Cloud Manufacturing Filling in the Startup Puzzle

David Wagner, Managing Editor | 5/21/2014 | 13 comments

David Wagner
E2 has long trumpeted the days when 3D printers would sit on our desks and print prototypes, consumer goods, and even body parts right from our desk, but a new cloud manufacturing company is taking this concept to new levels. Factorli, a startup with funding from Zappos CEO, Tony Hsieh, among others, is a cloud-based factory aimed at small companies that hope to stay fabless but still build products in large numbers.

Fabless manufacturing has been around for some time, but usually it requires extremely large product runs and long term partnerships with factories that require long re-tooling windows. Factorli is aimed at product runs in the hundreds or thousands. Using the cloud, product specs are submitted and the factory can use a combination of software and robots to turn out small runs of products efficiently and at a competitive price to other outsourcing options. In a way, it is the Threadless of factories. Instead of pumping out t-shirts on demand in order sizes around the size of a company softball team, it is creating widgets.

What that means is that they are the missing piece of the Kickstarter puzzle. Kickstarter has made it relatively easy for a company with a good idea to get funding for a small manufacturing run, but it was harder to build them in a timely and cost-efficient manner even with money in hand. And Factorli will allow the company to scale and grow until they grow to the level where a larger manufacturer is more appropriate.

Up to this point, manufacturing has been rather slow to adopt the cloud for manufacturing operations, according to this article, because of a fear of uptime. But uptime, despite a few high-profile hiccups, is one of the cloud's strengths.

The other issue is security of intellectual property. This is not so easily remedied. Regardless of whether you feel a cloud is more secure than your in-house data, the fact is you are uploading your designs onto someone else's computers. This is not something large-scale manufacturers will take lightly.

However, the issue is different with smaller companies and those choosing to go fabless. Cloud or no, those choosing to outsource their manufacturing are, by definition, trusting their IP and data to a partner. And the hurdle for smaller companies to gather funds to design and prototype a product is lower than when they also have to find a way to build it for themselves. Factorli, with its Las Vegas location, will also earn some points for being outside China, which has a reputation (founded or unfounded) for misappropriating intellectual property from partners.

In the end, this is the large-scale equivalent to the 3D printer on the desk. A single person can design, prototype, market, fundraise, and manufacturer from the same computer, and have 10,000 copies of the product made and shipped from Nevada with not much more effort than it takes to order a custom t-shirt.

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singlemud   Cloud Manufacturing Filling in the Startup Puzzle   5/30/2014 9:46:53 AM
Re: exciting concept
agree,  one problem is people can get money free very easy without any liabilities.
eethtworkz   Cloud Manufacturing Filling in the Startup Puzzle   5/29/2014 1:18:22 PM
Re: exciting concept
Hammad,

Kickstarter has some very good ideas for sure.

The Beauty of the website lies in its colloborative nature of getting things done.

Every single thing is crowd-sourced/colloborated on most effectively and efficently here.

Its a superb Site!
Hammad Masood   Cloud Manufacturing Filling in the Startup Puzzle   5/26/2014 3:35:08 PM
Re: exciting concept
I follow Kickstarter and there are some very interesting ideas I come across each day. Great forum to kick start your projects.
Anand   Cloud Manufacturing Filling in the Startup Puzzle   5/26/2014 11:41:11 AM
Re: exciting concept
@Sunita-I agree with you when you say that this is a very exciting project. The only problem is the issue of insufficient funds but once it gets good and committed sponsors, all shall be well. With the creation of widgets, large scale production is now on the rise. It is extremely amazing how a single person can carry out many tasks such as designing, marketing and fundraising with just a single computer. It is also amazing how a single product can be reproduced up to around 10,000 copies and shipped from Nevada with less effort.
stotheco   Cloud Manufacturing Filling in the Startup Puzzle   5/25/2014 1:27:26 PM
Re: exciting concept
Kickstarter and Indiegogo are two of the platforms that creators are turning to nowadays to fund their projects. There are many problems along the way: creators or developers that flake out and such. It's a risk on both sides of the party.
Zaius   Cloud Manufacturing Filling in the Startup Puzzle   5/23/2014 9:59:11 PM
Re: exciting concept
I think competition among the 3D printing service providers will also push the price to the right level. It is amazing how easier it is to market an idea these days.
jastro   Cloud Manufacturing Filling in the Startup Puzzle   5/23/2014 10:44:25 AM
Re: exciting concept
>> However, the issue is different with smaller companies and those choosing to go fabless.

>>And the hurdle for smaller companies to gather funds to design and prototype a product is lower than when they also have to find a way to build it for themselves

A perfect example of *disruption* in the marketplace. Remember when Kickstarter was disruptive? Times are moving fast. Hope the CIOs are spinning out new ideas now. Great article @dave
Pedro Gonzales   Cloud Manufacturing Filling in the Startup Puzzle   5/23/2014 10:17:42 AM
Re: exciting concept
I agree with everyone that this project completes the kickstarter puzzle.  New ideas and project can come to the market much faster helping create jobs and new businesses.  I don't know how the issue of securing intellectual property can be solved, this is the lifeline of a new business.
ProgMan   Cloud Manufacturing Filling in the Startup Puzzle   5/23/2014 9:16:54 AM
Re: New
LOL @Rich - yes, hard to imagine a more amazing transformation beyond that of body parts.  Although I guess it depends on what body part we are talking about also...
SunitaT   Cloud Manufacturing Filling in the Startup Puzzle   5/23/2014 9:00:20 AM
Re: exciting concept
This is an exciting project. All it needs is funding from the right sponsors. It is amazing how widgets have been created to facilitate large scale production. A company only needs to have the product specs plus the cloud manufacturing software in order for it to work efficiently. Manufacturing should be made faster and the fear of the up time should be resolved to the clod manufacturing work.  The kick starter puzzle will be a big boost to technology and it should be adopted by large scale companies. People like to feel safe hence the issue of intellectual property should be addressed.
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