Printing on textiles is currently analog, using one of two ways: silk screen printing, or in professional jargon, direct to garment (DTG), either directly on the item or on a piece of cloth sewn on another piece of cloth after the end of the process; or wide format printing (in professional jargon, roll to roll (R2R)).

End of the outlet?

Printing on textiles is still mostly analog. Of 11 billion square feet of textiles printed this year, 98% is analog, and only 2%, 260 million square feet of printed textiles, is done digitally. In other words, the market has not even begun to touch its potential.

There are two main problems with analog printing. One is that the process of preparing the cloth (such a shirt) and the color takes several hours, and is therefore more expensive. The second is that in order to justify the time and investment, large quantities must be printed, which means that the customer who ordered the printing (say, a fashion chain) is gambling on the demand for the item. If the gamble goes wrong (the public does not like the item), the customer is stuck with his inventory, and inventory without demand is money down the drain.

“This is the problem that Kornit Digital is trying to help solve: inventory management,” Seligsohn says. “The proof of its existence is the frequent end-of-the-year sales and the many outlet stores. A leading fashion brand does not like operating outlet stores, but it doesn’t always have a choice; it has to get rid of inventory. As soon as a wearable item meets the shelf, its price starts falling, and the profit margin on it drops accordingly.”

In addition to inventory management, Kornit Digital also deals with supply and demand and the environment. According to Seligsohn, “Demand means that each one of us wants to dress differently, to express himself through his shirt or his pants. Supply has difficulty dealing with a trend in demand like this, because analog printing means large-scale printing, without personalization. It also affects the environment, because textile factories generate 20% of the world’s industrially polluted water.”

Personalization can be epitomized through the example of Seligsohn Jr. There are more than a few websites that enable the user to design his own special t-shirt. One popular such website is Teespring, through which 12 million shirts have already been ordered, and which is a platform for beginning fashion designers. “A shirt like this costs my son $25, and I know that it costs only $3 to produce, so the website and those selling designs through it make an enormous profit,” Seligsohn notes. “The websites’ business model is a work of genius. There are fashion designers who have already made hundreds of thousands of dollars a year from it.”

Seligsohn adds that Teespring is not a gimmick. “It’s a company that is growing 40% per month, not per year. Over one million t-shirts are ordered through the website every month.” He says that these websites are differentiated through their supply times, and here is where Kornit Digital comes in.