The backing of some large customers and a unique business model ultimately could not save design-collaboration Web site Conferos Inc. from the grim reaper.
The Waltham, Mass.-based company took down its Web site Aug. 1 and ceased operations after struggling for more than two years to achieve the traction to survive, said Conferos President Frank Diodato.
The company, while gone, will be an archetype for future product-development work by molders and their suppliers, said Kevin Cronin, business director of Ticona's polyphenylene sulfide business and president of its Fortron Industries joint venture. Ticona was an investor in Conferos.
``Within the next several years, everyone involved in the plastics business will be doing collaborative development of one type or another,'' said Cronin, formerly Ticona's global e-business director. ``Conferos probably will not rise again, but they helped push that envelope.''
Conferos is in the process of closing its books, after notifying customers in July of its decision, Diodato said.
``We believed in the model and that the plastics industry would adopt this over time,'' Diodato said in an Aug. 6 telephone interview. ``We just did not have enough revenue to cover the shortfalls. Raising capital today is very difficult, and we weren't able to secure additional venture funding to take us through this period.''
The company, like some other manufacturing dot-coms, started with high hopes and an impressive cast of industry veterans and outside supporters. Its purpose was to pull together many Web-based product-development tools, allowing suppliers and customers to work on design and engineering on one site instead of having to fly to various locations for frequent meetings.
It had another important ingredient going for it: the use of software from major investor Parametric Technology Corp. of Waltham, whose Pro/Engineer computer-aided-design package is an industry staple. The site also offered Web conferencing and a variety of program-management and tracking tools.
Conferos was started by former executives from large injection molding companies Nypro Inc. and Tech Group Inc. and by Diodato, formerly with distributor Performance Polymers Inc. After going online in November 2000, the company lured former AlliedSignal Corp. sales executive James Morelli as chief executive officer. Morelli had worked at pioneering Web trading site PlasticsNet.com.
Other investors included IBM Corp. and, later, resin supplier Ticona of Summit, N.J. Several large resin suppliers, including Dow Chemical Co., used the site, as did consumer-products maker Schick Wilkinson Sword Division, a unit of Pfizer Inc.
But all that was not enough to keep the company afloat in the midst of a downturn that had put a spike through the hearts of other plastics-related dot-coms.
``There's been a de-emphasis on e-business as a separate function,'' Cronin said. ``It's probably out of fashion, and people think they shouldn't be there in general. For Conferos, utilizing the Internet was probably a double-edged sword.''
Trouble arose this spring, when three of the four Conferos founders and Morelli all left, leaving Diodato to run operations with a small staff.
Ed Rivera, a former Nypro executive who was with Conferos until joining a banking group recently, called Conferos ``a bit before its time.''
``We continue to see value in collaborative planning, but right now the industry is both gun-shy and broke,'' Rivera said in an interview a few weeks ago.
Until the end of July, Diodato said he feverishly had searched for equity to keep the company afloat. He finally had to give up, he said.
``Over the course of 21/2 years, we did a good job managing money. We weren't extravagant with advertising and we did a lot of things right,'' he said. ``I think e-commerce finally beat us down. But I also think it will come back again. And it won't be hype anymore, but it will be based on performance.''