Thriving as a Manufacturing Entrepreneur with John Saunders

Episode 199 | Challenges: Leadership Community Growth

EntrepeneurBeing a manufacturing leader is difficult, especially if you are a manufacturing entrepreneur! With so many possible opportunities and pitfalls, it can be hard to know how to navigate the small-business world of an entrepreneur. Guest speaker, John Saunders, shares his insight and experience as a leading manufacturing entrepreneur and the ways he has successfully set his business apart and thrived through slow growth. 

Founder and owner of Saunders Machine Works, John is a serial entrepreneur with his hands in multiple jobs, including running the NYC CNC YouTube channel and overseeing the training and manufacturing sides of his small business. His YouTube channel has become a medium to influence, inspire, and encourage aspiring and seasoned machinists in their careers. 

 

Connect with us:www.MakingChips.com/contact

 

Defining the “why” helps drive the business forward

Although he attended college to learn entrepreneurship, John found that his key takeaways came from practical experience in selling and machining. Originally wanting to create a business in order to provide a specific product, he quickly realized that creating an excellent product isn’t the same as creating an excellent business. In order to generate a successful business, you have to know the “why” behind the work and the products created. 

Whats your Why Makingchips

 

Entrepreneurship isn’t for the faint of heart. John advises that if you are having doubts as to whether or not you really want to work for yourself and jump into the world of paperwork, legality issues, building, training, hiring, producing, and customer service, then you may want to work for someone else for a couple of years. Study how your boss leads and drives their business forward - and then go try it for yourself. 

John’s business - Saunders Machine Works - grew out of his love for CNC machining and sharing its workhorse capability with viewers on YouTube via his NYC CNC channel. Continuing with the YouTube channel, he wanted a business that could also train individuals in machining and sell manufacturing tools and products. The three-part business has kept up steady - yet slow growth - just as John wants it.

 

 

Knowing when to jump at an opportunity and when to say NO

Keeping a focus on who you are and why you do what you do helps you to navigate the way forward. Instead of chasing every glittering opportunity, consider whether or not it will help fulfill the goals of your business or help create a better experience for your customers. What you are selling isn’t just the object in the box - it’s the atmosphere, relationship, and experience that you are offering your customers. 

 

For John, this means finding the best ways to share the modern world of manufacturing with others. His YouTube channel provides a place for machinists of all experience levels to ask questions, easily view videos that demonstrate solutions to popular machining problems, and be a part of the manufacturing community. The training classes that Saunders Machine Works offers provide practical experience in a variety of machining skills and open the door to both young and old to explore manufacturing as a hobby or career. John’s business also values offering internship and apprenticeship-modeled jobs to those who need practical experience through their product manufacturing side of Saunders Machine Works. 

 

The goal in sorting through opportunities is to make continuous improvements in your processes - to make them as efficient and streamlined as possible - all without wasting resources. Bootstrapping is the ability of your business to leverage your equity for the greatest return on investment. Money and time are ever manufacturing entrepreneur’s most limited resources. In some phases of your business, you may find that you are lower in one of those resources than another. If you have the opportunity to grow in your knowledge and skills as a master of your trade, take them! Don’t be wasteful. Invest with results. 

 

John’s take on managing growth as a manufacturing entrepreneur

 

“Growth eats cash for breakfast,” John warns. We are trained to think that any growth opportunity is a good opportunity, but it’s wiser and more profitable to consider each one through the lens of your “why.” With such a large following, John often gets calls offering partnerships with other businesses. Due to a poor partnership experience in his early entrepreneurial days, John has decided to never partner with another business. The true 50/50 partnership is rare and often difficult to maintain. That doesn’t mean you should never try it, but know where you want your business to go and maintain integrity with those goals through your growth tactics. Be sure to listen to the entire episode for more insight into making the best growth decisions possible.

 

Creating content that reflects your company’s values and meets your customers’ needs

It can be easy for entrepreneurs to become overwhelmed by all the marketing and advertising mediums available. John stresses the importance of only utilizing what you need, what you can afford, and what will speak most authentically to your potential customers. John aligns his content creation with his goal to help others help themselves in their manufacturing stories. Be honest about what you are portraying through social media. Authenticity is a huge factor; make it a point to share the stories that surround the challenges that your business has faced and the solutions that you found. Make note of what you are personally drawn to on social media and study why you like it. At the end of the day, it’s not about you. It’s about your current and potential customers and the quality of what you are offering them. 

 

 

Here’s The Good Stuff!

  • Fostering a positive atmosphere among a multigenerational workforce. 
  • Guest speaker, John Saunders - owner of Saunders Machine Works.
  • The product isn’t always the business. 
  • Knowing how to market yourselves requires a knowledge of who you are as a business. 
  • YouTube, training, and machining.
  • What you sell isn’t just the product in the box - it’s the experience you offer.
  • Hands-on experience provides the best education. 
  • John’s love of CNC machining and sharing what modern manufacturing looks like.
  • The apprenticeship model of training provides key experiences.
  • Why John says “no” to partnership opportunities. 
  • “Growth eats cash for breakfast” - knowing the goal in your growth. 
  • Using bootstrapping to reduce wasted resources and to grow where you are at. 
  • Good content creation is about knowing your goals and customers. 
  • The role of small businesses in the future of manufacturing. 
  • “If you’re not making mistakes, you’re not making money.” 

 

Tools & Takeaways

 

This Week’s Superstar Guest: John Saunders

 

Connect With MakingChips

 

Subscribe to Making Chips on Apple Podcasts, Google Play, Stitcher, or Spotify

Jim Carr: Hey JZ, I got a question for you. What is the future look like for ERP systems?

Jason Zenger: Well, I think it's all going to be browser, cloud based ERP system. Your data is going to be stored in the cloud. I'm using quote marks, nobody can see that. People are going to be able to enter those transactions and look at that information from anywhere.

Jim Carr: I know in pro shop, ERP is great. On Sunday mornings I grab my pot of coffee, I sit down, I do everything I can right from home using that cloud-based system. Go to proshoperp.com for more information.

Jason Zenger: Welcome to MakingChips. We believe that manufacturing is challenging, but if you are connected to a community of leaders, you can elevate your skills, solve your problems, and grow your business. I'm your host, Jason Zanger and I'm joined by my cohost, Jim Carr. Jim how you doing buddy?

Jim Carr: Good. Feels good to be back home and-

Jason Zenger: We're back in Chicago.

Jim Carr: MXD in Goose Island, Illinois. It's always good to be here. I've said this many, many times, I feel the excitement of the manufacturing facility here and what they're trying to accomplish here at MXD.

Jason Zenger: Well, not only that, we can't lay on the beach in California for a week in a time.

Jim Carr: No. We could if we wanted to but-

Jason Zenger: We have businesses to run.

Jim Carr: Yes, but that was fun last week as a matter of fact.

Jason Zenger: It was, it was good.

Jim Carr: We had a good time.

Jason Zenger: I have a thought for you. When Your dad-

Jim Carr: You want me to think?

Jason Zenger: You're going to have to put your thinking here buddy.

Jim Carr: Okay, go ahead.

Jason Zenger: When your dad owned Carr Machine, did you ever think about leaving him and starting your own business?

Jim Carr: I did.

Jason Zenger: You did. What did that look like?

Jim Carr: It wasn't a manufacturing company.

Jason Zenger: Oh really?

Jim Carr: It was not a manufacturing company. At one point it was a bar. But then, I've always had this affinity for the music industry and I've always had this affinity for marketing. If I could go back and I probably still would do this, I probably would do marketing for the music industry in some capacity if I were given the opportunity to go back in time.

Jason Zenger: Working for somebody or working for yourself?

Jim Carr: Oh, no. I've always admired people in pop music that there's limited talent, but they've made it super big in the industry. I've always wondered, well it was probably because they developed this great marketing team that just exploited the heck out of them. Because there's so many people, just like anybody that goes into professional sports, the competition at that level is so uniquely competitive that you just need something else. You need an edge, you need marketing, you need something to push you over the top because at the end of the day, there's a lot of competition and a lot of industries and I believe that through a really good executed marketing plan, you can do that.

Jason Zenger: That would be your marketing company or that would be working for somebody else? What I'm trying to get at-

Jim Carr: I don't know. I don't know if I would necessarily have started my own. I probably would have gained experience through working for somebody.

Jason Zenger: What I'm trying to get at is, entrepreneurship is a funny thing and there's a lot of us that work for ourselves that may or may not have started our own businesses. They might've been part of a family legacy, but sometimes I don't feel like I'm somebody that could ever work for somebody else. We have a special guest on the show today.

Jim Carr: We do.

Jason Zenger: We're going to talk about entrepreneurship and growth and financing and content creation and stuff like that. I feel like he's probably someone also that couldn't work for somebody else.

Jim Carr: But he probably did at one time and I'm sure we'll talk about that.

Jason Zenger: We all do.

Jim Carr: Yeah. I never have.

Jason Zenger: No, you worked at a bar, remember?

Jim Carr: Part-time.

Jason Zenger: Right. You didn't own that bar.

Jim Carr: Never full time. I've had the same full time job my entire career. Can you believe that?

Jason Zenger: Yeah.

Jim Carr: It's true.

Jason Zenger: You just told me.

Jim Carr: I know.

Jason Zenger: Tell me the Metal Working Nation right now too. Tell me something great going on at Carr.

Jim Carr: Lots of shipping going on in the last week finally because we can invoice all that and get some net 30 payments in. Yeah, that's a big thing. Business continues to be really, really strong. We just had a company in from Alabama quite frankly yesterday, a major player in the aerospace industry and they were super happy. They did an audit on us and they left and it was really, really positive when we showed them our [crosstalk 00:04:20].

Jason Zenger: What kind of an audit?

Jim Carr: It was a quality in business audit. They come in, you fill out all these qualifications prior to them coming in, what you have in place. What quality systems do you have in place?

Jason Zenger: They're reinventing like ISO or something like that for themselves?

Jim Carr: No. Anybody can put on paper what-

Jason Zenger: They want to touch your feel. Yeah.

Jim Carr: Anybody can put on paper what they want you to think and see but when they actually... When people come in and physically meet each other and see what's really going on at a company, that's when it comes black and white. That's when the clouds part and that's when the sun starts to shine either in a negative way or not. It was super positive. Kudos to my entire team. Everyone had a unique role in delivering what this audit was all about and I was really proud of my team.

Jason Zenger: That's great.

Jim Carr: Yeah. Thanks. How about you? Tell me what's happening at Zenger's. Do you work?

Jason Zenger: I feel I work very hard.

Jim Carr: But you don't go in that often, do you?

Jason Zenger: I have a schedule. I work out of my home office on Mondays and Fridays and then I-

Jim Carr: I'm a little envious.

Jason Zenger: ... work in Illinois on Tuesdays and Thursdays and I work in Indiana on Wednesdays. Today I actually cut my day in the office short in Indiana and drove up here to MXD from Indiana, took the skyway. I don't like paying for the Skyway, but I wanted to make sure I got here on time.

Jim Carr: Thank you. I appreciate you being here.

Jason Zenger: Yes. What's going on new? I'm actually thinking about introducing a role in my company and the role can be best characterized by a title that I don't want to use because it seems [crosstalk 00:05:46] in nature.

Jim Carr: Don't give it away.

Jason Zenger: No, the title is... My wife was giving me push back on it because she thought it was more of a political title than a business title but I said it's becoming more popular in the business environment.

Jim Carr: I'm going to write it down.

Jason Zenger: Okay. I am going to be creating a chief of staff position, however I don't think I'm going to call it chief of staff because I don't want to use the word-

Jim Carr: Don't call it chief of staff.

Jason Zenger: Because I don't want to use the word chief so I think it's going to be called director of staff. Basically it's a position that where this person is going to utilize the staff resources that we have and execute things on my behalf and even communicate on my behalf because I need to multiply myself I guess you would say and I want to do it in-

Jim Carr: That's a pretty big role.

Jason Zenger: It is a big role and I have a special person in mind for it. Somebody that I trust and that I don't have to over explain things to.

Jim Carr: Me?

Jason Zenger: No.

Jim Carr: Okay.

Jason Zenger: No. I do not want to work with you any more than I have to.

Jim Carr: Thank you for sharing that with me in the Metal Working Nation.

Jason Zenger: I don't even know if I want to share a hotel room with you again. We won't go there but we will get into the gruesomeness of that.

Jim Carr: No. Thank you for that. We may even want to edit that out.

Jason Zenger: No, I think it's fine. Your gross and the Metal Working Nation needs to know that. For manufacturing news, I actually have something that is ...

Jim Carr: It's not really a news article.

Jason Zenger: It's not exactly news and it's not exactly manufacturing, but I was listening to a podcast and it had the title how to create a thriving workplace culture. We've talked about before, I listen to a lot of podcasts is what I do in the car. You listen to music, I listen to podcasts.

Jim Carr: Yeah. That's true.

Jason Zenger: They had an idea and they cited a trend, which I thought was interesting where in order to foster an environment where you could have people who were at different points in their careers, different ages, different objectives that if you provided more options you could cultivate a better working environment. What I'm referring to here is something like simple things. Okay. Here's a couple examples that they gave. Your company's, you have what, like six, seven people?

Jim Carr: Yes, seven.

Jason Zenger: I have about 45 and you can't in two occasions-

Jim Carr: Different dynamics.

Jason Zenger: Yeah. It's hard to get like all those people together at one time.

Jim Carr: Nearly impossible.

Jason Zenger: Also people want to consume information differently. People listen to podcasts, people read and people watch videos. There's all different kinds, people read books. There's all different ways to consume content. What they suggested, if you have an all company meeting, a town hall or something like that, don't make it mandatory and offer it in different ways. Offer people to show up in person, offer people to stream the town hall or the meeting and text in or post questions that they have and also offer people to consume the video at two times speed at a later time if they want to because different people just... You might have a younger generation, he's like, "I want to hear this at double time. I get too much Jim Carr and if I can go through him and what he has to say that much quicker or too much Jason Zenger, I don't know, that's what I want." That's probably a younger person.

Jim Carr: I don't know how I feel about this.

Jason Zenger: I understand. You might have another person who says, "I like to be there in person. I like to stand up and ask a question and I like just to see the CEO of my company who's talking about whatever subject matter that it may be." But you're offering different options.

Jim Carr: I think that negates the whole objective of bringing people together at the table and sharing and collaborating.

Jason Zenger: It's pros and cons.

Jim Carr: It definitely does. I'm not like super sold on that quite yet. I'll think about it and listen to what your saying but-

Jason Zenger: The whole idea of what I'm referring to is just offering options for multi-generations. The second thing would be instead of just offering like a 401k or some other kind of pension and saying, "This is it," or some kind of matching on their pension, say, "We'll offer you a pension or we'll pay down some of your student loan debt." Now you're offering somebody-

Jim Carr: You don't mean a traditional pension plan, those are obsolete, right?

Jason Zenger: No. Well a 401k is considered a pension.

Jim Carr: Yeah. But it's not the pension plan that our parents knew.

Jason Zenger: You're thinking of a defined benefit pension.

Jim Carr: Those are gone.

Jason Zenger: Yeah, that's not what I'm referring to.

Jim Carr: They're not sustainable.

Jason Zenger: To clarify, instead of offering a 401k only, maybe you might say, "I want offer a 401k or I will offer to pay down your student loan debt." You're offering options for different generations, something to think about.

Jim Carr: Something to think about as an option to enhance your culture?

Jason Zenger: You're offering options in order to foster a good environment amongst multi-generations.

Jim Carr: Well, the only-

Jason Zenger: People in their twenties, people in their thirties, people in their forties and so on.

Jim Carr: Well, here's what I like about that. I like that you're thinking outside of the box because we all know how hard it is to attract and retain new talent. You're thinking about things that are different, different attracts new people, new ideas, new talent to your company and to your brand, but I don't necessarily know that they're immediately given me a warm fuzzy inside on what they mean to me.

Jason Zenger: What do you mean?

Jim Carr: Well, like I just said, I don't necessarily know if I like the idea of streaming or videotaping your town hall meetings because I believe a company meetings should be a physical thing or everybody engages. It should be mandatory. I don't care if you come in and just stay for 10 or 15 minutes, you don't have to be there forever.

Jason Zenger: We're not talking about when we talk about our level 10 meetings. I'm not referring to that type of a meeting.

Jim Carr: No. You're talking about a future.

Jason Zenger: No, no, no. What I'm talking about is when the lead person at the company comes up and makes a presentation in the company and says, "This is where we're going, this is why we're going there or says I'm here to answer your questions." Not like a collaboration meeting, that might be different.

Jim Carr: A meeting where you're going to educate them on something or answer questions. Got it. Okay. The college pay down thing, what if you have somebody that works for you that never went to college?

Jason Zenger: Well then they can take the 401k option. Once again you're offering options.

Jim Carr: Oh, is that an or?

Jason Zenger: The whole point is that you're offering the ors.

Jim Carr: Okay, got you.

Jason Zenger: Could you introduce our guest?

Jim Carr: I would be thrilled to.

Jason Zenger: We move on with the show.

Jim Carr: I'd be thrilled to. I was driving here today and I'm like, "I'm looking forward to meeting this guy. He's got a lot to talk about and I've got a lot of questions in my head already." I might go off script a little bit but-

Jason Zenger: Just wait till the end, okay?

Jim Carr: All right. Will do. This gentleman we have here in the MXD studio, his name is John Saunders. You've probably heard that name before. He is the owner of Saunders Machine Works and the face behind NYC CNC, his youtube channel. He started his machining endeavors 10 years ago in his personal apartment. He is an influencer among manufacturers with over 300,000 subscribers on YouTube and a massive following on Instagram. He is a bootstrapper and serial entrepreneur that has gone from just a YouTuber to business owner. Please welcome John Saunders to the MakingChips studio. John, welcome.

John Saunders: Thanks for having me. Appreciate it.

Jason Zenger: Yeah. Welcome John.

Jim Carr: You're welcome.

Jason Zenger: John as Jim said, you're an entrepreneur at heart, unlike Jim and I, you did not join a family business. Why machining and why entrepreneurship?

John Saunders: I grew up as a competitive rifle shooter and the short version of a 10 year plus story is I stopped shooting competitively and was just doing so recreationally and had an idea for a product. At the time I was actually in college for entrepreneurship, but I still made the mistake that I think a lot of folks make, which is they confuse a product with a business opportunity or they confuse a product with entrepreneurship. Really I think a lot of folks that I look up to and have learned from would tell you that a product is probably the least important part. It's still important but the least important part behind what truly is the opportunity to execute on that idea through the resources you have, through the team that you build, you put together and the value in the offering that you deliver. Before we hit the record button today, we were talking about marketing and how important it is to be able to find out who your audience is, what are you selling, why should they buy this-

Jason Zenger: You're talking about the why behind what you do?

John Saunders: Exactly.

Jason Zenger: Jim and I, we want to equip and inspire manufacturing leaders. The product could be a lot of different things.

John Saunders: Sure, sure. For me, I had the passion and I was a potential customer myself or an end user, but I was probably one of the worst people you could have picked to start this company because at the time I didn't know a Bridgeport from an end mill. I'd never made things. I didn't have any time or experience sourcing products from vendors. This would hit a low point for me when... I'm resourceful, I'm scrappy. I'd got on the Internet, I'd found an engineer to help us out and he had hired his machine shop contacts, his sheet metal contacts to start creating designs and ideas and products. Somebody finally asked about a tolerance and I answered like a carpenter.

Jim Carr: Plus or minus a 16.

John Saunders: Yeah, no, seriously. I didn't know what that was. I thought, "This isn't going to work." I'm telling this with the benefit of hindsight, it was a little bit muddyer at the time going through it, but I'd graduated college, I'd moved to New York City. I was working at a day job and I thought, "You know what? If I'm going to be an entrepreneur and help myself, I need to figure some of this stuff out." I wouldn't call it a whim, but it was a pretty big leap of faith. I bought a bench top CNC machine while I was living in Manhattan and stuffed it. Literally there's like an iconic photo that I use in presentations where it's literally next to the pillow of my twin bed.

Jason Zenger: Wow, were are you making chips?

John Saunders: I was. Again, with the benefit of hindsight, a wonderful time to be doing this and to be in New York City doing it. YouTube was just coming about. Blogs were getting more popular, forums were getting more popular, and then we had this kind of renaissance maker movement, which I'm not sure how much it overlaps with the making chips audience, but certainly at my level back then you have makerspaces coming about. You have 3D printers coming about. You have software like Autodesk Fusion 360 which is letting more folks gain access to cad and cam that works. You've got Arduino, which is a huge thing for me as a small physical computing device so that I could actually prototype.

John Saunders: I built my first target out of Popsicle sticks and then I built one out of Lego. What's the Lego robotics kit called? Not techniques, but there's a robotic Lego that has a wiziwig software editor and then I realized, "Wait, I can do this on Arduino." Which meant I'm actually in Digi-Key now buying real sensors. That was an important part because when I did start talking to folks to get contract manufacturing for this product, the few I found that were willing to work with us, I think worked with me because they said, "This kid's going to figure this out one way or the other because good grief, look at what he's done." I took a 80 pound bench top CNC machine. It was machining four inch long, 41, 40 parts in six setups over the course of three or four weeks. I was going to do this one way or the other and I think that's an important part.

Jim Carr: You learned a lot really quick.

John Saunders: I didn't realize it at the time, but I was selling myself. I was showing up saying this is what I have done. I had a Pelican case with all these parts in it and circuit boards and things and it was a, "If you guys are interested, if this is a good fit, let's work together. If not, I'm going on to the next guy."

Jason Zenger: Right, exactly. That's what it's all about. Well first of all, welcome to Chicago.

John Saunders: Thank you. Good to be here.

Jason Zenger: Yeah, I bet. I bet.

John Saunders: I'm on vacation. At any point in time I may have to leave immediately to resume the recreational activities.

Jason Zenger: I get you and I hope you enjoy your stay here in Chicago.

John Saunders: Thank you.

Jason Zenger: But the rifle, were you trap shooter?

John Saunders: No, it was small bore indoor. The Olympic style you would see you of prone and offhand.

Jason Zenger: Okay. My Dad was almost a professional trap shooter. He was class a double A trap shooter for all the timer.

John Saunders: It was really hard.

Jason Zenger: It was really hard.

John Saunders: I've tried and-

Jason Zenger: He won many, many, many awards when he was a young man.

John Saunders: My wife who showed me up when we were in Texas, she grew up knowing how to use a gun and she beat me in trap shooting, so it was quite embarrassing. That's okay.

Jason Zenger: Anyway, MakingChips content's at small manufacturers are at the heart of our industry and our very own Christine Schmitz wrote an article, Small but Mighty that discusses the topic. Chris Fox, our creative director, he has even said on our YouTube channel that manufacturing is going to shrink, which gets into this topic. According to the government, all of us in this room would be extremely small businesses. Tell us about your shop and what you do there.

John Saunders: Sure.

Jason Zenger: Are you an extremely small shop?

John Saunders: Oh, yes. I would win that award in this room. I moved back to Zanesville, Ohio, which is where I grew up about five years ago. I had spent 10 years in New York City, loved it, but I wanted to pursue this manufacturing thing. Long story short, we now run a company called Saunders Machine works, ends up that NYC CNC, while very well recognized on YouTube for this industry, not a great brick and modern name. A little difficult to say. The New York City part was part of our story, but not part of the present business of what we do. Saunders Machine Works, we have a 10,000 square foot shop. We do three things. We run the YouTube channel, which for me is not only just a thing that I love and enjoy, but this is going to sound a little cliche, but it's my one little chance to change the world.

Jason Zenger: You're giving back to the community.

John Saunders: Yeah. Well and just the numbers are insane. I don't track this stuff regularly, but the last time I looked since you and I had been sitting here talking something like 125 hours of our videos have been watched.

Jason Zenger: Wow. That's awesome.

John Saunders: You start to realize, "Wait a minute here, this is incredible." You can inspire people, you can reach out to people. The story started with me in New York City, not knowing what a fly cutter was and surface footage and so forth. We run the YouTube channel. We have a training facility. Folks come in every month and we do training classes on cad, cam, machining, fixturing, recording, et cetera with students or with people that are just green from the industry.

Jim Carr: Anybody?

John Saunders: Oh, okay. Almost all age ranges. We've had as young as 14 to as old as 88.

Jason Zenger: You conduct those classes?

John Saunders: I used to teach most of them and we now have a full time teacher.

Jason Zenger: Oh, great.

John Saunders: Then the real bread and butter of the business is the Saunders Machine Works brand where we make machining products, mostly fixture plates and we have a vice style work-holding thing we call them Mod Vise, which has proven to be quite popular.

Jim Carr: Is that a product lining on?

John Saunders: It is a product line. Yes.

Jim Carr: You're not doing contracts, CNC machine like I would do at Carr Machine where a customer sends you a print or a 3D cad model and says, "I need 20 of these. What is it going to take? What is it going to cost? How much lead time do you need?"

John Saunders: We did do that for a number of years-

Jim Carr: And?

John Saunders: The answers is I don't do that anymore. It's part of the process of growing as an entrepreneur is learning the N word.

Jim Carr: I know I need help with that. Yes.

John Saunders: No. We actually do still do it for a very, very select number of customers.

Jim Carr: Probably jobs you had already proven out.

John Saunders: Exactly. Well, customers that we-

Jim Carr: Customers that you know, yeah.

John Saunders: That goes back to really resonating with what you said about marketing yourself. I can machine a great part, I can machine a part that is certainly within the specs that the customer needs, but I am not a great machinist. I'm just simply not, I've not been doing it that long. I'm smart, I'm hungry, I enjoy it, but I would not put myself up against the tool and dye maker that may work at your shop period. But that's not what I'm selling. The reason that we-

Jim Carr: That's not who you are, that's not your brand, right?

John Saunders: No, no, no, no, no, no. What I mean is the customers that we've kept on, it's kind of funny because they could go to other shops and then frankly, there's probably people that may be a little bit cheaper. There may be people who are better quote unquote machinists, but what I'm selling isn't just what gets put in a box or on a skid and sent up, what you're selling is the experience of working with somebody. Meaning is that the kind of shot that's able to realize, "Wait, in here you got an interference fit here," or just dealing with clear communication, not missing deadlines. I may not be the great machinist, but I will keep you informed. We will get ahead of things and I will work my butt off to hit deadlines and that's what's awesome to me about the kind of American dream is, you don't have to be a third generation person with multimillion dollar equipment to just do a really good job. It's shipping the product.

Jason Zenger: I think as much as people talk about all these industries are being commoditized and everything and we all struggle with pricing, it's never going to be completely commoditized. There's still that personal experience that you bring to it. You always talk about communication jams.

John Saunders: It's huge.

Jason Zenger: We always talk about the experience that we give to our clients as well. You're absolutely right. Before we hit record, you also mentioned you went to an entrepreneurial college and we've talked a lot on the show, how being in the CNC machining industry is one of the highest paying jobs that you can get without a college education. However, it's good for some, good for others. I think it just depends on your objectives, but tell us about your education. How has that education shaped your business?

John Saunders: That's a good question. It is a good question. I think it gives me a comfort level to speak the lingo. I didn't know what a foul was when I had these first products trying to bring to market, but I did know the basics of contract law. I did know some stuff about what's marketing versus advertising. Stuff that's not that complicated, but until you've had the ability to digest it, think about it, see in the context of case studies or examples, it doesn't necessarily make you more likely to be successful, but it's certainly a step in the right direction to be able to be critically thinking. But I think ultimately in a funny kind of way, it was being in New York for 10 years and seeing how cut throat and how much you've got to watch your back and everyone's

Jim Carr: Was it cut-throated.

John Saunders: Oh, yeah.

Jim Carr: Really?

John Saunders: Oh yeah.

Jim Carr: More so than in, is it Zanesville?

John Saunders: Correct.

Jim Carr: Ohio?

John Saunders: Definitely a total different.

Jim Carr: I mean, completely different dynamic?

John Saunders: Just totally different. Yes. It's not just the day job in New York, it's life in New York. It's hustling-

Jim Carr: It's fast.

John Saunders: ... and yeah, exactly.

Jim Carr: You're not going to sit still on the sidewalk, you might get pushed over.

John Saunders: No, seriously, just negotiating any little thing, how to get a dinner table when the [inaudible 00:22:54] restaurant's busy and just all that little stuff and it calluses you a little to some extent, but I think that's been just as helpful. It's what people talk about and it's something when folks ask me about entrepreneurship and should they go into business for themselves, if they have that level of uncertainty that they're even asking the question, then the answer is, "Go work for somebody, learn on their time, go through some experiences. It doesn't have to be more than a year or two. Save money because money doesn't make you happy, but it sure as hell buys you a lot of options." That's key because I don't generally believe in debt. I strongly discourage debt when anywhere possible. That doesn't work for everybody because it also tends to mean things go slower and they take more time. But for me as an entrepreneur and as a Bootstrapper, it's just the way it's been.

Jim Carr: I get it. John, what drives you personally in your business and in the content? Because you're producing a lot of content, man. What drives you, what's compelling you in your business and in the content that you're putting out there and producing?

John Saunders: The honest answer?

Jim Carr: Yeah, of course I want the honest answer. I don't want you to fake it.

John Saunders: No, no, but so I got really lucky that when we started this process 10 years ago, I happened to pick YouTube. It wasn't a household name. There was no platform or monetization.

Jim Carr: 10 years ago, was a long time for that medium. Right?

John Saunders: Yeah.

Jim Carr: It was really in its infancy?

John Saunders: Correct. Yeah. Totally a fluke in that sense. I now feel an obligation because I love it because I think we are the largest YouTube channel in this CNC spectrum audience, but it's always going to be my story. That's what it want it to be, is this passion of sharing and learning. But so what drives me, number one, I freaking love CNC machining since the day I found it.

Jim Carr: Do you get excited when you see the chip flying off?

John Saunders: Yes.

Jason Zenger: Me too. Oh my gosh.

Jim Carr: I know.

John Saunders: Absolutely.

Jim Carr: The faster that we can pop that feed rate, I know. If it goes at a 45 degree or greater than, I get super excited.

John Saunders: Yes. Yeah.

Jim Carr: You know what I mean?

John Saunders: Rooster nesting and how hard can we push that tool dry so that we can get better rooster tails. I love machining. That's at the core of it, but I just always loved learning. Some of our most popular videos are these shop tours where we get to travel around the world and see different factories and machine shops, job shops, pop shops. That motivates me, but just showing folks you can do it, to me is what makes it worth it. You don't have to have, again, multi-generational thing. Unfortunately the US tends to not have the European model of really vested multi-year co-op or what would you call it? Not an internship but apprenticeship style.

Jason Zenger: Apprenticeship like the Germans and everything.

John Saunders: Yeah. How do you do-

Jim Carr: I did one of those.

John Saunders: Is that right?

Jim Carr: Of course I did, a long time ago.

John Saunders: Is that program still around?

Jim Carr: The Machinist Apprenticeship Program?

John Saunders: Correct.

Jim Carr: Absolutely. [crosstalk 00:25:28]. Absolutely.

John Saunders: At Carr?

Jim Carr: It is available at Carr.

John Saunders: I will hire somebody with minimal experience and I will put them through a formal third party Machinist Apprenticeship Program. Actually, I'm looking for people right now.

Jim Carr: Yeah. It's not at Carr, it's at the-

Jason Zenger: Where do I apply?

Jim Carr: [crosstalk 00:25:44] Manufacturing Association. Well, that you know it. Careers@carrmachine.com is under effect.

John Saunders: Thank you.

Jim Carr: We're working on a careers page right now so it's going to be quite the blast off in a couple of weeks. But yes, I have been through a formalized Machinist Apprenticeship Program decades ago. I learned on the job at my father's company and we still do formalized apprenticeship programs through a third party training center. If they go there, they learned the theory. They might have some hands on CNC training there, but really they're going to get the most of their machining experiences by being in the shop nine hours a day trial and error. You're going to put an end mill into the vise, you're going to put a drill into the table. I'm not going to put them on my brand new horizontal Mazak, I'm going to put them on a 20 year old CNC machine where I'm not going to cry too hard if they do that.

John Saunders: Sure. Would you agree though that that's something that seems to be unique and less common though, that sort of apprenticeship program?

Jim Carr: It doesn't seem unique or uncommon to me because that's all I know.

John Saunders: Got it.

Jim Carr: That's what I believe in and I believe because I've been there-

John Saunders: Is great.

Jim Carr: ... and I've done that.

John Saunders: Oh my Gosh, yes.

Jim Carr: I believe it's really powerful and it's very empowering quite frankly for that person to do that. They're learning this theory at a third party and then they're coming in, they're applying that theory to actually making. There's nothing like a veteran machinists telling you, "Hey, I think you've got that ML hanging out too far, or your setups really not that rigid, you're going to get a lot of cheddar. That bore is going to go oversize the minute you cut that. Yes, all of those things. There's nothing like on the job.

Jason Zenger: Where do you think training's going? There's a lot of options out there. You do training at your facility. There's associations that do training. There's for profit organizations. You have videos. I mean somebody could probably learn how to machine just by immersing themselves in your videos. Titan, he has his academy, Nims. Where do you think it's going?

John Saunders: Good question. Everything you just said I think is viable. I think what I try to do is let a 13 year old or a 17 year old just know what machining is. Know that that exists. Too many people don't realize how did the injection mold that made the shoes that I'm wearing get made? How did that Bolt Action Rifle get made? I just want you to know that that exists. I don't care if that's not what you want, but I don't want you to realize that existed later in life and what a machinists is now isn't the same thing when certainly Jim, when you would have likely gone through a program because now it can be quote unquote machinists could really be somebody whose full time job is writing custom post processors. It could be a full time cam person that's almost more like playing a computer game and simulation type stuff or it can be tool and dye. There's so many different avenues of it and I do think it's going to get a little bit more siloed where you have experts in those respective things.

John Saunders: What I do know is I struggle with schools. Even the local schools that I tried to get involved with, the way the local and city and state and federal programs run is they're behind and specific things like continuing to push high-speed steel tooling, continuing to push stuff on Bridgeport's. I'm sorry. I don't need someone to know how to run a Bridgeport anymore. I don't need it. I do not have any mind [crosstalk 00:28:48]

Jason Zenger: You're taking a stand on that because there's a lot of people that say you should ...

Jim Carr: Boom. I agree with you on that one. Yes.

Jason Zenger: There's a lot of people that say you should start with the basics.

John Saunders: The joke that we now adopted is I would rather have a student who can talk to me about Java script modifying a post processor than understands the power feed on a Bridgeport, don't care about the Bridgeport.

Jim Carr: I agree with you 100% on that man.

John Saunders: You don't need to feel what a reamer feels like going through a hole anymore. We have a speeds and feeds of library. We have digital tooling, we have reps. It's not saying I don't like that stuff, but it's not where you should be spending. When you go through a high school program that's two years and the last 25 days they introduce them to handwritten G-code, no.

Jim Carr: Introduce.

John Saunders: Introduce. They should've been knowing that from the day one. What is GO, what is a G-81, what is an aeroplane, what is a feed rate?

Jason Zenger: I literally had a conversation and I didn't even get a chance to tell you about this Jim. A couple hours ago, I talked with a gentleman named John from High School District 205 which is south Holland and a couple other areas around that. He told me, "How do we partner up with you? We're starting our high school machining program and-"

Jim Carr: That's cool to hear that.

Jason Zenger: Yeah it is great, but I doubt that they have CNC machines in there, so how do they start?

Jim Carr: Oh, how do they start? That's a great question. Actually boom must be a better answer for your new creative director, but it's a Tor mach, which where you came out of as a big part of our story because that's the machine I had in my basement that I got started with. To me, I always cared more about the ability to go from nothing to something. I was never the guy who was saying myself or advising others, "Oh go take out a loan for a 100k, buy a vertical machine center. You'll figure it out. You'll throw that ER 32 into the chuck and the table and you'll have a five digit spindle repair." I liked the Tor mach for those reasons. They work great for us nowadays as second out machines as a training machines. Then we have a very active internship program where we have two or three people coming through pretty regularly. Those machines are both affordable for schools and I believe there's a fair amount of active grant type money to set up those sorts of labs.

Jason Zenger: A lot of these high schools could actually probably outsource their machining program if they needed to.

Jim Carr: Well, no. What I'm saying is you could probably afford to get enough Tor machs in, certainly compared to one VMC would buy four tor machs. To me, if you're a student, you've got to make parts, you've got to figure out coordinate systems, you've got to make those mistakes. You've got to use edge finders, you've got to set up tools. It's not just, "Hey, we've got a lot of [crosstalk 00:31:07] even need edge finders." I think they got to have a probes. They got to have a probe. The edge finders are gone.

John Saunders: I don't even think we use edge finders anymore.

Jason Zenger: We don't sell a lot of edge finders anymore.

Jim Carr: No. I would imagine.

John Saunders: Renishaw probes might be where I draw the line though on high school kids learning because those-

Jim Carr: Those are expensive. I know and the stylists are expensive to replace.

John Saunders: We have Hymers though, where you can do all three in one and that's a pretty common tool in... Anyway.

Jason Zenger: You would say don't start with the Bridgeport though-

John Saunders: Correct.

Jason Zenger: ... even for high school program. This gentleman called me about how he partners with me. Speaking to partnerships and entrepreneurialship, I would imagine with the following that you have, you get people all the time calling you up saying, "John, I got a great idea. I want to partner up with you." What do you do with those opportunities? You've talked about growing slow, so I would assume that you say no. Have you ever said yes to an opportunity like that? What's your stance?

John Saunders: That's a good question. We do have that thrown out there. What we decided to do is-

Jason Zenger: When you say we, who are you talking about?

John Saunders: Sorry. Well I think about the company is... It's a funny thing as well because I think about myself as being both the guy who likes machining, but also I have these employees and we as in Saunder Machine Works, we as NYC and it's brand. It's not meant to be [crosstalk 00:32:13].

Jason Zenger: I was just curious. I didn't know if you meant you and your wife or you and your... Added another partner.

John Saunders: I have a very supportive wife, but she does not know a bridge mill from an end mill Bridgeport.

Jim Carr: My wife doesn't.

John Saunders: One of thing we started to do about three years ago is we realized there is a lot of demand for effectively extending beyond what we're doing on YouTube. We created our site NYC CNC. 95% of that site is free. A small portion of it does live behind a pay wall.

Jason Zenger: Oh, is that right?

John Saunders: We have a tremendous amount of resources for what I call manufacturing entrepreneurs and it's real stuff. It's not quite as polished as you might find in a college textbook, but it's-

Jason Zenger: It's deeper?

John Saunders: Well, things like my experience tips on renting a shop, things do not look for when you're signing a lease. Ways that lenders try to screw you on financing terms, real world stuff, making sure you can do prepayments without penalties and how to negotiate how to think about it. We have a quiz on that specific one because that's probably one of the most common things we see is folks learning how to buy a machine tool, how to negotiate on the purchase of a machine tool, where do you really lean on them and then where do you stop and realize, "Wait a minute here. At the end of the day, anytime you're working with a vendor, it is a two way street."

Jim Carr: Boom.

Jason Zenger: Bam.

John Saunders: Even if you happen to catch the guy at a weak moment where he's really got to hit a sales number and you beat him up and you get a good price. You know what? No, I want to come back to you when there's a hiccup or a problem or I want you to do well as anodizing as the classic one. That is a two way street relationship because I don't know anybody who says, "I've got too many [crosstalk 00:33:41].

Jason Zenger: You're raising Jim's blood pressure already-

Jim Carr: Yes.

Jason Zenger: Just by saying anodizing.

Jim Carr: I do have an issue with anodizing. Well, finishing companies.

John Saunders: Yeah. But is a good-

Jim Carr: Let's generalize.

John Saunders: We've tried to create a bunch of resources for folks out there so that they can help themselves.

Jason Zenger: What I'm referring to is if somebody comes to you and they're like, "John, I have this great idea. I want to go into business with you."

John Saunders: No.

Jason Zenger: No. You've never even considered it?

John Saunders: I also have an article on why we don't do partnerships.

Jason Zenger: Can you tell us briefly why?

John Saunders: Tell us briefly why? Because they don't work. Period.

Jason Zenger: Well, this worked.

John Saunders: Jury's out.

Jim Carr: Good point.

Jason Zenger: Good one.

John Saunders: You both have independent successful careers.

Jim Carr: We do. We do, we do.

Jason Zenger: I've actually cited that as the reason why I...

John Saunders: If this was a real business-

Jason Zenger: ... we talk about this-

John Saunders: ... I don't know. I would have killed them three years ago.

Jason Zenger: We would have needed separate hotel rooms certainly [inaudible 00:34:28].

Jim Carr: I would have pulled his hair out of his head.

John Saunders: It sounds like you two have complimentary skill sets, that's wonderful. Yes, I had that as well in the first business. The target business that I alluded to earlier morphed into a camera mount business.

Jim Carr: Camera mount business. Interesting.

John Saunders: My partner was a skydiver, so we were using GoPros-

Jason Zenger: You have been in a partnership before?

John Saunders: Oh, absolutely. Which was the highs of my life and the lows of my life and luckily in the end I learned a very cheap lesson at an early age, which that's the kind of stuff that you can't read in a book and you can't... Even so much as I tell this right now, I'm going to have people who still say, "Well, I'm still going to do a partnership." I can't help you then, but what I can tell you is that true 50/50 partnerships are very difficult. Having the legal aptitude to properly construct a buy-sell agreement is not only expensive, but most people who want to do this don't have the ability to think through that. It's very analogous to a prenup with your wife. It's just not a fun conversation.

Jim Carr: I don't have one of those.

John Saunders: Seriously?

Jim Carr: We put a lot of time into our buy-sell agreement and I think we have it figured out.

Jason Zenger: At MakingChips?

Jim Carr: At MakingChips.

Jason Zenger: I don't think we have it figured out.

Jim Carr: I think it's good.

Jason Zenger: I think it's good.

Jim Carr: I think it's about as good as it gets. It's very thorough. It was well thought out under a lot of different circumstances. Took into consideration the team that we have and everything because we have a fiduciary duty to those people that make sure that they continue to have jobs and it worked for you and I with 50/50 when it was not our source of income. We're worth paying the bills. Now that we're each a third partner, it's a little bit different and you have that balance.

Jason Zenger: Now we're three.

John Saunders: Oh, I did miss it. There are exceptions to everything. Again, if you're the type of company that's a true startup where you're raising capital and you have multiple partners and other boards, that's totally different.

Jim Carr: Some people have success with it John.

Jason Zenger: What was the worst story that came out of your partnership?

John Saunders: I've been fairly public about it, but ultimately I was not willing to quit my day job. I wasn't willing to both pour my savings into a business and risk losing my day job income. My partner wanted to move the business to a remote part of the west coast. He had a different vision of the company. It's funny because as much as I was frustrated and disappointed in how this went, I gave him a lot of respect as a partner. He was quite good at the things that he did and we just couldn't figure it out. We did enjoy working together and I will say we did a good job of putting the systems and processes in place. We ran that company for probably almost another 18 months or two years without really speaking where we had a three PL fulfilling orders. We had contract manufacturing, building the products and that in of itself was pretty cool, but we couldn't even figure out how to do a buy-sell and the company just ended up... Others innovated the camera mounts beyond the design that we had, so it had a natural path, natural closure. Yeah.

Jim Carr: Sorry, that didn't work out for everybody but it worked out for the best.

John Saunders: I'm not sorry at all. Truly, no.

Jim Carr: It was good.

John Saunders: It was a great lesson to learn and a point of pride. We had some pretty impressive milestones. We sold our targets to the navy seals, we sold thousands of camera mounts and that builds a level of confidence you can't replicate as a 26 year old who didn't know what a CNC machine was. Three years later to be hitting those kind of milestones, that's what it's all about.

Jason Zenger: That's fantastic. Jim, what is it you like about Xometry?

Jim Carr: Well, it's funny. I had been using Xometry to manufacture some of my overload parts and they're really great with their online technology, how you can just drag and drop a cad file in, get an instant price, but it's way more than that. They have really nice, intelligent manufacturing centric people on their phone lines up until 9:00 PM eastern standard time that you can call and get answers to your manufacturing solution.

Jason Zenger: Yeah, so it's not just online, but go online to xometry.com, x-o-m-e-t-r-y.com. One of the things that I struggle with is... You mentioned that one of things that you love is doing the videos. You love CNC machine. I have the things I love, doesn't really matter right now, but do you ever get sucked into things that you don't want to do? How do you keep yourself from getting sucked back out of those?

John Saunders: It's a great question and I think we're at an awkward stage. We're too small to have full time accountants, HR people. I'm still doing all of that sort of work. I think one of the ways that we've tackled that is with technology. We're pretty darn progressive in this industry for making sure we have automation built in. We left QuickBooks with pride because it's a horrible piece of software for that kind of work, for automating that, for integrating with our e-commerce for inventory, all of that. Investing the time to create those processes. I'm a big believer in the franchise model, even though we're not franchising our business and most machine shops are manufactured, you know these art franchising.

Jason Zenger: You're structured to franchise.

John Saunders: Absolutely, have to be. It's just another way of-

Jim Carr: It's all about implementing processes?

John Saunders: Bingo. Yeah.

Jason Zenger: We had an all episode where our integrator... We work according to this business method called EOS. Our integrator put a lot of those processes and systems together and we don't use QuickBooks either and I don't know how many, he said it was 25 different micro and macro software systems that are all integrated with each other in order to automate and streamline everything that we do and it's quite fascinating what he did so I give him a lot of credit for that. John, I would contend that the Metal Working Nation, the listeners of MakingChips are different than the average manufacturing leader. However, a lot of business owners in our industry mostly ride the wave of growth instead of being intentional. How do you manage growth and how have you taken an intentional approach to the growth of your company or have you just let it happen organically?

John Saunders: It's a bit organically, but I think the three sort of segments... YouTube scales naturally, which is quite wonderful. It doesn't really require any additional work on our... We're a little bit more serious about it. We have a full time editor, but otherwise that's the one that's awesome because it is a scalable software technology type of platform versus the extreme opposite of a true brick and mortar machine tool type business. The training, we've ramped up more classes, they tend to be sold out. We're sold out through December right now. I don't think I'll scale that business at our shop in Zanesville more than it is right now and I don't think we tend to scale it to remote sites because that's a very difficult thing to do. The answer to there has been a... We'll grow it to a certain point and then it's a first come first serve business.

John Saunders: Then from a true product and manufacturing side, we have made deliberate investments. We went from one machine tool, one Haas, one vertical machining center to now having four in the last few years. We've hired some more people, but ultimately it's funny, I also do a podcast and this morning's episode with my other hosts was about this very topic of, as you transition from effectively, what is a lifestyle business? I don't mean that in the way that the business is run to accommodate my lifestyle, but what I mean is that it's still my business. Saunders Machine Works is not something that would exist for very long without me being there and present and I don't necessarily want that. But you do have to have some amount of growth to have enough revenue, enough processes in place.I'm still the one that's handling some of the negotiations on buying materials and how we make decisions about replacing the forklift, that kind of stuff.

Jim Carr: Are you doing the quoting?

John Saunders: Oh, yeah. Yeah. But we don't do that much.

Jim Carr: Because it's all product base?

John Saunders: Yeah, exactly. Right.

Jim Carr: There's a set price for X, Y, and Z?

John Saunders: Most of our stuff is e-commerce.

Jim Carr: Okay. Oh, is that right?

John Saunders: Correct. We'll do POs and distributors stuff, but most of it it's just we push them to go direct. I do want to grow, but to me I always think about what am I getting? What do I want out of this, what's my end goal? I don't actually have a great answer for you. I will say that the business and the traits have been very kind to me. I think it's not so common you find somebody who to legitimately enjoys what they do. I hit cycle start less and less every month and I don't like that, so I choose to not grow to the point where I can't... We've got our first five axis three months ago. Darn it. It was fun to just carve out time even if that costs you some quote unquote growth to make some fun parts. We're building a robot from the movie Short Circuit, the book, The Johnny Five. We're building a full blown from scratch Johnny Five with thousands of parts. That cuts into our growth, but what's this all about if we can't have a little bit of fun?

Jim Carr: I agree.

Jason Zenger: Have you been motivated to say, you know, open up a training center or on the West Coast and on the east coast utilizing-

John Saunders: No.

Jason Zenger: No, because you just don't want to grow that quickly or that's not the reason that you're doing it?

John Saunders: It's not that I don't want to, the person that I have that runs our classes now is an incredible teacher. I'm very happy with it and I don't care to get into the business of... Such a great example, what are you selling? That point, what I'm selling is no longer a training. What I'm selling is my ability to find other people to train them, to become expert trainers. It's actually really... Put a lot of work into our curriculum and to having the machine set up. All of the new week Kanban, everything in the training classes itself. Our shop basically transforms for five or six days a month into a training facility, which cuts into some of the production work.

Jim Carr: We have to, yeah.

John Saunders: It streamlines that process. How do we switch these machines over? All the vises, all the parallels, all the tools, but it's kind of fun. I liked that part.

Jim Carr: Awesome.

Jason Zenger: We talked a little bit before we hit record. We talked about Bootstrapping. What is it and how does that concept fit into your business?

John Saunders: Look, there's two constraints in life, money and time. When you're starting out as an entrepreneur, generally speaking, money is much more of the constraint than time. Bootstrapping really ties into your ability to leverage sweat equity, to pour the time into it, to become experts on this subject matter because you don't necessarily have the money, stretching the dollars that you do have to go to the furthest triaging your capital. Figuring out what do I buy, what do I outsource, how do I think through the goal of developing this product or getting it to market? To me, there's a whole second level to that, which is the character of an entrepreneur. To me, it's a self filtering process. If you're not interested or willing to do that, as far as an entrepreneur, you're dead to me.

John Saunders: If you aren't willing to make that hustle to read a book about this topic, to figure out how to be an expert on it, even if it's not the end goal, then you're not going to make it, period. You've got to have that drive or else go work for somebody, which isn't... It's funny, you guys were mentioning that too before hit record. I miss working for somebody and I love being an entrepreneur. First of all, number one rule, you are not allowed to become an entrepreneur just because you don't like your day job. The two things are not correlated in any way.

Jason Zenger: They're not correlated in any way.

John Saunders: I think that's unfortunate thing where folks will conflate the two because they want this vision of the grass is greener, if it's going to be great. I'll tell you, I love what I do and I'm proud of what we built, but some days I miss being told what to do. I can walk into your shop Jim and you can tell me, "John, this is the machine. These are the parts I need you to make. This is what I expect of you and that's how I will judge you.""Oh, okay. I can do that." Yeah, I totally-

Jason Zenger: You have an objective, you don't have a blank slate in front of you, and I think that's the differences. Do you want that blank slate to create something or do you want to just meet an objective that's given to you and that's a different mindset.

John Saunders: As we always say, manufacturing is challenging.

Jason Zenger: It is.

John Saunders: Being an entrepreneur is extremely challenging. Some days I know exactly what you mean. I'm like, "Why am I doing this? Why am I doing this for all these decades? When am I going to be able to take a real vacation? Some of my peers are taking four weeks at a time off, and I'm like, I look at that and I say, oh my God."

Jim Carr: Put it on your calendar. That's where it starts.

John Saunders: No, I can't do that.

Jim Carr: You could, I know that you could.

John Saunders: First of all, I love my wife dearly. I've been married for 31 years, but I don't think I could go on vacation with my wife for four solid weeks, A. Secondly, just the idea that you can take four weeks away and completely let it go. Let your job go. I could not do that. I could not do that. I enjoy entrepreneuralship. I enjoy business ownership enough that I want to be engaged most of the time. I can minimize-

Jim Carr: But don't you think maybe after it's all over, maybe you'd be a better entrepreneur after that four weeks?

John Saunders: Not necessarily. Can I ask you a question?

Jim Carr: Yeah, go right ahead John.

John Saunders: If you and I hopped on a plane right now to somewhere without cell service and you were there for 15 days, would Carr Machine be affected?

Jim Carr: Yes.

John Saunders: In a bad way?

Jim Carr: Probably.

John Saunders: On the quoting specifically?

Jim Carr: Yes, because I do 90% of all the quoting.

John Saunders: But yes, because there would be a deficit.

Jim Carr: The pipeline would start to diminish.

John Saunders: We're pretty siloed. We are a lot of hats. I'm responsible for this, this, this and this, let's say. If I wasn't there, there would be a definite burden on my team. Yeah, there would be, for sure. I'm not ready to give it up quite yet anyway. I enjoy the daily grind a little bit. Like I said, I'm not willing to completely disengage, but I am willing to let go of a little bit on vacation.

Jason Zenger: My team would say, "You were gone?"

Jim Carr: Well, they don't like you.

John Saunders: A friend of mine who's in the industry who has been a great person to bounce ideas off of and also built up a really wonderful entrepreneurial story. His name is Jay Pearson. He runs a work holding company in southern California.

Jim Carr: We buy all his... Pearson Workholding.

John Saunders: Every employee at his shop has a major and a minor. The analogy here would be there's somebody at Carr Machine who minors in quoting, which means if you are absent-

Jim Carr: Yeah, my son could do it.

John Saunders: Sure.

Jason Zenger: You're just busy right now.

Jim Carr: He's got enough responsibilities. I wouldn't want to put that burden on him.

John Saunders: Fair enough.

Jim Carr: Maybe some day, yeah, of course. Anyway, John, we're talking about this entrepreneurial manufacturers can take a lot away from this Bootstrapping concept, but what does it mean for larger manufacturing businesses? Can they Bootstrap?

John Saunders: I've never worked at a large company.

Jim Carr: 50 million plus a year.

John Saunders: Sure. I think at some point there's a toggle that switches and you're able to invest in technology that allows you to innovate. But to me, it's not really a question of the size of your company, it's the ethos of not being wasteful. I think what blew my mind was I had the chance to tour and film over at Sandvik last year in Sweden and they were on their third generation of... I don't what they call them, but they're basically automatic forklifts, unmanned forklifts. They have a full blown system.

Jim Carr: Robotic forklifts?

John Saunders: Sure, I guess. On one hand that's extravagant, but on the flip side, number one, they are an incredibly popular, excuse me, incredibly profitable company. Number two, it's a form of innovation that has helped them shift their work force. I don't think anybody likes to see folks being wasteful and I think that's a harder thing to manage as companies get larger. But if you had the culture of investing it with, I hate to say results because now I'm sounding like a cliched MBA student, but what do you get out of that then I think that Bootstrap mentality can continue to live on. In other words, you could bootstrap a $37,000 product, just happens to be a larger product versus going for the adding a zero to it, if that makes sense.

Jim Carr: I get it. Thank you.

Jason Zenger: Is it just a matter of making continuous improvements and just working as if you want to drive as much profit to the bottom line or just save as much money in order so you don't take on that debt?

John Saunders: Well, Bootstrapping as it relates to financing is to me totally different. Again, there's lots of different ways to think about it. I've seen folks that do just in time at an amazing level, just amazing how they work with their vendors and that's phenomenal. I've seen companies that are very respectable who say, "To hell with that, I want a year's worth of raw material in my factory, period."

Jason Zenger: I don't ever want to run out because that costs me and my customers a lot of money.

John Saunders: I don't care what an MBA student tells me that they'll reduce ROI because I have working capital tied up. Nope, I'm in the business of making stuff and I can't make stuff unless it is sitting here on my fort to be made. I think that's a question that you need to answer for yourself.

Jim Carr: Yeah.

Jason Zenger: Got it.

John Saunders: It's culturally based, it's how you want to run your business.

Jason Zenger: Well and also goes back to the fact that this industry, it won't be completely commoditized because you have to know the person that you're dealing with. You have to know your clients and they have different needs. Let's move on a little bit to the content creation side. MakingChips, our mission has clearly always been equipment inspire manufacturing leaders. We didn't have that same experience that you did with say NYC CNC. Jim and I, when we started MakingChips, we thought about the times that we were having a glass of wine with a half a dozen manufacturing leaders-

John Saunders: Peers.

Jason Zenger: ... peers and we're talking about our pains. The pitch was how do we publicize these conversations? We even started like our first episode was over a glass of wine. Part of it was to get used to talking on the microphone, part of it was also like a homage to that sentiment, but who are you talking to with NYC CNC? Who do you really want to inspire when you create?

John Saunders: Yeah, the term we use is manufacturing entrepreneur, people that want to make stuff. For me, that's okay if that's a hobbyist or if it's a weekend warrior. I don't need to segment them into a true market because I'm not selling them something that they need to... The only cost for them is their time of watching and following our story, which I hope I... Well, actually don't hope, it will always remain a wholesome side of the story. I do a podcast as well and it's funny what you just mentioned because I love what I do. I love being an entrepreneur, but that doesn't mean on a not uncommon basis is I have questions about my decisions. You can be lonely. I can have questions about my own self confidence. We make bad decisions and I think I'm not interested in the fake raw, raw happiness. We're always crushing it. We're always busy. Granted, we've had a good 10 year run in the US, so it's been easy to hear that story.

Jason Zenger: It's still a weekend a little bit.

John Saunders: Yes. How the heck do you figure out insurance? How do you negotiate PNC insurance for your building? Do you rent a shop? Do I need to buy a CMM next or do I need to buy automation for my five-axis or could we-

Jim Carr: We just talked about that today as a matter of fact.

John Saunders: They're fun to talk about, but then they're not funny because darn it, this is important. This is hard.

Jason Zenger: Or it could be, "I need to hire this person or this person just gave me their resignation and I don't know what to do."

John Saunders: Yeah. Anybody who has those sorts of questions to me is a good candidate for our audience.

Jim Carr: John, how do you believe YouTube and or social media has changed manufacturing and the perception of it?

John Saunders: Oh, there's no question the perception is improved. I think because of what we talked about earlier, folks see the role in technology, they see automation, they see what a machinist is and isn't in a much easier and more digestible way. It's never really changed my perception because that's been my only perception-

Jim Carr: But we get a lot of bad PR, right?

John Saunders: Sure. I see parents of young students who still think that the machine shop is what they think of is really a cast iron casting facility, no.

Jim Carr: Because their great uncle lost three fingers on the punch press, right? That's all they remember.

John Saunders: Right. Well, we don't allow manual aids in our shop for... Kidding. No, it's totally different like that. I think the accessibility, we live in the best country at the best point in time in human history with the access to learn to work for somebody else or to work for yourself with this suite of things you would need to succeed as a manufacturing entrepreneur. With things like Instagram, with YouTube, you can learn it. A lot of times it's not necessarily mastering the content, it's just figuring out what the question I need to ask.

Jason Zenger: I think that for a lot of reasons and part of it is thanks to you for creating a lot of these videos, manufacturing entrepreneurship is really poised to explode even more than what it is now. I think people get concerned that like the jobs are only going to go to the big manufacturers. I think it's the opposite.

John Saunders: Oh, yeah, sure.

Jason Zenger: I think it's the opposite. We have friends of ours like Brandon who he's really Bootstrapping it in order to create a new business too and I think that is the future of manufacturing thanks to you for helping to drive part of that.

John Saunders: I do want to touch on that just a little bit though. My dad always used to say, "They may know how to run a Bridgeport, but they don't know how to run a business." They're two entirely different dynamics.

Jason Zenger: It's about being a tactician and then also learning the business skills.

John Saunders: There is. I think it's a very siloed on how to run a machine. I think it's a unique skillset, but I also think that running a business is very wide, you've got to be very, I don't want to use this word smart, but you've got to be resilient.

Jason Zenger: Well, you have to be willing to learn like John said. That was why that whole E Myth book was created.

John Saunders: I didn't read that, sorry.

Jason Zenger: Yeah, I know. I've got him to read one book in the time-

John Saunders: I loved it and I loved it. I got it-

Jason Zenger: I'm proud of you for reading that.

John Saunders: Thank you. I recommend two books and that's it.

Jim Carr: Go.

John Saunders: I recommend The E Myth Revisited and I recommend-

Jason Zenger: I'll write it down.

John Saunders: ... Dale Carnegie, How to Win Friends and Influence People. It has nothing to do, one would necessarily think with business, but it has everything to do with understanding the dynamics of selling because you are always selling. Right now I am selling Jim and Jason on why I was a good decision to come on as a guest host.

Jim Carr: Because we're cool, right?

John Saunders: Because [crosstalk 00:55:09] your audience on how to listen to the rest of this podcasts and not switch it over to the radio like you're always selling.

Jim Carr: Always. You're always promoting your brand, right?

John Saunders: Yes.

Jason Zenger: Yes. Selling is not a dirty word.

John Saunders: It is not a dirty word.

Jason Zenger: It used to be. It'd be like, "Oh, salesman." No, you're right. You're absolutely always selling. This goes back again to content creation. Our businesses are a little bit different than yours. You have your YouTube channel, you have your training, and you have your own line of products. Jim's business is, I would say more along the lines of traditional B2B, your B2B as well, but maybe Jim's a contract manufacturer. I'm a tooling distributor. Could we or companies like us utilize social media or YouTube in order to grow their business or just meet the objectives that we have in our [crosstalk 00:55:53].

Jim Carr: I can answer that question. Of course, we can.

Jason Zenger: I know, but I want to hear it from John. He has more credibility with me than you Jim.

Jim Carr: Well, no. Yeah. No, he does.

John Saunders: Yes. But I would challenge it with what's the goal here and who are your customers? I see a fair amount of social media done wrong, regurgitating a corporate PDF into an Instagram post. You're dead to me. I'm not going to look at that, it's not interesting. To me, you've got to be a little bit more insightful, sometimes self-deprecating. For companies like yours Jim, YouTube may just be the best vehicle for you for recruiting. They have nothing to do with your customers. It's what are you trying to do with it and how are you trying to change the perception? Because keep in mind nowadays you talk about recruiting workforce, you've got to sell to them too. When I go Google companies and you can't even find them, that's

Jim Carr: They don't even have a website?

John Saunders: ... different. Yeah, or they have a website that's bad or... It's a question of what do you want to do? What story do you want to be part of? How do you want to interact with that? With what you're doing, I don't know as much about your business, but there's some pretty cool stuff and disruptive stuff going on in that industry. How are people implementing tool cribs, is the one that's been on my mind a lot or vending machines or automation or tying in the ERP systems. These are real problems.

Jason Zenger: Unfortunately, we're doing some disruptive stuff, we're just not public about it.

John Saunders: Intentionally public or private or just haven't gotten around the top?

Jason Zenger: I would say partially intentional and partially because we just haven't had the time. Busy with MakingChips and also busy with the growth so, but we need to become intentional. What mistakes have you seen people make? You mentioned regurgitation, you mentioned maybe not being honest about who you are and showing your bumps and your bruises and stuff like that.

John Saunders: It's actually incredibly easy to succeed with things like social media. Just go look at what you like, go look at what your employees like to see, go look at what other people are engaging with. I'll give you an example of machine tool builder that's getting ready for EMO right now. If they're putting out Instagram videos-

Jim Carr: Getting ready for what? Oh, EMO.

John Saunders: EMO.

Jim Carr: Yeah. Yeah. The big trade show in Germany.

John Saunders: If they're putting out videos showing, "Hey, here's how we create up the machines." That's actually interesting to some people. "Here's the challenges or [crosstalk 00:57:52]"

Jim Carr: I would not know how that's done, right? It's probably quite-

John Saunders: It's interesting. It's interesting or like, "Oh, oh, we goofed on this. We're going to figure this out or here's the test cuts that we're trying to figure out." Versus another company that said, "We're proud to announce that Craig XYZ has been promoted to the senior vice president of regional managing director in conjunction for the trade show."

Jim Carr: It's awful, boring as hell.

John Saunders: What that distills down to is, it's not about me, it's about you. It's not about what my company gets out of this. It's not about my new product. Don't overtly sell this to me. You may have a really, really, really cool new automation system, but you don't have to just throw it in your face about what we have just come out with, what I have just come out with. Spin it around and say, "Hey, this is what we're hoping is going to work or change or show it in institute in a more subtle, more, more communing." Social media is supposed to be a communication, is supposed to be a two way conversation, not just a-

Jason Zenger: You're not just pushing-

John Saunders: Exactly.

Jason Zenger: ... you're pulling too. Yeah, I totally get it. That should be intentional.

Jim Carr: John, it's been a pleasure. I've never talked to you, I've never met you before, obviously, and quite frankly I'll be quite honest, I haven't watched all that many of your videos, so ...

John Saunders: No offense taken.

Jim Carr: Yeah. None at all. But I will admit that I really have genuinely enjoyed talking to you and sharing your story.

Jason Zenger: Jim's afraid to go to the shop anyway, so you know what? It used to be [inaudible 00:59:06].

Jim Carr: One thing I am, I'm really sincere and I just want to tell you that you had a lot of success over the last 10 years. What do you see in the next short term, one to three years and a lot can happen in one to three years, but what do you see NYC CNC and SMW doing in the next one to three?

John Saunders: Sure. Training classes, we're going to be adding a fifth axis class because we had so much demand that has completely rejuvenated my passion. I don't know how to say this other than I got tired of doing six setups and all that hassle and soft jaws and signed vises because I don't have that much time and I don't enjoy it anymore and I know I can do it so I don't need to prove it. Having a five axis now where we can do that stuff has been completely amazing. It's completely changed how I work with others and thinking about recommending their first machine or their second machine because it's just been that. I may be behind the times compared to some of your audience who have multiple machines, but darn it, there's plenty of three axis shops out there where I'm not thinking, "Holy cow." Training, we're going to add that. YouTube, we're going to keep doing what we're doing. I love we have the unique chance to basically film what many others don't because of this brand that we built, which is pretty darn cool.

John Saunders: I will never tire of touring factories. I will be pitching Jim later and maybe even you Jason, to come see the insides of your shops. I'll film them and share that insight. How do you do things? What is difficult? What's your story? What are you good at? What are you not good at? That's another great thing for entrepreneurs. Be okay with what you're not good at, but then figure out how to supplement that. Then for Saunders, we need a second five axis. Joking aside, I need to get a lave. Looking at CMM, with that five axis I'd like to get with automation, which ties into one of my favorite sayings which is, growth eats cash for breakfast.

Jim Carr: It certainly does, and launch too.

John Saunders: Yeah, right? And lunch. Absolutely.

Jason Zenger: Yeah. Well, John, it's been a pleasure having you on the show. Thank you for being here with us and for breaking from your vacation. Please tell your wife thank you for letting you go for a little while unless she was happy to let you go.

Jim Carr: Enjoy Chicago.

John Saunders: Thank you.

Jason Zenger: Thank you again for coming on the show.

John Saunders: Thank you, Jim, Jason, pleasure.

Jason Zenger: Jim, did you learn something here?

Jim Carr: I learned a ton. I learned that it's okay to not be okay.

Jason Zenger: I actually wanted to talk to you about that. I don't think like self-deprecating is maybe the right word to use with you, but talk about the mistakes you make and the issues you have and stuff like that. I think that that will-

Jim Carr: Talk about my mistakes and issues I get?

Jason Zenger: I know you don't like to say you're sorry.

Jim Carr: No, no.

Jason Zenger: Or maybe it's just you don't like to say you're sorry to me, but yeah.

Jim Carr: I thought about that. Where have I made mistakes? We've all made mistakes. Oh my God, I made a ton of them.

Jason Zenger: Why don't we do a whole episode about all the mistakes that we've made?

Jim Carr: That could be for our 200.

Jason Zenger: I've got several. It's a good idea. I like that.

Jim Carr: Because we all make mistakes and if you're not making mistakes, you're never going to grow and you're not making money.

Jason Zenger: Well, that's true. If you're not, if you're not making mistakes, you're not making money. Bam.

Speaker 4: Metal Working Nation listener. Manufacturing is challenging. You need to think differently. The day to day whirlwind of urgencies, the oppression of growth, customer demand, workforce development, new machine tools and robots. The list goes on and on. It is possible to stay ahead of the game of manufacturing, but you can't do it alone. We are here to give you access to exclusive content of other leaders as well as videos, blogs, show notes, and more resources designed to equip and inspire you on MakingChips.

Jason Zenger: I move slow-

Jim Carr: I may be a generation older, but I still understand where you're coming from.

Jason Zenger: I move slow because I love you and I want to make sure that you're staying with me.

Jim Carr: Thank you. Aaawh, you're kind.

×

Subscribe to the MakingChips Podcast!