INVESTING IN PROTOMOLD?

I was contacted today by an analyst at an investment bank to as me about my experience with Protomold (parent company of First Cut, whom I’ve written about)

As I was answering the questions, it struck as something that should be shared:

From the analyst:

…So I was hoping to get in touch to better understand what engineers think of Proto Labs. Have you used First Cut and/or Protomold before? What was the experience like? The company claims that they are the only ones in the quick turn CNC/injection molding business, do you know of any similar companies? Are they a well-known company among mechanical engineers? Any information would be much appreciated.

My response:

To answer your questions

• I have used first cut several times. I have been very close to the protomold process (in the sense that a team member was managing the quoting process) several times
• Protomold is known for being amazingly fast, significantly cheaper, and of moderate quality. This is great in some circumstanes, less so in others. They do not guarantee precision (because they just ship the parts that come off of the machine, as opposed to a more manual process where someone will inspect and retouch the parts if necessary), but in my experience the accuracy is sufficient (like I said, moderate quality). The other downside of their automation is that they don’t offer inspection services (i.e. a certificate proving that their parts are sufficiently accurate, this is a continuation of their precision “problem.
• The competitive advantage that protomold/firstcut have right now is their interface and infrastructure. The ability to upload a model, have it automatically reviewed for potential manufacturing problems, and then change specifications (like quantity and material) and see the quote update live is just amazing. In a similar (but non-competing…yet) industry, fineline prototyping is doing the same thing. They do additive manufacturing (SLA, SLS) and have a quoting structure that is as dynamic as protomold’s. It’s great because I can upload a partially finished design to get a ballpark quote and use that to get buy-in on the approach I’m taking.
• That said, the competitive advantage is fading. As more and more manufacturers realize that engineers are expecting the same level of quality that they get in consumer applications, they are scrambling to catch up. A local (to me) version is Rapid Machine (nashua,nh) . They have just expanded and have talked about creating something similar to protomold. Dynacept (a member of spectrum plastics group) has automated quoting, but only for select customers. The point is that they are starting to realize what protomold realized a few years ago.
• Protomold is very well known among mechanical engineers (at least in the product development world… there are mechanical engineers everywhere). They advertise in all the trade magazines and have been used by a lot of people.
• One of the things that keeps people from using protomold is that they are just a prototype tool shop. Many of our clients want the people who will be producing the production tools (i.e. steel) to also produce the prototype tools (i.e. aluminum). I would speculate that the more traditional services protomold can offer (inspection, tool qualification etc.), the more markets they will be able to push into.
• Along the lines of the last point, I feel that protomold doesn’t get used as much in medical because they lack traditional certifications. Companies know that a protomold tool could aid the development process, but often times it isn’t sufficiently certified to make the cost/benefit pan out. I suspect they could do more to crack into this market (which creates a lot of prototype machiend parts)