How A Rust Belt Native and Silicon Valley Technologist Is Re-Thinking American Manufacturing

Nick Pinkston grew up in rural Pennsylvania in a family that has spent more than three generations in the manufacturing industry. They worked in coal mining in West Virginia and then in ceramics in New Castle, Pennsylvania, where he grew up.

He’s now the CEO of Plethora, a startup sitting on the border of San Francisco’s Dogpatch and Bayview-Hunters Point districts that is re-imagining factories and the manufacturing industry.

Plethora helps companies prototype their parts for research and development. They automate feedback and pricing on designs. He explains, “We automated the factory so that it programs itself without any humans to make the parts — which makes the manufacturing happen in hours, not weeks.”

We spoke about factory automation, the cultural differences between Silicon Valley and the Rust Belt and what federal and local policy can do to support manufacturing jobs, which tend to be more middle-income than what the Bay Area’s knowledge-and-services model produces. Plethora is backed with more than $20 million of funding from investors including Founders Fund, Shasta Ventures, Lux Capital, Google and Autodesk.

Q: Can you tell me a little bit about your family’s background in manufacturing?

My father’s family is from Lansing, Michigan. My grandfather was a prototype machinist for Oldsmobile. My mom’s family was from West Virginia coal mining. They moved to Pennsylvania in the 1930s to work in mills. All of my aunts and uncles worked in manufacturing and my father and uncle used to give me tours of the factories they worked at.

For whatever reason, I’ve always had an affinity for manufacturing. Ever since I was 5, I had a lab. There were chemistry sets, electronics, rockets and model trains.

Q: What has happened to your hometown over the past generation?

It went from 50,000 to less than 22,000 people in less than 30 years. My mom told me that the tin mills closed because the industry went from tin cans to plasticized steel, but I looked it up and that story may have been apocryphal. The 1970s to the 1990s were the biggest hit to the population, so it’s possible that jobs were killed by globalization.

There was a big foundry for bronze that went down in 1980. Labor disputes and globalization were a major reason. I don’t think I’ve ever seen my hometown of New Castle, near Pittsburgh, ever in a time of prosperity. Especially since the steel crisis of 1977.

Q: But your family stayed in the region?

The whole region is now destitute. It became the heroin capital between Detroit and New York. A lot of violence sprung up. Heroin and meth. The town hollowed out.

I remember when the Walmart was built. That was a huge deal. That was the cool spot. The Walmart parking lot.

Q: What brought you to Silicon Valley?

I was at the University of Pittsburgh and then I started running tech events in the city. I went on a pilgrimage of hacker spaces and then started my first project, HackPittsburgh, which is a hacker space. Then I started CloudFab. After that, I had more money to travel. It was the first time I ever did any real travel. I had been to New York a few times. But my first trip to San Francisco was after SXSW, which was crazy. I was kind of blown away.

The tech scene in Pittsburgh didn’t believe in big dreams. I’d show up here in San Francisco and someone next to us would be talking about seasteading. In Pennsylvania, I remember once driving all the way across the state to go to a talk about seasteading because I was crazy and actually libertarian at that time. I’m not anymore.

I’d read Hacker News and TechCrunch and Popular Science. We saw that everything was in San Francisco.

So I moved here. I sold CloubFab to a manufacturer in Minnesota and had some time to do my own thing. I went to China and researched all of their industry in Shenzhen. I looked at injection molding. 3D printing. Basically all of these new technologies, and talked to the people who were working in the factories.

My last company did quoting software, so I’d interview people. But they couldn’t tell us what they’re were doing. It was too craft. I began thinking, “Holy shit! This is super old school.”

Machinists are masters at machining, but I like to call their knowledge “engineering folklore” because it’s not very scientific. It’s based on stuff they hear during their apprenticeship. We often don’t realize how much room there is to improve the field.

Plethora headquarters at Pier 80 in San Francisco. The startup helps companies prototype their parts for research and development. They automate feedback and pricing on designs. CEO Nick Pinkston explains, “We automated the factory so that it programs itself without any humans to make the parts — which makes the manufacturing happen in hours, not weeks.”

Q: So how did that lead to your company Plethora?

The point of Plethora to make anything from your ideas and mind. We want to automate the conversion of your designs and ideas. We are interested in deep automation of entire processes, which could affect jobs. It could automate certain parts of machining and customer service away.

We would be most analogous to job shops. There are basically two categories in the industry. You have contract manufacturers that produce many, many parts like Foxconn.

Then you have job shops, which are more like one-off shops. They take in parts and designs via phone calls and e-mail. Then there are these people on the phone who get back to you in a few days with a sheet that’s manually prepped by Excel. They’ll design the entire process by hand.

But we’ll analyze the job and give you a price instantaneously. We’ll take 3D CAD files and turn them into codes and plans, and then compile that to the machinery.

In the end state of this factory, people will be maintaining the equipment. In the long run, that is what is already happening in these large factories with companies like General Motors.

Q: Manufacturing output per capita has increased in the U.S. over the last generation, but employment levels have fallen. How much do you attribute this to globalization versus automation?

I tend to think that a considerable amount of manufacturing job loss is actually due to globalization and that only in the past five to 10 years are we seeing the true potential of automation to be the bulk of the job loss.

Most jobs are in small companies and they don’t automate at the rate that Fortune 500 companies do.

Globalization increases productivity by sending the low productivity work overseas, leaving the most productive work here that requires more skill, serves specialty markets and so on. That’s where you need to be to survive as a manufacturer in the U.S..

But I do know that machine shops since the 1970s and 1980s have basically halved. Today there are only 17,000 machine shops in the United States, yet there is more machining happening today than ever before.

Q: So what can be done from a policy perspective to support this type of labor?

This breaks down to a number of problems.

  1. You need to find highly-skilled labor. The highly-skilled operators and CAM programmers? There’s not enough of them that are being created. Companies in the U.S. are shortsighted. They should just pay people to go to school. You have to remember that most of these people don’t have a lot of money. There’s a disconnect. In Germany, there are government subsidies for vocational training. We should have tax credits for this. If you train people a certain amount for a certification, you would get it back in tax credits if people leave. Companies can’t do it on their own though. The margins at a company like Flextronics are like 6 percent gross. So they are trying to squeeze every little penny out of it. In the long run, this is a big risk to them.
  2. I would love to take all of the unemployed machinists and turn them into teachers, bring that curriculum back into American high schools and pay for the equipment. It has been cut over the last generation.
  3. I also think about how we can help people to learn faster. The manufacturing trades take their lineage from guilds. All of these different trades are changing too quickly for the schools. Plethora is always automating parts of the manufacturing process. The jobs are always changing. The pace of change in machining technology — even if you went to school for 3D printing and robotics — is happening so quickly. I don’t think schools encourage these fundamental skills. For example, there’s one machine where you typically need to wait five to 10 years in machining before touching that piece of equipment. But we let our entry-level people work with it after 1 1/2 months. There’s this guild mentality in the manufacturing industry, that this person needs to prove themselves. I do think in certain ways that you should let people document their skills and earn certifications. But we need a more lightweight system. You don’t need five years to become a machinist.

Manufacturing, as an ecology, is getting more and more complex. A few years ago, there were only two or three 3D printing processes. Now there are 20 to 25. It’s growing exponentially. How do you train people for this?

Q: How would you support different geographic regions of the U.S. — especially those most hit by automation over the last generation?

There are already clusters. Detroit is for automobiles. Boston is for CAD and robotics, while Pittsburgh is for robotics and medical. You can fund national manufacturing centers, or subsidize investment into these areas. I’m very Keynesian in this way. You can throw money at this and at worst, you keep the intellectual property.

Also, people in the manufacturing trades are not great at finding or being matched to jobs. Cities have social services but not strong recruiting offices. In the medium term, there could be a lot of leverage in these organizations like WorkHands.

Q: What about the jobs that have migrated as a result of trade and globalization?

It’s impossible to bring those jobs back. The ones we’ve lost to China? We should let them keep them. They’re going to lose them to Bangladesh, Thailand, Vietnam or somewhere cheaper eventually. Right now, China is actively subsidizing automation. They are like 30 percent of the market for robots globally.

France and Germany also just subsidize companies, like Peugeot, Renault and Citroen. The unions have more control in this model, and the unions by law are on their boards. It’s more of a corporatist model.

The American system wants too much profitability for that to work. This flipside is that the American economy is more dynamic.

Q: What do you do to train your own workers? And what kinds of incomes do they make?

We have a guy we call Scoob (pictured left). He was a deckhand on Alcatraz Cruises and grew up in a city in Athol, Massachusetts, which is the capital of machine precision tools. He always wanted to get into machining, but couldn’t get into trade school. He had minimal access to it, but somehow we found him and he flourished.

The program we have is a mix. When you first get in, we give you an experience that’s similar to an apprenticeship. You’re loading drill bits into the machine. Then we pair you with someone else on the floor, who has to train you to replace their job. Then you do machine operator training. That’s a two-week process. Then we give you CAD tutorials and you start pair programming for CAD, so you know how to design stuff.

From there, you’re useful to us and you can work as a full machine operator to make money. Now along the way, every station in our factory has tablets and the tablets tell you what to do. We’ve built in automation into the machines.

In three to six months, we can take you from not knowing anything to programming the most complicated machines in our factory. The lowest wage would be about $20 an hour and it can go into six figures.

Q: How do workers find you?

Craigslist. We also have a referral program and we work with lots of trade schools, where we know the professors.

Q: How replicable is this to other parts of the U.S.?

We’re a software company. We can build all our tools ourselves. There’s a newer class of company, called an automation integrator. Let’s say Tesla wants to produce robots to build cars. But you need a company to figure out how to program the machines to work together. That would be something like us.

These automation integrators are going to adapt to do the on-boarding and training. I think we’ll see more of this — kind of a “blue collar programmer” — as more of the industry digitizes.

By the way, I actually think that computer programmers are not going to be a white collar job in the long run. Machinists were the programmers of 100 years ago. It was a highly paid job, and can still be one even today. My grandfather had a great job. He was almost a petty bourgeois guy after being a prototype machinist. That’s not true for that job anymore. I actually think software programming will go the same way.

Q: How do people react when you go back home?

I’ve always been the black sheep of my family because I’ve always been into technology and not really any of the standard interests of the area like sports. I think people don’t know what to think of me. I never really fit in with the culture.

They do like that I’m in manufacturing and respect that I started and run my own business. But I do think this sense of otherness will only increase.

Initialized Capital

Stories and thoughts on early-stage entrepreneurship from a venture capital firm. We fund and help startups with their first check. https://initialized.com/our-startups

Kim-Mai Cutler

Written by

Partner at Initialized Capital. Contributor at Techcrunch. When life hands me lemons, I make tarte au citron.

Initialized Capital

Stories and thoughts on early-stage entrepreneurship from a venture capital firm. We fund and help startups with their first check. https://initialized.com/our-startups