We got an interesting episode today. We’ve got a guest who’s been on before, Jason Ray. It was December 2016 for something called Sightline Maps, which we loved the project because we think it’s really cool, topographically three-dimensionally mapping for government use, for school uses. The idea was that you would topographically print them on 3D printers so schools would learn what the stuff look like. He’s come back to use because he’s working on a new venture. It’s called Paperless Parts. It is a new kind of a service for getting quotes and finding a 3D print manufacturer to work with for making 3D print manufactured products. At the same time, sometimes it’s getting your first part. Getting that, “Is this manufacture-able in 3D printing and what’s the quality of it?” We call them design sign-off samples. That’s a really critical important part in our design process with our clients. I think it is for a lot of people. It’s one thing to print it on your own printer, but at the end of the day, you need to go ahead and make it in the final material, in the final version that you’re going to do. That design sign-off sample is important to get quoted and help establish whether or not a 3D print manufacturer is a good quality 3D print manufacturer.
There are many aspects to it. This is not just a replacement or another alternative to Shapeways and Sculpteo. It is really something different. It was an interesting discovery that we went through to really understand that. I actually have been on the site and uploaded some parts and was working to really understand, how could I as someone that does source manufacturing of parts, whether they be prototypes or actually short run production parts, how would this site serve me? It was quite a great journey and this interview takes you through quite a bit of that journey. There’s a lot of discussion about some of the things that are broken and really why we’re not getting 3D printing tipping in terms of manufacturing here in the US and creating that localized. For those of you who are just interested in the industry in general, there’s a lot of content for you here.
Listen to the podcast here:
Finding a 3D Print Manufacturer with Jason Ray of Paperless Parts
Jason, thank you so much for joining us today on WTFFF. It’s great to have you back on the show.
Thank you very much for having me. Its’ exciting to be back. It’s fantastic. It’s been a very exciting year. I’m excited to chat with you guys and share a little bit about what we’re working on.
Why don’t you start with telling us how you went from Sightline Maps, which is the one the last time we talked to you, to now Paperless Parts, which I love the name by the way.
Thank you. I can’t take credit for it. A co-founder thought of it many years ago and it’s stuck with him for a while. We’re lucky to have it. With Sightline Maps, it was really an interesting transition to watch the technology. What we realized is that additive manufacturing was the slowest part of the process of communicating topographical mapping. We decided that it would be much more effective to take the LiDAR files and put them right into a VR headset. A team of Navy SEALS, we can fly over a specific area and then we can load that area right into their VR headset. Sightline started to transition more away from manufacturing. That’s really where my expertise lies. It’s what I’m passionate about. It’s time for me to start looking into what the next opportunity is.
Tell us a little but about how Paperless Parts got started with you.
The concept and the idea was created in one of the larger rapid prototyping shops by a couple of my co-founders. They’ve been working in this shop. They’ve been understanding the challenges with prototype parts sourcing. They started thinking about what is the future of the sourcing components look like. When I got together with one of my co-founders, Jay Jacobs, we sat down and we started to talk about what does the future of manufacturing look like. Is it everyone is going to be going over to China and buying parts or we’re still going to be able to support that in the US? What is automation going to do to the manufacturing industry?
I just come off of about a year and a half of consulting with additive service bureaus and working with different organizations to figure out how their operational efficiency could be improved. We both settled on the same problem. It’s this problem that we define as buyer discovery costs. Buyer discovery costs are really the cost associated with a buyer and a supplier throughout the sourcing process. What we determined is that these costs are actually eroding existing marketplaces. For instance, if you look at MFG.com, it’s a very manual marketplace. In that marketplace, the suppliers experience very low win rates primarily because when a buyer comes to the marketplace, they upload their part file. That part file gets sent out to a variety of suppliers for quoting, multitude of suppliers come back with quotes and only one of them is going to win. If that buyer was just testing the market maybe just to inform their development process, maybe they had real intention of buying parts, that cost of quoting is just a significant burden. Hours and hours of time spent on both sides of the market place.
What you end up with is really this almost like a catch-22 in manufacturing. In order to make a purchase, you need to receive quotes. I need to have shops that are willing to quote me, but shops aren’t necessarily willing to quote product developers that they’ve never heard of before. It’s like, “I’m not going to spend the time to quote you because I’ve never heard of you and you’re probably just trying to get a price out of me rather than actually come buy a part from me.” What we said is, “How do we solve this problem? How do we eliminate the cost of buyer discovery?” What we realized is we eliminate the cost of buyer discovery by automating the instant quoting process for a variety of different manufacturing processes. We said, “What we can do is we actually can solve a lot of problems because quoting right now is more of an art than a science.” People will look at a part and they’ll come up with some spreadsheet that maybe was built five years ago. Some of the shops that are on Paperless Parts right now, when we initially started working with them months ago, very few people in the organization understood how they quote parts, which becomes a bottle neck in the manufacturing industry.
It’s true. We used to work for Bush Furniture and they had these crazy algorithmic formulas for how to quote a part. It was almost always inaccurate. It became self-defeating at times. They would kill a product before you get anywhere. We are not huge fans of feasibility analysis because we found so often that it’s not real world accurate. In other words, you can run an FEA test and then it will fail and yet we can make and it would be fine, or the opposite happens. It says it’s fine and it completely fails. There’s not a direct correlation between how you actually make something.
We found the same thing here. Those pricing formulation sometimes is so protective that you kill the product before you even got far enough to sample it. There’s something that we and Jason were talking about that relates to that. What used to happen is in that company, you didn’t get credit for common parts. If you used a part that was being either manufactured in other product or that you use in multiple of within a product, it was getting dinged with extra charges as if it was a unique part when really there was more of an efficiency, and the pricing model didn’t account for that. Similarly, something that we were talking about is when you have a 3D print machine that is going to take the same amount of time to print a part that’s two inches tall, whether you have one little part in the corner or you filled the whole bed with parts, there are different cost considerations. Sometimes those calculations need to be considered a little more manually than just with an automated system. Would you agree, Jason?
Yeah, and it’s actually quite challenging. A lot of shops are out there and when we first started working with them, they started treating additive machines like they were CNC machines. They were setting up their cost per hour on the machine and amortizing the machine cost over a five or ten-year depreciation schedule. That just doesn’t make sense. The technology is going to be obsolete in three years max. You really need to figure out how you can recoup your cost of investment, unless you plan on going back to investors to help you keep up with the current technology pace. What we found is that these shops were really struggling and ended up with some of the low cost providers out there, just not being able to sustain their business.
I want to address what you mentioned there in terms of filling the build area. Paperless has developed a group of core algorithms that allow us to do build plate packing. We can actually work with a supplier and we can say, “How much do you want to assume that your build plate is going to be filled? What’s historical for you? Do you run it with one part? Do you run it with five parts?” We give them the ability to very quickly tweak that as their operation scales up so that they can pass those efficiencies on in their pricing. What we’ll do is we’ll look at the footprint of a part and we’ll say, “How much of the build plate does that part take up?” Same thing if the capability exists for a vertical stacking, we’ll look at the three-dimensional cube and we’ll actually work with them on the orientation and figure out how many parts could scale within a single build plate.
So many things to consider, really. It’s really critical. We think that certain manufacturers might think, “They’re winning the battle. They’re making sure they are covering your amortization cost and all these other stuff and charging a higher price.” That may be such a higher price, they would lose the war and not get the job, or the opposite you were pointing out can happen where they quote this really low price to win the business. In reality they’re not profitable and that’s unsustainable too. There must be a balance somewhere.
That’s in finding the balance of what we’re really trying to provide at Paperless. We have four key pillars of Paperless Parts and they’re on our landing page. It’s instant and actionable. We try to differentiate ourselves in this instant and actionable, transparent and secure. Those are the four pieces. For instant and actionable, the way we look at it is we’re providing you instant information that’s actionable information. It’s not a 3D Hubs scenario where you get a price, you click ‘buy’ and then you end up in a conversation 24 hours later with the supplier trying to clarify a price that ends up going up or ends up changing or just doesn’t get delivered when you thought it would get delivered. Really, the prices you’re seeing on Paperless Parts are the prices. When you click ‘buy’ the order starts. It’s not, “Let’s start the conversation around an order.” That’s what we mean by instant and actionable.
Transparent and secure are the other two really big pieces. Transparent being that the buyers are going to know who the suppliers are and the suppliers are going to know who the buyers are. I’m not trying to create a veil. I’m not trying to build a one-sided sourcing network like Xometry or Fictiv or some of these other companies that are really just trying to own the customer. I would actually rather create more value in the manufacturing industry than I extract. I feel like that’s the only way we’re going to build a strong industrial base in this country around this technology.
The last piece is secure. Buyers told us there’s this IP issue. Buyers are afraid to send out their IP to us. You go to MFG, you put your IP in there. It’s all covered under an NDA, but you’ve no visibility of where your IP ever went. On Paperless Parts, when you upload your IP, you’re going to see 50 to 100 quotes and it’s going to be completely blind. No one has ever seen your IP at that point because the algorithm is analyzing the geometry of your part and correlating that with the activity-based costing of each individual supplier. Now, you control your footprint. Highly sensitive products, you don’t have to worry about your IP escaping. Only when you choose to buy from a supplier will your IP be transferred under NDA to that specific supplier.
I almost think you need it to go the other way too. One of the reason why we’ve been so successful sourcing in Asia with what we do for our product design business and for our clients is that we have a team on the ground that we established a relationship, that’s what makes it successful. We don’t go on Alibaba and have them quote things. We don’t do it that way. We get quotes but our team is making a direct relationship on our behalf. Then when it gets to the stage of product development, one of us shows up. We get to that higher level of that. What happens is that we have a lot more flexibility. We have a lot more cooperation going on and collaboration. They feel they have a dialogue box saying, “If you change this part of the design, it will perform better in our facility and we can lower the cost.” We have that going on in the product development process. This is a real product development house. They have real clients. This is not someone who’s working in the garage. Almost like we are rated as being, “Will you quote it? If you do a good job, you get the business.” That kind of direct relationship, that’s missing in a lot of it. There are ratings of the people but that’s not the same thing.
I think there’s also the desire for these suppliers to be able to offer special pricing to the professional shops in order to build relationships. What I mean by that is as a buyer, when you come on our site, you enter your company information so that when we complete that transaction, the supplier knows who they’re doing work for and you know who is doing the work for you. At the end of the day, if we said to a supplier, “We have now the capability that you can pick out design houses. If you like working with design houses, every company that we classify as a design house, maybe you’re going to give a 25% discount to.” The algorithm will automatically calculate that as a way to start getting the wheels turning. It’s very, very similar to outsourcing work in the manufacturing space. If my machine shop gets filled up, the guys down the street, they’re not going to be charging me the same price as they would just some random customer on the street. It’s an entirely different situation. I think there’s almost like that professional courtesy in the industry where people work together to generate maybe less margin but on a significantly higher repeat basis.
We agree. We think that the opportunity for a long-term relationship has to be worth something.
You guys really have a unique situation with being on the ground in China. There are several of those companies in and around the Boston area. I think Dragon Innovation comes to mind, as companies that do that. They work with startups to figure out how to get to China. My goal is really to bring manufacturing back to the US. One of the things that I firmly believe in is that we’re seeing this evolution in manufacturing right now. It’s three pieces. It’s automation, that is eliminating economies of scale. What I mean by that is it’s going to drive low volume production to start taking chunks out of this long run production cycle because I think what we can do in the future is we can eliminate a lot of the sales and operational planning that goes into, “Beginning of the year, we have to forecast that we’re going to make 10,000 of these parts.” No, let’s make 800 of them, let’s get them in front of customers as quickly as possible and have a very agile scrum approach to hardware manufacturing. I think that the current state of manufacturing is really going to facilitate that.
We have been developing products for more than twenty years. We started developing them and making them in the United States, in the State of Rhode Island and in Connecticut where we lived back then. That’s what we wanted to do. We continued to do it until it was no longer economically viable. We were forced to explore, and that’s when we first went to China. I think it was 1998 or 1999 when we went to China the first time. We did end up shifting the manufacturer of some of our products, making them over there. We understood how that works and we’ve done it for a long time. There are still today a use of scale where that makes sense. Believe me, I am very interested in bringing manufacturing back to the United States. It is much easier for me to deal with local suppliers and not have to deal with large forecasting and the lead times, all the logistics of doing something in China, if it wasn’t necessary.
That being said, you’re tapping into the biggest problem that we do have bringing business back to the US. That is that we do not get the kind of quote responsiveness here in the US. At the end of the day, I don’t have quite the right fit clients. Not all my clients are going to make here in the US. They may make the start of the run but then not make the end of it. Because of it, the long-term relationship or the long-term benefit has made it so the manufacturers just don’t quote well. When you don’t quote well, you lose the business. That’s really been an issue. I think you’re really solving a really important part, and that is that this discovery part is just faster in China right now and that’s a shame.
They’re hungrier for the business too. The number of folks that are doing prototyping in China that connects with me on LinkedIn every day.
We get about five of them a week. Prototyping is not so price sensitive. We’re very happy to make a prototype in the US or with a supplier that we know and work with in China that we trust. We don’t need a cheaper price on prototype. We don’t understand why there are so many of those that are soliciting us. They’re not getting business from us.
I think there’s a huge distinction too between a prototype and a first article. It’s totally different. I can go to a variety of different shops. Prototyping is rapid prototyping for a reason. It’s really what we found in talking to buyers and suppliers, the driving purchasing factor in this industry is, “How quickly can I have my part? Is it good quality?” The third piece is, “Am I getting just completely raked over the coals on the price?” If you’re not, really the goal was let’s get this part as fast as we can because the opportunity cost of slowing down my product development cycle and having engineers waiting for a prototype in-house, it just doesn’t make any sense. What’s going to be really, really unique I think with Paperless Parts is when you can compare prototyping sources and really will take this idea of discovering manufacturing to a new level. How much does it cost me to have my part 3D printed in FDM? How much does it cost in SLA? By the way, how much does it cost if I want to have a CNC machine? What’s the DFM feedback I’m getting on that? What does it cost if I want to have my part injection molded or casted? Being able to understand across manufacturing process without ever having to a supplier about that, that’s going to be an enormous amount of learning.
The other thing that we’re really interested in and I think where we’re driving is I’m going to help people understand how individual features of their part are driving DFM. We have a firm belief that this term Design for Manufacturability, DFM, is completely arbitrary at this point. Technology in the manufacturing space has moved so drastically that what DFM is designed for, a shop in Massachusetts that has a three-axis CNC machine and an FDM printer, then the shop that’s down in Texas who has an eleven-axis CNC machine is two completely different terms.
This is something that we deal with all the time. We do this model of creating an initial test run of a product. 800,000 pieces of something, test out the design and go forward with it. Because we have tremendous amount of experience in it, we know the difference between the model that we create that we’re having 3D printed versus the one that has to have all the right draft angles and all the right things that you need to injection mold it. We understand that difference. Very often, we get a lot of prototype requests from startups saying, “I want to really make this prototype.” We look at it and we go, “That can’t be injection molded.” You’re going to create something that you cannot make later when you need to. That’s a problem and it directly impacts the designed in cost. That’s where we really take issue with it because all those costs are designed in because manufacturing efficiency matters. Sometimes, we make compromises in our first run and we accept that higher cost because we want to make sure that it’s going to cost out later. We want to make sure that people are going to buy it before we go investing and that’s going to take to get that cost down.
We want to know that we’re right about the cost for the final model, the final version of it. Where it’s going to really be made or how it’s going to really be made. We want to make sure that that’s accurate. We’re more than willing to pay a slightly higher price upfront in that understanding of it. Where we see a lot of disconnect and one of the issues that we have is that, “I can have something made at Shapeways or Sculpteo or anything like that and check the material.” It’s a waste of time, that’s where we get frustrated with it. At the end of the day, our first article for us is the final design model. It’s like a design sign-off sample. If we’re going to make a thousand piece run, we want it made by the person who’s going to make that thousand piece run. We don’t want to have to go and do it again just because we couldn’t get it fast enough for our client to sign off on it or just because we couldn’t get it because it’s five times the price for a single unit instead of making the thousand piece run. You creating this relationship and conversation really will help us eliminate that extra step that we’ve been taking in there that isn’t helpful to anyone.
I think you hit the nail on the head. That’s the reason we really stuck with this idea of transparency. When a supplier knows who they’re making the parts for, they’re building a relationship. The quality is riding on their brand and their name. There’s an enormous amount of pride in the space and the parts that get manufactured. As soon as you put a blanket over that, and you try to own the customer, it reverts back to this path of least resistance of, “How can I make this as fast and as cheap as possible and get it out the door. It doesn’t have my name on it. I’m never going to get credit for having made this part other than the dollars.” American manufacturing, it becomes highly transactional. I think we’re assuming far too much commoditization where there’s still an enormous amount of human input and skill that’s required in manufacturing.
We know from doing business in China for many years that a lot more of business over there is not transactional. It is much more relationship-based. You get a lot more accomplished if you go to China and you have dinner with the factory owner, you get so much more accomplished than you would ever in 1,000 emails or 100 Skype calls staying here in the US. People that succeed in Asia go there. It’s the same thing here, why is it any different? It’s a cultural difference. Maybe it’s just the nature of American culture that when people in a corporation need to have a product made or a part made, they think of it as a transactional situation. When really, if it was approached a little bit more the same way, as more of a relationship, having clear understanding of the goals of the customer and the needs of the 3D print manufacturer, they could have success for each of them by meeting in the middle with that, but they don’t ever talk about it.
In some ways, Jason, it’s a generational thing as well. We don’t mean this like we’re old and we know what we’re doing, wise things here. What has happened is that there’s a generation of industrial designers who has never stepped foot in a factory ever. We find that all the time. What we hear from our clients and from everyone else we talk to all the time is that it’s rare that we spend ten weeks a year in a factory. It’s rare that those things happen but we found it to be the key to being successful in our area and being able to be more effective for our clients and design for manufacturing better. We found it to be very useful and effective and we were forced to do it at a time at which there was no way else to do business. You couldn’t clearly communicate via fax when we started doing that. We had to do it in person. We’ve come up with a generation who’s solely relying on a lot of computer analysis and it becomes more digitally transactional. That relationship has to come back in now.
We’ve got a little over 9,000 precision manufacturing operations in the US, but they are highly geographically concentrated when their customer base is a 50-mile radius around their shop. It is very old school. It has high customer concentration. They have two or three major contracts that drive the majority of their business. That’s why over 90% of these shops cap out at under $10 million in revenue. The owner is the only one who can quote, so he’s not going out there chasing business. He doesn’t have four people on LinkedIn sending messages to anybody who’s ever written about prototyping on their profile. He’s making his customers very happy in that environment. That’s it, and they stick to what they know and they make the same part. They’ve been making the same part for 30 years and they build their business around that.
I admire the lifestyle of business but I have also, the shoes on the other foot, where I’ve been trying to acquire those businesses. Buying a business that has extraordinary customer concentration and no other real channels for business is highly concerning to new owners. As these manufacturing operations get ready to transition, the average age of a machinist in the US is starting to get up there. You have this aging population of people. Master machinists are hard to come by. These people are highly skilled working with this equipment for years.
Now, we’re starting to get to a situation of where people who are my age are, “I want to go buy an operation. I want to build tangible products.” At the end of the day, “Can I really step into a shop that has an 80% customer concentration with one customer that the owner has been working with for 30 years and expect a business to stay with me?” It’s a big ask and it’s scary too. What you see sometimes is they either get rolled into a much larger manufacturing operations where, “If the one customer goes away, we can use the capacity and the talent in the machine shop anyways,” or they just end up getting liquidated where the owners extract as much cash as they can and they end up selling off the equipment.
We see Paperless Parts as a bridge. You’re a bridge between old school and new school in terms of manufacturing. There’s also some cultural aspects too and helping businesses get out of their own way a little bit to be able to work together and not just assume that things have to be done just one way. One thing we want to make sure is really clear to our audience, Jason, is that when you get quotes for your part on your site, it’s inclusive of the shipping cost to get it to you. That’s very different. It’s pretty unique. We haven’t seen that on other sites for ordering digital on demand parts. It’s what we wish always would happen when we go and book an airline ticket, is that the price that they quote me is actually the price I’m going to pay, but then, no, you’ve got to add, “You want to select your seat? Pay $80 more. You want to check your bag? That’s more, and of course there’s tax.” I do like that the price that you’re giving is the price.
That’s what we had to do. It’s one thing if you’re providing one price for one product and that’s it. If you came to our site and we only give you a single price, then we could add on shipping and there will be no like, “This stinks” moment. It’s still frustrating. It gets really frustrating is when you have a distributed manufacturing grid like Paperless, we have suppliers all over the country. Then we turn around and I’m giving you a single price, then when you go to check out, you’re in California and the supplier is in Massachusetts. The shipping to get it there when you thought you were going to have it is astronomical. We built the algorithms in the backend to make sure that shipping was accurately calculated based on your destination location and based on where the suppliers are.
What we experienced is a leveling in the United States. Regardless of where you are, you’re seeing the most accurate price you can possibly see. That changes the game because now, it’s not, “I’m only going to buy from shops in California because they’ll get it to me in a couple of days and I don’t have to pay this huge shipping.” What if the shop in Michigan is hungry for your business and they’re willing to give you a better price and they want to build a relationship with you? Now, at least you can see those prices on common ground.
It gets really complicated in all different aspects of business, when you start to have to get out all the UPS zone calculations and where are you compared to everything else, it is ugly and frustrating. To top it all off, when we’re considering the viability of a product, we have to look at it from the whole standpoint of its carrying cost, its shipping cost, its landing cost if you’re bringing it from overseas. That’s really where you get to, “Is this more viable here in the US or is it comparable to what we’re getting in Asia with this amount of wait time?” We have all these costs that we’ll be carrying for weeks and weeks before we ever receive the goods. When we can do a more accurate analysis of that, that really helps. Not a lot of people do it at that granular level we do here, but when you’re seeing it in that way, it makes you start to think, “Yes, there are all these other costs in it.” Those that maybe aren’t sophisticated at their algorithm that they use for calculating total cost, they start to reconsider it.
That’s part of why we built Paperless because we started to recognize that big companies like Caterpillar and GE are starting to figure out this make-buy decisions. They’re like, “Do we make the parts ourselves or do we buy them from folks in the industrial base?” We have this whole new technology additive. Are we going to keep storing in inventory? What’s truly unique about Paperless is we’ve got this platform for suppliers and buyers, but if you want to just come and learn how to internally cost a new 3D printer that you don’t own yet, you can very easily come in here. Load up all of your individual cost and upload all of your parts to the network and you’ll be able to see what you would have as a true cost in-house as a company versus what you could buy it from the network for. It will really help you understand the true ROI on buying a 3D printer.
This is something we’re thinking about. We’re passionate about 3D printing and we’re industrial designers and product developers. Often, ideas come to us or come across our desk where we’re like, “I can see that being a business on its own. Maybe I want to do that.” We start to analyze it. There is this exactly ROI calculation that we’ve been going through lately on a certain kind of commercial 3D printer, “I can buy one for this on the market. Even I could buy a second hand one on the market for this amount. How much business would I need to have of a certain price level to then it would make sense, I would buy my own machine? At the same, can I get started now outsourcing that manufacturing? Where is the transition point?”
Those are the key questions that should be at the heart of many startup businesses in the United States right now. We’re big firm believers in making sure the idea is viable, pay more money for it on a piece per piece item. Make a smaller run, make sure your market is really there because the marketing costs are so high in any business nowadays. Even though marketing is more accessible, it’s more costly to generate your leads and to really make your products match the market. When we look at that, we want to do that testing as early as possible, and then figure out when the return on investment for bringing in-house makes sense. A lot of times it doesn’t, that’s the model of a lean startup, right?
Absolutely. Startups bet their life on tooling. I’ve watched Boston startups with really cool, innovative products that just did not have the patience and the foresight to say, “We’re going to lose money this year. We’re going to lose money all year, but we’re going to make a much more expensive product and we’re going to iterate on it fifteen times throughout the year until we have as much customer feedback as we can get. Then we’ll bet the company on the tooling.” Companies are very, very quick to say, “25 people said this is awesome, that must mean the entire industry or the entire customer base is going to think our product is incredible.” They go out, they spend $1 million on tooling. They tool up, they make a ton of inventory and then the sales fall flat.
This is exactly the conversation I had on On the Shelf Podcast which is our friend, Tim Bush. We were having a panel discussion and we were saying what most people don’t really realize is that getting into Target and Costco and all of these things is really hard. It can take nine months, eighteen months, a couple of years sometimes just to get on the shelf at those places. What’s actually harder, and that’s what you don’t understand is turning and staying on the shelf. If you’ve burned up all your money and you’ve burned up all your investor base and the equity that you build, if you’ve burnt that all up in the process and now you can’t turn, you’ve lost your opportunity. Staying on that shelf is harder. We try to do it as early in the process as possible because we believe, when you have market proof that the dogs will eat the dog food, the money always shows up. It’s easy to scale up when you have investor and you can say to them, “Today, I’m making it for $100 apiece, but with your investment, I could invest in an economy of scale and I can cut that by 25%.” That’s an easy ask for money actually.
It’s hard because we fall in love with our products. I know it, I fall in love with it. If I love it, everyone’s going to love it. I think this is a great opportunity for me to say, Paperless is constantly evolving. A wise man once said, “If you release a digital website or a product and you’re not embarrassed about it, you waited too long to get it in front of people.” I would be the first to say that I have a healthy amount of embarrassment about what’s out in front of our users right now. What’s phenomenal is you’re seeing such a great community of people. We have 42 shops right now, whether it’s additive service bureaus or machine shops on our platform tuning their pricing, giving us just incredible feedback because there are just so many good ideas that come from the buyers. When buyers come to the site and they don’t find something they want or they see a price is too high and they reach out, I learned so much about how we can make Paperless Parts truly a value add in the industry. That’s the promise that we’re making as a company. We’re not going to make money unless you make money. We’re definitely never going to extract more value from the manufacturing ecosystem, then we create. That’s it. We want to be a net add. We’re saving the cost, we’re saving the time, we’re improving the process. Really, that’s our philosophy. We want to add value.
This has been a fun and dynamic conversation that I think is going to be of interest to a lot of different kinds of listeners. It was a pleasure to get to speak with you again. Thank you so much for coming on the show.
Thank you so much for the opportunity. I always enjoy working with you guys. I appreciate it. Thank you.
*Our Personal Experience Since This Interview (Full Disclosure)
In the time that has passed since this episode was recorded we have tried to use Paperless Parts for some of our commercial 3D Printing needs for our client work. Each time we have tried the available options fell short of meeting our needs. First it was a color issue, where we needed a larger quantity of parts than providers like Shapeways are suited to, and we wanted to match three standard Shapeways colors. Paperless Parts’ vendors were unable and unwilling to print any color other than their standard white or natural. The second time we had a very large part to print, and Paperless Parts pricing was more than twice that of Shapeways. While we are sure there are many situations where Paperless Parts is competitive and offers a great value, we suspect it is in more of a Business to Business engineering parts context rather than in consumer or decorative parts. So just be aware of this when you consider using their service.
Finding a 3D Print Manufacturer – Final Thoughts
That was a much more dynamic and fun interview than I really expected that it was going to be, even though we had a couple of calls to prep for this one and I’ve got to use their site and test it out for some work we’re doing. It was such a pleasant surprise. Jason is a really intelligent person, well-informed and he really does have quite a valuable service here. His heart is in the right place and that everyone needs to win in this process. There’s so much going on in the industry in general, which is why it’s not tipping. We see these design service sites where it’s all really about building membership and not about building up designers, because we need more designers. We have these manufacturers who are great at making cool, great 3D printers but they’re not helping to get more content generated on that end. Here in this space, he’s looking at and saying, “We want more localized manufacturing. We want 3D printing to become a manufacturing process. We want to localize that. At the same time, we recognize that we have to also nationalize that and be able to get customers from across the country.” Having a macro and a micro view of how to make this work and the opportunities, because that’s really where it is. It’s that there’s so much broken in this old school, new tech system, as he was talking about. We have almost like a language barrier in how things were quoted and are quoted.
We’re insiders who’ve been doing this a long time and we’ve merged along and educated ourselves in the technology. Because we don’t take no for an answer, we’re just like, “I didn’t like that answer. How are we going to make it work?” We go figure out another way, and if that means bring our own printer in house or do these things, we are open to those opportunities. We are also open to picking up the phone. This gives you a chance to do that. It gives you a chance to have direct relationship and communications. You don’t have to wait until late in your day and get on Skype and try to communicate with somebody across the world. It’s wonderful we have Skype and we can do that, but it’s a lot easier to talk to someone who’s a part of your own culture.
It’s not even just that, it’s the idea that he is offering up this transparency. We see a lot of the sites where they do this where they’re not letting you know who you’re getting a quote from. They’re so protective of the process that it makes it not useful at the end of the day. To be honest with you, we’re going to Google you. When we see the 3D print manufacturer, we’re going to Google them. We’re really going to check out how long they’ve been in business. We’re going to see how viable they are. We can’t afford to put our clients’ products at a place that might go out of business tomorrow. Just by the mere fact that that’s available to us makes it a lot more secure on our end to want to do business here.
The thing is that we’re coming back to this idea that relationship wins. That’s really been true our entire career. My article went live on Inc. and it’s about how to get a good quality 3D print manufacturer overseas. At the end of the day, it all comes down to the same thing, relationship wins. Just really puling that relationship back into the process, just because it’s digital, doesn’t mean there aren’t people there. It doesn’t mean there aren’t real designers there. That’s something we forget too often. It’s not just a design library. There’s somebody real designing that. That means their IP needs to be respected. We hear that all the time. It means that they put time and effort in it and they deserve to be paid for that. It’s the same thing on the manufacture side. They don’t need to have their time wasted quoting things for you when you’re not serious about it. By putting a face to that, by putting a relationship back in that, we all take it more seriously. We don’t waste each other’s time and we build up the industry together.
We’re really hopeful for the future of Paperless Parts. They’re definitely going on the right direction. They have a unique market that they’re addressing that there’s a huge need for. There’s huge potential for them, which is good for them as a company and it’s great for American manufacturing in general. We like the term that he used, “Eliminate the high cost of buyer discovery.” It’s really true. For us, it’s a lot of time. We have extremely impatient clients who are like, “I can get a quote off Alibaba tomorrow.” Yes, you can but can they make it for you? We’ve seen it go wrong too often. Taking the time for that buyer discovery process to happen, at the same time having an ability to have a gut check, because you’re having a price check, is a good way too. That’s the policy that we started adopting. We did an Alibaba check to say, “Is this in the right vein?” We didn’t bother people with sending them the new design because we don’t want to risk our IP, number one, and we also didn’t want to waste the time and the relationship because we want to be respectful of them as well. Then, we would do it from the other side.
It’s the same thing here. You get to do the price check, “Am I pricing this in the right way? Is it being designed right?” Then it opens up the possibility of, “Do I really need to have a conversation with the manufacturing facility right now? Is that the right thing to do? Because I feel like it should cost better.” Maybe if I opened up my conversation with someone and they said, “If you change these angles and you did this or you made it slightly smaller, it would improve the cost by 20%.” These are the conversations we like to have because it makes us better designers.
You’ve got to explore those things. You’ve got to know what the opportunities and possibilities are. You don’t just accept and take it as fact when one company tells you, “Here’s the cost.” They aren’t asking the questions. They don’t know your business. It really comes down to that. It’s that they don’t understand the details of your business, what your goals are. All they know is what fits them. This is a thing that we see a lot happen with some of the startups, the ones who are more on the invention-based startups. Those that start with the product and they head straight to tooling really quickly, and they spend lots of money on inventory later. The ones who do that who are just like, “I’ve loaded it up on Sculpteo and it tells me that it’s this price. I’m good to go.” They say, “It’s got to be like a fifth of the cost would be actual manufacturing cost at the end of the day.” They make an assumption on that. The reality is that we find it doesn’t work like that. There are so many factors in that process that make it more efficient and so many mistakes you can make by having done it that way. Just accepting it as, “This is the fastest, cheap, prototyping way. I know it’s costing me more but I know it will be less expensive later.” It may not be. That won’t happen if you don’t have that conversation early in the design process.
Check out our website at 3DStartPoint.com and as always, you can find us on social media @3DStartpoint. Thanks for listening. We’ll be back next time. This has been Tom and Tracy on the WTFFF 3D Printing Podcast.
- Sightline Maps
- Paperless Parts
- Dragon Innovation
- On the Shelf Podcast
About Jason Ray
With a passion for innovation and history of leadership from the boardroom to the warship, Jason draws upon his background in operational logistics, advanced manufacturing and contract negotiation to inform his business sense.
Jason began his career as a supply and logistics officer in the Navy. During his six years of service, he helped lead the Navy’s additive manufacturing implementation effort from the Chief of Naval Operations’ Staff, negotiated over a billion dollars worth of acquisitions at Naval Sea Systems Command and led teams of 90 sailors on two separate deployments to the Persian Gulf.
Jason earned a B.A. in Economics from Trinity College in Hartford, CT and his M.B.A. from Babson College, F.W. Olin Graduate School of Business.
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