Manufacturing was hard to do 2 decades ago, and is harder now.

I started, grew, and exited a modern manufacturing-based business, and I can confirm that almost everything about modern capitalism in this cycle is biased -against- any business that manufactures in 1st world economies. The business, Spoonflower, was and is an innovative marketplace of textile design, mated to on-demand manufacture, and had factories in Durham NC and Berlin Germany.

Three factors made this very difficult:

-- raising funding or debt to support old-fashioned capital equipment. Building factories was once the backbone of the US economy but is now pretty close to impossible for an entrepreneur. Raising money to write software is straightforward and well understood. Raising money to purchase industrial equipment the size of a city bus is not what our startup economy is optimized for, or even understands or has models for. Confusion about this is nearly universal.

-- operating a labor-intensive (anything where the largest component of cost is the labor component) manufactory. As others have noted, making stuff is physically demanding. Some people love hard work, but culturally this is rare. If you are crazy successful, the reward is another shift of harder, potentially more efficient work.

-- exiting investors / providing ROI. Our business fit in two categories: creative digital marketplaces (Ebay, Etsy...) valued at 4-6x revenue, or makers like Cimpress or Shutterfly at .5 to 1x revenue. Who buys factories.... even really interesting ones? The short answer: only those that already own factories. When you have a very short list of potential acquisitors, its hard to create an auction market for your equity.

In general, we did okay. But every step from launch to growth to exit felt very much like swimming into a strong current. The same very hard working and resourceful group of colleagues could have done anything. I'm proud of the work, but a lot of that pride is sheer contrariness at having executed on something so unlikely and having survived.

This would be much harder now.

Sourcing is harder. Friends working in the space now rely on a global sourcing network just as we did, that is in utter disarray. Operating on thin margins with a factory that must be fed raw materials to make money is terrifying on a normal day. These days the threat to supply chains is existential.

Launching consumer brands is harder. As has been widely noted, access to the top of the funnel has now been fully monetized (or fully enshittified) by Google, Facebook etc, and because of AI, that funnel now shrinks. Something will break loose here, but nothing has yet.

A post-pandemic employment environment is even more difficult for manufacturers. I think it is safe to say that demand for jobs that require 8-12 hours of physically demanding work surrounded by colleagues and industrial machinery is at an all time low.

I spent 15 years in service to a vision of domestic making, and while we were not defeated, I understand deeply the uphill battle any manufacturing entrepreneur faces.

user:	gartdavis
created:	January 21, 2012
karma:	55