Profit Minded

How Proto Labs makes manufacturing in the USA possible for more inventors

Prototype

You’re an independent, would-be inventor with an idea for a new product. You’ve even designed it with computer automated design software or printed out a model on a MakerBot. Next step: Manufacture an industrial grade prototype.

Our recent article about Rainbow Loom inventor Cheong-Choon Ng explains his decision to go to China for an injection mold of his small, plastic handloom toy: U.S. manufacturers quoted him $20,000 just to make the mold. In China he could get the mold and his first batch of products for half that. And half was all that the first-time entrepreneur had to his name.

But, as our story explained, he paid for that decision when his first shipment of 10,000 plastic loom hooks arrived mis-sized. It took him a year to file each one down by hand at home.

Had Ng known about a company called Proto Labs, he might have had an easier time.

Brad Cleveland, CEO of the Maple Plain, Minn., company, says his ideal customer is “anybody who needs a protoype or low volume production and cares about how parts are made.” It’s hard to say if Proto Labs could have done the job cheaper than Ng’s Chinese partner, but Cleveland has no doubt his company could have done it right the first time and helped Ng get the Rainbow Loom to market much faster.

Proto Labs offers product designers and inventors a custom CNC machined parts service called Firstcut and a rapid injection molded parts service called Protomold. The company has optimized and accelerated these standard manufacturing processes with proprietary software that lets it provide parts from a 3D CAD model in just one business day.

No competitor is as fast, Cleveland claims, and others offering those services will often turn away low-volume manufacturers. Cleveland says Proto Labs is set up to work with “anybody designing parts that they want to bring to market fast, in low or high volumes.”

Sarah Braun, the company’s marketing program manager, says that the services make it possible for entrepreneurial inventors, independent designers, and other do-it-yourselfers to translate their ideas into businesses. Since 2011, the company’s “Cool Idea Award” has awarded $250,000 annually to help designers with limited resources. Among the many products enabled by prize funding: a purse that charges a cell phone, a self-serve beer tap that scans a credit card, and non-metallic flatware that lets chemotherapy patients enjoy eating.

DIYers can build a basic model in a garage shop or a place like TechShop, and then go to Proto Labs to get a functional prototype or larger quantities made. And as additive parts manufacturing tools like the MakerBot become more accessible and faster, Braun sees greater synergies between Proto Labs and the Maker community.

“3D printing can be done in many different ways and is a very practical way of making prototype parts in a few hours on your desktop,” Cleveland says. “Once they have that, they can upload the 3D design to us to make in a day with standard industrial-grade materials and standard production-quality parts. It’s not as fast as 3D printing, but it’s something you can use in production.”

A computer scientist who was the company’s 10th employee and brought it from $1 million to more than $100 million in revenues, recently announced he will be handing over the reins in 2014 to someone better equipped to take Proto Labs to $1 billion in revenues. Already, he has expanded into Japan and the U.K., and grown the staff to 730. Proto Labs went public in February 2012 at $16 per share and hit a high this year of $89, winning recognition from Forbes as a top U.S. public company.

Cleveland says his team sets new production and revenue records each quarter, and “recently we set new record for the number of parts made in a month.” The secret sauce, he says, is Proto Labs’ software and an enormous cluster of computer processors. In-house software engineers write code that is broken down and run across hundreds upon hundreds of parallel processors. As soon as a customer uploads a 3D CAD model, a quick software analysis determines the exact cost to make and deliver a mold. “That quote goes out the door in minutes,” Cleveland says. “It’s a breakthrough.”

While Proto Labs is clearly helping to bring manufacturing back to the U.S., Cleveland says, “it isn’t because of where we’re located; it’s more to do with how fast and cost effective we are. We’re faster than anybody in China.”

And as costs rise in Asia, Proto Labs can often offer better pricing too. “The world is getting into a bigger and bigger hurry,” he says. “China simply can’t keep up.”

And, emphasizing the Proto Labs strength that might have been most helpful to Cheong-Choon Ng and his Rainbow Loom, Cleveland says, “We’re better at it in one iteration. In China you might have to iterate three or four times. If we screw it up, it’s a day or two to fix it.”

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