For all its vibrancy, the Estonian startup scene can feel a bit homogenous, centered on weekend hackathons and the quest for apps that can run on a cheap web host and disruptively improve some tiny facet of a trivial everyday task. But the real movers and shakers of the economy are companies that take an obscure but vital stage in a process that generates real goods, and make it dramatically more efficient. With 3D printing set to be the Next Big Thing, one Finnish-Estonian startup is positioning itself to play a role in creating a secure marketplace for design content. Andrei Tuch caught up with Fabulonia’s CEO, Kimmo Isbjörnssund.
How did Fabulonia start? Some of the founders are Estonian; was it an idea developed here with foreign executives drafted in to help sell it on the global market, or was it someone with an idea and money coming to Estonia in search of talent to implement it?
I moved to Estonia from Helsinki to start my own design consultancy in February 2012. I did some work for my first company here before founding Fabulonia. The biggest job was the Angry Birds retail chain design for Rovio.
I started developing the concept of Fabulonia and the idea of a copyright solution for 3D printing in May 2012, and it was firmly intended for global markets. I am and have always been curious about the technologies and possibilities of the future, not of yesterday. After the idea was born, I started to look for the right talent here to develop the technical platform and services, and found it. We have all funded it, so not all of the money came from abroad.
We developed the basis of our FabSecure platform and technology in autumn of last year, and demoed under the name Fabulonia for the first time this February, at the Mobile World Congress in Barcelona.
In April, John Dogru [Chief Architect, an American who has lived in Estonia for years - ERR] joined the team, and we have been focusing on finalizing the platform and developing new services on top of it. Today, the platform is ready for prime time.
In broad terms, what is the hoped-for business model? Remaining an independent company, building a technology and licensing it to someone else, like ARM? Providing a retail consumer service and becoming the Spotify of 3D printers? Or ramping up on VC cash to a brilliant infrastructural solution and then selling yourselves to Hewlett-Packard?
The first ambition must always be to become the world’s best in what you do, building a winning product or service, and being a viable business. The Fabulonia business model involves licensing, but we license our technology out to several companies, not just one single customer. Fabulonia has been called the Spotify for 3D models due to our invention, the secure streaming solution for 3D models, but we are much more than that. We are the world’s first live secure 3D printing platform that is available for licensing. Not an app, not a website, but a production platform for enterprises.
Fabulonia is not built with an exact exit plan in mind, nor are we building this to attract VC money like so many startups do. An exit will come if it comes, and hopefully we will need as little VC money as possible if we eventually decide to exit. The first goal is to grow and be world leaders in our area. Fabulonia is already a recognized pioneer and leader in our area, a very flattering position for a one-year-old company, but we are not taking a pause. It’s just starting, and we are set to conquer the world of 3D printing with our technology.
Without revealing the secret sauce - how do you intend to fight piracy? Encryption and streaming in other areas have proven ultimately ineffective against determined hackers; if you can play a video or piece of music on a computer, at the very least it can be recorded on a low level, and the beauty of digital content is that it doesn't degrade with copying. How can you prevent, let's say, someone at home putting a keylogger in their MakerBot that captures the sequence of movements of various hardware bits and copies your content that way?
We don’t really fight piracy; we try to make it much less interesting. Our aim is to provide a great legal channel for original content in 3D printing, so that piracy is not interesting. This has already happened in other media domains like music and games.
If somebody is determined to hack something, they will probably succeed. But our method of streaming is better than distributing the original files, since in our method the original is never exposed or distributed as a whole.
As said, we are not fighting against piracy, but we are in the business of protecting copyrights when the designs are stored or distributed using our technology. There are ways to copy designs such as scanning a ready object and creating a new 3D model out of it, or trying to sniff the movements of the 3D printer motors and get some of the machine codes that way. Most people are not interested in that, and the quality will never be the same. It’s a lot of hassle and may ultimately result in an unusable file, so we believe most people will be happy if there is an easy, legal way to get quality content that will print right, and won’t introduce malware into their systems. Fabulonia is the matchmaker between consumers and original content through our enterprise customers, and by [making the match], we help the 3D printing market grow and preserve the copyrights of designers and brands during the storage, distribution and sales of 3D models.
Your press materials tout your ease of use for consumers as a major advantage - they speak about how end users don't want to mess about with CAD files and weird formats. What about the creators? Let's say I've invented a better mousetrap and want to sell the design to people all over the world - do I need to learn how to draw it in specific software, and do I need to spend thousands of dollars on an AutoCAD license?
Yes, using either free software or paid programs like AutoCAD. If you are a professional designer, you already know how to use these programs, or your company has someone who is able to use them. Similarly, if I was a pilot, I would need to know how to fly a plane. We help you distribute and sell your designs securely, but you still need to design the objects.
There are numerous consumer-friendly design tools online that can be used to create simple designs. For professional designers, the tools are different. Once the design is ready, FabSecure uses it as it comes out of the design software, and no new file formats are required.
Not so long ago, Nokia released 3D printer files for a case for its flagship phone at the time. A leading gadget review website had the case 3D printed - it cost ten times as much as having one shipped over from Hong Kong, and was too brittle to be useful. Realistically, how far is the 3D printing industry right now from being able to offer home consumers something more practical and useful than toys or art projects?
The printer they used was a Makerbot 2. While it is OK, it is not amazing in its quality, and it is not exactly a consumer-friendly printer yet. It’s for tweakers and hobbyists.
The 3D printing industry is already at that stage where practical and useful objects can be produced. Even the average home printer can make useful objects, but industrial printers can print anything in any quality, even gold and chocolate. Metal printers can manufacture parts that can be used in airplanes. These very capable models are not yet suitable for home consumers due to their price and size, for example.
Home 3D printer prices will start dropping dramatically from 2014, and we will see really good quality coming out of home machines in a year or two. The technological advances in this area will be staggering. The main challenges are now in materials suitable for various purposes, and combinations of materials, at a cost and quality affordable by an average consumer. That part of the market is still a few years out. But simple materials like ABS and PLA plastics, and 3D printers that can manufacture good objects in these materials, will improve and become cheaper.
I went on The Pirate Bay and looked at their section for sharing 3D printer files. Almost all of the popular shares were versions of the Liberator gun. This is inevitably a specter that will be haunting the 3D printing industry for the immediate future. How much do you think it is discrediting or hurting an otherwise legitimate industry, and do major players have a moral responsibility to self-regulate?
The gun printing issue has damaged the 3D printing industry a little bit - or the perception of 3D printing, in that it has induced national regulators in many countries to think about regulating 3D printing. These gun projects have been personal crusades and individual glorification projects. You have to be either an idiot or very brave to build and fire a 3D printed plastic gun. It is true that some journalist did smuggle a 3D printed plastic gun, or parts thereof, onto an airplane successfully.
Once metal printers become more widely available and cheaper, we will start having an issue in this respect. We are aware of technologies to prevent guns or other regulated objects from being printed by recognizing the object and blocking the printing. However, we don’t think this, nor any regulations, will stop criminals from doing it. But will it ever be a serious problem remains to be seen. It would be best not to overreact because of a couple of publicity-hungry morons.
How big is the market? On your website, you are saying that "thousands" of customers around the world are waiting and willing to pay for original designs. That may be a worthwhile audience to a designer, but is it enough to pay the bills of a startup providing a middleman service? Let's say you launch in 2013. How big is the global consumer base going to be five years from now?
Our website is under development and misleading in that our main market is enterprises, not individuals or consumers. The economic impact of 3D printing is estimated by McKinsey to be at least 250 billion USD by 2025.
Fabulonia is a 3D printing security company that has built the world’s first secure 3D printing platform for enterprises. Our market is every enterprise in the world, big or small. Not a small market for any startup. Our main market is not individual designers or direct consumers. We sell our software platform to enterprises, who in turn sell their original designs to other enterprises or consumers. We enable any enterprise in the world to start a multisite, multinational distributed 3D printing manufacturing network with copyright protection.
3D printers are still something of a niche hobby. I realize it's a stretch, but one could maybe say that the state of the market right now is like smartphones were before the advent of the iPhone. Where do you expect the major breakthrough to come from, that will make 3D printers a common household item? What is the big problem that somebody needs to solve before that happens?
The main issues to solve, and these are being solved in the US in particular, is materials, quality and prices. It’s a work in rapid progress, and we know this because we work with these companies.
What are some other Estonian startups to keep an eye on, particularly ones that haven't gotten much publicity yet? Let's say, nothing that President Ilves has mentioned in an official speech.
Frankly, we have not had much time to follow other companies here, nor have we attended all these so-called networking events. We have used our time to build a world-class product. One piece of advice I would give to Estonian, and not only Estonian startups: don’t focus any more on apps or other obvious directions. It’s a retiring market that is extremely crowded, and has been for years already. People no longer pay for apps. They pay for content in the apps, maybe. Don’t be blinded by a couple of success stories.
Those who enter the app economy now will need to be a thousand times better than the rest to stand out. Running a startup is hard as it is, why choose to develop the 100th app to order a taxi or book a restaurant table? Be original and be first. In any case, you need to strive to be the best.
If you don’t have a good original idea, my advice is simple: don’t become an entrepreneur. And if you do, give up everything else and be just that, an entrepreneur.
We have taken practically no public money, and we focused on this entirely. Not on 10 different startup ideas. What has been great compared to being a startup in, say, Silicon Valley is that we were not distracted. We have focused for a full year on developing something truly amazing and production-quality, instead of a quick website or an app trying to attract VC money first. We took the risk because we believed this was the right direction.
In order to have a slightly better chance of success, a new startup should look beyond the obvious and all the noise, anticipate and solve future problems, not tiny issues of today. Going down roads where everyone else went yesterday is a sure recipe for ending up as roadkill.
It would be very interesting to hear the President also mention Estonian startups that were started by a non-Estonian founder. Estonia needs to become more multicultural and accepting of diversity, to welcome the challenging of ideas and thinking globally. Sure, there are many Estonian startups that do that. But the national average needs to become more open to diversity. Promoting Estonian companies led by foreign citizens by the President would be a small gesture in this direction. We have been global from day one, but it would be a good gesture to the outside world that foreigners are welcome to contribute to this country.
Also, Estonia needs a 3D printing strategy and there is at least one company originating from Estonia that can help shape it.