“Made in USA” with Jason Azevedo

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Allison: Welcome back to the Deliberate Leaders podcast. I am your host and executive coach Allison Dunn, I am pleased to introduce our guest. Today we will be talking about making made in the USA a thing again with Jason Acevedo, Jason created his first manufacturing company, just $600 when he was only 15 years old. At that young age, he was able to establish business relationships with some of the greatest companies in the world, such as Starbucks, Nike, Disney or Google, just to name a few. By the time he was 20, he was already making millions in revenue. Jason is one of the most dynamic people you will meet, he owns and operates the last standing Made in America factories, and they’re all located in California, no less, he has hatched a plan to give back the factories and some of his wealth to the American workers. Jason, thank you so much for joining us here today.

Jason: Awesome, thanks for having me.

Allison: My pleasure. I love to kick these off with a deliberate conversation. What would be your number one leadership tip for our listeners?

Jason: Make sure that your beliefs and your limiting beliefs are your own. i The amount of people that are taking other people’s influences as a leader. It’s to their detriment lead yourself to what you are looking for.

Allison: As a coach, I recognize that a lot. And so would you be willing to share one of the limiting beliefs you’ve removed? Because it was someone else’s?

Jason: So I’ll even go to right when we started in business, I was 15 years old. And I got kind of set the stage of what’s going on. I’m, I’m a sophomore in high school. It is February of 2007. And we start this company. So we get going finally start kind of getting some clients. We’re learning our skills and business. We’re starting to spend money on equipment, things are moving. And here comes the fall of 2007 and 2008. And every single person it seemed like we talked to is telling us don’t do it, you’re going to fail. That it’s horrible time to be in business. And I didn’t necessarily feel like that. But every person around us is no, it’s, it’s going to be just a retrospect horrible time. And, and one person messed up and said, You’re going to lose everything you have.

 So I go back to I’m 15 years old, I had $600 to my name. And I live with mom and dad, like, what? What are they talking about? lose everything I have. And it clicked. Everything I was feeling. And all of that detriment was what kept everyone else out of it. It was their fears, it was their pains, it was all of their ideals. And what ended up happening was the exact opposite. We kind of put all these people out of our heads and said, Hey, we believe in this, let’s go find people who’ve done similar stuff. And we learned that a giant crashing economy, suddenly some of the top clients in the world are available, because where they were doing business went out of business, the equipment is now pennies on the dollar. It’s the best, but we had to break that belief of hey, here’s other people’s opinions, other people’s, their pain. And we were starting to take it as our own. And once we cracked, that, it ended up being the best thing we can do.

Allison: That is fantastic. Thank you. And I think that’s such an important, you know, whenever someone is willing to kind of get outside their comfort zone and grow and like lean forward to do something, you will always have someone you know, whispering in your ear, it’s a bad idea or why it won’t work and all of that, but you can find the equal amount that supports what you’re doing. Tell me about the factories, the factory that you started and the factories you have now, just so that have that baseline.

Jason: So our very first company was in the apparel manufacturing space. We started as printing T shirts and the next thing you know we’re cut and sew and making, actually making garments doing some of the most kind of high end stuff you could do and we parlayed that into retail displays, then into sheet metal into injection molding, we make the control panel for most of the nuclear reactors in the world that are non Russian, I mean, you really just a very wide breadth of what we do in manufacturing. But with MRCA it’s a little bit different. So now what we do is we go by legacy US manufacturing companies, companies that are have been around two to three generations. Owners oftentimes don’t know how they’re going to exit the company. And we, and frankly, if a buyer doesn’t come in and take care of these companies, they’re probably just going to get Bob, a conglomerate shut down moved around. And you watch what that does to the local community.

So what we’ve made, the promise to do is go into these companies bought by them, build them strong, there, they always have a very good foundation, other profitable companies, they’re, they’re doing these, they’ve been around for 3040 50 years at minimum. And they’ve weathered every storm in that time. So the resiliency is there. And we just come in and add the energy. Because oftentimes, these owners, they’re, they’re at retirement age, or they’ve been past their retirement age. And really, they’ve kind of just kept it where they wanted it. And we revitalize those companies come in. And then we made a promise to take the entire national portfolio within 10 years. And we’re going to ESOP, 100% of the shares to the employees. So the American factory worker will actually own the factories that they work in.

Allison: I love that. And there’s two things that you’re talking about that are super near and dear to my heart, May I share, please do. So. The first is, is that I’m, I was raised in a family run business, started by my grandfather in 1952. We’re a manufacturing company we’re in we have four generations that have kind of passed through the business, it’s now being run by my siblings, and then you know, children around, you know, members, and my father just passed the baton to my sister. So it’s in its fourth level of leadership at this point in time, which is super exciting. And, you know, we pride ourselves as being one of, I think, the only one in our category that is still manufactured in the United States of America. So I’m like, I love those components. So family USA made, and the idea of empowering people with ownership and side of the business. So yay, that’s fantastic. All right. So tell me more about that. So your plan is, let’s, let’s talk through your plan. I just want like, give us the deets.

Jason: Okay, so we go, we’re actively doing this and have been doing it. And we, for all intensive purposes, we are a private equity fund. But we’re a manufacturing company. And that’s where our blood is. That’s where our souls are, we do use private equity to help fund and build the process. But really, we’re out looking for companies and my brother will look at, he probably goes through 50 to 100 a week that we’re just kind of we’re combing through and finding very good, resilient, strong companies not necessarily focused on one type of manufacturing another, we actually like to be as well rounded as possible.

But really looking for that opportunity that the owner has built this awesome company, and really has ingrained solid, amazing people in it. And just as looking for that next step, and who’s going to take it to that next level. So we bought a powder coating company years ago, and that company had gotten pretty beat not enough there was it just kind of stayed because the owner was happy where he was at. And we came in and doubled the company in the first year and gave every buddy raises everybody’s happy. It’s still in the exact same community it was in, it’s got some of the a lot of the original people that were there. And really, it’s figuring out how do you build this strength around these foundational companies and keeping the legacy of them alive?

I don’t know about your family’s manufacturing company. But there’s a high likelihood that the name of it happens to be your last name also. Yes, it is. It is important, especially when we get more into the more into the smaller communities that oftentimes our companies or that we’re looking at. That name means something it’s been on that building for 50-60 years. So we try to keep that name there as much as we possibly can. Because that’s part of it. It’s really more looking at these manufacturing companies as organisms. And then adding on top of that there’s a huge movement that companies are moving stuff back to the US at a rapid pace. And what we’re cross pollinating our companies to So hey, if so and so services, John Deere, well, maybe one of the other companies can also service, John Deere, that, that that’s kind of that that structure of you really using these companies to help each other because oftentimes manufacturing companies and especially on the smaller side data on their own island with not having that support system that they need.

Allison: Right. In the end is your master plan to have them each have their own identity as an employee Don’t structure so you’ll have a sub trust set up for each and every single one of them. In umbrella.

Jason: No, we decided to do the entire portfolio. So we felt it was the strength and numbers was very important to us. They add our core, protecting communities is really what we’re trying to attack. As individual smaller companies, they have more risk of, of influence, where if we take, if we take Joe that’s working in Arkansas, and Phil, that’s working in California, we put them so their ESOP is based on each other’s companies to now they’re incentivized to share information, to share clients, they’re incentivized to always be helping each other.

And what we’ve learned is if you can really build that network and tell everybody, hey, you’re all doing it together, you get so much more power, you also get a better defensive position. If, hey, somebody, somebody comes in, tries to conglomerate this or tries to push you out of a market. Well, now you have a national portfolio, that’s helping you compete. In addition to it all, it also gives very, very solid purchasing power, because now we’re buying across the nation instead of buying in a city.

Allison: Interesting, what is your when you’re, you said, your brother, I think you said is looking at manufacturing companies a week?

Jason: Yeah, he, so we kind of tear it, he goes, he loves to just go find them in any random place he possibly can. Then we see some interesting stuff. And he then filters kind of, hey, here’s the ones I’m thinking standard chance, because there’s a lot that just frankly, won’t ever had a criteria that we would look at.

Allison: Do you feel that manufacturing in general is a same business beast, and so it doesn’t matter what they’re manufacturing there, there are similarities are enough to be able to make it into the portfolio.

Jason: So there, of course, like anything else in life, there’s outliers, there’s certain stuff that’s too specialized, and hey, it just doesn’t match. But the way we look at manufacturing, and frankly, what manufacturing has become in the last 15-20 years, is we all know somebody who’s a really good cook, just an absolutely amazing cook. And they know how to do everything. And if you can give them a recipe, they will knock it out of the park.

That is manufacturing, engineering teams, hand manufacturers recipes. And if you’ve got a grasp on how to do process management, within manufacturing, you can create the products. Of course, there’s outliers. But if you look at, frankly, some of the strongest and best manufacturing companies in the world right now, especially that you saw this a lot with Japanese companies, the range of products that this manufacturing company was making is just so insane. Like I bought a car, a TV and a blender from you.

Allison: Just thinking about factors in manufacturing, what do you think that we need to be doing as, as factories located here in the United States to help us compete with other countries?

Jason: The biggest thing, frankly, is breaking stigmas, the rest has been done. And if people don’t believe it’s been done, the fact that Elon opened Tesla in Fremont, California, of all places, Fisher’s automotive, just teamed up for an Ohio plant with Foxconn, who is the, the premier Chinese contract manufacturer is opening plants in the US. So the work is done. The problem is the stigma. And we see this I grew up, I grew up in a factory house and my dad told us our entire lives, don’t go into manufacturing. So what that has created is we’ve got an entire age gap of people who have their whole lives, that wasn’t even an option. You were told not to do it.

So we don’t have a class of we don’t have that next, that next group coming in, to kind of take these companies. So what we do start seeing is a lot of people trying to piece it together. So really just breaking that stigma. These are very good jobs. There. Frankly, it’s the it’s one of the oldest industries in the world. It’s been the industry that has caused nations to grow and, and the middle class to thrive unlike any other industry. But you got to break those stigmas. The old you don’t want to work in a factory. I’ve seen the videos of the new Tesla factory. The place has white floors brightly lit like it’s the most beautiful building in the world. And there’s all of this equipment to make sure you’re safe and healthy and that you’re that you’re getting things out of it. So that’s really the biggest thing is breaking the stigma that these are, these are great jobs and these, it’s a great industry. And, frankly, Americans have had beat into their head for the last 30 years that it wasn’t.

Allison: I love nothing more than walk onto a factory floor, in addition feel like you don’t you mean, like, see the whole heartbeat of the machine happening? So, but I think that’s because I was raised in it. And so that appreciation of it, would you know, just to because I have a deep understanding, I want to make sure they ask a broad question, but so that others can hear your answer, what does it take to manufacture something?

Jason: That is the most loaded question. Give you an? Firstly, it depends, what you want to do. But a lot of work. I mean, that’s the reality is, iteration is the, the baby of manufacturing. So any, anything you’re going to manufacture starts with an idea of, hey, I want to make this thing. And you’re going to have to figure out how to engineer it. And I guarantee you, the engineers going to do it wrong. Because they’re not going to think about the manufacturing guy, as much as they say they are there, they’re just not going to and, and it because there’s so many aspects of it, then you’re going to want to dive in, and really kind of just play with stuff and test it out, Hey, here’s the, here’s how I want to, I want it to feel like this, that the best thing if someone’s trying to get a product manufactured.

The easiest things oftentimes is to tell the person that you want to manufacture, what you want it to do and what goals you want it to achieve. And not tell them what you want. So we get this a lot where people are like, well, here’s the drawing of what I want. Okay. But it’s not going to do what you want. Oh, but no, I had I had some engineer, I’m like, Yeah, but that material is not going to feel right. Or it’s not. And someone has been in the industry long enough, we’ll know where that is, or, Hey, I can make it like that. But it’ll cost you three times as much, or what me, tell me what the goals are, and I will help you get to it. So I think that answers that.

Allison: A little bit. In, in kind of your introduction, you were talking about the fact that bringing all of these different factories together to find efficiencies, what, what is your driving interest in this?

Jason: What do you mean by that?

Allison: Is there is there a target that you’re aiming at for the efficiency side of things, meaning I know that like leveraging knowledge is important and competitive advantage. But outside of that, are there other efficiencies that you?

Jason: Yeah, so I mean, from an surely fiscal standpoint, there are purchasing efficiencies, because if you become a bigger buyer, you’re buying volume. But the other one is finding gangs to gangs. So we were looking at a company recently learned Shih Tzu at the same time. And they made sense to us together. So if we got one we wanted the other. And, on paper, everyone look at it and go, What on earth is he talking about? These two companies have nothing to do with each other. One of them happened to have tin robotics programmers on staff. The other one had some of the best craftsmen for low runs I’ve ever seen in my life. Introducing automation to people who are high level craftsmen, is scary. And it’s an it’s an uphill battle. Introducing low run, low run manufacturing to somebody who is used to using robotics for everything is very, very difficult.

But if you can just literally split the teams and blend them. Now you get the best of both worlds super low production manufacturing, with teams that know how to take that to the next level and get high volume if need be. So we’re looking for personality change, differences between the company’s sales differences between the companies, it’s there’s no set hey, here’s the criteria we’re going for is the amount of times we’ve gone to go see a company and we do it the same way every time you got a folder in your hand on the way we used to drive the we all fly to into a central area and then drive to these companies. And because you’re usually not near a major airport, so we’ll we’re in the in the car, pull, pull the documents out and you’ve got all the executive briefs and all that.

Undoubtedly somebody in the car goes well how are we going to see these guys? And you’re just like, No, no, no, I Jason really likes this one. I don’t see what you’re saying. This is there’s no way this is going to work. And then half the time, the person was super excited, we walked the plant and they’re like, Yeah, I missed on the other half the time the person who’s saying they hated it was like, oh my god, now I get it. It’s just, it’s a feel. We also, it’s a lot about people. If we go to a plant, and everybody looks miserable, I don’t really want that company. That’s the reality. It’s, I can’t change that culture that effectively to make people really believe that the company loves them.

Allison: So your number one deciding factor is the feel of the culture.

Jason: Okay, no, no questions asked.

Allison: Okay, fantastic. I’m also super curious, my family’s businesses, the Craftsman side of things. But what percentage is craftsman versus high technology and innovation and mass production?

Jason: It depends constantly. Our goal is almost always to take the craftsman and then add in the innovation. It’s, it’s significantly easier to teach a craftsman how to verify robotics are doing what they didn’t do, or automation of some sort is doing what it needs to do, than the other way around it. Trying to teach a robot to be a craftsman is virtually impossible. And this is, this is one of those fallacies that people get all the time as robots take jobs. No, they don’t. All they do is increase production. It’s that the end the we want every single robot ran by somebody who knows how to do it better with their hands. That is that as the coup de gras of everything.

Allison: I, I’m excited about what it is that you’ve set out to do, what do you think is your number one biggest challenge you’re facing right now?

Jason: We’re building, we’re building our team. It’s so as you get larger and larger within the manufacturer space, we like boots on the ground? Well, you have to have boots on a lot of grounds that a lot of times. So I have a very, very fortunate on my team, I’ve actually my vice versa, manufacturing was one of the first six people to launch Tesla. That means just that is the level of quality we like to have around us. So making sure that we’ve got a team that can truly get to the plants and make people feel and understand that we’re in it with them. We don’t do it from a normal private equity standpoint of buying a company and going well, I need your metrics every week. That’s just not it. So really going out and finding just solid, solid, people that are frankly also willing to work and get onto those factory floors and work with teams. That is always a battle because it’s hard to find people that have that same focus.

Allison: Yeah, that makes sense. It sounds like a challenge that all of my businesses have just in a different kind of way. Jason, I wish you the very best of luck in your endeavors and creating a lot of employee owner mindsets out there. I think that that is an incredible challenge and task and opportunity for our certainly our factory workers. So thank you for doing that. What would be the best way for anyone who has a business that they’d like for you to look at and or to follow you and see what you’re up to? What’s the best way to do that.

Jason: If you want to get in contact with us, the best way directly to me is through LinkedIn. The other way is mrca.net there is actually a way to get a get a slot directly on my calendar. So we I will sit and talk to anybody about pretty much anything. It’s we’re very big about sharing information. So if you go to MRCA dotnet, you can get directly to me get actual time with me on the phone or, or via email or anything else or frankly anybody else on our team. If you follow us on LinkedIn, we constantly are just putting up stuff that we find cool or that that’s changing in the world that is going to be fun.

Allison: Fantastic. I love that. Thank you so much for your time today. It’s been a pleasure. Thank you. Appreciate it.