A few years ago, the Consumer Electronics Show was full of 3D printing companies, and despite the early enthusiasm, that industry has not lived up to the hype.
In this clip, Chris Hill and David Kretzmann talk about how self-driving cars are looking like the next big media-hyped technology. Listen in to hear more about how expectations of self-driving cars are being exaggerated, how much hype is reasonable, and what it'll take for them to catch on at the consumer level.
A transcript follows the video.
This podcast was recorded on Jan. 11, 2016.
Chris Hill: Last time you were here, we were talking about how a couple of years ago, Matt Argersinger went to CES and was struck by how many 3D printing companies there were, and he just shook his head and thought, "This is not going to end well for the vast majority of these companies."
David Kretzmann: Yeah, and there weren't many this year.
Hill: So, what's this year's version of 3D printing? What was the tech that you looked at this year at CES and thought, "This is a lot of hype, and it's not going anywhere immediately."
Kretzmann: I'll back up a little on this. Hopefully, people who are listening to Market Foolery also know and perhaps listen to Rule Breaker Investing with Fool co-founder and Supernova chairman, David Gardner. I think, in October, he had a week where he was talking about the hype cycle, looking at how companies have the peak of inflated expectations, and that's the stage where everyone is enamored with the tech or trend. Then eventually, reality sets in, it goes into the trough of disillusionment.
He gave 3D printing as an example, from a couple years ago, when everyone was like, "Yeah, we're going to have a 3D printer in every home, everyone's going to be using this, it's going to change everything, every industry." And then, eventually, it sets in, this is actually a pretty small market. Not a whole lot of realistic applications today, especially in the consumer space. And in that episode, he mentioned that self-driving cars might be in a similar position today that 3D printing was a couple years ago. And after being at CES, that's what I lean to.
Hill: You're saying David was absolutely right.
Kretzmann: I can see where he's coming from. It's like, man, seems like just about every booth. That's a slight exaggeration. But the vast majority of booths and exhibits there; every company wanted a piece of connected cars, self-driving cars, autonomous vehicles. And you just have to wonder ... certainly, you can see the world is heading in that direction. But it's not going to happen overnight.
You have to give consumers time to buy new vehicles. That's not going to happen fast. You have to give time for the technology to improve, for the sensors to improve, to get into enough vehicles that it's actually realistic to have a lot of self-driving cars on the road, and eliminating car ownership. So, certainly, yeah, I can see the world heading in that direction.
But man, every auto manufacturer there, every sensor company there, the one thing they continuously plugged was somehow their involvement and connection to connected cars, self-driving vehicles, autonomous vehicles. I sort of wonder if self-driving cars might be in the same position today that 3D printing was a couple years ago, where certainly there's relevant uses for the technology, but I think it's going to be a lot further out than people are anticipating right now.
Hill: Well, and a week ago today, Jason Moser and Taylor Muckerman and I were talking about news from the auto industry, General Motors investing $500 million in Lyft, and one of the things I mentioned was that later in the week, at CES, Ford Motor was expected to announce a joint venture with Google. And those were the reports, and that didn't happen. So at some point, either Google walked away, Ford Motor walked away, maybe they both walked away. But to dovetail on what you were saying, it's not just investors and consumers, it's also clearly companies who are looking at this and saying, "Okay, this is maybe a future bet we want to make. We want to invest in this. But there's no rush."
Kretzmann: Yeah, and I think you have to remember, companies were doing the same thing with 3D printing a few years ago, and that didn't make it a smart decision. You have Stratasys and 3D Systems writing off a lot of their acquisitions, essentially admitting one or two years later that they tremendously overpaid for a lot of these different company that they were snapping up. I think we have to be careful with getting too enamored with self-driving cars.
Certainly, I love the technology, I love the direction, it could potentially save a lot of lives and really make the world a much more efficient and better place to be, but you have to keep it in perspective that this is not going to happen within a year or two. This is an industry and a trend that's going to emerge and take place and grab hold over 10-plus years.
Chris Hill has no position in any stocks mentioned. David Kretzmann owns shares of 3D Systems. The Motley Fool recommends 3D Systems, Ford, General Motors, and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.