Issue #9 - The Future of Manufacturing
Welcome to Issue #9.
3D printing is continuing to be one of the hot topics in I40 this year. Besides that, I keep on exploring human-machine collaboration and why full-stack companies are very exciting.
📮I spent a lot of time looking at the productivity of manufacturing companies and macrotrends and published a new blog post why I believe startups in this area are super interesting (please share) 📮
I hope you enjoy reading it and if you do so, any feedback, shares or links are much appreciated!
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I enjoyed reading
#3dprinting#
📇 HP has just announced a new 3D metal printer. While there are already a few 3D metal printers out there, HP is entering the market with a pretty low price of $400k. By having a low price and a very fast printing method – they move the band of print heads across the entire bed in one swipe per layer - they might be able to successfully compete against traditional methods such as metal cutting or lasering which are not as efficient but still cheaper for most of the applications.
#3dprinting#
📇 Talking about 3D printing, Jeffrey Immelt who was the CEO of GE for 16 years and sits on the board of DesktopMetal and Formlabspublished a piece where he explains why this space is so exciting. In his eyes, the industry is at an inflection point because (metal) 3D printing is becoming more affordable and way faster every year. He thinks that this is the basis for flexible factories where companies can use 3D printing for both rapid prototyping (because it gets cheaper) and mass production (because it gets faster). He emphasizes the improvement by highlighting Desktop Metal’s system that is 50-100 times faster than laser-based systems while being orders of magnitude cheaper.
#climatechange#
🌡️ I think climate change is one of human’s biggest challenges and the manufacturing sector significantly contributes to pollution. Two researchers from the University of Michigan have worked on the environmental impact of outsourcing production and their results show that the devil is in the detail – cleaner at home, dirty abroad as they call it e.g. by offshoring “dirty” products. Out of a large dataset they collected, they found evidence that there are US companies that improved their own environmental performance by moving more-polluting activities abroad. As an example, 17-36% of four major air pollutants emitted in China come from production for export. To fight climate change, their suggestion is that states have to agree on strong environmental requirements within trade agreements and closely maintain a regulatory framework. It's a problem we can only solve together.
#humanmachine#
🤝 I couldn’t agree more with Willem Sundblad, the CEO of Oden Technologies, in one of his last Forbes articles where he underlines that the debate of replacing people by technology in manufacturing is wrong and the discussion should be centered more about human-machine collaboration and their benefits. This very much aligns with my article about the productivity focus of manufacturing companies that I just published.
About industrial Startups and Companies
#shutdown#
😔 Airwarewhich was working on an operating system for drones announced that it will shut down after raising $118M from the likes of a16z and Google’s GV. This is sad news and I think it shows how hard it is to build an operating system without owning the hardware while competing against the hardware provider that is also improving their software all the time (e.g. DJI). The following comment shows that:
“But over time, the software that shipped with commercial drone hardware from other manufacturers was good enough to make Airware irrelevant, and a downward spiral of layoffs began over the past two years, culminating in today’s shutdown”.
#investment#
🤑 With all the connected devices and the data floating in the cloud, factories also become more vulnerable. One of the leading industrial cybersecurity companies, Nozomi Networks, just raised $30M for further growth from GGV, Lux Capital and some others. The company is currently protecting over 300,000 industrial devices and many hydro generation facilities.
#investment#
🤑 Lux Capital, a US-based VC, is relatively well known to invest in moonshots. In this interview, Josh Wolfe who is one of the partners at the firm explains what type of founders he likes to back. Besides some early validation of the technology, he loves founders who are „rebel scientists or outsiders“ with an “indistinguishable drive” to prove others wrong.
#acquisition#
💸 Many people in the industry recently talked about the $300M acquisition of Relayr by Munich Reandtry to understand what’s behind that move. It is clear that Munich Re wants to use Relayr to grow is business in the IoT domain with the potential to maybe offer new insurance products or even business models. It will be interesting to see how this will play out in the next years, I’d love to see some radical experiments such as what Kaeser did with selling air-as-a-service now instead of selling compressed air systems.
Additional thoughts on recent development
Factory visit #factories#
I visited a big automotive factory recently. Some observations:
The increasing flexibility of the production due to a broader variety of car models puts a lot of pressure on efficiency gains which are harder and harder to increase significantly.
However, automotive companies are starting to explore new technologies and see early positive results e.g. AR for training, 3D printing of spare parts, cobots. Due to the size and complexity, it takes very long to scale them within a company.
Workers councils are quite strong in Germany when it comes to automation and wearables. This can dramatically lengthen the sales cycles, collaborating with them helps.
There is a big potential for assistance systems for workers that give them immediate feedback to ensure quality at the assembly line and prevent failures.
There is no standard for manufacturing analytics solutions compared to ERP where SAP is quite dominant. Big opportunity, see also the race for manufacturing analytics.
The best-positioned manufacturing companies will most likely be those that center the whole company around IT.
Industrial Landscape #landscape#
I made a big update to my industrial startup landscape a few weeks ago and added 30 companies. The next update will come in a few weeks with already 30+ companies on the last. It's getting hot in here.
Thanks to everybody for supporting this newsletter and for sending me interesting links. As always, any input, shares, and feedback are always warmly welcome 🙏
Robin