The Manufacturing Phenomenon That Is SendCutSend - EP 79 Jim Belosic

I sit before you with this American flag made out of metal. If you're watching on YouTube or Spotify, and I also have a shot glass made out of metal. We got both these things when we went to Nevada to visit a company called SendCutSend and to interview its founder and CEO, Jim Belosik, who you will hear from today. I feel like SendCutSend is under the radar, but they are a legit American manufacturing story, the American manufacturing story right now. Jim started this company a few years ago with his own money, didn't take venture capital. He just wanted to make metal parts for himself first and foremost. He got some, some metal cutting machines and then it turned out a lot of people wanted these parts. And now if you go to any hardware startup in California or Texas, wherever, there's a really good chance they're getting their parts from Senketsen. Same thing for the biggest aerospace, automotive manufacturing companies in the United States. Senketsen is kind of the closest thing we have to China at the moment, where you design a part using computer-aided design software, you want to get it machined. Instead of sending that off to China, waiting for it to come back, Senketsen turns these parts around really quickly. They have become a major, major thing. Jim's story is fascinating. The company is fascinating. You should listen to this interview. I should also note that we are 100% bought and paid for, at least look like we are, with this episode. SendCutSend has come on as a sponsor. Go to SendCutSend.com/corememory if you want 15% off a metal part. We did this interview months before they came on as a sponsor. I'd never even met Jim before. You can feel safe that this interview was done objectively, we sort of hit it off afterwards, hanging out. And then we did this weird thing with the Sam Altman, Greg Brockman podcast we did where I put it under the paywall for— and angered a bunch of people. And Jim ended up unlocking the podcast for everyone by paying $100,000. And he came on as a sponsor of Core Memories podcast. So there you go. You're going to enjoy this episode. It's a fascinating story. I'm Ashlee Vance. This is Core Memory. Here we go. Jim Belosik, how are you? Great. Yeah. Thank you for, for having us here. So just to give people some context, we're in Reno. We're at the headquarters of Senketsu, and we'll explain while we're in this particular building in a minute. We are by an airport, right?

You'll hear the planes. Yes.

You might hear some planes.

This is the quietest spot that we have.

Yeah, yeah, yeah. No, and there's a good reason for that because you guys are so busy. Well, look, I've spent the last many years running around the country visiting manufacturing operations, startups that are trying to get this stuff going, but then also the actual space companies, defense companies, industrial companies that make stuff, use big machines. And over the last few months on this long journey that I've been on, I just kept hearing about your company, Senketsen, over and over and over again. Every time I'd be at like a robot startup, rocket company, wherever, and I'd ask where they got their parts or they would just volunteer that this company has like changed the way we do stuff. So you're like a phenomenon. And I wanted to come here and figure this all out. We had a chance to hang out yesterday. You actually grew up nearby.

Yeah.

Yeah. And so you're local and yeah. So I want to tell us, tell people the story of Senkotsen and how this came to be. How would you, if you have to describe the company to somebody who's not really in the manufacturing business, how would you describe what you guys do?

Well, it's kind of in the name, so people send us their ideas or their, their design. We cut it or machine it or whatever and then send it right back to their door. So really, really quick turn manufacturing, on-demand manufacturing is another way to put it. We started with, you know, just ultra high mix, low volume stuff, stuff that you couldn't get anywhere else, you know, quantity of one of something that didn't exist. It only existed in your mind and then couple days later you can hold it in your hands. That's really the basis.

And there's a, there's like a few things going on there. I mean, one is the speed at which you guys do things. Somebody can send you an order that by noon today, and, and it'll be at their shop noon by noon, noon by noon tomorrow.

That's the new thing.

Yeah, there's the, the kind of freedom aspect that you're talking about where you can do a one-off or you can have a thousand. Or something.

Yeah, or 100,000 or whatever. We started with high mix, low volume, and then it became high mix, high volume, or low volume, high mix, whatever. Like all the different quadrants we're doing now as we've scaled. But yeah, the real intention was just for guys like me. I just needed one of something. If I'm working on a car, trying to build a robot or something, it's just, it's hard to get a small quantity of something made.

Yeah. And I think that's actually a good place to start. You know, so yeah, like I said, we hung out yesterday. You, I got to meet your mom, your dad. I could tell as a kid you were always building things. We talked about radio-controlled cars. You were doing a lot of design work of your own. It seemed like you were, when you had like your, was it your 8th birthday? You guys all came over and you used a saw in the house.

A bunch of 8-year-olds running bandsaws, man, that's the best birthday party you can have.

And so you're always working on these projects. You end up running a software company, but you're doing— you're working on cars on the side and you need parts for your projects. And for people who don't do this kind of stuff, it is hard. So like if you want— if you want one custom part for your car, it is hard to get the attention of somebody who's good at building that because it's not worth their time to configure a machine to build one part.

Yeah, the way it's always been done is like you had to know a guy, you know, it's like, oh, my buddy works at the shop, I'm gonna go bring him a six-pack of beer and he's gonna do it after hours. Like, in especially in the automotive world, the automotive hobby world, like that's how it was done for years. And then what would happen is that buddy would like move or get fired for running all your parts overnight. Um, so there's this like black market for getting one-offs done, and I was like, well, what if we made it like a real market?

Okay. And then there's the other end of that, which is the industrial end, which is where you are printing thousands of parts, hundreds of thousands of parts. And this all happens on these large machines. They cut with water, they cut with lasers, they run on software that can be quite difficult to configure. You need the part to have these— comes out of this computer-aided design software. It's got to be kind of designed right for the machine to understand the file. And so there's an art to that part as well. So, but when you start start out, you're more on this, on closer to the consumer end, and you're kind of trying to fulfill your own, your own need.

Yeah, in that moment, um, I only know what I know. And, you know, at the time I was like, I know, uh, what it's like to be in your garage and need something, or, you know, very, very small business, you know, 10-people type business that needs some prototypes or whatever. And they were very underserved. If you were a large OEM or a big brand, you have tons of manufacturers that are begging you for work. And then if you're on the low end, like, people just don't care. They won't give you the time of the day. Yeah, because they're getting those big contract jobs, and once they get the contract job set up, they want it to run for months because then that's where they make their margin back. So it was, it was a big challenge for all these guys to figure out how to make margin on, you know, making 1Z, 2Z stuff. That's, that's where we started.

And that was, it was like 2018?

2018.

2018. And, and these machines to get going, it's expensive. Yeah.

And so to do it right.

Yeah. So you face this moment of like, I think there's a need for other people like me, but I'm going to have to put up some money to find out.

Yeah.

And was it like $750 grand?

Yeah. I already had a little bit of space because that was like our hobby shop. You know, we had 5,000 square feet where you could store cars and, you know, had like a little workshop or whatever. So I was like, okay, I got the space. But I need the equipment. And you can get into it for a hell of a lot less, like you can get Chinese-made machines or something. Um, but I knew in order to make this work correctly, it needed to work 24 hours a day. You have to have that machine running constantly in order for it to make any money. And that's, that's the mistake a lot of people make. They, they buy a machine and only run it for one shift or one day a week or whatever. So I was like, all right, we gotta we're gonna do it, we're gonna go both feet. Um, so yeah, we bought the— it was like $700,000, $750,000 all up for this really nice Amada fiber laser.

Okay, so it cuts with laser?

Cuts with laser.

Okay.

What they don't tell you is, like, when you go see it in the showroom, it's this big beautiful machine. They don't tell you about all the accessories. So it needs dust collectors, and it needs liquid nitrogen, and it needs oxygen, and it needs chip conveyors, and it needs— and then you have all the scrap and dust and everything. So Anyway, we— I was like, this is going to work. I told my wife, I was like, hey, I'm pretty sure that if we get this thing, I can keep it busy enough to make the payment. And if I make the payment and can pay for a dude to run it, then we're good to go. You know, I can still keep running the software company, but then I have access to this cool equipment. And then a few other people have access to it, like hobbyists and makers. That's as big as I thought the market was.

And you're putting sheets of metal into that.

Yep.

And it's using a laser to cut out these—

like a cookie cutter, right? So you have this, this sheet And your goal is to put as many, as many cookies on there as possible with as little waste. So our challenge every single day is to play the best Tetris game possible.

Like how you arrange those parts on the sheet.

Yeah. And if you're lucky, like you get some parts that are like a donut and in that donut hole you can put another part and inside that part you can put another one. And if you can minimize your scrap, then you can make more money.

And in this moment, right as you're telling your wife, like, I can keep the software company going, but I'm going to kind of get into this as well. Yeah. I mean, hanging out with you yesterday, I was struck that you had been in the hardware and working on things and you'd been an entrepreneur. You had a lemonade stand, you had all these other little businesses along the way. I think you ditched college pretty quick after a little— 6 weeks. For 6 weeks. And so I would have expected you to do some like hardware business coming out of all that. But you're doing like a B2B SaaS company, basically.

Yeah. I've always been like an artist and designer. Early on, I realized that I was never going to make a living selling fine art, you know, ceramics or oil paintings or whatever. But I learned about this thing, you know, graphic design. And I was like, oh, that's, that's art you can actually charge people for designing business cards or brochures or whatever. So when I was 16, 17, That's kind of where I started, is designing business cards. I had a job at a sign shop. I learned how to hand paint lettering and, you know, like on the side of a truck door, Paul's Plumbing or whatever, figured out how to do that. So I got to be kind of creative, but then make a little money. Then graphic design. Once I moved to Reno and dropped out of college, I was like, okay, I'll make a little business out of it. So this was '99, 2000-ish. Not a lot of people had websites yet, but their websites were starting to come online. Yeah. So I'd go to Barnes Noble and read books on how to build a website like HTML2 or whatever the language was. I could never afford the book, so I'd like read them, take notes, and then go home and, you know, type So I started building websites and then after the websites got more and more complex, then my customers started saying like, well, what about software? You know, you built our hotel website, but can you build our reservation system? And I always said yes because I needed money, right? So I'm like, yeah, sure, of course I can. And then I'd have to go like back to Barnes Noble and figure out how to do it. Then I hired some really bright people who were a hell of a lot better at software than me. And then as we start to go towards like 2011, that's when people said, hey, you did my website, you did my software, but what's this thing called Facebook? You know, how can I use it as a business? I'm like, oh, well, of course we can figure that out. So we built this like business integration Facebook thing that would do contests and sweepstakes and it would collect data and it was forms and all this stuff. It just, it came from saying yes and trying to put a roof over my head, trying to pay payroll. It was not my first love. It was fun. It was a challenge. But that company totally took off. And then, yeah, with a successful company and a great team, I started having a little more time to wrench on cars and stuff. And I was like, oh, I actually love this versus B2B SaaS Facebook bullshit.

Yeah, yeah, yeah. Well, and then so how does the transition go from I've got a side business. We're going to see what happens with this machine. We just paid a ton of money for it to— that is the business that I'm doing now.

It was a really scary transition because we weren't making any money. You know, all my personal money was going in to fund staff and inventory and everything else while we're trying to spin up the hardware business. But You know, like, you know your love when you're just doing it all the time. Like, I didn't wake up and I wasn't like, I'm going to go do this Facebook marketing. I was like, dude, I'm going to go figure out how to make this machine run better. That was really fun. So whether, whether I was going to make any money or not, I was like, that's, that's where I want to be. Also at, you know, 2016, '17, early 2018, we started seeing how social media was changing. Instagram was becoming more popular. Things were kind of shifting. And I was like, I don't know where the software business is going, but I sure as hell know how much love I'm getting from having this hardware business. Yeah. So my co-founder at the software company, I was like, hey man, I want out. You want to— you want to buy me out? And he said yes. And then that was it.

That was it. And who were the first customers? Like, you're just going to people you know from the car world or people you know in Reno, or you just set up a website? How do they even find out that you have this machine?

All of the above. Friends of friends, like especially before we even really had a website, I was like, I have this machine and holy shit, it's sitting there costing me, you know, all the money. If anyone needs anything cut, you know, I'll do it. So we had a customer, a few customers just from word of mouth, and then Once we put up the website, you know, having a background in software and marketing and stuff helped because we're like, oh, we know what SEO is. There's a lot of manufacturers that have no idea, you know, how to market themselves online. So we had an advantage there. And I remember, so our anniversary is November 1st, and I remember that because that was our first order. And it was this guy who was into pickleball and he did these pickleball keychains.

Okay.

So that was our first upload, paid order that we actually manufactured. So super random, you know, but how else are you going to get custom pickleball keychains made? I have no idea. So we did that. And then, yeah, in the automotive world, that was our love. And so we'd talk to clubs, we'd go to shows, you know, and we'd show off, you know, like a car like a Tesla or the DeLorean or whatever and be like, hey, if you need custom parts, we can make it. So it started out kind of regionally in Nevada was for sure our biggest state for, for a long time until we had that momentum and people started finding us organically.

All right, what do we do at Core Memory? We cover innovative, fast-moving, forward-thinking companies, which is why Core Memory is sponsored by Brex, because Brex is the intelligent finance platform for many of these companies, 30,000 companies from startups to the world's largest corporations. Rely on Brex's technology for their finances. They've got smart corporate cards, high-yield business banking, and expense automation tools that are fantastic. I hate doing my expenses, and Brex's AIs and software run right through those expenses, figure out where we're spending money, and take care of so much stuff for you so you don't have to waste your time on it yourself. Go to brex.com/corememory to learn more and just, you know, get with the program. Let's get going. Let's get out of this archaic finance software and move toward the future. Core memory and Brex. You mentioned Teslonda. Maybe we should explain that for people who don't know. I just think it's a good example of the type of work you were doing on a car. Yeah, tell us, what is a Teslonda?

It's half Tesla, half Honda. So my first car was a 1981 Honda Accord. I've always had nostalgia for those and I had one. I wrecked the first one, but I bought another one when I saw it and it was kind of sitting in my driveway. And at the time, like the Model S had come out and it was starting to set really good performance numbers because at first people were like, oh, electric cars are worthless. The S came out and people were like, oh crap, this is incredible. And I immediately saw like, oh, this is the future of hot rodding. You know, if I could get myself a wrecked one of these, I can take the, the motor out and put it in something. So I came up with this harebrained scheme to find a wrecked Model S, take the guts out of it, and then put it into this, this Honda so that it would be a hot rod. You know, I wanted to figure out, instead of taking an LS engine and putting it into an old car, can you take an electric and put it in an old car? So Yeah, Tesla does this crazy Frankenstein-looking thing. It looks like it's set up like a '50s gasser because I had massive packaging issues. It was never designed to be rear-wheel drive. It was never designed to have batteries. But that project has zero off-the-shelf components. And so that was a forcing function of having SendCutSend exist.

Yeah, I mean, I got to see it yesterday. Like you said, I mean, you've got the Tesla motor, but you're not using the Tesla battery pack as the— in the Model S, it's the base of the car. So you've taken like a GM battery pack that's kind of this rectangular T-shaped—

Yeah, Chevy Volt pack.

Chevy Volt pack. And then, and then, yeah, you have to fashion your own. There is no off-the-shelf way to encase that thing and get it in the car. So that's what you're using your technology for is to then cut out these parts that you need to make this creation. So you're like living the same thing as your early customers? I'm—

I was customer number one. Yeah. You know, I'm still a customer. I think that's actually really important. So myself, our CTO Jacob Graham, 50 of our staff are ordering, you know, maybe not every day, but at least once a week. And we're continually, you know, eating our own dog food and learning and making it better. But yeah, doing that since day one, like that's anytime I had a need, then we'd add it to the company.

And then, you know, we're in this building. This one is empty at the moment. It will soon be filled with anodizing equipment. There's two buildings right next to us that are like— people will see when our video comes out— just filled with machines. You know, how do you go from— and then you have— you've got sites in Kentucky. Where's the other one?

Texas.

Texas. And then you guys are looking to expand as well. So how do you go— what's the transition as it goes from one machine to 2, 3, 4, and then dozens and dozens?

We've never been able to afford just to do everything all at once. It's always piecemeal, you know, it's just based on how much cash we have, if we can get a loan from the bank. And so, yeah, you start with one. As soon as you can afford a second, you get the second. We're— we have a lot of demand. But we're always capacity constrained. So that's why we have this hodgepodge of buildings down the street. You know, I don't know how many we need before they rename the street after us, but a few more maybe. But when you have this crazy growth, you're just, you're just, you're dealing with it. You're on a treadmill. Like, we don't really think about it. We can't plan super far out. You know, if I had tons of money just to light on fire, then we're like, okay, we're going to get acreage, we're going to build this beautiful facility, we're going to fill it full of machines. That takes a lot of time, a lot of money, and then it, no matter how well you plan, it's going to be wrong. So we just kind of, you know, jump off the cliff and build our wings on the way down.

But it was just, and it was just more and more word of mouth, like, yeah, from those early days.

Oh yeah, yeah. As far as like the growth goes, it's just let the product shine. You know, I, back to Tesla again, I was always really impressed with their, their lack of advertising. They didn't have an advertising budget back then. Maybe now they have a commercial.

I don't know if they do yet.

I don't know.

But you're right. Yeah, that was—

it was always just a kick-ass car.

Yeah.

And people were talking about it. So I was like, okay, if I can give my customers this thing that they've never had access to and now they have access and it's good quality, it's a reasonable price and it's super fast. They'll tell their buddies. That's how we actually got into all the big Fortune 500s or whatever. We don't have outside sales.

So somebody was working on their home project and then they went back to their job where they do that during the day and they're like, oh, we could just ask these guys to do this for us.

Yeah, they're in a board meeting and they're like, oh, we need these custom parts made. You know, what vendor should we use? The guy's like, oh, I used it on the weekend. For my RC car parts, we should try SendCutSend.

Okay.

So I was told it was called bottoms-up strategy. GTM, our go-to-market is bottoms-up. I don't know, whatever. Our sales strategy doesn't exist. It's just have a really good product.

So what did you guys like figure out that nobody else had done? I remember covering around 2008, 2009, there was this, the interest in 3D printing skyrocketed. There was early, all these, these people who don't come from the manufacturing world, these, these CNC machines, these kind of computer guided cutting fabrication machines, that there was this moment in time where it was like, oh, this stuff is getting so easy to use in some sense that we're heading towards this era of mass customization. Anyone who wants anything will be able to hop on a computer, do their design, print it, and, and outside of that story, just companies all the time, like every rocket, every aerospace company, defense company I go to has these machines in their back. They know how to use them. There's people doing this stuff. So it's not like this was all kind of sitting out there in some ways. And then like, what did you guys figure out that made it so much easier for people to do this?

The self-service layer. You know, I think, yeah, these, these machines are not brand new technology.

At least you guys are around making the machine.

Yeah.

You're buying the machine just like anyone could.

And, and even, you know, quoting software and, you know, instant quoting or whatever. Yes, we exposed that to a lot of people, but it wasn't brand new. It was just— I think it was our dumb approach of just being like, hey, let's just have this for the everyman. No one had really done that approach. Everyone was like, how do we get into the DoW? How do we get into a prime? How do we serve the government? Or how do I chase the biggest contract that I possibly can? How do I get GM to place an order for a million units? And I was like, how do I get a dude in his garage to place an order for one? Okay, I was like, I'll just have a super easy website, the best UI/UX possible. Um, you know, it's, it's, it's just really easy. But it turns out if you make it really easy a guy in his garage can use it and also, you know, a Fortune 500 can use it.

So, and so like, and if I went to your website today and I want to make, I don't know, I want to make something for our company, like a new, a new chunk of metal to hold all our batteries when we're traveling around or something like that. So I need to have a basic idea of what I want that to look like, and I hop on— I mean, there's a million different design software applications you can use. So I, I would kind of sketch that out, and then I would just send that file to you guys, and then I assume you either have software or a human that takes a first peek at that to, to give it a once-over to decide if it's going to work in the machine, or what, what is the process?

Yeah, um, what you're talking about is like our, our previous 7 years is use your preferred, you know, CAD package, Fusion or NX or SolidWorks or whatever, Adobe Illustrator, which is not CAD, but people use it. You have your product that you like, you upload it to our site instantly. We'll tell you if we can make it or not. And because we run all of those checks programmatically.

And you have to like build all the software to do that part?

Yes. Okay. Yeah, so we actually, we probably built more software than we should have. We should have cut a check for some stuff. Yeah, but that's not the way we worked. We're like, oh, we're going to make this exactly for our needs. So there's, there's not too much, there's not too little, and we control every single aspect of it, you know, from a piece of raw material coming in the door to tracking that label all the way until delivery. That's all our ecosystem. But anyway, you— we show you, okay, you know, hey, this is actually going to collide a little bit, you know, or you're going to have this issue, or hey, we can't cut that hole, it's too small. We give you that feedback and then we give you an instant price. We're like, hey, what metal do you want to cut out of or what material?

Cool.

Here's your price and here's your lead time. Do you want it or not? If you say yes, then it flies into production, gets scheduled with everything else. But I was saying that's— that was the previous 7 years. What we're doing now, because our, our TAM, our total addressable market, is people who know CAD. And what we're trying to do is open it up to everyone. So we have a product called Parts Builder, which is like some basic templates. So you're like, oh, I need a sprocket or I need just a bracket with a bend in it. Like we have those templates and then you can modify them. And now we're starting to leverage AI. So that you can just, just tell me what you want. And you're like, oh, I need this bracket. You know, it's got to have 4 holes in it, but the 4 holes are 2.25 inches apart and whatever. And we crunch all that and then, you know, spit out a model. So that's us trying to, you know, make it even more accessible to even if you don't know CAD. Yeah.

Okay. And then like the part where you guys are, everyone always is like, oh, it's crazy. I order the thing and it comes the next day. Like, is that stuff that you guys do as well on the delivery side or that's just, you're just tapping into FedEx FedEx or UPS or whatever?

No. Yeah, well, that's the trick. It's, it's all— so you have to use FedEx and UPS and GSO and, you know, a bunch of different freight companies. So not a whole lot of magic once it's in the truck. We're like, please, please, please haul ass. But everything before the truck is the magic. And especially having multiple sites, we're like, okay, this guy's in Florida, therefore I want that to come out of our, you know, Texas facility because I know that there's a truck that runs, you know, in 8 hours we can get it on that truck. Or maybe Texas is having an ice storm and so we want it to come out of our Kentucky facility or whatever. So we do a lot of load balancing and messing with timelines and schedules in order to, to hit those internal deadlines and then also balancing carriers like we know, you know, hey, if the UPS truck has already come instantly, we switch over so that everything goes FedEx or, you know, stuff like that.

Yeah. All right, pod friends, I am here to tell you about SendCutSend. They are a manufacturing phenomenon. Whether you're working on your own car or you're a giant automotive company, a rocket maker, if you need metal cut, machined, or bent, you're going to SendCutSend. They'll do it for you right, and they will do it for you fast. Go to sendcutsend.com/corememory for a 15% discount. On whatever you try to make. We love SendCutSend. Go visit them today. Can we give people a sense of— I mean, I don't know if some of this is proprietary. Like, we walked around and there's brands everybody listening to this would recognize, I promise you. Like, is there anything we can do to give people a sense of the size of the business, how many parts you guys are doing, what kinds of companies you're working with?

Yeah. We have over 300,000 customers. We've made over 30 million parts. But I think we're at this weird ramp now where in another year we'll have made 45 million, you know, so it's starting to haul ass. We have about 450 staff. Yeah. And our customers are everyone, you know, it's, um, rocket launch companies, it's primes, it's, uh, my mom, you know.

I saw computer makers people would recognize, even like clothing companies people would recognize. I don't know what they were.

There's actually some, so I'll mention a couple. Some of them we have NDAs and whatever, and some, I don't know, some big companies just get funny because they don't want you they don't want you to like show off that you're powering their company. Either they're trying to protect their supply chain or they don't want their brand associated with it. So we are sensitive about who we talk about. Um, one of the ones that's really interesting though is DoorDash. Like that popped up, you know, I get a report of, of who's ordering and I was like, what are they doing?

Yeah.

You know, but there's automation, you know, behind the scenes that they're trying to do. So it's they need little parts, they need little fixtures. Yeah, some of the clothing companies are weird. Zipline is a big customer, you know, that's because we're making all kinds of parts for their landing and takeoff rigs.

They make delivery drones.

Yeah, yeah, yeah. I don't know, bicycle companies, Trek Bicycles uses us, prototypes. And then, you know, we may not be in a General Motors vehicle, but we're on their assembly line. Amazon Mechatronics uses us, but we're not like in Amazon boxes. We're not on the Amazon delivery trucks, but our parts might be in a warehouse or on the distribution line.

And so for most of these companies, are they— the alternative would either be they make the stuff themselves and they have to pay for this machine and learn all these skills, or is this stuff companies would have maybe ordered from China and then waited for the parts to come, or they would have ordered it from like an American mom-and-pop shop, or I guess it's some combination of the two.

Yeah, it's, it's all— um, I'm most proud when a company orders from us and we know that they have our same equipment. There's, there's a couple companies that have our identical, you know, Amada fiber lasers, and we know they're running, and they're like— I'm like, why are you guys ordering from us? Do you have a machine down? And they're like, no, our machine is so damn busy making these really, really long runs, we need you guys for prototypes or whatever. So it's, it's cool that they're using us even though they have the equipment in their shop. So there's, there's that side. And then there's, yeah, if they can get it from China or whatever, they're, they're probably going to get it from China. If they need it incredibly fast, they're going to get it from us. And then a lot of the big guys have long-term relationships with these mom-and-pops that are like hyperlocal, uh, you know, outside of the Walmart R&D factory, there's, you know, a bunch of little shops that just serve that. And sometimes those guys get backlogged. It's really common with small shops to hit capacity and just stay there, and they're not expanding like us. Every time we hit capacity, we grow, and that just hasn't been the mentality for a lot of those people for decades.

Yeah, I mean, I think some people hear about like SpaceX, and it is true, I mean, they're vertical, they make a ton of stuff themselves. They're vertically integrated. But what gets lost in the story sometimes is they also are outsourcing a ton of parts to, to what really are these, these companies that have been around for decades in Colorado, in California, in Texas, wherever. And they just happen to specialize in like turbo pumps or valves or whatever. And they're very good at it. And but then it's a problem because they run into this over and over again. A lot of those companies, the kids, either didn't want to work there or they're off doing, you know, a software, like tech jobs, something new. And those companies are fading out. And so you guys serve as something of a replacement for that. Yeah. And then China, obviously you get the advantage of price and then often even though it's coming from very far away to some degree speed, it depends on what you're doing.

Oh yeah, it's still crazy fast. Yeah. Put it on an airplane and And it's, you know, DHL is pretty damn fast. Yeah. So yeah, we're competing. It's not this crazy moat anymore. You know, if you order massive amounts and it goes on a ship, then yeah, we, we definitely kick their ass there. But at the prototype level, yeah, maybe, maybe we only have like a 2-day head start, something like that.

So, and you, well, we're hanging out. You didn't strike me as crazy or political. Not crazy political, not crazy.

Oh, thanks.

Either way. Yeah. But you know, we are in this moment of, there's this sort of like patriotic thing going on. We're trying to reindustrialize the country. It's funny to me because I run around all these startups and they have the rah-rah thing going on. But then when I was actually on the ground doing my reporting, as far as I could tell, you, whatever this thing is that the United States is chasing, at least what I'm finding is I actually go in these places. You guys are the closest thing to, to kind of competing with China for these types of parts and replacing these skills that we're losing and making stuff in the country again. I don't say this just to like pat you on the back or puff you up, right? This is like what I'm finding. And I mean, it doesn't sound like that was the central mission when you started out. You were just trying to like make yourself and people like you happy, but you've kind of ended up in this. Spot.

Yes, uh, I keep hearing that and it's the burden growing.

Uh, you guys need to— you just— you usually— I walk in and it's like a competition to see who has the biggest American flag in there.

Oh yeah, we don't have our American flag in here yet.

Oh shoot.

Yeah, um, American flag's in the other buildings already. This one's still new. So no, I mean, I'm— I love, I love the US. I'm very proud of everything that we do. But I make parts. Like, my job is to produce parts for my customers. And if those customers are dudes in their garage or government customers or whatever, I don't care. We treat them all the same. That's the magic of us is I will give you the same exact service that I'll give to some defense prime or, you know, some big OEM or, you know, a guy who has $1 billion or a guy who has, $42 to spend with me. We treat them all identical and a lot of our customers like that. But that's, that's just been our focus. Like I said, I started this for guys like me and it kind of snowballed and people are starting to say like, hey, Jim, like you guys are actually doing it here. You're helping. You guys are the, the ones that are probably best suited to compete with China right now. You know, what do you think about that? I'm like, oh God, you know, do I have to like change my mindset? Because I thought that I was a soldier in the war and now it's like, oh, am I a general?

Yeah.

So I'm like, oh shit. So what I'm trying to do now is kind of set the example. I'm like, I can't do this by myself. Like, come on everyone, if I can do it, you know, a lot of you guys can do it.

I mean, it's a crazy fucking story in a lot of ways. You know, most— a lot of these companies I'm covering have raised either hundreds of millions of dollars billions of dollars, they are stating with this like express purpose, we're never going to catch China at what they're doing in terms of labor. And so the only way we move forward is to do some kind of step function change where we're moving to like this incredibly automated factory. We have really fancy software that is doing what these technicians of old used to do. And that's the only way is like we're never going to beat them apples to apples. So we got to advance all this stuff. And then in the meantime, again, I mean, just for people listening, this is not meant to be like a Senketsen commercial. I just promise you this is what's actually happening. In the meantime, this dude in Reno is like building this business pretty quietly for a while and ends up sort of like doing the very thing these other people are saying they're trying to do. I don't know if it's funny. It's just, it's a different story, you know, than like kind of some startup just forming overnight to be like, I'm going to reindustrialize the country and this is what we're going to do.

It's, it's because like I think Reno was a massive gift to me because the mentality here isn't, you know, hey, if you want to start a business, go raise a shit ton of venture capital. Yeah. Have a, have a thesis. And, you know, go, go get a bunch of money from someone and then go see if it works.

Yeah.

The attitude here, like, we're a bunch of cowboys in the desert, you know, they're like, hey, go work with your hands a little bit, figure out if it works. If it works, take the money that you make and then grow. You know, it's very old-fashioned way of doing business. And that's the only way that I've known. Like I said, I'm not— I don't have an MBA. I don't hang out in finance. Like, I can barely read a P&L. I'm trying to learn. It's just, hey, if we make money, put the money back into the company. So that's, that's how we've been growing quietly. And then I see these guys that get a lot of money.

Yeah.

On a, on some sort of proof of concept or maybe just an idea or a white paper. And I'm like, oh my God, you guys are going to blow that up. Like, what if, what if you're wrong? You just ordered 100 machines. What if they're not the right machines for you? You know? So our attitude has always been like very experimental. And when, when you look at our equipment, you'll see a smattering of different brands and vendors because we're always, you know, iterating and being like, hey, that was good back then, but there's this new one. So it's really hard to like just pick a point in time, drop $100 million and then buy all these machines.

So you guys don't— and you know, we talked about the software a bit and it's obviously an important part, but you guys don't stress it as much as some of the other companies I go to where it is It is very much this idea of, of a lot of what we've done for decades with the people working with this type of equipment is a craft. It's like something you have to learn all the ins and outs of the machine. We talked before about the software looking at the part and deciding if it can cut this hole or not. I mean, that's stuff that people— there's nuance to this. It is a craft. You learn this over time. And so the When I talk to other companies, the objective seems to be, okay, we need to teach software how to do a ton of that. And then obviously everyone's piggybacking on this AI era and it's like, not only will we do what the craftspeople do, but we'll apply software and then make parts that are even more efficient. They'll have cooling channels that a human never would've sort of thought to put in. And so we'll make an even more perfect part than a craftsman could do. But it's like this, I guess on some intellectual level, this makes sense to me that you would want software to do this and you're trying to automate everything. You guys just stress that so much less. I mean, is, yeah. So is that when people are telling that story, is that bullshit to you or we're not there or it's not as important as it's made out to be?

I think it's more easily investible. If you say, hey, we're software first and we have the software, you know, moat and software IP advantage, uh, for the last, you know, 4 to 7 years, like investors, if they are looking at manufacturing, that's the only way to get them in.

You don't really want to invest in a hardware company. You really want to invest in a software company.

We were, we were literally told a couple of years ago that we were uninvestable. Yeah. Because we're so CapEx heavy. And they're like, why am I going to invest in that company that needs, you know, millions of dollars of machines when I can invest in this other company that just has like a couple software guys? I was like, I don't know how to argue that. So I think when people are pushing their software as this groundbreaking, revolutionary, whatever, it's because they're probably trying to attract VC. And I'm not poo-pooing it. Like, the software advances are great. But for us, the, the software is the easy part. The software, um, we don't design it to, to go show off and, and get VC money. We design it for an internal need, and we're like, oh, we keep having these defects, let's write some software to detect it. You know, hey, we're having issues with getting a high-speed count, let's develop software to help us do that. The hard part of this is Everything outside of the software after the order comes in, getting it made, made efficiently, high quality, having it go through 50 sets of hands and not get effed up, and then putting it in a package correctly and then hoping that it survives UPS. That's the hard part. And that's, that's 90% of my focus. This software is like, I don't know, it's not that big of a challenge anymore.

So like if I— I mean, because if we walk through, which we will do, but when we, you know, we already took a peek at the factory. I mean, it's like I said before, I could go if I had $1 billion, I could go buy all those machines that you have and set them up and I could buy— I could hire people to run them. So like, and I know you walk through it a little bit, but what would I discover that was— is more difficult than that I'm picturing in my head if I try— if I was trying to compete with you guys and I'm like, okay, fine, so I got Santa's doing this, I'll just buy twice as many machines and twice as many people. As they have. Yeah, and I'll just go do this.

The, the number one advantage that we have is we've probably seen more models, more designs than anyone on the planet, and each one makes us smarter. And so the, the stuff that we reject, uh, you know, we watch that and we're like, okay, well, we rejected a bunch of things with this type of geometry or these features. How can we do equipment or processes that allow us to say yes. And our volume is so crazy, you know, you know, not quite half a million a month, but near, you know, as far as drawing uploads, we're seeing so much data in at such a high speed that it allows us to like solve much faster than anyone. So also just us existing for 8 years, like you get punched in the face for 8 years, you get pretty good at it.. And so we have massive advantages there. It's, it's all the weird stuff that the guys who just buy hundreds of machines and hire hundreds of dudes, it looks good on paper, but then once they start, they're like, oh crap, I didn't realize that I was going to have this weird electrical back feed in my panel. And I was like, yeah, we've had to solve that. I didn't realize that the nitrogen was going to freeze my lines when we're pulling on it so much because of all these machines. I'm like, oh, we had to solve that, you know? Energy constraints, scrap constraints, packaging constraints, scheduling constraints. There's all these weird things. And so it's like, it's a lot of tribal knowledge that we've been solving for a very long time. And that's why I'm really proud of our model to just like slowly grow and learn stuff as we go. Because, you know, go back 7 years, you give me $100 million, like everything would have been sideways. Like there would have been a bankruptcy auction for sure.

You almost had to suffer through this.

Yeah.

And then when you go to Kentucky or somewhere new, do you have like some special task force of the people who have learned all that stuff here that then can, or is it really hard? Every new site has its own issues.

Every site has its own issues, but we got really good at fixing them. We do have, you know, like a strike team that travels to a new location, helps onboard, helps hire, recruit, and then we do a rotation. You know, it's like, hey, go out to, you know, this new state, stay there for a couple weeks, come back. You're going to have someone else who's out there for 2 weeks. And we're teaching not only operations and software, but HR is going out there and teaching culture. You know, me and Aaron are going out there and, you know, just learning what the local population is into. Um, you know, every area is a little bit different and has different motivations, so We're trying to figure that out.

We should say you run this company with your, with your wife.

Yeah, yeah, yeah.

She's—

she does all the things I can't do, which is a lot. And she's awesome. But it's cool. We fight the same battles. Yeah. But yeah, spinning up a new location is a challenge, especially early on, because our staffing size was very small. But now we kind of have some experts. That can go around to different locations, share the knowledge. Even though we share knowledge via SOPs and Slack and conversations and video calls, when you're out there boots on the ground, so how come you guys are using these old sanding belts? We don't use that kind of sanding belt anyway. Like, let me get you the new ones. Or, whoa, you're on this weird version of software, like how come you didn't upgrade? Or how come this isn't a touchscreen? You know, so even though we We're like, hey Slack, please upgrade to this touchscreen monitor.

Yeah.

Sometimes people don't get the memo.

Yeah. And then in the people that like work in the factory, I mean, they're not always, they're not always somebody that's come from this mom and pop shop or who might have worked on stuff. You guys' theory is that you can get almost anyone who's got some energy and a decent amount of smarts to be able to run one of these machines.

Yeah, I can, I can teach a skill. I can't teach attitude. If you have a good attitude and you're like curious and you're like, whoa, these— if someone comes in and has a smile on their face when they see our machines and they see our process, that's a really good sign. They're like, whoa, I didn't even know you could do that. It's like, cool, I can teach you anything under this roof. So on-the-job training is massive for us. That's another gift that Reno kind of gave me. We don't have a population of machinists just sitting around or, you know, fiber laser technicians or CNC brake operators just like hanging out, you know, looking for jobs. The jobs here historically have been in the gaming sector or in warehousing or logistics. But if they have a good attitude, like I can teach them to run a million-dollar machine, you know, Cohen. Cohen's 19 years old, right out of high school. He did a little bit of like FIRST Robotics and VEX Robotics in high school, and he's one of our best programmers for CNC machining right now.

Yeah.

And, and everyone told us like, oh, how are you going to find programmers, man? They have to have 10 years of experience and they command these high dollars or whatever. It's like, no, get the right person, they'll figure it out.

Yeah. Well, we're talking about re-industrializing the US and where things are going? I mean, how much of this feels like theater to you? How much feels real? Where would you, just to give people a sense, actually even like, let's dial it back a little bit. Like what's the health of American manufacturing at this moment?

I think it's a lot healthier than a lot of people know. That there's so many companies and manufacturers like us that are kind of under the radar and they exist. We're like, oh my gosh, I can't get this made in the US. And when you dig a little deeper, they're like, oh, I did a quick Google search and couldn't find it. But the reality is a lot of these manufacturers have been going since the '70s or '80s or, or whatever. They have customers that are relationship-based or on handshake, or they have their phone number or their business card, you know, and that's how they advertise and market. And they're usually capacity constrained. And like I said, they're not growing. So oftentimes they're not out looking for work. But those guys exist. Like, there's so many things that you can get made. Someone was like, oh, we can't get castings made in America. I'm like, yeah, you can, you can. You just— the way that I found out about a bunch of casting companies is I went to a trade show and there was booth upon booth upon, you know, rows of booths about like all these different guys who are doing quick turn castings and high run castings and all that kind of stuff. And maybe they suck it to Google, you know. So there's, there's a lot of stuff that's being done. Where we're really screwing up as a country though is if, if you fill up your capacity for 6 months or a year or 2 years, that sounds awesome. Like you have this demand, go, go expand or whatever. And I don't know why we're not. I don't know if some of these guys are older or Actually, I just, I know my answer right now. It's fucking hard to get capital. Yeah, it's, you can go to your bank and you can get a loan on, on a popular machine. I forget what the term is, something around like thrift value or whatever. But if you have a common machine that you could sell at auction really quickly for good money, it's really easy to get a loan on that. But like, for example, if you're building an anodizing line from scratch, they— that doesn't sell at auction. It's bespoke. You know, there's, there's no way that you can sell it. So these guys who are doing, you know, foundries and casting and injection molding and whatever, it's really challenging for them to get money on some of their accessories and their infrastructure and whatever. So that's probably why they stay the size that they are.

So you're talking about like the skills are maybe there and then we need to support that with some, some capital and helping people. But then clearly We all know there is like this supply chain issue in that like America doesn't make a lot of electric motors, things like batteries, you know, just all that core fundamental technology is in China. So we can, we can build stuff around bits and pieces, but then the whole thing is harder. And we talked about this a little before. I mean, you didn't get into this as like some rah-rah thing. We're going to go, go fix this whole supply chain. But, but so how does this I mean, in your head, what's the story of— what's the best possible version of the story of American manufacturing over the next like 20, 30, 40 years?

Oh, I think we're a powerhouse. I think we're back to our 1950s roots where if you needed something made, if you couldn't get it, you've, you've provided it. You know, you're like, oh, if I can't get a motor, all right, can I build a motor company? You know, Western Magnetics is doing that. A bunch of other guys trying to make drone motors. And stuff because COVID was the first like shock to the system. We're like, oh shit, like it turns out we don't make anything. So after COVID, people are starting to say, okay, let's, let's start making stuff in the US. And then China started freaking everybody out, like building these big-ass landing ships to go invade Taiwan or whatever. And I was like, uh-oh, if that happens, maybe I can't get my little toggle switch like I used to, or I can't get my batteries. So then more battery startups are starting to happen and toggle switch startups and then tariffs. You're like, oh God, you know, now there's tariffs.

So it's—

it started out as nothing and now all of these things are compounding. But at the same time, there's an attitude shift to where everyone was so enamored with crypto and NFTs bullshit and they thought they were making money there. Now the reality is setting in like SaaS doesn't seem to be a good investment. Crypto is weird. AI had its run there, but it seems like it's consolidating. So manufacturing is starting to look sexy.

Yeah.

So the demand is there, the attitude is there. There's a bunch of guys who want to do it and it's all hitting together. So in the next 10, 20 years, like if we can ride this wave, we're looking really, really good.

So you— okay, you think there's enough momentum and interest to bring, bring it back on that fundamental level. But then you also— but then there is sort of the there's a layer of bullshit already to this of people putting their hands up being like, I'm making, you know, this, this new age manufacturing thing. And, and it's like not clear at all that they know what they're doing. So, but yeah, I guess you're, you're just saying like you got to start somewhere and the wheat separates from the chaff.

I'm focused on the doers. There's two groups. There's the group that's like rah-rah cheerleading they're really good at raising money. They're, they're, they have these really cool concepts, but it's unproven. And sometimes those, the loudest voices are the worst manufacturers, you know, because a lot of the guys who are manufacturing are so damn busy making parts that they don't have time to go and like cheerlead or whatever. They're just good at making parts. So I'm a huge fan of all those guys. They just need help like on the PR level or something. Yeah, on the exposure level, on the accessibility level. In the other group that's really loud, some of them will be very successful. But then there's also a lot of capital getting lit on fire. And I'm nervous that a few bad actors are going to ruin it for everybody.

Yeah, because doesn't that like undercut the momentum that you're talking about? If people are like, oh, actually manufacturing might be a good investment, but then, then 3 of these $100 million startups go belly under after just 4 or 5 years, then—

yep. No, it'll hurt me. Yeah, it'll hurt me personally if some of these like big high-flying things don't work out. So I'm like, shit, I got to root for everyone. But I think, I think there's, there's, as there's more like grassroots blue-collar guys who are going, hey, you know, I do feel like I can make this happen, or maybe I've, you know, my dad has made it happen for 30 years and I'm taking over and I can add on a new modern layer. You know, I can actually do a website. I can, I can purchase instant quoting software from someone. I can do all this stuff. The numbers are very small now, but they're going to grow and grow and grow until it's a little more common. Also, I think AI disrupting some of these like fake email jobs. Yeah, they're going to have to, you know, figure out like, hey, you know, maybe, maybe I can't be a PM at a FAANG company, but I could start, you know, a little manufacturing company or start a furniture company or something like that. I think that's, that's going to happen more and more.

And you're not— you don't feel like so much of this is dependent on— we had COVID, but then we also had a period of, of war in Ukraine. Israel, the tension of Taiwan. Like a lot of times the Department of Defense spending obviously goes up and down based on, on if there's conflicts that people care about. And then, and then Trump, you know, is his own thing of making this a priority and putting some of this stuff front and center, which obviously could go away anytime you change administrations. But I mean, when I hear you talk about this, it seems like you think there's enough reel there to survive changing, changing winds.

Yeah. My God, I will never, you know, do anything that's outside of my control. So when it comes to policy and government and, you know, administration or whatever, if it helps you, cool, take advantage of it, but get ready for it to change.

Yeah.

And I mean, we've seen it with tariffs and everything else. So you have to have a really resilient foundation. And for us, that's been, you know, serving the everyman. I think the term is dual use. You know, can you serve consumer? Can you serve industrial? Can you serve commercial? And then can you actually serve the government, the DOW if needed? A lot of the cash is going towards the DOW stuff. And that's, that's great. But you're on this treadmill of once you get a contract, then you got to fulfill the contract and then you're chasing the next one because that contract is only for X number of months or years. And so you're always chasing this and you have lobbyists and it's like super crazy stressful. Whereas if you have industrial commercial customers, it's the, the percentage of your customer base is each one is much, much smaller. You know, our largest customer is 0.59% of our income, you know, versus like if I have DOW, I'm like, they're 86% of our income. That terrifies me because it's someone else who can take that away from you. You know, if I lose a customer, it's because I screwed up. I don't want it to be because I like didn't have a pretty enough lobbyist or whatever, you know. So the dual use thing is really interesting for me because like during World War II, like, oh shit, we need bombers. So they went to GM or Ford or whatever and just were like, you're making boats and bombers and whatever. I do not wish for any kind of war, but I think that American manufacturing needs to be set up so that if something did happen and we had to defend our soil, Senka Sen could be like, all right, we're going to start making, you know, parts for tanks or whatever you guys need. And then when the war is over, you go back to running a really successful business. You know, no one should be trying to set up a business that only exists if war exists.

Yeah. Do you see— do you see the same? I just got back from Los Angeles. It was— there's so much going on there. There's nuclear energy companies, additive manufacturing, aerospace. It's like a fish slicing robot. I mean, the variety of machinery that people are working on was really high there. Closest I've seen, and it's pretty far away in terms of that variety, would be kind of like Central Texas, which has this— I think it's like this Elon effect in both places. Like one is a SpaceX knock-on in Los Angeles of like energy, SpaceX veterans, SpaceX youngsters all going off to start businesses. And I think just sort of like the idea that SpaceX did this, there's all this talent pool from aerospace and automotive here for 100 years. We could tap it. I don't know, it was conducive. And then Central Texas is very similar.

It's—

yeah, you've got Tesla building battery factories, Starlink doing antennas, all the stuff. And it seems to create these critical masses. Um, you know, in the California side, every single one of those companies I saw, they're basically kind of prototyping what they want to do so that they can then build the real big factory in Ohio, anywhere else, Alabama or Texas, and then in Nevada, like in, in several cases. Do you— yeah. Are you, are you seeing the same thing or is there some other hotbed of manufacturing that I'm missing in the US?

I think the OG is Detroit or Great Lakes, just the Midwest as a whole. There's so much made in Minnesota, Wisconsin, you know, Ohio, Pennsylvania, you know, that's, that's all those guys that are flying under the radar. They've been in business for, you know, over 100 years or whatever, and they serve these OEMs and they just put their head down and they produce parts. That's, that's the OG. There's a lot of talent there. Nevada is— Nevada has been on this trend. Where we were so reliant on gaming and gambling for a while, everyone kind of woke up and was like, oh shit, if this changes, we're all screwed because everyone knew someone who worked for the casinos or the gaming industry. So Nevada made an active push a long time ago to diversify. They're like, well, we're actually on Highway 80. We should, you know, go into logistics and warehousing. And then they're like, oh wait, we have a bunch of power here and we have like these massive fiber lines that are running along Highway 80. Maybe we can do data centers. And now we're getting into manufacturing because we have a lot of energy, we have a workforce that's ready to go. So Nevada is a really, really cool spot. We're also a very free state. Like, you can— like anodizing.

What is anodizing?

First, for people, it's like dyeing Easter eggs, but for metal.

Yeah. Okay.

So aluminum specifically. Aluminum will oxidize and it'll turn like a gray color or whatever. But if you anodize it, you are using electricity and chemistry to like open up the pores of the aluminum, put a pigment in there or like a surface treatment, and then you close the pores up again. So you can make it colorful or you can make it clear or whatever, but it, it's a very, uh, protective finish. But like I said, we're using chemistry. We're using electricity, large amounts of liquids.

I think I cut you off because like basically you couldn't build this in California if you wanted to, an anodizing facility, probably.

I want to figure it out.

Yeah, I'm not—

it's going to take me a while. The thing that we're doing here that's really unique is we're closed loop, so we have no air emissions, we have no sewage emissions. Our waste product is a dry cake. Basically that, you know, we can, we can throw out. If we can prove that model, then I'm hoping that I could take it to California. But the thing is, is I'm going to have to— I'm going to have to prove it. I'm going to have to go to California and say, hey, this is— I want an anodizing permit, but it's different than you've ever seen. And they're going to be like, nope, we don't do anodizing. I'm like, no, no, no, it's different. So that's going to be a massive challenge. If it's, if it's a pain in the ass, then we'll just keep going to other states that allow it, that are a little more open. Nevada, when it comes to permitting, if you say we're doing something innovative, they listen to you and they'll be like, oh cool, let's pair you up with the university. The university has this program where the students will analyze it and then like help the permitting sector update their permits because we want jobs, we want manufacturing, we want like cool stuff to happen here. We're very proud of it. And sometimes in California you can't get that.

That was fair to let. Part of the story too is like, okay, tell me all the different things. We spent most of our time talking about cutting metal. What are— there's a ton of different machines out there. What are like the basic skills that Senkutsen provides today?

Yeah, sheet metal cutting, bending, countersinking, tapping, hardware insertion, powder coating, anodizing, ceramic tumbling, deburring, basically anything that you can do with sheet metal, welding. So when we first started out, I would cut you a flat piece. That's all we could do. If it's flat and it fits on this, I will put it in a package and send it to you. And then we're like, oh wait, we can bend it, you know, make like cool shapes that work in an assembly. And then adding fasteners and hardware. And now we're getting into, okay, we can take multiple pieces of this like really complex box and then weld it all together, powder coat it, you know, give you more of a finished product. So that's, that's today. Then CNC machining, which is instead of taking a sheet of material, we're taking a block of material, carving it out, you know, using 5-axis equipment in order to make really complex shapes. We do a bunch of composite materials too, carbon fiber and then rubber and gasket materials and stuff like that. We use water jets for that. The goal, though, is like, how vertical can we go? Can I— can you send me like your whole assembly where, hey, I cut it, weld it, machine it, powder coat it, and then maybe am I doing the PCBs in the middle? Are we— do we have a cool motor manufacturer that can get you some made-in-the-USA motors in there too? Can we do wiring harnesses? How close can I get you to a finished product? You know, so that's more contract manufacturing. The thing that no one's really done is contract manufacturing that is high-mix, low-volume. But we're so good at high-mix, low-volume now, it's like, I think we could kind of do it for contract manufacturing too. All the big contract manufacturers here, we only have a few in the US. It's a big contract. You set up, you like, it's, it's like switching over a car line. You know, if we want to go to the 2027 Chevy whatever, they have to retool, retrain their staff, and then they do that for like a year or two to produce all those units. I'm like, how can we do that in a matter of hours instead?

And like, that would still, what would be What do you imagine would be the profit margins on a business like that? I mean, is this brutal? He can help pennies or it's better than that.

The thing that we're competing with is do you want it to exist at all? And right now at any price, it's really tough to make that thing exist. So if you can figure out a price that does you know, give you a good enough margin so that you can reinvest and grow the company, then you're good to go. Where the margins get really tough is in the very, very high quantities. If you have a— if you're competing against a company that's willing to dedicate, you know, all this tooling and labor and everything for a year and a half just to do one thing, their pencils are going to get really, really sharp. And we don't typically do that because there's opportunity cost. We have so many people who want to come in, I can't say I'm going to dedicate this building just to make one product at a very low margin. You know, I'd rather open it up for 1,000 customers at a medium margin so that I can hopefully add another building and get there.

For how the foreseeable future, this is US-based. Do you guys ship all over the world?

Oh, we ship to the US and Canada for right now.

Okay.

Canadians got all pissed that the tariffs happen?

I mean, do you see a world where you have like factories in Mexico, in Canada, in Europe, or—

Yes, to serve the local populations.

Okay.

Um, I'm definitely not interested in opening a facility in Mexico so that we can, you know, ship back to the US. But if I was in Monterrey, which is a massive manufacturing hub, and I can serve all those manufacturers there, then that's really cool. Every time we make a decision, it's based on logistics. The core of our business is speed. So if I can be in Poland and serve the EU really, really fast, then that makes a ton of sense. If I can be in Monterrey, Mexico, to serve Mexico really fast, you know, faster than going through customs or DHL or whatever, then, then that's why I'll do it. It— we don't really see the need to do some sort of like labor savings or whatever. Again, those big contract guys, their pencils have to be so sharp. They're like, oh, I can save, you know, $1.50 on labor if I go here or here. If you have a better margin, then you don't have to be so picky.

And you guys have— you've done kind of like a few million just from friends and family. Otherwise you were like funding this more or less out of your pocket and loans and things like that, right?

Yeah.

So you've— I mean, we had—

we had like QuickBooks Capital or whatever.

Yeah.

QuickBooks a lot. Like how much money you have, and every once in a while they're like, hey, you could get a $70,000 loan. I'm like, cool, I'll take it. I'm like, PayPal will do the same thing. And I'm like, cool, I'll take that PayPal loan. So yeah, credit cards, um, it was getting a little close to the sun, and then my wife was like, what are you doing? You know, take a little bit of money. And then yeah, so we raised a little bit of money in 2020, 2021, but it sat in the bank.

And then yeah, like for 5 years you guys have not done the $100 million, $200 million kind of thing.

You know, it was, it was a safety net. I mean, it allowed me to run. When you have a safety net, you go faster. But looking back, I was like, shit, I didn't really touch that money as much as I should have. But whatever. I don't have a time machine, so I'm always just looking forward.

But that's kind of like every time you want to set up a new building, those machines in there all cost like $200,000 to $750,000 each, right? Yeah. Or even—

yeah, the big blue ones.

Yeah.

Or $1.3 million each, tooled up.

So like every building you want, you're buying at least what, like a dozen of those?

Yeah.

Not more. So it's—

and then you run out of power.

Yeah.

And then you have to bring in a bunch of air compression and all the accessories, the feeding and watering. It's, it's very expensive.

So that's kind of like the gating factory— the factor for the business right now is just Every time you want to take the next step, it's a big investment.

Yeah, it's, it's challenging because we try and play this game where we're negotiating with our equipment vendors. I'm like, I want to buy 12. They're like, oh, awesome. And they get us pricing. And then at the end I'm like, okay, you can only deliver one per month for the next 12 months. And they're like, what? I'm like, that's all the cash that I have. And I can— I know when we're going to get paid. I'm like, I can make you a payment. So we're playing this game. And it worked really well at the beginning, but now we're at a scale where it's not just adding one more machine. Like you said, it's adding 10 or 100 or whatever. You know, we have enough demand to at least triple our size right now, but I can't just get loans on that or whatever. It's too big. So—

and so what's the biggest fear of taking a bunch of money grown really fast versus controlling everything, just building bit by bit. Like, do you see what would be your competitor here? You know, what's the argument against moving slow and just keep doing what you're doing? Could somebody copy what you guys are doing?

Yeah, I mean, especially talking to all the young guys in El Segundo or whatever, like there's always going to be someone younger with more motivation, with more money. That's, that's always a threat. There's no such thing as a moat. I don't, I don't think I came after a lot of people because I was young and motivated and had a cool idea. So we're always going to have that type of competition. But honestly, our scale insulates us a little bit. But our number one competitor is China. And, and I'm worried that if I don't move faster, they're going to eat our lunch. Or if I don't move faster and there is some sort of event and there's, there's issues, then I'm not supporting all of our customers as good as I could have. So if I can scale up really rapidly without tripping over myself, I can serve my customers better. And now I, I'm like, I'll serve America better. You know, I was always customer first and I'm like, actually, this is really important towards the future of America. If people can't have fake email jobs and they're going to work in the trades. Like, I want to support them.

Yeah. And so the Chinese version of this would just be that they create good software that lets people send in the designs and, and that just doesn't exist today.

The moat that I have against them is the service and support.

Okay.

Um, we talked earlier about DFM, design for manufacturability. Our software does a really good job, but there will be a guy in the, you know, man in the middle, uh, in case there's errors or whatever. And we're not just going to tell you no, we're going to be like, hey man, we really want to make this for you. If you can make this adjustment, then it'll work. And, and they're like, oh cool, I didn't know that. So we're actually providing like a manufacturing education to a lot of our customers. And I don't know if China will be able to do that. They're very responsive when it comes quotes or whatever you get on WeChat. Yeah, dude, they all ask, um, they'll give you a number. But when, when you're like experimenting with a product, you're going from prototype to production, that's where US vendors do such a good job.

Yeah.

So we'll always have that.

All right, well, I asked you all my big questions and I'm excited to get to go walk around. Um, I mean, just kind of like last thought, I guess, did you ever Guessing I know part of the answer to this. I mean, did you ever imagine you'd be— what was this, 8 years ago? Yeah, you started this out. You must have had dreams of where things could go, but I mean, did you picture you would be some, you know, American manufacturing powerhouse?

No, 0%. I personally like to fly under the radar. And my marketing team will vouch for this. I didn't want to be the spokesperson for this. You know, I like to put my head down and do stuff, but I've been tasked with it. Like, it's my burden now. It's like I need to show people that it's possible. I need to encourage people to do it. They say, like, the best managers don't want to be managers, but they manage because they have to. And I think that's kind of what I'm, I'm starting to feel now. I just wanted equipment that I could use for free.

Yeah.

You know, I want to go wrench on cars, you know, all my— I don't even have car projects anymore. So, but this is fun. This is endless challenges. It's endless problem solving. I think if it ever gets boring, I'll move into something else. But I do not see that happening.

Have you ever, like, I see all the ribbon cuttings and the politicians visiting and I cover all the time, like DARPA funding big advanced manufacturing projects in Tennessee or wherever. I mean, have all those types of people come out here to see what you guys are, no, not yet. Okay.

No. Sometimes it's a distraction. And sometimes we're just like, look, if you want to help, like order parts, you know, we exist, use us or not. And that's like DARPA orders from us, you know?

So it's weird because I see them buying some of these new additive manufacturing machines. Well, then they're trying to set up like the factory of the future and you can just order a part super quickly and we can make one house for Lockheed and Boeing and they don't have the guy anymore who knows how to make the thing. And so, but we only need 50 of them. And then I'm sitting over here, I was like, I think that's kind of what Senkotsu is doing, you know? And it's just, I mean, so yeah, I was just curious if they had popped by.

I think, I think where we're really weak is we don't have talent on the team to go do grants and fundraising and talk to DARPA and DODW, like, yeah, but there's a lot of people who start out with that, like their core founding team is like a lobbyist and a grant writer and whatever, and they get, they're really good at that. I don't have that muscle. Yeah, we'll need it at some point, but right now I just lean on like, hey, we exist, you know, if you need it, we're here. But like you said, we've been flying under the radar and we're Trying to be above the radar, I guess, now.

Yeah, I don't know, maybe it seems like it's working out okay. Uh, maybe some of these things are meant to be, you know. Um, well, thank you so much for your time. Thanks for having us here. I can't wait for people— I don't know, I imagine the podcast might air before the video does, but when the video comes out, people should see it because we go to your childhood home. Your mom was so sweet, she hung out with us. Your dad hung out with us. And I think people will to see like a little bit more about how you grew up and they will inform how you ended up here and some of what went into this. But yeah, it's been a cool, cool day. I feel like I'm meeting this legend that I've been hearing about.

Oh God. Yeah, that's not why I set out to do this. It's such a weird thing when you start to get recognized or someone's like, oh my gosh, you know, you're helping reindustrialize. I'm like, dude, I'm just making parts. That's all I want to do.

Yeah. Well, that was kind of actually one of the cool One of the coolest things about hanging out with you, everyone on our crew was like, that guy seems down to earth, man. So that was, that's refreshing. And so anyway, well, thanks for your time. And then, and then I urge everyone to check out the video when we get it up and it'll be cool.

Cool. Smash that like button.

Yes, please. Thanks, Joe.

Yeah, thank you.

The Cormannery podcast is hosted by me, Ashlee Vance, and/or Kylie Robison, or both of us together. It is produced by me and David Mikkelson. Our theme song is by James Mercer and John Sortland, and the show is edited always by the John Sortland. Thank you so much to Brex and Send Cut Send for all your support. And thank you most of all to everybody for listening or watching. We love you. Please leave us a like, a review, a subscribe. All those tremendous things. Thank you, and we'll see you again.