I’ve interviewed hundreds of entrepreneurs for this podcast. Most are problem solvers and optimists who are confident in their ability to meet their needs.
Take Lloyd Armbrust, for example. He’s an editor turned software founder who launched OwnLocal, a Y Combinator-backed portal for local newspapers.
When the pandemic hit, he observed doctors and nurses struggling to obtain protective gear. This is what he thought. How difficult would it be to make these things? ”
His solution was Armbrust American, an Austin, Texas-based manufacturer of personal protective equipment. The company launched in May 2020 and remains viable despite a dramatic drop in demand.
He and I spoke recently. He shared lessons about manufacturing, e-commerce, and prioritizing family first. The entire audio is embedded below. The transcript has been edited for clarity and length.
Eric Bandholz: Please tell me who you are.
Lloyd Armbrust: My background is in media and software, but most notably, I founded a US-based personal protective equipment manufacturing company in May 2020 at the beginning of the pandemic. We manufacture US-approved surgical masks, KN95 face masks, and gloves. People said we can’t do manufacturing here, it has to be in China, and we proved them wrong. Although this was the hardest thing I’ve ever done.
When the pandemic hit in March 2020, my software business, OwnLocal, was slowing down. I saw how doctors and nurses struggled to obtain medical care. Protective equipment —Some people wore raincoats in the emergency room. This is what I thought. How difficult would it be to make these things? ” So I started researching and quickly found out it was much more difficult than I had imagined.
I come from a software background and I often say that it’s easier to push pixels than to push atoms. If you want to extend your software, just click a few Amazon Web Services buttons and you’re ready to go. Manufacturing is a different animal. Yet, we launched on Shopify and made $1 million in revenue in the first week, largely because no one had masks in stock.
Bandholz: Was the stock ready or was it a scramble?
Arm blast: We were producing masks, but we underestimated how difficult it would be to produce them. There was no delivery system or proper label printers. I purchased a label printer from Office Depot and tried to fill my first 100 orders. Thousands of orders came in and it felt impossible. It took me about three months to catch up.
This wasn’t about money. It was about solving a problem. Our mission from the beginning has been to Strategic manufacturing Return to the U.S. All profits are returned to the company. Currently, consumer demand for masks has decreased significantly. In January 2022 alone, sales were $7 million, which has fallen to approximately $1.8 million over the past 12 months.
Bandholz: How do you run a company with such a decline in revenue?
Arm blast: It’s hard and you lose motivation. scale up and scale down It requires the same skills of cost-cutting and ruthlessness. In the early days, our system was inefficient. The company had 27 assembly machines and 100 people working to produce about 1 million units each day. We currently have 5 machines, each run by one person, outputting 200,000 units each day. So we went from 27 machines and 100 employees to 5 machines and 5 employees, with the same production capacity.
We got lucky with our rental agreement. This facility was used by defense contractors. When the pandemic hit, no one rented. manufacturing spaceSo we got more space at a fraction of the cost. The owner wanted $50,000 a month for the space. It was really beautiful and big. We started at $5,000 a month and worked up to $20,000 and they agreed to it. However, it was an 18-month lease. But by the time demand for personal protective equipment dropped, we were in prime real estate right next to Amazon and Elon Musk’s Boring Company. We eventually moved to a facility on my ranch to save costs.
Bandholz: When you built that facility, what did you expect your revenue to be and where are you now?
Arm blast: Our annual consumer sales are down to $1.8 million, but that’s only part of our business. We also manufacture for governments and other companies, but those contracts have tight profit margins of about 10-15%. The consumer side is more profitable and keeps us afloat.
When we built the facility, we had no idea where the bottom would be. China sells masks for less than it costs to buy the raw materials. They ship masks to the US for 1 cent per mask, but my raw materials cost more than that. The Chinese government subsidizes manufacturers, covers the costs of equipment and other equipment, and also offers rebates. We can’t match it on price.
90% of medical gloves in the United States come from Malaysia and China. But before the pandemic, the U.S. wasn’t producing any of these critical items.
Bandholz: You run OwnLocal, a manufacturing and publishing portal. You have six children and a wife who also runs a business. How do you manage everything?
Arm blast: that’s all Priority. At the top of my list is my wife, then my kids, and then making sure I have money in the bank. I rank my tasks every morning. I won’t focus on anything not on that list. That might annoy some people, but it keeps me sane. In my first marriage, work took priority over everything else and I was unhappy.
Family comes first now. Even if my daughter wants to sit on my lap during an important work call, she’s in a meeting. I won’t apologize. I’m focused on enjoying life.
Bandholz: Where can people support you and lend a hand?
Arm blast: armblast.com. you can find me × and linkedin.
