00:00:00 · Ty Morse, Jim Belosic
[00:00:00] S0: Today, I have the pleasure of sitting down with Jim Belosic, the founder and CEO of SendCutSend. SendCutSend is absolutely crushing building factories here in The United States, and in my mind, is one of the few manufacturing companies that is genuinely competitive with China. So with that in mind, I want to start this off with what does it take for a US manufacturing startup to be competitive with China, and is it even possible today? [00:00:21] S1: Yeah. Of course, it's possible. It's... It takes scale. You need a lot of scale. Manufacturing in The US right now is, like, I think 93% of it is, companies that are a 100 staff or smaller. And then, like, 75% of that is companies that are 20 staff or smaller. So lots of, you know, mom and pop type shops. You put them together, and we're a force to be reckoned with, but no one is really scaling at the proper level to bring prices down, increase speed, whatever. So that's what we're trying to do. We compete with China on parts right now. You know, maybe 20% of everything we do, 25%, we actually can meet or beat China. But I'm, I'm not happy with that. I want it to be a 100. [00:01:10] S0: And right now we have a bunch of machines in the background that in most cases are like semi automated or a large part of the process is automated. But there is obviously some human touch. So how do we actually make, you know, companies like this competitive?
00:01:10 · Ty Morse, Jim Belosic
[00:01:10] S0: And right now we have a bunch of machines in the background that in most cases are like semi automated or a large part of the process is automated. But there is obviously some human touch. So how do we actually make, you know, companies like this competitive? [00:01:23] S1: Yeah. Automation is not the magic bullet. Fully automating and dark factories and lights out manufacturing or whatever. Yes, it helps, but that's not the magic bullet. You know, we'll get there someday, but today's not the day. You have to have a mix. You know, we're really happy to have robots where it makes sense to have robots. And then we have good dudes where it makes sense to have dudes and dudettes. Everyone thinks like, oh, because China has cheap labor or whatever, the only way to compete with that is to automate. What we found is, no, you just have really good labor. And if it's expensive labor, they care. They like their job. They want to produce a good quality product. They want to hit deadlines. They want to go faster. They want to improve the process. So you take really good people and you lay... Level them up with really good technology and you're good to go. [00:02:12] S0: I know for the past like eight years, you've been in bootstrap mode and you've raised almost no money to date. A lot of people, when they're starting a, you you know, a manufacturing startup, they just raise a huge amount of money out the gate before they actually have any product or customers. And they kind of hope things will work.
00:02:12 · Ty Morse, Jim Belosic
[00:02:12] S0: I know for the past like eight years, you've been in bootstrap mode and you've raised almost no money to date. A lot of people, when they're starting a, you you know, a manufacturing startup, they just raise a huge amount of money out the gate before they actually have any product or customers. And they kind of hope things will work. [00:02:28] S1: Yeah. You... What's called? Product market fit? That's what they're looking for? [00:02:31] S0: You inverted the entire thing or you raised almost nothing and then figured out this entire process and how to scale before you raised the money. How do you kind of go from that R and D mode to now you're gonna be scaling a bunch of different factories around The United States?
00:02:46 · Jim Belosic
[00:02:46] S1: So I... I'm trying to show people like what the path is. I hope that we're a template for how to do this. My belief is you have to figure something out, you know, a very small scale, prove it, get the customers, understand what customers want, understand what your capabilities are, scale it using profits of the company. My thinking is very, very old school. You know, I've said before, I run this company like a lemonade stand. I buy lemons for 50¢, and I sell them for $1 I take the extra 50¢ and invest in more lemons, right? So my concept of running a business is you have to be profitable from day one. Now, not everyone has, you know, a million dollars laying around to go buy equipment or whatever, neither did I, but you can get a loan on it. So, to anyone listening out there, like make sure that you have good credit, leverage credit and debt to get your business off the ground and then put your head down and grind. You know, it's yeah, we're eight years in. People are looking at us and going, oh my gosh, you're an overnight success. It's like, no, you haven't seen us get punched in the face for eight years. Now is the time for us to like really add rocket fuel and go to the next level. So the challenge that we have is we've gotten to this big scale where it's very difficult to continue bootstrapping. Like for us to in the old days to open up a new facility, you know, maybe it was like a million dollars or something like that. Now for us to open up a large facility, it's $50,000,000. And it's... I can bootstrap that, but it's on this timeline that I just... I'm very impatient for.
00:04:30 · Ty Morse
[00:04:30] S0: Yeah. I know there's also this like dynamic of you don't want to be turning away customers, but you also want to make sure that the products and services that you're providing are of the quality and standard that you care about. And so if you want a twenty four hour, forty eight hour turnaround from someone asking for a part online and then having it show up at their door, you know, you can deliver that at small scale. But then if you scale too quickly, maybe suddenly things like slip. And so how do you kind of think about making sure that the product service experience that you create scales with the company?
00:05:03 · Jim Belosic
[00:05:03] S1: That's really hard. It's it's culture. So because we've scaled, I mean, we've scaled fast by some measures, but we've scaled slow by others. We've scaled fast for, you know, a self funded or mostly self funded company. I did raise a little bit of money. Shout out to Mark and Sandy. Thank you. We we didn't take, you know, this massive amount of money right at the beginning when we had no idea what we were doing. So it forced us to go at a certain pace and build the culture, without getting too far over our skis and and falling over. So what I'm concerned about is, you know, with some money to spend, all of a sudden you go 10 x faster. Do we start hiring people 10 times faster and there's, you know, 50% of them aren't the right fit? Luckily, we have this really deep culture, already ingrained. So everyone new gets to learn from the people that have been here. They understand how we operate, what our quality standards are, how generous we are. So doing that at scale, yeah, you need about 400 people in order to like serve everyone the Kool Aid, you know, it's because we're gonna have another thousand people coming on. I couldn't I couldn't go from 10 people to a thousand. I can probably go from four or 500 to a thousand.