Letícia Yumi BeppuJournal #1
During this summer I will be working as an intern for Endeavor. More specifically I will be working at Robtec, a small enterprise that is associated to Endeavor Uruguay. Robtec is a company founded more than ten years ago by three Uruguayan engineers that believed in a new technology that enabled machines to “produce” almost any object created via software like CAD. Some of these machines are called 3D printers and they basically “print” in different types of materials (powder, resin) an object that is designed in the computer.
My main project at Robtec will be to build a business plan for the distribution of a new 3D printer that was recently launched in the US. This new equipment comes as the first 3D printer priced under $10,000 and is expected to allow the technology to reach the mass market. Main challenges include doing an assessment of the market potential for this equipment in Latin America, understanding its financial viability and analyzing the potential sales and distribution strategies for the product in the region.
My internship started even before I arrived to Brazil. In May, I went to Chicago to participate in an annual event that gathered the main manufacturers of 3D printers. It was a great opportunity to get to know the different technologies that exist and how the equipment works. It was amazing to see how these machines work and the objects that they could create. The sky is the limit. They can create from small buildings and houses to hearing aids. Let’s say that you are a designer and wants to see how the tennis shoe that you are designing in the computer looks like as an actual object. Just click “print” and the machine will create a prototype of your shoe. I could not believe that I have never heard about such technology before!
Anyway, after this great experience I was ready to start my internship. I arrived in Sao Paulo and as a Brazilian, I felt at home. Even though Robtec started its operations in Uruguay, the company’s headquarter is in Brazil. My first day of work was very interesting. I was able to get to know the owners of Robtec and started to work in an environment very different from the financial institution environment that I was used to. The progress of my work is presented and the feedback is given in weekly meetings with the company’s owners. After working in lots of financial analysis and deeply understanding the financial projections of the business I will now start working on the analysis of the best distribution channels for the product.
Journal #2
This is the 8th week of my summer internship and I am almost done with the business plan for the launch of a 3D printer in Latin America. Most of my time was dedicated in understanding the market dynamics for this equipment in the region, trying to determine its market potential, its financial feasibility and which would be its ideal distribution channel.
Determining market potential was not a very easy task as this is an innovative equipment with no similar in the market. 3D printers were expected to hit millions of units of sales during the past years but these expectations were never reached. Many justified the fact by saying that the equipment price was still too high to reach the mass market. V-Flash is the first 3D printer with a price below $10,000 and one wonders if this was the price barrier that needed to be broke in order to sales to explode. Hard to tell but we preferred to be conservative given the historical sales of this type of equipment (approximately 4,000 units sold in 2007).
Financial projections were not very complicated once we determined the market potential. Given the company’s expertise in this kind of equipment the hardest part was understanding the complicated tax structure that exists in Brazil.
Furthermore, determining distribution channels, what markets to target and pricing have been a little bit harder as well. First, we had to determine what could be the markets most interested in this equipment (jewelry, medical, mechanical, education, etc.). Second is to understand what could be potential resellers to this equipment and if financials makes sense to stimulate them to sell and also for Robtec. Is it worth using a reseller or better to use internal sales force? Also, what are the marketing promotions that we could give? Try and buy strategy, renting and financing alternatives, etc. If renting, what is the value of the monthly or daily renting? For that, it was important contacting potential resellers and understanding their business and financials.
People here are laid back and very friendly. Even though the owners of the company are constantly travelling, a weekly meeting and email exchange guarantees that the project progresses and feedback is given.
Journal #3
As the business plan for the 3D printer in Latin America was concluded a little faster than expected, I started working on another internal project: the analysis of an investment to build an EPS (Expanded Polystyrene) tray facility in Brazil.
A Uruguayan entrepreneur that already owns an EPS tray manufacturer in Uruguay contacted Robtec with a proposal to install a facility in Brazil. EPS trays are trays that are used to sell meat, chicken and vegetables in the supermarket. Robtec’s strategy would be to get experience in the business by importing EPS trays from this Uruguayan entrepreneur and selling them in the Brazilian market. After a year, and with some clients in the portfolio, Robtec would build a facility in Brazil and start producing the product internally.
Logistics is a very important part of the EPS tray’s business. The cost to produce EPS trays is very low as the use of raw material is minimum (the product consists of 20% raw material and 80% air) but transportation represents a very relevant part of the total cost as EPS trays have a great volume. Moreover, customer base is usually pulverized (supermarkets, small grocery shops, etc.) so manufacturers count with a broad network of distributors.
The internship ended with a broad presentation of the 3D printer business plan to the three owners of Robtec and the company’s CEO. The overall conclusion was that the potential demand for these printers both internationally and in Brazil is still small but hard to predict given the innovation of the product. Still, Robtec decided to pursue the opportunity given that fixed costs were marginal and the possibility that demand hit the best case scenario was worth the risk. Robtec will be launching the product in September 2009 at its annual event.
