Bootstrapping Over Venture Capital: Jim Belosic on Rebuilding American Manufacturing
Manufacturing Happy Hour
Much of the talk about reindustrializing the United States centers on industrial policy and venture capital. On Manufacturing Happy Hour, Jim Belosic, CEO of SendCutSend, argued for a slower route: bootstrapping, organic growth, heavy investment in customer service, and treating workers and job creation as the heart of the effort. Drawing on their start in a sign shop in the 1990s, stories from equipment salespeople, and seven years running a sheet metal fabrication business, Belosic explained why they think manufacturing is poised for a "reboom" and what small and mid-sized shops can do to take part without chasing a quick exit.
A Bar in the Front, a Shop in the Back
The host opened by asking where the conversation would take place over a drink. Belosic chose SendCutSend's first facility, which the team called "the Mullet": business in the front, party in the back. They had originally bought the building for their software company, which needed office space. It happened to come with four to five thousand square feet of shop space and a double-height atrium reception area with an Italian glass tabletop. The software company never had walk-in visitors, so the reception area became a full bar with coolers and an ice machine. On Fridays the team worked from their laptops at the bar, and they spent evenings drinking in the shop while working on cars. They eventually needed a no-glass policy in the shop because so many cocktail glasses shattered. When the company moved to a larger facility and hired more staff, most of the bar was removed because "it got a little out of control." Belosic said it might return someday.
Why Belosic Thinks VCs Don't Belong in Manufacturing
The host's first real question was why bootstrapping is an alternative path to reindustrialization. Belosic answered bluntly that VCs don't belong in manufacturing. They then disclosed that SendCutSend has a very small amount of VC investment, from one of their best friends, who openly admits to having no idea what he's doing in this space. Belosic took the money because they were burning through their personal savings. Manufacturing is "capital intensive," a term they said they learned from that investor. Their wife made clear the business couldn't survive on the family's savings alone, so Belosic gave up a small share of the company to build a war chest. The money helped, but seven years in, Belosic stressed that this is not B2B SaaS. There is no quick exit and no large multiple on a sale.
Their broader concern is how VCs operate. In Belosic's experience, investors "shed their skin every 3 to 5 years" and become experts in whatever is hot: crypto, B2B SaaS, NFTs, and now AI. Manufacturing expertise, in their view, comes from growing up in it: working in a parent's or uncle's shop, running the lathe, and sweeping floors. Belosic worries that VCs will push owners toward profit multiples they got used to in software or crypto and apply that formula to a very different industry. They joked that VC board members might hear "hand me the Phillips" and ask "who's Phil?" They acknowledged they were generalizing and that good investors may exist whom they haven't met.
Belosic's alternative is to grow at a scale that makes sense and expand organically over a longer period. They admitted this is "very unsexy" because everyone wants to be a billion-dollar company in five years. You can do that with investment, they said, but the only way anyone makes money from it is by selling to "a greater fool." SendCutSend's approach has been to use as much of its own money as possible and scale more slowly. It will take far longer, Belosic said, but it is sustainable and, in their view, the right way to do it.
A Return to Owning and Running a Business
The host asked whether the definition of success might shift as young people realize they can do well by owning a machine shop or two without the glamour of a typical startup. Belosic expects things to look more like the 1950s through the 1990s. Back then, an owner built a business and ran it until retirement or handed it down, and it paid for the house, vacations, and the kids' college. Belosic believes the past couple of decades have put too much emphasis on the exit and on building a company to sell it. Saying "I want to build this and run it forever" or "I want it to be family-owned" is less popular, especially on social media. Manufacturing suits the long view, they argued, because its large investments take decades to pay off.
Belosic blamed the dot-com and FAANG-era media focus on newly minted millionaires and billionaires for spreading this mindset to nearly every kind of business. Their example was HVAC, where private equity is rolling up small companies. Belosic predicted "it's going to implode." They told a personal story: they needed an igniter for an old furnace, couldn't find one at Home Depot, and called a company they had used for years. That company had apparently been sold to private equity. Getting an appointment now meant going through a call center that asked about their house, their age, and whether they were married, when all they wanted was a truck with a part they could identify by number. Belosic sees that kind of experience spreading as companies imitate dot-com success. Their advice was to "chill out a little bit." Maybe you won't make a billion dollars, but $50 million is "totally great," and a family-owned company that grows slowly over decades is still very valuable. "You just don't get this massive yacht one day."
Learning From the First Wave of CNC in a Sign Shop
The host asked about Belosic's start in manufacturing in the 1990s. Belosic has always been an artist. As a kid, they made money selling drawings and Sharpie "tattoos" to classmates at recess. When they needed a job to buy a car, they found one within walking distance at a sign shop, figuring the work would involve art.
The owner, Mac, had learned sign painting in the 1970s, when hand painting was essentially the only way to make signs. Belosic described him as extremely skilled. Using lettering, striper, and liner brushes, he knew hundreds of alphabets by heart and could paint them on glass or truck doors. That skill, Belosic said, required both a natural gift and years of experience. At fifteen and a half, Belosic swept floors and learned sign painting from him.
Around the same time, CNC vinyl cutting arrived. The shop's first machine was a Gerber 4B sign plotter, which Belosic described as a tiny, rickety device that today looks like a cheap 3D printer from Temu but was cutting-edge then. Instead of painting on glass, you could cut lettering from a roll of vinyl with a knife plotter and apply it. This removed much of the need for painting skill and replaced it with a different skill: computer-aided design in programs like Photoshop, Illustrator, or FlexiSign. You typed the business name and phone number, the machine cut it out, and you applied it. Belosic saw that, as "this dumb kid," they could very quickly produce work that had taken Mac 20 or 30 years to master, though at a different level of quality.
While working there through high school, Belosic watched people return from sign shows in Las Vegas and start their own sign businesses. Belosic considered it too, because plotter prices kept falling every year. A shop that once could charge almost anything because its owner had rare talent now faced many new competitors and had to compete on talent, quality, and service. Mac ran the business long after Belosic left. What Belosic took from the experience is that new technology shakes up an industry. It creates wealth, competition, opportunity, and jobs, but you have to stay on top of it or you'll be left behind. They said they see that pattern repeated everywhere.
Boom-Era Excess in 1990s Machine Shops
The host mentioned a long article in which Belosic described how CNC, and then CAD, created waves of new manufacturing entrepreneurs in the 1990s, some of whom got "out of control." Belosic noted the stories are secondhand, though from a source they consider reliable.
In parallel with the changes in signmaking, Belosic said, machine tools got much better graphical interfaces. CNC lathes and mills could be run from CAD rather than punch cards, slide rules, or hand-written G-code. Young machinists running manual Bridgeports saw what Belosic had seen in signs: buy a CNC machine, start a business, and cut out much of the labor. Many shops were founded this way in the 1990s.
Belosic has worked with Amada for a long time, and many of Amada's salespeople have been there for decades. After a few drinks, Belosic said, they tell wild stories. In the Bay Area especially, as the dot-com era began and companies needed data centers and prototype or production computer chassis, a shop with modern CNC and CAD equipment was extremely competitive, especially one with a laser. At the time most work was punched, so a high-performing laser plus CAD let a shop "come in and decimate." According to these stories, owners could charge for speed and quality and keep more margin because they needed fewer staff for programming and manual work. Belosic recounted stories of owners calling to order three more machines without caring which model, a pile of cocaine on a customer's desk during a sales visit, and new Porsches wrecked in parking lots by drunk owners. Success brought poor choices and many divorces.
Belosic said they earned their own money slowly and that their wife is very understanding. The host suggested this was another argument for manufacturing's more realistic pace, and Belosic agreed: "You give a young man a ton of money really fast, he's going to make some really poor decisions." Belosic added that such windfalls are rare in manufacturing now, though the same behavior shows up in bubble industries: crypto traders crashing Lamborghinis and NFT buyers purchasing mansions with "pictures of monkeys." That ship has sailed in manufacturing, they said, but there are still efficiencies and money to be made.
Why a Reboom Now: Machines That Upgrade the Workforce
The host noted that Belosic's article described a later phase in which CFOs and MBAs moved much of this work overseas, which set up today's opportunity for a reboom. Asked why the moment is right, Belosic pointed to technology. The newest generation of machines has alarms, error control, communication, and reliability that make upgrading about more than speed or uptime. In Belosic's words, an upgrade upgrades "your entire workforce or your availability to workforce."
At SendCutSend, the goal is to take someone who worked at Target or Walmart and have them running a new multi-million-dollar laser within 40 hours. Belosic said they often walk through the shop on a new hire's Wednesday, ask where the trainer is, and hear "I got this, man." That kind of growth would be impossible, they said, if every operator needed ten years of experience, complex mental calculations, memorized G-code, knowledge of tools, draft angles, and offsets, or the ability to read prints. Belosic admitted a bias toward their own industry and SendCutSend's somewhat unusual offering. Still, they believe that as older owners retire, new entrepreneurs will start with brand-new, cheaper equipment and become competitive quickly because they understand the modern world. Belosic framed this as the "internet generation" taking over from the "no internet generation," a generation that knows it needs a website.
Manufacturing Exists but Isn't Visible
The host pointed out that newer equipment helps with training, but people still have to find manufacturing in the first place. Belosic disputed the idea that the U.S. has no manufacturers. In Reno, they said, a road called Edison is lined with 1,000- to 2,000-square-foot shops with roll-up doors that rent cheaply. Belosic called it the local incubator and compared a shop on Edison to being in El Segundo in California: it's where things start.
The shops on Edison, Belosic said, are generally not good at marketing, websites, or social media, so they depend on word of mouth. They gave the example of getting a cylinder head decked in Reno: hard to find online, but ask someone at Cars and Coffee and they'll point you to a specific shop. "It's you got to know a guy," Belosic said, and it has been that way for a long time. Manufacturing is present, just not visible.
Belosic sees change coming from younger family members. A son or daughter graduates from college and offers to build a website or do marketing for a parent who has been in business for 20 years, and those shops are becoming very successful. Owners in their 60s and 70s built their businesses on phone calls, handshakes, Yellow Pages ads, and outside sales, and they didn't grow up with the internet. Today, Belosic argued, being a good manufacturer isn't enough. You also have to be a good marketer, both to win customers and to attract workers. Every SendCutSend marketing effort is designed with recruiting in mind. When a job seeker sees the company's ad on Indeed, the hope is they'll think, "Oh, I've heard of that company," perhaps because it sponsors the softball team. The host said this is exactly how more manufacturers should think about marketing.
Showing Prices and Responding Fast
The host asked how manufacturers can speed up their digital presence, including whether to post prices and how to use instant quoting. Belosic described a debate with their brother-in-law, who owns a sign shop doing custom vehicle wraps. (They became family because Belosic met the sign shop owner's daughter, now their wife, while working there.) The brother-in-law lists no prices because every job is custom. He might have to remove door handles or strip clear bra film first. Belosic hears the same argument from manufacturers who say they have to see the part first.
Belosic's answer is to put yourself in the customer's seat and at least post examples: a part of a certain size and material, what it cost, and how long it took, along with an extreme case, such as a large Inconel part with extra post-processing, that shows why prices can climb. Posting a price range is fine, they said. Without one, "call for a quote" turns into a race to respond. Belosic does this themself: for commodity needs, they email six or seven vendors, and the fastest usually wins. Their rule is that if you can't show real prices, show examples, and if you can't show examples, "you better be damn fast" at quoting, meaning seconds or minutes.
Belosic also recommends answering services like those car dealers use. The person answering doesn't need to understand manufacturing. They can call back, gather more information, and say the request is going to the best quoter with an answer by the next morning. That quick contact, Belosic argued, builds credibility even without an exact quote. They criticized equipment makers who list "call for quote" and leave buyers guessing whether a machine costs $10,000, $100,000, or a million while a salesperson sizes up their budget and pushes accessories. By contrast, Belosic praised Haas, whose website lets you configure a machine and see a price. They are confident this has sold Haas many machines, and they believe it makes the company more profitable even if a perfect salesperson might have captured more margin. The host added that Belosic has described overseas competitors as very responsive, so U.S. shops need systems like instant quoting to keep up.
Service Over Price: Spending on Support
The host cited Belosic's description of SendCutSend as offering 200% better service even at 15% higher prices, and asked how to create that position. Belosic said customers driven solely by price aren't worth the time because they'll leave as soon as someone else is a nickel cheaper. Their other brother-in-law runs a landscaping business and doubled his prices. He lost half his clients, the ones who wanted $1,000 of service for $500 and nitpicked constantly. The other half didn't blink, because they knew they were getting great service. He ended up doing half the work for the same money and used the extra time to grow with ideal clients.
SendCutSend's philosophy, Belosic said, is to compete on speed, service, quality, customer relationships, feedback, and responsiveness rather than price. They weren't sure how the company ranks in the industry, but they are confident its spending on customer support is "probably 10x our next competitor." The company employs dozens of staff handling chat, email, and quoting 24 hours a day, seven days a week. On a spreadsheet it looks like a lot of money, but Belosic said it makes money, because customers like them move on if they don't hear back within an hour.
Belosic said they learned this from car dealers. Calling a Chevy dealer about a truck usually reaches a call center that aims to answer within one ring and connect you to a local salesperson. If a Reno dealer doesn't answer, Belosic will try Carson City, then Fernley, and buy from whoever is most responsive and treats them best, even if it means driving farther or paying $1,000 more for a large purchase. Many SendCutSend orders are only $30 or $40, so the company often loses money on the support behind a $39 transaction. It will still go to great lengths to teach customers their CAD software or design for manufacturability (DFM). Belosic believes this pays off because customers who have a good experience stop shopping around. Price still matters, they said, "but man, don't race to the bottom. It's really hard down there."
In-House Financing From Equipment Makers
The host moved on to equipment financing, which is harder or easier depending on the economy and interest rates. Belosic called in-house financing "very very powerful" for SendCutSend, especially from Amada, which they described as having its own bank that doesn't run like a bank. In Belosic's description, its finance arm exists to move machines, not to make a profit or answer to private equity. Amada vets buyers by sending a salesperson to talk with them, maybe over a beer, and deciding whether they are creditworthy.
Without in-house financing, Belosic said, an entrepreneur turns to the SBA, a bank, or a second mortgage, all of which want a track record. The SBA requires a business plan and is somewhat more risk-tolerant. A bank asked for a million dollars of equipment will want three years of profitable tax returns, which a new business can't produce without the equipment. OEMs with in-house financing or strong partners (Belosic gave Mitsubishi Capital as an example) can give entrepreneurs a start when Wells Fargo or Bank of America would "shut you down hard." Belosic also said in-house rates are usually very attractive. A third-party lender taking a risk might charge 12%, and 9% is the best third-party rate Belosic has seen.
Belosic's Policy Wish List
Belosic said they dislike talking about policy because it feels out of their control. SendCutSend doesn't have lobbyists "today," so they focus on what they can control. Still, their policy dream is a program that funds equipment manufacturers rather than entrepreneurs directly. Backing entrepreneurs directly would lead to large losses because not everyone is cut out for business, Belosic argued, while OEMs are good at vetting buyers. They visit your shop, look at "how much dirt is under" your fingernails, and can tell if you're "some M&A guy." Giving OEMs money to back loans would put equipment in the hands of people who deserve it. Belosic said this is what they would tell a policymaker or the president.
They also discussed an idea from one of their long-form "rants": Cash for Clunkers for equipment. First they promised Bridgeports would be exempt. Belosic wasn't sure of the year of the original program ("like 2008 or something"). As they described it, the government gave car owners several thousand dollars toward a new car for trading in an old one, however little it was worth, to support automakers during the downturn. Belosic called it successful in some ways because it kept production going and sold many cars. As a car enthusiast, though, they lamented that it destroyed many future classics: Dodge Neons, minivans they'd now like to Hellcat-swap, Caprices, and Ford Interceptors.
Their proposal would work like this: an owner whose main machine is 20 years old could donate or destroy it and receive a government-backed credit toward a new machine from a company like Mazak or Haas. Belosic suggested the government would recoup the cost through the economic activity it generates. They said that although they generally dislike government interference, this kind of program makes sense to them.
Regional Co-op Buying and Friendly Competitors
The host raised another of Belosic's ideas: regional purchasing co-ops. Belosic said it's much easier than getting the government to listen, but still hard, like "herding cats," and it needs a very stubborn person to lead it. Reno alone has six or seven sheet metal shops focused on laser cutting, they estimated. If they met regularly at a coffee shop, pooled orders, and approached a service center to buy 15 tons of material instead of one, they could negotiate better prices. Belosic noted that Whole Foods did something similar in its early days, according to a book about the company whose details they didn't fully recall: food companies shared a warehouse, bought in bulk, and split the goods, acting as their own middleman. They see the same opportunity in raw materials, and even in equipment, where buying ten machines instead of one changes negotiations on service, warranty, and consumables.
Belosic said the value goes beyond purchasing. Good relationships with other local shops mean that when a machine goes down, you can call someone and ask them to take work, such as deburring or powder coating, and SendCutSend helps others in return. Many owners want to "burn down" the competitor across the street, but Belosic said that usually ends with both catching fire. A friendly yet competitive relationship, a rising tide lifting all boats, works better.
Paying Well and Making the Shop a Place People Want to Work
Asked what else belongs in the picture, Belosic said it comes down to pay. Manufacturing has often paid entry-level workers poorly, $13 an hour to clean out a pit in a dark, dusty shop, and those workers can't wait to leave for retail, where there's music, a mall, and a hot dog on break. Young people choosing among jobs paying $20 to $25 an hour look for the best environment, benefits, and flexibility. That's why many choose retail despite difficult customers.
SendCutSend treats its working environment as a recruiting tool. Its facilities are well lit and fully air-conditioned, because it gets hot in Nevada, Kentucky, and Texas. They have strong dust collection, and the company goes to considerable expense to move its noisiest equipment outside under shelter so the shops stay reasonably quiet. It has good bathrooms and catered meals. The goal is that someone choosing between $20 an hour at Target and $20 an hour at a high-tech manufacturer sees more upward potential in manufacturing.
In December, the company started publishing its wage structure internally and externally. Belosic's examples: Production Tech 1 starts at $22 an hour, Production Tech 3 could make $45, and Production Tech 7 could make $120,000 a year. General manager pay is also posted. Once people see that poster, Belosic said, they realize that with effort they could earn six figures. They tied this back to pricing: you need margin to pay people well enough to stay. Belosic estimated that a worker on day one is worth about 10% of what they can do by day 365, so reducing churn matters. "You want lifelong customers and you want lifelong employees," they said. That's hard for owners who have been doing this since the 1990s, are burned out, and believe no one wants to work anymore, which is why Belosic thinks a new generation is needed.
Win Over Lawmakers With Jobs, Not Robots
The host closed with a point from Belosic's article: to win over lawmakers, show them job creation. Belosic said the new generation of manufacturers they're excited about often talks about automating everything as the way to compete with China. Belosic agrees that's part of the future but said "you have to chill out a little bit." Seeking a tax abatement, a grant, or rezoning for a facility at the local level means talking about jobs. Nobody wants to support a lights-out facility full of humanoid robots, Belosic said.
Belosic said they aren't very enthusiastic about heavy automation for SendCutSend itself, because it's "a crazy job shop" that handles thousands of different SKUs "before lunch," which makes full automation very hard. The company automates where it makes sense but also creates many jobs, because humans are versatile and "can do some amazing things." Their advice to anyone talking to the SBA, a mayor, or a governor was to emphasize how many high-paying, attractive jobs with career paths a manufacturing business will bring to the community, rather than the $4 million of conveyance it will buy. Their closing line: "you will get really far with dudes versus robots. Trust me." The host called it a balanced ending that was pro-people and, in many ways, still pro-automation.
Jim, welcome to Manufacturing Happy Hour. If we were having today's conversation over a beverage, where would that be? Describe the setting.
Actually, in our first shop, that's probably my favorite place to have a beverage. Our very first facility, we called it the Mullet. It was business in the front, party in the back, and we had a full bar, like a beautiful bar with coolers and ice machine and everything. So, 4:00 every day, you know, we could go down there and have a whiskey. When we moved, we moved to a larger facility and started staffing up. We had to remove a lot of the bar. It got a little out of control. So, the bar is no longer. Maybe someday again, but that was one of my favorite places to have a drink.
You're the second manufacturer, like, I should say, you know, more small midsize manufacturer that has had like a proper bar cocktail area setup within their facility. Tell me a bit more, like, was this like an old school Midwest basement bar? What was the vibe?
So when I bought the building, I bought it for my software company and I needed a lot of office, but it just happened to have like four or 5,000 square feet of shop space in the back. So when we bought the facility, it had this beautiful, like, double height atrium, you know, entry for a receptionist and, you know, to like wow clients or something. However, like, I didn't need that for my software company. We didn't have anyone walk in. We had no guests or whatever. So, we had this reception area that was gorgeous. Had like this Italian glass tabletop on it. It was super, super cool. But we couldn't really use it, so we're like, let's turn it into a bar. And then we used the hell out of that space. Like on Fridays, we'd all just hang out at the bar and work from our laptops. So, really, really cool.
We ended up spending a lot of time actually drinking out in the shop as well when we'd be wrenching on cars or whatever. And eventually we had to have a no glass policy back there because we had so many shattered cocktail glasses after a few hours of wrenching on a Friday night.
All right, man. You are like prime guest for Manufacturing Happy Hour here, where you had to implement a no cocktail glass policy out on the shop floor. So, anyway, this is a perfect conversation for a beverage. Then my first real question, let's say we're hanging out having a drink in the old shop. There's a lot of talk about policy and VC investment helping reindustrialization in the US right now. So my question for you is, why do you believe bootstrapping is, let's say, an alternative path to reindustrialization in America? Answer that as if we're having those whiskeys.
Yeah, VCs don't belong in manufacturing. And I will disclose, I do have a very small portion of investment from a VC and he's one of my best friends. But he knows, he's like, "Oh, like, we have no idea what we're doing in this space." You know, I had to take a little bit of money because I was burning up all my personal money. And it's a very capital intensive industry. That's a term I learned from him. And my wife was like, "This is not going to happen if you like just blow all of our savings on this." So I was like, okay, I'll give away a little bit of the company so that we can have a war chest. It ended up working, but now, you know, we're in our seventh year.
It's not B2B SaaS. There's no like quick exit. There's no like massive multiple, you know, on a sale or anything. That's just not how this industry works because it is so capital intensive. So VCs, God bless them, they really know like crypto or B2B SaaS or whatever the next best thing is, like right now it's all AI, and from my experience they kind of like shed their skin every 3 to 5 years and become an expert in some other domain. And manufacturing, to be an expert you have to grow up with it. Like, you should have grown up in your dad's shop or your uncle's shop, you know, running the lathe, sweeping floors, in order to really understand how to make money in this business.
I'm very nervous about VCs coming in and pushing owners to take a direction that doesn't make sense, because they're going to target, like, you know, these profit multiples that they're used to from SaaS, you know, or crypto or NFTs or whatever the hell their last win was, and then they apply that same formula to manufacturing. It's wildly different. So, my advice is, you know, VCs will give you that scale, but then you have this crazy-ass board to deal with, with guys that don't know the difference between, you know, if you said, "Hey, hand me the Phillips," they're like, "Who's Phil?" you know. So you don't get in bed with those guys. I'm generalizing. I'm sure there's some amazing ones out there that I just happen to not know.
But what I would instead recommend is, instead of going for this massive scale and trying to have, you know, a $100 million company in two years with VC money, instead just go at a scale that makes sense, where you can grow it organically over a longer period of time. Now, that's very unsexy. Everyone wants this like overnight success. You know, they're like, "Oh, we want to be a billion dollar company in 5 years." You can do that with investment, but the only way that anyone's going to make any money off that is they have to sell it to a greater fool. So, our path has been, let's use our own money, or as much of it as we can. Let's use our own money and scale at a very slower pace, but let's make sure that we're doing it right and it's sustainable. And it's going to take us way, way longer, but at the end it's the right way to do it.
Do you think maybe that mentality around what it means to be successful might change as people find their success in manufacturing? I'm jumping ahead a little bit here, but I feel like, let's say a young person invests in a machine shop or gets a couple of machine shops and starts realizing they can be very successful financially and in life without all maybe the glitz and glamour of what a typical millionaire or successful company looks like today. Do you think that'll change as people start getting a hang of this manufacturing thing and this next wave of entrepreneurship in manufacturing? I'm curious to hear your thoughts on that.
Yeah, I think it's going to be much more how it was in the '50s, '60s, '70s, '80s, you know, even the '90s, where you were a business owner and you created the business and you ran it until you retired or you hand it down or something like that, and it pays, you know, for your vacations, it pays for your house, it pays for your kids to go to college. I think what's happened in the last couple decades is there's a lot of people who are looking at all businesses and they see it as a way to like start from nothing and then turn it into $20 million on some sort of exit. And my belief is there's too much emphasis on an exit. It's always like, let's build this to sell it. And it's not as popular, especially online, you know, in social media or whatever, to where people are saying, "Hey, I want to build this and run it forever," or "I want to build this and make it, you know, be family-owned." So, in manufacturing, that's a great way to run something because you have this massive investment that's going to take decades to pay off.
So what happened with all, like, the FAANG companies and all the SaaS companies and social media and stuff, the dot-com era, the media was like, look at all these millionaires, look at all these billionaires that were minting constantly. And people started to apply that with just about any business. Like right now, I'm seeing it in HVAC where, you know, they're trying to do roll-ups. They're buying all these like little HVAC companies and rolling them up with private equity, and these guys are getting payouts. But it's going to implode. You know, just try and get an igniter fixed on your furnace. You know, I couldn't find one at Home Depot. I had a weird old furnace and I was like, "Okay, I'll finally call a furnace guy and just see if he's got one in his truck." But it was a company that I've used forever. Apparently, they sold to private equity at some point, and just to get an appointment, it was like a call center and they wanted to know like everything about my house and my age and if I'm married, and I was like, "Hey, can you just send a truck? I need an igniter. Like, I can tell you the part number."
So anyway, that type of experience is infiltrating its way into all kinds of companies, not just manufacturing, because everyone's trying to copy this dot-com level of success. And I think we need to like chill out a little bit and not be tempted with these really shiny unicorns and instead realize, like, hey, maybe I'm not going to make a billion dollars, but 50 million is totally great. You know, let's have that as a family-owned company that can grow slowly over decades, and then it's still very valuable. You just don't get this like massive yacht one day, you know.
Well, we're going to talk about what it's going to take to get more folks into manufacturing a little later in this conversation, but I think your backstory is important to some of your philosophy around why we're poised for a reboom in manufacturing, because you started in manufacturing in the '90s and you were there, I believe, in like a sign shop in Minden, Nevada, where you got to experience like the first wave of CNC. Tell us a bit about that.
Yeah. You know, I've always been an artist. I made my first money selling drawings on the playground. I'd draw little naked ladies at recess and sell to my buddies, or I'd take a Sharpie and draw tattoos on people at recess and make a dollar. So, when it came time to get a car, you know, my parents were like, "All right, well, you need a job." So, I found the best job that I possibly could for me, which was within walking distance because I didn't have the car yet, and it was a sign shop. So, I was like, "Oh, they kind of do artwork there."
So the owner, Mac, super talented guy, learned sign painting in the '70s, which was like the only way to manufacture signs back then. You had to be a very talented artist. So he would take a lettering brush and a striper brush and a liner brush and make, you know, he knew hundreds of alphabets that he could just do off the top of his head, you know, on glass or on a truck door or whatever, and it was amazing. Like, talk about skilled talent. This guy, first of all, you have to have the gift and then you have to have the experience. So this guy was amazing. So I started learning, you know, sign painting from him, and I was sweeping floors and doing whatever. I was 15 and a half, and at the same time there's this new technology, CNC vinyl cutting.
So our first piece of equipment that he bought was a Gerber 4B sign plotter, and it was this tiny, like, rickety thing. It looks like a 3D printer you could buy off of like Temu now for like $7. But this was like some super cutting edge stuff. So, instead of painting something on glass, you could take a roll of vinyl, cut it out with this knife plotter and then, you know, stick it to the glass. So, it took a lot of the skill out. You had to have a different skill, which was computer-aided design. You know, you had to use something like Photoshop or Illustrator, or I think we used a software called FlexiSign, which is like super obscure, but you could type in what you wanted it to say. You know, it's like Jim's business and the phone number, and this thing would cut it out and you go stick it on. So, I was able to see, like, as this dumb kid, I could produce work that took this guy, you know, 20 or 30 years to get good at. And I was producing, you know, at a different level, but I could produce very, very quickly using this technology.
And then, you know, I worked there through high school and I started to see, like, every year when someone would go to the sign shows in Vegas, they'd come back and they'd start a sign business. And even I thought of starting a sign business, cuz I was like, "Oh man, I could just go buy one of these plotters." And the price kept coming down and down and down every year. So instead of being, you know, this sign shop that could command, you know, any price that they wanted because he was like the only talented guy, there was all these sign shops that started springing up and it started to create a lot of competition. You know, we competed on like talent and, you know, good quality service and everything else. So, he ran the business for much, much longer after I left.
But it was interesting to watch how this technology really shook up an industry and created a lot of wealth for a lot of people. It created a lot of competition in the industry. It created a lot of opportunity. It created a lot of jobs. And so I see that replication all over the place. You know, every time a new piece of technology comes out, all of a sudden it's going to create so many jobs, so many opportunities. But you got to stay on top of it, otherwise you'll get left behind.
Yeah, I think I remember, and you wrote a long article about this. I've mentioned that in the intro for this episode, but you were saying this created a new wave of entrepreneurs. CNC allowed more people to get in there because the technology was more intuitive at that point. And then very soon after, CAD created the next wave of opportunity because you could create all of these models digitally before you ever manufactured them. So you, in fact, I think you made a comment that, you know, there were so many entrepreneurs and so much new money coming from manufacturing during this phase, the '90s, that, you know, some CNC shop owners were out of control, so to speak, if you will. Yeah, you're laughing about this. I feel like I need a little story about that because this would also be appropriate for a Manufacturing Happy Hour discussion.
Well, this comes secondhand. I wasn't there, but it comes from a very reliable source. So as I was there, like, you know, in the '90s in the sign industry, in parallel in the '90s was a new generation of technology in the CNC manufacturing world, which was like, you know, a GUI, you know, a really good graphic user interface that was taking away, you know, manual operations. You know, instead of a manual lathe, you could have a CNC lathe, and that was run not off punch cards, but off of CAD or whatever. So, a lot of shop owners, you know, the smart young guys saw this just like how I saw it in signs, where I was like, "Oh, I should probably buy one of these CNC machines and go start a business." There's a lot of like young guys who are in manufacturing running, you know, manual Bridgeports or whatever, and they're like, "Oh man, if I could buy one of these CNC mills, I could start my own business and it takes all the labor out."
So, a lot of these shops were started in the '90s because of this new technology. You know, instead of using, you know, freaking slide rules and punch cards and, you know, whatever, they could use very primitive CAD and tell the machine exactly where to go, you know, use G-code, but program it in a very efficient way instead of like by-hand G-code. So, these guys were buying the machines.
So I've worked with Amada for a long time now, and Amada, a lot of their sales staff has been there for a very, very long time and these guys have wild stories. So, you put a few drinks in those guys and they tell you crazy stuff. So, especially in the Bay Area, if you had modern CNC CAD equipment as the dot-com was starting to happen and all these places needed data centers or they needed prototype computer chassis or they needed production computer chassis or whatever, your shop was ultra
competitive, especially if you had a laser. You know, lasers back then, you know, everything was punched and so if you had a high performing laser plus CAD, all of a sudden you could just come in and decimate. That's what these guys were doing with Amada equipment. So they're making crazy ass money because they had the speed, so they could charge, you know, on speed, they could charge on quality. And they could also charge or they could also keep more margin because they didn't have to have, you know, as many staff doing programming or, you know, doing manual operations.
You know, there's stories where people just pick up the phone and they're just like, "Get me three more machines." And they're like, "Well, what model do you want?" They're like, "I don't give a... You know, give me three more machines." Cuz they were so busy. You go in to sell a machine and there's just like a pile of Coke on the guy's desk. And you're like, "Whoa, man. You're running at both ends there." You know, stories of just going out and buying new Porsches and wrecking them in the parking lot cuz you're too drunk.
So with success came a lot of poor choices. A lot of divorce happens. You know, anytime you get money, you know, people, it causes marital issues. So I got my money very very slowly. So my wife is very understanding of me. She actually, another reason for the slow path to success that you can get in manufacturing, I should say, or the better pace. Yeah. The more realistic pace, I should say.
100%. So, you know, earn it slowly. Don't go crazy. You give a young man a ton of money really fast, he's going to make some really poor decisions. So anyway, that's kind of some of the chaos that happened in the '90s with some of these manufacturers. You don't see it as much anymore. There's not like crazy windfalls, but you do see it in other like bubble industries right now, like, you know, we saw it in crypto. You know, crypto bros crashing Lamborghinis everywhere. You know, these NFT guys buying mansions with pictures of monkeys, you know, weird... like that. So, that ship has sailed, I think, in manufacturing. But there's still a lot of efficiencies and money to be made.
Yeah. Well, I remember, you know, when you were talking about this rise of manufacturing in the '90s, you had made the comment that eventually the next phase was CFOs, MBAs come in and they start outsourcing a lot of this work abroad. Which is to an extent where we've come now where there's an opportunity for a reboom because all of that happened. So let's talk about this next phase in a very short answer. Let's say why do you feel we're poised for a reboom and then I have a ton of questions to dig into after that.
We are poised because the technology is even better now. We're at this perfect part of the wave where this newest generation of machines is set up so well with alarms and error control and communication and reliability and everything else to where if you upgrade your machines, you're not just upgrading your speed in the machine or the reliability of the machine. You're upgrading your entire workforce or your availability to workforce. So, like for us, we run, you know, these brand new beautiful lasers and I can have a guy up and running on one. Our goal is 40 hours. Like I can take you from working at Target or working at Walmart to running a high-tech piece of equipment, you know, a multi-million dollar machine within 40 hours. But often what we see is a guy starts on Monday and then on Wednesday I'm walking through the shop I'm like, "Hey, where's your trainer?" And they're like, "Ah, I got this, man."
So that upgrade of machine, it enables growth at a level where you couldn't do it if I had to have some guy with 10 years of experience. You know, I couldn't do it if he had to be able to do these like crazy calculations in his head or memorize like half the G-code library or, you know, whatever. Memorize all of our tools and draft angles and, you know, curve offsets and all this other stuff or reference prints. You know, being able to read prints is a skill as we know. With modern machines, you don't need to do that as much. You know, I'm a little biased towards my specific industry and our offering, which is a little unique, but it's so much easier.
And that's why I think as people are starting to retire and it opens up the door for new guys to start up new businesses, they're going to start with brand new equipment and the equipment's cheaper and they're going to be able to be very very competitive very fast because they know this like modern world that we're in. You know, there's like the internet generation and then there's the no internet generation. The internet generation is taking over right now. They understand that they need a website.
And well, one thing I want to ask on top of this, maybe not ask is the right question, but we talk a lot about skilled labor on this show. And I think a point you just made there, and you and I have talked about this before, is that you need skilled labor in a lot of cases because the equipment is outdated and that's the only way for someone to learn it. And you just gave a great example of, hey, you're pulling folks from Target and Walmart and when you have that newer equipment, which we're going to get to in a second, you're able to get them up to speed quicker. But there's another piece of this. How do we make manufacturing more visible to those type of people to begin with? Because we talk a lot about automation. We talk a lot about how that's going to help the manufacturing industry. But at the end of the day, everyone would agree you still need to get the people on there. So, what do we do to make it more visible?
Well, you know, like I was saying, the internet generation versus the non-internet generation, you know, whenever people talk about we need to re-industrialize, you know, we have no manufacturers. I was like, actually, we have a ton of manufacturers here. We have this road in Reno called Edison. And Edison is lined with these like thousand square foot or 2,000 square foot shops with rollup doors. And you can rent them really really cheap. And so that's kind of like our incubator. So if a shop is on Edison, it's kind of like being in El Segundo in California. It's like you're in the new generation. You're building something from scratch. You haven't quite grown up yet. But it's where everything starts.
So all these guys on Edison, you know, running their little business, they're not the best at marketing. They're not the best at websites. They're not the best at social media or whatever. So they don't have a lot of visibility. A lot of it is word of mouth. I know right now in this town, if you need to go get like a cylinder head decked, it's very difficult to find those guys online. But there's a couple great machine shops and if you know a guy, you know, via Cars and Coffee or whatever, you're like, "Hey, who does your machine work?" You're like, "Oh, you got to go check out, you know, Exotic Engine or you got to go check out, you know, Herbert Performance or whatever." It's you got to know a guy. And it's been that way for a long long time. So that's, manufacturing is here. It's just not very visible.
So to become visible, to answer your question, it does take a new generation. And I'm seeing that a lot where maybe the business isn't even sold, but their son or their daughter just graduated from college, and they're like, "Hey, Dad, you've been in business for 20 years. Let me build you a website or let me do some marketing for you or whatever." Those shops are becoming really successful. These old guys, you know, if you're 65 or 70 running a shop, the way that it was done was with phone calls and handshakes. It was done with like the yellow pages if you were a baller, you know, you're like, I'm going to take out a half page ad in the yellow pages and generate work. It took outside sales, a lot of outside sales guys would go around. And so they haven't really changed. They didn't grow up with the internet. They're not familiar with it.
So, what we're seeing now, the way to success in manufacturing is you can't just be a good manufacturer. You actually have to be a good marketer too. You have to make yourself visible. Not only to attract labor but to attract customers. You know, every marketing effort that we make is geared to attract labor as well. You know, not just customers, but labor because we need, so that when they see our ad on Indeed or whatever, because we have an open req, they need to be like, "Oh, I've heard of that company." You know, "Oh, I think they sponsor the softball team or whatever." It really helps with labor.
Yeah. Your comment about how, that you were just saying right there that it's not just marketing to get new business, but it's also to get the people to join your team. That's the exact way more manufacturers need to be thinking about their marketing. Let's get tactical here a little bit. Whether it's purchasing machines, let's stick on the websites for a little bit, right? Because I was just up in the Upper Peninsula right before recording this and I was there seeing a bunch of businesses like typical trade businesses like A1 Plumbing, A1 Roofing, right? Like that was the old yellow page strategy. Pick something that's going to be right up in front of the yellow pages. But that's not the case now. And while manufacturers, I think you bring up a great point, many of them are still playing catch-up with the website in general, but there's also a need for manufacturers to go faster in general. I want to hear some of your thoughts around should you show your price on the website? What do you do to leverage like instant quoting software, right? Because I do think a lot of this audience understands it's like yes, you got to have that digital presence. Your website should be your 24-hour salesperson, but can you take that a step further for us? What are things that manufacturers can do to go faster in that digital presence capacity?
Yeah. I actually had a huge discussion about this with my brother-in-law who owns a sign shop. So, he became my brother-in-law because I was working at that sign shop and I got introduced to the boss's daughter who is now my wife. So anyway, signs are in my blood somehow. He does like custom wraps and stuff. So like you get your car wrapped either for like a color change or you put your business name on there or whatever. So he does wraps and it's a really cool business, but he has no prices on his website. And he's like, "Well, it's cuz everything's custom. You know, I don't know if I'm going to have to take the door handles off or not. I don't know if whatever. You know, if there's clear bra on it, we have to remove the clear bra first and then put this other thing on. So I never know." Like that's fine.
And that's the same argument that I hear with a lot of manufacturers. They're like, "Well, I have to look at it." You know, of course you do, but put yourself in the seat of the customer and at least give them some examples like, "Hey, here's this kind of part that's this big and this material. This is how much it cost. This is how long it took to manufacture. Here's an extreme example. This one got really expensive because it's all freaking Inconel and, you know, it's massive and has all these other post-processes. This is kind of what you would expect." And it's okay to put that price range in there because if it's just like call for a quote then you're like off to the races of who can respond the fastest. And I do this myself all the time. If I need something and it's kind of a commodity, I'll shoot off an email to six or seven different vendors and whoever gets me back the fastest is usually going to win. So if you can't display true prices, display examples and if you can't display examples, you better be damn fast at responding to quotes. Like literal like seconds or minutes.
I'm a huge fan of using call services just like car dealers do at least to respond and get some more data. You know, you don't expect some lady in Phoenix to know everything about manufacturing, but she can at least call the customer back and say, "Hey, I got your request for quote. I have a couple more questions. Okay, I'm going to put this off to, you know, my best quoter and we'll get back to you by tomorrow morning," you know, or whatever. All of a sudden, it's like, "Oh, this business has so much credibility with me now because they actually responded super quickly. They didn't give me the exact quote, but I know that they're working on it, you know, so they gave me that handshake."
I will tell anyone listening to this who's a manufacturer and you go to buy a new piece of equipment, good luck. Like there's, you don't know if it's going to be 10,000 or 100,000 or a million. They're just like call for quote. And then you have to do this dance with the sales guy and he's trying to figure out like how much you can afford and sell you all these accessories and... That's why I love like Haas. If you go to the Haas website, you can configure your machine, it has a number right there. And I guarantee that that has sold them a lot of machines. Even though they may be like missing out on some margin if they had a perfect sales guy or whatever, it moves more machines and I think they're more profitable because of it.
Yeah, that makes a lot of sense. You've also talked about how overseas competition is very responsive. So that's one of the things that manufacturers here in the US, if we're going to have this reboom of manufacturing, you need to have those systems or that instant quoting software in order to be as responsive as possible. Now I have another question for you kind of based on your own business at SendCutSend. What would your advice to manufacturers be if they were to provide 200% better service even if they're 15% more expensive? I believe that's how you described your business in an article. So, what is it that you do to create that situation for yourself?
In my experience, the customers that are driven solely by price are not worth your time. As soon as someone else lowers their price by a nickel, they will leave and they will go to that other customer. So, like who cares? My other brother-in-law, he has a landscaping business and the best thing he ever did was double his price because he lost half the clients, you know, the cheap ass ones who were a pain in the butt and they wanted $1,000 worth of service for 500 bucks, right? And they were always nitpicky. And then the other half that stayed didn't blink an eye. They didn't care cuz they were getting great service and they knew it. So he ended up doing like half the work making the same money. And you know he could use that additional time to grow his business with the ideal client.
So that's really our philosophy, is don't compete on price but compete on speed, service, quality, customer relationship, you know, having feedback. Being ultra responsive. So, I'm not sure how we rank in the industry, but I am very confident that our spend on customer support, customer service, is probably 10x our next competitor. So, we have dozens of staff that support, you know, do chat, do email, do quoting, do whatever 24 hours a day, 7 days a week. And when you look at it on a spreadsheet, you're like, "Holy... you're spending a lot of money there." But it makes us money because, you know, just like personally, if someone doesn't get back to me within an hour, I'm moving on. You know, I need to go go.
We learned that from the car dealer industry. So if you call a car dealer, 'cause you're looking at a new Chevy truck, that phone number that you call is not going to your local dealer. It's going to a call center. And their goal is like they have to answer that phone like within one ring. They have to like do everything in their power to get you connected to a local sales guy in order to close the deal. So without that, like in Reno, I can call the car dealer in Reno and if they don't answer, I'm going to call the one in Carson City, which is just down the street, and then I can call the one in Fernley, and I can keep like trying to find that truck that I want, and I'm going to give my business to the guy who's most responsive and is going to treat me well and give me the best service. Maybe if I have to drive a little bit more to get that truck, fine. Or if I have to pay $1,000 more, I don't really care because I feel more comfortable giving, you know, especially a large investment to this guy. So, manufacturers should take a page out of that book for sure.
A lot of our transactions are very small, you know, you can order something from us for like 30 or 40 bucks. So, oftentimes we're upside down when it comes to like giving support and service for that $39 transaction. We will go to great lengths to educate people on how to use their CAD software or, you know, DFM or whatever. But it pays off in the long haul. You know, after they have that great experience they're going to stick with us and they keep coming back. They're like, man, Send was so nice to me. Why bother? Why would I shop around if they were so cool and took their time to give me all this DFM information? So yeah, price is something you have to be sensitive about. But man, don't race to the bottom. It's really hard down there.
Well, whether these are exact numbers or not, I mean, it jumped out at me when you said you probably spend 10x what your closest competitor does when it comes to the service that you provide. Because if I'm going to do a quick recap of the laundry list we've been covering of how do we reboom manufacturing here in the US, we've been talking about service. We've been talking about responsiveness. We've talked about digital presence online. We were talking about getting equipment that you don't necessarily need someone who has 10 years of experience on, getting equipment that someone can learn quickly.
So let's focus on that a little bit, because when it comes to talking about industrial policy and things like that, you know, when we factor in the economy and interest rates and things like that, there are obviously times that are more difficult or easier to finance equipment. And I believe one of your tips is, hey, if you're going to bootstrap on your way to reindustrialization, look at in-house financing options. Tell us a bit about that when it comes to, let's say I'm a manufacturer that needs to upgrade my lines or a particular piece of equipment. Go into that option a little bit. I'm sure some folks are familiar with it, but I think it's worth highlighting here in this conversation.
Yeah, it's been very, very powerful for us. You know, especially with a partner like Amada that basically has their own bank in-house, except it doesn't run like a bank. Their finance arm is designed to move machines. It's not there to make any type of profit, you know, or be beholden to, you know, private equity or whatever. It's there to sell machines. So, they're amazing. The way that they vet their customers to see if they can pay it back is they send a sales guy and they talk to you and you have a beer, you know, and you work with them and they'll decide if you're creditworthy or not.
So, what happens without in-house financing, you're going to end up going to like the SBA or your bank or you're going to get a second mortgage or something like that. And all of those things require a track record. So, you go to the SBA, you have to have a business plan. They're a little more risk tolerant. But you go to a bank and you're like, "Hey, I need a million dollars worth of equipment." The first thing they're going to say is like, "Okay, can you give me three years of tax returns?" And you go, "No, because I'm just starting this out." And they're like, "Well, come back when you have three years of profitable tax returns." You're like, "Well, how do I do that without the equipment?" So these equipment manufacturers that offer in-house financing or they have a really good partner, you know, like Mitsubishi Capital or something like that, it can really give entrepreneurs an opportunity to get started in the first place when Wells Fargo, Bank of America, whatever are going to shut you down hard, you know, even if you ask for like a line or something like that.
Also, the in-house financing is generally at very attractive rates compared to, you know, another like third-party vendor. If they're taking a risk on you, they're going to charge you 12%, you know, or 9% is probably the sexiest I've ever seen from a third party, versus in-house. So, leverage that in-house relationship, you know, when it comes to policy. I hate to talk about policy stuff because it feels so out of my control.
That's a good way to look at it though.
Yeah. It's like I can be like, our senator needs to change this law. Good luck. You know, I mean maybe someday we'll have lobbyists, but today is not that day. So instead, you know, I try and do what's within my control, but when it does come to policy, if you do put a few beers in me and policy dreams come out, that's where I would love to have a program that funds the equipment manufacturers instead of the entrepreneurs directly, because when you back entrepreneurs directly, you're going to have massive losses. Not everyone is cut out for it. Not everyone is a successful business person, but if you support the OEM equipment manufacturers, they're really good at vetting people. They will come to your shop and they will see, you know, if you can do it or not. They'll look at your fingernails and see how much dirt is under there and be like, "No, man. You're some M&A guy. I'm not going to sell this equipment to you." So, give them the money. Give them the power to, you know, back these loans so they can get more equipment in the hands of guys who really deserve it. That would be amazing. You know, if I could sit down with, you know, a policy maker or the president or whatever, that's what I would encourage them to do.
You know, I mentioned in one of my rants, I call them my rants when I do these long-form writings, I was saying we should do cash for clunkers, but for equipment.
And I was going to ask you about that. Tell us what cash for clunkers is.
This is good. Okay, before anyone freaks out, like, no, Bridgeports are exempt. They will not be cash for clunkered. I love Bridgeports. But I don't even remember what year this was. Was it like 2008 or something? Cash for Clunkers. It was when, I don't remember.
Yeah. I mean, that's when I was trying to find my first job. So, that sounds about right.
So, Cash for Clunkers, in order to stimulate the economy, the president decided, let's give everyone, like no matter what it is, let's give them four or $5,000 or something towards a new car. So, if you push or drag in, you know, this Dodge Neon that's only worth a hundred bucks, we're going to give you five grand to buy a brand new car to support the OEM manufacturers.
And it was a success in some ways. It sold a lot of cars. So the OEMs, in this time where no one had any money because of the economic downturn, whatever, it allowed them to keep producing and sell new cars. But then as a car guy, it had some really negative effects. Like I haven't seen a Dodge Neon on the road in forever. So they all got crushed. All the cool minivans that I want to, you know, Hellcat swap right now are crushed. We lost a lot of Caprices, you know, a lot of Ford Interceptors got crushed. So, a lot of future classics got destroyed in that program. But my point is it was successful in a lot of ways.
What if we could do the same thing but with equipment? So, hey, you started this company in the '90s. Your primary piece of equipment is 20 years old. We've given, you know, a company like Mazak or Haas or, you know, DN or something like that, if you donate or destroy this piece of equipment, you're going to get X credit towards a new machine, you know, so government-backed. But the government would get their money back by all this like stimulus that they'd be generating, you know. So, as much as I hate the government interfering in anything, this type of program is one that makes sense to me.
Well, I appreciate you, you know, looking at historical programs that have had their pros and cons that the government has done in the past. I think manufacturers need to be more creative in this regard. And like I said, this is the perfect type of conversation to have over a beer in your old shop. So, you know, I'm glad you brought up some of these ideas, but you also have other ideas that I've come across that are outside of policy, if you will. This one example is one I saw you mentioning about manufacturers teaming up, like having regional co-op buying power. Tell us what that is and why you're bullish on that solution as well.
Well, it's a hell of a lot easier to do than getting the government to listen to you, but it is hard. It's like herding cats. You have to have like a very stubborn person leading this co-op. So, you know, just in the tiny town of Reno, Nevada, there's probably six or seven sheet metal shops that focus on laser cutting. So, if we could, you know, meet once a week or once a month or something at a coffee shop and, you know, with our list of like, hey, here's what I need ordered, and we had a co-op and we actually went to a service center and said, "Hey, instead of buying, you know, one ton of this material, I need to buy 15 tons." We could negotiate that pricing.
Actually, Whole Foods did that in the early days. If you read the book The Whole Story, I forget the founder's name, but did something similar where, you know, all these food companies, they got a warehouse together and they bought in bulk and then split it up amongst themselves, so they were their own middleman. But it gave them a lot of purchasing power. I think that opportunity is there, especially with machine shops, you know, buying raw materials, even buying equipment. You know, you can buy one of anything, but if you go to them and you say I want to buy 10, the negotiations get really interesting, especially on the service and warranty side, on the consumable side. It's really interesting when you have that level of buying power.
So I would encourage friendly partnerships with your local competitors, and it's better than just the material buying. We'd love to have great relationships with our other guys in town because if our machine goes down, it's really nice to be like, "Hey, John, we're sideways right now. Can I send you some work? You know, I need this deburred or I need it, you know, powder coated or whatever." And then vice versa, you know, we help out a lot of guys. So, having that friendly yet competitive relationship, you know, rising tide floats all boats kind of thing. A lot of people look at their across-the-street competitors and they want to burn them down. That usually just ends up with both of you like catching on fire. So, instead, try and be friendly.
Yeah. Now, you've given a lot of great tips throughout this conversation on what it would take to reindustrialize from a bootstrapper perspective, leveraging the financing programs that exist at OEMs, providing the service, providing that quick response time. Just continuing to look through here, the co-op buying power that we were just discussing. All these areas are, I feel like, quintessential pieces for a reboom. Is there anything we haven't talked about that you feel like is an additional piece of this puzzle that we should highlight?
It all comes down to pay, too. You have to pay your staff well. And I think in some cases manufacturing has been on the lower side, especially at the entry-level stuff. They're like, your job is to clean out the pit. You know, I'm going to pay you 13 bucks an hour. And it's a dirty, dark, dusty shop. And people are like, I can't wait to get out of manufacturing. You know, I'd rather go work in retail because there's music and I'm working at the mall and I can, you know, go get a hot dog on my break.
So for someone young, they're looking at like, if I'm going to make 20 or 25 bucks an hour, what is like the best environment that I can make it in and who has the most flexibility? So that's why you see so many people like going into retail. You know, even though they have to deal with crazy customers at Walmart or Target or whatever, it is a relatively nice environment and there's good benefits and it can be flexible with their schedule. Manufacturing needs to do the same thing.
One of our, you know, again, our big recruitment things is to have a good work environment. So, well lit. We invest heavily in air conditioning in our facilities. We'll condition the entire square footage, because it gets hot in Nevada, gets hot in Kentucky, gets hot in Texas. We have good lighting, we have great dust collection systems, we actually go to great expense to move our most noisy equipment outside and put it under shelter so that our shops are decently quiet. We have great bathrooms. We cater meals. We do all kinds of stuff so that when you're making the choice like, okay, I could make 20 bucks an hour at Target or I could make 20 bucks an hour in this high-tech manufacturing spot, like kind of looks to me like this manufacturing has a little more legs on it, like maybe I can go up.
So that's actually this big thing that we just started in December: we are very open about our wages internally and externally and we say, "Hey, production tech one is going to start out at 22. A production tech 3 could make 45. A production tech 7 could make, you know, 120 grand. This is how much our GMs make. This is whatever." As soon as you expose that poster, people are like, "Oh okay, if I start here, but I put in some effort, you know, I could be making six figures."
And, you know, going back to our earlier conversation where I was saying, "Don't compete on the lowest price," it's because you need that margin in order to pay your guys really well. So they stay with you. They learn more, they get more powerful. You know, a guy on day one is worth about 10% of what he'll be able to do on day 365. So, pay him well, don't have churn, have a nice environment. You know, you want lifelong customers and you want lifelong employees. But, you know, it's hard to do that when you've been doing this since the '90s and you're burned out and you think no one wants to work anymore. So that's why we need a new generation to come in and reboom.
Well, I like your focus on the wages and the people because I actually did have one more question for you. And I know policy isn't necessarily your favorite topic, but I do think one point that you made in the article that I saw where I first learned about you was you said if you want to win over lawmakers, you show them job creation. So maybe end on that. Why is that so important? How do we win over lawmakers, policy makers with job creation? Because that gets to the essence of, I think, one of the most important things from this conversation. It's not just about the automation. It's
having the people that make the automation and the new equipment that make it work at the end of the day.
Yeah. I think one of the problems with this new generation that I'm so excited about is they're coming on, they're like, we're going to automate everything, and they're talking about automate, automate, automate. That's the way that we can be competitive with China. That's the future. I agree. But you have to chill out a little bit. And when you're talking at the local level and you want to get a tax abatement or a grant or something, or you want to build a facility and you need them to rezone it or whatever, you have to talk about job creation. You can't talk about how you're going to have all these humanoid robots and it's going to be a lights-out facility. No one wants to support that. They don't give a...
So, I think automation has its place. I'm not super gung-ho on a lot of automation because we are a crazy job shop. We will do thousands of different SKUs before lunch. And so to automate, you know, to handle all that is pretty challenging. We automate where it makes sense. But we also create a lot of jobs because a human can do some amazing things. And we're very versatile.
So, I would encourage, you know, when someone is going to the SBA or they're talking to their mayor or whatever, if you have ears to the governor, that's great, too. Feel free to talk about how many jobs that manufacturing is going to create in your community and talk about how there are high-paying, you know, attractive jobs that have a career path. Don't talk about how you're going to spend $4 million of conveyance. You know, say, I'm gonna have a dude who's like walking around checking on things, and we're going to need a lot of them. And you will get really far with dudes versus robots. Trust me.
I think that is a very great way to end, with a very pro-people comment, but also a pro-automation comment in a lot of ways as well. There was a nice balance there, Jim. So, no, great advice throughout this whole conversation. I appreciate you taking the time to jump on the show. For everyone out there listening, there will be links to connect with Jim, to connect with his company, SendCutSend, over in the show notes. I think it's time that we head back to your old shop for one more round as we call this episode a day. Thanks so much for jumping on, Jim.
Yeah, thanks for having me. Cheers.
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