Path IV: Business model evolution

- Hi, there. In this segment, we'll continue our journey through the Additive Manufacturing Framework by examining Path IV: Business Model Evolution. I'll begin by reminding us of exactly what Path IV is about, and then we'll move through some examples of the business models that we're actually seeing emerging in this space. Let's get started. Path IV companies alter both supply chains and products in pursuit of new business models. Now, that's important, but it's easier to say than it is to do. Innovation and new business growth represent the holy grails of business opportunity, and managers need to consider all possible approaches to achieving it. In essence, managers seek to combine tactics and value embedded in Path II supply chain and Path III products to achieve not only the operational advantages that define new levels of competition, but also to create those important new business models. Examples of these business models are still emerging, and I think it's important not to get too hung up on whether something is Path II or Path IV, or Path III or Path IV, and really focus on the emergence of new sources of value by combining all of these attributes. That said, I think some compelling examples can be found that are out there, and one of them is the maker movement. Now, makers are individuals who apply manufacturing technologies to create their own products, either as a hobby or as a business. And there are companies out there that exist to help facilitate their efforts. One is cubify.com. They offer makers the opportunity to design and deliver their products to a growing market. Another is shapeways.com, which offers literally thousands of products that have been additively manufactured. Other websites act more as clearing houses of digitally designed products the users can download and print for themselves. Thingiverse.com as a good example of this. It has literally thousands of examples in a diverse range of categories. Of course, other more formal business models do exist. For example, we know of one product company that produces decorative household goods that works collaboratively with its customers using digital design to create unique fixtures such as doorknobs and plumbing equipment that can be used in specific applications. The company uses the results of this collaboration to bring new products and services to the market. Similar attempts to transform both supply chain and products exist in healthcare in the form of surgical guides and models. Here's a good one. This is an actual reproduction of a human heart that was taken from a patient. This patient went in and had a CAT scan and literally asked the doctor for a copy of the file and created this 3D model. Now, in a surgical setting, a surgeon might produce this heart as a way to practice, or model, or plan their route to a surgical procedure rather than having to deal with what they find when they get into the chest cavity or having to work from a three-dimensional image simply on a computer screen. Advancements in imaging and the creation of surgical guides are revolutionizing medical care. In fact, in the last year, more than 70,000 surgical guides were produced and used in actual procedures. And again, in most cases, what we're really thinking about here is not growing the overall market, but instead, improving clinical efficacy. Now, in general, the route to Path IV probably runs more through Path III than Path II. On the other hand, it could be that we need the combination of both products and the supply chains to support them to deliver the complete package of business value. This may be particularly true where digital design technologies become an important part of the collaboration between producer and end customer. Thus, we have to deal with the fact that disintermediation may be an underlying element of most business model evolution efforts.