Aug 06, 2023 All content of this newsletter is for entertainment purposes and not investment advice. All the news we share via social media can be found here. To subscribe to this email, click here. Alternatively, we also have a LinkedIn version of this newsletter. This edition includes Insights/Reflection, News, Events, Watchwhile, Open Source, Going Viral, and Book Recommendations.
How Will Software Eat the World?
Lately, I had fun reading stuff that was written a long time ago, a decade ago, a thousand years ago, and realizing how good writing can be very relevant in today’s life. While it is generally agreed that economic forecasting and market predictions are impossible endeavors, it is impressive how some people CAN get it right.
Such is the case with Marc Andreessen’s piece in WSJ in 2011, named “Why Software Is Eating the World.” Mr. Andreesen is an entrepreneur, investor, and co-founder of Andreessen Horowitz, now known as A16Z ($35 billion as of March 12, 2022).
Here is a prediction Mr. Andreesen made in 2011,
“Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.”
To backtest the above prediction, you can look up current worldwide smartphone ownership, which is almost exactly 5 billion based on different sources[source 1, source 2].
The reason I am bringing up this article today is that it is often triggering for MedTech, hardware startup founders to hear that software startups will have the upper hand in fundraising, capital efficiency, and exits. When investors hear the phrase “healthcare 3D printing”, they immediately associate it with the words “hardware” and “medical device”, two industries that are often associated with higher CapEx, a lower valuation multiple, and slower exits.
A natural response often contains counterarguments such as this well-written article focusing on the semiconductor industry. There are many similar articles like this, typically from hardware companies or investors.
However, as technology advances, the line between software and hardware is becoming blurry. It is almost equivalent to insisting on “digital transformation” in any industry nowadays. Frankly, industries that still do not use software or the internet will not exist. Same as any hardware technology. 3D printing, in fact, is a representative of the next step of virtual-physical world integration to increase human productivity.
A quick scan of the top ten U.S. companies with the largest market cap includes “hardware” companies like Apple, Tesla, and Nvidia. The first two are the frontrunners in perfecting software integration into their physical products. Nvidia, on the other hand, exemplifies how hardware tool makers can revolutionize the software industry, first in fintech, and now in artificial intelligence.
In our virtual event last Thursday focusing on AI/ML in medical 3D technologies, remarkable advances are made on the software front, not just automated segmentation, but an automated design process that significantly improves productivity and human experiences. Recent large language model advancement (e.g. ChatGTP) is already making text-to-design, text-to-3D medical models a reality.
3D printing should not only make complex things, but should make complex things easier than how we used to make simple things, and the perfect integration of new software and hardware is key if you want to beat the incumbents.
Therefore, rather than debating if hardware versus software will “eat the world”. They are really Yin and Yang, where they are complimentary and parts of a duality. I am perfectly happy investing in either the next “Apple” or “Google” in healthcare 3D printing.
Mergers and Acquisitions
That almost no one noticed…
But almost everyone now knows about recent FTC defeats against two well-known mergers. One is the merger between Microsoft and Activision Blizzard, and the other is Meta and Within. Quite a few industrial experts predicted the FTC failures.
Here are some types of mergers that the FTC may scrutinize and potentially challenge through a lawsuit:
- Horizontal Mergers: These involve companies that are direct competitors in the same market or industry. The FTC is particularly concerned about horizontal mergers that may reduce competition and lead to higher prices, lower quality products, or fewer choices for consumers.
- Vertical Mergers: These involve companies that operate at different stages of the supply chain, such as a manufacturer acquiring a distributor or a retailer. For example, Microsoft/Activation and Meta/Within mergers.
- Conglomerate Mergers
- Mergers of Dominant Firms: When two or more dominant companies in a specific industry or market plan to merge, the FTC may intervene to assess the potential impact on competition and consumers.
- Mergers in Emerging Industries: The FTC may pay close attention to mergers in emerging or rapidly growing industries, where competition is essential for fostering innovation and preventing monopolistic behavior.
- Merger-to-Monopoly
If anything, the potential 3D Systems and Stratasys merger seem to check several boxes above (specifically one, four, five, six). So why have we not heard anything from FTC yet?
Well, maybe because this is just not on their radar yet, considering none of the major news outlets is covering this upcoming merger other than usual industrial outlets. Or, perhaps FTC did notice this but does not believe such a merger will create harm in the 3D printing industry. And, perhaps they believe innovations outside of these two companies are now leading the industry. Let’s hope Mergeracolypse is just noise and not signal.
Going Viral
This month we want to feature another #3dhealspost story from Instagram by Exoiji , a 3D printed prosthetics company for humans and animals, from Cordon, Montevideo, Uruguay
From the post’s author (English translation) “A Different Proposal:
Our patient has suffered from a malformed left hand since birth. His request was the elaboration of a plastic piece, like a glove, that would hide his physical condition.The challenge was to provide a practical, functional, and aesthetic solution that contemplated his needs.It is a totally exclusive piece, with the mold of its anatomy obtained by 3D scanning of its other hand. The digital design was then carried out and subsequent manufacturing in 3D printing with PLAplus.We monitor the patient for a period of 60 days, with evidence of the patient’s compliance and comfort provided by the 3D piece.”
Want us to share your amazing medical and dental 3D printing stories on our Instagram account? Add #3dhealspost , tag @3dheals, and give us permission to repost. In case you missed our last 3D-printed O&P virtual event last month, don’t worry, you can now find it on-demand here. Also, if you join as a Premium member, you can access all the past events since 2017.
Open Source
In the month of July, we found another incredible open-source website for your creative endeavors:
HACKberry is an open-sourced 3D-printable bionic arm project founded by exiii Inc. It is now managed by Mission ARM Japan, a Tokyo-based non-profit organization.
Podcast
Acquired, again
Relevant to today’s newsletter, this is an excellent two parts series that focuses on the history of the co-founders, and the investment history and theories of Andreessen Horowitz, perhaps one of the most impactful and sometimes controversial venture capital firms today.
Have a great podcast to share? Let us know: info@3dheals.com
Hiring
We just updated our job board. Check it out. Have a new job post in healthcare 3D printing, bioprinting? Send us an email.
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