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Ponoko and On-Demand Customized Manufacturing

Ponoko logoThe abilities that high tech has put into the hands of business are amazing. Even more astounding is how long it can take for companies and individuals to realize what they have in their hands and how it can be used. That's what makes Ponoko of New Zealand so interesting. The company markets to people, mostly in the U.S., who want to see their own jewelry and other creations made but who can't afford traditional manufacturing processes. Ponoko uses 3D prototyping machines, around for years, whose lasers cut plastic or wood composites to pre-specified shapes to generate short-run final products. I chatted with CEO David Ten Have about the company.

BNET: How do you describe your business? David Ten Have: What we provide is essentially an online manufacturing platform for designers. We provide a facility that allows designers to upload a design and we can manufacture it. We've got a defined material catalog. We request that the designers append their designs in a particular design format given specific design rules. A designer can come up with an idea, rapidly get a real product, and see if other people are interested in the product and go from there. We've have people upload products into our marketplace and see enough interest in the product to produce in volume. It really reduces the risk of bringing a product to market. You can go from one to many thousands in small incremental steps.

BNET: Didn't you add a "design your own" capacity to the web site? DTH: Last month we released what we call Photomake. That's a tool that allows people to sketch something on a piece of paper, photograph it, upload the photograph, and load it into a design tool. We started off at the very beginning [of the business] by saying you need to use a vector package to do the design work and you need to provide us an EPS file, but there was a significant number of users who found that a significant barrier. In some cases people don't have the education or skills required. We're able to cater people who do that or who would want to use Photoshop or a paint package to do their design work.

BNET: How many customers do you have? DTH: We've got over 10,000 people signed up. I think we had between 1,000 and 2,000 active designers [before the new design tool]. By opening the tool up we saw a considerable increase in usage figures. We saw the doubling of the usage pattern.

BNET: What does active mean? DTH: People who are submitting designs and getting things made.

BNET: So people who submitted something at least once to be made? DTH: Yes.

BNET: Has anyone ramped up to larger volume? DTH: Last month we put through a number of fairly significant volume orders. If they do it smartly, they can essentially have zero or low inventory.

BNET: What is significant volume? DTH: At this point in time, thousands of orders.

BNET: What sorts of products are people having made? DTH: We've got everything from coasters and jewelry to bits of robotics. We've had people create all sorts of wonderful things that we didn't expect â€" furniture. And then really personal items like memorial plaques. It's a tool that also gets used as a form of personal expression.

BNET: How much it cost to make a single sample? DTH: In some cases it could be as low as $20 or, depending on the complexity of the design and the material [chosen], as high as $60. As you produce more the unit cost goes down. If you do one prototype unit and you're happy with that, we'll use a larger piece of the same material but cut 20 pieces, and our prices go down when you cut more on a bigger piece of material. If you want to produce thousands of these we will give you even greater discounts. You can prototype at vastly reduced rates or engage in a low-volume manufacturing, but still a lot [of volume] to a designer."

BNET: As you go from 1 to 20 units, how much might the price drop? DTH: You can start dropping that down to $4 or $5 dollars [a unit].

BNET: How much is shipping to the US? DTH: It's about $7 US.

BNET: Why do you think that so many of your customers are in the US when you're based in New Zealand? DTH: I think it has to do with the fact that there is a very strong make and DIY movement in the United Sates. I was at [an O'Reilly-run] Maker Faire in May and I was just astounded at the level of engagement that we saw from "normal" folk. There is a latent creative drive that I didn't expect from a group of consumers. It was a real eye-opener. Young people are embedded in an environment where they create their own stuff. Once you've started creating digital stuff, it doesn't take too much of a leap to say, "Why can't I create real stuff?"

BNET: What gave you the idea to do this? DTH: My background is in software development and a couple of years ago I started branching out into design. I found it was incredibly difficult to put a design file on the web and get someone to give me something real back. If you go to traditional manufacturers, they'd be looking at thousand unit orders. You're looking at quite a cash outlay to get a product in your hands, and that's even before you've proven that people want the product.

BNET: These tools have been available for years. Why do you think it took so long for a service like this to open? DTH: There are a number of factors, and I don't' think any one of them contributes wholly to the problem. One, there are certain ways of doing things in manufacturing and prototyping. In any industry where you ask a question why don't you do it this way and you get the answer because we've never done it that way, in some cases I think that sort of attitude has been prevalent. There are simple economic factors in producing one of something or ten of something instead of thousands of something and pricing them so they're attractive. The other side is that the technology itself in the end product has always been pitched as a prototyping [tool]. It's never be3en considered a final product. But if you use plastics and laser cutters, you can produce jewelry that people will buy. The other thing is I think there's a bit of a generational shift as well. One of the things that convinced me this was a real opportunity is that we were invited to a design school by one of the [faculty]. He led us to a workshop at 7 in the morning. Back in the corner they kept the lasers. At 7:30 there was a queue outside to use the laser cutter. When you see that sort of thing, you know there's something going on.

BNET: How much did the equipment cost? DTH: The machinery itself is on the order of tens of thousands of dollars. I spent a lot of time writing the software.

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