Donal Reddington on mass customization, crowdsourcing and digital manufacturing


Ponoko – A Post-Industrial Revolution?

Back in November 2006, I speculated as to the type of businesses which might emerge using a hybrid of mass customization, crowdsourcing, micro manufacturing and online factory business models. One such hybrid has emerged recently in New Zealand. Ponoko describes itself as the world’s first personal manufacturing platform where anyone can click to make, buy and sell digital products.

Ponoko is the brainchild of software entrepreneurs Dave ten Have and Derek Elley. The business was founded on ‘the disappointing experience people face when making (individualized) products’, citing complexity and high financial and environmental costs.

Encouraged by the rise of what they call the Internet connected ‘creative-class’, along with smarter, faster, smaller and cheaper digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), they formed Ponoko, to make real the idea of mass-individualized products created by the Web community and made on a globally distributed network of manufacturing hardware, controlled from any PC.

Users create product designs which they upload to the Ponoko site, and select the materials to be used in manufacturing. Ponoko then makes and delivers the product, or the product parts. This making process can be used to perfect the design.

The next step is to make the final design available for sale through Ponoko, by posting it in the Ponoko showroom for people to view and buy. Ponoko can make the product and deliver it to the customer or, alternatively, deliver the parts to the user for final assembly and delivery to the customer. Ponoko handles the payments between customers and the user whose design is purchased.

The other possibility is that customers could buy a design and make it themselves, using desktop manufacturing systems (laser cutters, CNC routers and 3D printers). While 3D printing systems are currently very expensive and impractical for home use, a number of separate projects are currently underway on 3D printers that would be affordable for home users.

Ponoko’s founders take the view that today’s product making and distribution model is financially and environmentally unsustainable. It is also under pressure to digitize like the music and video industries. The hold the view that because today’s 100-year old product making and distribution system is so ingrained into our every day lives and delivers so much benefit, problems are not so obvious. However, they make a number of points in relation to industrialised manufacturing:

1) Making and delivering (individualized) products is a time consuming, complex and expensive process. This pain does not fit well in a world that increasingly demands instant satisfaction from mass personalized and customized products at low cost.

2) Product making and distribution is cost prohibitive for new entrants without relatively deep financial reserves. This is stifling mass creativity of real products and the progress of humanity on unimaginable fronts.

3) Low cost mass production and global distribution relies upon using lots of cheap energy and labour. But these two resources are running out.

4) Product making and distribution is a major contributor to the global warming problem (according to the WRI, perhaps 20% of the problem). Being environmentally unsustainable, the increasing ‘carbon currency’ costs also make the current model financially unsustainable.

5) Finding individualized products is very difficult and buying such products is a time consuming, relatively complex and expensive burden.

Many of these are very valid points. For existing businesses that use mass customization model, there is already a saving of working capital in not carrying finished goods inventory. However, working capital must continue to be used for raw materials or components.

Ponoko proposes to eventually use a business model where product design data is sold digitally, and downloaded by customers for manufacture at home. If a business (or individual) can move to a situation where it can sell designs as data, it immediately becomes a seller of digital information rather than a manufacturer. All of the expenses related to manufacturing can be eliminated completely, as the company moves towards a purely digital trading model. Ponoko is attempting to position itself as a broker that joins digital design vendors with customers who will become ‘end-manufacturers’ as well as ‘end-users’.

However, it does not automatically follow that a distributed model will provide large reductions in carbon emissions. The energy expended in moving finished goods around the world might simply be replaced by energy expended in distributing raw materials more widely in a distributed manufacturing model. However, this does not take away from the potential of the Ponoko business model to actually bring about the ‘post-industrial revolution’.

A distributed model significantly lowers the barriers to entry for new product creators, and reduces the financial risk. With Ponoko, creators can ship digital product designs with the click of a mouse, rather than physical products requiring costly handling and delivery. And because product designs can be sold to a large global audience from day one, pay back periods can be shortened.

In addition, Ponoko’s proposed distributed manufacturing model means that the marginal cost of selling each additional example of a design is practically zero. (Once the design is completed and on the market, it costs almost nothing extra to the creator to sell one extra copy. There is no requirement to use up materials or components, only the need to transmit the design data to each new customer.)

Because no physical product exists until purchase, product design collaboration makes it possible for everyone to co-create and personalize ‘almost anything’ they need and want. Ponoko says that, as adoption increases, prices for their design-to-order and made-to-order commodity type products will become unrecognisably low.

Ponoko is currently in the beta testing phase. The first manufactured product made by Ponoko from a user’s design was recently unveiled on the Ponoko blog.

While Ponoko is positioning itself as a broker of digital designs in the longer term, if it is successful in the medium term, it implies that significant investment in manufacturing capacity will be required by the company to fulfill orders for finished goods placed through the site. Ironically, if Ponoko is to be successful it may need to become a big manufacturer before it can become the ‘iTunes of design’.

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5 Responses to “Ponoko – A Post-Industrial Revolution?”

  1. Nic Ward Able Says:

    Thanks Donal. I think there are always going to be questions to any company that wishes to manufacture and product for any initial designer and end user. Especially in such a new concept such as our one, Ponoko. We certainly believe that the benefits outweigh the pitfalls, and the ability to offer product designer collaboration not only offers present designers an unlimited blank page – but we believe it opens up a whole new world of ‘potential genius designs’ – that are not just functional for the one-user, or just look good – but can actually provide a huge end benefit to a community, a town or even a nation and more. When someone asks us ‘what will a person be able to design and build through you’ – our answer is simply – ‘how far does your imagination stretch’. As we believe that’s what design combined with digital manufacturing hardaware is going to give us – unlimited imagination, with no necessary requirement for a degree in design or engineering for the end product. It’s pretty exciting stuff – and we too can’t wait for the next hurdle to jump over and see what’s on the other side! What we do encourage is for any present or budding designer, crafter, inventor or the like to log on and sign up for our open beta, coming soon. So you too can become part of that next hurdle! Cheers, Nic Ponoko. http://www.ponoko.com

  2. Donal Reddington Says:

    Nic,

    I believe that the founding of Ponoko could yet be a landmark in the development of e-commerce, design and even World trade. The biggest ‘unknown’ facing the company is how long it will take for the development of desktop manufacturing hardware to reach a stage where 3D printers are usable and affordable by individuals. If this does not happen quickly enough, it may be a number of years before end-customers seek to purchase designs instead of finished products or components.

    If Ponoko succeeds, and I certainly hope it does, it could be the biggest event in industrial development since James Watt perfected the steam engine in 1765.

  3. Nic Says:

    Hi Donal,

    Completely agree with everything you say. And we too are constantly checking out and waiting to see the next stage in all the unknowns! I recall from an earlier comment (can’t remember where tho’!) where a commenter, Pillar, said ‘who would have thought that nearly every western home would have a laser printer in so little time’. And that’s so true! And probably even moreso in today’s society where we are so much more open to new technologies – and the rate of ‘shrinking’ technology is so much faster now. So 10 years may potentially be a lot closer. But even though home desktop may be around 10 years away, your ‘local’ fab manutacturing centre I think is so so much closer. So definitely making the end-customer purchase a viable possibility. Cheers! Nic.

  4. Phil McCusker Says:

    Hello all. Interesting read. I have a few problems with the model so far.

    Nic Ward Able Says: “When someone asks us ‘what will a person be able to design and build through you’ – our answer is simply – ‘how far does your imagination stretch’”

    I dont agree with the above statement.
    The way Ponoko is working now is limited to the software skillset and knowledge of the designer. Ponoko is asking people to produce vector based designs in Illustrator, Corel Draw, etc, something which the vast majority can’t and won’t do. There are too many transaction costs associated with this model. If we look at Zazzle, they have witnessed rapid uptake because the entire design process can be completed within a browser. Wikipedia is also incredibly cheap to contribute and collaborate on.
    The network effects which result out of a critical mass of users interacting will not be realised in my view on Ponoko unless these problems are addressed. So while their interface is clearly friendly, invitiing and informative, it is anyone’s guess as to how they can best smiplify the design process. Currently this cannot be done.
    Ponoko made a big splash, time will tell if they will sink or swim.

  5. Jon Says:

    Hi Phil, although I’m a bit late to the party, I actually agree with you regarding complexity and software requirements which is why the next big marketplace will be people searching for designs and buying them already made – which they can either cut on their own machine, cut by a third party such as Ponoko or for the more adventurous, buy digital plans and modify it to their tastes and requirements. This is what I’m trying to do with my business (WoodMarvels.com) but without Ponoko, the viable option of having it cut for you wouldn’t be possible. As such, Ponoko offers a heck of an opportunity to designers such as myself to expand globally without the associated headaches of inventory, shipping and logistics :-)

    Jon @ WoodMarvels.com

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