The Lattice (Official 3DHEALS Podcast)
Welcome to the Lattice podcast, the official podcast for 3DHEALS. This is where you will find fun but in-depth conversations (by founder Jenny Chen) with technological game-changers, creative minds, entrepreneurs, rule-breakers, and more. The conversations focus on using 3D technologies, like 3D printing and bioprinting, AR/VR, and in silico simulation, to reinvent healthcare and life sciences. This podcast will include AMA (Ask Me Anything) sessions, interviews, select past virtual event recordings, and other direct engagements with our Tribe.
While there is no rule for our podcast content, the only rule we follow is to provide our listeners with a maximized return on their attention and time investment.
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The content of this podcast is for informational and educational purposes only and does not constitute medical, legal, or financial advice. The views and opinions expressed by the host and guests are their own and do not necessarily reflect those of their employers, affiliates, or any associated organizations.
While we discuss emerging technologies in healthcare and 3D printing, listeners should consult qualified professionals before making decisions based on the information shared. The mention of specific companies, products, or technologies does not imply endorsement.
This podcast may reference early-stage innovations and concepts that are not yet FDA-approved or commercially available. Always follow regulatory guidelines and ethical standards when applying new technologies in clinical or professional settings.
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The Lattice (Official 3DHEALS Podcast)
Episode #90 | 3D Printing Across Decades with Lee Dockstader
Lee Dockstader takes us on a fascinating journey through the commercialization of 3D printing in healthcare, drawing from his decades of experience with industry giants like HP and 3D Systems. Dockstader is one of the major pioneers of the 3D printing revolution that helped transform medical applications today.
The conversation takes us behind the curtain of industry-defining moments few people know about. One is the story of Invisalign. Today it’s a household name, but in its early years Align Technology struggled to survive. Orthodontists resisted the innovation, and for nearly a decade the company failed to turn a profit. It was only when dentists began to embrace the technology that it found its footing. We explore why some healthcare segments adopt 3D printing rapidly while others move at glacial pace, and the fascinating business dynamics that determine success beyond just having superior technology.
Dockstader then goes on to give his account of the hearing aid industry's rapid transformation. Unlike dental's decades-long evolution, hearing aid manufacturing converted entirely to 3D printing within just five years in the early 2000s. The perfect storm of new scanning technology, specialized resins, and advanced printers led to dramatic improvements: reducing remake rates from 20% to 5% and transforming a craft that took a year to master into a skill learnable in days. With five companies controlling 80% of the market, once one adopted the technology, competitors had no choice but follow.
Looking toward the future, Dockstader shares his surprise that 3D printed eyewear hasn't yet achieved mainstream adoption despite its obvious benefits. With conventional frames offering limited sizing options despite high tooling costs, 3D printing could provide perfectly fitted frames for diverse facial structures at competitive prices.
As he looks back on his career, Lee Dockstader leaves listeners with a clear message. Persistence pays off, and finding the right champions within an industry can be the key to turning groundbreaking ideas into world-changing realities.
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About Pitch3D
What does it take to shape entire industries? Today, on the Lattice podcast, we're joined by Lee Dockstader, a true pioneer of 3D printing who has had decades-long career with industry giants like 3D Systems and HP. Lee has helped change everything from dental aligners to custom hearing aids and even surgical guides. In this episode, lee shares hard-won lessons, commercialization secrets and predictions for where mass personalization is headed next. There's just too much to fit into a 60-minute-long episode with Lee and I certainly hope to invite him back again. Now. Join us and learn about the real story behind 3D printing's most significant milestones in healthcare.
Speaker 1:The content of this podcast is for informational and educational purposes only and does not constitute medical, legal or financial advice. The views and opinions expressed by the host and guests are their own and do not necessarily reflect those of their employers, affiliates or any associated organizations. Hello everyone, welcome to the Lattice Podcast episode number 90. Today, our guest is Lee Dockstader, a veteran of the 3D printing industry and also has very long track records with two major 3D printing companies. One is 3D Systems, the other one is HP. Lee, thanks for joining us today.
Speaker 2:Happy to be here.
Speaker 1:You know, every time I have a meeting with you, I always learn a ton of stuff because you see so much. I mean you recently claimed quote unquote retired, but honestly I don't think you are. I think you're still extremely passionate about the industry and where it's heading to. So tell me what you're, you know. Okay, for those people who are new probably are not familiar with Lee, but for those people who have already been in 3D printing industry for a while, there's no way you can miss Lee's presence everywhere, and especially when it comes to healthcare 3D printing, I think your presence is everywhere. But why don't you tell us about your origin story? You know how you got started, decades ago, and then from there.
Speaker 2:Okay. So originally I wanted to be a pilot. So I applied to the Air Force Academy and ended up going to West Point. But my eyes weren't bad in college and so I couldn't be a pilot. So I thought, okay, I'll be an engineer and make my own plane. So I finished up at UCLA and because I took drafting, because I wanted to be an architect, I got a job at a TRW Semiconductors laying out hybrid amplifiers because drafting and layout and then I got involved with video there and then ended up moving down to San Diego after I graduated from UCLA to work for a cable TV box company and I got hired there because I had the video experience and I built my own hacker box to break the cable TV security. So that got me a job there. That was pretty fun.
Speaker 1:Nice.
Speaker 2:And then I worked with a lot of HP test equipment at the time and ended up working as a field engineer for them for quite a few years. And because of my drafting experience I got recruited to the CAD CAM when HP got into CAD CAM, first in 2D and then 3D, so I was an electrical engineer but I had more mechanical experience than all the other electrical engineers. So I did cad for a while. They sent me out to asia in 89 um, right during tenement square actually and I was out there for three years and came back and then one of the little software companies that was doing research for hp came up with the first windows 95 basedbased CAD package and they showed it to me on a 486 laptop.
Speaker 2:And I'm just going oh man darn, I'm going to have to find something else to do because we're selling CAD workstations for $50,000 and $20,000 for software. And here are these guys, showed on Windows 95 and selling it for $500. So I went and joined them. Be the chance to get rich and famous. We got the famous parts for a little while. What's the name?
Speaker 1:of the company.
Speaker 2:It was 3DI. It then became IronCab. It got bought by Autodesk and then spun off. Oh okay, I don't know if.
Speaker 1:I would be able to Google this. To be honest, I mean none of this stuff. I definitely was Googling you before I do this podcast, but I don't think I saw any of this information.
Speaker 2:Yeah, trispectives, it was very, very cool Windows 95 package. And then they got bought and then 3D Systems says hey, you know CAD and you know Asia, because HP had sent me out to Asia for three years.
Speaker 1:Yeah.
Speaker 2:And so they said do you want to go back? And I go well, yeah, pay for the apartment, the kids' school fees, and sure we'll go back.
Speaker 1:Asia is nice, asia is nice.
Speaker 2:Yeah, If somebody else pays the rent. That was a tough part in Hong Kong. Right it was in Hong Kong. Right, it was an expensive city, yeah, so I worked out there for another seven years with 3D Systems and came back and ended up taking over the stereolithography business and launched the current product line that's there today.
Speaker 1:So let's rewind a little bit. I did not know that you started your career in HP as a salesman. It's not even his job.
Speaker 2:Let's make it his job and send him out to Asia and have him do it out there. That's how it came up. But I actually went out there for an interview and I came back and I said thank you, but no, thank you, they go. Why? I said well, so I had a long list of reasons, spreadsheet, waiting factors, all that stuff. And my boss, my old boss, said hey, you're going to go and I go. No, look waiting factors. And says no, because you're going to go and I go. Why? It's because you're, you're 29 years old. You regret it the rest of your life If you don't. And that got me and I all the things I was afraid of happening happened.
Speaker 2:Oh, like what? Shut the division down? All sorts of stuff.
Speaker 1:Okay, I see business related, not because of the place.
Speaker 2:No, no. I met my gorgeous, tall blonde partner in a law firm. Well, that's a win.
Speaker 1:I would say that's a huge win.
Speaker 2:In Hong Kong. Yeah, she kind of stood out. We got married up there and then when we got the offer to go back, she goes sure, let's go. So we went back for another seven years. So I was out there for 10 years.
Speaker 1:That's amazing. We definitely need to unpack that at some. You know, right now China is on everybody's mind and every single sentence. So now going back to the 3d systems experience, is it true that Chuck Chuck Hall actually hired you directly?
Speaker 2:Chuck and Art Sims. I don't know if you remember that name. He was the CEO. Rich Valenson was the president Interviewed with those three guys, super, super team. Art was a management veteran from GE and I think he was on the board of SDRC at the time. Valenson was the head of the disk drive R&D division at IBM, had a couple thousand engineers and Art met him at some conference and kind of challenged him can he take his knowledge of high, high volume, low mix and do low volume, high mix? And he goes sure and anyway, hired him as president to come on board and he's that team hired me and I met max gerrits have you heard that name he has? He has a service bureau on the service bureau around Santa Barbara. But he gave me a 3D cube which I still have to this day.
Speaker 1:You know you gave me a lot of 3D printing stuff. Actually, it's still on my shelf. Every time I see you, you give me something. So yeah, that's a perk of the job. You know, when you started at 3D System, were you a business development. What was your role back then?
Speaker 2:They went out to be the managing director, so I started up the operation. So my wife started the company in Hong Kong. We set up a KK company in Japan, offices in Malaysia and Taiwan and recruited distributors and we did the maintenance ourselves, except in Japan, and then started our own company in Japan.
Speaker 1:Under 3D Systems. Right yeah yeah.
Speaker 1:Our own. Okay, yeah, great how I met you and what I understand what you do is that these big companies always hire you to literally create new markets because, yes, 3d printing is amazing. Look at all the amazing stuff behind you. I'm mesmerized on a daily basis with all the research paper that's output. But commercialization is really the pain point, and you've had decades of experience basically trying to create new markets and how to commercialize these amazing technologies. Do you want to unpack these moves, maybe some milestones of what you know? Back then, decades ago, what are some of the major milestones you did in terms of helping with commercialization?
Speaker 2:So I mean, back then 3D CAD was pretty new, right? So if you're going to sell 3D printing to somebody, they got to have 3D CAD. You can't print 3D stuff without 3D data. So that was so my experience out there in CAD, CAM and knowing the companies that had 3D CAD because, like I said, when I went back in 97, it was still relatively new $50,000 a seat and all that kind of stuff and so I just focused on the people that had cab and there were very few service bureaus. And so that was the next thing I worked on is getting companies to start service bureaus.
Speaker 2:And then the other thing at the time, thomas Pang, the guy who invented epoxy resin, launched it, but it wasn't humidity resistant and so, oh my goodness, the parts would go soft in a couple of days out there, 90% humidity, 90 degrees, and then 3D Systems. Sl5510 was the first good, humidity-resistant, accurate epoxy resin and that really started things going. But yeah, we focus on automotive companies that have hundreds, if not thousands, of seats at CAD, and then service bureaus and then the toy business and the tooling business. So of course the toy business in South China was huge and they all had CAD. So it was you focus on those guys.
Speaker 1:So it's almost like you see some gaps in an ecosystem and this is where you can find opportunities to close the gap and develop verticals. And then those are industrial verticals which I'm fascinated with but know very little about I want to talk about. Let's talk about the medical and dental space that you're also equally very passionate about and saw a lot of revolution throughout the years, you know. One is the dental revolution, the other one is hearing aid revolution. I was not even aware of 3D printing back then, but you lived through those milestones, really systemic shifts, tell us about. You know what was it like living through? Let's say first the um, the dental revolution with Align technology. I mean, it doesn't happen just overnight, does it?
Speaker 2:no, it took Align 10 years to be profitable and it and it hit 100 million dollars in revenue 10 years. And it was hard work because they had to create a business and at first they went after orthodontists and they went public and actually I bought some of their pre-IPO stock and held it for 10 years and doubled my money A few years later. Well, 10 years after that, it was instead of $20, it was $700.
Speaker 2:Could have held on to that one a little bit longer, but double your money, that's not bad, but yeah, so with them they approached orthodontists to carry their stuff, but it was I think at the time it was about $1,200 for the treatment to the orthodontist and the orthodontist goes no, no, no, if I'm going to charge $5,000 for braces, for bands and brackets and wires, it'll only cost them maybe $100.
Speaker 2:And so their profit was actually going to go down. So a line, when IPO, spent a lot of the IPO money on advertising to create demand and they sent them all to orthodontists and the patients would come in and the orthodontist would say, yeah, yeah, that line stuff is really great for a lot of people, but you, my friend, you need braces. And it almost put them under and it wasn't until they switched and went after dentists and the dentist goes wait a minute, I just take an impression and send it in and I can make 5 000 bucks instead of a half hour or 45 minutes drilling and doing a filling. He's yeah, sign me up. So, um, their fortunes really, really changed when they went after the the dental market and then they focused on international, outside the country and they have manufacturing now, I think in Poland and China, as well as their main thing down in Mexico.
Speaker 1:How did you get into this whole storyline? Did Align reach out to 3D Systems to figure out a manufacturing process?
Speaker 2:They did at the very beginning. Actually, the first process they had um, they put the, they take the impressions, they pour plaster models and they put plaster models in a small pan and they would pour black epoxy around it and then they would mill off a layer, take a photograph of it and they would stack the layers on top of each other. And that's how they did the segmentation to create the 3D models to start with. And then they had a very complicated software algorithm that moved the teeth and they cornered the market of those CNC scanning systems. And then they said this isn't sustainable and 3d systems have just launched a large format, high-powered solid state laser system, as opposed to the ones they had before were argon gas, I mean gas tube lasers. They had a whopping 200 milliwatt and it took a 100 amp three-phase circuit to run it. What year was that? It has more than that power now.
Speaker 1:Is that 1990s?
Speaker 2:Yeah, 90s, mid-90s.
Speaker 1:Okay. Yeah that's like the whole national laboratory, actually no it was late 90s, I'm sorry, okay, 98, 99.
Speaker 2:And that was just when Align was starting. So they came up with the accurate software, a solid state machine, and um, there was. This is public information now. But they, align, came to 3D Systems and says, hey, can you help us with this? And um, they tried doing it themselves for a year or so on the, on the sly, on the quiet, and they couldn't. They couldn't figure out how to make it faster and better and more accurate. And 3d said, hey, give us a couple million bucks in non-recurring engineering, buy 50 machines up front and we'll make it happen.
Speaker 2:And they worked on it for a few months and I think the, the throughput and the accuracy was almost order magnitude better, I mean. And then it, it just kept getting better and better after that. I mean it's. I mean they make a million custom parts a day, a day. Yeah, can you imagine the logistics of trying to keep track of all the sets of teeth and then the thermoformed aligners, the barcoding, and you have to get it in the right bag, in the right box with the right shipping label and the right billing information. I mean it's just mind boggling the logistics that make all that stuff happen, so are they internalized.
Speaker 1:They're internalized, that manufacturing process, even today. Oh it's all internal. Yeah, they've never outsourced so I mean that's a long marriage. The question is, this is going to be a marriage that's happily ever after um so far it has.
Speaker 2:Um. They did buy that european company that had the hot, yeah, cubicure, yeah, right. So I've listened to some of the interviews with the vp of r. D is the same guy that I work with. He's been there 25 years, Super guy, yeah. But they bought those guys and it'd probably first be grinding guards or stuff like that, Cause it took them a decade to choose a new resin, a new thermal forming material, Cause it's got to have very predictable um mechanical properties for to work with their software.
Speaker 2:And so with 3d printed ones, I mean you ever cut the, the, the security plastic packaging around certain stuff? I mean it's hard to cut, I mean that stuff is tough and the aligner stuff is even tougher. So for them to get those mechanical properties in a resin is incredibly hard. So they might first start with night guards or the retainers, ones that don't actually move the teeth but just keep them in place, and in that case they can make areas thicker that they need more mechanical strength on. You can't really do that with thermoforming, but you can do it with some fancy CAD and their own, their own resin. So it'll be interesting to see what they do. I mean there's companies that have claimed to have a liner material 3D printed, but it hasn't been popular at all.
Speaker 1:Yeah, it's always interesting when I talk about news articles with you about something that's you know just came out, and you always just kind of temper my enthusiasm down a little bit. This is like nah, jenny, it's not going to work that well. As it says yeah, I've definitely seen a lot of new stuff, like even 3D printed veneers that's coming out, but then I got tampered down a little bit that it may not work for a lot of people. It's just much harder than it looks, than our news article, which is, you know I. I would say that's part of the hype cycle.
Speaker 2:Still, um, so they're getting there. Dentures has made a lot of progress. I worked on dentures at hp for quite a while. Um, there are some denture materials. 3d systems has just launched a new printer that can do multi-material um, but the aesthetics and the fit and mechanical properties man, that's. That's hard all three. Um, I think a 3d printed base with cemented in um denture teeth like dense flies. I got a factory tour their their denture teeth division and they've worked on that like for 10 or 20 years and those teeth look fantastic. They're super tough. They last a long time. You can't get that kind of translucency, shade gradation and stuff very easily in 3D printing. 3d systems with their multi-material new dental printers getting there, but they they don't look like handmade dentures just yet. But I think a denture base with um out of the box denture teeth that fit in a custom base, I think that would be a good in-between step.
Speaker 1:Yeah, I mean I think that step one. It seems like we just need to find a replacement with whatever that's comparable to whatever that we have existing, and then the next step would be hopefully be cheaper and more accessible to a lot of people cheaper and more accessible to a lot of people.
Speaker 2:Yeah, the cheaper. I mean. It's interesting. Dentures are the most labor-intensive and least profitable device in the dental market. At least you know regular removable dentures, implant-retained dentures, they're called all-on-four, so you put four implants and hold the denture down. That's $18,000 to $20,000 an arch. Wow, and those a lot are 3D printed for temps and then CNC machined for the finals.
Speaker 1:Yeah, I think a couple of years ago, when we hosted a global summit somewhere in San Francisco, there was a dentist and I think she is her name is Valerie, I forgot her last name and she is a denture queen and she taught me a lot about the SAS statistics of how many Americans don't have teeth, especially elderly, and they just live on without teeth for decades. And and also the reimbursement of danger is extremely low, like you said is the return on investment is just not justifiable for a lot of labs and dental practitioners. So, yeah, I hope that spades can really revolutionize, but we're talking about, you know, almost 10 years since this is last on my radar. I don't know when we're actually going to see a real change.
Speaker 2:It's getting close. Densply's got one of their resins that's quite popular, I think. It's running on carbon and also regular DLP machines. It's running on carbon and also regular DLP machines and that's. I've heard that one's made pretty good advances in aesthetics and wear and it's coming from Dent Supply. So that's, they know what they're doing.
Speaker 1:The other thing I was thinking about when you know, when I was thinking about dental market is it is considered technically a luxury market because in the old days, by the way, there were a lot of Egyptian dentists I don't know if you noticed even in America, because they invented dentistry thousands of years ago and you can see, mummies had dental works, but only the rich mummies, not the average Joe. So it is somewhat in the luxury, premium item category rather than necessity, like medical. So my question is in terms of commercialization for dental, it's a little bit different game, right? I'm talking about it because I encounter a lot of dental startups and my question is is this going to return anything substantial? Is this going to be a really hard journey, long hard journey. You know, align Technology I did some research is one of the most successful companies that uses 3D printing as a technology. 3d technology also probably one of the most successful dental space companies. We're talking about an intersection of two extremely rare events. The stat doesn't look very good for current existing early stage startups.
Speaker 2:What are your thoughts?
Speaker 1:on that.
Speaker 2:They're a billion dollars a quarter and 70 gross margins yeah and they've got 800 million in the bank or something like that. I don't know, it's their, they've done well and they continue to do well, they continue to grow and they're they just launched um palatable expanders you know, those are the kids with the pre-teens.
Speaker 2:They don't have room in their um, in their upper. They have to get um a palatable expander and make room, and about 25 of all kids that have braces need a palatable expander and it's they used. Well, they're currently still. The retainers with the expansion screws in the middle are like torture devices.
Speaker 1:Yeah.
Speaker 2:So Align just launched a direct print palette expander and you change it out every night, so it's a very small change and it's not nearly as painful and they can move more things around the way they want, as opposed to just a general expansion. It's pretty cool and that's the first new product they had and it's the first 3D printed product they've had and I understand it's going over really well.
Speaker 1:Well, here's a question. Okay, if there is a startup doing just that, what is the success possibility for that startup to actually get somewhere?
Speaker 2:It kind of depends. The problem is access to market. Any of these little startups don't have access to the dental market. Dental labs isn't as hard. Say, there's like five or 6,000 labs in the US and you can hire half a dozen people and cover the labs fairly well, and the labs are consolidating. So you really only have to tackle the top 20 and get a good portion of the market.
Speaker 2:But dentists is another problem. You're not going to get past the front desk. It's you know, even, uh, any non-dental company, unless you're dense, ply or line or 3m or somebody that they know and they need. You're not getting past the front office manager and so, and to get that, then you have to hire one of the big guys to do it Henry Schein or one of those guys to distribute to you, and they want 30%, 40% off the top. It's the cost of customer acquisition is the killer, and that's what kind of did in Smile Direct Club. They got up to $600 million in revenue very quickly, very successful. And then COVID hit and their market just plummeted and it's like, well, what, what? What happened was everybody was seeing themselves on zoom. Yeah, like the way their teeth looked, and they didn't say, hey, send me my do-it-myself impression kit. They went to their dentist and their dentist said yes, I can fix your teeth. And so Align just boomed for that and SmileDirect just crashed. It's a shame. It was an awesome business proposition, but direct-to-consumer is tough.
Speaker 1:Yes, I'm learning about business every day and I think compliance for the liners is a huge problem. So, without the human component, that's one reason why probably SmileDirect didn't work as well. That's one of my hypotheses is that people just aren't really good during self-care and they need somebody there to supervise. The other interesting thing that you mentioned about that you need the big guys to be upfront, to be a front salesperson. I just heard this expression the other day. I'm trying to see if this theory actually works. If there's any kind of consumer-based product, you're essentially some sort of advertising company. So that is exactly what you just said. That's something I didn't know, but now it's actually fitting into that theory. It's consumer-based products. You just have to. Eventually, if you get bigger, you become an advertising machine.
Speaker 2:Yeah, smile Direct Club. They did social media advertising and during COVID social media advertising quadrupled in expense and it just killed them. They were spending so much for each new customer that it wasn't sustainable and they just couldn't recover.
Speaker 1:Yeah, it is pretty sad and also, I believe at the time Smile Direct Club partnered with HP also right, I'm fairly familiar with that.
Speaker 2:Yes, yeah, it was funny. The sales guy I worked with at 3D Systems and he got an appointment to go visit them right at the very beginning and he says, hey, lee, you know this space, can you come with me? And they bought two machines on the first visit.
Speaker 1:Bought two 3D Systems machines. No, no, Two HP machines. Oh, okay, Wait. So the 3D System guy wanted you to go to the meeting and you sold them.
Speaker 2:That's one 3D Systems guy who was working for HP.
Speaker 1:Oh, okay, that makes more sense. I was like who would do that?
Speaker 2:Yeah, that's all I mean. My grandmother was a dentist that did active retainers. My father had a big orthodontic lab. I was involved with Align for 20 years. I knew that that market and actually a line had offered to move their head of manufacturing to singapore and actually insisted that he go. And he says no, I'm not going, and he and he quit and um, smile, direct club hired him in a minute and it was so, so funny and I took him off to the side when I first met him and I go um, does anybody know that we knew each other for 20 years? He goes Nope, I go. Okay, so I can't share any of that knowledge and you can't share any of that knowledge. So we're going to have to play it straight. And it was so funny I'd have to ask him all these questions that he knew I knew all the answers to, but we had to. We had to ask it and he had to answer the questions, so we wouldn't share any confidential information.
Speaker 1:Wait, so wait. Sorry, I missed that. Who is this that we're talking about?
Speaker 2:I don't want to mention his name, but he worked for somebody.
Speaker 1:I was like suddenly in the storyline there is a figure with no names. Okay, yeah, no, I mean, this is actually a very small industry and sometimes we have to be absolutely discreet. So, yeah, no, I get it. But yeah, no, it sounds like you have a family history of dental industry, so you live and breathe the business.
Speaker 2:You're definitely the perfect guy to really grow the vertical.
Speaker 1:I mean we're skipping around in our agenda here. But since we're on here on dental, what do you see the future for dental industry from a 3d printing perspective or without 3d printing? Where do you see it's going?
Speaker 2:So it's kind of two ways. You've got big central manufacturing with big, fast machines and there's the big dental labs. Use that a little bit but most of them use desktop machines at the end of a bench lab manager and he'll have 10 people on his bench and often they'll have one desktop dlp printer at the end of that bench that that team uses. They don't do. They don't necessarily do central manufacturing, unless it's it's like a carbon with the dense pie resin in it. You know that's an expensive, fast machine machine. Most are still desktop machines.
Speaker 1:So that means, formlabs is still.
Speaker 2:No Formlabs. Their laser systems can't really compete with the, at least in speed with the modern DLPs.
Speaker 1:I see Okay, and what do you think the business strategy like for dentists and for the dental startups that we are? I sent you a couple of companies that you took a look. Where do you think things are going to be?
Speaker 2:It's hard for a startup unless they partner with one of the dental distributors.
Speaker 1:Like Sirona Densply yeah.
Speaker 2:Henry Schein, you know the distributors, yeah, or the big companies that have direct access with their own sales force. So if you're a startup and you want to get into the dental business, it's hard Because there's I don't know 10 at least 10 dops that are going after dental but what about, like um alternatives?
Speaker 1:what about dental software? Uh, managing, you know, this is, you know, may not, may or may not involve 3D printing, but just workflow.
Speaker 2:So there's like three. There's Serona, 3shape and ExoCAD. If you're not one of those three, life is difficult Because they own the market now and anybody who's got a 3D printer or a CNC machine has one of those three.
Speaker 1:There are some clones, and I believe they took decades to even get here.
Speaker 2:Yes, 3shape started with the audio, the hearing aids Right, and then moved over to dental. Exocad was kind of a government-funded research company in Germany and it got bought by a line and Dentsply Sirona has done their own for 20 years with the CERAC system and that was CNC machining but now they're using it for driving 3D printers as well. But the CERAC system owned the digital CAD business for 10, 15 years before they really had any competition, and that was the point in the office.
Speaker 1:Yeah, it seems like everybody who is big in the space already had the foresight of owning the entire ecosystem. Basically, yeah, they're pretty smart. That's all I can say.
Speaker 2:Yeah, and the implant drill guides was owned by Materialize and Dentsply. They had the patents on it and they had a monopoly for a decade or two.
Speaker 1:I wonder how many people are actually using it, though. That's the thing.
Speaker 2:Well, drill guides is another. So it's pretty interesting in the dental space. Uh, a few years ago I saw some statistic where dentists were placing more implants than oral surgeons and they crossed that line. Must have been five or six years ago. Yeah, because Because, before you know, oral surgeons do I don't know umpteen a day and they except for complex cases, they rarely used guides because guides cost four or five hundred bucks out of a $2,000, $2,500 treatment plan, and so they're not going to pay five hundred bucks for stuff that they do, you know, several times a day, but you have a dentist doing it two or three times a month, not two or three times before coffee in the morning.
Speaker 2:You want that guy using a guide, because if you mess up the hole that's bad, and so the people doing their own surgical guide is now fairly common. Yes, or they'll just do it at dental lab and have it and it's the. It's a fraction of the price now. It used to be four or 500 bucks, I don't know how much they are now. I doubt they're more than a hundred.
Speaker 1:Yeah, you know I'm, I think, as a big picture, growingly, I think 3d printing and 3d technology in general are upskilling people who weren't sub-specialized let's say, implants or particular surgery or complex orthopedic surgery and that stuff. I started to feel like it's actually the quote-unquote demarketizing is actually not demarketizing 3D printing, it's actually demarketizing these accesses to subspecialty care, which is really the next step of higher quality care. So I think that's really good for everybody, for consumers.
Speaker 2:Yeah, it is for the straightforward stuff. It's like orthotics. It's like orthotics. How long would it take a foot doctor to train a gp doctor how to prescribe plantar fasciitis insole? You know, an hour or two. And if, if that family practice had a half a dozen doctors and they shared one scanner, they could, they could reduce a second visit and expense for their patients and provide very good care by outsourcing to a company that made orthotics. Yeah, just for the scanner and the software and the prescription is super, super easy. So there's some of that going on, but it's not super easy.
Speaker 2:So there's some of that going on, but it's not too prevalent yet.
Speaker 1:Well, I think the key is to know where your limit is, and I don't think that's a very clear line sometimes, which could be dangerous Because people may overestimate themselves and then try to do stuff they really shouldn't be doing. To do stuff they really shouldn't be doing, and that's actually some of the complaints I heard from my orthodontist friends about normal dentists offering online technology. I don't know the details of the discrepancies, but that is a concern, yeah.
Speaker 2:A lot of the training is what not to try to treat.
Speaker 1:I see, yeah. So yeah, my question is I ask myself okay, if I ever need a dental implant, great God forbid would I go to a certified or a surgeon who's like the top of the pyramid, or do I go to a friendly local dental office who I know? The dentist, I am comfortable with him doing anything else, would I be open to do a implant with this guy?
Speaker 2:I'd find out how many he's done.
Speaker 1:Definitely don't want to be the first. That's that I have been the first for some procedures in the past, for some of my friends as a test rabbit.
Speaker 2:Yeah, so my, my dentist when I lived in Charlotte was a very avid Sirona CERAC dentist, so he would mill those on crowns and you'd get a crown and run a visit. It's awesome. And then he started doing more implant retained dentures and it's all on four. Then he started doing more implant retained dentures and he's it's all on four. So it's 2,500, 2,000 to 2,500 bucks per implant. So he's getting 20,000 for the arch but he's got to outsource it for five to 10,000 bucks for the screws be placed. And he goes hey, I could do that.
Speaker 2:So went back to school, learned how to do it and then I just started a um, a cloud based um, a cloud-based um CAT scan segmentation software, and we can make an upper and lower arch out of this plaster. That actually felt like a cranial bone. And he was ordering models just to explain the procedure to his patients and then he would use it to practice on himself. That was really cool. It was this company that I'd met. I heard about them and I called them up and I said, hey, do you have STL output or any kind of other 3D output? And he goes no, it's all graphics. Why would you want to do that?
Speaker 2:And I go well, I explained to him. No, it's all graphics. Why would you want to do that? And I go? Well, I explained to him. And anyway, it only took him a couple of weeks to do it, to get a file out to us and we printed them. And this French company called visual 3d was actually based at a university in Paris that actually trained oral surgeons, and so they took some cadaver bones and they took and scanned them and then made 3D printed bones and then they had the surgeons do different procedures on them and they said it was at least 90% the same sensation drilling the 3D printed bones as real human bone, cadaver bones.
Speaker 1:Is this a visual 3d, that's?
Speaker 2:3d. That's okay. The guy that was doing the main a lot of the work there spun off and formed his own company along with a teaching oral surgeon, so they're still operating today. Yes, making these 3d printed models for training classes, for training training oral surgeons and dentists. How to do these surgeries.
Speaker 1:Okay. Well, since we're on the topic of medical, I'd like to shift into the medical space. You worked in the medical verticals quite extensively for many years, yeah, and what were your focus?
Speaker 2:A lot of it was getting production, surgical guides going and orthotics. So the surgical guides for knees, I think there's. I think 20% of all knees are now done with surgical guides or something like that. And that's a lot of knees and they save 20 or 30 minutes out of the surgery and that doesn't sound like a whole lot, but the whole surgery is only taking about an hour. So it actually it's a lot.
Speaker 2:Yeah, it is a lot, and I think they get 10,000 bucks an hour. I think is the cost of a surgical theater or something like that. So if they can save 20 minutes, they can do another four or five, 10, 20,000 hour surgeries and, uh, according to a lot of stats I've seen, there's less revision, so that's less redos and there's less pain. Yeah, and so all of that combined makes guided surgery actually pretty popular, and the only competition that now is the robotic surgery and that's a $2 million machine and anyway. So it's different. So there are several companies that make surgical guides for knees and now they're moving up to shoulders and other different things.
Speaker 1:I think the robotic companies also belong to the large ortho companies. Some of them do, yeah, and they also offer some kind of surgical guides if needed or something like that. I don't think it's like it's actually part of their portfolio. Yeah, yeah, it's actually part of their portfolio. Yeah, yeah. And also, just so you know, I think the human benefit of having less operating time and obviously the outcome is better is that every minute you're under general anesthesia, your brain cells are getting killed. Oh really, yes, so there is a cost. You may not notice, yeah, but every time you go under something's Basically. Yes, so there is a cost. You may not notice, yeah, but every time you go under something's different. So, yeah, if me, I definitely would love to have someone who have thought about the surgery plan ahead of the time and then inside there's more precision and guidance during the surgery, if I ever go under for a big surgery like that.
Speaker 2:Yeah, it's replacing knees. I've seen videos of actual surgeries and they're using power tools and hammers. It is not.
Speaker 1:Yes, that's exactly why I didn't go into orthopedics. It's brutal. It's like a butchering process.
Speaker 2:Yeah.
Speaker 1:I do hope that in the future the surgeries will be less invasive and aggressive like that, but we're still not there yet. So I think surgical guide is definitely one step forward.
Speaker 2:Yeah yeah, at 3d systems. Back then we thought we were all going to be millionaires, because custom um knee implants right, and it turns out that they only have four or five sizes. And the knee implants themselves are not custom, but the guides to do the cutting for the socket is custom. Almost as exciting, but not quite.
Speaker 1:Wow, I'm sure somebody became millionaires after that.
Speaker 2:Yeah, the people who came up with the first guided surgeries.
Speaker 1:They're doing well when I knew about it, but I did not have the business insight or competition that I feel like robots, although it is expensive, it's a bit of like it's a surprise a little bit to the industry they actually can make these guys obsolete in a way.
Speaker 2:It's definitely a different business model. But Conformis is one of the big implant guys and I think they started out from scratch and they've got a lot of machines running 24 hours a day. I think they signed some deal with Stryker, I can't remember, but Stryker is another one of those that they make titanium implants. But it's interesting, they're not custom cell-like structure for um, uh, in the spaces between vertebraes and some hip cups and stuff like that. But what happens is because of the bone structure that they did the research on bone ingrows into the structure and if it's not the right cell size or not spacings or stuff, different stuff, the bone won't grow in. But they've done a lot of research and they 3D print those as a standard device. But they used to do it with diffusion bonding, so you take a structure and you kind of weld it to the other structure, but that was super expensive and not very good throughput and they started 3D printing and they've got a building full of titanium 3D printers.
Speaker 1:Yeah, I think they made the news. They bought like hundreds of machines.
Speaker 2:Yes, and they built an entirely new building for expansion of that. Oh wow, yeah, they've committed. Stryker does some incredible stuff, everything from cranial patches to knees, to titanium, to guides everything.
Speaker 1:Is Stryker still leading in the 3D printing space? I think yeah, not.
Speaker 2:Because I haven't heard about them lately in the news. Yeah, they, they keep it pretty quiet. I don't think too much has changed. Well, I think they might have even doubled down okay, yeah, that's good to know yeah, they've done quite well.
Speaker 1:So Conformis, I think it got acquired by Restore3D as a startup and actually it aims to create customized, completely personalized implant straight out. Yeah, I mean this is like something that's very interesting to everybody right now because it's fairly recent and we're all kind of monitoring if this acquisition is a success because there's a startup acquiring a public company at a very low valuation I mean quote unquote low valuation. We don't really know if this is a good acquisition yet. Um, the other thing is the space they're going after is the ones that people typically didn't like. After try, for example, j&j did completely personalized implant for somehow that that is not a huge part of their portfolio.
Speaker 1:And now that this startup focused just on this and it's quite ambitious and they have AI and machine learning embedded in whatever, everybody has AI and machine learning these days, so it's quite exciting, but also people are kind of on the sideline watching to see what's going to happen. It's very bold, very bold moves for this company and I like the team, I talk to them on a regular basis, so, and I invite them to our webinars and stuff. So yeah, that's that's like one interesting angle they're going after, but I don't know why the personalized implants, as much as it's very nice to think about, it, hasn't really taken off yeah, for the metal implants yeah there's turnaround time and post-processing.
Speaker 2:It's quite complex. The throughput on those isn't super.
Speaker 1:Yeah, you have to have a lot of the what do you think the current challenge we have as industry? Do we need a better machine and better post-processing or software? What is the pain point right now?
Speaker 2:I think it's um, one just certification for the process. I mean it takes years and things change within those years. I mean it's five to seven years for a new device at least, and so there's, there's uh approval, and then you need access to market training, all the doctors to do it. It's, it's, it's a slog, it's not. Hey, I got a new device, let's go. It's, it's many, many years. I think that's the biggest challenge.
Speaker 1:So now let's shift gear a little bit, since I know that you're still pretty much active in the space. You're an investor of a very exciting startup in the hearing aid space. Do you want to tell us about that?
Speaker 2:Sure, the hearing aid business changed completely to 3D printing within about a five-year period in the early 2000s, so about 2003, 2004,. 3shape came on board. There was two grad students in Denmark and they got their thesis project funded by one of the hearing aid companies and it was a scanner. And then they came on board. A medical resin company in Germany came on board and 3D Systems just launched a solid-state laser 3D printer. And all of those three things came on at the same time and I had just come back from Asia, back to headquarters, to take over the stereolithography business.
Speaker 2:And it was a wild ride. We got we worked on the first couple of companies just all resources, all hands on deck, and then once the first company started doing it, the others had to do it and whole business is was run by about five companies like 80 90 percent of the world's hearing aids are done by five companies and so once the first one kind of did it, the others had to. So there was just a buying frenzy for several years resin and special machines, special software, all sorts of good stuff. And I started working very, very closely with with three shape at the time. So I got to know those guys really really well, and the guy that was running their audio business left and he's now the CEO of this startup down in Australia.
Speaker 2:It was a guy at Monash University that used AI to scan the outside of the ear and then have AI fill in the inside part. That you don't have line of sight on and it basically is if the outside looks like this, the inside must look like that, and they base that on thousands and thousands of full ear scans that they had on file, and so you can actually take an iPhone 10, 11, or 12 with that really nice 3D scanner that's built into the phone, wave it around your ear and it takes a very, very good scan, and then their software completes the inside. And they're only business to business, they're not direct to consumer, so they will sell to labs or companies that want it personalized for their production.
Speaker 1:It's called H3D, right? Yeah, it's also a pitch 3D company. I don't know if it really helped them with raising any money, but it was an honor to be able to know the team.
Speaker 2:They're just doing their Series A raise right now.
Speaker 1:Cool. Maybe I'll reach out to Ian again to see if he needs any help.
Speaker 2:But that was so I invested in them. And then the other one was Action Face. The guys that did the figurines Same thing based upon the scanner and the iPhone, but unfortunately the software API that was used to do that was sold to Facebook and Apple downgraded the 3D scanner in future iPhones above the 13. And that kind of made it really hard for these guys for Action Face to continue. So they got sold to infinite reality.
Speaker 1:Undetermined financial return yet Well, it's better than zero Because, trust me, I've had that this year, and it's also another fantastic company, but I'm not going to mention the names because it's just quite sad.
Speaker 2:Yeah, there's a lot of 3D printing companies that are buying the dust now. That were, yes, that raised their money during the hype period, and I don't know who's left out in the cold, but there's a lot.
Speaker 1:Yeah, there are a couple of interesting things I want to just rewind a little bit. You said that the entire hearing aid industry was basically transformed in five years, which is totally a dramatic, different story from the dental story that we just heard, which takes decades. What do you think the key ingredients of that transformation are?
Speaker 2:It ended up with a better product with less returns. Hearing aid doctors they have to replace it If the fit doesn't work. It's a free remake and there was like 15 to 20% remake rate and it got down to like 5% with digital scanning. And the other thing is the way the old impressions and hearing aids were made. Before it was an art. I mean, it took about a year to get somebody to get their reject rate down to an acceptable level. But with digital you could train somebody in in a few days and it, the, the remake, is a fraction. I mean all the way in the ears behind the. I mean all all types of hearing aids and these things go for like 2,500 bucks, 33,000 in a year. And what's the shell cost A couple bucks. Maybe it's not the 3D printing, but it's the whole digital scan and fabrication. So it's consistent. It's definitely value-added, yeah, and then once one company had it, you couldn't compete if you didn't have it too.
Speaker 1:So another thing I would say, proposed in terms of theory is a fairly consolidated industry.
Speaker 2:It is. Five companies are probably 80% of the business. There might even be three companies. I know some of them combine and I haven't seen the numbers combined and then they can and I haven't seen the numbers. I don't think hearing aids actually have grown in volume very much, but it was 20,000 a day was the number I recall, and they all had these $200,000 SLA machines doing it. Now it's all DLP on the desktop.
Speaker 1:The other thing is I don't know if you know the statistic, but if you know that would be great. I think a lot of Americans also are living without hearing aids and hearing period. It's the stigma.
Speaker 2:It's the cost. Nobody wants to have a goal. Hearing aids it's bad enough getting old as it is.
Speaker 1:So, while, since you're claiming to be old, what do you have any? Well, let's talk about the future. What do you think of the next five to 10 years we're going to see in the industry?
Speaker 2:I've been pushing for 3D printed eyewear for a long time and did a lot of work at HP with some of the bigger companies. I to this day still don't know why it hasn't really blown up. I think it's again.
Speaker 2:Eyewear is dominated by two or three companies and they're kind of fixed in their methods and their factories and their supply chain, brands, brands, all that kind of stuff I I honestly don't know, because I mean tools costs anywhere from 20 000 to 50 000 bucks and that's per size. And so when you come up with a new branded eye design, how many sizes they make two or three and if they don't fit you tough. It's a funny business where now you can actually make a full frame with 3D printed textures, post-processed and everything for under $10. But of course, if injection molded it's probably a buck but they sell it for $ed, it's probably a buck, but they sell it for $300, $400, $500 for a frame, it's the world's biggest rip-off. So I think 3D printed eyewear once one of the larger companies implements it, I think it'll change a lot.
Speaker 2:Yes, it actually kind of has that kind of tincture that we just talked about Right now it's everybody's pitching the uniqueness, the fashion, the design and stuff, not that you can get a frame that fits your face perfectly in under a week in any size that fits you I actually think they're pushing the the uniqueness.
Speaker 1:yes, I also think it doesn't um disapprove our theory that 3d printing for eyewear is. I mean, fashion is a fast changing thing, so one day you one shape, the next day you're going to want another, and it's actually good for the business if you think about it.
Speaker 2:Yeah, but I just went through this myself. I had my eyes surgery years ago and finally ended up meeting readers. Now I need progressive readers and it's a pain in the ass to go in and they've got hundreds of frames on the wall. So it's okay, I want these this type, this type, this type and this size. And it quickly comes down to like four or five pair on a whole wall of frames. That actually fit me. And do you like any of them? Well, no, this one I like, but the frame's not exactly the right size, but it's good enough. And so you end up with your glasses slipping down your nose all the time.
Speaker 2:I have the same issue. Yeah Well, and then there's the Asian face, and the. African-american face very different nose bridges and different fits. That's right.
Speaker 1:I can only buy Japanese frames because our nose bridge is just fits. That's right. I can only buy Japanese frames because they, you know, our nose bridge is just shorter, yep.
Speaker 2:Yeah, I'm, I'm shocked and I think it's I'm guessing it's because it's owned by two or three big companies and they don't want to mess up what they've already got.
Speaker 1:That's, that's the only reason I you know, we we actually mentioned a company, a big company, in our conversation so far. That, I think, is actually changing the landscape a little bit, and they also, first of all, I've noticed a lot of people who were in 3D printing are going to that company, and also this company has acquired quite a few 3D technology companies, 3d printing companies, and that is ah, that's Meta Facebook.
Speaker 2:Oh yes, yes, they have, but they're, yeah, I know. They're not focusing on. Yeah, they're not focusing on what we wanted to focus on, but they did do a lot of acquisition inside in this space. They're doing some pretty cool stuff, but it's not for progressive readers, for progressive readers.
Speaker 1:Well, if listeners, if you want to start a cool startup, call me, because I am interested in starting a company in the space if opportunity arises, if I found the right teammate, because I need the glasses myself. This definitely sounds a very exciting space, yeah.
Speaker 2:The other one is earbuds. So if you actually do a little bit of research on how much market share and what the volume is on just the Apple AirPod Pros I mean, it's bigger than other huge multinational companies it's billions and billions, and that's with the standard set of six different sizes of silicon earbuds. But if you run they fall out. If you know your bicycle they'll fall out, and there goes your 400 headphones and they've.
Speaker 2:There's been custom earbuds on the market for a couple of decades. But price and fit is the problem, because it's the same process as giving you hearing aid, but you have to go in and get a hundred dollar impression. Then somebody has to take the impression and hand make an earbud out of it, and it's a pretty skilled task and so they end up costing between 200 and 250 bucks for just an earbud. It's like, okay, there's there's very little market for that. Uh, yeah, but with this uh company down in australia, h3d, they can take a picture of your ear and design an earbud to go on an airpod pro or any other maybe I should write him a check yeah, I did so.
Speaker 2:I made a small investment because I was I'd known the guy for decades, when he was at three shape, and this guy became the ceo of this little company and it was this, uh, a guy's thesis project, using ai to do the to complete all the things that the camera couldn't see, and it worked. And now they're doing dental as well. So dental models mainly. It's basically taking a really crappy scan and making a watertight model, filling in all the information that's missing.
Speaker 1:Yeah, no, I'm going to pin him up. Yeah, it's really a fascinating space and we're reaching the end of our conversation, Lee. Thank you so much for coming here today. Now any final word to advise for the future generation, people who are either in 3D printing or just in the university.
Speaker 2:Persistence pays off. It pays off more often than not. If you really think an application is suitable for production, stick with it and find an industry champion to share your thoughts with you. Not all will cross the chasm, so you have to keep several of these things going at the same time.
Speaker 1:All right With that. Thank you so much, lee. Great conversation. I'm sure I'll invite you back for another conversation and talk about our investment and observations of this world. Thank you so much.
Speaker 2:All righty. Thanks for having me.
