The Future of Flux, a 3D Printing Startup from Taiwan

On September 18th, two organization helping Taiwan startups, Taiwan UXD Group and Taiwan Startup Stadium (TSS), co-hosted an event titled Taiwan UXD x TSS Crowd Feedback Event in San Francisco. The local community in SF was invited to meet the 12 Taiwan-based startups attending TechCrunch Disrupt the following week.

The event was hosted at the SF office of 500 Startups in the SoMa district. There was a round of quick pitches first during which each speaker had only one minute to present, without any slides. The second session is an open floor session. Each team was assigned a table, and participants of the event walked around to each table to further understand the product and the pitch. Then at the end of the session the hosts made honorable mentions and comments.

Most of the startups exhibited their actual products, which vary over a wide range of industries. For example, Flux 3D Printer, who makes highly modularized 3D printers, made a new record of the highest crowd-funded startup from Taiwan. Luna, whose team members include Ju-Chun Ko and S. Canales, both Singularity University Alumni, makes hand-sized 360 cameras. There is a good mix of hardware and software products, as well as Business-to-Consumer (B2C) and Business-to-Business (B2B) products.

By the end of TechCrunch Disrupt, I had the pleasure to interview the Co-founder & CMO of Flux, Shawn Lin and the Co-founder & CDO of Flux, Fon Chiang. I learned much more about their growth since their wildly successful Kickstarter launch.

Flux has grown into a team of 15 people, 8 of which are engineers from Taiwan. Considering the US$1.6M they raised on Kickstarter, the size of the team seems reasonable. However the determinant to a smooth delivery isn’t just the team size, but the know-how of mass manufacturing. According to Shawn, the average delivery time of a Kickstarter funded project is 2 years, but Flux has much less than 2 years to deliver.

Flux is a relatively young team as every founding member but one is under 25 years old. Age is never a constraint for creativity, but manufacturing know-how likely is. It has been taking a toll and evidenced in their project update: the deadline has been postponed twice, resulting in six months of delays in total. To solve this problem, Flux is trying to connect experienced people in manufacturing through investors and advisers. Shawn assured me that the delivery time now is final and they are confident in keeping that promise. Over two thousand backers and I are looking forward to the product shipped to our doorsteps.

However the story does not end here.

A few questions naturally came across my mind after Flux had its undeniable success in Kickstarter launch. First is that to make a sustainable business, as a company that sells physical products Flux has to receive orders in sufficient volume in order to survive. Part of selling a product is choosing right channels to market. Channels vary drastically in different verticals, from traditional brick-and-mortar stores to online website to partnerships. Shawn mentioned that the major channel post-Kickstarter for Flux is their company website (https://flux3dp.com/). The success of a company website as a sales channel relies on many factors such as SEO, content marketing (which has become popular recently), and online traffic redirecting. We have not had a chance to dig into their marketing strategy now, as they are currently more focused on delivering the Kickstarter promises than aggressively getting more orders.

That said, Flux can only mass manufacture their products if they have orders beyond a certain volume. And to keep inventory under control, they have to have a constant stream of orders every month. Shawn has convinced me that they receive monthly orders beyond that minimum volume. Another part of selling a product is get the pricing right. So far the unit economics of Flux seems to work well. In other words, for every each product they sell, they make money. Now Flux has to figure out that how much volume they have to sell in order to justify the operational cost and reserve money to re-invest back in the product in order to retain the competitive edge.

Another interesting thing Fon mentioned during the interview is that Flux does not just see themselves as a 3D printer but a digital design tool. This new value proposition will take the company to the next level. The market of 3D printers is a “red ocean” market, which means the market boundaries are well-defined, and companies can only outperform their rivals to grab a greater share of the existing market. As the price of 3D printers becomes accessible for households, the margin of 3D printer companies shrinks. The typical way to avoid the red ocean and retain the high margin is to provide an unique value to the customers collectively through complete and extensive product lines. For example, Flux does not just print but also scans, laser engraves and holds items. Shawn thinks that there is great possibility that the world of future is full of digital design tools possessed by individuals. According to Shawn, Flux might become as accessible as pen and papers today. They might be even able to print out your breakfast.

Overall, I believe that Flux is on the right track and I am very looking forward to seeing how Flux will evolve into a sustainable and impact-creating company.