Gadgetory

I'm Alexis Ohanian I started startups invested in them and met amazing people using the internet to change the world our generation has an opportunity unlike any other we can create small empires without anyone's permission we're literally down under the Manhattan Bridge overpass also known as Dumbo and a lot has been said over the last decade about the decline of the American manufacturing industry one startup here in Brooklyn makers Row is actually doing something about it just want you to know before we get any further I am an investor in makers row but just like any other startup on the show we're profiling them because they're cool I also just happen to be a professor we connect designers and brands with American manufacturers basically our mission is to make manufacturing accessible in the US when I graduated from Pratt I design watches for Marc Jacobs DKNY if you have the designer brands decided to leave that behind start my own watch company and there I was producing overseas and I got a very difficult lesson in like sourcing overseas as an independent company versus being part of a large corporation got tired of that and I want to start a new company still very much in love with design but now I went to have much more control over the manufacturing process so I wanted to do everything locally so everything I was getting was hyperlocal the leather I was getting Queens the hardware I was getting in Bronx and everything was assembled in Midtown in the garment district so I knew every single person that was touching my product and it was a world of a difference I was working full time where we were I was working at Goldman Sachs why why did you want to leave goldman sachs on one of my half days i visited a factory with matthew and so at that time i was working with him part-time like doing spreadsheet stuff for him and operations stuff and i visited a factory and i was just blown away at you know at seeing what used to be a drawing of his that i had to see him like last week and seeing someone put it together and all of the steps are going to it and all the care that goes into it it was just incredible it was really interesting to see how long it took matthew to find american manufacturer because it that was his you know domain of expertise he wanted the best materials the best contractor and to be able to produce things with you know within two weeks within a month and so really hard it would take us months to find these American manufacturers Tania was really the one who saw the opportunity in that because we would meet other designers all the time and they all had the same problems they couldn't find the right manufacturers it was much easier to find them overseas but they're having problems with it I would go to conferences and people were complaining not just about marketing and sales but they were complaining about production and how do I find a contractor how do I find an American manufacturer and one of my designer colleagues paid two thousand dollars for just an excel sheet of American manufacturers and I was like this is ridiculous how like brokered the information is how hard it is just just find information like the Yellow Pages isn't enough Google isn't enough I'm from Detroit and I've seen what manufacturing can do to build up a city and I can see with the loss of manufacturing new to a city and devastated so it means a hell of a lot to be a part of something that can make a difference I love going to factories not only is it something that that's kind of like my roots my family came to Detroit because of war and all that sort of stuff some manufacturing is in my blood I wanted to apply my manufacturing experience to the platform so that were not just a like a Yellow Pages basically for American manufacturers I wanted it to be a platform which it made manufacturing easier to understand as well as access I broke down the manufacturing process into six basically bite-sized steps so that from basic concept to product in hand a beginner would be able to follow those steps to be able to create whatever they want it before makers Row was it really that bad was the sort of market for knowledge that inefficient that even you a Pratt grad like couldn't get the access you needed as efficiently as you'd like so I'm gonna throw numbers at you bring it please so the first time entrepreneur over 75% of first time entrepreneurs trying to produce physical products fail before they even get to the prototype phase many designers they basically draw something up on a napkin and send it overseas they have no idea what the process is they have no idea what the materials are that are going into the products that they're producing and that's really dangerous we were both non-technical people we didn't know how to code we had never started a tech company before and so we didn't really know how to get started so I started like signing up for mailing lists and going to meetups and and so on one of the mailing lists there was this application for an incubator we applied we put like our business plan we did a video and we got accepted so we used the acceptance into the incubator as leverage to get a technical co-founder and so we found Scott and he came on on board and and then within those three months of the Brooklyn bethe summer camp program we created makers row what was the initial feedback like it was awesome it was awesome I think that you know from designers they were just like oh this is really cool like I saw from my friends they went to Pratt with me they said this is really awesome like I was the guy who was kind of sitting back in class and just kind of like sketching out stuff and not really paying too much attention in class I think they're a little surprised that I would go back to the rudiments of like how a product gets produced but it's very much something that I fell in love with and then to see from the factories to see how many people were reaching out to these factories and see that they were actually getting orders enough for them to make a new position whether it be in labor or management with something that you know I'm a strong guy you know it made me well up a little bit I will say that adapt or die is a pretty well-known business tenant a company has been manufacturing here in New York for longer than I have been alive and they've been able to take this age-old business online right here in the garment district my father actually started making belts and my dad is a very you know driven motivated person he immigrated to this country from Russia he had to make something he started flea markets and then he started selling he started making headbands and things like that and then finally he moved into handbags what happened was he had a small little shop then he got bigger and bigger and he started selling wholesale and he made his own brand it became pretty big they had showroom on 35th Street in Manhattan they had an enormous factory just making their own merchandise I actually saw their bags all over the world they were shipped everywhere and I remember being a little girl on vacation with my father and walking into a store like in the Caribbean and seeing their bags and saying oh they made that and they would be all shy they know we did it Mickey you know for the first 20 years he made his own line of lower-end bags so that these were 10 15 $20 bags we cannot do that anymore I mean China took over that whole market so we've had to change in order to adapt otherwise we would be gone just like most of the handbag manufacturers in New York he said you know the business is changing you know I want to go do in a different direction you know I can keep the business open if you want to take a stab at it or you know we're gonna close I was like okay I'll try it I was young I had no idea what I was getting into um I was 21 just right out of school yeah so you guys so you graduate from college yeah where'd you go to school Cornell University awesome all right see graduate from Cornell and your dad's like here's a business good laughs we had to switch to a more luxury product a more niche product we can't compete with lower end beds there's just too many factories overseas makers row they came to our office and they said we you know we have a new idea we're going to be making a website and would you like to be featured there's very little marketing in the manufacturing world so if anyone approaches me with a good idea they seem very serious I'm gonna go for it we had pretty much immediate you know response from new designers you all have been in this for decades now how optimistic are you about manufacturing in the USA I know that new designers cannot just go overseas and start placing orders it's just too much commitment so from makers Roe from the website I mean we see that we get so many inquiries every day so many so we have a full-time person just answering inquiries all day long so there is there are so many people with ideas in the that don't really have the option to go overseas so all those people have to come to companies like ours we see you so because of orders from makers row and online you've got an entire person like hired to handle inbound yes from because of makers row and I think just the economy some people are you know out of work and looking for things to do and start new things and of course makers are all I mean that we get emails all day long people like to hide their manufacturer if they find a good manufacturer it's kind of like you have to know the right person or ask the right questions and but people are that everyone is so protective of their manufacturers because it's just that's the nature of the industry I would say a lot of people are yes some people are not you know they don't mind but most people try to keep their factory a little bit secret every founder wants to disrupt an industry right they're all talking about some big thing they're gonna change you guys are going after a really entrenched one that has a lot to lose for basically having this information out freely you know if if makers ro succeeds there are lots of people who have made it their business to hoard information about food manufacturers probably not gonna want to give it up so what's been I mean what's been the biggest challenge so far with dealing with that kind of disruption so we've gotten scathing emails from consultants which oftentimes you're you're right they hoard this information so that entrepreneurs like myself will pay them two thousand dollars just for a spreadsheet of contacts and you know that there's no real critical information in there to let you know whether this is the manufacturing that so you're still on the phone there was this one time where I picked up the phone we don't put our phone number anymore because we just got too many calls that's about but they picked up the phone and this consultant or this guy in the industry wanted to come over and talk to us so I was just like sharing come on and talk to it and so he came over it and then it actually ended up being a bad situation because he threatened us we sat down with him and he basically was like you know I'm gonna get what I want you know and I want to be a part of what you guys are doing like we have ways of shutting these types of things down but you know who is the we he's talking about here it's always that we where it's it's not this big guy that's called tiny behind them but you know they always try to make it seem as though they have this crew of people that are this uh yeah basically crew of people that could shut you down is he's just like you guys are crazy for giving all this information away for free I charge people for this information if you don't work with me I'm not saying I'm gonna do anything illegal but I'm gonna get what I want and and we're sitting there in the conference room and which is like what do I do like I'm not ashamed oh yeah and it's like this big guy that is madness startups don't have to deal with like a mafia style shakedown like that's like really nice start a period be a shame for something that happened to it like that's exactly but then he was also telling yeah cuz he was telling us other stories about like violent things he had done and I'm just like is that are you trying to put those two together um when he says shut down what do you think he's talking about oh you and that both no and he's talking about he's he's in he's using intimidation tactics to try to you know shut down the site which is understandable if that's if your only means of revenue is that spreadsheet you're gonna be pretty pissed because that's probably been supplying you you know for over five ten years we didn't know that you know so many people were going to be upset because we were giving the information away for free and so now we don't we don't take meetings unless we know everything over and nothing ended up happening he didn't end up you know shanking us or anything long as you don't wake up with any horses heads in your bed like yeah we still were a little bit shaky on that but I'm really happy that nothing came about so hopefully he's not watching you got a quite a few neighbors in here yeah yeah got a ton of companies here in the incubator it's really awesome to be able to network with so many different types of companies cuz you get lead is there's just a MakerBot here in the office for anyone to make stuff with absolutely I feel like I don't know if it's a New York tech thing i but there is a kind of I feel like there's an undeniable camaraderie at least oh yeah absolutely this is our home right here in this area you guys do not hide anything about this made in the USA pride you couldn't tell when area was on what has been the most surprising thing on the job here rocking social media for anchors the positive response we get from everybody so it's really passionate about made in USA I don't really excited and they want to see you grow a lot of the stuff that you're using today was that education learned in the classroom or just learn from googling and Stack Exchange and just trial err I'm glad yes yes no essentially it's all from trial and I were googling other people on the job actually looks at college Syracuse University for design and I just been coding since I was thirteen so similar work throughout they'll said I never went to school for this I don't believe that that you can really I mean you'll be really better and you slur on your own I think means nice to have the degree you'll have like this foundation but in order to stay up with with trends I mean stack overflow googling terms all the time I mean I think anyone can really do it if they put their mind to it and they're really excited fun doing it I encourage everyone to to start building a small Empire because we recently met this amazing couple who were so incredibly in love that it made me feel guilty for being a not nearly as romantic as I could be boyfriend I want to make this special purse and now what would my experience be like if I say went to Google or went to Alibaba and tried to get this purse made overseas there would be a little bit of a language barrier you're just assuming I don't know Mandarin or Cantonese or Vietnamese or a Okinawa yeah I'm assuming that you would probably have to act as if you are going to be placing a larger order in the future so they usually if they're making a sample they might charge you a low fee for the sample but they expect you know a few hundred peace order afterwards their businesses are set up for the production side all makers so here's where a bag starts we take the sketch that the client gave us and we make a set of patterns then the pieces are hand cut and assembled after that into a finished prototype he's cutting the leather skiving it what is skiving at me skiving is when you take the leather and you thin out the edges that was a course for the viewers I obviously know what skiving is I just wanted everyone else to know so roughly how many bags would you say can be made here in a day about 100 I live in a world where all we do is like pixels so just watching physical stuff be made and start out as like a sketch over there and be a thing that I would touch it not get me in trouble it's pretty cool you're going to place the rivet on there we're going to press the foot down and the rivet is tight on the bag now all right it's in there first let's push down there you go the rivet is on tight you know if I've learned anything from just doing this for the last 15 seconds I am not cut out to do manufacturing I see she's doing a pretty good job off the line are you doing at this rate no I I need to stick to keyboards I your speed is a little slow but I know I that is riveting surprised the missus I love it it comes from the heart and the Riveter just don't say you made it here that if that's what you're getting hurt Wow that's how much does it help you all that most Americans are now old I think it's pretty safe to say aware of our dependence on foreign manufacturing this was something this is not a new phenomenon but I feel like it's something that certainly last 10 years has really peaked in terms of awareness does it help you now because you can actually say like yes we have manufacturers who are producing the stuff United States you know all of the benefits that are there are available not just for designers but also for consumers isn't like is the timing of this right whereas even like 10 years ago it wouldn't be nearly as optimal as it is today I would say the stars are really aligned for us because it's a it's a political issue this is something where smaller communities are talking about jobs because they're losing jobs because factories are shutting down but this is also a time that we're fortunate because the prices of overseas manufacturing are rising in their rising really fast the watches that I produced in 2007 have now doubled if not tripled in price of production alone so we see this happening all across the board and now a lot of larger companies like GE and Apple they're looking for domestic manufacturing alternatives right so there isn't it's not just a kind of moral decision it's a business one right and and I think that a lot of people basically relied on the consumer to make the choice to choose you know domestic over foreign based product but I think that's really unfair when you see only 3% of the apparel that's consumed in the United States is actually made here you can't really blame the consumer what we want to do is encourage the decision makers the brands that are deciding where their stuff is made and encouraging them to produce here locally so then we can switch it around where there's many more American goods that can be found in stores we make a lot of very here a lot of it is because we can stay on trend because it turnaround is so fast that people really can kind of see what the trend is and get sales how often do your designers sort of rave about made in USA like you guys ever get asked to put little American flag tags inside or anything that absolutely we usually have made in USA labels so if I take one of these bags we have a video show it off go ahead under the tag don't see enough of that it feels like there's definitely a mission element to this company you know what what is the what is the best case scenario for for a city like Detroit which has seen so much manufacturing disappear I mean it's certainly coming back a little bit but what do you hope makers ro can do for cities like that you wouldn't say that with your chest out yeah and you're factoring is axial oohed lien come on you're saying it I mean like you could say with conviction it is a mission for us and I think that we found within the first few weeks we saw that this wasn't going to be something in which we're just calling people asking them to sign up this is an on-the-ground effort and we've just recently you know formed this type of series in which we're going out to these communities so more recently we went to Newark and with the help of Cory Booker in the city and Brookings Institute and so many other sponsors that basically open the doors to these manufacturers that if you knocked on their door they're not going to open it unless they have that from your voice so we're taking that type of series and going across the country with it we're going to make our way back to Detroit definitely there are lots of reasons why manufacturing is coming back to the United States plenty of them are economic what's so remarkable about makers row is that it's making it easy for anyone to take a sketch in their notebook and turn it into a physical good and all that efficiency means a lot more innovation you