Manufacturing startup gets a fast start [The Baltimore Sun]
(Baltimore Sun (MD) Via Acquire Media NewsEdge) Oct. 27--Jason Perkail of Baltimore and Dimitri Furman of Gaithersburg are audiophiles, former DJs with a passion for high fidelity. They never thought they'd be manufacturers.
But one led to the other. In the space of five whirlwind months, they designed a high-end hi-fi system, raised nearly seven times as much money on crowdfunding site Kickstarter as they originally asked for and are now setting up a production facility in Gaithersburg.
Their company, Tubecore Audio, has 292 orders to fill for Kickstarter supporters who rushed to get a below-wholesale price for a product that will retail at $599. The men are negotiating distributor orders now, too.
"We just started talking about it and made it happen -- a lot faster than I thought," said Furman, 36.
When people think of manufacturing, they think of old and big, not new and small. Tubecore is an example of micro-manufacturing. Perkail and Furman are Tubecore's total workforce. They plan to make a few hires in January.
It's a craftsman's setup, reminiscent of the days before the Industrial Revolution but with a high-tech twist. Manufacturing advocates expect to see more such firms.
"There's clearly lots of opportunity, because of a variety of new technologies, for people to get involved in very small startups in manufacturing that serve a niche market," said Mike Galiazzo, president of the Regional Manufacturing Institute of Maryland. "People are out there, they're inventors, they're playing around, they have tools they didn't have in the past."
Very small businesses already account for a large chunk of manufacturing firms, if not employment or sales. Both in Maryland and nationwide, about 40 percent of manufacturers employed fewer than five people in 2010, according to the most recent Census Bureau data.
Their numbers appear to be trending up after taking a hit during the recession, said Carrie Hines, president of the American Small Manufacturers Coalition, a trade group for manufacturing extension agents that help firms.
"A lot of the clientele that our members work with are really mom-and-pop shops," she said. "They have an idea, they see a need ... and they literally start in their garage."
That's pretty close to Tubecore's beginnings. It was born in a Rosedale-area commercial garage used by Baltimore Hackerspace, a gathering place for engineers and others who like to make things. The nonprofit has a laser cutter, a metal lathe, a 3-D printer and other tools for tinkerers -- and hopeful entrepreneurs.
The hackerspace's members have formed two companies so far, both this year, with more in the works. Besides Tubecore, there's ubld.it, a firm that's run out of another Rosedale garage and makes build-it-yourself tech kits. First product: a hybrid vacuum tube audio amplifier.
The founders of ubld.it helped Tubecore with its electronics design, and Tubecore in turn helps with ubld.it's marketing. David Powell, a co-founder of both Baltimore Hackerspace and ubld.it, said the local resources run deep.
"If you have a product idea, it's just a matter of networking," said Powell, an Essex resident.
Some urban enclaves -- including Brooklyn and Queens in New York -- have seen a blossoming of small producers, said Jonathan Bowles, executive director of the Center for an Urban Future, a New York think tank focused on economic development and growth. This "burst of entrepreneurial manufacturing" hasn't generated big job numbers precisely because the outfits are so small, he said.
But some might break out and grow in a big way, he added. And he's glad to see new blood in an industry some had written off as dead.
"It's almost like manufacturing is sexy again," Bowles said. "Not the kind of mass-produced widget manufacturing, but niche manufacturing, specialty goods, maker products."
That's Tubecore's product. Wired magazine dubbed the Tubecore Duo, an amplifier with an onboard media center, an example of "handmade artisanal electronics."
Tubecore uses a computer numerical control machine -- known as a CNC -- to do the precision milling on the hardwood for the Duo's cabinet. But the assembly is done by hand.
Perkail, 32, the Duo's designer, said he was going for a retro feel -- a solid-wood, 1950s look -- with vacuum tube pre-amplifiers and other vintage tech that produce the high-quality analog sound he loves. You can plug in your record player, if you have one, and get "exactly what you would hear in a recording studio," he said.
But the Duo is a lot smaller than its forebears, at 18 inches wide and 8 inches tall. And if you plug it into your television, it also can stream movies -- and potentially do a lot of other cutting-edge things.
That's because the unit, and its media player, is designed to be "hackable." It has a Raspberry Pi -- a computer the size of a credit card -- so users could write apps to, say, make their home automation systems smarter. Or anything else they could come up with.
"Tubecore Duo Is a Sweet Marriage of Analog and Digital," the TechnologyTell tech news website declared in August.
Perkail put the Duo on Kickstarter just after midnight July 30, and within 32 hours they'd met their $20,000 goal. When the campaign ended in September, 338 backers had pledged more than $135,000 combined.
That rush of interest came despite a weak market for the hi-fi industry, which hasn't recovered from the recession. Such systems accounted for $188 million in retail sales nationwide last year, compared with $390 million in 2007, according to market research firm Euromonitor International.
The big backing for Tubecore let the company skip over early startup steps -- like proof of concept -- and go straight to production.
With the money they raised, Perkail and Furman bought the components to build a CNC machine and rented a shop floor in Gaithersburg, which at 1,600 square feet is the size of a modest house. (They looked in Baltimore, but, Perkail said, while the city has no shortage of available manufacturing space, he couldn't find anything quite small enough.)
Kickstarter funds also allowed the two men to upgrade their design. They thought they'd have to use off-the-shelf speaker drivers, but now they have custom-designed titanium models that "were completely unreachable for us in the beginning," Perkail said.
It's all happened so fast that Tubecore's website thus far just points people to the firm's Kickstarter page. A full site is scheduled to launch in December. In the meantime, Perkail and Furman are busy lining up vendor accounts with suppliers, negotiating with distributors and getting the shop ready for production -- they're pushing to start the first week of November so they can ship the Kickstarter orders before Christmas.
"What we set out to do is combat what I call the dockification of music listening," Furman said. "Even the big boys are doing it: ... catering to the masses that want some cheap, small, plastic, portable thing. What suffers is just the quality of music. What we're putting together, I think it's going to be the most powerful hi-fi system in its class."
The two met a few years ago while working at a magazine publishing firm. They quickly discovered music was a common interest.
Furman has a recording studio in his home, and Perkail owns '70s-era hi-fi equipment from Pioneer's Spec series, so loved by audiophiles that there's still a robust secondhand market for it.
Perkail said the Duo was born after he searched for a small speaker system to put on his desk and "just couldn't find anything I thought was worth spending my money on." Perkail, who's designed and built things since about age 6, decided this spring to make his own. Furman quickly signed on.
Both men are in it full time -- no day jobs to cushion or distract. They left the publishing company shortly before launching Tubecore. And when they say they're working on their startup full time, they mean it. Launching a manufacturing company is all-consuming, no matter the size.
"It's every second I'm awake," Perkail said. "I even dream about it."
(c)2013 The Baltimore Sun
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