The new CEO of MakerBot on the company's recent layoffs, and where the 3D-printing pioneer is headed next.
MakerBot Industries is the public face of 3D printing. And whenever the public face of a nascent, closely-watched consumer technology undergoes a serious customer relations crisis, closes all of its retail stores, and lays off 20 percent of its staff, the impact is prone to ripple beyond the fate of a single company. Jonathan Jaglom, in other words, may be tasked not just with reversing the fortunes of MakerBot, where he's just been appointed CEO, but an entire industry.
Since its founding in 2009, the ambitious upstart broadcast a Silicon Valley-sized promise: to bring instantaneous, user-friendly manufacturing to the masses. To let a layperson create real 3D objects with the click of a button. After a meteoric rise driven by an excitable press (co-founder Bre Pettis graced the cover of Wired next to a headline that read "This Machine Will Change the World"), the emergence of 3D printing as a mainstream-leaning trend, a $10 million venture capital infusement, and a subsequent 2013 acquisition by the industrial printing giant Stratasys that valued the company at $403 million, MakerBot hit a hull-puncturing snag.
Some of its extruders—a key component of MakerBot's highly touted, $2,899 flagship printer, the 5th generation Replicator—were found to be defective. That ushered in a slew of returned machines, nasty reviews in the press, claims the Replicator had been rushed to market, and fan onslaught of aggravated customer complaints. Meanwhile, sales flagged, and Stratasys's stock shrank.
In August 2014, Pettis had stepped down, replaced by MakerBot president Jenny Lawson. By 2015, Lawson was out, and Jaglom was in. Within months, Jaglom had fired 100 of the company's 500 employees, and closed its three retail stores.
Totally justifiable, then, that Jaglom seems to fidget, just a bit, as we sat down for an interview a week later.
The glow of the company's electrified logo greets me as I step off the elevator, onto the 21st floor of the MetroTech building in downtown Brooklyn. A wall full of impressively detailed 3D-printed items buffets the reception desk, and a staff member is leading one of the company's Learning Workshops (there's one every month, and it's open to the public) for local 3D printing aspirants and enthusiasts. The bloop and hum of the printers reverberates throughout the open, well-windowed space. It sounds a bit like a small fleet of R2-D2s working politely in a machine plant.
Johan Broer, the company's PR manager, offers me a brief tour; he shows me the latest Replicators, including some that are printing with new bronze, maple, and iron composite filaments that aren't on the market yet. He hands me a real hammer that was printed in-house. It's heavy, and could probably hammer an IRL nail just fine. There's an entire room stuffed full of the printers; the black-and-LED-pink machines look like android incubators. One of the Replicators in there is busy whipping up a 3D VICE logo.
Broer also demos a new MakerBot app that lets users customize and print simple, pre-designed objects like medals, toys, and jewelry with a few taps. It's fun and intuitive, and aims to help make 3D printing even more accessible to those who might still find the technology foreign or complex.
The gleeful high-tech geekery and exuberant instructions of the MakerBot teacher make a stark contrast to what lies around the corner, however: bright, stylishly designed office spaces that appear only two-thirds occupied. It's quiet enough in the offices that you can hear every oblivious blip of the printers from the other side of the office. The mood, it's fair to say, seems dour.
"The market was not as big as we thought it was two years ago," Jaglom said bluntly, not long after we sit down in his office, which overlooks Manhattan. Our interview lasts nearly an hour, and Jaglom is both enthusiastic and cautious. Dressed in a blue sweater and collared shirt and jeans, he affects the air of your affable, successful cousin.
"You have to give the respect to those sitting here before me," he said. "They took that decision to go to the consumer market—they were the first to do it. That's the spirit, of being fearless and trying new things, which I really think is a great attitude within this company that I have an important role to play to preserve."
The 39-year-old, Swiss-born Jaglom says that his priorities since taking over have been to dedicate more attention to customer support, to address the remaining fallout from the extruder problem, and to reorient the company to target its Replicators to the professional and educational markets. In our chat, he emphasizes his 10 years of experience in the industry—he started his career at the 3D-printing firm Objet in 2005, which merged with Stratasys in 2011—and versatility within the company. Over the years, he has held positions in sales, marketing, customer support, and as overseer of Stratasys's Asia division.
"So I'm taking all that knowledge, and it's fitting nicely into place as a CEO," he said. "I should be careful in how I say this, but it's the first time in my professional career that I'm feeling comfortable taking on this challenge. So that's exciting."
Jaglom is the first MakerBot chief executive to be brought in from its newish parent company. His father, Elchanon Jaglom, is the chairman of Stratasys. Elchanon's cousin Michael Jaglom is also employed at the company, according to Jewish Business News.
And he's in the midst of a trial-by-fire, taking the helms of a prominent tech company in a moment of turbulence. Mike Murphy, a reporter for Quartz, told me that he interviewed Jaglom for a 3D-printing story the day before the layoffs, and Jaglom said then that they were planning on expanding retail operations. When confronted after the news broke, Jaglom apologized and told him he couldn't disclose the closures at the time. "And that's fine," Murphy said, "but you don't have to tell me the opposite is happening."
Jaglom did seem genuinely unhappy by the downsizing. "Layoffs are always hard for morale. I've been doing my best to help," he said. "I'm not a Stratasys guy. I'm not a corporate guy. I'm much more of a MakerBot guy." Those layoffs, he said, were an unfortunate necessity. "It had to be done for financial justifications. The numbers were just not there."
"The tremendous growth this company has gone through—600 percent a year. How do you do that? The outcome of fast growth to that extent is, you're bound to—I don't want to call them mistakes, but you're bound to lose focus," Jaglom said. He calls choosing to close the company's three retail stores, to cut costs, a "painful decision," and notes that MakerBot still has Replicators at 500 retail partners including Staples and Home Depot.
In addition to the retail layoffs, he also closed MakerBot's 3D Printed Products, which printed products for companies on demand, and its 3D Design Services division, and moved many remaining employees in those divisions to customer service in a round of restructuring. The plan, he says, is to address the customer service issues first and foremost. The company introduced a new Smart Extruder that clogs less often, and can be more easily replaced to swap out different materials on a job. MakerBot claims that complaint calls, about the faulty extruder and otherwise, are down 40 percent, and that the return rate has fallen, too.
Next, he aims to do more business in professional and education settings; to target businesses and university labs. MakerBot says its desktop printers are already in 5,000 schools around the country, and Jaglom touts its Innovation Centers—"large-scale 3D printing installations" designed for use by university faculty and students alike. One such center recently opened at the University of Maryland.
The aim is to provide engineers and engineering students to access to inexpensive 3D-printed parts. "What is becoming very clear to me is that designers, engineers, and educators are beginning to use printers a lot more," Jaglom said. "You're seeing a movement of the professional space moving into the desktop space—and I know that space very well."
His five-year vision is a bit more ambitious, and it begins with MakerBot's digital marketplace, which currently allows companies and individuals to upload 3D printing files for sale.
"I'm a big believer in the digital store. That thing will kick off," he said. "It's your iTunes for 3D printing. You want to work with a vendor, he wants to make sure his file is protected, he wants to get a coupon from it in the form of cash, but he wants it accessible to a mass audience."
So, he says, it will work something like this:
"I'll be sitting at home. Maybe something broke; maybe my glasses." He grabs the sunglasses on his desk, continues, "maybe I want to reprint it and I'll go to Oakley, Ray Ban, whatever, Philippe Starck in this case, download the file, pay $3.49 for it, and print it at home. And then you will have to go to your Kinko's or your Fab Labs, your local 3D printing, if you want it in metal or plastics you can't have at home."
"I think we're five to seven years away from that," he says. The Thingiverse, MakerBot's online ecosystem for download files, is still going strong; it sees a million downloads a week. And a new partnership with Hoover will let users print out vacuum cleaner parts at home. There's a similar deal with GE for refrigerator accessories. But he adds that, right now, "the digital store is not gaining the traction we thought it would be gaining. We were hoping it would be somewhere else, but it's not there yet."
That vision of 3D-printers in every home is for now a ways off, especially because the employees who would be putting them there are themselves uncertain about the company's future. Employer ratings at Glassdoor, a website used to gauge the quality of workplaces, are fairly abysmal. The most commonly agreed upon complaints are "Due to it being a relatively new company, it has its growing pains" and "the completely clueless and ignorant upper management."
But Jaglom says he understands the low morale. "Many of these people are under 30, and haven't had this kind of hardship at work before." And he insists he's intent on keeping some things the same. "MakerBot has a lot of great things in its company culture that need to be preserved, starting with the brand. The brand is very solid. I have absolutely no intention to change that whatsoever, that would be a very bad move," he said.
Analysts still project serious growth over the next coming years for the 3D printing industry at large—market researcher Canalys, for instance, expects it to balloon to over $16 billion dollars a year by 2018. In 2013, the market was worth $2.5 to $3 billion. If it can finish patching up its technical issues, and consistently ship a reliable product, MakerBot would appear poised to profit handsomely. Many investors, like Eric Wiesen, remain confident: Such "trough" periods are common for new companies, he says. And MakerBot is still the most recognizable 3D-printing brand by a mile, even if a host of cheaper, more nimble competitors are nipping at its heels. The Peachy Printer, a truly open source 3D-printer that retails for $100 is set to ship in July. And 3D Systems' Cube printers, the most direct answer to MakerBot's Replicators, are lining store shelves, too.
Still, those industry forecasts are optimistic. Whether there's as robust a future for mass 3D printing as MakerBot once imagined, and as Jaglom imagines there will be again in the years ahead—he views the downscaling as a temporary setback—remains to be seen. Familiar questions abound: Is there enough stuff that average consumers want to print at home? Will 3D printers really become as commonplace as computers as their staunchest advocates have long argued?
Jaglom thinks they will, and he thinks ease-of-use, not price, is the obstacle. But at least right now, Stratasys isn't really backing that bet; between the layoffs and retail closures, the company appears to be at best holding the line while it recalibrates.
As I walk out the half-empty halls, the impressive array of gadgetry buzzing at my back, Broer gives me an uneasy look as I lift my camera to snap a photo of the office space. Not just because it would be bad "optics," I consider later, but perhaps because it's a raw wound to those employees still there.
Like the polymer products the machines churn out, 3D-printing itself is something of a puzzle, and still a fragile one. To penetrate the mainstream, there might need to be a wealth of useful items like those Hoover vacuum parts for people to shell out to own the technology; to attract enough partners to fill out that ecosystem, it might need to appear closer to the mainstream. And more people need to buy the printers to incentivize improvements in the research and development. We've seen these hurdles cleared before, of course; the story isn't unlike that of computers, mobile phones, or the internet. A tipping point passed could speed us towards that better resembles the dream of Star Trek-style insta-creation that the Replicator's named after. Whether it does, and whether MakerBot will lead the charge, is still an open question.
"MakerBot was the first one to launch the ecosystem, the Thingiverse, mobile apps, having a camera installed inside a printer, the Smart Extruder, the idea that you can change the extruder one from another to use different materials—these were all very very innovative ideas that were kicked off here," Jaglom said. "That's the spirit within this company. I'm very familiar that it exists, that it's a good thing—now I have to ensure that it continues."
*This article has been updated to more accurately reflect the date of sale for the faulty extruders.