BPM Technology: Why the company failed

Published in the January/March 1998 issue Prototyping Technology International, UK & International Press Copyright 1998
by Terry T. Wohlers

October 1997 was a sad month for kayak builder and inventor Bill Masters. Masters is the founder and owner of Perception Kayaks, the largest and most successful kayak company in the world, with manufacturing operations in the USA, UK, and New Zealand. Masters is also the inventor of Ballistic Particle Manufacturing and founder of Perception Systems, Inc. Perception Systems later became BPM Technology. It was in October that BPM pulled the plug on the company and closed its doors. Could this be the first in a string of RP system companies and technologies to go sour? Or is BPM an exception?

I first met Masters in August 1987 at a CAD/CAM conference in Boston, Massachusetts. I vividly recall Masters approaching me with a copy of his patent, dated 12 May 1987, along with an amusing description of his technology. Masters explained that he had invented a device that was much like a spit wad shooter, the kind we used in grade school to shoot spit wads on the ceiling and at each other. When you shoot a lot of wads, he said, they begin to take shape. And if you can control the direction of the wads and the motion of the device that's shooting them, you can produce any desired shape. Can you imagine what was conjured up in a listener's mind as he talked? Fortunately, I was familiar with stereolithography from 3D Systems and could understand how his technology might work.

As years passed, Masters concentrated on managing the rapid growth of his kayak business. Meanwhile, others at BPM managed the company and focused on producing a working RP system that they could demonstrate. In the 1991 time frame, BPM convinced Palmento Seed Capital of South Carolina that Masters' invention would lead to a commercially viable product. So what went wrong? Why didn't Masters' successors succeed?

Perception Systems was formed in 1988 to develop the Personal Modeler, but it wasn't until November 1996 that BPM shipped the production version. For eight long years, the company was plagued with ongoing technical problems and a lack of strong management and direction. The company burned through at least US$10 million, and possibly up to US$15 million, before it shut down the operation.

Today, many argue that BPM shipped the product before it was ready, although others felt that the development of the technology dragged on much too long. Simply put, investors, company employees, potential customers, and industry watchers grew impatient. Some began to wonder if BPM would ever introduce a system commercially.

The company was under intense pressure from the competition and investors to introduce the system in 1995. That was when the company made the decision to ship its product to many beta test sites and distributors. As many as 16 Personal Modeler systems were shipped and installed. But there was one problem: few of the systems worked reliably. Even the systems on the exhibit floor at Autofact ’95 in November experienced problems.

This resulted in a lack of confidence in the technology and the company. Almost all distributors and key customers that were once excited about the Personal Modeler returned their units to BMP and lost interest. As the word spread that companies were returning their systems and were unhappy with its performance, the negativity created was more than BPM could overcome.

The technology was being promoted as a 3D printer for concept modeling, but it lacked speed. Imagine an Actua 2100 system from 3D Systems firing only one of its 96 jets. The system would be deadly slow. This was the case with the Personal Modeler. Even if the system would have been reliable, it is questionable as to whether it could have competed with the Actua and Genisys from Stratasys. A race between Personal Modeler and Z Corporation's speedy Z402 would have been an embarrassment.

If a 3D printer is not lightning fast, model strength had better make up for it. This was not the case with the Personal Modeler. The models were weak and often broke in shipment or when handled. A system for concept modeling that is slow and produces fragile parts does not have much market appeal.

For a period of almost a year, BPM had to shoulder the burden of developing a new market. Never before on the planet had companies been asked to buy a similar machine for concept design. Making matters worse, this occurred at a time when beta sites and distributors had few good things to say about the product.

Even with the combined resources of 3D Systems, Stratasys, and Z Corp, educating the market over the past year has been slow and challenging. Potential customers have not been beating down the doors of these companies with purchase orders. The reasons for this are somewhat of a mystery, but I have some thoughts.

Surprisingly, it can take years for companies to absorb new ideas and approaches. Often, they do not sink in until they hear about their competitors using them. Also, since technology such as 3D printing is so new, many companies prefer to wait to see how and if it develops. Why buy now when it might become much better and less expensive months down the road?

Second, cost is an issue. Whether spending US$65,000, US$55,000, or even US$35,000, the product should work. BPM's Personal Modeler has not been the only product that has been accused of reliability problems. For early adopters, this makes the investment more risky than buying technology that has a proven return on investment (ROI). To reduce risk, Masters believes that a system for concept modeling should not cost more than US$5,000 (ideally, not more than US$2,000).

Third, many designers of mechanical parts and assemblies do not produce physical mock-ups of their work. Their drawings and specifications drive the process in the model shop. Expecting designers to produce physical models in the engineering office, in many cases, is an entirely new concept.

The closing of BPM shows us that a company must offer a product that meets a genuine need. What is more, it's critical to announce a product at the right time and introduce a rock-solid version of it to the market place. If the product development cycle takes too long, the world will pass it by. The irony in this story is that BPM tried to develop a product that would help other companies speed products to market, but the company could not even get its own product to market.

Contrary to popular belief, BPM (as a corporate entity) still exists. The company has not been dissolved. Equipment, etc, which is being stored in a warehouse, and several patents, are for sale. Meanwhile, Masters plans to develop a new low-cost system that he believes will appeal to engineers.

He is a bright individual with many interesting ideas and I would not be surprised if he comes up with another promising approach. He has 30 patents to his name, with as many as four that concentrate on methods of RP. 

So the question remains: Is BPM the first in a string of RP system manufacturers to disappear? I don't see other companies evolving the same as BPM, but I do expect to see merger and acquisition activity. With few exceptions, RP system manufacturers around the world are not doing well financially. Indeed, revenues from RP product sales worldwide grew 41 per cent to US$176 million in 1996, but if this figure is divided between 17 companies, with one company (3D Systems) taking US$80 million, there's not a lot to go around. In the final analysis, companies will inevitably merge or disappear, especially if they are mismanaged or do not have products with broad market appeal. BPM was not the first -- Quadrax came before it -- and it won't be the last.