It was time to start our own factory

Chris Anderson announced today he was leaving editing Wired magazine to go run his electronics business. As I read about it in his book Makers I not only see why, but I get jealous. 


D


"It was time to start our own factory. I started a proper company, 3D Robotics, with a partner, Jordi Muñoz (of whom much more later). In a rented Los Angeles garage, Muñoz started building our own mini Sparkfun. Rather than a pick-and-place robot, we had a kid with sharp eyes and a steady hand, and for a reflow oven we used what was basically a modified toaster oven. We could do scores of boards per day this way. As demand picked up, we outgrew the garage. Muñoz moved the operation to commercial space in an industrial park in San Diego, which was nearer the low-cost labor center of Tijuana. 

In came real automated manufacturing tools: first a small pick-and-place machine, then a bigger one, and finally an even bigger one with automated component feeders. The toaster oven gave way to a proper automated reflow oven with a nitrogen cooling system for perfect temperature control. And for that we needed a nitrogen generator, of course. And so it went, with more and more professional tools, which Muñoz and his team learned to use by finding tutorials on the Web. By this time we had outgrown the first space and expanded to a bigger space next door. Then we outgrew that, too, and today 3D Robotics has a factory that sprawls over twelve thousand square feet and a second one of nearly the same size in Tijuana. The facilities are buzzing with robotic assembly machines run by factory workers, and teams of engineers developing new products. Pick-and-place robots build circuit boards, which are baked in automated reflow ovens temperature-regulated by a nitrogen generator. Laser cutters, 3-D printers, and CNC machines make quadcopter parts. 

These are real factories now, just three years after Muñoz started hand-assembling boards on his kitchen table with a soldering iron. From Maker to millions In our first year, we did about $250,000 in revenue; by 2011, our third year, we had broken $3 million. In 2012 we’re on track to break $5 million in revenues. Growth continues at about 75 to 100 percent per year, which is common for open-source hardware companies like ours. We’ve been profitable from the first year (it’s actually not that hard in the hardware business—just charge more than your costs!), but try to reinvest as much of the profits as possible into building new factory lines. Because we’re online, we’re global from the start and tend to grow more quickly than traditional manufacturing companies because of the network effects of online word of mouth. But because we’re making hardware, which costs money and takes time to make, we don’t show the hockey-stick exponential growth curve of the hottest Web companies. So, as a business, we’re a hybrid: the simple business model and cash-flow advantages of traditional manufacturing, with the marketing and reach advantages of a Web company. We’re still a small business, but the difference between our kind of small business and the dry cleaners and corner shops that make up the majority of micro-enterprise in the country is that we’re Web-centric and global. We’re competing in the international market from day one."

Makers: The New Industrial Revolution by Chris Anderson