By Jerry Mooney
Is “software eating the world?” as VC Marc Andreessen claims. Perhaps. But that’s a good thing, at least for people wanting to get ahead in the world’s manufacturing industry.
Recently, we’ve seen companies come from practically nowhere to become global brands. Take Pebble for instance. Pebble started out life as a Kickstarter project. The company saw an opportunity in the wearables space and decided to act on it. To date, it’s produced and sold more than a million smartwatches despite the presence of Apple.
Pebble isn’t the only example of startups having massive success. What about Nebia, the shower head maker? This company managed to get the mighty Tim Cook (Apple CEO) himself to invest in the business.
This startup insurgency is changing the way that people view manufacturing. It’s no longer the purview of a few capital-rich firms in the firm East. It’s coming home and going small - but in a big way.
So what’s causing all of this?
Manufacturing Entrepreneurs Now Have Access To Crowdfunding
If you wanted to buy machinery, like Mills CNC equipment, in the past, you had to get a loan from the bank. But today, manufacturers can deck out their factories through crowdsourcing, like Kickstarter. Of course, getting their hands on this funding is tough. But once an idea takes off on Kickstarter, it can be hard to stop it.
Inputs Are Now Much Cheaper Than They Were Before
Then there’s the fact that the initial input costs are way down from where they were. We used to get taught in economics that manufacturers faced large startups costs at the outset of any venture. But with the falling price of software, hardware and prototyping, that isn’t so much the case. Microchips and sensors have come down in price and become far more capable in the process. And 3D printing has had a huge impact on the amount of design experimentation companies can do before production.
Manufacturers Can Now Use Hardware Incubators
Many of the top manufacturing location in the world now offer “hardware incubators” to entrepreneurs. These are studios and service providers that help startups get going on the path to full-blown business success. These incubators are essentially spaces where startups can tinker with their designs. And they’re popping up all over the place. The creator of the Android OS recently announced the creation of his new company, Playground Global. The idea of the company is to provide studios where small businesses can play around with their devices. Playground will then help to build out the rest of the company’s supply chain while the product is in development.
Big Companies Are Now Interested In The Cottage Manufacturing Movement
Just a few years ago, there wasn’t a whole lot of interest in cottage manufacturing from the big players. But recently, that’s all changed. There're two main reasons for this. The first is that there is value in what startups are doing. Apple, for instance, is trying to create manufacturing platforms linking startups to bigger companies. The second is that startups are innovative and big business want a piece of the action. There's money to be made in the risk-taking of others.