00:06:17 · Ty Morse
[00:06:17] S0: Even with money, you can only scale culture so fast. And I think Sam Walton, one of the things he did was he would fly to different Walmarts and basically just see if everything, you know, worked and was... Or what was amiss. He would go to the, like, distribution centers at 5AM and bring donuts and talk with the truck drivers to see... You know, get a pulse for five different stores at once. How do you kind of scale yourself while you're doing that if you can't be walking the floor every day?
00:06:42 · Jim Belosic
[00:06:42] S1: Yeah, you can't. So I I run into that every day. Just walking around this facility, I see new faces all the time. Right now as we're filming, this is C shift. So Friday, Saturday, Sunday. I'll come in on a Sunday and see 10 new faces. And you know, some people will be like, Hey, know, where do you work? What department do you work in? I'm like, I don't know what department I'm in. So I can't be everywhere at once. And thank God, because that's exactly how you put a ceiling on your business. If you think that you're the only guy who can go around and make sure everything's working perfectly, you'll be limited by how many hours you can be awake. Very early on, I knew that I wouldn't be able to do that. So having, you know, an incredible staff as my direct reports, They are my eyes and ears. They go around, they understand what I want. They understand the vision of the company. And I understand their vision too. Like the office of the CEO is, it's not just me as CEO, it's like five people. The CFO is five people. The president is five people. You know, everything is kind of like a group of us that are all additive. And then that way, no matter if someone's on vacation or traveling or whatever, it's basically the same answer to any question that happens across any facility. So hiring great leaders that are a culture fit, and then just doing it time and time again, that's the only way that we can do it. We spend a lot of time traveling now. Our travel budget is through the roof. We're gonna have to address that at some point. I don't know how, but especially when we start a new facility, you have to be out there for weeks at a time in a rotation with myself, with other leaders. So they understand like the background, the history of the company. They can be a really incredible operator. Maybe they came from some massive manufacturer and they're gonna run our facility, but they don't know SendCutSend. And so it takes weeks and weeks and months of us going out there, them coming out here, blending it all together. It's it's hard. It's fun, but it's hard.
00:08:43 · Ty Morse
[00:08:43] S0: Yep. I know you just raised a 110,000,000 or something like that. Yep. And I know for a very long time, you were very conscious and thoughtful about not raising money, and you had some good reasons for doing that. But at some point, I think things flipped, and there was so much demand that you just could not scale fast enough without external capital. So what kind of made that flip in your mind?
00:09:07 · Jim Belosic, Ty Morse
[00:09:07] S1: In my perception, I thought I was disappointing my customers. The only way that we can control demand is by increasing lead times or raising prices or saying no, you know, put a banner on the website and it's like, sorry, like stop ordering. We we're not going to hit our deadlines. Right. That's super painful. It's incredibly expensive to the brand. Like we built our brand for years and years on speed, quality, good price, incredible service, you know? So as soon as that starts to slip, I think you can grenade the entire company. So we're like, okay, we gotta go faster. We gotta go faster. But demand was always outpacing our budget, outpacing our bank covenants. You know, we have great lending partners. People give us a loan on our machines all day long, but there's a lot of stuff that you can't get a loan on. You know, I can't get a loan on tripling the size of my software development team. You know, I can't get alone on these crazy R and D projects that we need to go and experiment with, and we don't know what the outcome is gonna be. So what I'm, what I'm happy that we did is we waited so long to say yes to taking on money that I didn't have to give away the farm. I didn't have to give away 50% [00:10:24] S0: of the business.
00:10:24 · Ty Morse, Jim Belosic
[00:10:24] S0: of the business. [00:10:25] S1: Didn't have to give away, you know, my vision or anything like that. We built a really, really awesome company that looks great to our customers. It looks great on paper. And so when it comes time to negotiate like, hey, gonna give up a chunk of my baby, you know, we gave up 10%. That that amount of loss of control was acceptable to me in order for the gain that it's gonna get me to my customers. Because that's a shit ton of money. When you have to, like, produce every single dollar of profit, you know, as a team over years, when someone can just inject a bunch of capital and you get to run with that and add capacity and add scale and lower prices and increase speed and add new capabilities, it's like, okay, that's a trade off I'm willing to make. But I'm glad we didn't do it too early because it wouldn't have been 10%. It would have been, you know, 50% or 70% or who knows what. [00:11:20] S0: When we were just at dinner last night, we talked a little bit about expectation setting and like making sure that whatever you're saying that you're gonna do, you actually do it. And not only that, you kind of exceed it most of the time. How do you think about expectation setting in your mind with the customers or even with suppliers and vendors and stuff?
00:11:20 · Ty Morse, Jim Belosic
[00:11:20] S0: When we were just at dinner last night, we talked a little bit about expectation setting and like making sure that whatever you're saying that you're gonna do, you actually do it. And not only that, you kind of exceed it most of the time. How do you think about expectation setting in your mind with the customers or even with suppliers and vendors and stuff? [00:11:37] S1: For for expectations of... My son is joining us in in the audience here. I always told him... I was like, I don't make threats. I make promises. If you don't clean up your room, I'm gonna throw out everything on the ground. And it's like, I will throw out everything on the ground. And then I had to buy it back again. So anyway, that hurt me more than it hurt him, but expectations are promises. So if I promise a customer that it's gonna be there on Thursday, it better get there on Thursday. If I promise them that it's going to cost a certain amount, it's going to cost a certain amount. So the expectations is like live by the sword, die by the sword. The issue with it is it's like a ratchet. When you improve stuff, that's the new bar. Like you can't go backwards, which is where, you know, we run into these crazy challenges. Like manufacturing is a hell of a lot easier when you're not quick turn. So from day one, we're like, oh, we'll be quick turn because I'm impatient. I want my stuff fast. We should do that. Scaling that is really hard. And then as you get better and better, you're like, cool, let's let's shave a day off of our lead time.