YouSaid · the spoken record

Lloyd Armbrust

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33
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2022-04-28
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2022-04-28
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  1. “I appreciate that. I think that when I look back on it and hearing you say that, honestly, the thing that hits me is like, yeah, I was not thinking through it. I think that many successful entrepreneurs just don't think how hard it's going to be. And you just jump in and then you're there and you figure it out. And I think that's the hallmark of entrepreneurship.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  2. “I think so. I think it's like when you build some pieces of your own infrastructure, it just makes sense to add on. Like if I have, you know, we do our own shipping, right? We do our own packing. We do, we have our own warehouse. It's really not trivial, but it's a lot easier for me to add on product lines to that than it is to start from scratch. And so I think you have to do that and you have to diversify in order to survive.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  3. “So there are all these things that make it really impossible for the United States to be successful because we just do not have the parts for the parts and we don't have the knowledge base. We don't have like I was saying earlier. It's like I had to become an expert in sonic welding because there just aren't any experts in Sonic welding where you could go in China or you could go in Taiwan and like there would be just like there's people that are experts in plumbing they're experts in sonic welding like you could call them in your factory and they'd be like, oh yeah, here's the problem. But it just doesn't exist here.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  4. “It's infrastructure guy. We just do not have the infrastructure to do it here. It's like even though we are sort of like supply chain proof and that's something we talk about a lot, we're not really because of some of our parts, like our robotics, like our pneumatics are all Japanese. So what happens if we can't get our Japanese parts? Like they don't make them in the United States. They just don't.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  5. “That sensor took out my entire line. I was done. I could not make any masks. And I called our manufacturing partner and actually the manufacturer the chip in Taiwan. And I was like, look, we need this thing super fast. I was like, I'm buying five of them and put them on five different carriers. See who can get it to me the fastest because we were down. And I was talking to them and they were like, that's crazy that this sensor has you down because there's a 24-hour market here. And you could go and there's five different companies that make this sensor. And you could get it 24 hours a day. They have that infrastructure in place in places like China and Taiwan that we just don't have here anymore. And so it is so hard for us to be actually successful because we do not have the infrastructure to actually make stuff anymore.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  6. “I mean, it's just easier said than done. And to be honest, I did not realize how far the United States was behind. I was kind of shielded from it, to be honest, because we're so great at things like Hollywood and we're so great at marketing in the United States, but we don't realize that just about everything is made overseas now. I mean, everything. So like I'll give you an example. We had a single sensor that cost about a dollar overseas.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  7. “Yeah, it's the same thing. A lot of filters are actually surprisingly, they're formed here in the United States, but the fabric is made overseas.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  8. “But it's like I was making masks and filling up our warehouse and it's like, well, I can't keep doing this. It doesn't make sense, right? So that is the one thing that I think when we can connect with the consumer base, with this story over something that they want and need, it makes sense. But the moment that they don't need it anymore, to your point, like that connection is broken. And so that's one of the reasons why we're taking our actual same technology and we're launching an air filter business for home HVAC unit because that's something that everybody needs. And that's where the conversation's going. Like, you know, you need something in your home that actually can filter the air for you at a quality level.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  9. “The boom and bust cycle of the mask business is not something that I would recommend to anybody. We had to lay off. I mean, the last before the last Delta wave, we had to lay off like 70 people. That's heartbreaking to do.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  10. “And in fact, I purposely priced them at a price that was lower than what was being sold at the time. And all of those customers that came in, I limited it to one person per order because I wanted to get it out there to as many people as possible. For me, it was like I just want people to be protected. I don't want somebody who is flipping masks on eBay or Amazon to take advantage of this situation. And we haven't changed our price since. In fact, during Delta and Omicron, Amazon went really high on their prices. People were complaining. But we have stayed exactly the same. But it is expensive because it costs more money to make it here.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  11. “We were like, well, hey, I know these other people, they all work at the nail salon. They're really hard workers. And actually working in a nail salon, you have this like technical thing where you're trying to, you know, paint something that's very precise and the customer will get mad at you if it's not correct. And it's the same thing with masks because it is actually more of an art than a science, to be honest, like putting this mask together. That's something that was the hardest to learn was how do we get the fold right in the machine? How do you adjust the static electricity? Like, how do you get the weld points right? And these folks are really, really adept to it. And so our entire staff was almost wholly coming from this, the local mail salon industry.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  12. “Again, this is one of those things that was just, I think, super lucky. We happen to hire somebody. And I think it was a referral from somebody who I think worked at a nail salon. And all the nail salons were closed in Texas at the time.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  13. “Consumer mentality is that if you can give them this story, and you could say, like, look, like we're providing jobs, we're giving living wages, we're giving healthcare, and all of this stuff is made in the United States supply chain proof, what happened before, it can't happen with this in place. You're not just a customer, you're an investor in the future of this American manufacturing, like people just love, I mean, they bought into that. And guy, like I opened up our sales because the date we had like a newspaper, a local newspaper story. And I was like, you know, wouldn't it be funny if I just started a store and people could buy because you couldn't get masks because you were saying from anywhere and I was like, wouldn't it be funny if like people who read this story can just buy our masks? Like that would be funny. I'm going to go ahead and do that. And we did, I think, I want to say in the first week, we did like a million dollars in sales.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  14. “Yeah, I think the Wall Street Journal quoted us as saying we're selling masks in a pandemic. It's not that hard. That was in a four-hour conversation. He pulled that one out. But no, I mean, to be honest, I call us the accidental consumer brand because we really tried to get traction with hospitals and governments, but those existing supply chains, like they already exist. The relationships are with 3M or with overseas providers. It's very entrenched. We still haven't broken into it, to be honest. But the consumers, what I love about...”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  15. “So we actually structured the deal as a loan for that reason. I named the company Arm Breast really after my dad. My dad passed about five years ago. And he was really the inspiration, to be honest, for all of this. And I named it armbreast because I didn't want it. That was the other thing, too. Like startups, the thing they don't really tell you is when you raise VC, it's like you have to sell it. So you're building this thing, you put your blood, sweat, and tears into it. And your job is to, if you're successful, is you sell it. I mean, it's like, you know, raising a kid and then being like, all right, it's somebody else's kid now. I mean, it's insane. I mean, just emotionally wrecking. And I've seen so many other, you know, founders that I know personally just go through this depressing thing. And so I purposely named it armbreast because I did not want to sell it. I did not want to have that exit.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  16. “Yeah, actually, so I raised just a couple hundred thousand dollars from friends and family. That was enough to get the first machine in. And I think when we were showing that we were making these masks is when I went to the investors and I was like, look, we're trying to make masks, we're trying to bring mask manufacturing back to the United States. And I think a lot of the folks, it was like an altruistic thing. It's like local angels in Austin and San Francisco that I had known before. And they were like, yeah. And so we raised, I actually raised $3 million in a weekend. I did the worst PowerPoint presentation in my life. I recorded a voiceover seven minutes long. I sent it to all these people. And we closed about $3 million based on that.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  17. “And it was going up every day. And I couldn't get it. And so I told my COO, I said, look, you need to find this. I don't care how you do it. This is your only job. Figure it out. And he contacted anybody that had anything to do with masks on LinkedIn. It was like 300 people. And I kid you not. I'm not making this up. The last person he gets a hold of, the guy's like, well, actually, I do have some mail blown. We were thinking about making some masks with it and we were like, look, we will pay double whatever you paid for it. And so we paid $100,000 for this actually made in America milk blown.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  18. “Oh, that is another story. I mean, we actually make the material now. But the journey to making the material was trying to find it. And at the time, before the pandemic, you would pay probably about, I would say, $10,000 a ton in China for that meltbone layer, you would pay about $17,000 in the United States for that meltblown layer. So that kind of gives you the idea. It was selling for $120,000 a ton in China.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  19. “So the FDA actually did this thing called the Emergency Use Authorization for Masks and they let us in that right away. And then we actually, like I said, we did a lot of things and we got lucky and the batch of masks that we had created lined up and we were able to get our 510k very, very quickly from the FDA. I think there were, look, I think the government at the time was really trying to make things happen and they were pushing things forward.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  20. “Oh, yeah. Because we didn't have to just make masks. We had to get it to make masks so that we could submit it to the FDA so that we could actually sell these as surgical masks. Because it's a regulated thing, right? And so I had to get them made and then shipped right away to a lab. And then get them tested. And one of these tests guy takes like 12 weeks to do. Like they put on rabbits and make sure there's not a reaction. Like, I'm not even kidding.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  21. “This takes some time. And so I was there in that mask lab, that first mask lab for 18 hours a day. I kid you not. Just had a kid. So my wife was a trooper on that decision. And we were just figuring it out. You know, it's like no one is an expert really in Sonic welding, which is the kind of the thing that melts the plastic together in the United States. And so I had to learn it. I was like reading manuals and documents to figure out like what frequency I should be tuning this thing to.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  22. “So I had reached out to a couple of folks in the area, some people who had worked at a automation line of, I think it was a former Toyota production line here, just outside of Austin. And that plant had shut down. And so they were looking for work. And again, this is the beginning of the pandemic. Like, no one's working, right? And so I got some really, really smart guys who knew automation. And they were able to help me hook it up. But it was funny because the machine was so temperamental and they are used to like manufacturing. These guys are used to like making something that you plan and plan and plan. And then after a year, you have this thing up and running. And I was like, guys, like I just spent like a lot of, there's a lot of money for me. I just spent a lot of money. We need this thing to be making masks now. And they're like,”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  23. “Half of it was warehouse, half of it was lab space. They were making weapon sites in there before and the company went out of business. And it was just sitting there for like two years unused and they just had a lease, someone that was going to take the lease. And then it fell through because of the pandemic. And so we went to the owners of the property and we were like, look, we can't afford the whatever they wanted, 25,000 a month for this beautiful pristine manufacturing space. I was like, but we're going to make masks. We're going to save lives. Can we do a deal here? And so they gave it to me for $5,000 a month Which was incredible. And that gave us this amazing space that we could, we actually eventually were able to produce a million masks a day in that facility”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  24. “So I had a pretty decent size like 80 person startup in Austin. And so we had before the pandemic. And actually, funny enough, I had just decided to shut down our office right before the pandemic started. But I had good relationships with real estate brokers. And I said, hey, I'm looking for like a thousand square foot to set this thing up. And I mean, I didn't really know a lot about manufacturing and how much warehouse space I need. But what ended up happening? To be honest, I think like. I think the companies that are successful doing a lot of things right accidentally. Like there's a lot of luck. And one of the super lucky things that we did was we stumbled on this facility that was 15,000 square foot.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  25. “Yeah, in fact, my son was born two days before the machine produced the first couple of masks off the line, which was in early May. So, yeah, we did get it up in six weeks. And then we had the governor's office, his response team for COVID came through probably a week after we launched. And they were like, this is great. Do more of this. They're like, we'll give you a big order.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  26. “Yeah, I was thinking, I think I actually tweeted in like February, like beginning of February, I said, I think thinking about spending $140,000 on a mask machine, bad idea or terrible idea. And everyone was like, this is a horrible idea. But over the course of the next 15, 20 days, I eventually convinced myself. And I think we actually did send the money in, I think it was the first week of March.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  27. “And by the way, it was like, I want to say the base cost of the machine was $140,000. And so I remember when I was like, you know, I went to friends and family. I was like, all right, here's my idea. Maybe I lose all of our money. Maybe I get it back. Everyone was like, okay, let's do this. So I wired the $140,000, really hoping that that money wouldn't go to nothing because I don't. No, maybe this is a total scam. You know what I mean? And yeah, I mean, I was on, you know, while they were producing the machine, we were doing FaceTime with the manufacturer every night, you know, seeing their progress, seeing it run all together. We got it packed up and sent here. And I think it was. April, I think it was the first week of April that we got the machine landed in the United States.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  28. “I did a lot of research in terms of reaching out to current mass manufacturers and not just China, but in Taiwan, in India, and got relationships with folks on WhatsApp. And then I started looking into the actual machines themselves. And then I found a factory that was just starting to do a fully automated line. And so I got all the documentation. I put it together. I actually found a robotics guy because I don't have any experience in robotics. Well, I do now. Found a robotics guy in Flugerville, Texas. And we got together. We looked over the plans. We said, hey, I think this works. And we actually ended up flying this thing.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  29. “And so I said, okay, if we inject some modern manufacturing here and we put this to work, we add some robotics, we remove like the 10 or 12 people that touch a mask to actually make it. Can I make that work here? Like, can I sell it for the price that was being sold before the pandemic? And if I do those things and I have some other things like we were actually vertically integrated, so we make some of the fabric ourselves, which shaves off some of the cost. And I was like, man, I could really compete with the Chinese model. And I could sell to hospitals. I could sell to governments. And previously I'd been selling to newspapers. I was like, what could possibly be harder than selling software to newspapers? Like surely I can sell to governments and hospitals.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  30. “Yeah, I mean, I think I've just become more of like a, I really became focused on the core financials. Like, do the unit economics make sense? And so what are masks being sold at before the pandemic? And how are they being made? And I found that mostly masks were being made manually, one at a time by hand at the time.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  31. “$350 million to buy masks and import them into the United States because we can't get masks here. And I was like, that's really a dumb solution. I was like, I did the math. And I was like, I'm pretty sure for like $5 million, you could make the capability of making that many masks. That's actually what put me over the edge. I ended up pulling the trigger.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  32. “Yeah, 100%. I was just looking around at all these articles and all these people saying we can't get masks. And I was like, this is a really stupid problem for America to have. I grew up with my dad was actually in manufacturing. He was a plant manager. And I would hear him talk about how things are being outsourced and how like this could be eventually really bad for the country because if we don't maintain the skill set here, what happens to us? And I think I just had that in the back of my head. You know what really kind of set me off was an investor from my group of investors kind of sit around this email and said, we're going to raise”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT

  33. “Yeah, that's correct. It was more of a software company, really. I mean, we were a Silicon Valley back startup. We raised about $10 million. And it just was one of those startups you don't hear about because we didn't have like some crazy exit. We didn't IPO.”

    2022-04-28 · How I Built This with Guy Raz · HIBT Lab! Armbrust American: Lloyd Armbrust · IDENTIFIED FROM THE TRANSCRIPT