Point: Additive manufacturing (also called 3D printing) technologies enable new design methods and local manufacturing by entrepreneurs.

Story:  When designing a new part to be manufactured, designers traditionally had to define the shape they wanted and then pick the material that could support that shape (based on strength, flexibility, etc.). That is, they designed the piece separate from picking the materials. For more complex products, designers had to decompose the product into semi-independent parts that were designed and manufactured separately and then assembled with screws, welding, clips, glue, and so on.  This deconstructive process risked incompatibilities between the parts, added complexity, and increased costs due to a assembly labor.

But, nature does not design in this deconstructive way. A tree trunk, limbs and leaves aren’t built separately and assembled. Rather, nature designs and grows the entire tree in a progressive, additive fashion, and largely from one material. Nature starts with a material (e.g., cellulose is the material for trees) and deploys that material in various densities, shapes, thicknesses, and modified formulations to create an integrated object.  The same basic building-block material that makes the thick rigid truck of a tree also makes the broad, flat leaves of the tree, thin flexible twigs, and hard shells of the tree’s nuts.

Additive manufacturing mimics nature (unlike traditional reductive manufacturing that removes material to make a form).  Additive manufacturing can build almost any shape that can be drawn on a computer, including hollow and contorted forms impossible to make in other ways. Specialized machines (essentially 3D printers) lay down layer after layer of material or draw with a bead of molten material to grow the part the 3D shape that was downloaded from the computer. Virtually anything that someone can imagine, draw or compute in 3D can be made with additive manufacturing.

Several competing 3D printer technologies let designers and manufacturers choose between clear resins, colored opaque thermoplastics, powered metals, and even powered ceramics.  Companies can use the technology to create prototypes, customized shapes, spare parts, and intricate parts in low quantities.  For example, Boeing used metal hybrid additive manufacturing processes and powdered metal manufacturing to create parts that reduced the weight and fuel consumption of its aircraft.

Although industrial printers like Boeing’s cost upwards of $500,000, consumer-grade printers cost only $1300.  The low price point creates a vast new opportunity for entrepreneurs to provide 3D printing services.  For example, online service company Shapeways prints any design that its customers upload, from fashion and jewelry pieces to gadgets and art. Even better, Shapeways lets is members open virtual storefronts on the site to sell their products. Some of the most popular products for sale include a PirateBay ship model, a Dymaxion world map, and a customized metal branding iron that will brand any text you want when attached to a BIC lighter. In addition, open source communities (such as MakerBot Industries, RepRap, Thingiverse) are dedicated to creating ultra-low cost printers and sharing designs for cool additive manufactured parts.

Action

• Think about how in-house 3D printing (or in-home 3-D printing) might change your business.
• Design new additive manufactured products based on shapes that would be “impossible to build” with traditional manufacturing.
• Create new business models based on products or services that support additive manufacturing or that transcend the curse of economies of scale needed by traditional manufacturing

Point: Test large-scale innovations for 1/20th the cost by using 3D simulations to prove viability and performance.

Story: Forty years ago, Georges Mougin got an idea: solve water shortages in drought-ridden countries by towing an iceberg over the sea to them. Floating icebergs are pure drinking water, but they slowly melt into seawater.  Why not harvest them before all that drinking water is lost?

The idea of towing an iceberg, however, seemed crazy.  When Mougin talked with scientists about the idea, objections abounded.  “Once you get north of the equator, you’ll have nothing but a rope at the end of your tow,” said Wilford Weeks of the U.S. Army Cold Regions Research and Engineering Laboratory at a conference in 1977 when hearing of the idea.  Other questions were: how much power would it take to tow 100-million ton iceberg? What would be the environmental impact of it melting in equatorial waters once it was anchored at a coastal city?

Although Mougin was confident of the idea’s viability, he had no way to prove it. Despite securing the backing of a Saudi prince, Prince Mohammed al Faisal, the projected costs and unanswered questions proved insurmountable.  But Mougin continued working on the idea, doggedly amassing data on issues like ocean currents and learning how technologies from other industries, like those developed for off-shore oil drilling, could be tapped.

Mougin’s lucky break came in 2009, when he heard of Dassault Systemes‘ “Passion for Innovation” program.  Dassault Systemes sponsors the Passion for Innovation program as a philanthropic venture to give individuals or nonprofits free access to Dassault Systemes’ suite of products (CATIA, DELMIA, SIMULIA, ENOVIA, 3DVIA. SoildWorks, Exalead) as well as a team of Dassault Systemes engineers.

“We’ll help you and provide you with the modeling and simulation technologies that should demonstrate that your project is feasible,” said Cedric Simard, IceDream Project Director, Dassault Systemes.

Dassault Systemes worked with Mougin: “We used virtual and digital simulation technology to recreate a virtual world around the iceberg, taking into account real oceanographic and weather data to simulate the sea currents at several depth levels, as well as the wind, waves, and even the impact of the sun’s rays,” Simard said.

After using CATIA software to create an exact model of the iceberg, the team used Dymola for the complex simulation, factoring in issues like ocean temperatures that would affect melting en route as well as meteorological phenomena like wind. The team also used SIMULIA software to consider risks such as fracturing of the iceberg. Running these simulations enabled the team to test the concept for a fraction of the cost of building a prototype: $500,000 instead of $10 million.

The simulations proved that it’d be possible to tow a 7-million-ton berg with one tugboat, primarily relying on ocean currents and consuming only 4000 tons of fuel over the 140-day journey, Simard said. The berg would experience some melting (38%) but still provide enough drinking water for 20,000 people for one year.

“Mougin is a very passionate guy,” Simard said. “He’s 87 years old, and he’s been working on his project for forty years. Now thanks to the power of simulation and the digital world, he can see how his idea would work in reality.”

Action:

• Create mathematical models of large-scale innovations
• Ground the model in real-world conditions and environments with empirical data
• Estimate performance, costs, potential failure modes using advanced software
• Present a compelling graphical story of the innovation with 3D visualization.

Sources and Additional Information:

My video interview with Cedric Simard on CollaborativeInnovation.org

Ice Dream Project

“Dassault Puts Inventor’s ‘Ice Dream’ to 3D Simulation Test” by Beth Stackpole

“Iceberg Transport” by Lauren K. Wolf

Point: Entrepreneurs in high-growth companies can influence the federal government to increase their company’s access to capital, people, and markets.

Story: Accelerating high-growth entrepreneurship

Background: The Startup America Partnership, an initiative launched by President Obama in 2011, seeks to accelerate high-growth entrepreneurship. One step is to reduce the barriers entrepreneurs face when starting high-growth businesses. To accomplish this step, senior Obama Administration officials convened roundtables in eight US cities to hear from entrepreneurs and local leaders about what the federal government can do to help high-growth entrepreneurs.

Event: Congressman Jared Polis kicked off the event, along with panelists Phil Weiser (White House National Economic Council), Don Graves (Department of Treasury & President’s Council on Jobs and Competitiveness), Michael Fitzpatrick (Office of Information and Regulatory Affairs) and local leaders like venture capitalist Brad Feld (Managing Director & Co-founder of The Foundry Group) and Kathy Rowlen, (CEO and founder, InDevR).

After the short panel presentations, the 150 invited attendees from Boulder’s entrepreneur community divided into four groups to discuss possible short-term improvements of federal government regulations and procedures that affect high-growth entrepreneurial companies. Startup America will prioritize the suggestions, distribute them to respective federal agencies, and implement them as quickly as possible.

Definition: Startup America focuses its efforts on entrepreneurial high-growth companies as distinct from both small business and larger, more established companies. These high-growth companies differ from small local businesses (e.g., local restaurants and service providers) in that high-growth companies push the limits in their efforts to scale new innovative products, services, and business models. High-growth companies hire hundreds of employees as the entrepreneur pursues national or global scale. Unlike small businesses, high-growth companies often aspire to be the next Fortune 500 company that defines new and innovative industries. Discussions in the breakout sessions suggested that creating scale means gaining access to three key resources: capital, people, and markets. Changes at the federal level could markedly improve access to these resources, spur economic growth, and create jobs.

Issue: Improving Startups’ Access to Capital
Solutions Suggested:

• Exemptions that let banks extend loans to entrepreneurs. (Some participants cautioned, however, that even if regulators let traditional banks lend to high-growth entrepreneurs, the banks wouldn’t make the loans due to cultural mismatches — they see startups as too risky.) Venture capitalist Brad Feld recommended focusing efforts on venture banks that do understand entrepreneurial companies, such as Comerica, Silicon Valley Bank, and Square One.
• Tax-code changes that encourage equity investment in start-ups rather than investments in more established firms that can borrow from banks.
• Expanding the government’s SBIR program for funding innovators and startups. One problem with today’s SBIR grant rules is that SBIR funds can only be applied to prototyping ideas, not commercializing them. The rules assume that entrepreneurs can find private capital once their ideas are ready for commercialization. But in these times of limited access to private capital, many innovation-focused companies can’t find the money they need to convert their SBIR-developed innovations into products. Attendees suggested more funding for SBIR grants and liberalization of SBIR-related regulations to increase job creation.

Issue: Improving Access to Talent
The problem is that many regulations assume — or almost mandate — a traditional workaday paycheck relationship between company and labor. In particular, IRS tax code elements (e.g., contractor/employee tax rules and Section 409A deferred compensation) and SEC regulations (e.g., on secondary markets of shares in private companies and stock-option accounting rules) stymie the kind of flexible access to skilled talent and gain-sharing that high-growth companies need.
Solutions Suggested:

• Exemptions to some of these regulations during the early stages of a company’s founding, so startups could have both arms-length and sweat-equity relationships with people.
• Immigration reform to retain foreign-born college graduates and to encourage both entrepreneurs and investors to come to the United States. US colleges and universities profit from full-tuition foreign students, but the country loses that educational investment when current immigration rules force the graduates to leave the US.
• Move forward on “Start-up Visa” programs that enable early-stage, high-growth entrepreneurs to come to the US and start their companies here. Attracting and retaining both talent and capital will help create innovative future companies that create future jobs.

Issue: Improving Access to Markets
Regulations designed to protect consumers can backfire if the approvals process is so cumbersome or takes so long that entrepreneurs run out of resources before they get approval. Waiting months to hear back on SBIR funding or years for regulatory approvals can exhaust startups’ resources. The root cause of the problem is unbalanced incentives on government. Regulators and politicians face high penalties for under-regulation (i.e., they worry about “what if someone gets hurt by permitting X”). But, these same government officials experience little or no counterbalancing penalties for over-regulation of innovation (the millions of people awaiting healthcare or environmental solutions that are delayed or stymied due to over-regulation). The problem is that everyone can see the failure of lax regulation but few can see the lost opportunity when a regulator says “no.”  Problems  like economic underperformance — or disease and death caused by a lack of entrepreneurial solutions — aren’t as noticeable. As one participant said, the regulator’s motto that “failure is not an option” all but implies that innovation is not an option, either.

Solutions Suggested:

• Pinpoint and cut out as much paperwork and unnecessary regulation as possible.
• Remove delays from grant-approval and regulatory approval processes
• Opt for self-policing solutions or data reporting rather than up-front regulation.

As Go Entrepreneurs, So Goes America
To me, the most distressing stories I heard at the event were from entrepreneurs who felt that their only option was to leave America for more growth-friendly countries like the UK and China. Excessive regulatory demands and delays, combined with high legal costs, are driving entrepreneurs to go overseas, and countries are offering incentives and capital to attract them. These entrepreneurs aren’t just thinking about outsourcing a few low-skill jobs, but taking the whole company — along with the innovation, business growth and new jobs — overseas.

Phil Weiser noted that America’s venture capital environment does have a unique quality of allowing entrepreneurs to fail and resurrect themselves to produce later greatness. Yet despite this “permission to fail,” some participants feared that the government-imposed limits in the U.S. on access to capital, people, and markets mean that high-growth companies aren’t permitted to succeed. And if they can’t succeed in the U.S., they can too easily move. In today’s competitive world, more countries have the resources and motivations to host the best and brightest. Today’s mobility of capital, people, goods, and information mean that high-growth companies can readily relocate and take their energy, innovation, and success with them.

At the same time that some entrepreneurs felt that the U.S. government may have failed their high-growth companies, those in government see that these entrepreneurs have failed government, too. Panelists urged the attendees to participate in government. Although entrepreneurs focus on telling and selling their ideas to customers and investors, they have not spent sufficient resources telling and selling to government. If citizens, including high-growth company entrepreneurs, are the customers of government, then government can only succeed with timely and useful feedback from high-growth company entrepreneurs.

Action

• (Note for our international readers: Although this particular post focuses on the U.S., I’m sure your country has analogous means for improving your government’s understanding of the value of innovation and high-growth entrepreneurship.)
• Think about what regulations and government processes create needless obstacles to innovation and growth for your high-growth business.
• Post your ideas or vote on the Startup America’s open innovation forum (http://reducingbarriers.ideascale.com/)
• Track and comment on pending regulations at Office of Regulatory Affairs
• Lobby your senators and congressional representatives for more entrepreneur- and innovation-friendly laws