Four New Mass Customization Start-Ups Presented by Business Week

In a recent article, Business Week presented a number of new start-ups selling custom products. The report by Eve Tahmincioglu provides some good insight into the costs and backgrounds behind opening a mass customization business. These are the customization businesses presented in the report:

CHIP-N-DOUGH is a local cookie company in Santa Ana, CA. It allows their customer to place corporate logos on the cookie tins. The response has been great: Last year, 30% of the company's $1 million in revenues came from the custom tins. Mrs. Snyder, the founder and owner, went through five programmers and $50,000 just to develop the software needed for customers to place online orders, and also designed the machine to print the custom tins by herself, including own chemicals and dyes which she customized to create proprietary colors. In total, she spent about $300,000 on the changes. Now customers can order between one and 1 million tins online. To date, the largest order has been for 15,000 tins—about 360,000 cookies. Customers can either upload images to the site and design the tins themselves or e-mail the images and leave the rest to Snyder's staff. Tins can be made in as little as one hour—less than the time it takes to whip up a batch of chocolate chip cookies.

ZYRRA was founded by Christi Andersen and Derek Ohly, in Cambridge, MA, to provide women with bras that really fit. The two business partners used $40,000 to modify off-the-shelf costume design software to create a large assortment of prototypes of different bras. On the sales side, Zyrra sells bras through home parties, in which one of the company's three salespeople takes 12 different measurements for each customer. Customers then choose colors and trim. Bras start at $70 and are manufactured in a local factory. The company’s web site is used for marketing and to ask potential customers for their ideas. Re-orders shall be possible online soon.

CHOICESHIRTS is one of the many businesses selling custom shirts. Founded by Matt Cohen in Pennsauken, NJ, it uses a fully automated process that keeps costs low and volume high. Cohen started his company with about $500,000 in personal savings in 2001. He sold stock designs at first, but quickly realized that offering custom designs could set him apart. Cohen upgraded the software on his Web site, working closely with an online development company in which he has an ownership stake. The process took about four months and cost several hundred thousand dollars, most of which went to developing interfaces that connect to back-end administrative and production systems. In 2002, he launched Mother's and Father's Day shirts that customers could personalize with their own or their parents' names.
Today, about 65% of ChoiceShirts' $3 million in revenues came from the custom shirts. And customers of personalized are coming back: About 20% to 30% of ChoiceShirts' business comes from repeat customers.

NAME MAKER is selling high-end gift wrap printed with custom slogans. When Cheryl Dorrell founded the company in 2004, she learned that the existing plotters could produce neither durable nor water-resistant prints. So she designed her own $250,000 machine. They now have five of the machines, and their workings are a closely held secret. Customers place their orders online, but the words are set by hand, part of a nine-step process that takes two weeks. Name Maker's made-to-order gift wrap runs from $24.95 to $32.95 a 12-foot roll. About 15% of Name Maker's $2 million in sales came from customized paper in 2005, and Dorrell expects the product to bring in as much as 65% of sales this year. Not bad for a new niche.

Comments

[Chris Norman]

Mass Customization of a particular product is nothing more than specialized production. Until a system is developed that allows anything (within reason) to be customized, its just specialized manufacturing. I believe these early adoptors are setting the stage for true mass customization but it will require a complete removal of labor to make it truly affordable. to do this, we'll need more complex CAD/CAM systems and advanced 3D printing technology that is just beginning to become realistic and widely available.

[Chris Norman]

I believe the next generation of mass-customization will come through the use of 3D printing technology for either molds or as the final product. All of the current concepts are centered around 2D printing except the custom tins for cookies. The company is probably using CNC or 3D printing on a stamping machine or metal press to do the art embossing.

[Frank Piller]

Derek: Well, for me these four examples are not really leading edge developments of mass customization, just nice new start up stories utilizing the idea to build their business.

I do not see the difference between mass personalization, mass individualization, and mass customization ... for me, the basic idea is the same and the term somehow most widely used is mass customization, which can be either on all dimensions of a product or service, design (style), functionality, fit, ...

[Derek Elley]

And what comes after mass personalization (of t-shirts) and mass customization (of bras or shoes)? Is it now the time for mass individualization? This is a phrase I found recently and quite liked it to secribe the idea of co-creation at the digital design level - thanks Lionel at http://www.futurefactories.com :)

[Andreas Gerads]

Another interesting (Austrian) StartUp: IQshoe, offering customized shoes. Not yet launched, but there will be an Interview this Tuesday at the "Labor für Entrepreneurship" (http://labor.entrepreneurship.de/blog)