Desktop Factory (www.desktopfactory.com) is developing desktop 3D fabrication and prototyping systems. The Pasadena-based Idealab spinout is getting set to launch its first products, was just named a finalist in Entretech's upcoming technology awards, and we thought it was a good time to catch up with the firm on what it has been developing and where it is. socalTECH's Ben Kuo spoke with Cathy Lewis, the firm's CEO:
What's the history of Desktop Factory, and what's the connection with Idealab?
Cathy Lewis: As with all companies out of Idealab, that's where the history starts. As you probably know, after the tech bubble Idealab started looking at companies beyond the IT and search space. They came up with a couple of fantastic companies that are more hardware-based--an energy company, a robotics company, and other firms which turn out actual physical products. As a result, one of those companies had acquired a 3D fabrication system from Stratasys. That system cost $40,000, and every time you printed a part--a physical output of a CAD/CAM design, or some other object physically rendered--it cost several hundred dollars. One day, Bill Gross was walking past the machine, and thought--why couldn't we find a way to take this concept down to the desktop, make it low cost, and put it in everyone's hands? It's so phenomenal to print out what you envision. So he talked to one of the folks standing by, Rich Diephius. Rich Diephuis and Bryan Bedal are the cofounders of Desktop Foundry. So they spent a year looking at current patents and looking at the technology, and concepts. After the first year, they came up with a concept that could work, and could work at very low cost, and which they could patent and develop and IP portfolio around the concept--around the concept Bill had for Desktop Factory. In 2004, it was born as a company, right around the same time they came up with their first prototype engine. They came up with a very affordable way to print solid objects, using additive fabrication. The system starts with some consumables--for us, a nylon based powder, the same nylon that is used in makeup--added some materials for strength and coloration, and literally accepts CAD/CAM drawings from any system that draws in 3D, and prints out a physical object.
After the prototypes came into being, they went through testing, and tweaking the systems, with work through 2004 and 2005 on the consumables, process, and the product. We filed provisional patents with the patent office, and we've had two office actions, and in late 2005 we were ready to build our first beat unit. We built that, and tested it in the middle of 2006. At that point, Bill and the board of directors felt that they should find a CEO who had worked in the printing industry. The technologies we had selected are more common in traditional printing than 3D printing, and the price point that we've chosen to take the product to market is more like printing than the 3D printing market. So they put on a search in the June timeframe, and I was on board in August. We are just sixty days shy of our first beta unit, we have four units in test, sixteen on order and which will be built, and we're oversubscribed in the number of companies who want to participate with us in the beta process.
We have some very strong names in the education area, design, and aerospace that would like to participate. After that is complete, we will go to a complete commercial launch next year. We have twenty four people now, primarily in engineering, with one sales person and a full operational organization. That organization has affordably put together a process solution, bill of materials, tracking and other phenomenal systems in place. We've got better tracking than the big companies I've worked for, and we're on the cusp of delivering a sub-$5000, 3D printer to market. It's been high test, but very, very exciting. We have over two hundred orders from customers already.
What's your background?
Cathy Lewis: My background is mostly from printing and copying, and technology sales and marketing. I started my career many, many years ago selling a concept for CPAs and accountants to do tax returns online. I built that to $1M and sold it 5 years later. I went from there to Xerox, for 18 months, just as it was entering the quality stage, and struggling with the copier business and losing market share to the Japanese. I left, and went to Siemens Information Systems for six years, where I ran Pacific Northwest sales and marketing. I then rejoined Xerox in a marketing role, when by this time they'd matured as a company again, and held a variety of roles in senior management, field sales, and marketing. My last position there was VP of Worldwide Marketing for color systems at Xerox. About 6 years ago, I left and joined Ikon Office Solutions and was Senior Vice President of Marketing reporting to the CEO. I spent five years there, but I wanted to come back to California. So, I worked myself out of a job at Ikon, and begun thinking on how I could find the right type of opportunity in California. My last dialog with the CEO at Ikon was that I needed to go back to my original roots, and run a small company in a hands on role, to handle all the elements of a business. I had been looking for a job for two weeks, and was contacted by Idealab, which had decided to search for an individual with leadership and sales and marketing background from the copier marketplace. Without knowing much about Idealab, I came in for an interview, and felt it was a perfect match. It took a lot of what I knew about the technology, sales and marketing, and brought me into a whole new world of printing physical objects. I didn't know anything about modeling, and I'm not a CAD guru, so it really expanded my horizons, but it also didn't compete with Ikon--part of one of my conditions was a two-year non-compete with Ikon--so I got the best of both worlds. I now have a home in Manhattan Beach near my daughter and her family, and she's got a baby due in September.
Why did you decide on this market, and why haven't solutions here been low cost?
Cathy Lewis: Rapid prototyping has been available for about 15 years, and it has been a very focused niche for very high end companies. The systems, when they were launched, started at $700,000 to $800,000. The lowest cost solution was $200,000. So, the two or three companies that have survived in this industry have enjoyed a pretty well managed market, with double digit growth every year. There's a very strong client base, both in consumables and products, and there's a move into areas of rapid manufacturing. While the number of units at the super high end relaxed, if you watch the growth curve, prices for units have dropped precipitously in the last four units, and number of units shipped has grown quite dramatically--and this was done without lowering products below $20,000. We have a group of mid sized, smaller companies, such as product designers, manufacturing engineers, artists, and education--such as tech schools and four year colleges. We've found significant pent up demand in the education, well into high school and middle school. If you think about the constraints of the education budget in the last year, there are issues with funding wood shops and automotive classes, but these schools have the software, and PCs and are looking for a low cost, nontoxic solution for printing out drawings and renderings from CAD and CAM--to drive math, science, and engineering.
There's also a huge, pent up demand from companies who have never had access to the technology. It's mostly about pricing, but the toxic chemical composition is also an issue. Dealing with toxic chemicals used in other products is very, very expensive. We also have companies like Northrop Grumman, Delphi, and others who are not looking to replace what they have, but to augment what they have, to allow their designers and engineers to iterate more often. Right now, even if you have the technology, it's socked away in some lab, and you have to wait for output with other departments. If you're a small company, you have to send out to a service bureau and wait for it to come back, with the turnaround time associate with that. We have over 200 orders today without any real marketing, and we have one sales person that responds to inquiries on the web site--that's almost enough orders to cover our first year of production.
It seems like at your price point you might even find some home users?
Cathy Lewis: There is going to be a lunatic fringe, and early adopters for the home. We were at TED showcasing the product, which we gave as a stage gift. We must have had fifty people say--I want one. I asked them--what's your application? They said--I don't know yet, I just want one. I think there will be early adopters at the $5000 price point. Our goal is to bring this down market, to where it's $995 and if you break some equipment in your house, you can literally go to the web, download a drawing, and print a replacement part and not go to Home Depot and search for it. We also see children using this to learn math and sciences, with your Bobby builder toolkit, an aquarium toolkit, or with Dora. You could have toys and games built on this solution to help with learning in the home.
Why is it you've been able to build this at such a lower price point, and others haven't?
Cathy Lewis: Currently, the technology being used uses lasers or ink head jets, which are expensive and complex, and points of failure, and UV curable resins and specialized powders. We said--none of that works for us--particularly because of the patents, and complexity. So we stepped back and said we won't use a laser--we're using a common light bulb, a halogen lamp. We use an elliptical reflector to focus that into a beam, which is used for drawing, versus a laser. We don't have wavelength managed powder, and instead of using UV curable resins, we use Nylon based powder. Combined with other components--aluminum, glass, carbon black--to turn the consumable into a shade of gray that is heat absorbent--we now have a consumable that is very low cost, and non-toxic. The next thing we did is we took a roller, just as in laser printing and copying, which literally lays down a thin layer of powder, the light bulb draws the image, and rolls off to a build platform. That drum roller, the halogen lamp, and the nylon based power doesn't require UV curable resins, which is the low cost implementation concept we've patented. That combination gets us down to the desktop size. One tradeoff we made is a 5x5x5, 125 cubic inches, and the market suggests that will accommodate 75% of what people print today. Clearly, in the consumer/home market, that will accommodate 95% of what you want to print.
Thanks for the interview!