Transforming American Manufacturing with Modern Software with Jason Ray

0:01Light that spark fire nation JLD here and welcome to entrepreneurs on fire brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Creator Science. Today, we'll share how entrepreneurs are transforming American manufacturing with modern software. To drop these value bombs, I am brought to Jason Ray into EO Fire Studios. Jason is CEO of Paperless Parts, the platform designed to help manufacturers grow their business. He became determined to solve problems plaguing the industry while serving in the Navy. And today, we'll talk about the aha moment that led to paperless parts.

0:40We'll talk about American manufacturing. We'll talk about hacks, data leaks, the importance of cybersecurity, and so much more. And a big thank you for sponsoring today's episode goes to Jason and our sponsors. Artificial intelligence has made a splash in the headlines, and for good reason. The digital landscape is changing quickly, and AI is a huge part of that. If you're feeling behind the curve, don't worry. HubSpot has got your back. HubSpot's AI power tools, including their content assistant and chat spot are a perfect place to start learning the power of AI. Here's how they work. HubSpot's content assistant helps you brainstorm, create, and share content in no time.

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1:55And that's why LifeForce is making proactive and personalized healthcare easier than ever. Start your membership today and receive$200 off. Visit mylifeforce.com to get started now. That's my, L-I-F-E-F-O-R-C-E.com. Jason, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. What's up, Fire Nation? I've always been the type of guy where it comes back to hard work. And I think there's a misconception right now that you can be really successful and not have to work that hard and that you can have everything you want. And it doesn't take that much work.

2:38It doesn't take the hustle. And so from my perspective, it all comes back to hard work. And are you outworking other people? That's my perspective on it. It's the way we built paperless parts. And it's the only way that I can keep up. Well, Fire Nation, we're talking about transforming American manufacturing with modern software. And Jason, you mentioned paperless parts, and you're the CEO of this company, but it wasn't always that way. So I want to hear the aha moment that you had that started you on the journey that you find yourself on today? The big aha moment for me, and there are probably a couple of them.

3:23The first time I was sitting on a minesweeper in the Persian Gulf and just experiencing the pain that people feel every time they try to buy parts from a machine shop or a contract manufacturer in the United States. I'm sitting there trying to make procurements, trying to get our ship up to full operational capacity. And at the end of the day, it was incredibly challenging to do my job. So that was the first time I said, wait a second, I thought we were a superpower. I thought we had the most advanced industrial base in the world. So what's going on here? And then when I left active duty, I went out to try to buy one of these shops.

4:04I figured, hey, I could buy a machine shop. I love working with my hands. I love creating physical products. I love seeing the impact of my work. This will be great. And went out, spent about nine months talking to these shops. And that was the second time I had this aha moment. And the aha moment was, oh my gosh, this industry is so brittle. It's built on hard work and brute force of entrepreneurs who have done things without software that don't scale, that don't transfer and the entire generation of these business owners is going to retire in the next 10 years. And that was like, it was a key moment in our journey because looking at this industry, we said, wait a second, this is going to be so bad for our country and it's going to be so bad for innovation.

4:56And this comes back to this idea that a lot of people think innovation is just software. It's more apps. It's more tech. It's, you know, that's innovation. And from my perspective, I think we live in a very physical world. We drive cars, we fly in planes, we shoot things into outer space. All that is physical. And so my belief is that innovation relies on a really robust and diverse industrial base that you can interact with and you can iterate very, very quickly agile hardware style, you can go really fast and that will drive innovation in society. New medical devices, autonomous vehicles, autonomous mining equipment, tractors, name it.

5:40It just completely changes the game. But we can't do that if we don't have the industrial base to produce all the components that go into these really cool innovations. This is really interesting because I experienced something quite similar with my time in the US Army. I'm sitting here as a tank commander, we're looking to get parts, I need to requisition stuff, I need to do this, I need to do that. And everything was so archaic. I'm just like, man, this is like in the 2000s, we're literally the most powerful military might in the world. And this is the process we're going through to get something that we need to fight another day, to protect ourselves.

6:22And it was really shocking and really baffling on so many levels. So I love when people, Fire Nation, like Jason did, like I was aware of as well, they keep their eyes and their ears open and they see like real problems in this world that aren't being solved at all or they're being solved very poorly. And they say, hey, that's a fantastic opportunity. And that's you every day, Fire Nation, walking around. You can see opportunities of situations that are being handled poorly or not being handled at all. And that's going to give you this amazing opportunity to really do something cool, to fill those gaps, to solve those problems like other people just aren't able or willing or have any desire to do.

7:04Now, if you believe in what you hear in the news today, American manufacturing is on life support and it's been that way for quite some time. I know that you see this a little bit differently now. So talk about the key trends that's driving the growth of American manufacturing today. I think American manufacturing is experiencing a renaissance that it really hasn't experienced in quite some years. We're seeing massive growth. So we're seeing a lot of work come back from overseas. And part of this is this really interesting understanding that during COVID, we got to see the world was exposed to exactly what you and I saw in the military, which is, oh, my God, like manufacturing is actually really important.

7:53We can't buy simple stuff because we don't make it in the United States anymore. So I think the entire world, and this was true about every country, started to experience their reliance on global supply chains. And I'll just say I'm not opposed to a global economy, global supply chains. I think it's super important. And I also think every country should have the ability to stand on its own two feet. And so we got this massive eye-opening moment. And at the same time, all these companies that decided to take their work overseas because it was a little bit cheaper started to realize that there was a massive opportunity cost in doing that when there was supply chain disruption.

8:35So now all of a sudden, the formula is different. The savings has to be significantly higher to justify the risk of supply chain disruption. So I believe it's McKinsey estimates that over the next handful of years, three, four years, we're going to see$200 billion worth of manufacturing come back to the United States, which is enormous. And that's going to increase the demand for collaboration, communication, estimating, seamless ordering. It's going to force the industrial base that we have today, that from the perspective of having adopted technology, definitely on life support, it's going to force us to really take steps into the future to support that level of demand.

9:24And I think it's going to be incredible. And you're already starting to see an enormous amount of interest from venture capitalists. I mean, gosh, back in 2017, when we started the company, and I was talking to people about job shop manufacturing, I was talking about assemblies, talking about, hey, you know, this stuff goes into airplanes. People's eyes would gloss over like this is not interesting. Like this, this is a dirty old sector. Isn't most of the manufacturing done in China anyways? Like why would anybody want to buy software in these companies? That was the 2017 conversation. Now you talk to investors and they're like, oh my gosh, like we just created a billion dollar fund to fund the future of manufacturing.

10:06You look at VCs like Eclipse, Andreessen Horwitz, they're out there. They're putting hundreds of millions of dollars into this idea that is the resurgence of American manufacturing. So it's really kind of cool. This is really cool. And of course, you know, for somebody that's spent their entire life being a U.S. citizen, I do love hearing about the growth of American manufacturing and where the future is going to lie. And I'm also a big believer in the global environment and that, you know, we are better when we're all working together. But there has to be, you know, some intra-reliance on where you are located.

10:43And I just know that so many of us in living all over the world would be in such better situations if there is a future supply chain disruption, like we experienced recently, that you would have the ability to have something fairly close by producing the things that you need and you would have access to that as a result. So we have a lot to talk about around these topics and more when we get back from thanking our sponsors. Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business startups, and entrepreneurship.

11:25One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns. Listen to Success Story wherever you get your podcasts. Ready to look, feel, and function at your best? Then I've got the perfect next step, a LifeForce membership. LifeForce gives you the tools and support you need to optimize your health and performance through a membership that combines biomarker testing, functional medicine doctors, certified health coaches, and advanced nutraceutical and hormone therapies. Here's how it works. Every three months, you'll draw blood to see where you're performing well and what needs work based on 40 plus biomarkers that drive your mental and physical health, all from the comfort of your home.

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12:37Jason, we're back and I want to shift the conversation a little bit because we're always hearing about hacks. We're always hearing about data leaks, everything of that sort. Talk to us about the importance of cybersecurity in protecting sensitive data. You and I both have military backgrounds and we know the importance of how much money we invest in our defense, the United States defense budget is massive,$700 billion. So we're spending an enormous amount of money to drive the future of technology. And that has an enormous impact on technology we use everywhere. And if we are losing this intellectual property because small machine shops are getting hacked, and the output of that is you have China's military that looks very much like ours, same helicopters, same planes.

13:34Why? Well, it's because we're losing this intellectual property. So I think what's happened is the internet has come to manufacturing before regulation was able to keep up with it. And what ended up happening is we used to have this thing called ITAR, International Traffic and Arms Regulations. And it basically forced manufacturers to self-certify that they were not exporting the intellectual property of the American defense engine. You know, we're not going out, we're not sharing designs, we're not outsourcing to China, we're making it in America, we're protecting it, we're not allowing non-U.S.

14:14citizens to see this information. Well, what a lot of manufacturers didn't realize is you can't email these files, Because when you email a file, that goes up into the cloud and sits on servers that are God knows where and then gets downloaded onto someone else's computer. And you're starting to expose that information and it becomes a heck of a lot more risky. Over the last five years, the government created something called the Cybersecurity Maturity Model and FedRAMP. And those two things together are effectively their level up from the ITAR self-certification. So now shops around the country and anybody that is touching defense intellectual property, they are going to have to meet very stringent cybersecurity and physical security requirements.

15:04We've invested millions of dollars in this paperless parts to make sure that we can support Our customers, over 50 % of our customers today are part of the defense industrial base. So it's a really important piece for us. So I think that answers the question or at least gives you a little bit to work with. It definitely does. And I think this is something that we always need to be learning about Fire Nation, understanding more about, because this is our protection, our personal protection, our family's protection, and of course, the businesses that we rely on, their protection. So right now, one thing that we are experiencing, Jason, is this ever evolving workforce.

15:46Can you talk about this evolution and specifically how manufacturers are grappling with it? You know, it's really interesting. I was having this conversation with one of our customers the other day, and it's like manufacturing is just not sexy. And it kind of should be, but it's not. And it's really more of a marketing problem than an actual, it's just not sexy. It's just not packaged well. I mean, I remember when I was growing up and maybe the same was true for you. But my parents were convinced that if I didn't go get my degree, my four year degree, well, then they didn't do their jobs as parents.

16:24That was just binary. Trade school wasn't even in the cards. They were like, if you don't get a four year degree, you know, we've basically failed the parental test. And that that is just a product of really, really awesome marketing. So for the last 20 years, people have been thinking that and we've seen a significant drop in the number of people going through trade schools and going into the trades, manufacturing, where you can actually make a lot of money. And I think that pendulum is starting to swing back the other direction, especially as manufacturing isn't just, oh, you know, I'm sitting on a production line putting screws into a part, but it's actually robotics engineering.

17:06You are telling a really advanced machine how to produce a highly precise component that's going to go into a rocket engine that's going to get fired into outer space. It's sexy. It's really freaking cool. And I think this evolving workforce is starting to realize that they want fulfillment. They want a sense that their work has meaning and that they're contributing to a much larger picture. And I think manufacturing is starting to become that place where they can do it. I love thinking about this stuff, Fire Nation, because it is so true. And for me, having a son on the way, my first child, this November 11th is the expected due date.

17:50I'm thinking to myself, man, like I do not know if this child is going to go to college. And I am totally cool with that. Like I don't even know if this kid is going to get any kind of a traditional education. I mean, we'll see. But I mean, in five or six years, I mean, that could be interesting what opportunities are out there for me to put my child into. that doesn't have much to do with what I grew up with education-wise, which was like you go to school at kindergarten, you graduate high school at 18, you go to college at 18, you graduate at 22, and now you have this amazing degree that you go off into the world with.

18:24So that story is changing. That's just myth of this opportunity that comes when you're holding that degree is really being exposed with the mountainous debt that people are getting into and the inability to get any reasonably paying jobs to attack that debt and also have enough money left over afterwards. So it's being challenged across the board. I think there's some really interesting opportunities that are going to come in the next one, five, 15 years that's really going to change this landscape. Because like you mentioned, Jason, it is fantastic marketing that's happening or that's happened in the past.

19:05and it's kind of being exposed now in a lot of ways. Look at the AI. I mean, there were reports this morning that coming out of McKinsey and some of the other consulting organizations, and it's still early days, but what are they saying? The most impacted people by new technology are not going to be the blue collar workers. It's going to be the highly educated workers. It's going to be the people with PhDs. It's going to be the knowledge economy that gets impacted by these tools that democratize the access to that knowledge. It's going to be really incredible. And obviously it's still early days, so I'm not swallowing the hook yet, but I think we need to keep an eye on it very closely and what that means for our future children and where they land and what their path looks like.

19:52Well, it's a crazy, exciting, scary, unknown world that's out there all mashed up in one. And the best we can do is just keep our finger on the pulse and make decisions day by day and go forth and conquer and continue to surround ourselves with the right people and the right opportunities and make things happen, which is what you're doing right now, Fire Nation, by listening to this episode. So Jason, take us home. What is the one thing you want our listeners to walk away with from this conversation? Be resilient. If you are resilient and you get up off the mat when you get knocked down, you are going to be successful because you're going to keep pushing.

20:32You're going to keep going that extra mile. You're going to be working hard and you will find success. I think just being hardheaded and being pretty gritty, that is why we are still here as a company. Just refuse to give up. So be resilient, push hard, and really believe in yourself and believe in your team. I think that's what I would love to leave people with. There's a great book by Nassim Taleb, which is anti-fragile. And that's what it is really all about. It's about being resilient, not being a breakable, getting back up after you fall down. How can Fire Nation connect with you, Jason? What is your call to action for our listeners today?

21:15Look around the world, your physical world, every single thing, your desk, the phone that you're holding, whatever you happen to be listening to this on, this is manufacturing. every single thing, the car that you ride in, the airplane you fly in. So start to realize that manufacturing drives the US economy. It drives the global economy. And if you're interested in it, you want to learn more about it, you can connect with me on LinkedIn. I would love to share what we're doing at Paperless Parts. And if I can help you, I absolutely will. Fire Nation, you're the average of the five people you spend the most time with.

21:53You've been hanging out with JR and JLD today. So keep up that heat. And for links to everything we talked about, visit eofire.com, type Jason in the search bar. The show notes page will pop right up. And Jason, thank you for sharing your truth, knowledge, and value with Fire Nation. For that, we salute you and we'll catch you on the flip side. Thanks so much. Hey, Fire Nation, a huge thank you to our sponsors and Jason for sponsoring today's episode. And Fire Nation, what can 3 ,000 of the world's most successful entrepreneurs teach you? how about how to achieve financial freedom and fulfillment.

22:28My first traditionally published book, The Common Path to Uncommon Success, is a revolutionary 17-step roadmap that will lead you to the lifestyle you've been dreaming about. This book took me 10 years of accumulating the genius of the world's top entrepreneurs, and you can get it all in one place when you visit UncommonSuccessBook.com. I'll catch you there or on the flip side. Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business startups, and entrepreneurship.

23:09One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns. Listen to Success Story wherever you get your podcasts. Want to live better, longer? We all do. And that's why LifeForce is making proactive and personalized healthcare easier than ever. Start your membership today and receive$200 off. Visit MyLifeForce.com to get started now. That's MyLifeForce.com.