July 10, 2025

#216: TJ Dembinski (Eagle Electronics) — Onshoring America's Critical Technologies (TOF Report)

TJ Dembinski is the co-founder and CEO of Eagle Electronics, dedicated to on-shoring America’s critical technology supply chain, starting with the IoT and automotive-grade cellular modules!

This journey traces a fascinating arc — one that begins with the macro and geopolitical forces shaping global commerce and lands in a Northeast Ohio advanced micro-electronic manufacturing floor where Eagle Electronics is domestically building one of the most critical pieces of our digital infrastructure: the cellular module.

TJ's story, and the founding of Eagle, is deeply embedded in these broader structural shifts — from the decoupling of U.S. global supply chains to the bipartisan momentum around domestic manufacturing and deindustrialization, to the evolving national security concerns that now govern the production of connected technologies.

We also talk about the nuances of reshoring, what onshoring looks like in practice, what cellular modules are, and why Ohio — of all places — is emerging as the epicenter of America’s next industrial chapter. From partnerships to cutting-edge automation, from regulatory and security considerations to hard-earned insights about what it actually takes to build something physical at scale — TJ brings an insightful clarity to one of the most exciting, complex, and important entrepreneurial movements underway today and how Eagle Electronics is positioned to lead within it.

00:00:00 - Reviving Domestic Manufacturing  
00:05:09 - The Evolution of Eagle Electronics  
00:08:11 - Understanding Cellular Modules and Their Importance  
00:10:56 - Navigating Regulatory Challenges  
00:14:02 - The Role of Trust and Security in Technology  
00:16:53 - Building a Skilled Workforce in Ohio  
00:20:00 - Funding and Capital Landscape in Ohio  
00:23:04 - The Future of Onshoring and Manufacturing  
00:26:02 - Lessons Learned as a Founder  
00:29:04 - The Importance of Nuance in Global Supply Chains  
00:37:00 - Requirements for Success
00:46:50 - Hidden Gem

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LINKS:
https://www.linkedin.com/in/tj-dembinski/
https://www.eagleelectronics.com/
https://theohiofund.com/


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Transcript

TJ Dembinksi, Eagle Electronics [00:00:00]:
We want to onshore the manufacturing of critical technology. One of the most critical pieces of this is the cellular module kind of any connected device will likely have a cellular module in it. None of that manufacturing happens here domestically and what we are doing is we're bringing back cellular module manufacturing to the us.

 

Jeffrey Stern [00:00:22]:
Welcome to the Lay of the Land Podcast. I am your host Jeffrey Stern and today we're going to do something a little different and introduce a new concept. As many of you may know, my full time focus is now on the Ohio Fund, where I have the incredible opportunity to invest in the most compelling businesses and projects across the state that will fuel Ohio's economic future. To that end, I have started a new podcast dedicated to elevating Ohio's collective ambition by highlighting a portion of these most compelling stories of innovation and growth throughout the state that might partner, partners and I at the Ohio Fund have the privilege of being a part of so while my work on Lay of the Land will continue in parallel to the Ohio Fund Report, from time to time I will be publishing stories from the Ohio Fund Report on Lay of the Land, which I hope you will enjoy all the same. Our first episode of the Ohio Fund Report happens to feature Eagle Electronics, a Northeast Ohio business headquartered in Solon, Ohio that would be right at home as a standard Lay of the Land episode. You'll hear from Eagle CEO TJ Dembinski on how Eagle has become the leading manufacturer dedicated to onshoring America's critical technology supply chain, starting with cellular modules. The Ohio Fund Report is also a standalone podcast so you can directly subscribe to it on Apple, on Spotify, on YouTube and any other places you would listen or watch episodes, including the Ohio Fund's website, www.theohiofund.com. so please do that if you are interested in these stories with that programming note aside, please enjoy this awesome conversation with Dambinski.

 

Jeffrey Stern [00:02:02]:
After a few disclaimers, Lay of the Land is brought to you and is proudly sponsored by Roundstone Insurance. Headquartered in Rocky River, Ohio, Roundstone shares Lay of the Land's same passion for bold ideas and lasting impact from our community's entrepreneurs, innovators and leaders. Since 2005, Roundstone has pioneered a self funded captive health insurance model that delivers robust savings for small and medium sized businesses. They are part of the solution to rising healthcare costs, helping employers offer affordable, high quality care while driving job creation and economic growth throughout Northeast Ohio. Like many of the voices featured on Lay of the Land, including Roundstone's founder and CEO Mike Schroeder, Roundstone believes entrepreneurship, innovation and community to be the cornerstones of progress. To learn more about how Roundstone is transforming employee health benefits by empowering employers to save thousands in per employee per year healthcare costs, please Visit Roundstone Insurance Insurance.com Roundstone Insurance built for entrepreneurs, backed by innovation, Committed to Cleveland before we.

 

Jeffrey Stern [00:03:08]:
Dive in Just a quick note, this podcast is for informational purposes only. Nothing you hear today should be taken as investment advice, a recommendation or an offer to buy or sell any securities. Today's guest is the CEO of one of the Ohio Fund's portfolio companies, meaning we do have a financial interest in the company being discussed. As always, views expressed by our guest are their own and don't necessarily reflect those of the Ohio Fund or its affiliates. Any forward looking statements you hear today are based on current expectations and may change. Please do your own research and consult with your advisors before making any investment decisions.

 

Jeffrey Stern [00:03:35]:
Welcome to the Ohio Fund Report. I'm Jeffrey Stern, a principal at the Ohio Fund and host of Today's Conversation, where I had the real pleasure of speaking with TJ Dembinski, co founder and CEO of Eagle Electronics, which is dedicated to onshoring and securing America's manufacturing of critical technologies. Starting with IoT and automotive grade cellular modules, this conversation traces a fabric fascinating arc, one that begins with the macro and geopolitical forces shaping global commerce and lands in a Northeast Ohio advanced microelectronic manufacturing floor where Eagle Electronics is domestically building one of the most critical pieces of our digital infrastructure stack. The cellular module. TJ's story and the founding of Eagle is deeply embedded in these broader structural shifts from the decoupling of US global supply chains to the growing momentum around domestic manufacturing and re industrialization and to the evolving national security concerns that now govern the production of connected technologies and securing America's supply chains. Before founding Eagle, TJ was a partner at Drive Capital where he spent over five years exploring and investing at the frontiers of emerging technologies from AI to cybersecurity to advanced manufacturing. In our conversation we explore how his vantage point as an investor informed his transition to becoming a founder and entrepreneur, and how Eagle Electronics emerged from an intersection of powerful global tailwinds and one very specific specific customer need. We also talk about the nuances of reshoring, what on shoring looks like in practice, what cellular modules even are, and why Ohio of all places is emerging as the epicenter of America's next industrial chapter.

 

Jeffrey Stern [00:05:17]:
From partnerships to cutting edge automation, from regulatory and security considerations to hard earned insights about what it actually takes to build something physical at Scale TJ brings insightful clarity to one of the most exciting, complex and important entrepreneurial movements underway today. And Eagle Electronics is positioned to lead within it. So with that, please enjoy this fascinating conversation with TJ Deminski.

 

Jeffrey Stern [00:05:42]:
I remember of the first times we met was when I would frame it. You were exploring the idea maze and actually wasn't about critical technologies, advanced manufacturing. We were talking about AI and where investing in AI, where enterprise value might accrue, where people were building in AI and how it just kind of changes the whole landscape of things. And I wanted to kind of start there because I always find it really fascinating how from if you look at your decision tree of your life and kind of map your career against it, how it's very difficult with any kind of clairvoyance to say and know this is the path that I was on. But from a place of retrospect and where we are today, you can kind of look back at your life and career and identify maybe the thread that ties it all together. And as a way of introduction, I wanted to ask, in reflection, what would you say is the thread that ties your career together?

 

TJ Dembinksi, Eagle Electronics [00:06:46]:
Interesting. I'd probably say the biggest thread. And it's actually more of a. It's a philosophical answer to some extent, but I often think about whether you direct your life or whether life happens to you. And I think it's a funny thing, but most of us operate in contexts that are so much greater than us, meaning there are macro trends that are just so powerful that they pull you in. And if I think back to my career, I have ridden the tailwinds of a lot of macro trends. Not so much because I was smart and I chose to do those things, but because I was exploring opportunities. And there were opportunities that originated as a result of those macro trends that pulled me in.

 

TJ Dembinksi, Eagle Electronics [00:07:28]:
And if I think about this past year and how we originally met, one of the opportunities that I was exploring was around investing in the AI space. It feels like this inevitable tailwind. All of the momentum is in that world and we read about it every day in the newspapers and now I think so that was the trend that I was exploring at the time. But what's a funny thing is if you think about these macro trends that pull you in, there's another broader macro trend that's pulling us in. And it's probably the onshoring of manufacturing in the U.S. and frankly, the decoupling of supply chains between the U.S. and China. And that was just another one of those tailwinds that was so powerful.

 

TJ Dembinksi, Eagle Electronics [00:08:06]:
I wish I could say that it was this intentional effort of mine to go build a business in the space, but I think that that was the space that pulled me in and it was this macro trend that I just couldn't shake.

 

Jeffrey Stern [00:08:18]:
Yeah, well, and it was powerful enough to kind of inspire the transition from investing to founding of an organization. Just kind of take us through the evolution, if you will, of how you thought about what this trend even was and where the opportunity within it was.

 

TJ Dembinksi, Eagle Electronics [00:08:36]:
Yeah, I mean, I think that to some extent this has just been, this has been a trend that has been going on for really the last decade as geopolitics have played out and, and as this has just become more of a hot button issue. The way this specific opportunity with Eagle came about was it was actually the result of the last few years of work that I'd done back in 2016. So prior to founding Eagle, I had been an investor at Drive for the last, really for the five and a half years prior to that. One of the businesses that we'd had the good fortune of investing in was a company called Finite State. Finite State had had really the thesis for the business was most vulnerabilities that exist in an end hardware product are typically not the result of final assembly. They're the result of there being a vulnerability somewhere along either the hardware or the software supply chain. And that being the ultimate exploit point. Finance 8 had its big break in 2019 when they were the ones that discovered many of the backdoors that existed in Huawei equipment.

 

TJ Dembinksi, Eagle Electronics [00:09:34]:
And as a result of that, really a number of Chinese businesses had reached out to them and said, hey, we need to find a way to assuage our customers fears and let them know that hey, our product is okay for American consumers, is okay for American businesses, are no vulnerabilities and therefore it is okay for you to design into your end product. One of those companies was a company called Quectel and it has been and continues to be a good relationship. About a year and a half ago though, as geopolitical tensions continued to bubble up, they reached out to Matt, the founder of Finance State, and said, hey, we need to find a way to guarantee continuity of supply to our customers under any geopolitical scenario. Do you have any ideas on where to start? And that was how we got, that was how myself and my partner Mark got introduced to the team. And what we pretty quickly said to them was we said, hey, we have no interest in this being a one off consulting project for how to onshore manufacturing. However, we do Believe that all of the macro trends that you're caught in the middle of are not unique to you. Geopolitical tensions are only increasing. The desire to onshore manufacturing domestically is only increasing.

 

TJ Dembinksi, Eagle Electronics [00:10:43]:
And frankly, end customers desires to procure from American suppliers and sort of onshore suppliers is only increasing. We want to go build the onshoring partner of choice, both for companies like yourself, but also then for those end customers. And we would use the sort of story of onshoring with you guys as the case study in how to do this. So that's kind of the origin story and we haven't really looked back since.

 

Jeffrey Stern [00:11:06]:
To set a bit of maybe a historical backdrop to some of those tailwinds that you've been working with in the formation of Eagle. What happened with advanced manufacturing here? What is the story of onshoring and re industrialization I kind of love from the perspective of Eagle. A lot of people are talking about what that looks like in practice and there isn't a lot of what it looks like in practice.

 

TJ Dembinksi, Eagle Electronics [00:11:32]:
Yeah, that is true. Although I would say if you look at the trend line, you're starting to see a lot of it happen in practice. If you zoom out For a second, 30 years ago we offshored a huge amount of manufacturing, both advanced manufacturing and then also not advanced manufacturing. That was just the result of a labor arbitrage that existed between Asia and the US the past really decade. I think you've seen a huge amount of investment in automation. And the irony is that that has actually made American manufacturing more competitive. So, and it's funny, I think one of the things that we found is that in in Asia, a lot of the region that a lot of the reason that folks have made investment into manufacturing technology is not for cost reduction, it's actually for quality control. Basically there's so much turnover on these lines that they need to have advanced manufacturing and sort of automated manufacturing in order to control the quality.

 

TJ Dembinksi, Eagle Electronics [00:12:32]:
Because there isn't a huge amount of knowledge stability on the line.

 

Jeffrey Stern [00:12:36]:
But the byproduct is that you can do it.

 

TJ Dembinksi, Eagle Electronics [00:12:38]:
Yeah. And so what's interesting though is that in the US what that has actually allowed for is it's allowed for kind of a cost parity or a relative cost parity where all of a sudden the cost to produce a overseas is not so different than the cost to produce a product domestically. Just because now if you look at kind of the total product cost, the percentage that is the goods has increased and the percentage that is the result of kind of a value add from the Manufacturing side has diminished. And so the irony is that has now made American manufacturing more productive and more possible. And while you're right, that in kind of, if you were to look at it from an absolute number of sort of advanced plants that exist here today relative to other parts of the world were small. But if you look at the trend line and probably the year over year growth rate, we're rapidly increasing. I think you've seen that with TSMC Arizona. You've seen that with all of the incentives that have come from both the federal and state levels.

 

TJ Dembinksi, Eagle Electronics [00:13:33]:
And then you've seen that probably most recently with last week's announcement of Anduril coming to Ohio.

 

Jeffrey Stern [00:13:37]:
Totally in reflection on where this kind of tailwind came from. And it's in one of these kind of rare bipartisan supports of it. There is an agreement that it is important for us to reconsider how we have done manufacturing and supply chains. What do you find was the catalyst for this kind of thinking at a higher level?

 

TJ Dembinksi, Eagle Electronics [00:14:02]:
I think in a lot of ways it's a very easy political story to get behind. Jobs are bipartisan, advanced technology is bipartisan. And a desire for America to be secure and control its destiny from a critical technologies perspective is a bipartisan belief. And all of these trends have kind of coalesced together such that Republicans, Democrats, everyone in between has been able to say, hey, this is an easy thing for us to support. All of our constituents like it, and therefore I'm going to put my weight behind it.

 

Jeffrey Stern [00:14:36]:
When you talk about critical technologies, can you expand upon what we're actually talking about?

 

TJ Dembinksi, Eagle Electronics [00:14:41]:
Yeah, a lot of this is kind of the advanced manufacturing on electronics starting at really, you can kind of start at the base chip level. I think there's a number of folks that worry about our reliance on Taiwan for a lot of the critical chips that underlie most of our critical technology. And as a result, folks have wanted kind of to diversify our reliance, diversify away from our reliance on that to having a lot of those capabilities onshore. That's what's led to the TSMC Arizona plant and frankly all of the subsequent chip manufacturing efforts that we've seen.

 

Jeffrey Stern [00:15:17]:
You mentioned Anduril as a recent move from California to Ohio kind of story. And Palmer Luckey had mentioned this phrase hinting at why that was the case and kind of described Ohio as a place that can pull you in and speed you up, which I just appreciate very much as a pithy aphorism for why you might want to do and consider building here. From your perspective, though, as you considered all the possible places that you could have built Eagle, what was it about here that made it interesting and compelling?

 

TJ Dembinksi, Eagle Electronics [00:15:57]:
So I think there's a couple of things. One, obviously my co founder in this is Mark, Mark Kwame. He's one of the founders of Drive. He's the founder of the Ohio Fund. I've known him now for the better part of almost seven years. When we began working on this idea, I think it just so happened that obviously the Ohio Fund had been raised and that was a wonderful source of opportunity and sort of a way to have this vision be realized. I think too one of the things that we did was we called every contract manufacturer that we could find to understand who had the capabilities, the workforce to do and the knowledge to run the machinery that we're going to have to run. And frankly it's pretty remarkable.

 

TJ Dembinksi, Eagle Electronics [00:16:37]:
You start calling around and you realize that there's actually only a handful of places that are able to do that. We came across a contract manufacturer up here in Northeast Ohio called Coax Technology, which is where we were yesterday and where we're setting up the line. And first off the team there was wonderful management was willing to work with us and kind of architect what is a pretty unique relationship for this. And then lastly there was just because this is a part of the world and a part of America that builds things. And so there were a huge amount of incentives actually to base manufacturing here. Chiefly we were actually able to operate in a foreign trade zone, which means that all of the materials that come in, we do not pay a tariff upon import or I guess upon entrance into the foreign trade zone. And then provided we ship out, which a lot of this, a lot of final assembly for technology products still exists over and over in Asia. There's no tariff upon exit either, which means that actually we're able to do this at a pretty cost competitive price.

 

TJ Dembinksi, Eagle Electronics [00:17:42]:
And then lastly, I think you just see it. I wish I had this data off the top of my head, but if you look across kind of all 50 states and where the majority of these projects, sort of the major products that you read about in the newspapers have originated, you got to think that there's not a lot of places that is ahead of Ohio. Obviously the intel plant is being built down in central Ohio, Anduril's plant is being built down in central Ohio. And I can just think of a number of smaller things that we are all aware of just given our proximity. And you just don't read about many of these big infrastructure projects happening to the extent that they're happening here.

 

Jeffrey Stern [00:18:17]:
So with that backdrop and context laid out, what is Eagle Electronics?

 

TJ Dembinksi, Eagle Electronics [00:18:23]:
So if you zoom out for a second, really the thesis here was we want to onshore the manufacturing of critical technology. One of the most critical pieces of this is the cellular module kind of any connected device will likely have a cellular module in it. None of that manufacturing happens here domestically. And what we are doing is we're bringing back cellular module manufacturing to the US and so the way we have done this is we have licensed technology from Krectel they' and cellular module manufacturing and we plan on producing our own modules domestically here.

 

Jeffrey Stern [00:19:02]:
Help me understand what a cellular module is. When we think about semiconductor chips, where does this fall in the value chain of microelectronics?

 

TJ Dembinksi, Eagle Electronics [00:19:14]:
Yeah. So any connected device that connects to one of the carrier networks, I think T Mobile, AT&T Verizon that will have a cellular that is a cellular module. That is what it allows for the device to connect to the carrier networks and ultimately have connectivity built in. We all use a cellular module on a daily basis and this is like a anything. If you zoom out for a second, you think, okay, are there going to be more connected devices tomorrow than there are today? I bet that the answer is yes. And as a result, we thought this was a really competitive area to go build the business and start. Just given the fact that all of this manufacturing for this technology happens overseas, none of it happens domestically and we're going to be the first to manufacture these here.

 

Jeffrey Stern [00:20:00]:
How do you do that?

 

TJ Dembinksi, Eagle Electronics [00:20:01]:
Yeah, so that is what we've gotten into. So that is with our arrangement with Coax. And so what we've done. It's actually pretty funny. We were walking the line yesterday at Coax and what we realized is there really isn't equipment. That is the equipment that we have purchased just doesn't really exist in the U.S. so we purchased the most up to date Fuji machinery and then we've purchased a whole lot of proprietary testing technology. So what we're doing now is we're setting up a line at Coax that is our contract manufacturer.

 

TJ Dembinksi, Eagle Electronics [00:20:31]:
We've subleased space from them and this is going to be a line fully devoted to manufacturing the modules. What's interesting is most contract manufacturing on the electronic side that happens in the US today is high mix, low volume. What we are doing is the exact opposite. We are high volume, low mix. And as a result, the machinery that exists in most of the CMS that we look at today has a very different purpose than the machinery that we have done. So the machinery that we've purchased is devoted to mass production. I think this is wide commercial application scale. And that's.

 

TJ Dembinksi, Eagle Electronics [00:21:10]:
That is what we are setting up just at coax today.

 

Jeffrey Stern [00:21:14]:
If you think about Eagle in the context of a way for international companies to retain access to the North American market, while you mentioned assuaging of the security concerns of those who might buy those products domestically, what is the regulatory environment in which Eagle is operating and the, the challenges, the tensions that it has to navigate through?

 

TJ Dembinksi, Eagle Electronics [00:21:41]:
Yeah, I think the answer is it's constantly evolving. I joke that it's way better to be lucky than it is to be smart. So when we started this business, I think we had a feeling and a sense that there were these inevitable macro trends that was going to lead to a decoupling of supply chains. I don't think that we had realized how quickly it was going to happen. So even just since we've started this, the connected Vehicle rule has been sort of the primary catalyst for a lot of folks thinking of, okay, how do I start to make procurement decisions that are compliant with now a new and evolving regulatory framework?

 

Jeffrey Stern [00:22:16]:
What is the Connected Vehicle rule?

 

TJ Dembinksi, Eagle Electronics [00:22:18]:
So the Connected vehicle rule is it now governs how anyone that's making connected cars, which is virtually every car that's on the road, every new car that's on the road, how they have to make their purchasing and procurement decisions, and it has a specific provision against purchasing from what we call foreign adversaries, meaning Chinese or Russian companies. That is a big deal for the supply chain because a lot of this stuff still is manufactured over in China. A lot of the code that gets written is still written over in China, and a lot of the hardware originates over in China. And so this is a pretty meaningful piece of regulation that every company now that is affected by this has to make changes to their supply chain. What's interesting too is obviously there's a new administration as of this past Monday. And what we have wanted to understand is, okay, is this the starting point or is this the ending point? And what we have found is that this is really the starting point and that what is likely to happen is that all of the requirements of the Connected Vehicle rule are likely to go and apply now to the rest of industry and govern, frankly, just sort of a new supply chain that is just beginning to be built.

 

Jeffrey Stern [00:23:37]:
So I think we've all, as a society been a witness to maybe at its worst, what happens if you're dependent or reliant on an adversary supplying technology that your for example, maybe military is dependent on what might happen in that scenario. How do you go about assuaging the actual security concerns?

 

TJ Dembinksi, Eagle Electronics [00:24:03]:
Yeah, well, I think that there's, you have to bifurcate what is real risk versus what is perceived risk. And what that requires is actually a pretty strong understanding of where the exploit points might come from and where the vulnerabilities might lie. And that is a big thing that we have had to go and do when we talk to customers because obviously folks are going to say, hey, a lot of the technology that you are building today is based off of a quack tail design. And that's where I say, actually no, a lot of the technology that we're going and building today is really based off of a Qualcomm reference design, which is Qualcomm's obviously based out of San Diego, an American business. So that is kind of one of those things. Where is that a perceived risk or is that a real risk? And a lot of the ways, I think a lot of the hardware piece, it's a perceived risk. Then there's the question of okay, well software interacts with this and that's where you have to go and say, well actually no, we have a secure North American build environment, we have an American based software team and we're working with finite state, which is how this whole opportunity originated to go and say, well no, we're doing a full security test, audit and analysis of the source code and all of the code that goes onto these modules prior to them going out into the wild and then being what we as Americans consume.

 

Jeffrey Stern [00:25:26]:
So I think you and I both have spent a lot of time with founders and thinking about startups and the life cycle trajectory of them. And, and Eagle in the context of that startup life cycle I think is somewhat unique in the trajectory that it has and what those stages might look like. The idea of an mvp. How have you thought about what the chapters of the Eagle life cycle are? Knowing there's this arrangement with Quicktel to get started, but a broader vision to do this more holistically for a broad set of critical technologies.

 

TJ Dembinksi, Eagle Electronics [00:26:02]:
Yeah, it's funny. So I mean, I joke when we. I spent the last five and a half years as a venture investor prior to starting Eagle and one of the things we would say is when you're starting a business, you need to push into the market in order to ultimately create pull from really day one we've had pull into this market and I think that just speaks to the fact that there are broader macro tailwinds for what we're doing. The interesting thing too is that most businesses that are affected by these macro tailwinds, they're not small businesses, they're like, they're global enterprises that navigate sort of a Chinese regulatory, they navigate a Chinese regulatory environment, they navigate an American regulatory environment, they navigate a European regulatory environment, they navigate just an entire, a global regulatory environment. And what that's meant is they need to find ways to have single product designs but for a global customer set. And that's actually really hard when there's different, when there's evolving regulatory environments. And so one of the things that we want to do with Egle is say, hey, no, you can still have a single global product, a single product design, but do so in a regulatory compliant way globally. We're starting with the cellular module because it's really unique where if you think about where we're going to have the most competitive manufacturing, it is likely in these highly automated space, the labor arbitrage still does exist.

 

TJ Dembinksi, Eagle Electronics [00:27:35]:
And so the more you can automate the manufacturing, the more competitive it's going to be domestically. And this is fortunately a very automated manufacturing thing. Now there's still a number of folks that are on the line, but just relative to kind of final assembly where there's plastics and injection molding, that is not what this is. Over time, we want to go use kind of this case study on saying, okay, we identified a really critical piece of technology that is not manufactured here and we found a way to onshore the manufacturing. Now we want to go and do this across subsequent verticals. And so we started really at the module itself. I think the next thing that we want to go do is do the full board. And then after doing the full PCBA board, we want to go do then.

 

Jeffrey Stern [00:28:19]:
Kind of final assembly comprising the real value, I think.

 

TJ Dembinksi, Eagle Electronics [00:28:24]:
Yeah, exactly. Growing the sort of opportunity that is in front of us and the amount that we can offer our customers over time is priority number one. Now there's a crawl and then there's a walk and there's a run. We are still in the spectrum of that, very much in the crawl phase.

 

Jeffrey Stern [00:28:39]:
You mentioned people working on the line knowing that in the context of when you were exploring Coax and its peers who might have even the capability of doing this kind of work. Do we have the workforce and people who have the acumen and the know how to to work on these lines if we haven't had a lot of them historically?

 

TJ Dembinksi, Eagle Electronics [00:29:04]:
Yeah, it's a good question. It's actually one of the things that attracted US one to Ohio and then two to COAX specifically. If you just zoom out for a second, I think the reason that we have found a number of these huge infrastructure projects coming to Ohio is because Ohio has been very intentional about how it's created a labor workforce that can handle this type of manufacturing. Ohio State has put a lot of into training folks to do this type of work, which is why intel and Anduril ended up there. Up in Northeast Ohio you've got Lorraine Technical Community College that has also similarly got a big MEMS program. And as a result I think there's kind of these more these programs that will allow for this workforce with this sort of very specialized skillset to continue to exist and continue to pump out more folks every year that are able to do this. At COAX in particular, it's still a pretty specialized skill set. And there's a lot of engineering know how smt, which is so we're the technology that we are that we will use to manufacture these, these modules is all surface mount technology.

 

TJ Dembinksi, Eagle Electronics [00:30:14]:
Manufacturing equipment like that is a specialized type of manufacturing equipment. And to find the folks that have experience on that is not common. And so by, by partnering with COAX on day one, we're able to have a workforce that knows how to do this.

 

Jeffrey Stern [00:30:28]:
Knowing what you had described as the pull into the market and how large of an opportunity this is, all of the geopolitical tailwinds, the macro structural trends that have created the space for this opportunity, why haven't there been more goes at bat from other companies? When you think about competition, how do you think about competition?

 

TJ Dembinksi, Eagle Electronics [00:30:52]:
It's a good question. One, one of the questions that we would always ask in venture investment was why now? And I think the reality is it's only been. I have found that every day there has been more momentum for what we're doing and for onshore manufacturing than there was the previous day. And I think that's the result of now there just is starting to be a much broader focus on this from a policy perspective. And so like you saw the CHIPS act and the Inflation Reduction act, there was a lot of money set aside to and incentivize this type of project. That is ultimately what led to the intel plan. And then in addition there's now more regulatory motivation as well. And so I think that there has always been a desire to do this, but there haven't really been the pieces that have been put in place that have allowed for it to happen from a practical perspective.

 

TJ Dembinksi, Eagle Electronics [00:31:48]:
And I think one other thing that I would Add is there's this chart in our fundraising deck that we love to show. And if you look at a plant that exists over in China or other parts of Asia kind of more broadly about a decade ago, if it cost a buck to produce a product, it now costs $0.30 as a result of all the automation that has occurred. And we're able to take that manufacturing advancement and bring it here where all of a sudden you've actually got cost competitive manufacturing as well.

 

Jeffrey Stern [00:32:16]:
So you've mentioned a few times now how your experience as an investor has maybe influenced your approach and thinking as a founder. You know, as it should, it's the experience that you've had. What if more personally, just what have you learned now as a founder that maybe you wish you had known as an investor? And what have been the most useful observations or learnings that you've earned as an investor through working with so many different founders that you've been able to apply as a founder?

 

TJ Dembinksi, Eagle Electronics [00:32:44]:
One I think the biggest thing is you can always overthink everything and deliberate forever. Sometimes you just gotta make a decision, stick to it and then reevaluate after you know what the outcome is gonna be. I think the second thing is, man, I'm embarrassed now about how much founders time, how much time I took up from founders when I was an investor where at the end of the day, like no one is gonna solve that problem unless you as the founder do it. And every time you spend talking to folks that are not gonna help you solve whatever the problem is of the day, then you're just that amount of time further away from finding the actual solution. And then lastly there' a real psychological thing of being a founder where you feel a huge amount of ownership and responsibility for it. And at the end of the day investors, they take on real risk as well. But no one is more tied to the outcome than you as the founder.

 

Jeffrey Stern [00:33:39]:
So I want to spend a little time talking about funding. I think you and your co founder Mark have probably spent more time than just about anyone thinking both as a investor here in Ohio and also as a founder here in Ohio, what the landscape looks like and the perspective from both sides of it. What is your perspective on capital in Ohio and the role that it should play, particularly in the context of this vast opportunity for reshoring and re industrialization.

 

TJ Dembinksi, Eagle Electronics [00:34:11]:
For any venture capital is critical. And and I think drive capital really changed the landscape when it started in 2012, where if you just at the end of the day, like funding, opportunity, all of those things, they are easier to come by when Proximity is there and Drive Capital was the first fund that really brought kind of that Silicon Valley mindset of investing to places outside of Silicon Valley. And that changed, I think, the opportunity here and the way that people were thinking about building companies in Ohio and frankly in the broader region. And as a result you've really seen this kind of, I would say momentum build from that where it's like the snowball effect where once things get rolling, they continued to go in that direction. And now it's not atypical to see a Silicon Valley venture firm come and invest in an Ohio based business or a New York or Boston based venture firm come and invest in an Ohio based business that is really at the growth stage. Though it is still absolutely true that at the earliest stages, capital and sort of rounds that come together are the result of proximity. Where I was reading this thing last night where most kind of when you least need money is when you're most likely to get funding. And that is just.

 

TJ Dembinksi, Eagle Electronics [00:35:36]:
And it's oftentimes when businesses like most need money that they're the least likely to get funding. And as a result, I think you're more likely to just serendipitously have a funding opportunity occur when there's more capital located in the areas that you're building the business in. And so I think it's absolutely true now that funding has allowed for businesses to be built here. And if you add that on to kind of the broader trend of onshoring and really manufacturing, I think one of the theses that Drive had and that I still believe is that founder market fit is incredibly important. And a lot of the opportunities and problems that need to be solved, like there just aren't. There aren't people investing in those. And that's just. And that is because there isn't really the founder mentality like most businesses that are being built in Silicon Valley today.

 

TJ Dembinksi, Eagle Electronics [00:36:27]:
They're all AI and software oriented. A lot of the businesses that are built here are like moving atoms. And that is just because that is what people know here, that is like what the legacy industrial base has been built around. And so you see a lot of those opportunities in the companies that go and solve those problems be built in this part of the world. And so it's absolutely critical that there's also capital here to back those founders up.

 

Jeffrey Stern [00:36:49]:
Yeah, we do have this rich industrious history of building things and knowing how to build things in the spirit of your and Eagle's grander ambition to reshore critical technology manufacturing, what do you think is required of the whole ecosystem to. To realize that vision? And what is Eagle's role to play in it? How do you think about what success looks like?

 

TJ Dembinksi, Eagle Electronics [00:37:19]:
It's a great question. Firstly, I think capital is critical. It is not for the faint of heart, and it is not for the faint of heart from a funder's perspective either. I mean, just the equipment, the manufacturing equipment that we have invested in on day one to go and start this business is almost $4.5 million worth of equipment that, like, you need the ability to access real capital and sort of have investors that are willing to stomach the risk that comes with that in order to get this business off the ground. From there, I think you need to continue to see an ecosystem be built up around this. I think we were very fortunate to find coax. I think that the reality is that you need a lot more coaxes to exist in this part of the world if we're going to see what we're doing to be just a drop in the ocean in terms of a much bigger trend. And then lastly, I think you just need to see, like, my goal here is that we're not the only person doing this.

 

TJ Dembinksi, Eagle Electronics [00:38:17]:
My goal is that we have a lot of copycats down the line. And that would be wonderful because the reality is that I'm a believer that a rising tide floats all boats. And if we have more folks to trade with and to partner with on kind of subsequent projects and subsequent ambitions, then I think we're more likely to see success.

 

Jeffrey Stern [00:38:35]:
What are you most excited and optimistic about?

 

TJ Dembinksi, Eagle Electronics [00:38:39]:
So all of this has been in the hypothetical so far. I mean, we were walking the line yesterday, and all of the equipment has now shown up. We're still, we gotta kick off manufacturing, and we expect that we're gonna kick off manufacturing in Q3 of this year, hopefully sooner. But this is very different than the world of software where you kind of ship it and if it breaks, you fix it. In our case, it's $4.5 million equipment. We got to set it up right on day one, and then we got to go and properly manufacture from there. And I am most excited to see modules coming off the line, ultimately shipping to our customers.

 

Jeffrey Stern [00:39:13]:
I mean, you mentioned operating in the world of atoms. What do you think have been the lessons that you've picked up on building in hardware with software, but really kind of grounded in the world of atoms?

 

TJ Dembinksi, Eagle Electronics [00:39:30]:
I think there's a lot less margin for error. So in software, we used to say, just like, keep pivoting, keep pivoting you can't really do that in this. And it's funny, the pivots that we have had since we've started, they're absolutely pivots. The vision and the model of what we are doing and where I understand even our value prop for a lot of customers has changed since day one of founding the business. But. But at the crux of it, we are still manufacturing cellular modules. And what that means is we have to set this line up properly. And this is $4.5 million equipment.

 

TJ Dembinksi, Eagle Electronics [00:40:11]:
You can't go set up a subsequent line. If you get the first line wrong, you won't have the capital, you won't have the know how, you won't really like. There's just no reason to say that you have the right to do that. As I think about this, there's just a lot less margin forever. Now, all that said, the second thing is too, on just the economic, economic side of it, like software, there's zero marginal cost to selling. And what we're doing, like that is not true. There are materials that go into this that cost real dollars. And so from a unit economics perspective, we have to be really confident that what we are doing is correct.

 

TJ Dembinksi, Eagle Electronics [00:40:46]:
Otherwise it's really easy to sell a buck for 90 cents. And that is the last thing that we want to do.

 

Jeffrey Stern [00:40:51]:
In the spirit of pivots, I think one of the patterns that I've picked up on is just that it's very rare that the business that a company was founded on is the business that the company succeeds with. You've mentioned now the evolution of Eagle. How would you describe what the value proposition is?

 

TJ Dembinksi, Eagle Electronics [00:41:12]:
Yeah, it's funny, my answer to this has changed over time and that is without the actual fundamental business model changing too much. I thought for a brief period, I thought when we initially founded that this was going to be part of. People just want to buy from American suppliers. They want to buy American manufactured devices. And they also would be looking for ways to protect against the possibility of tariffs. I think all of those things are still true and that those are very real motivations for customers purchasing. What I've realized the primary motivation is though, for customers purchasing is trust and security. They want American software on their devices and they want an American development team being the ones that are going and testing the software and then ultimately uploading it to the modules.

 

TJ Dembinksi, Eagle Electronics [00:42:06]:
And that has changed the way I've thought about this business and how it's scaling over time. When you really realize that you're in the trust in the security business, what.

 

Jeffrey Stern [00:42:14]:
Do you feel is unsaid? Obviously, we've covered a lot of ground here. But in reflecting on your journey personally, on the business of Eagle, is there a particularly important or salient aspect that you think is interesting to talk about?

 

TJ Dembinksi, Eagle Electronics [00:42:28]:
Yeah, I think it's a funny thing. I think that what gets lost in all of the political rhetoric these days is nuance. And that's a dirty word when it comes to talking about big, complicated, macro ideas. But nuance is inherent in anything that is big and macro and complicated. And one of the things that I have found that where we have lacked nuance is like, in a lot of ways, we need to find partners that are going to be good, positive collaborators with us that are not American. In our case, like, a lot of the partners that we've found have been Chinese companies or. Or folks that are part of a Chinese company. And you just can't have a supply chain where you say, hey, today you can only buy American because we are so intertwined as two nations.

 

TJ Dembinksi, Eagle Electronics [00:43:17]:
And as a result, it's not as easy as an executive order saying, tomorrow we can't buy Chinese components, we can't buy Chinese anything from China. And so as a result, I think that when we think about our supply chain, we really need to recognize that we as two countries are very intertwined and have policy that recognizes that.

 

Jeffrey Stern [00:43:40]:
How do you foster a consideration or awareness or tolerance of nuance?

 

TJ Dembinksi, Eagle Electronics [00:43:48]:
I think knowledge is critical, and having people become aware of that is critical. Like most people recognize that they look at the inside of their shirts or whatever it is, and it says made in X and that is typically not America, and that that is true for every part of the manufacturing value chain, or at least that is true for most things that we manufacture. And I think that once people can actually recognize that, while also saying that all of the motivations and aspirations of onshore manufacturing are noble and things that we should be doing, but recognize that what comes with that is a necessity to collaborate. Because in a lot of ways, we don't have everything that is required to do that here on day one. That's why you're seeing the TSMC Arizona plant get built. Like, we had to do that in conjunction with TSMC because they're the only folks in the world that have the knowledge that's required to do that.

 

Jeffrey Stern [00:44:44]:
What other earned wisdom do you feel you've picked up in this world thus far?

 

TJ Dembinksi, Eagle Electronics [00:44:49]:
I don't know if I have much wisdom yet, no. I think that my biggest piece of advice to myself throughout this has been to just Keep going and to turn the next page. See what you're going to uncover. I mean, it's funny, like, when this whole thing got going, I put this at about 1% probability of actually occurring in every subsequent meeting. I'd say, you know what, maybe we went from 1 to 3% today and then from 3 to 4% the next day. And it kind of slowly inched up into being more and more possible. And now I'm pretty darn confident that we're going to have modules that come off of these lines that ultimately American businesses purchase and sell to an American consumer. And that's like a really exciting thing to think about.

 

TJ Dembinksi, Eagle Electronics [00:45:36]:
But that what it along the way, there have been all sorts of ups and downs. There have been days where I thought we're going to take over the world and be a public business, and then there's days where I thought we were going to go out of business the following day. And I just need to keep reminding myself to take the deep breaths, appreciate this along the way, and know that as you continue to turn the next page, there's going to be opportunities.

 

Jeffrey Stern [00:45:57]:
Yeah. I mean, that is the entrepreneurial rollercoaster. Totally demoralizingly low lows and kind of euphoric highs along the way.

 

TJ Dembinksi, Eagle Electronics [00:46:05]:
Yeah.

 

Jeffrey Stern [00:46:07]:
Well, we'll round it out in some closing questions to bookend the conversation. Our traditional closing question is for a hidden gem in Cleveland.

 

TJ Dembinksi, Eagle Electronics [00:46:18]:
Interesting. I doubt it's hidden, but Mark and I had dinner on Wednesday night at the Marble Race Room, which is this, like, beautiful steakhouse in downtown Cleveland. And I love things that I think are world class and you could put them anywhere in the world and it'd be the best at what they do. And the atmosphere, the interior of that place is world class. And you could put that thing in anywhere in the world and people would say, man, I want to go get a steak there.

 

Jeffrey Stern [00:46:49]:
Yeah, it is an inspired ambiance and atmosphere. Any parting words?

 

TJ Dembinksi, Eagle Electronics [00:46:56]:
No. Thanks for having me on the podcast. I really enjoyed this.

 

Jeffrey Stern [00:46:59]:
Oh, absolutely. My pleasure. If people had anything they wanted to follow up with you about, learn more about Eagle. Where would you direct them?

 

TJ Dembinksi, Eagle Electronics [00:47:08]:
Reach out directly. You can find me on LinkedIn and I'd love to meet more folks.

 

Jeffrey Stern [00:47:13]:
Amazing. Thank you.

 

Jeffrey Stern [00:47:16]:
Thank you for tuning in to the Ohio Fund Report. If you enjoyed this podcast, we'd love for you to leave a review on your favorite platform and subscribe to stay updated on all future episodes. You can subscribe via Apple Podcasts, Spotify, YouTube, or directly on our website at TheOhioFund.com the information shared on this podcast is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any security. Past performance is not indicative of future results. The views and opinions expressed by our guests are solely their own and do not necessarily represent those of the Ohio Fund. A guest's participation in this podcast does not imply an endorsement or an investment recommendation by the Ohio Fund. This podcast may include conversations with leadership of a company in which the Ohio Fund or its affiliated funds have an investment and as such, financial interest in the success of this company, and there may be a conflict of interest in presenting information about the company and its performance. Any forward looking statements or projections discussed during this episode are based on current expectations, assumptions and estimates.

 

Jeffrey Stern [00:48:28]:
Actual outcomes may differ materially due to a variety of risks, uncertainties and other factors. Listeners should consult their own legal, tax and financial advisors before making any investment decisions. For more information about the Ohio Fund, including our form, adv, other regulatory filings and additional conversations, please visit theohiofund.com.