FactoryShop brings capacity-sharing to machine shops
Startup, launching this fall, will help busy machine shops take on more customers.
By Amy MacMillan Bankson |
September 7, 2016
Casting and welding are performed in machine shops that FactoryShop assists
The $43 billion American machine shop industry may become more efficient thanks to an idea honed in the student-focused 2016 Global Founders’ Skills Accelerator.
Founded by Tushar Garg, MBA ’17, FactoryShop helps overextended machine shops accept additional customers by redistributing unmet demand across its network of other machine shops. Currently, there are eight machine shops—all located in Massachusetts—in the FactoryShop network. The other FactoryShop team members are Tayo Olufowose, Ikmal Maharon, Zach Chen, all MBA ’17, and Will Wolfe, MBA ’18.
Through the Global Founders' Skills Accelerator, the team earned nearly $20,000 of funding, as well as a $2,000 monthly stipend for personal expenses.
Garg, a chemical engineer, plans to keep growing FactoryShop, and will take advantage of MIT’s Sandbox Innovation Fund program that provides equity-free funding of up to $25,000 and mentorship to help grow the company.
Recently, Garg discussed solving factory backlogs and helping shop owners grow their businesses.
How did you come up with the idea for FactoryShop?
I came up with the idea during my time working as an operations manager at Gillette. I realized that inefficiencies exist in the manufacturing industry because everyone works in silos. These inefficiencies can be solved by capacity-sharing marketplaces. I explored four different ideas in 3D printing, logistics, et cetera, during my first semester at MIT Sloan and then finally decided to go with FactoryShop while participating in StartIAP over January earlier this year.
Who are FactoryShop’s clients?
Our clients are busy machine shops. These shops, which could be large or small, are in high demand and are often booked for months in advance. Thus, when new customers approach them for additional jobs, they often have to turn them down. These customers are then forced to go overseas in order to find cheaper and quicker sources. FactoryShop enables these busy shops to accept those orders. However, instead of manufacturing the parts, we have them manufactured by an alternative, available machine shop. This helps other machine shops that might be struggling to find customers, as we can provide them with business, while they don’t have to spend money on sales or marketing.
How will FactoryShop make money?
We will be charging a commission fee on each transaction that is done via our platform. We would distribute the extra value created among our customer, the machine shop that built the part, and FactoryShop, so that everyone benefits.
Tushar Garg, MBA ’17
Did you make any changes to the FactoryShop concept during Global Founders’ Skills Accelerator?
One of the first things we learned in Global Founders’ Skills Accelerator was just how important the customer is. You really need to get into the minds of your end users and empathize with their problems. While doing primary market research in our first month at Global Founders’ Skills Accelerator, we realized that machine shops are being ignored, and everyone is focusing on manufacturing plants as their customers. We are the first of a kind to be solving the demand mismatch problem in the machine shop industry by catering to both—busy and free shops.
Was being a part of the Global Founders’ Skills Accelerator helpful?
Yes. The staff and entrepreneurs in residence at the Trust Center care deeply and want to see us succeed. They have often gone to great lengths to help us: for example, coaching us for a sales pitch or finding relevant industry contacts.
We plan to launch FactoryShop this fall after we have completed the proof of concept, and have vetted our partner machine shops on strict quality parameters.