The Manufacturing Startup That's Outcompeting China | Jim Belosic, SendCutSend

37:24And when that type of thing happens, how do you how long does it take for you to make that call? And then how do you actually do that? Usually it ends up at my desk. I'm like chief of customer support. You know, I always I always try and take the super nasty ones. Honestly, it doesn't happen that often, because if you deliver a really good product and you exceed expectations, then you're not dealing with a bunch of chaotic customer support stuff. How do we solve it? We, we go the extra mile. Like usually our, our goal is one touch resolution. So if someone writes in as like, Hey dude, my parts were all bent up.

38:06It looks like the FedEx guy to like kick this down the alley. Our first response is you have a full refund and new parts are getting overnighted. You'll have them tomorrow. Like we're so sorry. We want to make it right. and then you know it's expensive but we learn from it you know we learn hey did our packaging fail whatever it's always there's always a lesson in there and then the customer is usually like ready for battle because they're used to dealing with these other companies that are fighting back yeah and as soon as we don't fight they're like oh shit okay so sorry you know and then they're totally chill if we do that and then they're still mad it's like okay cool what else can we do like the phrase that you hear a lot from us is how can we make it right we want to make it right sometimes right isn't a refund sometimes right isn't part sometimes they sometimes they want to talk to me you know sometimes they want public apology i have no idea but it's like what do these people want to make it right we will do that if we try and we still can't make it right then it's just the blunt conversation of like hey man you don't like us and that's okay yeah it's okay we're not we're not a fit for everybody and that's the whole thing with senkassen we're a little weird um if you're if you're really experienced in sheet metal or cnc machining we can do 80 of it but if you have been doing this for 20 years or whatever and you're like hey how come you can't do this super common thing in the industry we're like well because we don't you know we are in and out burger um small menu but it's super good super fast you know you're getting when you show up.

39:40Yeah, yeah, exactly. So yes, could it does In and Out have a fryer where they could make a breaded chicken sandwich or something? Sure. But they're not going to because it's not in their model. So we have to explain like, hey, we're not a good fit for everybody. But for a lot of people, we are. Some people accept that and some people don't. Yeah, the best form of capitalism is basically you're trying to create as much goodwill is met with the most number of people and then just have a consistent, you know, every single time they interact with you, they love it and they want to come back. And also you're, you know, the way that this works is like if they get their part a day faster or something, maybe that just speeds up their business just ever so slightly, which allows them to scale faster, which then allows them to send you more orders.

40:25Yeah, we we try and be like the guy next door that if you could pay in beer, you would. I've done that. I've brought a six pack to a place and been like, for the love of God, can you help me make this? Okay, you have to explain that. How many times have you done that? Brought a pack of beer to some... Oh, dozens. Really? Well, you have to know their advice. So it's like, which kind of beer or do they prefer bourbon or whiskey or vodka? You're thoughtful about it. Yeah, very, very thoughtful. Zin, you know, whatever. And then the same thing happens to us. you know a neighbor will come over and you know we've got so many bottles of tequila for lending out a forklift that's how the economy works you know and it's neighbors and machining and stuff like that so we're like okay how can we take that concept and scale it to the internet and so it's just going the extra mile it's it's it's caring about their project you know we we have more investment in customer support and dfm engineers than anybody and the reason why we're overstaffed is so that people can like show true interest in the product projects that these people are building and help them carry it over the finish line you know again whether we're the right fit or not in the super super early days we had a customer who got us confused with like a guitar company and they're like hey i need to find this um uh this owner's manual for this guitar pedal thing and we're like hey that's not really us but we looked for it and we found it and here's the pdf and they're like oh my god you know that guy ended up coming back and ordering um a bunch of pick cards for guitars or whatever but you can't do that if you're trying to slam through and hit metrics so the other thing that we do with customer support is we don't really hire customer support agents, we hire enthusiasts and makers and designers.

42:19And so everyone on our team is a customer. Actually, we do that everywhere besides customer service, too. It's like we try and hire our customers, people who just get it. And then that way, when they're talking to a customer, they're like, Oh, man, I've been there. I've done that. Here's how I would do it. Here's how I would approach it. Especially with automotive projects, we have a lot of guys who are super into cars. and if you're making like a battery box out of sheet metal oftentimes when we go and we're like hey how come this ticket had like 85 responses how come it took 21 days to solve this ticket it's it was solved the first shot but then they were talking about cars for like a month and a half you know talking about like which fuel injection system to use or whatever so i love having that luxury and you know again cfo is going to be like you're way overstaffed in customer support is you know are we though or i don't know like i my bet is is when you do hire a cfo it's going to be someone that's like very culturally aligned i want to see how long we can go without having one that's my goal why we've had a couple and they're great people just not the right fit at the right time um i think when you're publicly traded obviously you have to have a cfo and governance and whatever but when you're growing and you're just trying to build a really good product they're focused on that spreadsheet they're they're focused on running the business from a spreadsheet and they're the ones to say like how come you spent 42 000 in candy last month i'm like because it's fucking feels good you know and and all the chocolate spoiled because we shipped it to florida and it all melted so we had to reorder you know um so cfos don't get it because especially a lot of cfos haven't run a lemonade stand you know they weren't hustling you know they had uh they went to a good college uh they got some job as an analyst at mckinsey or something like that and then they just were crowned cfo uh I want a CFO who's like, you know, down and dirty and seen some shit and excited to walk the floor.

44:33Yeah, exactly. Walk the floor, figure out what's going on. Those are pretty rare people. So right now we can operate without a CFO because we, the whole leadership team is the CFO. Yeah. You know, I contribute my gym math and instinct and forecasting abilities. Um, you know, our VP of operations contributes like what our capacity is our controller is looking at like tax burdens and all this other stuff so combined you know we're like captain planet you're too young for captain planet probably um voltron that's you're way too young for that too anyway together we're like pretty kick-ass machine on the on the like uh you know 85 tickets for you know some guy building a car.

45:18It kind of reminds me of, I think it's Tony Hsieh from Zappos. And he, you know, their entire tagline for Zappos while they were building it was they want to like deliver happiness. And there was this moment where I believe that he was in Vegas and it was like 11 p.m. at night. And he was, you know, he tried to build a staff of people that are like support people and customer service people that would just solve people's problems, you know, and whatever the problem was. and uh just off the cuff they decided to at like 11 p.m at you know they were trying to order a pizza and they couldn't find anywhere in las vegas that had a pizza at 11 p.m and so they're like fuck it let's just try calling the support number and see what happens they didn't tell them who they were or anything they just called the customer support of zappos and were like i need a pizza and the guy was like well we don't really do pizza but then he like found a pizza place and like help them order the pizza.

46:12Yeah, no, I think if everyone took that approach, the world would be a better place. However, you can't take that approach when you have VCs breathing down your neck for growth and margin and, um, you know, just money at all costs. You know, how can we, how can I pretty you up so I can flip you onto the next greater fool? You're not allowed to do that. you're not allowed to do all these like over the top cool gestures that are going to build a generational company because you're so worried about making the next quarter. So we have that luxury. I think more people should be exposed to that type of building a business where they can have the luxury of doing what's right versus what helps the bottom line.

47:00Because the bottom line will come. You just have to be patient. When you're thinking about the whole legacy of the company and your legacy, and you're thinking about this much more long-term perspective of 25, 50 years, and you're getting a customer that is super happy today, that's going to be ordering for the next 50 years. How are you deciding to make decisions when, with that understanding in mind, short-term profitability of a single order is not necessarily as important as the happiness of a customer? How do you think about that? I mean, obviously I have no background in finance. You seem to be doing all right.

47:36You know, I don't have an MBA or whatever. And I think that's a huge gift because I run the company as a company that I would want to interact with. So my legacy is, you know, how can I win a customer over now and then have them as a lifetime customer? And that brings a lot of challenges. It's not just like speed and price and quality. It's also expansion. It's growth with that customer. So my software company prior to this was B2B SaaS. So hell yeah. You made the right pivot. That was back when it was cool. And so we had the concept of churn. Churn was terrifying to us because we put all this effort into having a customer and then they'd leave and we're like, oh no, our subscription count went down.

48:28when I started this business, I was like, oh, dude, we don't have a concept of churn. Once people use us, they keep using us over and over again. Now, they may use us less frequently if they don't have a project or something like that. But typically, if we win them over, we could win them over for the lifetime. We found out that that's not true in all cases. Sometimes our customers outgrow us. And it's really, really cool. It's like a proud, bittersweet moment. you're like really excited to see that they're not going to use you anymore because they bought their own equipment or they're starting their own manufacturing line and we've advised on hey here's equipment to buy here's how you want to set up your line here's where really procure your nitrogen yeah we've i want people to win yeah you know um but i was like okay i can't do that for everyone what if all of our customers outgrow us then i'm screwed right so how can i grow with them so just speaking of like legacy or whatever i want someone to be able to start at a kitchen table with an idea we do a quantity of one and then they're like hey i made some iterations quantity of 10 quantity of 100 000 whatever they're like hey i'm starting to distribute into other countries can you help with that i'm like okay let me figure it out i've done that before but my quantities are massive um laser cutting doesn't make it sense anymore how can you help us with stamping can you help us help us with casting can you help us with injection molding i'm like i don't know that's that's where I want to go with legacy uh because if I can truly have a lifetime customer like someone who discovers us from first robotics or vex robotics when they're 16 and then when they're 45 they're still using they're still using same cut sound you know because I know guys that have done that with McMaster you know I know guys that have used McMaster for 40 years uh I would love to be in that same category.

50:18I would also like to spend a moment, you started off with just some laser machines, and now you are doing all sorts of stuff. I think, how many different machines do you have right now? I don't know. A lot, like different processes or total machines in the network? I have no idea, because we have a lot, you know, all the CNC machines are, that's the the fastest growing part of the business right now. So we do laser cutting, water jet cutting. We have CO2 lasers for plastics. We have CNC routers for like carbon fiber and phenolic materials. We have CNC lathes and three axis machines and five axis machines and robotics.

51:01And we have powder coating and hardware insertion machines and kitting systems and pick to light. And I don't know, we have a lot. We have a lot going on and it all comes from customer demand. You know, the, we add materials cause people ask for it and we don't, we can't add everything cause again, we, we still try and be like in and out and have a menu that is manageable. Um, but you know, as we grow, it's like not only are customers asking for it, but I'm my own customer too. So I often have a project where I'm like, oh man. man, my welding bottle is out of gas again. I don't want to weld this.

51:43I haven't welded in six months, so I'm shaky. You know, I'm not good. I wish that I could just have this welded up. So it's like, okay, maybe we get into welding. Maybe 3D printing is not quite working for this application and injection molding would be way better. You know, if I personally need it, you know, or my CTO. There's probably other people that need it. Exactly. So that's how we explore stuff. That's how I'm going to stay busy for the next 10 years. And I'd be curious, like on the expansion side, when you're thinking about entering a new market, like buying a bunch of CNC machines or something like that, you want to you have a certain standard of quality of the customer experience that you have with the things that you currently sell.

52:20And I imagine that day one, right as soon as you turning it on, you want that same standard of quality. Yeah, that's why we don't tell anybody. So how do you, once you decide to go into some new business line, how do you basically make sure that that first interaction with the customer when they're ordering something is going to be the same standard? Like spinning that up? You don't tell anybody. Don't tell anyone. What do you mean? We call it the gaslight launch, where we just gaslight people into believing that it's always been there by the time they discover it. You know, they're like, oh my God, I didn't know that you guys had carbon fiber.

52:55and we're like, yeah, dude, where have you been? You know, it's been there for a long time. Even though maybe we just launched it, but we don't tell anyone because we want to get really damn good at it before we do anything. So we just started a podcast and to interview cool customers and staff and stuff and just like a little behind the scenes. So if we don't have cool lighting or anything, our podcast, it's getting better though. You got it. You got to start somewhere. You got to start by doing the first one. That's the thing. You just have to do it. So the first three episodes we threw away.

53:30The next five episodes, no one has seen because we're not telling anybody about it because I'm not proud of it yet. Once we become like we're proud and we start to talk about it and advertise it, it'll be episode 30. And they'll be like, oh, my God, I didn't know you had a podcast. I'm like, where have you been, man? Jeez. So same thing like with CNC, with new materials, with new capabilities, we run it secret menu. You have to send you an entire secret menu of things that you can do, but don't tell anyone about? Yes. Yes. It's a hell of a menu. And, you know, we have select customers that are vocal, both positive and negative.

54:11We keep them into a couple different buckets. So if you're watching this and you get asked to test secret menu stuff, you're in one of the buckets. You're either in there because we love your positive feedback or you're in there because we love your negative feedback. um just love your feedback yeah so so we'd let them test it we refine we refine you know i years ago i was like i think i want to start a restaurant and i started researching how to start a restaurant and everything and one of the the big takeaways was you don't just say grand opening you open and you invite like a couple buddies and then their families and then a few people off the street and so you have this like slow launch that happens and by the time there's a grand opening sign out there your waitresses are trained your chefs know you know what rush everyone knows the process so that's the same thing we do here um how long does something typically stay on the secret menu before it's wide openly available depends it depends uh because i imagine every single one you have to basically get it to that point where you're proud of it yep yeah you have to work out all the bugs.

55:15So yeah, by the time the public sees anything, it's probably at version four or five. If it's a material, it could be four or five weeks. If it's something like CNC, it could be four or five months. There are projects that are coming that have been in the works for two years and we've started it up, shut it down, started it up, shut it down. Sometimes we'll shut it down because the technology is not there we wait a year and we're like oh my god we just saw this thing works yeah because someone was having the same problem that we were having they figured it out and we're like oh shit let's blow the dust off of this add this new piece of tech and and see if we can make it happen so that's always super fun um but what i don't like to do is uh you know tease and then not have anything to show you want to be able to deliver what you are saying that you can deliver.

56:08Yep. Yeah. For the factory itself, you know, you're working on a whole bunch of different stuff now. And you're walking around your own factory to see that everything is, you know, even as you're walking through earlier, you're picking up little, little things off the floor, and you want it to be clean and put together, you know, I think the best way to learn is you just go see something in action that's working. And then you kind of and you get enough of the data points where you're able to say, I like, you know, this works really well. I also don't really like I've seen in two or three factories and now I know that like one thing works really well another thing is not so great and you're taking the best parts to incorporate your own business what have you done there yeah everything so being in Reno we're not exposed to a lot of factories there's a lot of warehousing here however that's really cool for automation you can see like take robots we've toured an Amazon fulfillment center before arrow Electronics is down the street we toured that facility which is amazing the issue with us is we're so high mix there's nothing really like it we often see a lot of solutions that are great if we made you know 10 skews or even 100 skews but because we make thousands of skew things per day it's really challenging my favorite thing to do though is you don't tour if you're a sheet metal manufacturer you don't tour other sheet metal manufacturers it doesn't matter go tour something that's super weird go tour like uh food processing or like flour distribution cold chain stuff you'll always pick up something that you could apply to your industry and then now that's secret sauce so if you're looking at what's been done like if you go to trade shows you like fab tech fab tech is a huge trade show in the fabrication industry you go there and you learn more about like your own industry and it's kind of like preaching to the choir but if you go to like a cosmetics uh trade show it's wild you're gonna see like weird marketing techniques that you've never seen you're gonna hear about like packaging equipment that you didn't know existed um like our packaging equipment it's for food like it's to keep like steaks fresh um so the the weirder industry that you can explore and borrow from, like, that's how you get innovation in your own industry.

58:35Yeah, I know. When we were talking yesterday, you said that the two people that you have, like, learned a lot from, and I think there's probably others, but it's like Les Schwab and Sam Walton. And Sam Walton would, you know, whenever he would go to, you know, I think he took on his family on a lot of trips. Yeah. And almost every single day that they were out on a trip, he would be basically just touring the, uh, the different like retail locations and like supermarkets and all this different things. And his kids knew that he would just, you know, go to some supermarket in like Argentina and then go lay on the floor to see how, you know, why the aisles were.

59:11And then like, go talk with the staff and ask about, you know, all these different things. How have you kind of chosen your role models and what have you like learned from them? I think I, the reason I, I like Sam Walton and Les Schwab especially, uh, is because their, their reading level or their writing level is right at my reading level, like fifth grade. Um, they use vocabulary that I'm familiar with. You know, I grew up in rural Nevada. Um, I didn't go to school or, well, I went to high school, but I did like six weeks at UNR. Um, I, you know, on x there's a lot of people what they call word cells or something they're using crazy terminology to explain something that's like really freaking basic i think sam walton les schwab were confident enough in their abilities of just doing it like a blue collar method and just making shit work they didn't have to use crazy ass vocabulary or try and impress vcs with you know i can't even think of any words to use an example yeah i feel the same way by the way it's just it's basic do the basics really really well maybe you're not going to impress people at a high society party or you know god forbid i go to silicon valley to some you know cocktail party because i'm going to be wearing jeans and my flannel or whatever but i have a good business and i have good customers and i think those guys knew it too they took good care of their employees they weren't there for an exit they were there for a legacy they were there to make america better they were there to make sure that their employees could buy homes and and cars and have babies and that's that's exactly what i'm doing and i i'm like dude do i need to write a book or something so that people will respect my stupid approach because they're like sam walton is doing you know all kinds of awesome stuff and he wrote a book and of course he wrote the book to the end of his life and yeah and he did he did an incredible job so i'm like fuck i guess i gotta just wait until i'm dead and then people will be like oh dude the jimbalosic method like actually works there might have been some special sauce there yeah so i'll just wait until i'm dead and then uh maybe they'll like teach this in business school i don't know it just feels like i'm doing the right thing yeah so when you're thinking about you know there's there's things that you can kind of control inside of the the four walls of your warehouse or your factory.

1:01:33But especially with, you know, customers, it's, it's, you're relying on a lot of other people's supply chains to make everything work. And, you know, I know, and again, with Sam Walton, like he would go to, like, he would talk with the supermarket people, the people that were in charge of his, his, his stores and other people's stores. But then he would also, to get like the best source of real time information on a whole bunch of different stores at once, he would basically go to some distribution center where they have a whole bunch of different trucks going to a whole bunch of different stores at once.

1:02:03And then he would just bring a bag of donuts or like a box of donuts, I believe at like 5am before everyone shipped out. And he would just talk with these guys. They were truck drivers, and he'd be able to get like a pulse on, you know, 15 stores at once. How have you kind of thought about what you can control? And then for the things that you can't control? How do you make that work? Yeah, I kind of lit up when you said, Oh, you focus on stuff that you can control. That's a million percent our motto it's focus on our constraints our constraints are what we can control if it's outside of our control um it's still our problem and we can mitigate like catastrophes a little bit by having you know backup vendors or redundancy or whatever but really our focus needs to be on what do we do best and we don't spend any time thinking about oh what could have been or you know we would have should have could have i i often say i don't have a time machine i don't have a time machine yeah that went sideways that was super screwed up um but i can't go back in time so what should we do moving forward our constraints, one of the things that we talk about is, is it our problem or their problem?

1:03:13meaning our customers and you know we can't do a certain type of bending geometry or whatever is it their problem that we can't do that no it's our problem so we always have to look inward and like challenge ourselves to be better like we'll add tooling we'll add process we'll add technique in order to make sure that it's uh it's not their problem it's it's our problem we'll solve it But when it comes to things outside of our control, so we look at weather. You know, we're in northern Nevada. We're 30 minutes from Lake Tahoe. Winter weather is a real thing. First couple of years, it bit us in the ass.

1:03:57So that was actually a big reason that we expanded, you know, to different facilities across the country so that we can move out. And you have one in Kentucky and Texas now. Yeah, one in Paris, Kentucky. and one in Arlington, Texas. And then we have a fourth facility that Secret Menu right now. No one really knows about it. Is that your lab, the special stuff? No, it'll be a full facility. It's just not online yet. So anyway, we're trying to expand so that we have better control on the things that are outside of our control. Whether lead times from raw material vendors, you know uh dude memphis got hit with an ice storm or something like that a couple years ago and that's like the fedex hub and if you have all your eggs in the fedex basket and memphis goes down like you are screwed for weeks so that ice storm shut down the hub so they started putting stuff on intermodal rail and then all the rail got like backlogged and trucks were lost anyway it was there's all kinds of issues so we can't control everything outside of our control but we can have backups on backups on backups we can have redundancy so yes we ship ups we'll ship dhl we'll ship um you know whatever we can in order to mitigate uh carrier issues weather issues uh suppliers for every material that we have we have at least three suppliers we always have favorites you know, based on price or lead time or whatever, but shit happens, you know, during COVID, like they'd be like, we're shut down.

1:05:36All of our guys are sick for 10 days. It's like, well, I can't allow you to shut me down. So, uh, it's, it's expensive. It's time consuming, but once you start to get used to it, uh, it's a huge advantage. You build a muscle of like working on the fly and figuring shit out. Yeah. Yeah. For the amount of like inventory that you have, you know, I think you talked about basically having like seven days of metal, pretty much in the factory at any given time. How are you thinking about basically guaranteeing that, assuming not everything goes right, you can still deliver on time and like, all that sort of thing?

1:06:15Like how much inventory do you want? Well, this is actually where a CFO would really help. because I learned that having millions of dollars of inventory on the floor impacts cash. I didn't really know that. I was like, how come we have no cash? What is a capital cycle? Yeah, I was like, that's weird. Also, I learned a lot about net terms. I was like, oh, we're making all kinds of money. But then it doesn't come in for a little while. I was like, oh, shit, we have no cash. so anyway we're we're trying to be smarter about how much inventory inventory we carry if it's a long lead time material we may have to carry a year's supply um you know some of our our non-metals are kind of exotic and it might take us three months to to get a supply so you gotta be basically expecting assume for the worst you need to make sure that you have that on hand plus a spike that's the other issue we're we're kind of like a contract manufacturer we're kind of a job shop but on steroids a contract manufacturer is usually going to say like hey i need a million units over the next 12 months you know deliver me you know 100 000 a month or whatever we have no idea what's going to happen at any given moment so if you have this material that's three month uh lead time you're like okay i need to carry enough for three months plus three months to replenish but then what if what if a company what if an aerospace company comes to you and it's like hey i need 10 000 units of that long can you do it yeah so you have to have surge capacity too which sucks for cash but actually not having a cfo has allowed us to do that because i'm like i just don't want to run out like that's that's the number one uh order that we give to our procurement staff and our supply chain staff don't run out just stop running out for the love of god it's so expensive to run out there's opportunity cost there's you have to make it right you know so maybe you have to overnight a bunch of shit you're ordering raw material from mcmaster which is wildly expensive um so just don't run out and that's that's something that when you're running the business on a spreadsheet it's really hard you don't see the same d yeah yeah yeah so uh the other thing that we do is like you said earlier just have a good relationship with your vendors our building next door or old building.

1:08:38We when this well, not this building. Anyway, we outgrew our building. And the building next door came available. I'm like, okay, we're gonna move there. We put up our existing building for sale. And we got a bunch of offers. It was very popular piece of real estate. And we ended up selling it for a deal to one of our vendors. and it's coast aluminum they're they're right next door and they're amazing and i was like i would rather our vendor be right next door um then you know make a little extra money on you know some dude who's not going to be a cool neighbor so yeah the the fact that we can have uh we can walk over with beer and get them to hop in the forklift and deliver some metal you know in an emergency case is super super awesome um i wish we could scale that i mean we're trying to we're trying to um be more vertically integrated and control a little bit more of our supply chain you know i was talking to somebody the other day i was like i was like could we own the mill where the aluminum is melted down or actually where does that come from well it's it's bauxite which is mined i'm like can we get a mine and then like wait who actually makes money in all of this i think it's the shipping guys the shipping it's always like if you go to the root cause analysis it's usually like shipping everything that you do has to be shipped so anyway maybe we need like an ocean transit company and then a bauxite mine and then a refinery and then and then we can be with scale you can kind of make that make sense on a spreadsheet yeah something yeah yeah i i think our first step is um i'm not really worried about our supply chain We deal in commodities and if we can't source it, there's a lot of other guys that can.

1:10:35If our stuff is really exotic, then it's hard and you'd want to control the supply chain more. But at least for where we're at now, we're okay working with really, really good vendors. But at some point, yeah, you know, how do we own the metal, you know, from the mill? How do we own the transport that it's going on? You know, can I can I have a railroad line that delivers our coils? You know, that's that's how I'm thinking. I don't know if I'll ever get to think of is John D. Rockefeller kind of in the back of your mind at any time. Yeah, I don't. I've never read this stuff or anything, but because he basically he kind of thought through, I think his entire business in figuring out how could you like there was I think at one point he bought an entire forest to basically create barrels so that he could transport oil.

1:11:24easier and it was just like fully integrating vertically integrating his entire supply chain i think that's always been my challenge you know from my first business you know when i was 15 you know mowing lawns um i was like man i want to get every house on this street and i should have thought bigger you know i should have thought like i want to get this entire neighborhood and then the adjoining neighborhood and then i'll be able to hire a driver so i can go to other neighborhoods or whatever but i always i was like oh i'm gonna get my neighbor then i'm gonna get the street and then maybe i'll get the block or whatever um that thought process has followed me through all my companies and just now i'm like oh wait you have to think so much bigger so that you can land somewhere in the middle uh brian wolf our vp of operations he always says um aim for perfection and you'll achieve excellence.

1:12:20And so, yeah, if I think about owning a bauxite mine, maybe we'll end up acquiring one of our service centers or something like that. So I'm not going to have a mine or a railroad, but it'd be cool. In your mind, like throughout the journey building Sync Ascend, how has, I wouldn't necessarily even say the ambition level, but basically the way that you think about the business, How has that evolved over time? Even now that you're thinking about it today, you know, you're thinking about maybe we have to buy a mine, maybe we have to buy a railroad, all sorts of stuff to make things work. How has that evolved?

1:13:00I think a lot about what can Jim do? What can only I do? And at the beginning, like I said, shipping with Jim. I can ship. I can drive a forklift. I think I'm still forklift certified. I could. You know, I can push a broom. I can load machines. I can do some stuff. But so can other people. And so I find myself focusing on stuff that only I can do. I'm going on podcasts to be the face of the company. You know, I'm the one who has to have these relationships with key customers. I'm the one who has to negotiate with key vendors. I'm the one who solely has to control vision and expansion and be the number one cheerleader.

1:13:47So yeah, every once in a while, I'm like, God, I really wish I could just go run a machine. You know, I really wish I could just be on the forklift all day. It's so fun. That's your happy place. Yeah. But I can't, I have to do gym stuff. So, you know, looking forward, it's all in my mind. You know, I have a great leadership team. We have great staff that is there and we work together and come up with ideas for the future. But when it comes down to it, it's my responsibility. So it's hard shifting from, oh man, I really want to go hang out with the guys and sharpen tools or something like that.

1:14:30But I got to go be in a conference room and talk to some dude on Zoom for two hours. it's not super great, but it's a good use of my time because it pushes us forward. And I think only a founder can do that. You know, if I brought in a CEO from somewhere else, they're just not going to have it. No, I think you kind of got to lead with, you know, the business that you want to build. And also, I imagine that you didn't start out always wanting to be on the forklift. Like at the very beginning, before you even tried the forklift for the first time, you didn't know that you enjoyed that. But then also over time, as you're as you're growing and making a bigger company, there's other things that are probably really enjoyable, that you just wouldn't like you get a little bit of the fun.

1:15:19Yeah, yeah, I, I get to, I get to do like intangible things more than anybody else. I get to experiment more. I get to throw a bunch of stuff away, I get to try things and, you know, throw shit at the wall and not all of it sticks. And no one's breathing down my neck about it. Like, Jim, you just burned up six weeks of time or you just lit$100 ,000 on fire. It was my decision. And it was also your money. And you like it. That's the great thing about like really owning the company is that if you're if you're spending a dollar, it's your dollar. Yes. It's not someone else's dollar. And so if you spend it in a way that other people are like, that doesn't make sense.

1:15:58It's like it made sense to me. Yeah. I still get yelled at our president. She was my lovely wife. She gets a little upset at me when I, when I light too much of our own cash on fire, but it's, it's fun. It keeps me coming back. I am notorious for starting projects and then giving up halfway through. So I'm, I'm a car guy and I'm always like restoring a car, building a car, doing something like that. Facebook marketplace is my nemesis because I'll tear the engine out of something and then I'm waiting for parts so I'm on Facebook marketplace I'm like oh there's a beautiful Grand National for sale you know let me check that out and then I'm selling the other project for for parts you know this business uh is a continual project it's never finished and I've sold cars as soon as I'm done building them because i like the build yeah and as soon as it runs and drives i'm like boring lame don't give a shit you didn't you didn't enjoy you you wanted to make the thing i like the project and manufacturing is infinite you know uh challenges and weird stuff that you can always improve upon this place will never ever ever be perfect um we'll never be done we'll we'll never have enough capacity.

1:17:21We can never offer enough materials and enough processes or whatever. So I'm excited that this can keep me busy for the foreseeable future. Yeah, I want to I want to spend a little bit of time, you know, in the very beginning, you took a huge, I think what most people would consider a huge risk, I think people generally misunderstand risk. But you took a big risk by buying that first laser. How do you think about what risks make sense? What is risk in your mind? And then what is something that most people perceive as risk, but in your mind is the most obvious thing in the world? If you take a quantity of risk, it'll be seen differently by 10 different people.

1:18:02If you tell 10 different people, rate how much risk this is, you'll get 10 different answers. I think the best founders and entrepreneurs are naturally risk tolerant. um so my concept of risk is wildly different than my wife's uh but i bought an old car and it doesn't have seat belts and oh my god she does not want to ride in that thing and the whole way we're riding home she's like where's the seat belts um and i'm like dude they they did this in 1964 they lived my dad drove a car like this and he's alive so um i'm totally comfortable with that risk. So when it comes to business, I am often told that I'm taking risks and I don't see it that way.

1:18:48I'm just like, no, this is what it's going to take to move forward. What have been those biggest moments? It's like, if you build it, they will come, you know, it comes with capacity. So the CNC endeavor is one of our bigger investments. And we have never done CNC machining and we have no clients that have you know had cnc machining needs but i was like the market's there i need it you know personally as a customer um i've heard some grumblings from customers that it would be nice if sen cut send could offer that but when i ran the math i was like oh to do it right and to do it at sen cut send scale you you have to go all the way in you're jumping in with both feet.

1:19:32So it's calculated risk. I always know what my safety net is. And the worst case scenario, I was like, the banks know where these machines are, they can come and get them. Yes, I will lose some money. But I'm not gonna like, go to jail. I'm not gonna lose my home or anything like that. You know, it's, it's, if everything went completely sideways, what would the worst case outcome be? And then, then I plan against that so if the worst case outcome is like I'm going to jail I usually avoid that although my kids are older now so you know maybe a little bit more risk on we haven't actually seen what Jim is capable of yet yeah exactly like that's that's coming um I've avoided uh like a private pilot's license forever um because I had kids but my daughter's gonna be 19 and and my boy is gonna be 16 um so whatever they knew their dad for long enough like they have some good memories they you know at least he went out you know flying the flying the company plane you know so uh anyway we we avoid jail time in our risk calculations uh i also avoid on a serious note i avoid like anything that's gonna result in layoffs or affecting my staff's like home thinking about their lives yes i have i have 350 families that I take care of.

1:20:57It's not staff. It's not a dude. It's the dude and his wife or the wife and her dude or whatever and their kids and everything. So I have to be very cautious that I can't overhire. Oftentimes, we are running a lot of overtime. Again, CFO. CFOs do not like overtime. time. I do because I'd rather pay more on the paycheck than have to lay off 10 people because I made a bad bet. Have you had any situations where you had, you know, you were operating on a slightly different philosophy and you did have to make one of those really tough decisions at any point in this in the journey or have you been relatively able to predict?

1:21:43I was ready to go down with ship with COVID. I remember what was that? March of 2020 or whatever. Yeah, it was March 2020. That whole time sucked. It was like lockdown. I was driving to work. There was no cars on the street. And we got to work and we all went outside. We're like, we don't know what the hell's going on. We're not supposed to touch each other or whatever. And I said, we have enough money where we can like sweep and paint and organize and stuff for about six weeks. And I was like, I'm going to burn all that money. making sure that these guys are paid because they had mortgages and stuff.

1:22:21I was like, let's, let's keep going, you know, and until we're completely done. Um, turns out, you know, we were lucky, um, a bunch of ventilators needed to be made and then battery packs for the ventilators and everything. So we were, we actually made more parts during COVID than we ever had. Um, so it turned from like a very, very difficult time on the other side of that six week period. Yeah. You actually had a lot of business and were able to keep on going. Yeah, but I was prepared to do everything I could to make sure that payroll was met. Was that the time where you were like the most afraid?

1:22:55Yeah.

1:22:59Unknowns to me, they don't happen very often because I run many, many scenarios. That was a very unknown like black swan event. I had no idea what the possible outcome was. So it was great that we were able to benefit. but I didn't have a whole lot of options, you know, after that money ran out, after we paid a couple of payrolls, I was like, I don't know what to do, man. So yeah, having options, being creative, it allows us to handle worst case scenarios. Whenever I'm doing modeling or forecasting, but we always have three, there's a high, a medium, and a low. The low is the worst case scenario like what's our what's our bare minimum so that we can keep going and then medium is like what do we think is going to happen and then high is you know what if we beat you never plan on the high you don't start buying equipment based on the high um you buy equipment based on the low you know or somewhere between the low and the worst case sort of situation you hire based on the low if you bet on on the the the best golden you know rainbows scenario it's not going to work at every time and bad things happen if it doesn't work.

1:24:14And oh my God, I see so many like pitches. You know, they're like, hey man, I'm raising, can you look at this, this pitch deck? I was like, where did you get your math from? And they're like, oh, it's all going to be perfect. And we're going to have this much ramp. And they're like, no, you got to plan for the shit. If you can make the model work with this shitty scenario where you have a quarter of the customers that you thought and your machines break 50 times more than you expect. And your maintenance is 100 times the cost. If you can make the numbers work then, then by all means go for it.

1:24:48But so often people don't account for the real world. They don't account for an ice storm in Memphis. They don't account for - COVID. Yeah, lasers make thermite. Like we make thermite all day long. We have aluminum oxide and iron oxide that are mixing together. So lasers catch on fire. I was like, the salesman doesn't tell you that. When you're running a bunch of them 24-7, you start to learn like, oh, there's these issues that happen. So you get good. You just have to survive. If you survive long enough, eventually they write a book about you. I think on the surviving point, that's pretty key as well.

1:25:28You've talked about in like other interviews that you've done, you've talked about growing a little bit slower than maybe you would like. And I think that's probably pretty intentional. because you might be able to make a bigger, you know, take a bigger risk today. But if that's like an actual risk where the company doesn't work, if that thing goes, you know, to shit, that's maybe not a risk that you want to take. And so from like a growth perspective, would have been like the mental models for you on deciding to grow a little bit slower and more methodically so that you know that there is going to be customers there or the 25 % is okay, you know?

1:26:07have there been like that or no no i can't say like i chose to grow slowly yeah um i was constrained yeah i was constrained on money uh when you're trying to sell funds um you can only grow so fast but thank god you give me seven years ago you gave me a hundred million dollars to create send cut send no we wouldn't work we'd be 100 dead in the water i would have bought the wrong equipment i I would have hired the wrong people. I would have done everything wrong because money would not be a constraint. So I would be very risk tolerant with money because money is a constraint. You have to move a little slower.

1:26:49And I'm glad. It's much more enduring. Like this is one of those things where you're like building a very enduring business that's going to be there. It's going to continue serving customers. Yeah, but that's not how VC works. They need a return very, very quickly so that they can pay off their LPs or GP. I don't know how that works. Anyway, they got guys breathing down their neck to get a return. So growth at all costs, as fast as possible, get that valuation, get new money in, punch out, whatever. We've always thought about it as, you know, what's the right decision at the right time so that we don't burn the house down, but at the same time we're growing to meet demand.

1:27:35We throttle our marketing all the time because if we marketed at the percent of investment that every other company does, I think the demand would be too great. And then we'd piss off a bunch of people. I don't have the capacity for it. You know, this is a very capital intensive business. You talked about it yesterday, you're you're you're when you were initially talking with your wife about it you know you'd been working in in software for a very long time um and as a joke you're like yeah this is a capital intensive business not a capital life business yeah it was a it was a term that i i had been told i was like oh it's capital intensive yeah it's just cost a ton of money also i hate when people say capital it's just money do you need money or not jesus um it's it's because you have all these fixed assets these you have equipment that may have a 10-year lifespan or longer and it's expensive to get it going i mean think about starting a steel mill you know and it's like damn near impossible now it takes so much money and investors are not patient you know that's why it takes government level investment in order to get these huge things off the ground because you have to be comfortable not seeing a return either ever or maybe after 50 years or something like that.

1:28:53So I'm trying to run this company so that, yeah, there will be a return. But I'm the one looking for the return. And I'm very patient because I enjoy this. I'm having a good time. So you've been very methodical about how you're building this business. And you have a different, semi-different management style than most people do. And I think you're trying to find employees and like partners that are very aligned with that philosophy. How do you go about finding really fantastic talent? Would I want to have a beer with them? Also hire customers. I'm a huge fan of diversity. Like we were talking about earlier, you don't tour sheet metal shops.

1:29:39You tour a dog food factory or a place where they're making nail polish or something. and you try and take things from other industries and apply them to your own. So I'm not hiring sheet metal guys. I'm not hiring a lot of CNC machinists. I'm hiring people that are problem solvers, people that come from an array of different backgrounds. And it works. We're a pirate ship. I'm the captain of a pirate ship, but we we're all wildly different wildly different in backgrounds but together it's like we have all these skills if you hire a bunch of sheet metals guys they're going to try and solve sheet metal problems using sheet metal tools um but if you have you know an ex uh rocket scientist and then a biologist and a psychologist or whatever you come up with like You need solutions.

1:30:41Yeah. Stuff that's never happened. So we hire based on what you've done. Like proof of work? Yeah. I just told my daughter the other day, she was worried about her GPA. I was like, I have never looked at someone's GPA when I've hired them. But I will look at what you've done. And even our software engineers, Cody Callahan, I hired him at a job fair at the university. didn't even care what classes he was taking or whatever, because he pulled out his iPhone and he was like, check out this app that I built. And I was like, this is amazing. You know, come work for us. That was that was a decade ago.

1:31:20So you're looking for like those experimentalists that are actually getting out, getting their hands dirty with whatever they are passionate about. And people that are chasing like tangible things like projects that you can show off versus like awards and credentials. There's nothing worse than seeing on someone's resume. They have like all these three letter terms. I don't know what the hell they are. You're looking for the people with the inner scorecard. Yeah. Yeah. What are you proud that you accomplished? What stuff have you done that shows that you've tried and you failed and you tried again and you got it to work um another one of our engineers he he worked at a factory that was making the breakfast sandwiches for starbucks and his job was like monitor if the bacon was cooked accurately or not and he was like this is a bullshit job so he built a little robot that would snap a picture of the bacon and then compare it against like good bacon and so he didn't have to stand on the line next to the bacon it was like holy shit you are working for me now um when we see those opportunities we grab them.

1:32:27Also, we have passionate customers. The really cool thing about the business at this... Oh, I got my fingers stuck in there. The really cool thing about this business at this point of our lifetime is we have a little bit of brand recognition. So people are like, hey, I use you. I'm a huge fan. If you have any job openings, I've used you as a customer for X number of years. We can go back in their account and see what they've ordered, you know? And I have to imagine that's like an incredible source because it's not only are they using you, but it means that they were they were building stuff. Yeah.

1:33:03Yeah. But at the beginning, no one knows what the hell send cut send is. They don't they don't understand what we're doing. So you have to suffer. You have to convince a lot of people at the beginning. Every startup founder knows that you have to force them to drink the Kool-Aid. And you're like, come on, man. Like we're doing this awesome thing. Believe in it. So you do a lot of cheerleading, then something happens where all of a sudden you're on the other side and they're like cheerleading for you. They're, they're coming and saying, Hey, I've used you forever. Um, I think I could add this cool skill to your skillset.

1:33:37Um, what do you think? So oftentimes, like when we post a job, we have hundreds of applicants for, for a single role. Um, and we get to kind of cherry pick the best of the best, but that comes from seven years of building brand and culture and everything else. So hire your customers if you can. Hire the best in the field if you can. I said that we don't really hire machinists and we don't hire sheet metal guys because everything we do is weird. If you're a press break operator for the last 20 years and you come and get a job at Senkut Sen, it's worthless. The way that we approach it is completely different.

1:34:18And so that 20 years of skillset is not very valuable to us. We'd rather have someone that is able to adapt and come up with novel solutions that, you know, approach something in a way that's never been done. If you know too much about something, it can hold you back. It's one of the reasons like I try not to know too much about any machine or any process here. So I can still have like a little bit of, you know, first day experience. every time I walk through the shop, I'm like, whoa, I've never seen it do that before. Can we make it do that? You want to be thinking about it from fresh eyes as much as possible.

1:34:54Always fresh eyes, always fresh eyes. But yeah, with staff, it's hire people that can actually do something and they can prove it beyond a resume, hire based on portfolio, hire based on projects that they've done, whether it's software or, even if I was hiring a CFO, I want to see like, how did you get through COVID? Like, what did your models look like? How did you fundraise? How did you do all this stuff? I don't care what school you went to. I don't care what companies you worked for. I care about what challenges were presented to you and how did you solve them? And that can be applied. So has it been another thing where every time you start working, expand, you know, what you're offering, and you're setting up new machines and stuff, you're kind of bringing in fresh eyes and fresh blood that know how to operate those machines know how that sort of like world works.

1:35:49And then you're adopting those people. And they look at the other facets of your business. And they're able to look at it from a little bit of a fresh perspective, and figure out things that you may not have not have come to you on your own. Yeah, I think, I think if you, if you know, hey, that machine cannot cut that material, you're not going to try it but we don't know we try not to know we're just like let's see if it'll do it we're like oh shit you know machine got on fire you know whatever it's like okay how do we how do we try it again and make it work and we keep pushing and pushing until it works um i i encourage everyone to not know too much about their own business uh you know i i said earlier that my job now is to do gym only things.

1:36:34The side effect of that is I'm not doing everything to perfection out on the floor. So I still have those fresh eyes when I walk out on the floor, I can see things that other people aren't seeing. Because it's it's still new to me because I'm not doing the same thing every single day. So I think that there's kind of this cultural zeitgeist or the general feeling that a lot of like younger people have is the world is not necessarily set out to work for them and they can't really build a life and career in the same way that they maybe could have 50 years ago how how are you thinking about that and and like kind of inspiring young people to get after it and and do meaningful things yeah I think yeah the talk right now is like hey in the 50s you know single income to buy house you know you can buy a house you can raise family seven kids you know my my grandfather yeah i think there was no there's five kids um single income forever they had a house with a pool and you know they had two cars and everything and that was fine on his income uh he actually worked at lockheed uh on the sr71 program um so that was totally possible back then now people think it's only possible if you're a software engineer you know something making four hundred thousand dollars a year a total comp you know 500k whatever um in machining in sheet metal in the trades in uh manufacturing that used to be the case that you could make good money and then it kind of went away because it was a race to the bottom people were competing you know with offshore or whatever and i don't think it has to be that way um we pay our people well because well at first we started with because we're weird we have to train people how to do things our way if we invest all this training in them i want them to stay um if they stay they're extremely valuable like if you are churning people out constantly it's incredibly expensive you know you put all this time in onboarding and training and then they leave to go somewhere else you have to start all over again there's massive opportunity costs So we're like, hey, let's let's pay well.

1:38:49Also, I think it's right. Like if you build all your models to allow for a, you know, well compensated employee, it makes a better product. It makes better customers, et cetera. So they're not going to be looking out, you know, over their shoulder trying to figure out what is the next leap where I can actually build this future that I am excited about. Let's provide growth from within. Let's take good care of these people so that they care about the products. They care about the equipment. dude if you've grabbed someone off the street for like 13 bucks an hour and you're like hey run this million dollar machine if that thing starts smoking or making a terrible noise they're not gonna care they're like i don't know my job is to hit the green button you know you pay the guy 40 bucks an hour he's pretty happy for that job he knows that that machine takes care of him and his exactly uh so you have better equipment up time and it just it pays for itself over and over again That generosity isn't for naught.

1:39:44You work it back. But I hear, oh, nobody wants to work anymore. These kids, they don't want to work anymore. No, they don't want to work for you. They don't want to work for this 70-year-old asshole that started out making$2.25 an hour, and he thinks that$20 an hour is like, you should be jumping up and down for that, especially in a dark, dirty, you know, gross place. Um, and you know, there's no AC or whatever. No, no. If you say nobody wants to work anymore, they don't want to work for you. And you've created an environment that's just not exciting and, and, and not, well, the thing is too, is, you know, you're spending a lot of time and money and thoughtfulness on trying to create an environment where someone you can go hire that guy for$40 an hour and they're excited.

1:40:38You know, they're looking forward and trying to figure out like problems and solutions. You said 350 employees. If you do the right job, you have 350 people that are all independently looking out for ways to improve the business and improve how the thing works and make customers happier. Yeah, they actually care. When you're making minimum wage or you're getting taken advantage of the main thing that you're doing on all your breaks and on your lunch is looking for a new place. And if your buddy leaves and finds a better place, you're going to go with him. One of the things I'm most proud of is when we get, we'll get one new guy and then he's like, ooh, this place is awesome.

1:41:17And he'll grab like two of his buddies from his old job. Two of his best, like the people that he knows are the best. So we have little pockets of this. We have families. We have like most of the Andreessens work here. lighteners we have like six lighteners or something that work here um so we have husbands and wives and sons and daughters and whatever and that's really cool but then we also have these guys that oh hey we all used to work at x and then you know they they work here now so um i i hear talk that in order to be competitive in manufacturing we have to automate um we have to have dark factories, you know, manufacturing can't afford to pay people, you know, living wages.

1:42:03I'm proving the opposite. We're profitable. We pay our staff well. If you if you pay them well, they care about the product. It actually saves you money. And we see it time and time again. Yeah, that's the difference between, again, being frugal and cheap. Yeah. Yeah. Yeah. A million percent. Final question. What's the hardest thing you've overcome? Hardest thing that I've overcome? the the hardest thing that i've overcome that's that's a tough question because um it's just like a series of challenges constantly every single day um i've been really lucky you know i've i've been with my wife for over 20 years you know my kids are great uh i've been punched in the face a lot in business we've had highs and lows but that's just part of it.

1:42:49Um, I overcome little challenges every minute sitting here with you is a challenge. I'm like, Oh my God, do I look okay? Am I sitting up straight? Am I sweating through my shirt? Um, and then I'll go on to the next one. The next one, I don't remember a whole lot because I'm, I'm moving on to the next thing. Uh, it's like women in childbirth, you know, you're forgetting as much as you can as they're pushing that kid out. They're like, I'm never doing this again. And then a week later, they're like, Oh, I'd love another one. You know, so they forget I have that same problem. Um, I don't know. I, I, I love challenges.

1:43:27I love a challenge when you're working within constraints. If you put me in a grocery store and said, make me something for dinner, I, you wouldn't know where to start. No, dude. I'm like, oh fish with chicken on top of steak and rice and noodles um but if you give me a constraint you know you're like hey dude here's uh you know a can of chili and some graham crackers i'll be like all right dude we're gonna whip something up it's gonna be great so i don't know i people have overcome way bigger challenges than i'll ever face um you know they've gone through cancer, they've gone through the loss of a child or a loved one or whatever.

1:44:13I haven't had those things happen. So anything that happens in business is just a challenge. You get punched in the face, you bounce back up. And I'm having a good enough time to where I keep getting in the ring every day to get punched in the face. So it makes you strong. I'm super happy to do it.