Are we heading for another bubble?
Spend any time at all on Bloomberg or CNBC, and you’ll inevitably come across the “Real Estate Experts” discussing the current state of home prices across to U.S., and how signs may be pointing towards another bubble. You know, the same one that kicked off in 2006 and triggered an absolute financial meltdown?
Yes, that kind of bubble…
Now, I am not here to discuss the rising home prices, or whether you should buy or sell. What I am here to talk about is something that no one ever seems to mention when discussing the rising cost of homes: production costs. Did you know that According to the National Association of Home Builders it costs roughly $237,760 to build a single-family house? This, of course, does not include the land itself – just the materials and labor involved in building the structure…
How can we possibly expect to offer affordable housing when the base price of a home is nearly a quarter of a million dollars?!
Thankfully, there is a solution on the horizon. One that will change the game for innovative home builders: 3D Printing.
Think 3D printers are just a novelty item? Think again. There will be a time when you’ll be able to live in a home that was literally printed. And that time is coming sooner than you think.
Last year, ICON, an Austin-based start-up, was the first company in America secure a building permit to print a home. And they did so, successfully. Things went so well that last month the announced the commercial availability of their Vulcan II 3D home printer, and have started taking orders for 2020 delivery.
Why is this so important? Because it can drastically reduce the costs associated with building a home. And while the technology is of course very young, the long-term impact of 3D printing items of this magnitude is astounding. What happens to our country if the average price of a home falls from $237k to $50k? Who is suddenly able to afford a home that could not before? Who could be lifted out of the poverty cycle driven by overpaying for apartments?
Homes are not the only major disruption on the horizon for 3D printers. Last year, NASA began using rockets with 3D printed components, with the aim of reducing costs so that the agency can make a manned trip to Mars financially feasible one day. And the US Military has been researching technology that would allow for 3D printed human bones, reducing the need to amputate limbs of soldiers experiencing massive trauma on the battlefield.
While 3D printed homes, rockets and bones might all seem a little science fiction, it’s the reality that’s in our future. And it’ll affect more industries than you think. Way more. In fact, if you’re not thinking about how 3D printing could disrupt your business, you’re already behind.
Amazon broke a lot of records last year. Market Cap. Amazon Prime Subscribers. Revenue Benchmarks. All shattering their previous records. They also shattered one more: shipping costs. Amazon spent a reported $34 billion on shipping costs last year. To put that in perspective, that’s more than the revenues achieved by nearly 75% of the companies listed on the Fortune 500. All spent on shipping…
Is this massive growth and need for shipping sustainable? It’s hard to say, but it certainly seems like Amazon is challenged by it. They’ve been buying countless transportation and logistics businesses, building out their own truck fleets, allowing entrepreneurs to buy their own “Amazon Shipping” franchise – anything they can do to manage the growing demand of getting custom packages from their warehouse to your front door.
But what if a package didn’t have to get to your front door? What if that tool or picture frame or watch could be printed at home instead? How would that change things for Amazon and all the companies involved in shipping its products? It would change everything. And while many may think the idea of printing your own goods at home is far-fetched, is it really more far-fetched than printing your home or your own bones?
Didn’t think so…
Now, I have no doubt that Mr. Bezos and his talented, innovative teams have private conversations about what their company would look like in a future where consumers can print complex goods on-demand at home. Maybe Amazon shifts from selling the actual goods to 3D printer blueprints, wirelessly transferring that watch or tool schematic to your printer the second you click “Buy Now”. Regardless of the outcome, it’s important that they (and you) start thinking about it now, while they still have a chance to plan and prepare for that eventual transition, whatever it may be.
According to a study done by Thomas Kinney, a History Professor at Bluefield College in Virginia, there were over 13,000 businesses in the U.S. wagon and carriage industry in 1890. This was over 5 years after Carl Benz introduced the world’s first automobile. Want to guess how many of these 13,000 companies survived? If you guessed almost none, you’d be right. Even, though they had seen the automobile, they didn’t want to believe this was the future. In fact, it was dismissed as a novelty. A fad. Something that would be reserved for a very few in society. And so, they continued with business as usual, making parts and accessories for a technology that – with Henry Ford’s introduction of the Model T in 1908 – would soon be obsolete, sending them into bankruptcy and out of business.
And the few horse and buggy businesses that survived? They were the ones that stopped calling themselves “a horse and buggy company” and instead started calling themselves a “personal transportation company”. They used expansive thinking to position themselves outside of any one industry, focusing instead on the result they achieved for their customers (we move people from point A to point B), rather than focus on the specific means of the time (we make horse and buggy accessories).
If Apple was just “a computer company”, would we have ever gotten the iPod or iPhone? If Disney was just “an animation company”, would we have ever gotten Disneyland? The ability to think beyond the constraints of your current product or service allows you to sail your ship through the ever-changing seas of your industry, and adjust your sails to follow the most powerful winds.
Could 3D printing be “just another fad”? Of course. Lots of new technologies fail to take hold. But what if it’s not? If we’re already printing rockets, homes, and bones, what else is horizon? Is it that crazy to believe that we might be able to one day print anything we want on-demand at home? I certainly don’t think so. And I encourage you to take it seriously as well. For the companies that achieve the greatest long-term success are the ones that think differently and innovatively about the changes, their business will experience with the advent of new technologies.
So, what will 3D printing change for you?
Interested in creating a culture of innovation to help you prepare for the upcoming disruption? Check out these articles: