Reader Question: I Would Like Some Feedback On A Business Idea…

In: Business Ideas By: Brian Armstrong

16 Feb 2010

Here is a question from a Breaking Free reader that I though others might find useful (my response below)…

Brian,

I would like some feedback on a business idea…

I’m thinking about a 3D scanning and 3D printing service with a website to solicit business.

A 3D scanner is around $3,000, and a 3D printer is about $15,000, so startup costs would be a little “high” I guess. The scanner can scan an existing object, and convert it to a CAD file. Then, with that file, someone could “print” a 3D object in ABS plastic, even if the part was complicated. It is an efficient way to see/test a prototype idea.

Not sure how much market there is for something like that. The client would need to ship an object to me to scan, and then I would probably be required to send the object back with an electronic CAD file. And if I offered the “printing” service, I would send the ABS model back to them, all for a fee. This is kind of a new thing developed in the last couple of years, and could save some companies money in their product development. The startup cost probably keeps the small entrepreneur out of that market. But, I could spend that much if I thought I could recoup my investment, and eventually make a profit.

Right now I am working part time for $10/hour at the local community college tutoring math. I am a licensed Engineer in Texas, but finding a job is difficult. If I could book 30 to 40 hours a week tutoring at $20 to $30 an hour, I might consider being ok with that. I am a UniversityTutor.com tutor, but on my 3rd (free) referral, with just 1 client 1 hour a week at $20/hour.

- [Name Removed]

Hi [Name Removed],

Interesting idea. One way you could test it out is to see what keywords people are searching for on Google near where you live. I’m not sure what keywords it would be exactly, but if you lived in Houston for example you might see how many searches are being done for “3d printing service houston” and keywords like that. This would give you an idea of the market size. You can use a tool like the Google Keyword tool for this type of research.

Then do those searches yourself and see what websites come up. Are the results good? (i.e. people providing this service at a reasonable price) Or do you feel you could do something substantially better marketing/price/customer service wise than what is currently out there? What will be your competitive edge?

If you feel you can do substantially better in some way (i.e. there a market “pain” out there that you can solve), and you find a way to get the equipment (give equity to an investor, get it on business credit, etc) then you’re right a website would be a great way to market this business. You could create a business website with WordPress like in this article. You could also choose the domain name as www.3dprintinghouston.com (or whatever you decide your #1 keyword is) – this alone (the keyword as the domain name) will probably be enough to give you the first position in Google for that keyword. Google gives a high weight to the domain name.

That would give you your first customers, or at least some traffic to your website. How many customers would you need to get to pay back the business loans? (Basically the total cost divided by the margin per item sold. Note this would get you to zero – still no profit or compensation for your time – anything beyond that would be profit.)

To get setup you could start with the bare minimum. Accept payments with a Paypal “Buy Now” button, put up some testimonials up, list an easy way for people to reach you, and a money back guarantee. Don’t invest too much time in getting things perfect – just start with the bare minimum to get something up quickly and improve from there. With the Google traffic you should get some bites.

Finally, I’d think up front about how this will scale. In other words, if this thing takes off are you going to have to be printing these models 8 hours per day and is that the sort of life you want? If you don’t want to do it yourself long term, are the margins there to hire someone else to help you so you could move into more of a manager role and scale that way? In other words, be in this for the long haul – if you are passionate about this particular field for some reason and feel you could one day be the best in the world at it (at least in your local area) then go for it. Because it could one day be a great company – but it will take years of hard work. If it’s not something you’re passionate about it will be too easy to give up when the going gets tough. But if you’re passionate about it (or find a related business that you are) then I say go for it. You’ll never know unless you try!

In the comments below, what other advice would you (Breaking Free readers) give him?

Hope it helps!
Brian Armstrong

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19 Responses

Witold Rugowski

February 16th, 2010 at 8:28 am

I’m not sure if there is viable business model. I don’t see demand for both scanning and printing (I mean – that would be just for making copies parts You have no plans).

I would say that scanning itself may be interesting (to get CAD file to make some modifications to scanned object).

And regarding 3d printing – I think rise of companies like MakerBot (http://makerbot.com/) will create 3d printers in much more affordable price range. This will result in less demand for 3d printing service.

On a plus side – I think that engineering area, rapid prototyping (with physical objects, not as in software development) has great future.

So I would suggest to stay within this area, but search for idea which does not require such investment.

I’m myself doing such things – being web developer doing freelance, I have started ecommerce site selling Arduinos in Poland. For example – I’m software guy and I have basically no idea how to deal with mechanics – if You have knowledge and interest in this topics maybe start blog with tips, howtos. If there will be response, You can start with creating some kits to build mechanic parts of projects for software guys like me :)

Brian Armstrong

February 19th, 2010 at 5:10 am

I wouldn’t say it’s an easy business to get into either…but that’s isn’t a show stopper in itself.

College Town Menus (CTM)

February 16th, 2010 at 2:27 pm

Interesting concept, but I go back to Brian’s main point (and theme of this blog) is that your entire idea is focused on you trading YOUR Time4Money. BreakingFree and the 4 Hour Work Week has a primary goal of automating business so that you, the owner, can be removed from the business process and sit back and receive a fat check. If you look at Brian’s current, past, and future projects, almost all of them are focused on the residual income aspect. Agreed that if this is your passion, then it doesn’t matter how big (or dependent) it becomes on you — you’ll love it regardless.

One idea to consider though is yes, although you could buy the equipment straight and clear, but again, if the business fails, then you realize that major expense immediately. If you RENT the equipment, then the parent company will incur costs of replacements if mechanical failure, you make smaller monthly payments, and can easily liquidate if you need to close. Lots of major companies don’t OWN any computers or printers, because of the refresh rate required of them. Food for thought.

Chuck Cohn

February 16th, 2010 at 3:12 pm

I actually think that $15k is a *very* small barrier to entry relative to most industries – it won’t scare off individuals – and is a drop in the bucket for the big printing companies. My concern here is that the normal printing business is completely commoditized – printers compete on price and turnaround time. There are a few big printers in the US who do hundreds of millions of dollars in revenue and have significant economies of scale. It would be extremely easy for them to take their online platform and add 3D printing, which I expect they will do once there is real demand for 3D printing. Just my 2 cents….

Brian Armstrong

February 19th, 2010 at 5:11 am

Chuck is right…don’t feel like $15k will keep anyone out of this business. Just to start a tiny little restaurant people often invest upwards of a quarter mil, so $15k is nothing.

Frank

February 16th, 2010 at 10:09 pm

Are there inventors out there that have ideas but need help getting to the prototype phase? You may be able to help inventors take the first step in seeing if their ideas are viable. Just a thought. Good luck! It is definitely a tough time but I hope you can figure out a great business!

Mike

February 17th, 2010 at 4:01 am

I might buy the scanner, but not the printer. What I would do is look for other companies that already employ that technology and then I would outsource that to them.

That is what I do with my digital printing business. Rather than invest in $500K – 1M in equipment, I use companies that already have that equipment to be my production department. My entire business was started with a small office space, a computer and a website.

Michael

February 17th, 2010 at 4:46 am

We’ve been at the 3D scanning business for many years. We’re about as big as it gets in the U.S. Feel free to check out our extensive website at http://www.directdimensions.com.

If you want to do this, I will be glad to give you some deeper advise and suggest ways you can be successful. It’s a growing field but I can tell you that its not easy.

Brian Armstrong

February 19th, 2010 at 5:12 am

Wow great offer Michael. To the poster, definitely take him up on this!

Aali Raza

May 18th, 2010 at 5:06 pm

Micheal

I have looked at the ZCorp 650 machine and its an awsome machine. How may I contact you to understand this business better please let me know. Thanks

Tampogo Home Business

February 23rd, 2010 at 1:16 am

You should consider joining a home based business company. Think of them as a “business in a box”. All the “leg work” has already been done. Most have business models that are pretty solid, and some of them are completely FREE to join such as Tampogo Home Business. Another great home based business to consider is a healthy chocolate home based business called Xocai (Sho-Sigh).

Matt

February 25th, 2010 at 12:57 am

Brian,

I have ideas for products/inventions frequently, like most people. I was able to find advice on your blog about starting a business based on a service such as this post, or services provided by websites, but nothing on a product. Assuming I have done the market research for a particular idea and I feel it is worth pursuing, what are my next steps? Patent? Contact manufacturers to set up a partnership? Anyone with advice please respond.

Brian Armstrong

February 28th, 2010 at 9:26 pm

Hi Matt,

You’re right I have little experience in that area. From talking to other people I’ve seen them do that (1) patent (2) get prototype built and (3) attend conferences to try and find buyers for it. But I admittedly know very little about it. If anyone else here as experience please share!
Brian

Joseph

March 22nd, 2010 at 3:55 pm

Great minds!

Alexandra Gibson

May 6th, 2010 at 3:40 am

Our home business in our village is a small catering service. The profit is good in the food and beverage business. ‘

blairstom

May 29th, 2010 at 12:32 pm

home business really needs extra effort and money but you will also need good judgement on marketing offline or online. I have an online business and getting good leads is one of the keys fro mgetleadsystempro.com. its tested through times. In your case, if you already found your niche..then give full time and effort to get it big.

Peter Timorow

December 31st, 2010 at 1:34 pm

Did you consider using a service like http://www.feedbackers.biz? (they provide feedback reports for new business ideas within 24hours for $99).

Melissa E

March 13th, 2011 at 8:35 am

I think it’s a really cool idea. Keywords that come to mind are: Product fabrication, product design, product prototype, product manufacturer, how do i get a prototype of my project? (i often type questions into google). You might consider adding “U.S.” to your keywords too, since I was expecting that most people who did this kind of thing are in China. Being a fan of the Four Hour Workweek, I feel stuck at the prospect of getting a design fabricated for the first time. It sounds like your business might be able to help a person with something like that. As a person who has (or wants very much to have) this kind of need, those are the keywords I would use to search for you.

Barbara

November 19th, 2011 at 6:29 pm

What’s up, just wanted to mention, I enjoyed this blog post. It was practical. Keep on posting!

Hi there, I just wanted to tell you, you’re dead wrong. Your point doesn’t make any sense.

Hi, how’s it going? Just shared this post with a colleague, we had a good laugh.

Touche. Great arguments. Keep up the amazing spirit.

This post is priceless. When can I find out more?

Highly descriptive post, I loved that bit. Will there be a part 2?

Inspiring quest there. What occurred after? Thanks!

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