Sramana Mitra: What you just said provides a good segue into a wide-open space that I think is going to mature in the next phase of the internet’s evolution. It’s the notion of mass customization from a manufacturing workflow perspective.
Right now, we have seen mass customization products or categories. We’ve seen some businesses starting to gain some level of scale. It’s still a very underutilized and underexploited area of business. This infrastructure to drive mass customization is a very interesting opportunity, especially from the manufacturing and supply chain side.
From the front end, taking orders and recommendation systems is easier. The supply chain and manufacturing aspects of mass customization are very complicated. To make that happen, it’ll require very specialized software systems and different kinds of manufacturing workflows. What are your thoughts?
John Davagian: I do think it’s complex. The other complexity is that manufacturers are typically the laggards. A lot of the automation that’s happened have been more in the go-to-market front. There’re huge opportunities to your point here. Those opportunities are how do I create marketplaces that will enable a manufacturer to go faster?
We’ve got a situation here where other industries have proven that this can be done. You just highlighted it with regards to what HubSpot’s doing. You can look at some marketplaces out there that are not nearly as complex like Uber and Lyft.
Sramana Mitra: Marketplaces is a very big trend. We’ve covered it extensively. In fact, vertical marketplaces is a big trend that we see in a lot of industrial niches as well. I was just talking to somebody from London this morning who’s trying to build a real estate marketplace that includes all of the professionals who are part of the real estate buy, sell, renovate process. I’m actually alluding to something more complex.
The primary value of marketplaces is finding customers more easily and removing intermediaries from the process. The opportunity that I’m alluding to is not that. The opportunity that I have identified is mass customization of products. It shows up extensively in fashion. There’s a company that we covered a while ago from Australia that is doing mass customized shoes. They have broken down the process into customizable elements. They’ve scaled to a sufficient degree that Sequoia invested in them.
That’s an example of mass customization, but it requires a different kind of infrastructure. That breaking down of the different modules of manufacturing is different for different domains. That is what I was alluding to.
John Davagian: In manufacturing, people, processes, machines, and supply chain play a role in the ability to accelerate as in your example. When you break those down independently, you end up with not enough inventory or too much inventory, machines not being able to customize in a way that’s required if the elements don’t communicate. You need those independent pieces, but much like technology and stitching together different objects or technologies, there needs to be a well-integrated or well-orchestrated process.
Sramana Mitra: That’s my point. This is why mass customization is complex. There are a lot of pieces that need to work together to deliver a mass customized product.
John Davagian: Technology is the great enabler, right?
Sramana Mitra: Yes.
John Davagian: It’s going to take time because manufacturers lag in terms of getting there. We know we can do it.