MIT Technology Review on Ponoko: "Ponoko wants to give customers the tools to design and sell whatever they want."

Last week, Michael Gibson published a very nice analysis on Ponoko in the MIT Technology Review. I wrote about this company before, and the article has a nice summary of the recent developments of this user manufacturing start up.

Gibson writes:

"For most companies, product design and development is a long process of trial and error, involving, among other things, in-house designers, committees, timed product releases, and, ultimately, customer feedback. Until a product sells, or if it doesn't sell, it takes up costly shelf space in either stores or warehouses.

But by letting individuals dream up, make, and then sell unique products on demand, Ponoko is attempting to eliminate the product-development wing. Ultimately, it hopes to eliminate the need for a centralized manufacturing plant as well, by recruiting a large enough community of digital manufacturers--people scattered around the world who have 3-D printers, CNC routers, and laser cutters. Moving the site of production as close as possible to the point of purchase will reduce the need for long-distance shipping.

"Just as personal computing went from the mainframe to the desktop, and the result was distributed desktop computing, we see the same trend occurring with digital manufacturing, as it moves from the warehouse to the desktop," says Derek Elley, the chief strategy officer for Ponoko."

At the end of the article, Gibson quotes Phillip Torrone, a senior editor at Make magazine, who tried Ponoko to create a custom stand for his iPhone:

"They did everything that was required for me to get my product," Torrone says. "Their tutorials are fine; the templates were good examples. Pretty much, they did everything right. Now the question is, is there a demand? How much money does a company like this need to make to stay afloat?"

Ellery's answer is that, eventually, Ponoko's revenue will come entirely from digital services, not from manufacturing fees. The company intends to develop six revenue streams, including ad sales and commissions on design purchases."

For more analysis, head to the full article.

Ponoko and related services, and the corresponding business model, are the theme of my upcoming webinar with Pure Inisghts. More information here!

Comments

[Philip McCusker]

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

Nick from Ponoko: “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.