User Manufacturing and Crowdsourcing in New Zealand: How Ponoko enables creative users to create, manufacture, and sell digital products online

How Ponoko worksPonoko is a user manufacturing platform based in Wellington, New Zealand, where anyone can click to make, buy and sell digital products. Users upload designs, Ponoko manufactures them for them using rapid manufacturing technology, and send the result to users. If they like and approve the result, users then can start to sell their designs (and products) to others using Ponoko’s online shop and distribution system. And as in many ventures, the initiator of the business was a frustrated user who could not buy what he wanted to fulfill his needs. After reading about the idea of personal fabrication by Neil Gershenfield at MIT, a business was born.

I asked Dave ten Have, Ponoko’s founder and CEO, to describe how the company was founded and what the team wants to achieve. With the help of Steven Kempton , Ponoko’s chief blogging officer, the following guest article came in:

Ponoko was founded on the idea that making or buying individualized products shouldn’t be so complex, time-consuming and at a high cost, both financially and environmentally. It should be an enjoyable experience, where you can focus on the design and not be overly limited to what resources, materials or tools you may or may not have or know about.

The idea for Ponoko came from software entrepreneurs Dave ten Have and Derek Elley, both of whom have made a number of things where each experience left a sour taste. A particularly disappointing project was Dave’s experience in designing some wall art – a skateboard shape made of dark rich wood with mother of pearl inset designs. This small project took way too much time than Dave had anticipated – two years in fact. It took an incredible amount of phone calls and emails to multiple parties (mostly engineers who didn’t have an interest in creativity/art). In the end, it cost a huge amount for an unpleasant making / buying experience – and when it turned up, it was wrong and had to be sent back. The worst part was having to go through the horrid process all over again. (You can see Dave’s personal blog for pictures). After this and other disappointing experiences in making individualized projects, they founded Ponoko.

Encouraged by the rise of 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), Dave and Derek formed a plan to solve these problems. They started with the premise that the personal computing and the personal manufacturing industries have strong parallels, realizing that one day everyone will be able to create and make any product from their own home. This led to 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.

Today’s product making and distribution model is financially and environmentally unsustainable. It’s also under pressure to digitize like the music and video industries have. 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. But when was the last time you made something?

Making products today does not come easy – some major problems exist:

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

* 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.

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

* 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.

* Finding individualized products is very difficult and buying such products is a time consuming, relatively complex and expensive burden. Why is there no easy to find supplier of low cost personalized products?

These pressing problems illustrate that a new product making and distribution process is required. Our solution is made possible given the rise of the Internet connected ‚creative class‘ along with digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), and production materials.

The idea of Ponoko is to address these challenges and to deliver the future of product making and distribution to the mass market, today. Ponoko shall deliver the following benefits:

Less risk. On-demand design and manufacture is made possible, so work does not need to be commenced until a consumer makes a purchase. And because product designs can be sold to a large global audience from day one, pay back periods can be shortened.

Lower costs. With Ponoko, creators can now ship digital product designs with the click of a mouse, not physical products requiring a pocket full of cash. This is Apple iTunes for products, but with YouTube style user-generated content.

Instant scalability without cost. Ponoko’s distributed manufacturing model means the creator’s cost and time frame to manufacture a product for 1 customer is the same as for 1 million customers. Creators can sell millions of products on-demand at ’no‘ extra cost.

Increased control. Ponoko is specifically designed to provide end-to-end visibility & control over the entire product making and distribution process.

Less complexity. By connecting creators direct with consumers, the traditional supply chain complexity involving a manufacturer, distributor, wholesaler and retailer is eliminated.

But also for consumers, the system has a number of benefits. The main advantage are low cost individualized products. Because no physical product exists until purchase, product design collaboration makes it possible for everyone to co-create and personalize ‚almost anything‘ they need & want. As adoption increases, prices for Ponoko’s design-to-order and made-to-order commodity type products will become unrecognizably low.

We are in beta phase at the moment, so if you’re interested to find out how this all works and to help us make it the best making/buying experience you’ve had, please sign up.

Context:

Ponoko Blog
– Previous posts on the user manufacturing trend
Neil Gershenfield on personal fabrication

About the Author:

Frank T. Piller is a Co-Director of the MIT Smart Customization Group at the MIT Media Lab, Massachusetts Institute of Technology, USA, and a chair professor of management at the Technology & Innovation Management Group of RWTH Aachen University, Germany, one of Europe’s leading institutes of technology. Before entering his recent position in Aachen, he worked at the MIT Sloan School of Management (2004-2007) and has been an associate professor of management at TUM Business School, Technische Universitaet Muenchen. Frequently quoted in The New York Times, The Economist, and Business Week, amongst others, Frank is regarded as one of the leading experts on strategies for customer-centric value creation, like mass customization, personalization, and innovation co-creation. His recent analysis of the crowdsourcing business model “Threadless” (co-authored with Susumu Ogawa), an innovative crowdsourcing business model in the fashion industry, has been elected as one of the Top-20 articles in MIT Sloan Management Review.