commit: e0aa41b039eb73f7d5a0796aa9c4e5c015123112
parent 6e4b1859778293a842695e57f90dea26bb5e75e4
Author: Drew DeVault <sir@cmpwn.com>
Date: Tue, 26 Dec 2023 13:09:11 +0100
Prusa
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diff --git a/content/blog/2023-12-26-Prusa-is-floundering.md b/content/blog/2023-12-26-Prusa-is-floundering.md
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+---
+title: Why Prusa is floundering, and how you can avoid their fate
+date: 2023-12-26
+---
+
+Prusa is a 3D printer manufacturer which has a long history of being admired by
+the 3D printing community for high quality, open source printers. They have been
+struggling as of late, and came under criticism for making the firmware of their
+Mk4 printer non-free.
+
+[Armin Ronacher][0] uses Prusa as a case-study in why open source companies
+fail, and uses this example to underline his argument that open source needs to
+adapt for commercial needs, namely by adding commercial exclusivity clauses to
+its licenses -- Armin is one of the principal proponents of the non-free
+Functional Source License. Armin cites his experience with a Chinese
+manufactured 3D printer as evidence that intellectual property is at the heart
+of Prusa's decline, and goes on to discuss how this dynamic applies to his own
+work in developing a non-free license for use with Sentry. I find this work
+pretty interesting -- FSL is a novel entry into the non-free license compendium,
+and it's certainly a better way to do software than proprietary models, assuming
+that it's not characterized as free or open source. But, allow me to use the
+same case study to draw different conclusions.
+
+[0]: https://lucumr.pocoo.org/2023/12/25/life-and-death-of-open-source/
+
+It is clear on the face of it that Prusa's move to a non-free firmware is
+unrelated to their struggles with the Chinese competition -- their firmware was
+GPL'd, and the cited competitor (Bambu) evidently respects copyleft, and there's
+no evidence that Bambu's printers incorporate derivatives of Prusa's firmware in
+a manner which violates the GPL. Making the license non-free is immaterial to
+the market dynamics between Prusa and Bambu, so the real explanation must lie
+elsewhere.
+
+If you had asked me 10 years ago what I expected Prusa's largest risk would be,
+I would have simply answered "China" and you would have probably said the same.
+The Chinese economy and industrial base can outcompete Western manufacturing in
+almost every manufacturing market.[^china] This was always the obvious
+vulnerability in their business model, and they *absolutely* needed to be
+prepared for this situation, or their death was all but certain. Prusa made one
+of the classic errors in open source business models: they made their product,
+made it open source, sold it, and assumed that they were done working on their
+business model.
+
+[^china]: That said, there are still vulnerabilities in the Chinese industrial
+ base that can be exploited by savvy Western entrepreneurs. Chinese access to
+ Western markets is constrained below a certain scale, for instance, in ways
+ that Western businesses are not.
+
+It was inevitable that someday Chinese manufacturers would undercut Prusa on
+manufacturing costs. Prusa responded to this certainty by not diversifying their
+business model whatsoever. There has only ever been one Prusa product: their
+latest 3D printer model. The Mk4 costs $1,200. You can buy the previous
+generation (at $1,000), or the MINI (from 2019, $500). You can open your wallet
+and get their high-end printers, which are neat but fail to address the one
+thing that most users at this price-point really want, which is more build
+volume. Or, you can buy an Ender 3 off Amazon right now for $180 and you'll get
+better than half of the value of an Mk4 at an 85% discount. You could also buy
+Creality's flagship model for a cool $800 and get a product which beats the Mk4
+in every respect. China has joined the market, bringing with them all of the
+competitive advantages their industrial base can bring to bear, and Prusa's
+naive strategy is causing their position to fall like a rock.
+
+Someone new to 3D printing will pick up an Ender and will probably be happy with
+it for 1-2 years. When they upgrade, will they upgrade to a Prusa or an Ender 5?
+Three to five years a customer spends in someone else's customer pipeline is an
+incredibly expensive opportunity cost Prusa is missing out on. This opportunity
+cost is the kind of arithmetic that would make loss leaders like a cheap,
+low-end, low-or-negative-margin Prusa printer make financial sense. Hell, Prusa
+should have made a separate product line of white-labeled Chinese entry-level 3D
+printers just to get people on the Prusa brand.
+
+Prusa left many stones unturned. Bambu's cloud slicer is a massive lost
+opportunity for Prusa. On-demand cloud printing services are another lost
+opportunity. Prusa could have built a marketplace for models & parts and skimmed
+a margin off of the top, but they waited until 2022 to launch Printables --
+waiting until the 11th hour when everyone was fed up with Thingiverse. Imagine a
+Prusa where it works out of the box, you can fire up a slicer in your browser
+which auto-connects to your printer and prints models from a Prusa-operated
+model repository, paying $10 for a premium model, $1 off the top goes to Prusa,
+with the same saved payment details which ensure that a fresh spool of Prusa
+filament arrives at your front door when it auto-detects that your printer is
+almost out. The print you want is too big for your build volume? Click here to
+have it cloud printed -- do you want priority shipping for that? Your hot-end is
+reaching the end of its life -- as one of our valued business customers on our
+premium support contract we would be happy to send you a temporary replacement
+printer while yours is shipped in for service.
+
+Prusa's early foothold in the market was strong, and they were wise to execute
+the way they did early on. But they *absolutely* had to diversify their lines of
+business. Prusa left gaping holes in the market and utterly failed to capitalize
+on any of them. Prusa could have been synonymous with 3D printing if they had
+invested in the brand (though they probably needed a better name). I should be
+able to walk into a Best Buy and pick up an entry-level Prusa for $250-$500, or
+into a Home Depot and pick up a workshop model for $1000-$2000. I should be able
+to bring it home, unbox it, scan a QR code to register it with PrusaConnect, and
+have a Benchy printing in less than 10 minutes.
+
+Chinese manufacturers did all of this and more, and they're winning. They aren't
+just cheaper -- they offer an outright better product. These are not cheap
+knock-offs: if you want the best 3D printer today it's going to be a Chinese
+one, regardless of how much you want to spend, but, as it happens, you're going
+to spend less.
+
+Note that none of this is material to the license of the product, be it free or
+non-free. It's about building a brand, developing a customer relationship, and
+identifying and exploiting market opportunities. Hackers and enthusiasts who
+found companies like Prusa tend to imagine that the product is everything, but
+it's not. Maybe 10% of the work is developing the 3D printer itself --
+don't abandon the other 90% of your business. Especially when you make that 10%
+open: someone else is going to repurpose it, do the other 90%, and eat your
+lunch. FOSS is *great* precisely because it makes that 10% into community
+property and shares the cost of innovation, but you'd be a fool to act as if
+that was all there was to it. You need to deal with sales and marketing, chase
+down promising leads, identify and respond to risks, look for and exploit new
+market opportunities, and much more to be successful.
+
+This is a classic failure mode of open source businesses, and it's *Prusa's
+fault*. They had an excellent foothold early in the market, leveraging open
+source and open hardware to great results and working hand-in-hand with
+enthusiasts early on to develop the essential technology of 3D printing. Then,
+they figured they were done developing their business model, and completely
+dropped the ball as a result. Open source is not an "if you build it, the money
+will come" situation, and to think otherwise is a grave mistake. Businesses need
+to identify their risks and then mitigate them, and if they don't do that due
+diligence, then it's *their fault* when it fails -- it's not a problem with
+FOSS.
+
+Free and open source software is an incredibly powerful tool, including as a
+commercial opportunity. FOSS really has changed the world! But building a
+business is still hard, and in addition to its fantastic advantages, the FOSS
+model poses important and challenging constraints that you need to understand
+and work with. You have to be creative, and you must do a risk/reward assessment
+to understand how it applies to your business and how you can utilize it for
+commercial success. Do the legwork and you can utilize FOSS for a competitive
+advantage, but skip this step and you will probably fail within a decade.
