the 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
Direct Digital Manufacturing

End Use Parts

200mc 360mc (EUP) 400mc 900mc

$100,000 tool savings using

DDM process for one part
Questions