stating the obvious: this post is my opinion
A month ago, I wrote Part 1 of my public thesis why I believe the 3D design stack is under attack. Starting with why the incumbents actually have a problem in the first place.
Here, I am continuing my thesis. Writing about the vectors through which incumbents are coming under attack, and their clients can unshackle.
I have noticed how some investors prefer to think their software thesis in terms of features. I don’t find that very helpful. Features are just a result of some larger macro shifts.
That’s why we dont think of our 3D design thesis in terms of features. We think in terms of market structure and mega shifts.
Get the slide deck
Let me begin my thesis by using a unique metaphor
Imagine your body needs chronic treatment. Let’s say Diabetes. And folks tell you that you need insulin to treat it and function well.
There’s a dealer (not saying who) who has the reputation for always having insulin. You get it from him. But he sold you insulin at a teaser rate.
And he’s mixing some nasty stuff into your insulin which makes you addicted and dependent. You find it very hard to go to another dealer, because this guy’s insulin is just really hard to switch away from.
In the foreseeable future, his teaser rate will run out.
Now, the dealer comes to you and says “hey, this other drug goes super nicely with the insulin i’m already giving you, it’s great for your body”.
But really, what it does it creates even more chemical dependency of your body so that you can never get out of his insulin.
And you look at your wallet and you think: “hold on, when my teaser rate runs out, all the money in wallet will go to my one dealer. WTF”
“Now he wants to make me even more addicted?”
“No way; i have to get off his $hit, get my life in order and find a less abusive way to get my insulin. And while I’m rethinking it all, I should find an insulin that is not mixed with some of his nasty addictive stuff !”
“Oh, if I am making that huge life change anyway, I should also never again be dependent on a single dealer.”
Now, at this point in your realization, imagine there’s someone who tells you they actually got away from the dealer and since then built their own insulin stack. They tell you they began sourcing the different chemical components from trusted sellers and brewed their own insulin inhouse into the mix that is BEST FOR THEIR body.
That would be perfect, wouldn’t it?
You’d like to do that. You’ll probably need good support from others who are on the same journey as you. But because the vendor has left so many clients unhappy and addicted, you can easily find a huge group of people who have the same issue as you and you can consult each other and team up so you can all brew our own mix and become our own producers.
Within this metaphor, we find five interesting components
the need for a great product to fulfill life-critical functions (”control my blood sugar”)
the product stack
the vendor’s incentives
the pricing model
the community
Before double-clicking on them: I find it noteworthy that most “pundits” or investors out there think about the feature set, when they think about disrupting the dealer in the above metaphor. And it is a key component – if I can’t offer a decent substitute product, I can’t compete. But: the key to change in this metaphor also lies in working with the system’s incentives, pricing, structure and community.
Let’s bring the metaphor into 3D design and work through the components one by one:
Attack vector 1: Life-critical functions
The drug (insulin) in the metaphor can be equivalent to many tools used in the 3D design stack, but probably the most critical one in the stack of 3D designers and architects is their central CAD/BIM authoring tool. Without which the users couldn’t fulfill their core functions.
The attack vector here is not a more feature rich authoring tool (i.e. an insulin that consists of more chemical components, for that matter). The required feature set is sophisticated, but very clear.
Rather, the attack vector in terms of enhancing the life-critical functions that I see is:
Concurrency: The ability to manipulate and process elements in the same model at the same time.
atomic distributed version control aka git: The ability to store the state of every atomic object of the model at any point in time (and not just time snapshots !) from n-number of users and thus give a complete historical trackability of edits, branches and commits to the 3D model.
n:n multi-player: The ability to have n-number of users collaborate in n-number of distributed software from different vendors, without having to have one central vendor (or server) participate (which would not be n:n).
AI-ready streaming of my proprietary data: The ability to normalize, ringfence and distribute a firm’s or team’s model and model history, so that the team can build their own large language model based on their ringfenced but huge amounts of proprietary data without having to share their data outside their team.
Unfortunately for decades-old legacy authoring tools (the insulin), the above functionalities cannot be easily added on top of an age-old stack. They form a very different core stack around which to build an authoring tool from the ground up, starting with the database and data query architecture. Any legacy authoring tool will have a high development effort to switch to a modern stack that supports the above functions, plus the effort to convince and retrain their users over time.
And that is the attack vector here. Modern software for the 3D design stack built on modern technologies that allow concurrency, git, n:n and AI-ready streaming, offering not a 1:1 substitute but a drastically improved alternative to the drug fix currently on offer.
Which brings me to the entire stack.
Attack vector 2: Product stack
The dealer in the metaphor benefits from the fact that his client cannot home-brew a superior or otherwise better or cheaper insulin himself.
The same thing happened for decades in 3D design. A vendor would offer the most complete authoring software or the most sophisticated specialty tool. A client could never rebuild the same software in house. But worse – a combined stack of tools was not available that – when stacked together – would be a superior solution.
That’s what’s rapidly changing now. Architecture firms and design clients around the world are in the process of re-evaluating their IT spend. What they realize is that that one vendor will soon eat up their entire IT budget. We are talking 2025-2027 here. So soon.
While the largest clients are developing some lighter parts of their stack inhouse (eg. Testfit tools), the most sophisticated parts of the 3D design stack are just not feasible to be built by AE firms or design firms. Inhouse is not an option for the most sophisticated parts of the software stack.
Fortunately for them, these clients begin to actively go into the market, and look for new vendors that fulfil parts of the “dealer’s” software. These clients are willing to stack different softwares together, which do their part of the stack more excellently that the “we-try-to-do-it-all-in-one” software from the untrustworthy vendor.
That’s the attack vector that the dealer does not have an answer to. AE and design firms re-stacking their toolset with software that is individually superior in specific functions, and thus re-building the entire stack of their firm one by one.
Now, the dealer has no reason to participate in this, because: incentives…
Attack vector 3: Vendor’s incentives
In the metaphor, the vendor has the incentive not to heal the patient, but to keep them addicted. Being addicted means coming back for more, eternally. Every time you come back, the vendor needs to sell the patient more per dose, because doses hit resistance. A vicious cycle.
A very similar dynamic plays out when a vendor has maximum market power and market share in a 3D design software product that is ultra core to the user’s company (eg. an architecture firm) and is very complex to learn. The more the designer uses the product, the more the designer stores their data in the vendors software, the higher the addiction.
The vendor then has the incentive to keep adding more and more addictive features, and never let their clients come out from under.
Fortunately for the architecture and 3D clients, though, this is exactly the attack vector here:
Because clients are aware of these incentives (it’s an open secret and visible to the naked eye), the vendor has no credibility of ever meaning well for the clients. Even if the vendor has a change of heart – the hurt is already done. The only reason his clients stay with him is because there is no superior alternative. He abuses them. The moment the vendor faces true superior competition, his reputation is so hurt that whatever he claims he wants to do right by his clients – his clients know that he abused them.
Therefore, any alternative vendor (ventures, for that matter) offering superior substitutes can credibly claim to mean much more well for the vendor’s clients and structure their product and pricing model in a way that demonstrates credibly a good-natured alignment to the client’s benefits (and not to the dealer’s). All you have to do is to structure your product and license in any way that tilts to the benefit of the client, eg. in terms of length of commitment, service, flexibility in using the software, and pricing model. And the existing vendor has no way to defend against this attack vector because he created a systematic issue for himself.
Which brings me to pricing.
Attack vector 4: Pricing
The vendor/dealer in the metaphor is used to a steady and constantly expanding revenue stream from his clients. It will be very hard to change the pricing in a way that tilts in the favour of clients, because (a) “why would I” and (b) the vendor would take home less money where everyone has gotten used to that steady stream and pile of cash. How does the vendor explain that at home?
He doesn’t, or at least not without major discussions and convincing.
That’s the attack vector here. New entrants being able to offer pricing models much more aligned with client outcomes.
Instead of prohibitive seat-based licenses for 3D software, and a hard crackdown on clients who “over-use” according to the vendor – new entrants can offer pricing models that allow them very fast growth and allow architecture and 3D clients much more flexibility and independence. For example:
Pay for volume tiers, don’t pay for unexpected usage spikes
Pay for unlimited use, don’t pay for over-use
Pay for higher-tier features, don’t pay when features not needed
Pay for service level access (especially great in combination with open-source software), don’t pay for custom development and support
Attack vector 5: Community
All clients source their product from the same vendor. That’s why they share the same pain, and they know they share it.
The moment a few of them start building their own product stack, and ask around who can help with sourcing the parts needed, collaborating together to re-engineer a solution – the movement begins. Because the pain is so high and the trust in the vendor is low.
The vendor’s incentives, of course, are to avoid that movement. Control the communication, make sure they don’t speak with each other and make sure that no collaboration happens outside the control of the vendor.
That’s the final attack vector in my list. Activating a nascent yet vibrant community, and unleashing a movement that is brewing under the surface. Arm them to re-stack their toolkit.
3D design has one of the most amazing technical communities out there. Made up from game developers to aerospace engineers to architects – they all build in 3D, and many of them code. They organize online, they exchange ideas and learnings.
And new entrants – especially those that have a credible open-source strategy – are the ones that will be in the position to channel the power of community through this attack vector on the dealer.
My thesis is that through these 5 five attack vectors, 3D design clients can unshackle themselves from the dealer in the metaphor.
So much, for now.