Interview: PCH is the $1 billion manufacturing company you've never heard of. With its acquisition of Fab.com, that could be about to change. Dezeen spoke to founder and CEO Liam Casey about his plans to do for design what Zara did for fashion.
"In the fashion business, I always look at companies like Zara that do fast fashion and bring products through on really short, fast turns," said Casey, 48, speaking exclusively with Dezeen following yesterday's acquisition. "I think there's great opportunity there, when you look at our ability to bring product from concept to consumer and in a very lean supply chain."
Based in Ireland, PCH is a kind of one-stop-shop for designers, established brands and tech startups, taking care of the entire product supply chain. The vast company already shifts over 10 million components every day, making chairs for Philippe Starck and headphones for Beats by Dr Dre as well as technology products for household-name brands including Apple.
The company has always operated behind the scenes – until now. With its purchase of struggling design retailer Fab.com, PCH has its own shop window and plans to use its manufacturing expertise to bring exclusive, high-quality products directly to consumers.
PCH will also use the platform to offer the products it already makes for tech startups to Fab's huge customer database. "We're sure now that there's a value add here for our startups," he said. "It's good for our business to have this direct channel."
"It's not going to be a discounting site, that's for sure," Casey added. "It's going to have premium products, with a huge focus on customer service. The ultimate goal for us is about creating the Netflix for the kind of products that we move."
Here's an edited transcript of our interview with Casey:
Dan Howarth: Tell me about your background.
Liam Casey: I spent 10 years running a fashion business back in Ireland, many years ago, where we ran our own private label, bought product, bought raw materials from fabric mills, brought it to contract manufacturers and converted it into product, then sold it on the high street – places like Dublin's Grafton Street.
I got out of that business and came to California to set up this current company, PCH. It started as a sourcing company, working mostly with tech companies, helping them source products – mostly components for the PC industry. Then it got into working with the bigger tech companies, helping them put products together from end to end. They would come up with the design, then we would take it from design all the way through to delivery.
Dan Howarth: What does PCH do?
Liam Casey: Today, we have about 3,000 people, mostly where we get involved with product development, engineering, logistics and supply chain around taking a product from an idea and shipping it all the way to the end consumer.
We also work with a lot of startups that are very focused on the hardware world. We're always looking for ways to help them along every step of the process. So from when they have an idea for a product, how to work with an industrial design firm to help them design it. It's not just the product, it's also their business – to help them bring that all the way from an idea to a product that's ready for retail, then how to actually get it to a consumer.
A big part of what we do is that we developed the whole out-of-box experience – to ensure that when you get the product, it's a great experience. Whether that's at a retail store or whether it's delivered to your home.
We're very focused on that. In the e-commerce world, there are a couple of moments of truth. One is when you go online and discover or find something, and you click "buy now". The other very big moment of truth is when you get the product and you take it out of the box. That unboxing experience is hugely important. We have our own fulfilment centre, where we ship the products directly to the consumers.
The majority of our business has been with large tech companies. We're involved with the Beats supply chain from end-to-end, prior to the Apple acquisition. We also work with Apple.
Dan Howarth: How does the process work?
Liam Casey: We would make a consumer electronic product for a brand. We have also made chairs for Philippe Starck, through one of his editors. We understand that the common denominator across that is design, brand, and consumer experience. That's what we look for when we engage with companies.
If a big-box retailer came to us and they just wanted us to white-label a product and put their brand on it we wouldn't be interested, because all we're doing there is adding cost. We engage in areas where we can add value and create value.
In our startup business, we work with entrepreneurs. We also work with industrial designers, and we think that design is so important with any of the companies we work with. If you focus on design, there's a huge value out there.
One of the things we hate, we think inventory is evil. We try and ensure that there's no inventory in a channel. Part of our sustainability programme is about making sure that there are less products, not more products.
We've got complete visibility along the supply chain, from the raw materials, all the way to the finished goods and delivery to the consumer. And we've been doing this for 19 years, so we understand it pretty well.
Dan Howarth: How did you come to acquire Fab?
Liam Casey: Last year, Renee Wong – who was the general manager of Fab at the time – came to our event in San Francisco. She was really excited by the products and the fact that we could manage the entire supply chain, help the companies navigate through what they needed to make the products ready for retail. She was really interested, and I had a conversation with her when we talked about what was important in that experience and having unique content.
That's what's really important for me, people want to know the story about the product. If you've got the design part, if you engage with great industrial designers and great products, it's often a challenge to bring through that experience all the way through to the delivery. That's what we focus on, and that's where I think we're quite different to a lot of companies. We actually understand how to bring these products to market.
Dan Howarth: What are the first things you're going to do with Fab?
Liam Casey: This story has been rumoured for quite some time, and during that process we did a lot of searching internally about if we really wanted to do this and is it the right thing to do. We're sure now that there's a value add here for our startups. It's good for our business to have this direct channel.
The ultimate goal for us is about creating the Netflix for the kind of products that we move. We have our own unique content that you can't get anywhere else and we generate those products. You will be able to get other products on the store as well, which we will continue. There's a lot of products there that we will continue.
It's not going to be a discounting site, that's for sure. It's going to have premium products, with a huge focus on customer service. Customer service is not free deliveries, that doesn't add value. If you've got great product that's exclusive, that's really well designed using great materials and the designers have a platform to talk about the product and why the product should exist, that's going to get attention and interest.
Dan Howarth: How will you make Fab different from other e-commerce sites?
Liam Casey: The big thing for us is our ability to interact with industrial designers and to understand what they're trying to achieve, and then to able to execute on it. We move about 10 million components a day. Our revenue last year was over $1 billion (£650.1 million), at retail it's probably about $10 billion (£6.5 billion). So we have a large amount of experience.
Our experience will come to bear here – how we make products and the story around the products, the materials used and where they come from. We can really get into that whole back story and tell it.
Dan Howarth: Fab has had quite a turbulent past. Will you be able to get past that and keep consumers' interest?
Liam Casey: If it becomes a true platform for designers to engage with a community, I think it's possible.
If you look at some of the companies that our designers have worked with in the past, people like Brett Lovelady at Astro in San Francisco, Robert Brunner at Ammunition, Scott Wilson at Minimal in Chicago. These are great designers that we have worked with on various projects, and they're fantastic at articulating the story behind the product and engaging with the community as well.
Dan Howarth: Are you planning on creating permanent physical stores for Fab?
Liam Casey: Possibly. I think there's great opportunity there, when you look at our ability to bring product from concept to consumer and in a very lean supply chain.
In the fashion business, I always look at companies like Zara that do fast fashion and bring products through on really short, fast turns – nobody's done that with technology. When I spent 10 years in the fashion business, I could go to a fabric mill in Europe and buy 60 metres of fabric and bring it to a contract manufacturer. At the last minute I could change my decision about whether I wanted a suit, or a jacket, or a pair of trousers from that piece of fabric.
When I entered the technology world, what I saw first was that there were technology roadmaps and product roadmaps, and they were so long. The ability to innovate and create was so bad in that world.
In 2008 when there was the economic downturn, what we saw available was new products like Arduino – a board used for programming – and there was 3D printing. Today you have other products like Raspberry Pi and Android, and much bigger 3D-printing capabilities. Today, the fabrics for the technology world have changed, and that's driving a huge amount of innovation and creativity. That's what's exciting for us, to be able to do that and bring products from an idea to a consumer, and do it in a short period of time, there's quite a lot you can do.