How are entrepreneurs developing the resources to finance, design, build, and distribute products, and how can this ultimately lead to the creation of viable businesses and jobs? Read excerpts from the conversation below, or download the full transcript.
SCHONFELD: Who are the new manufacturers?
HATCH: The cost of a computer numerically controlled milling machine, or CNC tool, has come down about 95 percent. Software companies like Autodesk are making software easier to use. We’ve had dozens of crowd-funded projects [at TechShop] that spent only $10,000 to $100,000 to get all the way through prototyping to their first run in manufacturing. That is new.
RINGELMANN: We’ve had campaigns raise money for 3D printers, or to raise money to make a film. We had a campaign by two young women who wanted to create solar-powered, environmentally friendly inflatable lights that they could give away to the developing world. They ended up raising $60,000. We had a couple who couldn’t afford in-vitro fertilization treatment, so they went on Indiegogo and raised $10,000 to have a baby.
A few young entrepreneurs were passionate about keeping bugs away. So they put their creative minds to work and they came up with this awesome contraption to, in a very benign fashion, shoo away flies. They used Indiegogo, which leveraged Facebook and social media, and ended up raising almost $600,000 by offering their product as a way to raise the money.
SCHONFELD: The marketing starts with the core group of early adopters who will be your most loyal customers. And they cheer you along. Once you have the product, a lot of people find Facebook is a great distribution mechanism for connecting with new customers and getting people to recommend their products.
BURNETT: That distribution is incredibly important. If you think about how we make decisions, it’s influenced by what our friends, family, and co-workers do. Facebook allows you to engage that community in a word-of-mouth and scaled way. So you can activate those friendships and have them tell your story in their voice and augment your marketing message. Almost every business story on Facebook starts with a person connecting with friends on their page, talking about a set of interests, and realizing, wow, maybe I have a business opportunity.
TEN HAVE: Ponoko enables distributed manufacturing. We help people reach out to a global market. People use crowd funding to determine the appropriateness of the product—is someone going to buy it? They do early prototypes at TechShop. And then they can use a platform like ours to then push their product out into the globe. That ecosystem didn’t exist five years ago.
SCHONFELD: Does that create jobs here or abroad?
TEN HAVE: We’re finding people are starting to think critically about everything in their supply chain. That includes whether or not they can use local resources. People are bringing jobs back locally. In many cases it’s less complex than sending stuff overseas.
HATCH: Because robotic tools are so cheap, you’re now able to manufacture things in short and moderate runs, better meet what the customer wants, and move a lot of jobs back to the U.S.
TEN HAVE: People are starting to build out the narrative around the product. Knowing who made the product is an important part of removiong the opacity of information around products. It’s about reinvigorating a social contract.
RINGELMANN: We have a great example on our site. A young woman started a gluten-free bakery and made gluten-free macaroons literally in the back of her garage. And they started getting a little bit of traction. And then they had the opportunity to expand production, hire people, and get their product into a regional grocery store, which was a huge opportunity. The only thing is, they needed to update their packaging, which was going to cost $15,000. They went back to the bank and said, hey, we have this huge opportunity to grow. It’s not that the bank didn’t want to. Their risk return models just didn’t work. So they went on Indiegogo and raised $15,000 by preselling macaroons. Within three months, they were distributing their product across 40 states. And now they are hiring people.
SCHONFELD: Barriers to entrepreneurship are going away, not just in the digital realm, but in the physical one, too.
RINGELMANN: All these ideas have just been repressed and never saw the light of day, because the mechanisms to raise the money, design the products, distribute the products, and market the products were never there. But now they are.
I think we’re going to see this rising middle class of entrepreneurs. It’s just a matter of you deciding, “Yes, I’m going to try.”