Maker Business vs. Big Business

By now you may have heard that MakerBot is slashing 20% of its staff.  20%.  If you'd like to read their "press release" you can do so here.

I want to be clear, I am not anti-MakerBot.  Even though they have had their fair share of issues, I believe at this point MakerBot has become something of a cautionary tale when it comes to Maker business meeting Big business.  When MakerBot was acquired by Stratsys, I was initially concerned that the "flavor" of the company would be lost.  When Bre Pettis left - my level of concern grew even more.  If any company could truly bring 3D printing into the mainstream, I thought it could be MakerBot however I fear for the continued survival of the brand.

Being in business is tough.  Ask any Mom-and-Pop operation or CEO.  As you could imagine, money is the biggest concern you have in business.  It may not be cash directly, but if you are having warranty issues or customer-retention issues it all boils down to money (read: the bottom line).  Small business generally has to balance customer loyalty with a dearth of liquid cash.  Big business has to balance revenue against the demands/expectations of investors whether the business is public or private.  You have to pick you poison when it comes to how you want to operate and grow.

Normally, when you read company press releases you have to a little reading between the lines unless the proverbial cat is out of the bag.  If a business privately reorganizes, it's probably because someone got fired and they're taking opportunities to shift people/responsibilities while they have a moment.  If a business publicly announces a reorganization, it means that they are looking to reduce the cost of doing business.

In MakerBot's case, I would guess they are doing the following and why (again this is an educated guess):

1.  They are reducing what I can assume is full-time headcount to cut down on salary+benefits cost; they are also utilizing contract labor.  This tells me that they are going to cut their operating costs by eliminating the costs of fringe benefits.  They may save some money on labor, but insuring employees is expensive and if they are letting full-time employees go and replacing them with contractors - benefits are going to be the cost difference.

2.  Moving their R&D team to their headquarters makes sense from a communication standpoint, however financially it makes more sense if you consolidate everything to one facility.  They will still keep their factory in the same location which tells me that it doesn't make financial or logistical sense to move the factory.  Moving the R&D team makes sense if you want a cohesive creative force.

3.  As a corollary to #1, focusing contract workforce on your past generation machines does free up your full-timers to focus on the next generation of machines.  4th Gen should have all of the kinks worked out of them so you are just having someone to manufacture what "should" be a robust design.  You don't need that much engineering support and it should take care of itself.

I want MakerBot to succeed because I believe they can bring 3D printing into the mainstream.  However when we start to talk about the influence of big business onto small business, labelling something as a lifestyle brand or a niche brand doesn't exempt you from the same financial pressures that face mainstream brands.  You still need to make money to keep investors happy.

Free Radical Labs will always remain a small business.  I enjoy the pains that we face knowing that the list of people we financially answer to is delightfully short.  We don't have tons of liquid cash, but we make do with what we have.  This keeps us honest.  We strive to provide the best customer service because its the right thing to do - the monetary benefits are nice, but if you always put money first you will make decisions that will drive customers away.

We want you to come back and keep coming back knowing we have your best interests at heart.