#247 Carson Morell & Daniel Scott Mitchell (Takton) — Manufacturing Technology

Carson Morell & Daniel Scott Mitchell [00:00:00]:
There's a lot of opportunity to run and something that we can build for the next couple decades and something that's really gratifying and is meaningful to the country, that's meaningful to us. And manufacturing has come had come up as one of his potential areas of focus and that was kind of like our we started mentally flirting with the idea of working together and then over the next couple months built our plan, built out our initial team, our first product, raised some funding and then I took the plunge, left my job from Rivian and we've been full steam ahead on Tacton ever since.

Jeffrey Stern [00:00:30]:
Welcome to the Lay of the Land podcast where we are exploring what people are building in Cleveland and throughout Northeast Ohio. I am your host Jeffrey Stern and today I had the real pleasure of speaking with Carson Morrell and Daniel Scott Mitchell, co founders of Tacton, a manufacturing technology company building fast, affordable tools for small and mid sized manufacturers. Carson and Daniel came into manufacturing from different paths. Carson as a founder and operator, Daniel as an engineer at companies like Tesla and Rivian, but but arrived at the same realization that there is a massive gap between the most advanced manufacturing technology and what is actually accessible to the majority of shops across the country today. So they set out to meet manufacturers where they are. They got in a car and spent months visiting factories over a hundred across the United States, learning directly from operators, machinists and owners about how work actually gets done. And along the way they kept coming back to Cleveland and ultimately decided to build Tacton here, in one of the densest manufacturing ecosystems in the country where that kind of proximity matters. In our conversation we explore that journey, how they came together, the insights from their public factory tour to what they're building at Tacton today.

Jeffrey Stern [00:01:43]:
A catalog of simple, accessible products designed specifically for the majority long tail of manufacturers that have historically been underserved by technology. We we also explore their approach to product development, the importance of industrial density in places like Cleveland, why they chose to build Tacton here, and the broader opportunity to rebuild American manufacturing capacity. I love learning more about their story that they've chosen to build here and the passion and optimism they have for the future of American manufacturing. So please enjoy my conversation with Carson and Daniel. Lay of the Land is brought to you and is proudly sponsored by Serity Partners. As a wealth management firm, Serity Partners shares Lay of the Land's same dedication to serving local business owners. And the Serity Partners Cleveland team understands the challenges that entrepreneurs and founders face here in Cleveland, Northeast Ohio and beyond. Wealth comes with complexity and increased demands on time and resources, it is easy to become overwhelmed.

Jeffrey Stern [00:02:40]:
Serity Partners clients benefit from a unified team of local specialists who coordinate across both business and personal needs. With Serity Partners commitment to transparency in putting clients needs first, complexity can become clarity. To to learn more, please visit seritypartners.com or call 21266 today, Serity Partners proud to be recognized as one of the top financial advisory firms in the country.

Jeffrey Stern [00:03:06]:
I think we have to start with all roads leading to Cleveland. Cause I think that will anchor the entire conversation here. From your respective paths here to Tacton being here to just Cleveland as the industrial density point of why it has all coalesced around Cleveland. And maybe that's just a good place to start, you know. Why, why Cleveland? How did we, how did we find ourselves having this conversation?

Carson Morell & Daniel Scott Mitchell [00:03:33]:
Yeah, we moved headquarters here in December last year mostly due to spending a lot of time here over the summer. So last year we did a, we did a roadshow, spent at least half the year in a car on the road with other members of our team as well, touring sections of the Rust Belt and the Midwest and probably ended up in Cleveland a good seven or eight times along the way. We had always another reason to go back or to extend our stay. And yeah, I think the, the people and the relation to work just kind of kept pulling us back. And then when we were 20, discussing locations for where to open up shop next ultimately landed on coming back to Cleveland.

Carson Morell & Daniel Scott Mitchell [00:04:20]:
I don't think we knew at the time that we were doing HQ scouting. We were generally just on the road with the mission of trying to see as many small and mid sized factories as we could learn from folks who were actually building stuff as opposed to trying to pretend like we knew what everyone was struggling with from behind our laptops. But as Carson mentioned, we had this roadmap planned in advance. Here's when we're going to be in this city. Here's we're going to drive from Cleveland and then that day we're going to drive and leave, go to Indianapolis and then we're going to go to Detroit. And besides the fact of the roads actually passing through Cleveland, which helps, there was a couple number of times that we were like, all right, we're going to borrow a couple days from Indianapolis and go back to Cleveland. Because there were so many folks who were collaborative and willing to open their doors and willing to like let a couple strangers from the Internet come visit their factories and talk to them about the different technological ideas they had about how to improve their operations. Like, it was somewhat unique to Cleveland specifically.

Carson Morell & Daniel Scott Mitchell [00:05:14]:
I mean, generally the Midwest is a lot more welcoming and warm and happy than maybe the coasts are, but specifically Cleveland, we felt this, like, welcoming presence. And then when it came to searching for an hq, it wasn't really a search. Carson just like, woke up one day and he's like, all right, we're done Cleveland. It's pretty clear to us we're going to Cleveland.

Jeffrey Stern [00:05:32]:
Yeah, I mean, a lot there resonates, frankly, the reason this podcast even exists, and I think at the heart of why I am still even in Cleveland was because I found the same warmth, reception from people when at the time I was just reaching out from a place of curiosity as, like, a stranger. And literally every single person in Cleveland said yes to that exercise. It's just something, something about it here. What was the impetus for going on this tour? Did you guys have an intuition about what you were hoping to learn and discover or kind of inspired that, that journey?

Carson Morell & Daniel Scott Mitchell [00:06:06]:
Yeah, we were. It was pretty early on. I was actually, I was. I remember I was sitting in a co working space with one of our, one of our pre seed investors while we were trying to raise our. Our seed round. Couldn't grow the team too much. And we're just trying to figure out, okay, how do we, how do we get started? And knowing that we were going to be building products for manufacturers, we decided, hey, like, what's the best way to build some awareness about what we're doing and go meet lots of manufacturers and learn too? Daniel's got a heavy manufacturing background. I didn't at the time.

Carson Morell & Daniel Scott Mitchell [00:06:43]:
And so it was a really good way for us to dive in head first. So I think I, I think I said the idea and then I, I tweeted it because I was like, I'll have to do it if I'm like, hey, we're gonna go visit 100 factories, you know, put it out there. And. And we, we did. It was so cool because, I mean, when we posted, we probably had like 15 that we knew about. We didn't have a hundred lined up. What was cool about that is people were kind of jumping on board and said, oh, you should do this city. You should do that city.

Carson Morell & Daniel Scott Mitchell [00:07:09]:
So the next thing we did was we announced the route. More people said, oh, you should come here while you're in town. You could stay with me and this and that. It was really cool. It came together pretty quickly. And then I think maybe a month and a half, two months later, we were in the car and I drove out of New York City and wasn't there for probably six months.

Carson Morell & Daniel Scott Mitchell [00:07:32]:
I just to reiterate on that, like from my manufacturing background, which is not formal education, I was educated as a mechanical engineer, largely focused on designing things. All the intricacies that come alongside with actually building something. So like taking a drawing from paper and taking blocks of metal and turning it into something in real life, that's something. I didn't have formal education and that was acquired through experience by. I'm going to borrow two terms from Japanese here and transparently I just looked them up to make sure that I'm pronouncing them correctly. One of them is gemba, which means go and see. And that's one of the big principles for Japanese Lean manufacturing is like you have to, when you're solving a problem, you have to go see the place. And then as a subset of gemba, they have these gemba walks, which means like you have to go walk on the plant floor.

Carson Morell & Daniel Scott Mitchell [00:08:16]:
But there's another term called genshi genbutsu, which means actual place, actual thing. So if you're going to have hypothetical discussions around, oh, I want to fix this or I want to do that, and you know, we have this mission of trying to create technology to help equip small and mid sized manufacturers to be more productive and to have these like high five, high horsepower tools that exist in advanced manufacturing but haven't traditionally been built with small mid sized manufacturers in mind. We can't sit on our ivory tower on a whiteboard saying here's how we think the problems exist and here's how we want to solve the problem. We have to gembo, we have to go and see and we have to talk about the actual place and the actual thing to be able to acquire enough knowledge to solve the problems. That's the problem solving process that was like hammered into me through experience on how to solve problems on the factory floor. So it kind of came second nature to me when Carson's like, let's do a roadshow. Like, yes, that's exactly how we're going to acquire the knowledge we need to understand how to solve the problems. And then that also goes back to like one of the core principles of like lean startup building, which is like before you spend a bunch of time and money building something you're not sure people like, let's go get in front of the customers and talk with as many customers as we can.

Carson Morell & Daniel Scott Mitchell [00:09:26]:
And it put us in this unique place where like, I feel like coming into this, we were not by any means experts on small and midsize manufacturing. But even a small or mid sized manufacturer spends a lot of time in their, their factory. They don't see lots of different factories. And we've got this unique exposure that like within the course of a year we're one of the few people I think in the world that have gone and seen like almost 150 small and mid sized factories in the US and like now I feel like I wouldn't call myself an expert, but we have

Jeffrey Stern [00:09:53]:
like, you can at least be an advocate for it.

Carson Morell & Daniel Scott Mitchell [00:09:55]:
An advocate for sure. And we've got a wide lens of like lots of things that we've seen and that's thanks to folks that were willing to open their doors for us. And like Carson said, we started with 15 planned for sure and we committed to doing 100 publicly. And it's the kindness of the folks in the community and on the Internet that like opened the doors for us that helped close the gap for the rest of the.

Jeffrey Stern [00:10:13]:
Yeah, I didn't quite have the vernacular to know what that phenomenon is called, but that intuitively was like how I approached when I started my own company too. It was just kind of like a listening tour of. I mean you just have to, you have to understand the problems of the people you're trying to help if you actually want to help them.

Carson Morell & Daniel Scott Mitchell [00:10:33]:
And it's an exercise. Like if you get into Y Combinator, they make you talk to as many customers as you can. It's a core principle to like building a fundamentally sound business I think. But it's cool that that like is also a nexus with the way that I was taught to solve problems in manufacturing as well.

Jeffrey Stern [00:10:47]:
What did you learn on this tour?

Carson Morell & Daniel Scott Mitchell [00:10:49]:
A lot of things. Yeah, a lot. There's, there's a lot of work to be done in bridging the gap in technology, in talent and access, in resourcing for a lot of these manufacturers. Yeah, they knew almost as little as we did about what else was out there at the beginning of the tour. And that was like almost surprising but then very quickly not surprising at all. So I mean those were, those were a few of them. I mean there were a lot of takeaways.

Jeffrey Stern [00:11:20]:
Yeah. How would you diagnose the state, you know, kind of writ large of what you saw and where the opportunity is and you know what coming out of it was energizing about it to both of you.

Carson Morell & Daniel Scott Mitchell [00:11:34]:
I think there's a pretty heavy misconception that family owned businesses that are generations old are like, people think they're diametrically opposed to Using new technologies to doing new things. Like we've actually heard a lot from folks who are like our peers in this space building technology for manufacturers, saying like a lot of these manufacturers, they're just gonna have to like fall to the wayside, you know, they're not gonna be able to adapt to new technologies. But the fact of the matter is like when you come talk to these people and you realize the history of their businesses, they've had to reinvent themselves several times. If your family business has existed for the last 140 years, imagine all the different revolutions in the way that technology is used and the way that your parts are going into other people's technologies. We know manufacturers that started making stuff for telegrams and then they made stuff for telephones and then now they're making parts for SpaceX that are going to space. And it's like they've been in the telecom industry the whole time. Yeah, they've reinvented themselves several times over. So I think for me there's like a, I think people have almost written off a lot of these older businesses, a lot of these small and mid sized businesses saying we just need a bunch of Teslas to come in and shake up the whole place and that's the way that we're going to survive.

Carson Morell & Daniel Scott Mitchell [00:12:41]:
But I think one of the big eye opening things for me and the ecosystem at large is like there's a ton of opportunity for us and for other people to build technology with these small and mid sized factories in mind. And it's not that they're opposed to adopting new technology. A lot of them have actually tried to implement stuff like state of the art robotics and they kind of got burned because the technology providers that were making tech for them didn't have their best interests in mind. They designed something for a large enterprise company that's backed with billions of venture dollars, not the small mom and pop shop who's trying to invest out of their surplus. And so I think it's a uniquely overlooked part of the market. It's incredibly important because small and mid sized businesses make up 98% of the industrial base in the U.S. so there's only 2% of factories in the U.S. that are owned by large companies.

Carson Morell & Daniel Scott Mitchell [00:13:30]:
And we'd go and knock on all these doors and I was expecting to see, oh, these guys hate technology. They're not willing to adopt anything new. And what I actually saw was them inquisitive and excited and asking us questions and willing to collaborate with us. And to the extent that, which we ended up building several products off the back of the intel that people gave us. And it wasn't us like pulling teeth to understand what the problems were. A lot of times it was someone saying, hey, if you built this, that did this, this, this, this and this, I would pay this much for it. And like, as an entrepreneur, you never get that out of a customer. Which was pretty awesome.

Jeffrey Stern [00:14:00]:
Here's a problem, I'm willing to pay for you to solve it.

Carson Morell & Daniel Scott Mitchell [00:14:02]:
And some people would. I mean there's a lot of people that were willing to back us and like excited to pre order something before we even built it, which is really exciting.

Jeffrey Stern [00:14:11]:
So one of the things we were talking about before we started recording is, you know, how do you, how do you get young people excited about American manufacturing again when so many of these businesses are, are these multi generation family businesses and there's not kind of an influx of young folks excited about it? I think the backdrop has changed a little bit with this kind of excitement around re industrialization, reshoring manufacturing, figuring out how to rework supply chains, and there is a resurgence of energy. But obviously you2 are two young folks interested in this space. How did your paths cross and what kind of inspired both of you to want to devote your time to entirely build a company around this and just like the origins of how you two came together.

Carson Morell & Daniel Scott Mitchell [00:15:02]:
Yeah, I guess to answer the first part of your question, how do we get young people interested and involved? I think part of it is people just don't know these paths are available. There's not a lot of awareness of, you know, like, what can you do in manufacturing, what kind of school do you need to go to? And those options aren't like, presented regularly to students even, you know, at the middle school and high school levels. So I think more awareness and more structure to help walk people through that process would, would go a long way. And then also like there will be more money to be made than there has been in the last last couple of decades, you know, for recent graduates of school or trade school to get involved but don't necessarily have, you know, a grand solution for that. But to your, to the second part of your question. We first met my freshman year, your sophomore year of college. We were both students at George Mason University in Virginia and Daniel had gone viral on LinkedIn for getting an internship at Tesla. George Mason, great school.

Carson Morell & Daniel Scott Mitchell [00:16:12]:
Tesla wasn't knocking at the door to hire kids from the school to come work for them. And so I knew that, hey, Dana got the job. That must be, he must have gotten and got it right. He must have found an angle to go to get the job. And that was super interesting to me. So I'd reached out and said, hey, let's go grab coffee. And I was working at the coffee shop at the time that I told him to come meet me at.

Carson Morell & Daniel Scott Mitchell [00:16:34]:
He, like, played it like it's neutral turf, and then he takes me to the coffee shop that he works at. It was not huge advantage. He had an ace up his sleeve there for sure.

Carson Morell & Daniel Scott Mitchell [00:16:45]:
But, yeah, no, I mean, we sat for hours. We sat for hours. And then, I mean, after that, I mean, Daniel did a bunch of cool things, which he can speak to, and I went and worked on my first two companies, but we stayed in touch every six months to a year. I mean, we would. We would just. One of us would text the other like, hey, let's. Let's get together. I think we had lunch once, coffee once, and then had a, you know, maybe three video calls as we were, like, each moving around the country.

Carson Morell & Daniel Scott Mitchell [00:17:16]:
And then it wasn't until recently that we, you know, when we. When we started this, that we had reconnected and kind of started talking about what could we do together. But maybe you could speak to kind of what you did in between.

Carson Morell & Daniel Scott Mitchell [00:17:28]:
I alluded to it a little bit earlier, but I had the awesome opportunity to study mechanical engineering, go into product design, product development, engineering. A lot of what compelled me to want to become an engineer in the first place was watching things like how it's made. Always tinkering with stuff. Growing up, I attribute a lot of that to my mom and to my dad, who let me build all sorts of crazy stuff around the house. And we had, like, tree houses in the backyard, and we'd make, you know, try to make a fire, kiln, oven in the backyard and all this crazy stuff. And my dad has an awesome wood shop in his garage that, like, I had any tool that I wanted to at my disposal. But then I went and became product development engineer, and I realized that I was creating drawings and then sending the drawings to someone else, and someone else was going to be the one that got to build it. And so I realized that there was, like, a little bit of a stigma against manufacturing, which I think, to go back to the first part of your question is, like, we need to start to erase that stigma.

Carson Morell & Daniel Scott Mitchell [00:18:20]:
That it's not less gratifying or less noble by any means to do something that requires you to get your hands dirty. It's actually more gratifying in my mind. I think there's something about human nature that makes it more gratifying when you build something with your hands. But a couple years in my career, I'm like, holy cow. I think I wanted to do manufacturing. So I got some awesome exposure. After having done program management, having done engineering, I got some awesome, awesome exposure mainly through folks at Tesla and at Rivian who were willing to trust me with very little formal manufacturing engineering experience to get my hands dirty, to work on some really awesome projects with state of the art teams with the best backers in the world, and starting from factories that were planned from scratch with the intention of being the most advanced, technologically advanced factories in the world. And it was cool.

Carson Morell & Daniel Scott Mitchell [00:19:06]:
Like, I got to play with the coolest toys in the world. I got to solve problems really quickly. But the first recognition for me that there was like something worth working on in manufacturing for small and mid sized manufacturers is when they took a bunch of people from Rivian's team internally and created this supply chain task force. Basically saying, our factory is really, really good at building cars really fast, but we're gated by the fact that our suppliers can't send us parts fast enough. So there was times where they would run the factory a couple days a week, and then the rest of the week they'd sit and wait for parts to show up. And then when the parts came the next week, they'd run only a couple days and then sit and wait for parts to show up. And they realized that's not the proper way to run a factory. So they tried to invest in building up their supply chain.

Carson Morell & Daniel Scott Mitchell [00:19:47]:
And that was my, like, that was my eureka moment when I started to look at the Tier 1, Tier 2, Tier 3 suppliers to someone who's got the most technologically advanced assembly factory in the world. And I go there and they're like one of the biggest value adds that I had was convincing them to use whiteboards to keep track of part output because they were losing track of how many parts they're creating every single day. Like, that was a far cry from being able to check on my phone how many parts had been made on that machine per second over the last year. And then these guys were arguing over how many parts they made today and realized there was just a huge technological disparity, like a wealth gap between the technology that was available to the top 2% of manufacturers and the remaining 98. And then also saw how that cascades to a productivity gap when some factors are more productive than others, that actually yields an actual wealth gap as well. So it makes it Harder. It's this vicious cycle where it makes it harder for them to invest in new technologies because they're not as productive and they're not making as much money. Around the same time that I'm having this realization, Carson and I are reconnecting and he's talking about he's ready to build his next company.

Carson Morell & Daniel Scott Mitchell [00:20:51]:
And his conviction is that he wants to do something where he can take technology into a space where there's a lot of opportunity to run and something that we can build for the next couple decades and something that's really gratifying and is meaningful to the country, that's meaningful to us. And manufacturing has come, had come up as one of his potential areas of focus. And that was kind of like our. We started mentally flirting with the idea of working together and then over the next couple months built our plan, built out our initial team, our first product, raise some funding. And then I took the plunge, left my job from Rivian and we've been full steam ahead on Tacton ever since.

Carson Morell & Daniel Scott Mitchell [00:21:27]:
Yeah, that's awesome. One thing to add to what you mentioned about the gap for manufacturers. You've got really good technology for that top 2% and they don't really have talent issues, right? You can just pay to find talent. And for the smaller shops, talent is their biggest issue. That challenge goes away with really good technology. You just need fewer people and then you have more resource to invest in better people and also more people when you do need them. As you said, it's a vicious cycle. But I think like that's the difference.

Carson Morell & Daniel Scott Mitchell [00:22:01]:
You know, you'll talk to one bigger shop whose job we don't have problems with talent. We got, you know, the awesome team and nobody leaves. It's great. And then you've got really small shops who struggle with that. And I think that's like another big takeaway is that the number one challenge that came up for these small shops doing the roadshow was that nobody wants to work. We can't find anyone, we can't get anyone to show up every day and we can't afford to pay more than, you know, the guy down the road. And that, that came up all the time, except for when we went to larger, more established businesses. Even on the bigger end of medium sized businesses, these, these challenges weren't as big for them.

Carson Morell & Daniel Scott Mitchell [00:22:43]:
That was, I think, another big takeaway that was interesting.

Jeffrey Stern [00:22:46]:
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 roundstoneinsurance.com Roundstone Insurance built for entrepreneurs backed by innovation committed to Cleveland.

Jeffrey Stern [00:23:46]:
So what is Tacton?

Carson Morell & Daniel Scott Mitchell [00:23:48]:
Yeah, so Tacton is a manufacturing technology company. We are building a catalog of affordable products for small to medium sized manufacturers. Are back to kind of the thesis that we've been sharing. There's lots of really good tech that today doesn't cost as much to build, at least to build enough for a small shop to use. Right. There are really incredible technologies out there that take lots of investment and you can't achieve them with small amount of resourcing, but you can do a lot today because of all the wonderful AI tools that are out there. Developers are able to move faster and you're able to do more with less. And so we saw that as an opportunity to compete with some of the products that are out there, but also build simplified versions of them.

Carson Morell & Daniel Scott Mitchell [00:24:39]:
You know, all the features for six figures a year for the software, but maybe the two, three, four core features that somebody really needs at a much, much smaller price without a big long contract. And while that's smaller deal sizes for us, you know, our plan is to build lots of really awesome products that are accessible for everybody and build products that anybody can try out and see if it works and see if it helps them, see if it generates an initial, you know, an immediate ROI for them. That's kind of that, you know, that's what we narrowed in on. So a catalog of these accessible products for small to medium sized manufacturers. Now that can be software, it can be hardware, maybe robotics in the future and just one product at a time driven by the feedback that we get from manufacturers when we're talking to them. That's, that's how we decide what's next and what's really cool about the way that we work with these manufacturers is it's okay if they don't want to Buy our first product or our second or our third. Because we're going to build lots of products and we want to have a strong relationship with them so we can get more data to inform the next product and B, so we can revisit one. Hey, that, that thing you said you wanted like two years ago, I don't know if you're still looking, but we built it and we took your feedback and we'd love to have you try it and help us choose what features are next.

Carson Morell & Daniel Scott Mitchell [00:26:07]:
And so we get this evergreen relationship with the customer that you just don't get when you just have one product. Right. You can try to sell one product to everybody, maybe try a second time to that same pool of people, but you're going to burn through people. And I think the way that we're doing it, what's been so fun is just we get to build awesome long term relationships with people and take their feedback and then they get to see it come to life. I mean that's the, that's, that's what we're doing. We're doing two products per year is kind of the tempo that we're targeting. We've got a team of engineers at the Tacton level and then as we develop these products we've got product managers and eventually we'll build out sales teams across the country. We're bringing these products to market, capturing more feedback from manufacturers and you know, keeping that, that flywheel going.

Carson Morell & Daniel Scott Mitchell [00:26:59]:
I don't know if you'd add anything.

Carson Morell & Daniel Scott Mitchell [00:27:00]:
No, I mean he, he makes it sound simple like that, that's the, that's the blueprint. Yeah, but I think it's actually hard if someone wanted to replicate it because you have to be genuinely motivated by this and you have to be building with a long term approach. We often talk about this being the last business we build. Like not do this for a couple of years, find a quick exit and go do something else or go kick it on the beach. Like this is something that we have a long term motivation. We know we're going to be in relationships with these folks for decades. And the way that you build when you are trying to forge decades long relationships with people is vastly different from if you're trying to make a rapid go to market machine where you put as much in the top of the funnel as you can and shake it aggressively and see what falls out the bottom. We build products intentionally and that's something that I'm heavily focused on because I focus on the product development side of our business is like as someone who was previously a product manager.

Carson Morell & Daniel Scott Mitchell [00:27:50]:
It's like the most challenging product management exercise in the world because I want to solve every. And we've got a high, high horsepower, really strong firepower engineering team that could solve any problem. But we have to identify the Pareto 80% like that. I actually, I'm going to call it like the adjusted Pareto here because I think it's a little bit different in manufacturing.

Jeffrey Stern [00:28:11]:
It's the 98%.

Carson Morell & Daniel Scott Mitchell [00:28:13]:
Yeah. If the full feature set is like 100%, I think we can tick 90 to 95% of the boxes for a small midsize manufacturer at about 50% of the cost. That's empirically what I'm seeing through. At least the first couple products we're building total out of pocket cost to the customer. We can cut about 50% of the cost versus existing technology providers and a good example of that is our machine monitoring product. We're about 50% of the cost of other providers in year one. We're actually 25% of the cost in the remaining years. But we're able to cover about 90 to 95% of the bases for small and mid sized manufacturers.

Carson Morell & Daniel Scott Mitchell [00:28:48]:
So there's some edge cases that exist for really, really large manufacturers that if we were to go try and pursue those, we'd spend a bunch of money building those features and we might get some multimillion dollar enterprise contracts, but we would lose our mission along the way and price out the 98% of the shops that we want to help solve problems for. So maintaining high discipline in our product development process, staying deeply connected with folks to understand what their key points are and honestly getting products that are half baked into their hands and getting their feedback if they're willing to test it for free. And then on the go to market side making sure that our pricing, our go to market strategies are all set up in a way that they're amenable to small and mid sized manufacturers. Sense as an example is like a lot of the other competitors out there, try and sign folks up to multi year commitments where they pay this like omnibus price that covers hardware, covers software, covers installation, it covers support. There's not a lot of transparency on that. And in effect you end up paying for installation and hardware every single year even though you don't get new hardware every year and you don't get installation every year. But we've listened to feedback from folks that we know and tried to understand that small and midsize shops can't sign up for multi year commitments because they don't know what their P and L looks like. They can't sign up for contracts where they're going to pay for software for a long, long time.

Carson Morell & Daniel Scott Mitchell [00:30:05]:
They don't want to sign up for buying hardware where they don't actually get to own the asset and depreciate the asset. And so we've built our go to market motion similarly the way we've built our product around. How do we make this most effective for small and midsize manufacturers? And then we go out there to market. I feel like it resonates with a lot of people and they say, wow, this makes sense. And it's like it's not to our credit, it's to credit of the hundreds of manufacturers that are willing to collaborate with us and help us form our product development, help us form our product.

Jeffrey Stern [00:30:34]:
And you listened?

Carson Morell & Daniel Scott Mitchell [00:30:36]:
Yeah, that's all we had to do is have a good set of ears and that's what helps inform our process.

Carson Morell & Daniel Scott Mitchell [00:30:41]:
I think too one of the things that is important to us is going in person. We talked about that earlier but like going to see every customer or potential customer or potential for a future non existent product. Right. Customer in person. That doesn't, it's not super scalable but we make up for that scale on the stickiness. Right. We're building a long term relationship with these folks and now we try to come out of that first interaction with give us your ideas, let's talk. We're gonna throw stuff your way, you throw stuff back our way.

Carson Morell & Daniel Scott Mitchell [00:31:17]:
And there's not a lot of times we get together in person with, you know, a shop owner or any manufacturer and we don't have an open door both ways after that. And I think that's, that's been a really cool part is, you know, we're not, we're not reaching out to thousands of people a month or every few months. Even now we're talking to fewer people. But we're building good relationships and letting that compound as we introduce new products. It's a different approach than most take and it's also just more enjoyable. I think it's been really fun to

Jeffrey Stern [00:31:53]:
your idea, Daniel, that you probably could have built a thousand products. In your kind of assessment of what that disparity was between the 2% of factories and kind of the legacy factories, how did you guys figure out where to actually start?

Carson Morell & Daniel Scott Mitchell [00:32:12]:
Well, lots, I would say every single factory is different. That's an important baseline assumption to have. You could go to two factories that both serve the same customer, that both start with the same block of raw material. And they both have the same machines and the same number of operators, and they're producing the same design, and you walk in there, the way that they're solving the problems is completely different. And so that's an important distinction to have as an important understanding to have. So when we talk about the top 2% of factories from a financial perspective, they have the backing to either buy any off the shelf technology that they want because money's no object, or comparatively, to someone with really, really high margins, money's no object, or they just have engineering firepower to build the bespoke solution that they want exactly the way that they want it, and it matches their operations, which are unique from everyone else. And so when you've got these like, enterprise style solutions that are available off the shelf to the top 2%, they're highly customizable, but they take a long time to implement because every single shop is different. Or they're building the thing that's relatively easy to implement, but it was expensive to build because they paid engineers to build something from scratch.

Carson Morell & Daniel Scott Mitchell [00:33:16]:
Small midsize shops don't have that advantage. So what we've had to do is get our reps in and listen to a lot of people. And I mean, I just call it like it was my reliving my crash course in product management and spending a lot of time with a lot of people understanding how they solve problems differently, understanding how to consolidate those into common threads. And then from a development perspective, we do as much as we can to be flexible and to allow people to use the product the way that they want to use it. And a good example is like, we made a station asset, so like a digital record of all these things that you can upload about each of your machines. And so we thought we could add a lot of structure based off of one person's feedback. Someone wanted to say, hey, I want to keep maintenance logs in here. Can you add some fields so that I can populate maintenance records? And another person said, well, I want to store my machine manuals in there.

Carson Morell & Daniel Scott Mitchell [00:34:03]:
And another person said, hey, can you upload photos of the installation of the Sense when you went there and installed this device on our machine? It'd be cool, super cool for me. We'll see on each machine where the hardware is located so that I, if I need to troubleshoot anything, I can see where that is. We fused that huge credit there to like our CTO on Sense Manufacturing for Bode, who does a great job of fusing all of this disparate feedback into, hey, this actually sounds like one feature. Someone told me maintenance, someone told me machine manuals, someone else told me installation photos. That sounds like one feature where we build this flexible digital library that's lightweight and it doesn't take our engineers a lot of time to develop it, and it doesn't take users a lot of time to learn it. But let's make this digital library that scratches the itch for all the different people. But to us, it's only building one feature. And so we do this exercise a lot where sometimes to our users it might sound like we're not listening or we're half listening, or we're asking questions about something that's kind of adjacently related to what they're talking about.

Carson Morell & Daniel Scott Mitchell [00:34:59]:
But it just goes back to this exercise of being ultra connected with our customers, being willing to spend a lot of time with people doing things that don't scale, which is like talking to every single customer that we have on a regular basis to understand how they're using the product and where we can make it better, and then doing a good job of staying connected as a team and collating all that feedback together to create what we feel to be like. Instead of killing two birds with one stone, can I kill like five or ten birds with one stone? From a development perspective, that helps us stay lean as opposed to building 10 different versions of the same product.

Jeffrey Stern [00:35:29]:
If the biggest challenge today is, is still one of labor. So, I mean, one of the interesting things that I've gotten to see through being here in Cleveland and getting to meet with a lot of manufacturing folks is if it was the labor arbitrage that pushed a lot of the hollowing of the kind of industrial base that we have here generally to places like China that still exists for the most part, what has allowed for a lot of it to come back economically has been that we can automate so much of it. And so just curious how what you guys see as kind of the balance between automation and people in this industry today and where that kind of lies also in the disparity between the 98% and the 2%.

Carson Morell & Daniel Scott Mitchell [00:36:22]:
That's a great question.

Carson Morell & Daniel Scott Mitchell [00:36:23]:
Really good question. I mean, we see a lot of small to medium sized shops pick up their first cobot robotic arm. It's usually pretty incremental, but we see shops that have more and have invested more into automation. And we'll see one shop that has a machinist running four machines that all run 24, 7 and during their shift they're making sure those machines are running and checking Parts swapping tools out and they're able to manage a lot more versus other shops where you might have one, sometimes one with the help of another running one machine. So that, I mean the, the amount that you're able to get done with really good machines, it's pretty drastic. Of course, the barrier being the cost of those machines. And if the shop's growing fast enough, which is pretty neat, you know, they get to keep their whole, their whole team on board and just have a lot more machines that are being run. I don't know if you'd, I'd just

Carson Morell & Daniel Scott Mitchell [00:37:21]:
say, I think we see this dynamic in lots of different markets where the pendulum swings really far and it swings too far sometimes and then it comes and swings back the other direction. I think we maybe saw a bit of an overswing of the pendulum in terms of offshoring things that could or should be produced domestically. Especially when you look at the total cost and all the factors involved. Quality, having trust with your vendor, having a strong relationship with your vendor, the convenience of being able to drive down the road and solve a problem with someone as opposed to getting on a plane and flying 12 hours away. And then from a logistics perspective, perspective also thinking about, do I need to wait, Do I necessarily need to wait 12 weeks for my parts to show up because they're on a container, on a boat? Or can I find someone who's around the corner in Cleveland and use that as a way of building a relationship and also boosting the local economy here? Automation is definitely a part of it, and cost of labor is definitely a part of it. But as Carson mentioned, there are tools that are helping folks disconnect their total production output necessarily from the number of man hours worked. Really what it comes down to is like, do you have someone who's willing to learn, who's willing to work hard? Not necessarily. Do I have a machinist with 30 years of experience willing to run this machine? I think I would say the winners that I would bet on in the technology space are creative about how they can use technology to automate.

Carson Morell & Daniel Scott Mitchell [00:38:46]:
And when I say automation, I don't just mean robots on the shop floor. I mean can you automate some of the administrative tasks that are soaking up the non critical thinking time of the people who are working on the floor? Do you have machinists with 20 years of experience spending their time writing on a clipboard how many parts they produced and how long they were standing there at the machine when you can have technology do that for them? And then similarly trying to Bridge the labor gap. Keep going back to this topic, but it's the number one problem we've heard from folks is like, if you can't find a machinist with 20 years of experience, can I use technology to decrease the barrier to entry to make it easier for someone who's a high school graduate who's genuinely interested in learning about manufacturing and wants to get their hands dirty and is going to work hard? Can I use technology to reduce the barrier of entry for them to come and run a machine? And I've got technology set up that it makes it intuitive for them to run a machine with very little experience, as opposed to having to have wrestled with this type of machine for 20 years to be able to understand how to do it. And like, not all of manufacturing has to be like a black magic where you don't understand how to make the machines work unless you've got decades of experience doing it. There's some of it that necessarily still is just because the science is that complex or the constraints are that tight. But there's a lot of manufacturing where I don't want to say dumb it down, but you can make it easier for folks with very little experience to come in and add value on day one, even if they aren't an expert yet. But be positive value add, which makes it easier for folks to hire. We've got a friend in Salt Lake City who's like, this isn't a manufacturing hub in the US but there are a lot of people who are young and are smart and are willing to work hard.

Carson Morell & Daniel Scott Mitchell [00:40:19]:
And he invests in technology that allows him to hire pretty much anyone off the street and has them effective and producing it like a full capacity output within a couple of weeks of joining the company. Which is a testament to his like, tactful use of automation, tactful use of technology to make it easy for folks to get started.

Jeffrey Stern [00:40:36]:
When you think about a place like Salt Lake City vs. Cleveland and when you had this kind of revelatory moment of all right, we're going to Cleveland, like, why does that industrial density matter? And just maybe speak a little bit to beyond the warmth of people here, which I don't think you can really discount at all, but, like, why that part matters and why you've chosen to do what you're doing here.

Carson Morell & Daniel Scott Mitchell [00:41:00]:
Yeah, great question. I think, I mean, for us to the first point about proximity, like, we want to see as many shops as possible and, you know, not just talk to as many manufacturers as possible, go to as many shops as possible. That Means we're driving around and if I'm driving, you know, an hour, two hours between shops every day versus five, ten minutes, we get to see a lot more and move a lot faster. So just from a go to market perspective, it makes a lot more sense for us to start somewhere like that. And product and product development increases our

Carson Morell & Daniel Scott Mitchell [00:41:30]:
clock rate at which we receive feedback.

Carson Morell & Daniel Scott Mitchell [00:41:32]:
Yeah, 100%. I think in especially as we're, you know, we're, we're going into an area almost cold. You know, we had relationships here, but you know, you're talking about a fraction of the total population of manufacturers here. There will be, you know, in the future. We launch in another region and we have people on the team who already have existing relationships and it's easier to crack in. But when, when you're going in cold, being able to just, you know, have that density makes things a lot easier in terms of meeting people and getting moving, in terms of I think proximity locally, like a getting together in person still really matters for lots of manufacturers. I mean it's cool here you have not just people who are selling to manufacturers, but manufacturers themselves going to each other's shops, seeing how other people are doing things. Oh, you got this new machine.

Carson Morell & Daniel Scott Mitchell [00:42:24]:
Can I come check it out? I mean we hear about that all the time. And once those relationships are built, there's almost this open door policy and people swing by, say hello and we've kind of been able to do that now, which is really cool. We'll have three or four visits scheduled for a day and we'll see that, you know, Joe is down the street and it's only a three minute drive to pop in and say hello and we get to do that. And that's, that's really cool. Again, like nurturing those, those long term relationships that we're building, those are parts of it. But I think that density of shops also, or the density for shops also matters for talent. And having a lot of talent in one place, having a lot of machine tool sales companies and cutting tool sales companies and maintenance companies all in one area. There's more competition, people are moving faster.

Carson Morell & Daniel Scott Mitchell [00:43:18]:
I think there's just, there's more activity which is better for everybody.

Carson Morell & Daniel Scott Mitchell [00:43:24]:
So you alluded a little bit earlier to like China and the way that China is doing things and building their industrial base and like, I think there's a little bit of a misnomer there that people thought that everything coming from China is like cheap plastic crap. They're actually one of the biggest industrial powerhouses in the world and they went from pretty much cheap plastic crap to the best industrial powerhouse in the world in only a couple decades. And a great example of that is Shenzhen in China, where they've got this hyper local environment that's super connected with one another. And when I say super connected, like this is a term that I think I tried to coin super connected, like one word, super connections where you're not just hyperlocal and co located with one another, you're also ultra networked with one another. And so I don't know if anyone, if you've done this personally or anyone listening to this has like tried to do business with China and manufacturing. You can send someone a message on WeChat and say, I want to create this product and it requires lots of different bits that get assembled together that are made with different production technologies that will be made from different vendors. And you can get a response back from someone on what the cost for that thing will be in like 45 minutes. And they're collating feedback from five different manufacturers.

Carson Morell & Daniel Scott Mitchell [00:44:34]:
And it's because they're all located around the corner from each other and they're also all connected with each other and they can send each other messages and they're super connected in that way that sets up an inherent advantage where you're able to move faster, people are able to support each other. And like Carson saying, all these economies of scale of having like really, really solid ecosystem for machine tools and for talent and all these auxiliary systems that come around manufacturing, that's what makes me excited about being in a place like Cleveland. But when I look at Cleveland, I still see a lot of opportunity. Proximity is there supporting ecosystems there. But I still see a ton of opportunity to hyper network everyone and to be super connected. We don't have like a WeChat alternative in the US that's well adopted by everyone. And even in Cleveland there's lots of like awesome organizations that do a great job of connecting everyone together. I still think we could do way better in terms of being like, I don't know, go from like dial up to fiber Internet levels of connected with one another with lots of connections between lots of different nodes in the network.

Carson Morell & Daniel Scott Mitchell [00:45:36]:
I think that there's a lot of economic value that's lost and sent through inefficiency. It's sent far, far away because people don't think they can find someone around the corner who does the thing that they need. And it turns out there was someone around the block who has the exact capability that they needed and they just weren't able to find them or they didn't want to look hard enough. But a lot of folks are spending like two to six weeks trying to find a vendor and then they can't find one and they give up and they go with the person who shows up on Google. So there's a lot that exists here in Cleveland, but I think there's like an opportunity to make it even better by super connecting everyone to set us up in a situation where it's like rivals Shenzhen but with American production capacity. Yeah.

Carson Morell & Daniel Scott Mitchell [00:46:18]:
And I think it's like, I mean it's very much a black box for the manufacturers. They just don't know what's out there, what's around them. I think on the roadshow we found that half the shops that were existed on Google did not exist anymore in real life. Especially when we were doing door to door and we were just showing up cold to shops. You know, we would go to a shop and it was empty, shut down, you know, however many years ago. And then there's a lot of shops that exist and are there in the real world and are not on Google. So there's, what's that? Like one third of the actual shops that are really there are also really there online and everything lines up and so there, I mean it's just, there's no, there's no clarity. And I think to your point about being colo located, there's no like intentional collaboration in the supply chain.

Carson Morell & Daniel Scott Mitchell [00:47:08]:
You know, in, in China. It's like, hey, when, when I get an opportunity like this, you're going to do this and you're going to do this and you know, we're all going to get new machines together and we're all going to be able to deliver it faster together. There's not a lot of that here. Mostly because it's just not, it's just not possible. People are in survival mode or they don't know, you know, they don't even, they don't know their neighbor or somebody nearby that they could be working with. I think you look even a lot of the shops that have, you know, the first or second generation owners still involved, they've got their buddies and their buddy shops and they know each other really well. But the next generation, the next generation, it's just all things have broken apart really. And so you don't have that same level of relationship there that I think is, it's pretty neat.

Carson Morell & Daniel Scott Mitchell [00:47:58]:
I mean, we've gotten to see some shops. Even today we're with a Lloyd Gage cutting tool distributor, great partner of ours and they're third generation and they were in a third generation shop I think this morning and we were all there together and you know their dads, dads work together and their dads work together and I mean there's just, there's so much more there and I think like even if we start now and it takes a few generations, like it is worth, it's worth rebuilding.

Jeffrey Stern [00:48:23]:
Are you guys optimistic about like where, where this can go when you think about those kinds of aspirations?

Carson Morell & Daniel Scott Mitchell [00:48:29]:
Yeah, absolutely. I think like one of the things, you know, people, people say is like are we going to, is it going to be us or China? I don't think it's not that simple. Right. Like we can, we can do really well and they might still do really well which you know, it probably will, could happen. Who knows what will happen but like it's not black or white. Like there's one winner and it's like absolutely worth pursuing us building our manufacturing capacity in the U.S. i mean even if we did 20% more of the things that we buy for ourselves, we'd be better off. 10%, 5%.

Carson Morell & Daniel Scott Mitchell [00:49:03]:
You know, it's all helpful and it's all worth doing. So super optimistic and I think one of the really neat things, having so many touch points and seeing so many shops. There is an incremental improvement in the overall sentiment of the shops that we visit. I think there was a lot of like general discouragement when we were visiting shops. You know, third generation, been around for a long time, no successor in place to run the business. You know, same customers they've had for 20 years, no new customers, businesses dwindling down. And I mean we had, we were in a shop first thing this morning. Who was kind of in that situation

Carson Morell & Daniel Scott Mitchell [00:49:49]:
three years ago maybe Three.

Carson Morell & Daniel Scott Mitchell [00:49:50]:
Yeah, three years ago. And then scooped up a massive opportunity, opened up a new location, 24 7, lights out, fully automated shop with a big contract with tier one and like the tides turn for them and like that is, that is possible. I think it's just about staying in the game and more people getting involved and more people working towards this common goal. I think it's absolutely possible that we get closer to where we used to be, if not all the way there. But yeah, overall super optimistic even from

Carson Morell & Daniel Scott Mitchell [00:50:23]:
a networking perspective about connecting people because I think the ingredients are already here. I've seen a lot. It's very gratifying for me to see the connections that we've made and we've been able to make second degree connections or connect the people that we know. To each other from our mutual connections and then to go visit them and be like, hey, we visited Dan Sutterlin today and he said that he's been talking to Johnny Burkic from QP Manufacturers and they know each other now. They, you know, he said, I know, I've heard of them. I knew they were down the street. But now because we were intentional about making introductions between each other, they're able to exchange notes, they're able to talk to each other and say who's going on vacation when. But that's like a first step towards building trust with one another, toward building relationships with one another.

Carson Morell & Daniel Scott Mitchell [00:51:03]:
I think that like what we've been able to do at a micro scale of being intentional about meeting as many people as we can and then introducing folks where they can create value for one another, there's a lot of room to run there. That I think is a snowball effect. I hope it's a snowball effect that if we start small there can be some knock on effects first domino doesn't have to be that big to start making some real impacts. And I think about like just boosting a local economy. The extent to which people can choose to source a multimillion dollar production contract with someone who's their neighbor rather than finding someone overseas. GDP is not the perfect measure of what production production looks like and what economic output looks like from a country. It's not just about invisible dollars flying around. I think there's also some inherent value in having the means of production under your control as well.

Carson Morell & Daniel Scott Mitchell [00:51:52]:
And specifically in the US where we've got this unique dynamic where 98 plus percent of factories are owned by family businesses, like they're small companies. And we know empirically from data that small businesses do a great job of buffering the middle class and creating investment in people's lives in the US So would I be as excited to like grow this network if it was a bunch of super corporate giants or government owned giants that were manufacturing? Probably not. The challenge is a lot steeper for us now that there's, you know, 50 times as many shops because there's a bunch of small ones. But that's what makes me excited is about the ability to like support small family businesses. And when I say small, like these are actually great businesses with, you know, some of them have hundreds of employees. I'm still considering that small in comparison to the folks that have 500,000 employees on their payroll.

Jeffrey Stern [00:52:41]:
Yeah, well that all resonates quite a lot. I mean, that's at the exact heart of What I've loved about lay the Land in the first place, I mean, it's, it's the ability to connect dots. It's really hard to quantify what that does in the short term. But I mean, thousand introductions in it's. I mean, companies get founded, people get hired, people get funding, people become friends. And as that coalesces, I do think it compounds and makes a meaningful difference.

Carson Morell & Daniel Scott Mitchell [00:53:11]:
I have been villainizing big companies a little bit, but people cry a lot about billionaires being far too wealthy. But when I look at my personal opinion only. But when I look at the amount of economic output and the economic value they were able to bring, considering that a lot of them own a very, very small portion of their company and they've accumulated a billion dollars of wealth, look at the market capitalization of their company. That's an indication value that they've created for everyone. I would say a similar ratio probably exists in the small business realm as well, where someone's able to build a good, honest business themselves, but they're also creating a ton of butterfly effect economic value and personal value and gratification that exists for a lot of people in the community around them as well.

Carson Morell & Daniel Scott Mitchell [00:53:55]:
Yeah.

Jeffrey Stern [00:53:56]:
What have been some of the entrepreneurial lessons learned through this endeavor as you guys have joined forces and kind of gone at this for the first time together?

Carson Morell & Daniel Scott Mitchell [00:54:06]:
Man, oh man. It's a little bit of an interesting one and it's just what came to mind. I'm a little surprised what came to mind. But the quality of people that we're working with is really, really important on our team. The initial partners that we choose to work with when we collaborate on stuff, having ridiculously high standards on the quality of people that you work with, I used to think was like a fatal flaw of mine, but I'm starting to think that it's a strength just because there's a lot of mediocrity out there in the world and it's from an entropy perspective. It's easy to fall into mediocrity so that the folks that can fight that staff, I mean outside of that, customers that you work with early on, partners that you know, other companies that we choose to partner with, even folks that you bring on as advisors or anyone that you're willing to heed their advice or spend time on interacting with. I feel like it's like a core value of entrepreneurship to be selective around where you pour your resources into. But that rings really loudly to me is like, I'm very grateful for the high quality team that we have.

Carson Morell & Daniel Scott Mitchell [00:55:10]:
The high quality customers that we have to partner with and really our industry partners who some of them we've never exchanged a dollar with. But they've created a ton of value for us by being willing to give us feedback on products, to tell us no, this isn't valuable or to take one of our sense devices and install it on their machines. Before we had ever tested. We developed this product without ever testing it on a CNC machine. It's designed for, largely for CNC machines. We trained it on my dehumidifier in my basement. Because we don't own a CNC machine and because of the high quality of folks that we have relationships with. We have folks in like multi hundred million dollar per year manufacturing facilities that let us come in with no experience, with no training and install them on their machines and let us build our first case studies that then have led to us being able to like sell this to a lot of people.

Carson Morell & Daniel Scott Mitchell [00:56:02]:
And that for me it's just like that's the quality of the folks that we chose to partner with and that were kind enough to partner with us.

Carson Morell & Daniel Scott Mitchell [00:56:08]:
Yeah, couldn't agree more. I think too like we've just, we've seen it with our team. Like we've got, we got a small team right now, but we have an incredible team and we pack a punch. We get along together quite well. And I think one of the things I've enjoyed most about the culture we're building is like we can move quickly and butt heads and disagree and push each other and call each other out when we're wrong and, or when we think somebody else is wrong or there's a better way and we can commit and move forward and pick a direction. I think that's just been, it's been, it's been super enjoyable and I think something that has come easier than it usually does. Daniel's leadership and how, I think how well we work together and the people we brought on board, that's been really incredible. I think too building now versus previous companies I've built.

Carson Morell & Daniel Scott Mitchell [00:57:05]:
The amount that you can do with a small team is just so much more times you can do, you can do more. Like there's. We were, we were building a presentation recently and we're able to do it. We said we were like the last time we built a presentation that looked like this, it took us three or four months to like iterate on it and get it to, you know, a certain point so we could just move, move faster with fewer people. And that's been, it's just A completely different way of operating which has been really cool.

Jeffrey Stern [00:57:36]:
What, what has, I mean, despite the depth of knowledge and experience that you have in this space, what has kind of surprised you the most about, about it so far?

Carson Morell & Daniel Scott Mitchell [00:57:48]:
I would first start by saying I don't think we have expertise or depth of experience. I mean we've seen a lot and I'm grateful for all we've learned and known but I would be foolish to think that we've seen anything other than the tip of the iceberg. That's why we're still doing factory visits today, even after having done 150 over the last 10 months is like there's still so much for us to learn. I don't know what you're going to

Carson Morell & Daniel Scott Mitchell [00:58:09]:
say, but yeah, I think one of the things I was, I was most surprised about not coming from a manufacturing background is even the larger manufacturers, like maybe the 99th percent, you know, not the 1% of the 2% in your head you're like, oh, they're going to be like, you know, massive. But a lot of them are just like a bunch of small and medium sized businesses like bolted together. So there, I mean there are, we've, we've seen shops that are, or not even shops but like production facilities that are part of massive publicly traded conglomerates and they don't look that much different than a medium sized shop down the street. And so it's been interesting to see that some of those, those facilities like they do have the same problems as medium sized manufacturers and it's not all, you know, Tesla gigafactories. Like there are big companies that are just again lots of small, medium sized plants put together. So that, that was, that was like surprising for me but really cool. And I think it's, there's just this facade that like, oh, they must have everything like figured out and it must all be put together. And I think that's also like a really interesting thread that could help pull some of those large and you know, bridge the gap between the large shops and everybody else.

Carson Morell & Daniel Scott Mitchell [00:59:32]:
I realize I just said I don't think we a lot but I'm going to say I've been excited to have learned so much and collect, I mean mentally a lot of data but also like actual on our computers data on how manufacturing looks like in the small, small and medium sectors. I don't think there's a lot of people who have as deep of an understanding specifically across the breadth of small and mid sized manufacturing as we do. I'm grateful for the way that we've built our products and we're secure with everyone's data, but also use it as a way to improve the products moving forward. One of the things I think of is like our machine monitoring product. We've collected hundreds of thousands of hours of machine runtime and we understand what the power signatures look like and vibration signatures look like on certain types of machine for hundreds of thousands of hours. Now we're able to use that to do really incredible things like understand what anomalies look like based off of a categorical understanding of how these machines look like. And I don't think that there's been a lot of folks that going back to what Carson said, like could have technologically feasibly done this in the last couple of years because it would have just cost too much for the engineering firepower to get that done. But today we can achieve so much with such a small team that it's possible for us to do this.

Carson Morell & Daniel Scott Mitchell [01:00:40]:
And it feels like a little bit like we're playing in the wild west. And this is the first time that we're collecting these, you know, sets of data that I don't even know what we'll end up using with them in the future. That's like the most surprising part to me. But I'm excited about the potential future here from like an intelligence perspective on building products upon products upon products that are I think the most valuable thing we'll end up building as a company in terms of enterprise value won't be any one product that we build. It'll be this like deep intelligence moat of understanding of what different small and mid sized shops look like and how they use different systems and how those systems interact with one another and having the data to be able to back

Jeffrey Stern [01:01:19]:
with the continuation but also culmination of that listening tour, like what if you could wave the proverbial magic wand like what, what is the lowest hanging fruit thing that if everyone could just adapt at the same time would have the biggest kind of impact in your guys opinion?

Carson Morell & Daniel Scott Mitchell [01:01:36]:
One of mine is like not quite an answer because it's an attitude thing, not a technological thing. But to the extent to which, if we were able to kind of remove some of the scar tissue from folks that have been burned by investing in technology in the past and make it really, really easy for them to take a swing on new technology, I think a lot of them are wholly reason based and would see a positive ROI and stuff and that would rapidly increase the rate of adoption of technology in the small to mid sized manufacturing sector. And that's exactly what our go to market motion is intended to do is we're not going to force anyone to do an all or nothing rollout of all their machines in their plant or nothing. We're more than happy to show up with one or two or five or 10 devices and then tell someone they can buy the remaining 140 later if they're excited about it. That's one thing that's like an attitude type perspective for me and from a technological perspective. I alluded to it earlier, but looking at automation with a broader scope other than just can I put sexy robots on the shop floor and move parts from one point to the other without humans touching them like that is cool. We do see that from time to time and it's incredible. But there's so much low hanging fruit to be reaped in making the front office of a manufacturing shop or the front to mid office of a manufacturing shop less human labor intensive.

Carson Morell & Daniel Scott Mitchell [01:02:57]:
There's still a lot of logging that's done by humans on paper and then it's typed by another human into an Excel sheet and then it's uploaded by another human into a SharePoint file where someone else is connecting it to a dashboard. And there are solutions that exist and some of those we're trying to build ourselves which take that from being several humans involved in a chain to like you don't even think about it. We install it, it takes 15 minutes to install a machine monitor and it creates dashboards on its own. And there's technology like that that has existed for the most part in like business analytics and finance and all this stuff. But now it's making its way into the nitty gritty parts of like data tracking and administrative work for manufacturing. And there's a lot of folks, like I said, who are willing to like invest in stuff like that that I'm willing to bet on them as winners even if they don't have any robots on their shop floor.

Carson Morell & Daniel Scott Mitchell [01:03:48]:
Non technology thing that everyone can adapt. Keep your shop clean, make it a place that people want to work. We've seen shops that you know, you can eat off the floor and people show up in nicer clothes to work because they know their nice clothes aren't going to get dirty. I mean it just the, it's, it's crazy how big of a difference that

Carson Morell & Daniel Scott Mitchell [01:04:06]:
makes or the return on investment of having bright enough lights to be able to see what you're working on.

Carson Morell & Daniel Scott Mitchell [01:04:12]:
Yeah, 100% and nice uniforms, things like that, like small steps and I think those are it's very easy to lose sight of those things when you know you're, again, you're in survival mode like that. That totally makes sense. But it goes a really long way.

Jeffrey Stern [01:04:26]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:04:27]:
And we've seen a lot of shops that have just done an unbelievably incredible job, even if they're small, keeping things tidy. You know, everybody pulling their weight on keeping their stations clean. I think that's. It's small, but it's, it's a consistent enough problem where, you know, it's. I think it's also like an indicator of a lot of other things. You know, how clean are you keeping the. The environment for your team that make a big difference, the small things.

Jeffrey Stern [01:04:51]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:04:52]:
And I think like on the technology side, I think it also just, it just depends on the shop and as Daniel said, like making it easy for people to experiment and test technologies and see what's going to move the needle the most for them. That will go a really long way. I think just taking, taking the first step, trying something new. It's probably been a couple decades for a lot of shops since they've tried something new. And just getting back into the routine there will help a lot of shops start making improvements in the right direction.

Jeffrey Stern [01:05:21]:
Some closing questions here. What were some of the. What comes to mind is the most memorable moment from your tour? I'm sure there must have been some pretty.

Carson Morell & Daniel Scott Mitchell [01:05:31]:
There was a really good Halal truck in Indianapolis.

Carson Morell & Daniel Scott Mitchell [01:05:34]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:05:35]:
I mean, this isn't factory related at all, but that food was incredible.

Carson Morell & Daniel Scott Mitchell [01:05:38]:
That was good.

Carson Morell & Daniel Scott Mitchell [01:05:39]:
They let us put the fries under the sauce. Not a lot of folks let you put the fries under the sauce.

Carson Morell & Daniel Scott Mitchell [01:05:44]:
That was a good one. In Cleveland, we had like an open afternoon. It was hot. It was like peak summer, probably August at that point in time. And we had, we had like two scheduled visits for the day. And we had three people, three of us maybe at the time with us. And we're like, all right, we're all gonna split up and like walk around these, in these industrial parks and like, so you can get, you know, into the most shops or whatever. And sometimes when your door knocking, it goes really well.

Carson Morell & Daniel Scott Mitchell [01:06:11]:
Like you get a. We've had. You get in on the first try and that's where you spend your afternoon. You know, other times you don't have a lot of success. I don't think we got in anywhere that day that was on schedule. Maybe one. And we walked around for four or five hours. And I just remember laying on the pavement at the end of the industrial park, like Our clothes are soaked from walking around.

Carson Morell & Daniel Scott Mitchell [01:06:32]:
But it was fun. Like, we had a hell of a summer. And that. That was a cool. A cool part of it, just being outside and getting rejected at doors.

Carson Morell & Daniel Scott Mitchell [01:06:43]:
There was a point at which Carson and I were like, like, it's okay if we get rejected. We just can't get rejected too fast because we want to at least stand for a couple minutes in the ac.

Carson Morell & Daniel Scott Mitchell [01:06:52]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:06:53]:
So can we drag our feet a little bit and get someone to consider having us in? Could you just go ask the owner? I know you don't think he can take us. Could you go ask the owner and see if he could take us in? But in all seriousness, like, I think that for us, it's not like, a huge factory learning or technology learning, but that really galvanized our team as well around, like, being able to do the tough things, being able to work hard even when you're not getting the fruits of your labor immediately. That definitely went toward hardening our culture to a point where, like, Carson's saying, like, it feels like it's second nature to us to work the way that we do, but I think it's intentional. I gonna toot Cleveland's horn again here, but a similar day. Incredibly hot outside. We went and visited, and I'm gonna just mention it to give him a huge shout out. Dan Sutterlin reached out to us on X. Kent came in inbound on us on X and said, if you're going to be in Cleveland, I'd love to have you in my shop.

Carson Morell & Daniel Scott Mitchell [01:07:48]:
Took us in. We had a great conversation with him. He gave us a bunch of feedback on what eventually became the couple products that we built, and then made introductions to us to five other manufacturers in his industrial park, knocked down doors for us to get us access to other folks, and then took us out to Mexican for lunch after. And it was like, dude, you have provided so much value to us. And, like, at the end of the day, he was, like, trying to pay for the bill. And we're like, dude, no, thank you. I really appreciate that spirit. I think that perfectly encapsulates, like, the experience we've had with the community in Cleveland, and it heavily influenced us to put our headquarters here, but also when we're launching future products, and I've alluded to it a little bit around, like, super connectivity of a supply chain.

Carson Morell & Daniel Scott Mitchell [01:08:35]:
Like, we're working on something in that vein, and we're intentional about wanting to launch that in Cleveland because of the network and the community that we've seen here in the Space.

Carson Morell & Daniel Scott Mitchell [01:08:43]:
Yeah. And big thanks to Kyle Zeller for bringing us together. And, I mean, he was a big part of why we kept coming back over the summer. Was like, oh, I got to take you here. I mean, it was like. It felt like it was his job to take us around. It turns out it is his job. But at the moment I was like, you know, why is he doing all this? But, I mean, that was just like, Kyle's been instrumental in, like, getting us into some really cool rooms and meeting great people.

Carson Morell & Daniel Scott Mitchell [01:09:10]:
I get all my restaurant wrecks from him. He's the man. So. And in many such cases, like, so many people here have just been. Have been awesome.

Jeffrey Stern [01:09:17]:
It's good people. I mean, there's certainly a lot more we could talk about. Is there anything that feels particularly important that we haven't talked about that you feel is kind of instrumental to the tack time journey or just kind of the entrepreneurial journey or. Or just anything at all that you wish we would have talked about?

Carson Morell & Daniel Scott Mitchell [01:09:32]:
Just a thought that comes to mind kind of retrospectively looking at. We talked through, like, career journeys and stuff to get here. I'm grateful that we've been able to, like, just pursue genuine curiosity and genuine passion. Like I said, you could try and copy this playbook and it wouldn't work unless you genuinely cared about it this way. It's hard to go knock on doors in 97 degrees heat in Cleveland and get rejected 14 times in a row and still want to go up and knock the 15th time. But. But that's like, the fervor that our team has and like, the support system that my wife provides for me to, like, be able to go chase my dreams like that. Like, I'm just very grateful for that.

Carson Morell & Daniel Scott Mitchell [01:10:09]:
And my advice to anyone, if I were to give it, is just like, follow genuine curiosity, follow genuine passion. More so than trying to create a master plan. The invisible string, in hindsight, will look like it was planned perfectly because you've got this genuine thread of curiosity pointing in the right direction. But I genuinely love what we're working on, and I'm grateful for the folks that we're doing it with.

Jeffrey Stern [01:10:27]:
I realize I didn't ask what tacton means.

Carson Morell & Daniel Scott Mitchell [01:10:30]:
That's a great story.

Carson Morell & Daniel Scott Mitchell [01:10:31]:
That's a really good question.

Carson Morell & Daniel Scott Mitchell [01:10:33]:
So the first four letters of taktan, T, A K, T. German word takt. The Japanese borrowed that in lean manufacturing, it means pulse or heartbeat. But the Japanese use that in manufacturing taktime to mean like the pulse at which your plant has to be so the parts moving from one station to the next, like your heart beating and yeah, boom, boom, boom, boom. Parts moving through the plant to meet your customer demand. So if you look at what your customer demand is and you look at how many parts you have to make based on your customer demand versus how much time you're able to run, you can divide those out and figure out, oh, I need my parts to move from one station to the next at least every 15 seconds. And that's the heartbeat of the plant. And we'd like to be associated with the heartbeat of the plant.

Carson Morell & Daniel Scott Mitchell [01:11:11]:
Also, Tecton, if you were to change the A to an E is the Greek word for builder. So we're very excited about building for the heartbeat of the plant. And then also the fun part is we were able to buy the domain tacton.com, six letter domain, add some meaning toward it, toward our manufacturing. The trifecta there for us. And the funny part is the com was important for us in making the naming decision, but it worked.

Jeffrey Stern [01:11:33]:
Yeah, that's awesome. That's a great meaning. We'll close it out then with traditional closing question, which is for hidden gems in Cleveland.

Carson Morell & Daniel Scott Mitchell [01:11:43]:
I'm so new that I feel like anything I say, any. Any Clevelander will hear it and say, that's not a hidden gem. Everyone knows about that. But I'm trying to think something you

Jeffrey Stern [01:11:52]:
wish other people knew about Cleveland, that perhaps.

Carson Morell & Daniel Scott Mitchell [01:11:54]:
I think the one thing that I, I enjoyed over the summer is just the. The summers here are spectacular.

Jeffrey Stern [01:11:59]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:12:01]:
And you've got like this, like, extreme difference obviously, between, like the winter and the summer here, which relatively. It feels like so much awesomer to have warm weather, but I could feel it like summer's coming up. And I think that was like, something I wasn't expecting. I don't know what I was expecting, but it was, it was a cool surprise. So I think that's. I think that's something that people don't know. And then I think another thing is, like, the same reason Cleveland was incredible in the 60s and 70s and many other years, like, are the same reasons. It can be.

Carson Morell & Daniel Scott Mitchell [01:12:34]:
It is awesome now and it can be even greater in the future. You know, people keep investing here and building here. Like, the. There's infrastructure for this to be. I don't remember how many people. City. A million, somebody. Yeah, there's.

Carson Morell & Daniel Scott Mitchell [01:12:48]:
It's. There's a lot of space. There's a lot of land. Like, there's a lot of room to grow. And I think that's like, that's just like, it's really cool. And You. You get here and you're like, oh, there's like, this is. This is the real deal.

Carson Morell & Daniel Scott Mitchell [01:13:00]:
And it was the real deal, I think.

Carson Morell & Daniel Scott Mitchell [01:13:02]:
Yeah.

Carson Morell & Daniel Scott Mitchell [01:13:02]:
I think there's, like, a lot of potential here, which I don't know if you could say about every spot.

Carson Morell & Daniel Scott Mitchell [01:13:08]:
So I told you before we started recording that it feels like the promised land here. And then I'm now sitting in the presence of two people that came from New York to Cleveland and are growing their businesses. And it calls back to Rockefeller to me, too, who left New York and came to Cleveland to grow his empire. I think it's an incredible place to grow a business and not just, you know, dollars on a piece of paper business, like a meaningful business that builds real things in real life and makes an impact in the world.

Jeffrey Stern [01:13:35]:
You're just saying all the things that make me happy. Yeah, no, it's. That all resonates. Well, I think that's a perfect place to wrap it. Daniel Carson, thank you very much. If folks had anything they wanted to follow up with, learn more about what you guys are doing, where would you direct them?

Carson Morell & Daniel Scott Mitchell [01:13:50]:
Takton.com t a K-T-O-N.com because we own it.

Carson Morell & Daniel Scott Mitchell [01:13:54]:
Yeah, we got a form on there. You could fill out the form on the website if you want to reach out.

Carson Morell & Daniel Scott Mitchell [01:13:58]:
And I just, you know, I hope some folks are listening to this, hopefully manufacturers or folks that know manufacturers, like, we. It's. It's not a spiel, it's not a shtick or anything. Like, it's genuine. When I say we want to meet manufacturers regardless of if they ever become a customer, like, it's super valuable for us to meet people and to know people and to get to visit them. So if anyone in the Cleveland area or otherwise is willing to let us in their door and show us what's going on in their production facility, that would be fantastic to get to meet them.

Carson Morell & Daniel Scott Mitchell [01:14:29]:
Yeah. And our emails are just our first names at Techtown.

Carson Morell & Daniel Scott Mitchell [01:14:32]:
Yeah. So if you want to, you can reach out.

Carson Morell & Daniel Scott Mitchell [01:14:34]:
Don't need to go through the website. Yeah, please do reach out. We'd love to meet, grab a drink, go to lunch, come by the shop, whatever it is. We're available in here.

Jeffrey Stern [01:14:44]:
Perfect. Thank you, guys.

Carson Morell & Daniel Scott Mitchell [01:14:46]:
Thanks for having us.

Carson Morell & Daniel Scott Mitchell [01:14:47]:
Thank you so much for having us. It's been a thrill.

Jeffrey Stern [01:14:51]:
That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to jeffreyoftheland FM or find us on Twitter oddleayoftheland or sternfa J E F E if you or someone you know would make a good guest for our show, please reach out as well and let us know. And if you enjoy the podcast, please subscribe and leave a review on itunes or on your Patreon Preferred Podcast Player. Your support goes a long way to

Jeffrey Stern [01:15:19]:
help us spread the word and continue

Jeffrey Stern [01:15:21]:
to bring the Cleveland founders and builders

Jeffrey Stern [01:15:23]:
we love having on the show.

Jeffrey Stern [01:15:24]:
We'll be back here next week at the same time to map more of the land. The Lay of the Land podcast was developed in collaboration with the UpCompany LLC. At the time of this recording, unless otherwise indicated, we do not own equity or other financial interests in the company which appear on the show. All appendages opinions expressed by podcast participants are solely their own and do not reflect the opinions of any entity which employs us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Thank you for listening and we'll talk to you next week.