Could “decentralized manufacturing” be the next industrial revolution? Tino Go, the founder of Baru, a custom furniture, and more recently cabinets, startup believes it will be, as part of the fourth industrial revolution. Baru uses what Go calls “digitized custom manufacturing,” which enables customers to place orders with small, independent workshops that own milling equipment called computer numerical control machines. The CNC machines are robotic and precisely mill sheets of engineered wood, from heavy and medium density fiberboard, to particleboard.
Baru’s custom-made furniture pieces are contemporary, minimalist, utilitarian. Surfaces are either tinted wood veneer or a few solid color options, from white to luscious red, with timeless clean lines, at a mid-range cost. A custom-sized electric sit/stand desk with drawers, one of Baru’s most popular pieces, for example, costs $2,660. Customers choose the style they want and fill in the dimensions, so a piece can be custom-made. Baru’s price includes a two-three week turnaround, assembly in the customers’ home, a two-year warranty, and 30-day return policy.
Baru’s local manufacturing and supply chain process is unique, an “onshoring” of sorts. The company uses 30 manufacturing locations across the United States, which are independently owned workshops.
“We’re creating a virtual factory out of other people’s machines and other people’s warehouses full of stuff,” says Go.
Think 3-D Printers, But Subtractive
The idea for Baru, which launched in 2020, came to Go when he tried to get a bookcase for his house in Cleveland, Ohio. “I discovered,” says Go, “that it was a medieval process, and expensive—and it was just not acceptable.” Go, 58 years old, worked in advertising early in his career, and then went back to school for an MBA. From 2004 onwards, Go worked as a controller at industrial companies, like the German chemical company BASF near Detroit, and Héroux Devtek, a landing-gear maker. Go was well acquainted with the state of CAD (computer-aided design) software and automation. “It was shocking to me that no one was making it efficient for those machines to manufacture custom goods,” says Go.
He then discovered through his research that there were thousands of CNC machines sitting idle much of the time in workshops across the United States. CNC machines are operated digitally and can cut to the one thousandth of an inch on X, Y and Z axes. Think: 3-D printers, but rather than 3-D printers’ additive process, CNC machines are subtractive, cutting away at material.
Baru’s first steady stream of customers came from Google employees at the beginning of the pandemic’s lockdown phase in 2020. Baru was put on the Google employee perks program, when an investor mentioned Baru to an employee to help Googlers set up their home offices. “It put us on the map in 20 or so cities,” says Go over a recent Zoom call from his parked car in Hayward, California, where he’s trying to “generate serendipity by physical presence,” as he puts it. “I’m reverting to 1980s techniques,” he adds laughing, about driving throughout the US, making in-person Baru connections for sales, to raise money and find interested manufacturing partners. The word “Baru” means “new” in Bahasa, a version of Malay, the national language of Indonesia, where Go was born.
Baru is currently raising a seed round in order to scale. To launch, Go invested $200,000 of his own money; the State of Ohio Innovation Fund and individuals like John C. Dean, formerly of Silicon Valley Bank and the internet pioneer John Davidson, among others, invested $400,000. Baru’s furniture and cabinet revenues so far have been just under $1 million, according to Go, with $500,000 in the pipeline for the next quarter. It remains to be seen if there are enough consumers who can, or are willing to, pay $2,000+ for a quality sit/stand desk from a company that values local manufacturing and reducing their carbon footprint.
Some potential investors remain skeptical, according to Go.
“Everyone likes the idea of de-globalizing manufacturing. Everyone likes the idea of being able to customize products. Not everyone sees, from an investor viewpoint, they don’t see the market demand,” says Go. But what he thinks some investors fail to understand is that Baru’s on-demand virtual manufacturing isn’t just solely for custom furniture manufacturing. No, “this is anything manufacturing!” he states. CNC machines can also cut plastic, acrylic, steel, aluminum, among other metals. Baru’s on-demand ordering process and supply chain could be a blueprint for all types of manufacturing, such as machine or automotive parts. “It’s all about that digital, virtual supply chain,” Go says.
Currently Baru is the only furniture business using local manufacturing partners and vendors that he knows of, but Go is by no means protective of his decentralized manufacturing processes. In fact, Go says he welcomes copycat companies, furniture or otherwise. “It’s actually a personal goal that the method is copied broadly,” says Go, “because it just drives more efficiencies into the world.”
Idle CNC Machines Fuel Baru
The CNC machine, a fully automated robotic router, is the linchpin allowing Baru’s entire operation possible. The machines make three dimensional cuts with extreme precision. The same shape can be cut 100 times over and will never vary. CNC machines cost anywhere from $70,000, to more than $100,000, yet many CNC machines are used just a couple hours a day in commercial workshops.
Leland Thomasset is a master woodworker and the owner of Taghkanic Woodworking. He’s one of Baru’s 30 manufacturing partners, located in Upstate New York. “CNC is becoming much more accepted in North American manufacturing,” says Thomasset, “everybody’s going, ‘What else can I do with it?’ The same way I did.”
For low volume jobs, Baru pays its manufacturing partners $125 per hour for time and $200 per hour for machine time. The manufacturing partners don’t have to worry about getting deposits from customers and time-consuming administrative work. Baru takes care of it.
“It’s a win-win for consumers, local vendors and local manufacturing partners,” says Thomasset, who had initially been a co-founder of Baru with Go, but stepped back as the demand for his own high-end custom cabinetry work grew.
When Thomasset and Go approached various workshops to be potential manufacturing partners in Baru’s early days, the positive and negative reaction was split about 50-50, according to Thomasset. Half of the workshops saw the value of using their CNC machine for an outside Baru
job, while the other half did not, thinking they could do a job directly for the customer and cut out Baru as the middleman. But Thomasset notes that a workshop is typically busy with their own workload, a Baru job is a way to earn extra cash. In Baru’s early days, Thomasset recalls saying, “My CNC is my ATM machine. Every time I turn it on, I make money.” He calculated that his CNC machine cut material 2,000 hours, basically one working week, out of a year.
Uniform engineered wood sheets—made in the US, Canada, and in some cases Europe—metal legs, knobs, among other bits of hardware, are supplied by vendors local to Baru’s 30 manufacturing partners, another necessary component of the businesses.
A Particular Type of Customer
In order for Baru to remain successful, it needs a sizable group of consumers, individuals or developers, who are willing to pay a little more for quality custom products made locally by skilled workers—but far cheaper than a carpenter making custom furniture or cabinets from scratch. Customers also might choose Baru based on reduced environmental impact and, possibly, better worker welfare.
“We don’t optimize for the lowest cost of goods manufactured, made somewhere overseas with low quality materials, with low durability that ends up being unrecyclable garbage,” says Go. Thomasset calls Baru “white glove service from front to back, at a very consumer friendly price.”
The ideal Baru consumer also appreciates local manufacturing in relation to the community. Skilled manufacturing jobs have been disappearing since the 1980s, often leaving a wake of poverty.
“Between 2000 and 2010, US manufacturing experienced a nightmare,” wrote William B. Bonvillian, a lecturer at M.I.T. in an Organisation for Economic Co-operation and Development (OECD) report. He noted that the number of manufacturing jobs declined by one third during that decade.
A Better Way To Manufacture
Go immigrated to Detroit, MI, as a 5-year-old with his family from Indonesia. Go attributes his desire to start Baru to his corporate finance background as a controller. “A lot of controllers, they’re more focused on reporting, but I was more focused on the strategic outcomes,” says Go.
The pandemic, and the snarled global supply chains that resulted, highlighted the need for local manufacturing. According to a McKinsey & Company report from this year, the US is poised for a manufacturing renaissance. Some 44% of respondents in its supply chain survey reported they had increased their regional sourcing during the past year, and 51 percent said they expected the relevance of the approach to continue.
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.