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PIRATE D3CAN THE BUCCANEER CONQUER THE SEAS?

1This case study was written based on a face-to-face interview with the co- and chief operating officer of Pirate3D, Brendan Goh

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Pirate3D – Can the Buccaneer Conquer the Seas?

In October 2015, Brendan Goh, the young, passionate, and energetic co-founder and chief operating

officer of Pirate3D faced many challenges as the three-year-old Singapore company stood poised for

the next phase of growth. Aside from strategic and operational responsibilities, Goh was also

overseeing the sales and marketing activities for Pirate3D. The team had a vision of putting 3D

printers into the hands of consumers and households in the same way laser printers penetrated the

consumer market. To achieve that vision, the goal was for the Buccaneer (the name of the 3D

printer) to be the “best Christmas present of 2016”. Goh had only one year to achieve that goal, and

the company had many hurdles to overcome. He wondered what steps he had to take to make the

dream come true.

Vision

The vision of the management team was for Pirate3D to become the world’s leading provider of

consumer 3D printing solutions. To achieve the vision, the team focused on R & D to produce the

best quality printer in the world — user friendly and affordable for the mass market. They integrated

the hardware with apps on the PC, iOS, and Android platforms for ease of connection to a library of

3D printable objects contained in a repository called Treasure Island.

The birth of Pirate3D

Goh and his good friend Tsang You Jun were both engineering undergraduates studying materials

science at Nanyang Technological University in 2008. For their school assignment, they had to make

prototypes and bought a 3D printer to do so. They faced a lot of problems getting the printer to

work properly after assembling it. When the printer did work, the pair was captivated by the sight of

an object created right before their eyes. That sparked their interest in 3D printing. They later met

Roger Chang, a 3D printing enthusiast and a business undergraduate at National University of

Singapore (NUS). Initially, the three undergraduates were planning to start a 3D printing service, but

on the advice of Neo Kok Beng, an adjunct associate professor at NUS Business School, they decided

to build a 3D printer instead. Their idea was to create a product superior to the existing 3D printers

at that time, an affordable and user-friendly 3D printer for consumers. In August 2012, Pirate3D was

incorporated. With seed funding of SGD 589,000 from Red Dot Ventures, a Singapore-based seed-

stage venture capital firm and the National Research Foundation Singapore, they were able to

commence work on their printer prototype, the first concept of Smartobjects and software to enable

easy creation of 3D files.

Management team

The Pirate3D management team consisted of four co-founders. Neo was the chairman, Chang was

the chief executive officer, Goh was the chief operating officer, and Tsang was the design chief. With

the exception of Neo, the rest of the team members were in their late twenties.

Neo did not participate in the day-to-day running of the company, but provided strategic leadership

to the team with his vast experience in technology entrepreneurship, and expertise in product

development and commercialization of technology. He was also responsible for the initial funding of

the company. The seed funding and a large part of Series A funding was obtained through his help.

He also established connections with government-linked organisations such as the International

Enterprise Singapore to raise funds for their overseas expansion activities.

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Although Chang was a business graduate, he had mechanical skills. In addition to business planning,

he oversaw the development of the mechanical aspects of the Buccaneer. He worked with partners

to enhance the technology on the Buccaneer and expand the range of printable objects on the 3D

print library. He also collaborated with publishers of technology magazines and websites to garner

reviews for the Buccaneer in the United States, their planned market for launch.

Tsang was the creative brain and designer of the company, responsible for the design of the

Buccaneer. He was responsible for branding and marketing. With his talent in design, he handled all

public relations, branding and graphic assets of the company to ensure a consistent brand image. He

also worked with companies like Amazon and related 3D printing partners to plan for distribution

and reach for the launch of the Buccaneer. The automation and streamlining of customer service

was also under his purview.

Goh was the public face of the company. He was involved in all aspects of operations including

strategic planning, production, and human resources issues, among others. He also liaised with

distributors in different markets for sales through retail channels. At the same time, he was actively

sourcing for funds to raise capital to meet the growth requirements of the company while and

managing legal and regulatory compliance issues.

The Buccaneer and the 3D printing solution

The Buccaneer

Figure 1: The Buccaneer

The Buccaneer was positioned as a toy that could create thousands of other toys, limited only by the

creativity of the creator. It essentially allowed the owner of the Buccaneer to become the owner of a

toy factory.

The chassis of the printer was made from stamped stainless steel and the body was built from

injection moulded polycarbonate. The build platform was made from non-heated polycarbonate. It

had a trendy design that for the modern living room. It could also be a showpiece! With fused

filament fabrication, the highest layer resolution of 50 microns, and a print area of 130mm x 96mm x

139mm, the printer could produce objects of the highest quality. The high quality was good enough

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for professional model makers. The Buccaneer was built to be set up easily. Unboxing to the first

print could be achieved within seven minutes. Other printers at that time required more than

layman’s knowledge to assemble and operate. The Buccaneer was easy to set up. The user did not

have to feed raw spools of plastic into the printer because these were already integrated into the

Buccaneer via cartridges. They selected environmentally-friendly plastic. There was also no wire

hassles because the Buccaneer was built to enable networked 3D printing through wireless internet.

Backed by 35 years of design expertise, the patented nozzles allowed hours of printing without

jamming.

The printing solution

Complementing the Buccaneer were a 3D library of print objects, Smartobjects design tool, and app

that allowed the seamless transition from online library to 3D printer. Pirate3D collaborated with

content creators like CGTrader and MyMiniFactory to include their content on Treasure Island.

Treasure Island was a 3D model repository which only contained digital files that were ‘perfectly

printable’. Consumers could also select content beyond the Treasure Island and print any object

obtained online using the STereoLithography (STL) file format. Consumers who wanted to customise

3D prints without knowing how to use 3D creation software could use Pirate3D’s new product,

Smartobjects. With the easy-to-use editing algorithm, the consumer could edit the dimensions of an

object contained in a digital file before sending it for printing. Together, the entire experience of

printing was made extremely user friendly. Even a technophobe could print 3D objects in a few

simple steps — (1) installing the app on the Apple or Android phone, (2) logging onto Treasure

Island, and (3) clicking on the object of choice and clicking print on an internet connection. For the

mass consumer, Pirate3D’s solution was one of the most user-friendly 3D printers then. Table 1

shows how Pirate3D’s solution meets the needs of the mass consumer.

Table 1: The Perfect Match

Mass Consumer’s Needs Pirate3D’s Solution

Creation of customised 3D prints without

having to learn 3D creation software

Base on Smartobjects’ easy-to-use

editing algorithm

Access to printable objects Treasure Island print library with growing number of choices of objects

Reliable one-button printing

Easy-to-use 3D printer and related software

Ease of use Streamlined and simplified experience

Affordable pricing Affordable, high quality 3D printer

Smartphone accessibility Heavy use of iOS and Android apps

Competitive environment

Industry

3D printing was a 30-year old technology that had been used extensively in fields as diverse as the

military, healthcare, architecture, aerospace, automotive, education, and manufacturing. Many

universities and companies had collaborations to focus their R & D on the application of 3D printing.

As the use of 3D printing became entrenched in the business arena, interest in consumer 3D printing

grew. The growth in the consumer 3D space was apparently due to the expiration of early patents

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for fused deposition modelling (FDM) assigned to Stratasys’s Scott Crump. The expiration of these

patents resulted in lower costs of producing 3D printers that utilized FDM technology (Hornick &

Roland, 2013).

Industry predictions about consumer 3D printing market performance were mixed. A study by the

Photizo Group forecasted that the market for low-cost, personal printers that sold for USD 5,000 and

below together with its consumables would grow to USD 1.79 billion, while the total market was

projected to reach USD 5.1 billion by 2018 (2014 Consumer & Desktop, n.d.). A different report by

Canalys forecasted that the global 3D printing market for printers, associated materials, and services

would reach USD 20.2 billion by 2019. Although the figure included both business and consumer

markets, both were expected to advance rapidly. In the consumer market, it was predicted that

many of the newer 3D printers would be plug-and-print devices and priced around USD 500 to

encourage consumers to make impulsive purchases. Loyal consumers were also expected to upgrade

to more expensive models when they become prosumers (Alto, 2015). These reports were more

optimistic about the growth of the consumer 3D printer market.

In contrast, a report released by Deloitte was less optimistic. According to the Deloitte report, the

consumer 3D printer market was bogged down by several factors. First, the printers could only print

small-sized objects using limited performance materials. Second, the print quality was not

sufficiently detailed and its resulting features were coarse. Third, many of the printers on the market

were difficult to calibrate, use, and maintain. There were problems with the printers. For example, if

the temperature of the printing plate was too hot, the printing object would melt; if it was too cool,

the object would not form properly. Fourth, it took many hours to print even a small object and

materials cost was high. Printed objects also required further finishing touches. Fifth, most of the

printers produced objects from just one or two types of plastics and not many useful consumer

objects could be made (Deloitte, n.d.).

Competitors

There were several companies that were main competitors to Pirate3D in the consumer market.

MakerBot was the first company to attempt consumer 3D printing in 2009 when the FDM patents

expired. They were later acquired by Stratasys in 2013 (MakerBot Industries, n.d.). They aimed to

serve the consumer and desktop market. Their early printers had to be assembled by users and were

targeted at hobbyists. Their recent range of printers required neither assembly nor customization

and could be unboxed and used. One of the greatest strengths of MakerBot was their 3D repository

called Thingiverse. Thingiverse was a 3D design community where anyone could find 3D models to

print, as well as collaborate with each other to remix designs or share their own 3D models.

Thingiverse therefore, had hundreds of thousands of models in their databank. The disadvantage

was that the vast collection of models was not curated, making it difficult to control the print quality

of the models (MakerBot Thingiverse, n.d.). MakerBot targeted their printers for use in the office,

classroom, and home. Their printers are priced from USD 2,500 to USD 6,000, with a smaller model

priced about USD 1,250 (MakerBot, n.d.). In April 2015, MakerBot laid off 20 per cent of its staff. In

October 2015, it again announced that it would lay off another 20 per cent of its staff. The main

reason cited for the layoffs was the weaker-than-anticipated consumer demand for 3D printers.

They also shifted their strategy of targeting the consumer market to the professional and education

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markets. Users complained that the printers were not easy to use and the extruder (similar to a print

head of a printer) had to be replaced frequently. They also complained that the extrusion system

was unreliable (Zaleski, 2015).

Beijing Tiertime Technology Co. Ltd (or Tiertime in short) was one of Asia’s largest global 3D printing

solution providers. They manufactured both industrial and desktop 3D printers, together with 3D

printing software and materials. Its desktop series of printers were called the UP series. The printers

were sold at prices between USD 1,200 and above USD 2,000. The UP series gained worldwide

recognition as a quality product for its refined printing precision and accompanying user-friendly

software. In 2013, Make magazine, for the second time, awarded Tiertime with the “Best in Class:

Just Hit Print” title against 23 other nominated desktop printers. UP was the top choice among

institutions and hobbyists for its robustness and reliability. For a technically-trained person, the

usage was simple and maintenance was straightforward (Tiertime, n.d.). One main disadvantage of

the printers was that the unattractive “raw” appearance of fully-open printers. Another

disadvantage was the use of a toxic plastic called acrylonitrile butadiene styrene. As a result, objects

printed with such plastic would not be considered safe (Luimstra, 2014).

XYZprinting was founded in 2013. It was owned by the Kinpo Group, the world’s leading electronic

manufacturing conglomerate. The emphasis of XYZprinting was producing low-cost machines for

price-sensitive businesses and consumers. The company aimed to provide an easy-to-use device and

a great user experience. They had a range of seven different printers from the cheapest called da

Vinci Jr. 1.0 to the most expensive called Nobel 1.0. The price range was from USD 349 to USD 1,499.

For different speeds, the print quality ranged from 100 to 400 microns (the bigger the number, the

worse the quality) (XYZprinting, n.d.). XYZprinting engaged in aggressive marketing to raise

awareness of the printers. Some of the models required the use of an USB cable and needed to be

linked to a computer for the duration of the print. In online reviews, it was deemed to be value-for-

money, but only meant for technology-savvy users who did not mind experimenting with the

software settings (Devereux, 2015).

There were many smaller players in the industry that had pricing comparable to the Buccaneer. The

Peachy Printer, similar to Pirate3D, was launched through a Kickstarter campaign. Instead of using

the existing print technology in the market, it used a new technology to create objects through a

liquid light-sensitive resin that solidified in the presence of a laser beam. This new technology

allowed the printer to be priced at USD 100, making it the cheapest available 3D printer at that time.

The other printers that had a price tag of between USD 200 to USD 999 were MakiBox, Printrbot,

Phoenix 3D Printer, Romscraj, Solidoodle, RigidBot, RoBo, and Deezmaker Bukito Mini (Hongkiat,

n.d.). Many of these brands also required users to assemble their printers or possess some

knowledge and experience with 3D design software.

Kickstarter campaign — the double-edged sword

Initial success on Kickstarter

In May 2013, Pirate3D launched a Kickstarter campaign that lasted for one month. The management

team decided to raise funds using Kickstarter because they felt that success at Kickstarter would help

the company raise their international profile. They set an initial target of raising USD 100,000 and hit

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that target within 10 minutes on Kickstarter! In one month, Pirate3D managed to raise USD 1.43

million from 3,520 backers (Dehue, 2013). Their huge success on Kickstarter drew international

attention and following that, they received a lot of press coverage for being a company with one of

the most successful Kickstarter campaigns. Technology blogs, online sites, and even Fox News had

news coverage on the Buccaneer. The young marketing team also garnered a lot of goodwill, with

many strangers offering marketing trade secrets for free.

Pirate3D was a darling and media favourite when their Kickstarter campaign’s performance

exceeded their initial objectives. Unfortunately, the same media attention turned negative when

Kickstarter backers did not receive the printers on time. Pirate3D had managed only to ship the

Buccaneer to about 40 per cent of their Kickstarter backers by 2015 (Bhagat, 2015). The backers

complained of repeated delays in the arrival of their orders on various social media sites. Initially,

Pirate3D offered backers the option of getting a refund. However, the option was stopped when the

company faced cash flow problems. The company then switched their focus to fulfilling orders

instead but this resulted in greater dissatisfaction among the Kickstarter backers.

Despite the gloomy situation, some backers who received the orders gave very positive feedback.

Two testimonials were posted by these backers on the company’s website, while other positive

comments were posted on Kickstarter website.

According to Kickstarter backer Jeremy Z,

Received my printer two weeks ago. Started printing right out of the box without

issue. Things were going so well, I ran out of material on day 5. Brendan and the

team promptly shipped me the extra spool of material that was supposed to come

with my original shipment. While waiting for my additional spool of material, my

main logic board went out on me. After a few quick emails to the team, I also had a

new board on the way.

My new board arrived today. It was installed in 15 minutes. While I was at it, I

removed some broken filament without issue. What shocked me the most was how

easy the buccaneer is to work with. Even without using the video tutorials I was able

to install my new board and remove the broken filament quickly and easily.

After setting the printer up again in my iOS app (new board means new ssid) and

recalibrating, I was back in action. My first print turned out even better than any of

the previous prints.

The wait for my buccaneer was just like yours. Frustrating at times. It was worth the

wait. The technical support the Pirate3D team offers from across the globe was

refreshing. I wish you all the best. If I can offer any assistance to any of you, please

let me know.

According to another Kickstarter backer Leon Z,

I received my printer a few months ago. I want everyone who is reading this to

understand that you guys are truly waiting for a very good product. What you guys

are working on is something worth waiting for.

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Software: I use the Android app for all of my prints and it works very well and very

smoothly. Whenever I have an STL that I need to print (That is not on Treasure

Island) I just click on it anywhere in my phone (e.g. Google Drive, My files) and it

opens the app and shows a preview and I can easily adjust the settings. It also does a

great job of adding support when needed. Overall, it is a very clean and great app to

use.

Hardware: The printer itself works just as well as the software. The resolution is very

good and the print speed is good as well. I have printed for hours and hours straight

and have encountered absolutely zero jams. The print plate works well and unlike

what some of you might have heard, I have printed many times and the filament

sticks to the bed every time and is easy to take off the bed. It looks elegant on my

desk and is a pleasure to look at.

I believe Pirate3D has worked very hard at creating a truly consumer-friendly printer

that is easy to use. My son can fully operate and use the printer and the app. I am

extremely glad with my investment and hope for all the best for you and your

printer. If you are still waiting, trust me, it is worth it. I have used many printers and I

am very glad I got this printer for my family and I.

Challenges

On 13 October 2015, the company updated backers that they had ceased operations for two

months, and that cessation was expected to continue for another three months. They had

retrenched about 10 staff, but still had a team of 12 R & D members working on new technology for

the next-generation printer (Loh, 2015). The first reason for the change in strategy was to reduce the

cost of producing the 3D printers in order to enable them to sell it at a price that the mass consumer

would buy on impulse. The second reason was to incorporate the latest 3D technology that had

been developed since their first printer was produced, to manufacture a better printer. The

company was trying to raise an additional SGD 2 million to SGD 3 million to fund research and

production of the new printers to fulfil the orders from the Kickstarter backers and Japanese

retailers.

This announcement led to many negative reports on traditional media. For example, in the

Singapore media, the headline of an article in The Straits Times on 16 October was “Start-ups

Buccaneer 3D Venture Sinks” (Loh, 2015). Similarly, negative news also appeared in technology news

online sites and other social media platforms.

The company had run into financial problems due to three main reasons. The first reason was the

high engineering cost for building an entire ecosystem of software development kits, app for

downloading 3D objects, and custom hardware. The cost of raw materials was high. Many previous

Kickstarter projects that funded 3D printers had failed on the task of building 3D printers alone,

excluding the cost of building an ecosystem of software and hardware (Dilanka, 2015). Building 3D

printers was not feasible on pricing that meets the low budget of the mass consumer. The second

reason was the exorbitant cost of shipping and handling of international deliveries for warranties

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and repairs, excluded from the majority of Kickstarter projects (Bhagat, 2015). The third reason was

the inexperience of the management team. The three main members in charge of the day-to-day

management of the company lacked both industrial design expertise and manufacturing experience

at the time of the start-up. They made mistakes and this contributed to the high cost of producing

the first printer.

The team had to learn many business strategies and lessons. According to Goh, “If I had known then,

what I know now, I would have done things differently”.

Nevertheless, despite all the setbacks and negative press, the team remained fuelled by passion and

ambition. They had strong tenacity and a stubborn belief that their dream could become a reality.

Marketing the Buccaneer

The company had planned to launch the Buccaneer in the United States as the “best Christmas

present of 2016”. The management team felt that they should launch the Buccaneer in the United

States because many products achieved worldwide success in sales by doing that. They believed that

it would be harder to attain global recognition if they were to launch it in Singapore. Due to the

positioning of the Buccaneer, it would be launched in the toy segment. The team felt the price

should be USD 397 to ensure that the Buccaneer would be an impulse purchase. The key to success

would be two-fold. The first key is to ensure sufficient distribution to specialized toy retailers,

hypermarkets, and department stores, and an online store with a strong distribution network to

fulfil online orders. The second key is the creation of awareness of the Buccaneer through marketing

campaigns. The chances for success would be higher if sufficient hype could be generated for the toy

before the actual launch. However, there is one constraint. The campaign had to be relatively low

budget because as a small start-up, Pirate3D has relatively low capital.

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Conclusion

The dream of having a Buccaneer in homes of all consumers was not unrealistic. It was a highly

plausible scenario. However, would Pirate3D be the company to do it? Could Goh overcome the

challenges to reach his goal? Could the management team raise the necessary funds to invest

further in R & D to build a cheaper printer? Could Pirate3D really launch the Buccaneer as the “best

Christmas present of 2016”?

End-of-Case Questions

Question 1

Using the PEST framework, evaluate the marketing environment faced by Pirate3D.

Question 2

Assess the competitive environment of Pirate3D using Porter’s Five Forces.

Question 3

Assess Pirate3D using a SWOT analysis.

Question 4

Assess the challenges faced by Pirate3D, and offer recommendations to the company to

overcome them.

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References

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Retrieved from http://www.canalys.com/newsroom/global-3d-printing-market-reach-202-

billion-2019

Bhagat, R. (2015, October 15). Kickstarter darling Pirate3D flounders, delivers less than half

of 3D Printers ordered. CNET. Retrieved from http://www.cnet.com/news/kickstarter-

darling-pirate-3d-flounders-delivers-less-than-half-of-order/

Dehue, R. (2013, June 3). Pirate3D’s Buccaneer 3D printer is a huge success on Kickstarter.

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round-overview/

Loh, S. (2015, October 16). Start-up’s Buccaneer 3D printer venture sinks. The Straits Times.

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sinks

Luimstra, J. (2014, March 11). Is 3D printing always a safe activity? 3D Printing.com.

Retrieved from http://3dprinting.com/news/safe-3d-printing/

MakerBot (n.d.). Retrieved from http://www.makerbot.com/

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MakerBot Industries (n.d.). Retrieved from

https://en.wikipedia.org/wiki/MakerBot_Industries

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About Nanyang Technopreneurship Case Centre

With funding from both the National Research Foundation of Singapore and Nanyang Technological

University, the Nanyang Technopreneurship Case Centre (NTCC) was one of the initiatives of the

Nanyang Technopreneurship Centre (NTC) to enhance the quality of entrepreneurship education

through the case pedagogy. These are part of NTC’s efforts to foster, promote and nurture

enterprising mind-sets, skills and knowledge in entrepreneurship education.

There is a plethora of business cases but a general paucity of cases highlighting the specific problems

faced by technopreneurs in growing their ventures. NTCC adds value to Technopreneurship

education by developing a pool of cases on technology-based local and international enterprises.

Through the cases, NTCC hopes to share the experiences, success stories and challenges faced by

entrepreneurs/intrapreneurs in growing their organisations and how they overcome their problems

to sustain growth.

The theme of this first compendium is “innovation through technology”. It features Singapore-based

and global companies confronting issues and challenges due to technological shifts in the industry

and changing market and competitive dynamics; when introducing new products in the marketplace;

and in using technology to drive organizational change.

Online versions of these cases are available for complimentary downloads at

www.ntc.ntu.edu.sg/ntcc .

Teaching notes are also available to faculty members for use as reference, reading and/or teaching

materials in various academic and professional programs. For further information, please contact

Ms. Denise Lee ([email protected]) and Mr. Wu Chong Chuan ([email protected]).

Acknowledgment

The Nanyang Technopreneurship Case Centre (NTCC) was supported by the National Research

Foundation (NRF) and the Nanyang Technological University (NTU). We would like to thank NRF and

NTU for their funding support.

We would also like to show our gratitude to all the writers, reviewers and anyone who have

contributed to the accomplishment of the NTCC.