Is the push for American Made an open door to a would be entrepreneur? In this Tough Things First podcast, Ray Zinn tells us how it could be done for those seeking the American Dream.
Ray Zinn: Hi Rob. How’s it going today?
Rob Artigo: Great. So with a nation, I feel like we’re in a mode of… There’s turmoil going on and there’s some uncertainty out there, but one of the interesting things is this drive to bring some manufacturing back to the US and I’ve been thinking about are there opportunities for would-be entrepreneurs out there to dive in and take a chance on some of these things? This would be like carving out a niche, making a product that is typically known to be made overseas and making them here instead. And I think you can do it on kind of a small scale. Also going based on the idea that people who are doing this might have limited time and limited resources to get going, but they may have come up with a brilliant idea and something they’d really like to do and maybe take charge of their own destiny in that respect. Here are some suggestions that I pulled together and it really references how to pull it off. I talked about limited resources, financial resources, and limited time.
Rob Artigo cont: The first suggestion here is to start lean, pick just a product and test it out. And this could be like kitchen tools or a card table, something that maybe you’re building something that you can sell locally. But I think the important thing is you got to budget and start lean.
Ray Zinn: Well, it’s interesting. In mid to late seventies when I was working in semiconductors in Silicon Valley, actually in the Bay Area, the government was trying to force companies out of the area because they were worried about the pollution and water contamination and other green-y type initiatives. And so the companies were moving out, they’re either moving to different states or they’re moving their companies out of the country. They’re off shoring it. I looked at that as a real opportunity, grow my company and my idea. And so I asked my friends, I said, what do you think about me starting a semiconductor company in Silicon Valley? And they go, oh, it’s crazy. Everybody’s leaving. Everybody’s moving out, everybody’s offshoring. I mean, why would you want to start a company where everybody’s leaving? The government is against you, they’re putting all these rules and regulations and trying to stop you from producing in the state.
I said, well, let me see what I can do to work with them. So I started finding out ways that I could minimize the concerns that they had. And I said, look, if we’re going to be employing all these people, and actually the government can cooperate with me, when they viewed me as not being threatening, that I was not acting like the victim. I was really trying to have a positive influence on the community. And they actually cooperated with me. I mean, I got a lot of concessions when I started producing semiconductor wafers and my products here in Silicon Valley. It’s really expensive and the labor costs were high and the material costs, the water and electricity, the utilities were high and the taxes were high, and it looked like there was no way I could succeed. But I found a niche. I found a way to work within the system, and it was quite successful.
In fact, I ran probably one of the most successful semiconductor companies that was ever formed. I didn’t lose any money except for one year because I worked within the system. I didn’t let the system defeat me. I used the system to benefit us. We touted the fact that we were US manufactured. That gave me some clout with companies that want to use US manufacturing. I used some older equipment that people had gotten rid of because they were having to move out of the Bay Area. So I was able to buy my equipment quite inexpensively.
I was able to actually produce a wafer fan that was about 1/20th the cost that I would normally have to spend because I just took advantage of people who were leaving and bought their equipment for 5 cents on the dollar. I just found a way to live within the system. So that’s what you need to do is find out how you can use this on-shoring capability in a way to take advantage of that, that will help you as we now move into a more of an on-shoring environment. Just look for niches. Look for ways that you can benefit from doing it here rather than over there, as they say.
Rob Artigo: And you did. One of the suggestions here is that you sourced cheap. You went around and you found bargains where you could. And I imagine that back when X manufacturing ceased in the US and went overseas, that the technology was different in terms of how to get it done. And there may be ways to do the same thing now, more cost effectively and competitively, just simply because technology has changed. Am I right?
Ray Zinn: Yeah. What I did was I found ways to market semiconductors that did not require expensive equipment, did not require me to have to offshore. I never offshored while I was running my crowd because I had the on-shore view. In other words, that was my focus. So I just said, okay, where can we benefit or how can we benefit from doing it locally as opposed to having it offshore? So I worked feverishly to maintain a local US-based company. When other people told me, you can’t do it, you’ll fail. The labor costs are too high, utilities are too high. For those of you who know Silicon Valley, you know that it’s very expensive. Everything’s expensive. Rent was expensive, utilities are expensive, labor costs are expensive.
And they just looked at it in a very negative way. And I looked at it in a positive way. I said, how can I benefit from these more expensive labor costs? Or how can I benefit from the higher rent and utilities and so forth? And so I looked at how do I benefit, not how do I lose. I took the positive aspect of it as opposed to the negative.
Rob Artigo: Wow, Ray, that’s just being on a mission to get it done and being very smart about it as you go through the process. And then of course you want to be able to, whatever it is that you end up making or building or… Your business has to be able to sell something fast so that you can scale quickly. And I imagine that you have to get out there and you have to scale quickly and you have to scale smart.
Ray Zinn: As I said about the utilities, how I benefited from the utilities is that I said, okay, how can I minimize the amount of water that I use? How can I minimize how much power I use? And so I looked at working within how expensive, because if things are cheap, you tend to exploit the cheapness of it by not finding ways to get around it. Whole concept of me using less water, less power, that may be competitive. How do I benefit from higher cost labor? I just found ways to minimize the amount of labor, human labor I had to use, and I was able to hire better people to perform those functions that I needed. And I were just more efficient. So I probably had one of the most efficient semiconductor companies in the world because I was induced or motivated to work around more expensive labor, more expensive utilities. So I want everybody to know that I was in Silicon Valley, my company was in Silicon Valley until I sold it in 2015. We’re in the most profitable semiconductor company in the world.
Rob Artigo: And it would seem that if you’re listening to this, that might be an onerous environment. Oh, we had to stress over every single nickel and dime, and that’s just not the way it was at Microl. People there were productive. They were happy to be there. And there wasn’t anything… It wasn’t like it was a slave driving or anything like that. We are talking about a company that was very successful and the people who worked there were happy and they worked within an environment where they could be cost-effective and productive at the same time. And that’s any CEO’s dream.
Ray Zinn: Exactly. So just want everybody to know that I ran a extremely profitable semiconductor company in Silicon Valley using Silicon Valley expensive labor, Silicon Valley expensive utilities. I lived within that. And that actually made us a better company when I learned to live with what I have, rather than saying, oh my gosh, the labor costs are going up, my utilities are going up, taxes are going up. I looked at make those a positive, and so I just learned how to minimize the impact of higher costs.
Rob Artigo: Well, Ray, the listeners can send messages to you by going to toughthingsfirst.com and accessing a message platform for you. And they can ask a question if they have it, a comment if they want to, and just put it out there and Ray will read it and he’ll get back to you if that’s what’s required. So Ray is on X. He’s also on Facebook and the LinkedIn and Ray’s books are out there. Tough Things First and the Zen of Zen series one, two, and three, the Essential Leader is on sale now. Your new book from Ray Zinn, 10 Skills, Attributes, and Fundamentals That Make up the Essential Leader. Thanks, Ray.
Ray Zinn: Thanks Rob.
