Saying No to Scale: Pipeline Cuts, ECO Fatigue & 500% Growth Without Breaking

0:00This is the Manufacturing Automation Podcast. I'm Michael. And I'm Matt. In this podcast, we're going to discuss growing companies, automation and manufacturing. And how we're building a lives and businesses we want to see in the world. So general feelings of the week? What's been hitting your list, Michael? I guess I'm just kind of tired. That's kind of the theme for me. And I'm really starting to look at, how do I build a business model in a way that frankly is less exhausting? There's a lot of projects that I really love and go really well. And there's some projects that definitely do not fall in that bucket. And kind of the correlation that I'm seeing is the larger the scope of the project. We have the semi-turn keys. And it's 17, 18 grand for the hardware, 9, 10 grand for the labor implementation. And they always go super smoothly. And the customers are always super happy. But then we get these 50, 60, sometimes 6-figure,

1:03very complex integrations. And it does feel like even if we deliver a perfect result or we're completely ready to go, there's going to be something wrong with the machine when we get there. Or they'll find some reason that they're not happy. And I'm looking at that now. OK, well, how do I just eliminate that part of my business in the long-term and then 4X, the number of semi-turn keys we sell, right? And I'm having kind of the same feelings with the interload. I think the interload, it's a great product. But at the end of the day, because it's so new, and because a lot of the companies who are using the interload, maybe hire the lowest common denominator operator, it's very easy for them to point to, oh, it must have been this new machine. And then, of course, we go through the logs and they crash their spindle, or what have you. I guess that's a big theme for me. So I'm trying to figure out how to not fight uphill battles.

2:05And what's working that's rolling downhill and trying to duplicate that? It's really interesting that those of your notes to the week, because mine are very similar, of really general feelings of the week is, yes, saying no more frequently. Definitely needs to be a theme. And went from 95 deals in our pipeline down to 33. So I trimmed hard. All right, we have plenty of bottom-of-funnel, really good projects that are moving. Obviously, those didn't get trimmed. But there's these 60-ish leads or deals that I've been chasing for over six months to many years that see very limited progress every time I meet with them. And I'm just going, I'm not doing any outbound research to them moving forward. And it was just a decision I needed to come to. But it's really interesting that you're saying very similar things this week. It's going to add. Yeah, it's just tiring doing too much,

3:07and trying to manage too much stuff and things that are too different. Mine came down to as I was like, I can't do this amount of sales. I'm literally just split. I can't get the sales pipeline. I can't get the quality to the leads I want to. And so it was like coming down to two choices. It was hire a salesperson or cut, or I guess three, give poor quality, but poor quality was an option. And so I decided to go with the cut because we have so much in the bottom of the funnel that I'm not concerned about work. I actually concerned about pushing too much work through, and that could be demoralizing to a good salesperson. If you're like, yeah, I need to temper you down on the closing rates right now. Yeah, I mean, for you right now, I think that's definitely the right call. Because from the sounds of it, I think you're in a position where it's going to be really difficult to build out the capacity on the timeline you have to to do the work that's in front of you for the next year.

4:09Yeah, that's exactly. I mean, we're telling customers that are new coming in, that are pipelines X. I mean, really we're booking out in the 2027 at this point for projects, unless they're already active deals not made commitments to those people. Yeah, I mean, and for the number of deals that you have like flowing through that actually get realized as revenue. Because you're such an industrial scale B2B where the deal value is so high, maybe even 33 is too many, right? Maybe you're even then not cutting hard enough and putting too much energy into sales. Yeah, that could, that would be interesting. There's a few on there that like just, they're on like the watch list is what I kind of called it where I'm like, I really like the people that I'm working with here. And that's always kind of my downfall of not saying no is like, some people are just really good to work with. But those are also sometimes a sleeper clients

5:09that like end up being really good in the future too. So those are a few of them, and then some of them where it's like, all right, make a decision. Yeah, yeah. Any other kind of general feelings of the week other than trying to pair down? No, that's, I mean, I have a couple of things I'll go through is just a busy week of that building out some sales SOPs that I've been wanting to get done this quarter and then board meeting next week. So a lot of busy tasks too. And it was also an invoicing week. So lots of review there. Yeah, well, every day is an invoicing day for us. So it's kind of funny ours. We do all of our invoicing and all our payroll in the same week. So we do monthly payroll. It's kind of an oddball for our industry, huge and financial literacy. So we invest in financial literacy for our team members. And since they're dealing with such big numbers, that's why we push for them to go to monthly payroll.

6:12So they get to think about numbers a little bit differently. And then, yeah, it's all invoicing that same thing. And it's easier. I mean, we're on weekly, which is kind of annoying. But it's definitely easier for us to, I'm not going to deny that, but there's some other underlying goals and objectives. The reason we went that way. And there's always a transition for people that it's new to, takes usually the first couple of months to get their minds wrapped around it and then they like it. I think the only other, like, generally notable thing as like a general feeling. I've cooled on AI a little bit. Not a ton. You're pretty hard into it. Yeah, yeah. I was very zealous. The, you know, basically, I think, like I built these really cool tools. And the, you know, one of them was a complete ERP system for the entire company. And it tied into dozens of things from, you know, QuickBooks to our Google ads to our Instagram,

7:13like every single channel where there was an API, I worked on plugging everything into this. And that was a ton of work. And I, you know, spent probably a solid two weeks on it. And when I, like, really seriously looked at all the stuff in front of me, it was a horrible decision. Mostly because, like, we have these, you know, projects that need to get done and that I need to be, you know, putting my eyes on, especially given that, that we're short-staffed right now and be focused on executing, right? I'm really happy you reached that conclusion because I had actually been thinking about last week's podcast quite a bit. And if it was the same theme, I was going to be challenging very hard to do. Yeah. So now some of the lines I wrote down that I was prepping for won't get executed because of the way you open that up. I'm really happy to see that direction. So there's that. There was a lot of AI work that I think will be good in the long term there, but was not great in the short term.

8:14And I, you know, I pushed too hard and I did it too fast. Now, along with that, there was this much smaller project that has actually turned out to be invaluable, which has just been to build out these same kind of servers that connect, you know, all these different services directly to cloud. And, you know, correct it. Like, you know, separating my inbox into the confidential, non-confidential, giving an access to the ladder and, you know, like just being able to kind of auto-generate an email in my voice. And then, you know, doing the same integrating across different services, you know, like fireflies, just call, like our calling system. That has been amazing where I can just type in to cloud, you know, what are the urgent emails that are in front of me that I haven't responded to yet. And it just gives me a line-by-line breakdown. I wish I would have listened to you sooner. I'm clawed though. I started using it this week. Yeah. I had to build out sales SOPs.

9:15Completely different. And chat, I'd actually say chat, partially chat I felt like regressed this week. There was something that was just like, it felt like a year ago chat. And I'm like, all right, I'm gonna just go try clawed here for these tasks. And I haven't looked back. I've moved everything over there this week. So thanks for continuing to push that. There's a couple other things I want to try in there, but I just haven't got time yet. And I want to encourage you to push on Manus as well. That's the next on my list. I have a software tool that, well, people have heard about it. It's our sales software tool that we built internally that worked really good for trade shows. I've been talking to the team about basically giving me some of that code. And then I want to try and make it a little bit, the UI UX a little bit easier. So when we have the EA come in, they could actually use it because it's really nice. It is just like wonky-ass. Like if you don't know the workflow and trying to train the workflow, it'd be easier just to rebuild some of the tools. So I really want to try that, but I got to find some time.

10:18Yeah, like I would almost say for some stuff, definitely not all stuff, but the jump from clawed to Manus is similar to the jump from GPT to clawed. It's not that hard. I think it was more of a mental thing. No, no, no, I don't mean difficulty in the jump. I mean, how much better the model is at doing some tasks? Oh, I see where Sam got it. The thing about Manus, it's like it's expensive as hell, but if you need to generate ad copy, proposals, like that kind of thing, Manus just delivers a better result more cleanly, where I'm going in and editing it less. And I don't end up fighting it. Yeah, okay. I mean, my sales S O P at a clawed looks like a marketing literature at this point. And like I spent 30 minutes into like formatting. Right. I think that was easy. Yeah. So I mean, if you're happy with it, like build out and clawed,

11:18I only use Manus for like just velocity. I have these 30 things I need to do today, but I want to make a really nice proposal. So like if it costs $10 or $15 for a proposal on Manus, and I don't have to, you know, sit there messing with cloth for 10 minutes, like that is often worth it. Oh, for sure. Yeah, it's, you're buying time versus hiring people. That's easy decision every time. It feels bad paying Manus like two grand a month. I'll say that. Why? Yeah, I think it's just, I have this like a version to SaaS of, I just hate watching, you know, money come out on a regular monthly basis. That's payroll. And, you know, it's like, like clawed is doing more for me than Manus, and it's $200 a month, right? But, but yeah, I mean, the really what I'm saving and buying there is the delta and the amount of time I would spend if I were using clawed instead of Manus. So it's not totally in a vacuum, but I think it's still worth it.

12:19Yeah. Okay. On the sales and marketing fully, since we're kind of through the general feelings. Yeah. Why don't you start sales marketing? Mine was a sales SOP or playbook as we're kind of calling it internally. I had built a lot of this out at the end of last year, a lot of our SOP is prior to us doing that trade show circuit that listeners may or may not remember three trade shows, three weeks back to back to back. I haven't touched the SOP since then. I went back through, audit them completely, did a rewrite, took them into clawed, had it asked me a bunch of questions. It was a full day task to really get our SOP's honed in and removing some of the noise that was built into the SOP is making it easier to train somebody who was my main focus for this one. Because we had like the sales process we built out is oddly complex, but it's working well. So I need to find ways to... Can you explain how it's oddly complex?

13:22That's a good question. There's certain ways that we have to... When a lead hits the funnel, so you have different portions obviously with the funnel. You have marketing qualified sales qualified lead, it's depending upon ratings then that leads gets rated on and then really it's a metrics by which those leads get their rating metrics internally. So it's the standard bands that we've talked about, budget, authority, need, timing, and then we have a synergy metric. And then we also layered some other within our AI auditing tool to verify those budget and authority metrics with online data, and that's where the sales tool comes in. But there's some certain ways that we have to go through these processes and certain messages that we do as somebody goes from marketing qualified to sales qualified and then once they become sales qualified,

14:22once they're actually having going from lead to deal within there and then the cadence of certain things. It's really weird, there's a certain psychological structure that we've found that buyers like on this journey. I'm not really willing to share all these things, but it's oddly repeatable is what we've seen for the last handful of deals we've closed because they all went through the same process. If you're open to it, I'd love to talk to you offline, but I'm about that. Yeah, I'm trying to think of it as a process. I mean, I've got that one. So I'm mostly working on the SOPs to try to get the, it's not be you doing it, right? Exactly, and then there's different verticals that we run down because we have the machine build vertical and then we have the extension of team, like automation vertical that a lead comes through is a portion of it and that breaks down to depending upon the way they answer questions

15:23and how we move them in our funnel as well. Part of the know was actually just changing some of the customer personas of how they get bucketed to because of how much energy it takes and then what's coming to me. That's part of the guideline. I think one of the big changes I had is this automation extension of your team is, we don't have many people go through that, but those tend to be... Can you explain what that means to me? Yeah, so what we're doing is we're basically creating an engineering department that's focusing on automation for some companies. So they get resource access to us on a minimum retainer, same thing as our automation assessment program where we have 40, 81, 60 and then we kind of have an extension program as well. And they get kind of exclusive party there, but there's some costs that are a little bit different as setting that up. So that's been a fun one. Those are not the most consistent,

16:25but there's a process that we now have around that and figuring out who fits that is a little bit tough, but that's, we were high level discussing six years of my life of trying to bucket this now. I'm trying to figure out a way to hone this in because this has literally been six years in my life to build this 32 page playbook. I'm trying to think that there's anything else. What about the spin off website? How's that going? Because I know you, yep. I just approved a budget was at last week. I said that they're set to start in April. We actually made one minor change. We're not going to take CNC machining out or just going to be doing VFS on the website and making it just a product page. It's going to be hyper focused. SEO audit on it, they decided that we were better off just to do that because CNC's not having that much of an impact. It also puts that business in a box

17:26based on some long-term goals of really trying to sell the whole VFS product line because develops focusing on automation. I have customers come to us for VFS and I'm slow to respond. I don't give them the service that is the premium feeling that has become developed. And if that's happened over the last 12 months here, that means something that needs to change there. So we're actively looking to exit that business model hence the reason we're putting it into kind of a business in a box and it's on website. So that's where that's at. That makes sense. So quick sales and marketing for you. Yeah, what's funny is it was a lot of work this week in sales and marketing. But it was building out a giant playbook but it was really a 20% tweak and honing it in to make it easier to train people for the sections I need because I want to take off almost all type of funnel. Is my goal and be focusing on mainly a little bit in the middle and a lot on the bottom.

18:30Marketing app proved that the pages should be live this coming week. So new pages for home page. We've got some changes coming related to the automation assessment and extension of team that we just kind of discussed. There's going to be some changes to the home page there and then some of our automation service pages are going to be getting that new style. We're testing a few things in there as we kind of discuss in the past. So not all the pages will look identical but it's strategic. And then I'm really excited for rebuilding the how we work page and getting that on that look. So that's kind of next in the pipeline there. Yeah, I like the how we work because I always answer the same questions. I think that's something I need to... We've found that that's a common frequent page for people that are getting ready to move forward. So like they're deep in the marketing qualified lead funnel. Yeah, that makes sense. So I think that about hits it,

19:34trim to the sales pipeline hard. It was emotionally difficult. I will say that because saying you get attached to things I think might be the wrong way. But I struggle just saying no to opportunities is probably the best way to summarize me. Oh, I understand. I mean, that's just like I think that's true for every bootstrapped entrepreneur, right? But I think that's the right thing generally, right? Yeah. For me for marketing, actually kind of the same on the website, we rolled out, it's been in the works for a bit, but a new like Kiro banner on our homepage. All right, so what we went back to video there just to get some better clarity, put the metrics and try to get people to focus on ROI a lot earlier. Do you find that you like the video at the top? Like in a lot of websites, I'm not a big fan. Yours actually works because it's moving relatively slow

20:37and it's pretty clear. But like some of the pages you get to, and it's like, what am I supposed to look at? This is all a video. Yeah. I just realized one of my buttons on the website is broken. Now I'm talking about this. So I'm going to get that fixed. But some like minor website tweaks, the we brought out a new product line, which is the auto vice LT. It's a much more affordable air vice. It is priced at $17.79. And basically is set to be, it's designed to be a direct competitor to air vice the company and to deliver much better precision at about the same price point. I'm marketing copy and that looked really cool. Or the graphics. I'm assuming that was all managed or clawed, but those looked really sharp when I saw those come through. Yeah, that was all mannest. And they cost like five bucks a piece to man guy. I always do the math with mannest. That's free compared to. I mean, that's cheaper than private. Well, what's funny is we made these just beautiful graphics.

21:39And I put them on Instagram and they just performed horribly. Just a random unedited picture of the product and on a generic background had 20 X that performance versus the nice infographic with everything laid out. People are starting to just not trust pretty. Like if it's too perfect, like you're just not trusting it anymore. It was a conversation ahead with our marketing agency this week because I feel like that's a common theme. The auto vice, I mean, we launched it yesterday. We had a very, this is our first production run. And we just had a couple of first articles that have already been sold. So those are already gone. So it's pretty much immediately going back order. That's always tough, right? I always have this issue either over like you, you have to order parts from vendors

22:41and then you have to decide how many you're estimating a product is going to sell. That doesn't exist yet. And then, you know, you have to see in actuality and I've seen both sides where I've been stuck with tens of thousands of dollars of inventory or where I'm missing tens of thousands of dollars of sales. Yeah, I mean, you've started doing the pre-orders. Like you did it on the airbys. I'm assuming that's around the window. Yeah, yeah, I'm forgetting. I didn't do that here. You didn't do it on the air. No, we just tested it internally and you know, went through the revisions and yeah, I mean, I think the like user feedback was much more important on the cool and clear to figure out how to make the install process seamless. Whereas like, you know, the device works or it doesn't and it's and the repeatability is what it intrinsically is from, you know, the machining and the design. Yeah, that one makes sense to just go through that process because you have a lot of other voices. I was just wondering for like a lot of the new products

23:41you're doing. You ever thought of just like batch releases or drops almost like, all right, we're doing another order here, place the order by X date and you'll get on it when they deliver, estimated delivery is X. It's not a bad idea. It's an interesting hook on getting people hooked into your brand too. Yeah. You know, just generally from like a marketing and sales philosophy, I'm trying to really crank the Shopify e-commerce knob and you know, we just sell a ton of tumble blasts and you know, that's become such a nice revenue stream that I don't have to touch, right? Like the product just works. The assembly procedure is nailed down. It's very linear. I know exactly what the margins are. And I've been trying to replicate that and you know, our now we're calling it the AutoVice Proline. It is really nice and has amazing repeatability, but you know, the people who are buying a robot system

24:43and are going to buy the cheapest vice possible. You know, they're never going to buy a $2,500 or $3,000 vice. I always find that comical. I paid 70 grand for this robot. So I'm going to put the cheapest, most unreliable end of arm tooling on it. Yeah. Like most of our robots end up with more expensive end of arm tooling than the robot cost. Yeah. Like, I don't know. It just, it always blows my mind when I see those, like somebody putting a tongs on the end of a panic. I've seen that. It sounds comical. Yeah, I don't know what it is, but I, the thing is, there's a market for it. We haven't been positioned in that market. And like, I think that it's a better product. And just being out in the market, being in my opinion, you know, superior, just with time, I think we'll start to take market share that we wouldn't otherwise get, right? That, you know, a lower tier of, you know, in my opinion, which is obviously bias, like that, you know, a large portion of the airvice market that aluminum

25:46vices are currently occupying. So I've been thinking a lot about that. And also, you know, analyzing, like, why have our Shopify sales gone up so much? Why haven't they, or why haven't they? No, why haven't they? Yeah. And so, so March is going to be the first month ever. And it, it's been kind of a slow month overall, mostly because we're catching up on, you know, existing closed paid for deals. But the, the big thing is, in March, it's going to be the first month ever for us, where Shopify was the majority of revenue. And that's a real shift. That is, that's congrats. Yeah, I'm really pushing for it. Like, yeah, that's awesome. Yeah. And, you know, to, as we were so busy and things were chaotic, I definitely think probably that shouldn't have been the case. Like, if I was less in the, the AI, rabbit hole, and more on top of sales, you know, there probably would have been a couple more turnkeyed deals.

26:48And maybe the numbers wouldn't be exactly the same. But, but nevertheless, the Shopify store is doing much better. I mean, grown much faster than I would have predicted. You know, especially after, you know, I think like a year and a half of, you know, doing 10 to 15,000 dollars a month in Shopify. And, which, you know, it was the minuscule amount of revenue. Compared to the overall company. And now that, you know, we're significantly, significantly above what I would have expected. So, I'm trying to double down there. And, you know, we have, I'm starting to play a lot with a Google ads, like we have one Google ad campaign with a 60X return on outspend. She's, yeah. Take all your cash, throw it in. Yeah. And, you know, it's a branded search campaign. But, so, you know, people are already searching her name when we're getting this. Okay. But, the thing that issue would not doing it is that our competitors are paying for our brand name.

27:49And then, so you can, it's kind of a, yeah. It is wild that Google lets you pay for trademark names. Yeah. Like that would be an awesome law that you'd probably love to see overturning. Yeah. The, and, you know, we're right now onboarding a new marketing firm and hopefully, as we go and we're going to start with the Google ads, rework all the Google ads. I'm hoping to see our return on outspend on Google go up. And maybe we'll do things like, okay, we're buying the competitor keywords now. I'm not, I'm not sure. If you have an agency that can set up Google ads and run them while I want to hear about it, because my experience has been, I'm as full of just went on back and let my cash in fire. Because it would have been less of my time spent. So it has still been ahead. Yeah, what's interesting, too, is, you know, I went and I compared the return on outspend between, you know, Meta and Google. And Meta, I was seeing like 2.7 to 4,

28:51depending on the age of the accreative. And I've been very guilty of not updating the accreative as much as we should have. But, you know, Google just kept climbing. And, you know, it was at eight. So I took half of the Meta budget and put it towards Google and the return. And that's my cup getting better because the algorithm had more training data, which really surprised me. But yeah, I mean, I'm just going to try to optimize Google ads, pour more money into it and, you know, see how much. But are you optimizing it or is the agency? So that's like, that's a very interesting question. And it is. Yeah. Because you're paying them for what I heard. Yeah, so to be super candid, like if I knew as much as I know about, you know, AI helping you, you know, almost as your assistant, right? If I knew this much about it two months ago, I don't know that I would assign the contract, right? But, you know, we're here. The contract is signed. Let's see how they do. But like right now, it kind of both are happening, right?

29:53It's like me and AI are auditing the work that they're doing and making suggestions. And I'm not, we will find out. I mean, they've been amazing to work with. Really, the question is, are they worth, you know, so much as a marketing firm charges? That's the way I trained my agency as I reviewed everything, gave feedback. AI kind of came online as I was going through it. So then I built agents to make my reviewing process easier because I knew exactly the same things I was doing. What I ended up with is a really well trained agency that knows my business. And they're just as good as having an in-house marketing team. Except for now, I've got somebody who does web dev, somebody who does SEO, somebody that does all our copy and then managing it like a campaign manager, but the cost of having one marketing campaign manager. Yeah, yeah. So. Yeah, that's how I'm definitely trying to view it. It's definitely tough and industrially to be. And if you can get to where your hands off

30:55and they're doing everything, it can be such a slam dunk, but I know how much work it is to get there, right? Yeah, I wouldn't say I'm hands off. I still probably, I mean, I could look at my timeline for this week. I'm going to have four hours invested into them this week. So 10% of my week still went to reviewing their stuff. I'd say that's about average or worth. That's where it needs to be to keep quality up. About four hours. So, yeah, I mean, after the podcast, I'm going to have my first official meeting post onboarding with them, and where we're actually starting to launch creative. And I will see, but I'd like the biggest thing for AI for me has been actually going and I mean, I'm not even doing it. I'm telling Claude, like make me an MCP server that connects you, Claude, to Service XYZ. And it's a pain, I'll be honest, like it takes some work to set these apps up,

31:56but just having the lack of friction, like I have a Shopify MCP that I can change inventory levels, I can edit product pages, and you gotta spend a lot of time on security, right, to get it to that point. But I can do it directly through Claude in a way that none of the existing, like even the existing Shopify API, or built-in AI, isn't able to make that kind of edits. So I've been working on tying everything into, like our Google ads and our meta ads. And yeah, just having that layer of friction gone, where the AI has the information and can read it and write it directly, has really been transformative for, I mean, the AI works longer, it has more data to work from and has better precedents of what to do. I don't know what to say about that. Yeah, I'm just madding. The other marketing stuff,

32:57I mean, I haven't been doing enough Instagram, that's pretty obvious. It's one of the main ways that I try to engage with our audience, and I mean, I've just been dropping the ball, like there's really no excuse there. I need to spend more time, like I have the time, I just need to fix my priorities. I can't remember the last time we posted on Instagram, or I don't know what was this year. Yeah. So, yeah, I mean, it's tough, because I'm on the shop floor less and less, right? And that's what the business needs me to do. But ultimately, I need to get a shop foreman or something to just run production, or I'm almost completely pulled out of it, and problems are just kind of fixed, and the flow keeps going, and I can focus solely on working on the business, but that's probably a few months out, very least.

33:58But that makes it tough to make content. I'll be honest, right? If I'm not running machines, if I'm not fulfilling orders, if I'm not touching the turn keys in a significant way. You can't take content of Zoom calls, especially with IP restricted calls. Yeah, that's the thing. And like every turn key, we generate all these videos, just send to the customers, but they're all NDA parts. So I have tons of footage that I can't share, and that's really the only footage that we're systematically generating. So, that's a challenge. AI changed their part. Yeah, I mean, I'm sure you probably could, Rand, curious. Is that an interesting idea? Yeah, I mean, you know, we never show. NDA is because I've also been seeing some of our NDAs that have been coming through recently from potential customers is,

34:59we can't put their stuff into AI. It's been some of the new things. I was like, I haven't seen it yet, but I expected to start coming up. Yeah, I have a couple of them, and I'm like, man, this makes a sales process sucks. This might qualify you out pretty quick, actually based on how much more friction this creates for us now. Yeah. Definitely. But engineering and projects? No, why don't you start? Because I'm circling on and on there. We've got Project 29. Pretty much everybody is on that right now. I actually shouldn't say pretty much. Everybody is hardcore focusing on that to at least some extent of their resource bandwidth. 28 is electrical cabinets getting assembled, but that's pretty straightforward. For 29, I believe trash CAD is set to be signed off today or Monday is going to be the trash CAD. Yeah, so that's a good question. So our process for designing machines is, we have kind of our sales proposal CAD,

35:59which is like ultra trash CAD. You build that, and then by the time you get to our machine, build SOP, we give the engineers what's called trash CAD opportunity where they get to design lay stuff out. No questions asked, break all the rules on our SOPs for conventions. The goal is to get ideas out quickly. Prototyping and CAD 3D, sometimes they'll make stuff and print it, sometimes they'll make little short assemblies on the desktop or board stuff like that. But they're building a lot of it in the trash CAD environment. What happens with trash CAD is it's exactly as it sounds. Once we're done with trash CAD, it all goes in the trash. And then we start designing the machine based on what that trash CAD ended up looking like. We found that what happens is we carry less technical that throughout a project. Our team actually moves faster in our timeline because one thing that develops been ultra focused on is complex machines in under six months. That's where we're going. So we want to build complex machines, just like 29 in under six months.

37:01Our target for this customer is we just started, I guess it's been 30 days ago now. Our goal is to deliver this to them in December as our target. So that'll be the fastest we've done something of. It'll be the most complex, largest dollar project and pushing for one of the shorter timelines. We've done that timeline before, just not on one of this complexity. And three reason we're putting the resources the way we're doing this time. So aim for it. I think that kind of hits what trash CAD is. And so they're almost on a trash CAD. They're going into a real design. That's also like during trash CADs solidifying vendors we're working with, getting CAD from them and laying out how it's going to work with them. That's a portion of that as well because vendor selection and getting CAD from them is a serious time investment. Oh yeah. Yeah. So we've got one vendor on this project that's making things interesting.

38:05They make a very niche product, not in the state. And it is definitely creating a little bit of friction on speed. But there's ways to get around that. So our team's focusing on timeline. Yeah. Awesome. Engineering for us. I mean, we kind of, you know, finalized everything and then you'll launch the AutoViceLT. The, I mean, happy there. There's not much else to say. It's a relatively simple, just very nicely machined aluminum vice that has like steel interface components. And that's really the special thing is light vice from Fit Access, which we also sell does this very similar thing where it has steel inserts and it makes all the difference, right? Where they just don't wear out. We had a VFS vice back in the day

39:07that we had prototype that was like that. And you're just like, I don't see them. I didn't see the market for develop going in there. So I'd be curious to see your vision. Yeah. And we have a product called the spindle storm. Guess what that is? spindle storm. I'm assuming it's a fan on a ship fan. It's a ship fan. Yeah. Yeah, I mean, that still kind of gets me the trade name thing. Man. There. Sorry, I'll let you finish that. I'm going to have a sideline joke. Yeah, our tree names are just ridiculous. And I'm aware of it. And there's a tree name for everything. And there was a guy who actually was trying to buy our business. And I met with him and the deal went nowhere. And I was not interested in selling that amount of the company. But the one piece of advice he gave me is like, you should really try trade names. They work really well for us. And I tried it. And I was surprised to see just how well they ended up working out.

40:08And now I have people like, oh, I want to give grip, grip, grip, grip grip, grip. Just these names that we pulled out of nowhere. And the name recognition is much better than part GA F15-75, right on. Yeah. Yeah. All right. What's your sidebar? I don't know. I thought about it more. But you had a product back in the day you're going to call the GIM load. And I'm surprised you're not calling this GIM blower. Oh, man. Nope, that one's a little more obvious. Yeah, sidebar on my stupid humor. It's Friday. It's going to be a guys weekend. So I guess my IQ is really dropping fast as we approach the end of the day. Yeah. Other thing that, I guess, from an engineering point of view, I'm just, man, I'm tired of ECOs. Jeez. Like, we have two very difficult customers

41:09who just keep throwing engineering change orders at us and they expect it to happen for no money and instantly. And it's infuriating. And I'm. Change orders are never fun. No, I wish I had a way to say there's a way to get around them sometimes. But sometimes you just don't know what you're getting into or metrics change based on the customer business. And you know, the frustrating thing is it doesn't seem to matter how precisely or how well we scope things out. It doesn't really matter what the contractor terms say. Sometimes it's just this super small percentage of customers who just make things really, really difficult. I think you need to dig into the persona of those customers and see because when I dug into the persona of the difficult customers that develop as had over the last five years, there are some very clear indicators or red flags that I should have weeded some of them out sooner. Yep. So I've been doing that.

42:11And I've made some strategic shifts in how I handle the sales. I mean, like the first thing is that, you know, especially with with semi-turn keys or turn keys, making sure that they're asking the right questions, right? Like rather than just being focused on closing a deal, making sure that they are understanding, like, you know, the value is not running as fast as possible. The value is running two extra shifts. And, you know, making sure they're asking the right questions up front. But, you know, I'll be super honest. I don't think it's ever gonna be a perfect system because I had customers who were vetted and who were, you know, looked like they were going to be amazing and effortless to work with, who, you know, a couple of them have turned out to be some of the worst customers actually implement with, right? But what I heard there is you're making sure they ask the right questions, which means are you leading the witness? And if you lead the witness, you get them to where you wanted

43:13them to be, which means you qualified them to who you needed them to be, not who they were. No, what I mean by that is like the, I don't want somebody who's just jumping in, right? If that makes sense. The, who's like, let me buy the thing, not think about the, you know, RLI, not think about the part, not think about what happens after, you know, we're done running this piece of production and need to move on to a different component. Oh, okay. Yeah, they want to buy too fast. Yeah, exactly. Those are red flags for me, typically with customers. Yeah, I've found that the hard way over the years is customers that are trying to like, oh, you know, we got to go fast, fast, fast on XYZ. Yeah, there's times to go fast. And then there's times not to. No. And I did one thing I think is going to be huge is I, I pulled my, my personal business cell phone number off of my email signature.

44:14I'm just like, you know, I, for, for the great customers, for the people who should interact directly with me, like I, I will call them or text them on my number. But, um, that's one thing I really realized that we talked about for the last couple of weeks is like not having yourself as the direct point of contact, um, makes dealing with things like an ECO a lot easier. Um, it seems like, you know, that maybe not great customers won't push as hard on an engineer or an apps guy as they would on, you know, the owner of the company. The other thing I like about it is typically if you have two engineers from both companies working on navigating an ECO or negotiating it, then if there's any friction, that's when I'll typically come in and then that's usually when an executive from the other side of the company will come in. And then we're basically mediating the two engineering discussions and it usually results in like five minutes to get to the solution or it's a lot faster, maybe not five minutes,

45:17but it's usually one call. Yeah, we get to a solution and it usually is a lot less, um, it's not as negative. You know, like when I was the engineer and I was the one having to renegotiate terms, it was personal, it was business, like it was like all layers of emotions on time, which then just didn't get the best customer experience. Yep. Yeah, and the other thing that I'm doing to change it, I mean, I've, I've looked at like part of the issue isn't even at the ECOs, um, you know, I mean, really the problem with the ECOs is is the timeline expectations, um, of, you know, we should change the all these things and then it should be done instantly. No, we're going to add two weeks. Um, and you know, that's kind of problem number one, problem number two is just, um, it's squeezing margins, um, and basically the rather than trying to operate in, you know, less than ideal margins, my solution there has been to accept, you know, a certain percentage of customers are going to be unreasonable

46:19or have integration challenges because they have machine issues, um, or, you know, uh, just to get my margins to the point where I can, can eat a certain amount of ECOs, not that I want to. Um, yeah, but it just, yeah, you're not eating them. You're just increasing project velocity, which then ultimately increases your margins and your revenue. So, yeah. So, you know, just, I think it does two things that kind of prights us out the people who are most likely to do it, um, and also, you know, when it does happen, um, you know, I, I'm looking at the, the total project margins and they're not 20% right? Um, and, you know, I, I can live with that number dropping from 50 to 40. I can't live with it dropping from, from 45 to 20, right? And, and that's what I've been seeing happening on, on two projects in particular. Okay. That's your gross profit you're talking about, right? Where's that? Okay. So, um, other than what, what's after engineering, kind of spacing?

47:21Continuous improvements. Yep. Uh, I can go, it was sales SOPs for me this week and then it is onboarding SOPs for the team. So we've got, um, mechanical engineer starting next week. We've got another engineer starting in May. Uh, we had two really good interviews this week. We'll be giving one of them an offer, um, next week I would assume I have to meet with our electrical engineer. See which one he wants to move forward with, uh, if not both. Um, and then I have, uh, executive assistant interviews coming in the first week of April. So a lot of onboarding SOPs because it's clunky. We haven't hired a whole lot of people. We're still a eight person company right now. Uh, I'm forecasting us to be 16 at this point next year. Uh, so we really got it level up or onboarding process. Yeah. Because saving one week on eight people is two months of labor.

48:22Mm hmm. So, yeah, that's a hard one. And one thing that I've kind of realized is, with more time, is you can decouple like top line revenue from the number of, you know, people in the staff, with a different approach to business. And I know, you definitely have that focus on vertical integration. And, um, basically, you know, we had automation revenue considerably go up, but didn't increase the staff. And we did that by, you know, outsourcing domestically a lot of our manufacturing. And, um, and that's worked wonders. Uh, but, uh, I don't know, I just keep that in mind. Like there, there are ways to maybe not hire as many people without adversely affecting top line. Um, I don't know a better way to put this than we're not talking about doubling in revenue,

49:24just because we're doubling in team. And we're looking at 500 plus percent growth in revenue and only doubling the team. I mean, that's just going to be painful and chaotic and difficult, no matter what, right? Not necessarily. Okay. Um, we invested, so developed and prepping for this for many years. We strategically invested in the way we built our machines. We rented a loss for periods of time, uh, strategically to make sure we hone in processes. And educated our team accordingly. We were planning to grow by, I would say, about 300 to 400 percent this year. We weren't planning for the, we're actually capping at about the 500 percent, which is what we're seeing. Uh, because that's, that's at the, that's the stretch point for us. But I wish you luck. I still think it's going to be really hard. It's always hard. It's always hard, Michael. Yeah. But there's something hard about growth that, that's just a different kind of heart.

50:26Um, and it's exciting. And, you know, I've been there where it, like I've almost been, you know, addicted to fueling the growth. Um, and yeah, I mean, I've had that do wonders for, for us as a company. And I've also had it, you know, be less than ideal on when things changed. That's what going into this one is, we've gone through many growth curves similar to this over the last decade. Um, there was some significant learning experiences that went through that. And the way that we set up the, the game plan, let's say, is strategically different based on that past data. There's just, you know, you plan on going for that growth. And that's actually end up accidentally understaffing has been one thing that we did because you under, uh, under estimate how much time it takes to train people. Really, if you hire an engineer, if you need 2000 hours out of a person, you're really only getting 60% of that the year one.

51:32And that's being optimistic because of the, the impacts of how much efficient they can be because they're learning so much. Negative impacts on the people that have to train them and how much their productivity goes down. So that's what we baseline engineers at 60% year one. And that's also driving some of the, the reason of our staffing and it's setting the stage for, I'm not anticipating. 26 just to be a growth year, we have to follow it with 27 with a growth year. But not necessarily 27 being a growth year and people growth year in, uh, output, which is kind of what we did this last year. Or we didn't increase people, but we increased Apple. So I don't know how else to share it. There's like other than saying you make a lot of mistakes, you lose a lot of money in some of these growth curves. As they get bigger, you just can't make a lot of the same mistakes. Yeah. Yeah.

52:32Any other CI stuff that hits my big ones. Just reading my notes here. Yeah. I mean, on my end, some CI stuff. I mean, really trying to embrace Conbon and trying to get myself out of, you know, ordering and reordering processes and getting, you know, the team and the systems connected to the vendors has been a really nice CI. Um, trying to just nail down assembly SOPs on, you know, like we have a nail down on our volume products. Like, you know, we're making a couple of tumble blasts a day. Like those SOPs are dialed. But, um, you know, we're not in the same position, um, with, you know, some of our more advanced modules. So then I have to have a higher, um, you know, level of QC and more hands-on involvement from, um, the, you know, assembly lead or whoever to make sure that the product is.

53:32Is good going out the door. And that's making new products all the time. Yeah. Yeah. Um, I seem to be really good at making new products all the time. But yeah, I mean, um, I guess like as a CI in general, just trying to alter the business model a little bit to be to have a bigger percentage of revenue coming in from, you know, a less niche, like generalized market. Um, trying to like replicate the tumble blast performance where, you know, you know, I have a need. I see the solution. I buy the solution. And that is a very easy revenue to realize and scale compared to something like, you know, semi-term key process where, you know, I have to get the customer to see something new that they haven't really seen before. Understand how it works. And then, you know, get the education to the point where they trust it. Um, and, you know, really, I'm viewing it as a kind of a having these products that are, you know, lower barrier entry and more straightforward.

54:37I'm hoping will, you know, create a, you know, funnel of returning customers kind of going up on the, the tier of that in which they're engaging, you know, with us as a company. You know, maybe they buy the, you know, budget aluminum vice and then, you know, in a couple of years, we're selling them, you know, full modules are a term gear something. Just thinking through that, that process, that's an interesting. Because what's interesting is not everybody that comes to you for a tumble blast will even ever own a CNC. Oh, yeah, absolutely. That's, that's what I was going through where it's like, I'd have to think about that. If you have, if you're targeting shop tools, but then there's how do you strategically target the ones that you can. Yeah, and I expect it to work better with things that are more directly used in the machinery, right? Yeah. The tumble less is kind of funny. Like I, it definitely has resulted in, and deals or, or follow on sales from CNC shops.

55:37That the more common thing I've seen is like a deal fails to close, like people don't want to proceed on a turnkey or something. But then they go and they realize we had a tumble blast and they buy that. So it's almost like this unintentional revenue capture of like, oh, we have that problem, which is kind of funny. Have you ever looked at doing oil skimmers? I have. Yeah. Or like chip filter, because hot chip filtering blows. Like it is the shittiest experience as a machinist in my opinion is that little tray in the back that still amounts to a mountain of sludge every couple months in the bottom of your tank. Yeah. Like, yeah. And like I, we always bought like the little cheap oil skimmers and then we do little janky things to get the filters to work better on our machines. It's like, if somebody would actually make a easy to retrofit and semi cost effective, just paper based filter that's a consumable, I would have loved that back in the day. But everything was so big, so clunky and so expensive that I would just like, I'll just keep throwing paper at it.

56:41Yeah. I'm not sure. Like we've looked at both. We've looked at filtering systems and oil skimmers systems, oil skimmers, I think that that market is actually too well served already. That's more solved than the filtering. And you know, if I don't feel like I can legitimately offer the best or close to the best solution, whether that's for the money or in general. I generally don't try to launch a product into a new category. The oil filter thing, you know, is something we've looked at a building like, and we never really pursued it, like something like a Freddy, right, like a cool and filtering system. But the low cost angle is interesting because there's really no good solutions there. But you just said the oil filtering is handled. Not the oil filtering, the chip filtering. Yeah. I think the oil is actually better served than the chip. No, no, no, that's what I'm saying. Okay.

57:41Maybe I had that backwards. I don't know. We got it now. Yeah. Yeah. I don't know. I think that they're, I had sketched out some sheet metal solutions back in the day and then I just decided that it wasn't. I mean, that was when I was at rings and it was like, yeah, I could spend these dollars trying to make a product that doesn't align with car parts. You just keep making car parts that we know we can tell the crap. All right. Well, I got another call coming up in a minute here. Do you want to close out with a personal item? I'm hanging out with my cousins this weekend. We're making a century old family recipe ring baloney. Cool. That's where we're up to. Yeah, I mean, for me trying to get out of the house, play tennis more, work less. That's why I'm working on it. Good luck. I think there should be good weather over there, hopefully. Yep. Thank you so much for listening to Matt and I's conversation this week on the manufacturing automation podcast. If you like the podcast, please share it with a friend or give us a five star review on Spotify or Apple podcasts.

58:45We'll be back next week to continue sharing our respective journeys in life, business and industrial automation. Thanks so much.