Ep. #830 - The Future of Manufacturing

00:00.00

Matt Watson

And we’re back with another episode of the Startup Hustle today’s guest or today’s host is me Mount Watson and our guest today is Noah Labhart with Veryable ops I’m excited to talk to him today about the future of manufacturing. Um, before we jump into that, I do want to remind you that today’s episode of Startup Hustle is brought to you by fullscale io helping you build a software team quickly and affordably and I believe Noah can help you probably build a team quickly and affordably for. Manufacturing is so excited to talk to you about that today and learn more about a world that I don’t know anything about, to be honest. So excited to learn more about it and know how are you doing.

00:41.70

Noah Labhart

I’m doing great. Thanks, Matt thanks for the intro, and excited to be here.

00:43.74

Matt Watson

Um, so I guess enlighten us about manufacturing like ah where do we even begin.

00:50.89

Noah Labhart

Sure that’s a that’s ah, that’s a big broad topic, right? Manufacturing right? Manufacturing distribution warehousing supply chain. We consider them all the worlds that we support so at variable we’re. We’re providing an on-demand marketplace for manufacturing labor. So we’re kind of a gig economy for workers on the shop floor and what you see in manufacturing right now is you see big skills gap there are and you know individuals that are getting close to retirement. There are younger folks that are not stepping into the. Manufacturing workforce people are trying to find people to work people are trying to find work and they can’t connect and so you know what we do is not placement. What do we do? We don’t do temp staffing. We don’t do things like that we provide a technology marketplace that enables businesses to. To jump into a third labor paradigm full- time labor attempt staffing and then use on-demand labor, which helps them optimize their workforce.

01:52.50

Matt Watson

So let me ask you this So the type of labor. You’re talking about whether would that be considered skilled or unskilled like just general labor or you’re like, hey, I need a machinist today how does that work exactly?

02:02.80

Noah Labhart

Good question. Sure good question Primarily it’s unskilled so the way that we talk to our businesses is is okay thinking about your operation differently. We tell a story about that. We call it the orthodontist story If you’re an orthodontist and you’re slammed you have more work. You know what to do with it.

02:08.46

Matt Watson

Um, okay.

02:21.53

Noah Labhart

Are you going to go hire 10 orthodontists or you’re going to hire someone to do the billing do the scheduling to take care of the office all of the different things so that that orthodontist can focus on being the orthodontist? So primarily the workers we have on the platform are unskilled workers, right? They do have skills some of them are welders. Some of them are machinists things like that but the work that we do. Really our sweet spot is something that you could hand someone a set of instructions, and anyone could come in and do those instructions.

02:47.96

Matt Watson

Well and and and honestly, that’s what like Henry Ford gave the world, right? was that assembly line kind of thinking of like you know all the skills it would take to build a car would require an immense amount of skill right? But to like okay you put this 1 thing on the car and you screw in this bolt and then the next dude does something else right? Like.

03:06.77

Noah Labhart

That’s right.

03:07.38

Matt Watson

Made it a lot simpler right? So if you’re following those sort of principles in a manufacturing process. It’s a lot easier to bring people in and outright.

03:13.36

Noah Labhart

Absolutely yeah, I mean, you got the assembly line, right? But then you bring in forward with lean and with just in time and those sorts of ways of thinking where you’re you know you’re essentially flexing up and down everything in your process and up until this point there hasn’t been a way to flex up and down your labor.

03:19.89

Matt Watson

And.

03:32.98

Noah Labhart

And that’s where we come in. We give you the ability to flex it up and down so no longer is it a fixed expense. It’s a variable expense with your demand.

03:39.82

Matt Watson

So how did you get into this What what gave you the idea for this.

03:42.83

Noah Labhart

Sure sure. So um I had started a mobile development agency. We’ll call it that I was building digital startup solutions and was building a bunch of different types of solutions and got the ish to build my own right? Got tired of doing the project work got tired of building. Everyone else’s dreams wanted to build my own. But I was not the idea guy. So the idea did not originate with me I talked to one of my tech founder friends and he said and I told him I was like hey look I’m looking to build something but I don’t have any ideas right now I just want to get involved if you know of anybody you know, make some intros for me please and he said you need to talk to Mike Kinder and Mike was ah ah a friend of his and a friend of his brothers and we he’s my partner. He went out and ah was an operations guy supported manufacturing for a long time was a strategic ah director of strategic operations at pwc so he went out to plants and basically solve problems. Told people where the problems were and he saw the future of manufacturing saw where it was headed and saw that if labor wasn’t solved then the rest of manufacturing wouldn’t be able to go forward to this next wave of digital integration digital factory industry 4.0 all the buzzwords. And so we got connected. He pitched the idea to me going backwards a little bit I worked in the manufacturing plant as a college kid and during the summers and so I understood the the worker environment and I also supported manufacturing from an it standpoint from a business standpoint on the shop floor. So I understood. The inner workings of a manufacturing plant too and we pitched the idea to me I was like this is going to work. This is the idea I want to go work on.

05:25.18

Matt Watson

Well, it sounds like a ah fun problem to solve and you know over the last several years. There’s been kind of the uber of everything right? and and it’s like you guys are like the uber of this you know is 1 way to describe it and there’s um, you know we’re primarily based out of Kansas City but of course, thank you to everybody listening from all over the world. Um, in Kansas City there’s a company called bungee and they were like uber for a dude with a pickup truck like I went to the furniture store and my wife bought this damn thing I can’t get home and they want $200 to deliver it next week or I go on my phone and like some random dude with a pickup truck shows up in like 15 minutes and they take it home for me all like $30 brilliant idea because now I can laugh at everybody who owns a pickup truck because I already did that and said hey what why? The hell do you need a pickup truck I just go on my phone and I say hey dude come get my crap and they move it for me like it’s awesome.

06:08.75

Noah Labhart

Um.

06:20.99

Noah Labhart

Right.

06:22.90

Matt Watson

And a brilliant idea but it was sort of like that it was like uber for pickup trucks like somebody shows up to help you move? whatever it is. You need to move like it’s pretty cool. Yeah.

06:29.63

Noah Labhart

Yeah, absolutely you know it’s interesting I had heard a bune and it reminded me. There’s one in Dallas fort worth called pickup and and it’s it’s basically that your friend with a truck your friend to move stuff your your big strong burly person to come help you move the stuff.

06:46.00

Matt Watson

Yeah, yeah, it’s it’s crazy all the different things that exist out there. So the the people that are using your product are they using it to fill. Just kind of temporary like oh we normally have a hundred people. We need to hire 20 but we haven’t been able to fill the position so they rely on your service to help fill those 20 or what how do they like what scenario do they usually use your service.

07:10.22

Noah Labhart

Um, ah, let’s less so sure it’s a great question so you know what you’re describing is you know we really need 120 people and we can’t fill. Those positions is more of ah, ah, an opportunity for temp staffing. Because I need 20 more people on an ongoing basis where we come in as the week to week basis like hey my sales team crushed it last week right? and we’ve got 10 more orders and I’m not gonna go hire 10 more people right? or 5 more people. Whatever the amount of people is I just need I need 5 more people for this week

07:33.65

Matt Watson

Yeah.

07:40.75

Matt Watson

Sure.

07:45.95

Noah Labhart

Right? Because then demand’s going to fall next week that’s where we come in. We give the tools and the functionality in our platform to help you manage and and essentially automatically calculate the on-demand needs that you have in your operation and bring people in on a week- to- week basis and that’s how we enable businesses to have that flexible.

07:46.11

Matt Watson

Um, right.

08:05.50

Noah Labhart

Capacity Flexible labor capacity.

08:07.34

Matt Watson

And that makes a lot of sense to me and so do they just kind of curious like what kind of premium would they pay potentially for using your service versus like oh I can hire somebody for $20 now but instead I use variable like what? Ah what would that I’m just curious what the difference would be.

08:23.72

Noah Labhart

Sure so you know our premiums are basically the low end of what you would pay for temp staffing right? Temp staffing is generally between 30 and 60% on whatever hours or whatever you know timeframe you’re using we we are a 30% premium on the transaction. So.

08:34.47

Matt Watson

Okay.

08:43.70

Noah Labhart

You know if you pay someone one hundred bucks we’re you know we’re gonna charge you 130 right? and so but we also give the ability to we enable businesses to do peacework ops as well. So if you wanna pay someone based on how much their output is then you can do that as well. I pay five five bucks for someone to to build a widget right. And I need them to build 500 widgets and I don’t care how long it takes you as long as you get it done in a day. It’s not about the hours we enable them to be able to do that too.

09:12.45

Matt Watson

So so any none of these people actually work for you right? So you’re you’re just you’re just providing the marketplace and marketplace businesses are really difficult right? It’s like starting a dating website like you’ve got to have guys and gals or whatever. On the diet of dating anyway. So I do this Um, or it doesn’t work right? You have to have buyers and sellers. You know, whatever, whatever kind of marketplace it is so how how hard is it for you from that perspective on ah on a you know I guess as you go from city to city right? and I know bune had the same issue that I mentioned earlier and and they. You know it’s like hey we need truck drivers and we need to work out deals with like antique stores to promote us or whatever they work out a big deal with Costco or somebody like that that recommends them so but how do you juggle that marketplace side of this as you go like into new markets.

10:02.70

Noah Labhart

Sure I mean I can tell you how we did it in the early days and how we kind of evolve that into how we do it now because you’re exactly right? That’s a big problem with Marketplaces is the chicken. The egg problem do I start over here or do I start over here and really it’s both and it’s 2 different audiences all right? So the way we started in the early days what we thought was.

10:12.15

Matt Watson

Yeah, yeah.

10:22.22

Noah Labhart

Okay, businesses are gonna get this immediately operations folks are going to get it immediately because it’s ah, an immediate value ad they’re gonna be a little bit easier to sell so we focused a lot on recruiting workers onto the platform before we actually launched any businesses on the platform and we we started out in in Dallas. Um. What we found was that was flipped. So the workers got it immediately. The workers understood the gig economy they understood the type of work that was out there. They understood the using the apps for the most part, the technology. Um, but the businesses were like hold on you guys are new and I don’t know you.

10:58.34

Matt Watson

Ah.

10:59.73

Noah Labhart

And so you’re gonna have to really educate me and sell me on why you’re different from temp staffing why you know how you’re going to solve my problems et cetera so we we flipped and nowadays when we go into into newer markets. We sort of have the worker side and I don’t want to say automated but we have a. A very strong playbook to where we can get workers on the platform very quickly in new markets and so we focus a lot on. Okay, what businesses are we already serving. Do they have a footprint in the market and if we don’t have a ton of those if we have some of those let’s activate them if we don’t have a ton of those. Let’s start targeting some businesses. That we know and that we have case studies for and get them on board quickly. So it was really interesting in the early days we had a ah ah flipped hypothesis on who would be easier to get on the platform and we were. We were not correct in that.

11:50.16

Matt Watson

So The so the employee side of this the people that are working are they usually people that are kind of in between jobs or they you know they like driving for Uber you know at nights because it’s busy at nights you know getting people home from the bar but during the day they do something like this like. Who is like the target employee.

12:11.21

Noah Labhart

It’s a great question. You know it’s it’s kind of it’s kind of all over the I would say all over the Map. It’s kind of a few categories right? It’s the person you’re talking about right? that loves the gig economy right? and and to be clear and to answer your question earlier. These are all ten ninety noncontractors no employees on the platform. And so so there’s the the individual that likes to get economy likes to drive uber at night works variable during the day does instacart when they can you know things like that. They’re really embracing the gig economy. There’s the others that really need the flexible schedule that have worked in manufacturing a long time I can’t commit to working for a full time company for.

12:32.76

Matt Watson

And.

12:45.80

Noah Labhart

You know 8 to 5 or whatever shift it is through the week I need to be able to work Mondays Thursdays and Fridays and I can work Sunday night you know because I’ve got kid responsibilities right? or I’ve got x y and z so there’s a lot of the platform that this fits their needs as well.

12:52.91

Matt Watson

Yeah.

13:00.44

Noah Labhart

The other is is really kind of the cash constrained individuals as well. So early days we had people come and us saying hey I want to come work on the platform. But I don’t have gas money to get to the work tomorrow and so in the early days we would we would drive out to meet people and be like here’s some money for gas. Yeah, please keep using the platform and and so.

13:08.80

Matt Watson

Yeah.

13:19.62

Noah Labhart

Cash constrained individuals work our platform as well because we pay them daily so if they work an op on Tuesday they get paid the next day at Eleven o’clock and so we make sure that cash is is to them quickly.

13:32.36

Matt Watson

So I’m curious ah about what what do these people make and I’m I’m obviously it varies from Kansas City to Dallas to you know, different markets. But I’m just curious what what would it if I decided to sign up for this tomorrow of what am I gonna make.

13:38.69

Noah Labhart

Sure.

13:45.14

Noah Labhart

Sure the the average op pay kind of right now. It does fluctuate based on them on the the market you’re in but it’s around fifteen sixteen dollars an hour. So if youquate it to that. It’s about fifteen sixteen dollars an hour week.

13:51.50

Matt Watson

Okay, so is it. So so if I ah told my my nephew today who needs a job like hey you don’t have a job go you know, look at doing variable. Would he be able to do enough work potentially that it would be sort of like a full time job for him or or is it or is it too unpredictable.

14:11.36

Noah Labhart

Absolutely if he’s in if he’s in Kansas City sure it’s a great question. So if if he’s in our markets that we’re in so we’re not across the us yet. We’re expanding to the rest of the United States over time but the markets that we’re in are where we are right now we actually just launched Kansas City so if your deew is with you in Kansas city.

14:20.98

Matt Watson

Yeah.

14:31.21

Noah Labhart

Um, that there would be enough work on the platform of industrying together a full time job and he would be able to not only do that ah work for diverse different companies, learn different skill sets learn different environments and really kind of build out a resume especially if this is the industry. He wants to be in.

14:39.20

Matt Watson

Ah.

14:46.14

Matt Watson

Well and I would I would think for somebody like him. You know what kind of perceived risk. Do they have of like I don’t really know if variables gonna have work for me to do next week so am I still looking for another job right? They’re like does that erode at your ability to be able to provide staff because your staff is always concerned that. They don’t know if there’s a job next week you know like how does that like perceived risk for them.

15:06.27

Noah Labhart

Sure That’s a great. That’s a great point to bring up and and it’s sort of back to the chicken. The egg Problem. You know the more work that we get on the platform from the businesses. Ah that the less you know likely that there’s churn on the platform that there’s people. Ah, there’s people not available to work and so you know there are some individuals that that do feel that risk a bit you know that you know perhaps there either is less work on a platform in a newer market right? and that that happens you got to grow a market but then also that’s right, That’s right? and then also though.

15:25.63

Matt Watson

The.

15:38.50

Matt Watson

But supply and demand.

15:44.60

Noah Labhart

When there is a lot of workers on the platform and there’s you know, not as many businesses than the high performers the high rated workers and the people that have done a lot of ops on their platform are getting first pick right? and the people that are in a business sort of labor pool which we call it your labor pool. It’s basically their favorites list.

15:55.80

Matt Watson

Yeah, yeah.

16:04.10

Noah Labhart

They get first divs on the on the work so people getting on the platform in an established market have to really work hard to maybe maybe take a haircut on the on the op like okay, that’s right, that’s right and and they may.

16:11.22

Matt Watson

Somebody has like a rating rating and review system for each employee the type of work they did or what have you.

16:19.67

Noah Labhart

Totally and there’s a bidding system as well. So like if someone saying I’ll pay you a hundred bucks be like well I’m trying to get started I’ll do it for 90 right? and get a good rating get in good with that business and then you build up your profile.

16:30.43

Matt Watson

I love it. So I’m I’m in the process of remodeling my house and like our general contractor. We needed to do demo like my old kitchen and he just put an ad on Craigslist and said hey for twenty bucks an hour you know I need a bunch of people to do this like just general labor people. I was actually blown away by how many responses he got just by posting on craigsist of like we need people to demo a you know house remodel. It was crazy. He had like an unlimited amount of people. But.

16:50.47

Noah Labhart

And.

16:57.88

Noah Labhart

Yeah.

17:02.73

Matt Watson

I mean $20 an hour isn’t a crazy amount of money but some of the guys that were doing this. They were like you know weren’t making a lot of money doing what they’re doing or they’re in between jobs or whatever and it was sort of variable sort of thing. Um, and there’s a lot of people out there it. It seems like that are always floating from 1 job to.

17:13.21

Noah Labhart

Right.

17:20.98

Matt Watson

Another and 1 thing to another and um, you know this is another great opportunity for people to do stuff and um I talk to people all the time you know like oh I I was a digital marketing strategist or specialist or whatever and then they lost their job and they’re like I drove uber for the next six months and they’re like I’m trying to hire them as a digital marketer again right? and like they were doing uber and like some of them make a lot of money like they make a pretty decent amount of money doing this stuff that and they they probably really come to enjoy the freedom right of like I can work whenever I want or what have you and um. I mean you gotta love it. But the same time aren’t you guys? How do you guys deal with fighting against the trends of you know how you provide benefits to them or unions and all that stuff like how to you know, just like uber does and other similar companies. How do you have to kind of deal with that crap.

18:12.49

Noah Labhart

Sure no, it’s it’s a great question. Um, you know what? what we’ve seen so far and we’re we’re still fairly young in our in our you know days we’re not uber size. We haven’t been around for for that long but but. What we have seen is that individuals on our platform stick around and they keep their profile and they use it when they need to some of them use it full time. But if they say if they get a full-time job or something like that they they stick around keep their profile because they want to return to it as far as the unionization and. And things like that you know we pay close attention to the legislation out there out there and you know we’re we’re affected by the rulings and you know we pay attention to a lot of what’s going on in California with with ah prop 22 and and all the all the things right around the the uber full time workers and things and so that affects us. You know from ah from an operating standpoint. But what we’ve seen is that our our workers on the platform. Um, this really doesn’t affect the unions. This really doesn’t affect and when when I say unions I mean the manufacturing unions right.

19:14.66

Matt Watson

Well so well. So what? I mean 1 question I for you and I’ll but I’ll be the first to admit I don’t know a lot about manufacturing or reuns. But um, do you have some clients that are union you know union shops or whatever you want to call it where then they’re also using your service. And bringing in you know, kind of temporary work that are non-un people is that a common scenario is not.

19:37.89

Noah Labhart

So It’s not.. It’s not a common scenario I can’t think of one that we have right now we have talked to some folks and they’ve said. Okay, yeah, we don’t think this would be a problem but I don’t know that it’s been.. It’s been something we’ve had to really address yet when we. When we hypothesize around it right? I Guess you should say better What we feel is like this really should be supportive of the unions like okay you want to go do some work elsewhere and earn earn a a little bit extra cash and we’re gonna kind of keep the status quo here for the Union. Fine. Great.

19:58.48

Matt Watson

4 in here.

20:13.29

Matt Watson

Yeah, yeah.

20:15.69

Noah Labhart

And that’s not affecting what we’re doing here. So there’s a little bit little bit hypothesizing there. But I suspect we’ll run into that in the in the future.

20:23.42

Matt Watson

Yeah I guess I just have this this thought in my head of like it’s a union company and the Union’s on strike and it’s like they brought you in to to provide the labor while the Union’s on strike or whatever is what I’m thinking of my head.

20:35.99

Noah Labhart

Yeah, yeah, we you know we we? Um, we have talked about that scenario I think there was a there was an Amazon strike going on and we talked about. Do we have a play here. Do we have a play to go help. We weren’t ready. We don’t have a playbook for that yet. But I think at some point there is.

20:46.63

Matt Watson

Um, yeah.

20:53.69

Noah Labhart

There’s an argument for that. It’s like okay you guys want to go on strike there’s other ways for us to get work too. You know So there’s there’s tricky. There’s tricky things with unions. You know.

20:57.48

Matt Watson

Well and and and and no doubt you have people that will listen to this through a pro Union or against a union or whatever and everybody has a different opinion but in in anything that happens like okay so and so is on strike somebody benefits from it on the other side right? Just like a nuclear you know a.

21:04.64

Noah Labhart

Yeah, yeah, sure.

21:16.64

Matt Watson

Ah, tornado comes through. Yeah, it’s bad. It’s tragic and all the stuff. But the people who do home remodeling are super excited right? Like there’s always somebody on the other side and like even with the the war in Russia with Russia and Ukraine right now is terrible for a million reasons. There are other people highly benefiting from that right? um there.

21:22.30

Noah Labhart

Yeah, yeah.

21:30.39

Noah Labhart

Absolutely right.

21:36.32

Matt Watson

Other industries that for example, software developers. You know our company fullscale and again this this episode’s brought to you by fullscale io we hope you build software teams quickly and affordably you know because there are so many software developers in Eastern Europe now a lot of companies. Don’t want to hire software developers there because the conflict or their team is just gone. Right? Like they had amazing talented developers in Ukraine and there’s lots of them and and we actually have an employee in Belarus who’s phenomenal now we have people knocking on our door trying to find software developers because they lost their team or whatever right? and it’s just to say it’s a tragic event absolutely and and it’s not our goal to profit on it or any of that. But. In those in these types of events. There’s always somebody on the other side that inevitably like gets some benefit from it right? It’s like the giant mortgage foreclosure in 2008 like whatever company like got paid to go clean up foreclosed houses made a killing right? like there’s just always.

22:20.36

Noah Labhart

Yeah.

22:29.69

Noah Labhart

Yeah, you’re you’re right on and I totally agree with that I think you know just to to be clear. We’re not Pro-union or Anti-union Either we’re we’re pro-economy so and exactly aligned with what you said.

22:32.97

Matt Watson

There’s just always that side of it. But.

22:44.37

Noah Labhart

Someone benefits if if someone’s holding out on a work and that just kind of is how it plays out.

22:46.30

Matt Watson

Well I mean you’re I mean you got to help both sides right? You’re like hey we’re we’re here to help the employer. It doesn’t matter if the employer is a union shop or not. We don’t care and we want to support people looking for work that need a job. So I mean we’re we’re just trying to help everybody here. How do we? We’re the matchmaker right? like we don’t really care. We’re just the matchmaker.

22:53.49

Noah Labhart

Um. Yeah,, that’s right, Absolutely Pro economy.

23:05.23

Matt Watson

So to get this thing off the ground. Did you guys have to raise any capital was was this a have you guys had to raise a lot of money.

23:11.00

Noah Labhart

So we haven’t read to raise excuse me. We haven’t had to raise a ton. Um, we have have strung together 5 seed rounds we we’ve actually closed our series a we closed our series a last last year we strung together 5 seed rounds to really establish the first four years or so.

23:29.44

Matt Watson

Wait a second. This wasn’t an overnight success.

23:29.97

Noah Labhart

And and now with our series. A we’ve raised. Ah exactly no absolutely not surprising right? You know you know I think that that’s surprising to some people right? exactly.

23:37.12

Matt Watson

So you’re saying the shit’s hard.

23:44.69

Matt Watson

It’s ah it’s a 4 It’s a four year four year overnight success that I mean no nobody realizes how hard this is and all the work that goes into building the software perfecting the go-to-market strategies. You know all that stuff like no nobody appreciates.

23:49.12

Noah Labhart

That’s exactly right.

23:55.87

Noah Labhart

A 5

24:00.56

Matt Watson

Hard work except that people have been through it like you and I like we’ve been through this and we we have like scars from it right.

24:04.70

Noah Labhart

Absolutely absolutely no doubt you know we were very lucky in those those 5 seed rounds our investors stuck with us so those 5 seed rounds were done by the same kind of 5 investment groups that that invested in us early and then we added 1 more player with our series. A. Um, and we have a fantastic board. A fantastic supportive set of and investors that really see the vision so series a really allows us to get out and sprint span cross rest United States and build the next you know next vision start establishing the next vision we have for the product.

24:37.21

Matt Watson

So do do you see you guys having to raise some more money in the future to continue to expand in other markets like is it and is that an expensive. Ah, really expensive thing like oh we need a couple hundred grand to seed every new market or something is that a big expense.

24:50.62

Noah Labhart

Sure That’s a good question. It’s not as expensive as as you know it might seem we do. We are pretty people heavy. You know we’re we’re We’re very bullish on having the right people in the market to help tell the story and help educate those businesses. Um. And so that’s the primary expense when we deploy these new markets. It is you know a handful of dollars to bring on for people-ish to start a market and then start building it. Um, and so that’s really where our our money goes.

25:22.27

Matt Watson

Um.

25:23.68

Noah Labhart

And that’s really where our series a came in and helped fuel this so we’re we’re expanding across the rest of the United States now the next couple years and that’s our primary goal and that’s where a lot of the funds are that we funds are going towards that we raced.

25:35.92

Matt Watson

So how do you see this. You know impacting kind of the future of of manufacturing like you do you foresee more and more manufacturing jobs coming back to the us I mean as we we seem to have these economic fights with of course Russia right now. But also the likes of China and others and.

25:51.24

Noah Labhart

M.

25:55.50

Matt Watson

Seems like there’s more and more of a push to try and bring you know, manufacturing back. But at the same time. It seems like there’s a major labor shortage and like how do you? How do you see that that you know future of manufacturing playing out in the United States

26:07.30

Noah Labhart

Sure you know there’s a lot going on in manufacturing right now excuse me, There’s a lot going on in manufacturing right now. Um you know, bringing it back stateside I think is is something that is happening because of the you know the the global you know.

26:25.72

Matt Watson

Um, yeah, yeah.

26:25.96

Noah Labhart

Sociopolitical things going on right and the supply chain issues right? and all all those things out there. It’s coming back because I think people realized okay I took my my manufacturing operation I put it over in you know X country right. And I saved a half a percent or a percent on my bottom line but I created all these problems right? I say I created all these problems like it caused all these problems and now there’s all these headaches with the supply chain with anything goes Awry then I really don’t get that 1% savings. So I think people are starting to say okay, it really won’t that it’s really not.

26:47.66

Matt Watson

Okay.

27:03.24

Noah Labhart

Worth it right? and so having it in in this in the states creates jobs it creates efficiencies it creates just ah, a much better situation. So I think that’s a big part of what we believe is coming back now where manufacturing is going though is is more towards. Ah, you know a lot of what’s been created by the Amazon effect right? It’s it’s customers are are wanting. You know their specific order. They want it tomorrow. They want it custom. You know they want everything absolutely and and so manufacturers.

27:32.11

Matt Watson

Yeah, more custom than ever.

27:38.99

Noah Labhart

And distributors and warehouses have to be able to respond to those demands because that becomes the de facto. What people are looking for so in able in order to do that. They have to evolve into a more digitally Savvy Factory a digitally savvy place to do you know, distribute product or store product. And that includes labor and so you know you have to be able to um, customize you have to be able to just in time your materials and your inventory and your people and be lean and all that sort of thing So That’s where it’s headed and it’s headed towards a more digitally connected factory.

28:12.34

Matt Watson

So I mentioned that I’m remodeling my house and we picked out new countertops to the kitchen and we had a installer figured out and then just randomly the installer said oh we’re out of business and which blows my mind because it seems like the economy is hot and.

28:25.36

Noah Labhart

Ah, man.

28:31.20

Matt Watson

They were really big and doing a lot of business but they could have went out of business because of the labor shortage right? like ah if they’re a fixed cost say that oh we need 30 installers you know, working all the time and then you know that covers our fixed cost but they can’t get enough installers then they ultimately.

28:45.32

Noah Labhart

M.

28:49.30

Matt Watson

Can’t stand business right? Just like with manufacturing it’s like oh we’ve got to Manufacture X number of widgets if we don’t have the labor needed. We’re screwed like we the business is not viable right? and so you know potentially you have a huge piece of that that you can help support and fix that problem.

28:53.82

Noah Labhart

Um.

29:05.59

Matt Watson

Right? If if you can tap into a new labor pool.

29:08.55

Noah Labhart

That’s absolutely right? Yes and so combining the ability to bring in labor as you need it with the thinking about your operation differently where you’re focused on your full-time workers are your specialized workers and that’s that’s a different problem right.

29:20.36

Matt Watson

And.

29:23.27

Noah Labhart

Labor shortage specialized workers. It’s a different type of problem that that’s not the one we’re we’re trying to solve what we are solving though is that need for you know, specific or or for really for a headcount on a Week -to- week basis to allow people to you know, complete those instructional tasks right.

29:40.50

Matt Watson

Yeah, you don’t you don’t want the Ceo out there packing boxes and loading the truck because you’re shorthanded right? like and Emily that’s probably what happens these days right? like you’re just doing whatever you can do to help. But if you can you know use variable and you can get somebody in there to load the truck.

29:41.85

Noah Labhart

The people to to come in and and pick back and ship.

29:50.30

Noah Labhart

That’s right. Um, and.

29:59.83

Matt Watson

Doesn’t require a lot of you know training like we just need people. We need people right.

30:01.97

Noah Labhart

That that’s exactly right? That’s absolutely right? And if you you set up your operation right? You can really optimize optimize your operation around that.

30:10.70

Matt Watson

So is there opportunity for you guys to expand into other other industries like the one that I keep thinking of is just like general like construction like general like construction labor would wouldn’t that be real similar.

30:21.80

Noah Labhart

Sure sure So um, it’s a great question. We actually get it a lot the the core marketplace which is just you know people and bids and and work opportunities that is very very those the type of the type of functionality around that is very it could be pretty.

30:30.43

Matt Watson

Um, no.

30:40.41

Noah Labhart

Could transfer to other industries what we’re building on top of that though is specific for the industrial environment and it’s specific for manufacturing is specific for that week to week calculation based on your demand and we’re we we are surfacing operational insights. We’re surfacing. Things for manufacturing specifically because that’s what we know and because that’s that’s the industry that that we know love now. That being said, we have considered you know, maybe building our platform in such a way that’s easily easily licensed for other you know individuals that want to go take on that that verticals you know? ah.

31:00.84

Matt Watson

Ah.

31:15.49

Matt Watson

You know.

31:17.66

Noah Labhart

Have some friends that that have built a company called Sadie and health they’re not licensing on our platform but they’re trying to solve the nursing shortage they’re trying to have on-demand nurses and then you know there’s there’s other individuals that are doing other on-demand worker things and so you know if our platform was licenseable. We could say hey.

31:24.60

Matt Watson

Ah.

31:36.31

Noah Labhart

Go address your market. You can use our marketplace right? You can use our background check functionality. Our our worker payments functionality and things like that pay us whatever dollars. So it’s something we’ve kicked around.

31:45.90

Matt Watson

Yeah, it seems like there would be a lot of different different kind of market like verticals for this this type of solution. Do you guys have competitors for what you do.

31:55.58

Noah Labhart

Sure that’s that’s a great question. So not direct but overlapping so we we compete primarily with tech-enabled staffing so there are temp staffing firms that have created technology around ah temp staffing so they they serve a much. Broader market some of the some of the ones that kind of come up in comparison are like Wanolo which is actually our our primary one that that we look at but juallo serves a much broader niche. You know they they have pizza delivery drivers they have you know retail workers they have you know things like.

32:29.10

Matt Watson

Um, the.

32:33.59

Noah Labhart

Things like that and they also are trying to support warehousing in a specific way. We’re all in on the industrial environment. So we really niche hard and understand and coach on how best to use that environment and so you know they’re kind of primarily those types of individuals are.

32:41.28

Matt Watson

And.

32:50.81

Noah Labhart

Our primary competitors. But no, 1 ne’s really trying to attack the industrial environment like we are.

32:54.83

Matt Watson

So I actually invested a few years ago in a company called ah pop-up Bookings pop bookings and I just thought of that but it was actually very similar for events and so like trade shows and stuff you’re like oh I need I need a cute guy or gal to come hang out in my booth.

33:04.39

Noah Labhart

Me.

33:12.64

Noah Labhart

Are.

33:12.76

Matt Watson

And attract people to my booth right? or you pay event staff for that or you pay event staff to come like set up an event or or if you’re red bull and you want to pay cute guys or girls to go out to the bar and promote red bull like it was like a different kind of same sort of thing. It was like on-demand staffing right? and.

33:27.10

Noah Labhart

Um.

33:32.54

Matt Watson

Um, it was sort of part of the gig economy and people don’t realize like how many different types of jobs. There are out there like that.

33:37.70

Noah Labhart

Oh yeah, yeah, that’s a massive market out there that you know there’s a job that we we use to to sort of bring people on the platform as well. Not a huge traction point for us. But it’s called steady and it basically lists all the gig economy apps out there and links to their apps and and and.

33:52.52

Matt Watson

Um, there’s gotta be a how many of marther here. Yeah.

33:57.20

Noah Labhart

Ah, there’s a ton I’m not even sure and and they’ve been growing too. So I think they’re I think one of their primary investors in at least the the face of their company is shaquie o’neill so they get a lot of lot of Tra a lot of traction from him.

34:04.90

Matt Watson

So here’s what we’re gonna do next. We’re gonna create an app that you sign up for and then you can work for any of the gig economies is there a thing for that if.

34:13.15

Noah Labhart

Perfect I Love it. Not yet, not yet, but we we hope to build something in the future for a way for workers to get paid on any gig economy app. We. We just released our our. Our solution called Vault which is what how we pay our operators and we have visions of grandeur to take that out and and enable gig workers to get paid on that and essentially an embedded bank account into a gig economy app.

34:42.90

Matt Watson

So do you have to do you have any concerns with your your you know the employee the employee side of it that show up at these employers and and do this work for a couple days or whatever and then they try and hire them full time like. Do you like forbid them from doing that or do you just like charge them like a staffing fee like oh for a thousand bucks you can just hire them full time we’ll we’ll let happen or whatever like how do you deal with that.

35:01.90

Noah Labhart

Sure that’s a great question so in the early days we we thought about that and and and we even you know got into some conversations with businesses about that and I think it was more prominent then because our work our our operators count was was lower. Um. But where we are today is we’re we’re agnostic to that you know if if they have a specific need. Yeah, ah yeah, if they have a specific need that that that person fits full time and it’s a great opportunity for them. We applaud that keep your variable profile.

35:22.86

Matt Watson

If it happens you don’t care.

35:36.44

Noah Labhart

You know, go go work. You know if you need more work on the variable platform. We’re here for you. It’s kind of the same thing as as for the businesses when they ramp up and ramp down their workforces If there’s a week. They’re not using us it means their demand is is exactly the way they predicted right? same thing for workers.

35:49.55

Matt Watson

Well, it sounds like if it sounds like if I was an employer I would want to use your service as a way to potentially find employees right? Hey they come in for a couple days I see if they do a good job and then if they do a good job I’m going to make them a offer to be full time like I think I would be trying to use your. Your platform for that. Even though it’s not necessarily what you you want, but it gets me using it too right? like I’m using it because of it.

36:08.94

Noah Labhart

Sure, yeah, no, that’s true and some people use it for that some people use it and hire a few people again we we’re pretty, we’re pretty open to that and what we can do in the interim when you’re you know when you’re doing that is explain hey you need to think about this a little bit differently. Because although you hire this person full time when your demand drops next week you know you’re probably going to consider firing someone or you’re going to be paying someone to not do anything and so we kind of help to educate like how to optimize the workforce around that the second thing I’ll say is that some operators don’t want that full-time op.

36:31.00

Matt Watson

Right.

36:39.12

Matt Watson

Yeah.

36:47.99

Noah Labhart

Offered They’ve been offered a full time role at some of these companies they work for and they say no I get way more flexibility and pay through variables I’m gonna stick with the platform and so that it’s it.

36:54.86

Matt Watson

Which makes total sense and and on the other side on the employer side if I got to worry about ah hiring people full time and firing them and um, paying unemployment and you know certain state rules and whatever like I may not be able to fire them or whatever so it makes total sense too that they wouldn’t necessarily.

37:08.19

Noah Labhart

A.

37:12.95

Matt Watson

Always do that so they they and they like having the on demand side of it for people to scale up and down. So once again, today’s episode of Startup Hustle was sponsored by full scale helping you build a software team quickly and affordably we can help you scale up and down your software development team. We’re we’re the variable of software development I guess um.

37:16.52

Noah Labhart

Absolutely.

37:32.42

Matt Watson

So you can find startup puzzle on Facebook look for the startup hutle chat. There’s a lot of amazing entrepreneurs on there. It’s a great place to meet other likemind individuals. We also have a Youtube channel you can check us out and. If you enjoyed today’s show please give us a 5 star review. We appreciate that. Um Noah any any parting thoughts as we as we wrap this up for other entrepreneurs out there that are you know, thinking about you know, starting their next thing or or looking for advice looking to learn.

38:04.83

Noah Labhart

Sure I think the only thing that I would say to entrepreneurs is just do it just start and do it now if I could go back and do anything differently I would have started way earlier and and and would have really given a lot of things a shot that I that I didn’t and I was too busy doing other things. So. Just do it get out there. Give it a shot learn fast and and iterate.

38:26.21

Matt Watson

And by the way I’m so I’m a software guy and the thought of doing hardware and having to manufacture my own hardware by the way is always scared to shit I mean I would never want to do that So many horrors of manufacturing hardware.

38:41.90

Noah Labhart

I.

38:43.24

Matt Watson

Ah, luckily likelyily, you don’t have to deal with that. You’re you’re helping probably a different kind of manufacturing mostly but um, but yeah as a software guy like always run into running a few different startups to do hardware like you know, wearable sensors or all sorts of different things as like manufacturing man that’s a whole different whole different things. So.

38:55.17

Noah Labhart

Um, yeah, not my gig either not my gig either for sure.

39:02.73

Matt Watson

Yeah, all right? Well good luck to you and in your business and um congratulations it sounds like you’re solving a real problem and you’re also gonna solve a problem for my nephew I’m gonna I’m gonna go contact his but right now and tell him get to work So I’m so glad that I talked to you today.

39:18.32

Noah Labhart

Thanks Matt thanks for having me this has been a blast.

39:21.14

Matt Watson

All right? all right? Thank you.