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Kevin Mako: Hello, product innovators. Today we learn from a local self-started manufacturer of over 150 products on how to start your own local manufacturing facility for your invention idea.

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Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors,

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Narrator: product developers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial

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Narrator: idea to getting your product on store shelves. We're taking you step by step to build a functional product and scale your product business.

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Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses. Now, onto the show.

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Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Don Skaggs to the show. Don founded the manufacturer of U.S.

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Kevin Mako: Biotex Corporation, which he started in a farm back in 1991 and grew to over 150 products in production over 22 years before being.

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Kevin Mako: bought out. Don has also been the president of the Inventors Network, Kentucky for nearly 20 years now.

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Kevin Mako: Today, Don is going to share some valuable knowledge on how inventor startups and small manufacturers can start their own manufacturing facility locally for their invention idea,

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Kevin Mako: then how to grow and scale that operation and what benefits there are for taking this production path. Now, on to the episode.

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Kevin Mako: Hey, Don, welcome to the show. Glad to be here. Well, we're excited to have you on today to talk about setting up your own manufacturing operation locally. And that's

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Kevin Mako: something that we haven't gone too deep on on the show, but it's something that you did. You actually

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Kevin Mako: were the one who built a factory, scaled it up, and then eventually exited. So we want to go through that story. Give us a background.

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Kevin Mako: How did you get from the early days to owning an operation like

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Don Skaggs: that? Now you're the president of an incredible inventors community. Well, well, thank you, Kevin. My backstory is we basically bootstrapped a company

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Don Skaggs: out of a farmhouse. And of all places, Eastern Kentucky, which is a rule, kind of a mountainous rural area and in Kentucky. And a place that

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Don Skaggs: you're not supposed to start a high-tech startup. And we ended up making products, especially products for the pathology laboratory industry.

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Don Skaggs: One of our claims, one of our flagship products was a product that would irreversibly change formaldehyde to 100% non-toxic material in less than 15 minutes.

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Don Skaggs: That's kind of a mouthful, but that was our elevator pitch. And while it's probably boring science to some people, it resonated with our customers. And our customers were

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Don Skaggs: hospital laboratories. And in the early 90s, they had a real problem with formaldehyde. They were having to dispose of it. It was very costly.

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Don Skaggs: They couldn't just pour it down the drain. And we had a product that would actually take care of that problem, take care of a very painful problem for

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Don Skaggs: them. So we started out of the farmhouse and didn't have a lot of resources to start with. But we

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Don Skaggs: We grew it. Number one, we picked a really scalable product. It was a liquid product. We could make a leader of it. We could make 100,000 gallons of it. And we ended up doing both.

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Don Skaggs: But we didn't start with 100,000 gallons. We started with small bottles. So we would make some samples.

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Don Skaggs: I would load them into a 1991 mercury tracer wagon and just drive around from hospital to hospital, seeing if customers would buy it, learning

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Don Skaggs: about my customers, and learning, seeing what lit their faces up and saying, wow, I really like it.

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Don Skaggs: this and what just kind of made them get that bored look on her face and just kind of walk away in their minds. We found out what worked that way by bootstrapping.

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Don Skaggs: We didn't stay in the farmhouse long, though. We grew out of it, grew into a factory, had employees, grew up 23 years, and then

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Don Skaggs: sold it 2014, sold the company to another company out in Texas. It was just an amazing ride to learn

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Don Skaggs: and to grow and to become from that, who are these people, who is this guy? We started out with just this idea and then we turned it into a product and then we grew that product.

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Kevin Mako: And it probably had 150 different products where it was over. What a story. And you know what's so unique about this is I want to dive

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Kevin Mako: into it a bit when you actually started the production facility. Most people, when they've got that invention idea, they outsource the production.

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Kevin Mako: Let's assume the design, the engineering, the prototyping. You've tested it. You love this thing. And whether it's a chemical product like yours was or I know

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Kevin Mako: you got into a bunch of hardware, physical hardware products in the end as well. But that seems to be the de facto logic of production.

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Kevin Mako: Okay, we're going to outsource this thing to somewhere, whether it's locally or overseas and get it produced. But you made the decision early. And I'm

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Kevin Mako: sure you had options at the point. You're going to actually mix the substance and produce this in-house, literally in a farmhouse.

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Kevin Mako: That was where you were going to start, start small and then scale your way up. So what was some of the decision factors there that led you to decide to do it

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Kevin Mako: yourself and build an operation yourself as opposed to outsourcing it to

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Don Skaggs: another producer? Well, one of the things that kind of just drove us was just the fact that we were starting so

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Don Skaggs: small. We had to make do with what we had. We'd take the resources we had at the time. We had a lot of intelligence resources. We knew how to make this stuff.

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Don Skaggs: We understood the chemistry. We understood all these other factors that were involved in making it. But we knew if we were to outsource

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Don Skaggs: to a big company, we could probably do it cheaper ourselves. Now, this is, of course, not true with every product. It was true with ours.

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Don Skaggs: And since then, I mean, since the business, of course, I work with a organization called the Inventors Network, Kentucky. And working with a lot of

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Don Skaggs: inventors now and entrepreneurs, I've seen this same principle taken to different levels with hardware products.

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Don Skaggs: And sometimes they can outsource small runs, which I love. I love the idea of starting small, doing a small run, testing it, seeing what works,

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Don Skaggs: changing what needs to be changed, and then kind of moving on and making those changes.

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Don Skaggs: When you're making your mistakes, you know, you're usually going to make those mistakes early. And it's funny, starting bootstrapping out like we did.

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Don Skaggs: We had really were forced to make these early mistakes.

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Don Skaggs: That's part of why I tell, teach a lot of inventors and entrepreneurs now

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Kevin Mako: to do that. take you know, make those mistakes small. Well, this is great because I love talking about short run

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Kevin Mako: production or test marketing with real products in the actual market, but at a small scale. And that's really what you did.

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Kevin Mako: And that was kind of the essence of it back of the day. And the second thing that you mentioned here is hardware parts and how there's different levels of manufacturing that you

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Kevin Mako: could actually do with a hardware startup. Everyone thinks of manufacturing, especially if you're talking plastics or electronics or whatnot.

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Kevin Mako: You're imagining this massive factory to produce them. But manufacturing doesn't necessarily mean that you're making every part to every piece of that actual puzzle.

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Kevin Mako: A lot of the time, especially with a hardware startup, it may just mean final assembly, packaging, quality control, warehousing, logistics.

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Kevin Mako: There's a number of elements that are actually accessible to a startup could potentially even be done. And we've seen it with dozens of our clients where they're doing some sort

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Kevin Mako: of fabrication in their garage or their basement, right, getting those final touches on a product

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Kevin Mako: or putting certain things together or just making sure that the product is right before. they're sending it to their first few hundred customers.

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Kevin Mako: Again, starting small and working your way up. So it's important as physical product startups to understand that there's many ways to

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Kevin Mako: produce a product, many different advantages of managing it yourself and managing the process yourself.

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Kevin Mako: And of course, Don, one of the big ones that you mentioned is you found straight up cost

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Don Skaggs: savings by doing this this way. Oh, absolutely. A lot of people that go into production, they don't realize they don't have to make every single component from scratch.

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Don Skaggs: You know, you can get things that are already made and combine them with other things, and now you've got your product.

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Don Skaggs: You can get different components from different resources and big companies. And I've even seen this with the kind of the R&D side of it, too.

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Don Skaggs: We did this a lot ourselves, and then I sort of replicated this when I started working with some other entrepreneurs and startups.

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Don Skaggs: And that is, you can talk to a lot of these companies that produce these components. And for us, it was, you know, usually chemical components.

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Don Skaggs: and if it's a large company, they usually have big research departments and researchers that are usually

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Don Skaggs: bored and sitting in their basements of this big research complex. And if you get hold of the right person, you get to talking to them.

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Don Skaggs: And sometimes they will just spend all kinds of time and energy just giving you vital information. They're pushing their component. They're pushing their

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Don Skaggs: product and that's all good. But it's helping you because now you're finding, oh, look, there's all these applications.

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Don Skaggs: I'm thinking of one inventor that we've worked with not too long ago, and he was looking for a way to absorb impact.

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Don Skaggs: If you're pushing something and it's absorbing a certain amount of impact, and I wound up talking to all of these different cushion manufacturers. And it's funny,

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Don Skaggs: you get hold of, you know, it was several phone calls, several conversations, but you finally kind of drill down to that right person.

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Don Skaggs: And I remember having a half hour conversation with the chief technical officer for this very large company that made cushion-type

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Don Skaggs: products. And he was talking to me about everything about ballistics and impact rates and just all of this vital information. And all that was

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Don Skaggs: free just because I invested the time of talking to these people and getting this intel. And here's the other funny thing about that. You're getting to talk to these people.

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Don Skaggs: And a lot of times they'll send you samples. This one particular startup, we wound up with a whole room full of different cushions from all of these different places all over.

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Don Skaggs: And we got to test all those. We found the right material from that. And we did the same thing with the chemical industry.

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Don Skaggs: And we would find the right product that worked in the right way.

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Kevin Mako: It took a lot of swings, swings and misses, but staying with it was the key. You mentioned something very important, especially in the product development lifecycle.

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Kevin Mako: I think of the hundreds of products that we develop at Mako Design, very rarely is something absolutely completely custom, especially if it's a multi-part assembly.

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Kevin Mako: Very rarely is it completely custom every single part. In fact, we actively are looking for what's called original equipment manufactured parts.

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Kevin Mako: Those are parts which are made at facilities that eagerly want

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Kevin Mako: new products to be developed with their said parts, which is something that you were alluding to when you're dealing with all these different cushion manufacturers.

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Kevin Mako: Their job is to make these parts so that design houses and new products come out with their parts in them, especially if you get into electronics.

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Kevin Mako: It's all about electronics parts, libraries, but think about it for just non-electronic hardware products as well.

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Kevin Mako: Very rarely do you want to design something that's completely custom because usually you're focusing on one or two major value ads. That's the innovation, the invention

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Kevin Mako: that you've come up with. There's absolutely no reason to take all of these pre-existing technologies that can help your innovation work and try and reinvent the wheel. Absolutely.

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Kevin Mako: For a number of reasons. Not only is it going to be cheaper, you can get samples from it to include with the product. It's much easier to develop.

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Kevin Mako: There's going to be less issues. It's far better manufacturer because they're a focused facility on that specific part. All kinds of reasons why you'd

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Kevin Mako: want to use an OEM part in your product. But that has to be well thought out in the product development lifecycle.

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Kevin Mako: And that's actually not the norm for product development. If you look at traditional industrial design, it's generally for big corporate and it's making almost this beautiful

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Kevin Mako: new thing almost entirely from scratch. But as a harder startup, it's very expensive to look at

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Kevin Mako: all of your different parts as their own unique innovations within that product. Instead, again,

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Kevin Mako: focus on the few differentiators, how you're going to combine these things together, rely on really great original equipment manufactured parts to actually put the thing together.

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Kevin Mako: And if you design it this way, exactly what Don's talking about. It's going to make it much easier for you to get into that production.

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Kevin Mako: And this actually is whether you're manufacturing overseas locally or whether you're building a factory yourself, the same logic applies in design by focusing

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Don Skaggs: on only the need to have differentiators. Absolutely. There's so many shoulders you can stand on in every industry.

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Don Skaggs: And it doesn't matter what industry you're in, like you were saying, it could be electronics, it could be chemical, it could be any type of manufacturing.

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Don Skaggs: There are components out there with the right focus in the right direction.

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Kevin Mako: You can really take yourself a lot further than if you're trying to reinvent the wheel on every single component. Absolutely. Don, I want to talk about

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Kevin Mako: it's scaling your manufacturing operation. So you've got the product working. You're starting to sell more units. You moved out of the barn.

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Kevin Mako: What were some of the advantages or any tips that you see along the way that you're really glad you did it yourself as opposed to outsourcing? How did some of those benefits

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Kevin Mako: unfold as you started to grow a bigger business with more products and product lines? Like you said,

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Don Skaggs: you ended up with almost 150 different products by the end of your over 20 year production run. Yeah, and you know, it's funny.

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Don Skaggs: We sort of took that bootstrapping mindset and we stayed with it. When we grew into a larger facility, you know, we didn't have to particularly

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Don Skaggs: have something that was custom made just for us, unless we were custom making it ourselves.

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Don Skaggs: And still, even when we were doing that, we were custom making them out of a lot of times out of materials and out of systems that already existed.

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Don Skaggs: We would look a lot of times to other industries. And we were kind of in an odd industry was just a unique section of what they call the clinical laboratory called

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Don Skaggs: pathology and histology and cytology. Basically, that part of the lab dealt with a lot of different things. It wasn't just like counting cells in your blood.

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Don Skaggs: It was very, very hands-on. It was really the only part of the clinical laboratory you could not automate. So there was a lot of pieces and

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Don Skaggs: parts that you had to deal with in that lab. And we were always coming up with solutions for that.

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Don Skaggs: But in order to do that, a lot of times we had to kind of reinvent how we did things. And sometimes we would borrow from things out of the

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Don Skaggs: cosmetic industry, things out of the agricultural industry, and borrow what they were doing that was commonplace for them and be able to

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Don Skaggs: apply it to what we were doing in our own specific way, where it would work. And it's kind of my own definition of what they call technology transfers, where we were taking

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Don Skaggs: something that was just commonplace in one industry. I've seen this with some inventors before, where they'll find something that is a very commonplace in

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Don Skaggs: one industry, but completely unheard of in another industry. And a lot of times, that's where an innovation can be found. It has to be modified.

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Kevin Mako: It has to be qualified for that other industry. But again, that's where the innovation comes in.

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Kevin Mako: That's amazing. Now, by having your own facility, it sounds like you're able to, first of all, you're getting great feedback from your customers. And that's an important side note.

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Kevin Mako: Always listen to your customers. You've mentioned that a couple of times in our discussion here today. you let them kind of guide you on what their needs were.

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Kevin Mako: But now it sounds like what you would do is you would take that knowledge from the customer back to your own facility and start this almost essentially bootstrap

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Don Skaggs: testing of solutions to solve the problems that you're hearing from the field. Absolutely.

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Don Skaggs: I had the unique opportunity of getting to live on both sides of the fence in my business. I stayed very close to R&D and I stayed very, very close to marketing and sales.

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Don Skaggs: So I would see those customers. and I would find out where those pain points were.

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Don Skaggs: And I always used to say your best R&D came from out there in the field because you were finding what these customers needed, especially a lot of the larger companies,

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Don Skaggs: and this is where smaller companies can be nimble and be very, very innovative, and really kind of stay one step ahead of the competition, no matter how big they are.

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Don Skaggs: You basically put three things into a product or a business. You put time, you put money, but you put this third thing called wisdom. And if you don't have the wisdom first,

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Don Skaggs: you likely take the other two and you'll put them in the wrong places. And usually you learn those from your own mistakes or you learn them from other people who have made

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Don Skaggs: those mistakes. That's why hanging around other good, successful inventors and entrepreneurs is very, very important.

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Don Skaggs: We would find this input from the field and we would take it back and then we would try to apply that and saying, okay, well, how can we solve in this unique way?

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Don Skaggs: What particular problem is this customer having that is just really causing them a great deal of frustration?

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Don Skaggs: And what set us apart from a lot of the larger companies is larger companies were very, very siloed.

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Don Skaggs: And those companies would have your R&D people that were just kind of over in their little city. And you had the marketing and salespeople who were over in another little city.

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Don Skaggs: Well, we were small enough and we were close enough. We kept those two pieces of our company close enough together to where one would constantly be in contact with the other.

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Don Skaggs: We'd always come out with a product that was better. Sometimes people would even try to copy our product.

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Don Skaggs: We had companies that were a lot larger than us, but actually try to copy us. I remember walking into a trade show one time, and they had, they looked like they had

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Don Skaggs: everything where they had tried to copy us right down to the literature. It looked like they'd taken the pictures of the origin, just kind of moved around on the page a little bit.

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Don Skaggs: And, you know, part of me just kind of wanted to laugh to myself about it, but, you know, another part of me was like, mad at him, here you are copying my product.

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Don Skaggs: But here's the funny thing in the end. We had one particular product. It was very innovative, and we had a lot of people that would try to copy us.

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Don Skaggs: And it was a very large companies, big multinational, multi-billion -dollar companies.

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Don Skaggs: And they would come out with a product, and we would always stay one step ahead of them. We would always know, okay, this is really what the customer want, and

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Don Skaggs: they're just kind of imagining what they think maybe the customer wants. I'm thinking one in particular one.

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Don Skaggs: And they found out that they launched the copycat product, and they found it it didn't work, and then they tried to make some changes.

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Don Skaggs: The changes just made it worse, because, again, they weren't, well, they were not in touch

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Kevin Mako: with their customer. Just getting that input and integrating it into your R&D, I think is so important.

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Kevin Mako: It sounds so exciting because you didn't just have a manufacturing operation. You also are building

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Kevin Mako: an R&D lab within that, that of course connected with sales and marketing and all the rest to keep everything very tight net.

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Kevin Mako: I want to talk to the inventors listening on to the show. Just imagine your invention.

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Kevin Mako: Imagine your gadget or whatever. If you are manufacturing that, That's a major advantage in-house. Obviously, you've got your quality control that you can keep a tight eye on.

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Kevin Mako: You've got the speed to market. You can have all these different benefits to your actual production house. But in addition, you've got that loop of R&D.

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Kevin Mako: And that is really something that can create tremendous scale. Most inventors have more than one idea.

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Kevin Mako: So you start with your first and just imagine you had your own kind of, let's call it R&D playground to continue to tweak and refine not just that invention, but all of the

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Kevin Mako: different ideas that you have and even more important, all. all the great ideas that your prospective customers and your buyers are going to have that will

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Kevin Mako: feed back into new versions of the product, complementary products to that, maybe just different lines that are related all together.

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Don Skaggs: That can all happen in-house if you've set up your own mini manufacturing operation in the beginning and obviously scale it as the whole system grows.

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Kevin Mako: Absolutely. And it's being in touch with that customer, but being so

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Don Skaggs: close-knit to the R&D that I think makes all the difference with that. Very powerful stuff. And then in the end, you ended up Selling, tell us about that. Kind of a fluke.

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Don Skaggs: We were actually calling another company that we knew about a supply of something that we didn't have that they had. I was having trouble getting a hold of this company.

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Don Skaggs: And it was like after hours and I finally get hold of the guy. And we was the owner of the company. I knew it. He said, yeah, yeah.

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Don Skaggs: He says, I'm just kind of cleaning stuff up here because I'm, you know, he says, you've heard haven't you? We just got bought by a company. I said, oh, really?

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Don Skaggs: I said, is this other company kind of on a buying spree? And he said, oh, yeah. He said, they bought like two, three.

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Don Skaggs: other companies, that's how the introduction got started with us selling to exit. It was a good time

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Don Skaggs: for me. I really had found a passion for working with other inventors and entrepreneurs.

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Kevin Mako: So I was kind of done with Pathology, been 23-year run, and I was ready to do something new. It worked out really, really well for us.

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Kevin Mako: Well, let's talk about what you did because it's amazing. You've been part of that Inventors Association in Kentucky since the early 2000s. You've been the president, I believe,

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Kevin Mako: since 2004. And then in 2014, you sold the manufacturing operation and

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Don Skaggs: you basically put your heart and soul into this organization. Tell us about the organization, what you're up to, what you're doing today, to give the highlights.

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Don Skaggs: Sure. When I sold the company, I had one of those What's Next for me moments. And I remember sitting in the audience of a presentation about business, you know,

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Don Skaggs: because I'm always trying to educate myself. I'm always trying to learn new things, new people. And in this

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Don Skaggs: illustration that they were doing on stage, he had two simple lines on a page. And he said, this one line represents your passion.

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Don Skaggs: He said, you could have a really, really great passion for a lot of things, but not be very good at it. He said, just think of the first people that show up on American Idol.

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Don Skaggs: They think they can sing, but they really can't. He said, and this other line represents your expertise, what you're really, really good at.

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Don Skaggs: And he said, there's a lot of times a lot of people that are really, really good at something, but they don't like what they're doing. And it's those people

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Don Skaggs: get up every morning and hate their job. He says, if you can find the intersection of those two lines, you'll find your sweet spot, you'll find where you're supposed to be.

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Don Skaggs: And I sat there in my chair and I wondered, I thought, where is that for me?

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Kevin Mako: And it immediately came to me. It was this passion that I had for working with other inventors, other entrepreneurs, and helping them do what I did

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Kevin Mako: with my company and when I started mine. That's amazing. I like the second element of that in

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Kevin Mako: particular because you hear it a lot growing up, follow your passion, do what you love. But that second part is arguably just as important.

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Kevin Mako: Also do something that you have the relevant skill in. And I think for inventors, that might be relatively easy because clearly you have a skill of coming

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Kevin Mako: up with an invention idea. You've identified something. Most of the inventors I meet, eventually invent more than one thing. So the interesting thing is you clearly have some skill

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Kevin Mako: in and around identifying either solving a pain point in the world or finding an opportunity in the world. And if you can get good at that and listen

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Kevin Mako: and become an expert, hopefully by listening to this podcast, and of course, there's many other great resources that are out there, but you can

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Kevin Mako: also become very passionate about it at the same time. So you match passion and skill, and that really creates the best output.

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Kevin Mako: And we've heard this a zillion times now in many different verticals.

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Don Skaggs: It really seems to be kind of a golden secret sauce that doesn't necessarily come up immediately, but it's something that if you kind of relentlessly pursue this, it can happen.

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Don Skaggs: So talk about the Inventors Association and what you're doing to help inventors. Sure. We do three meetings a month and they're all online. You can join us from anywhere.

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Don Skaggs: Our website's k-yinventors.org. And basically we do a meeting that it will feature a inventor,

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Don Skaggs: successful inventors, successful entrepreneur or someone who is very, very skilled in one of the steps to the process.

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Don Skaggs: A lot of people think, all I've got to do is just rush out and get a patent and I'll be an instant millionaire. Well, that's not the way it works.

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Don Skaggs: There's a lot of pieces and a lot of steps to taking an idea and turning it into a real product or a real business.

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Don Skaggs: And we have experts that will talk about each one of those things. Maybe it is the product design.

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Don Skaggs: Maybe it is an attorney about protecting your idea, protecting what's valuable about your idea. Maybe it is marketing. All these different experts.

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Don Skaggs: So we'll have a meeting about that. We'll have a meeting that's kind of a little more hands-on, a little more how-to-do something.

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Don Skaggs: And then we do a third thing that's kind of unique. It's very, very different than the other two meetings. We call it our Inventor Entrepreneur Workshop.

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Don Skaggs: And in the Inventor Entrepreneur Workshop, it's members only. We all work under a closed non-disclosure agreement. And we basically go around the room and introduce everybody.

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Don Skaggs: And then we go around the room again and everybody gets a chance to talk about this is what I have. This is where I'm at. This is where I'm stuck.

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Kevin Mako: Instead of getting one person's idea or opinion, you get an entire room full of people. And it kind of turns into a brainstorming session on steroids.

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Kevin Mako: The energy in the room is amazing. amazingly high. You usually always walk out with a lot more than you put in. Well, you've got a passion for an invention.

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Kevin Mako: And if you feel like you need a little upper on the skill side of it, what an incredible opportunity to learn from Dawn and many others in the

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Kevin Mako: community. Just as a heads up for the listeners out there as well, I'll actually be doing one of the expert panel speaking events coming up on November 11th, which will be

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Kevin Mako: a virtual event. So you

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Don Skaggs: can tune in from anywhere if you become a member of the organization. So hope to see some of the listeners of the Product Startup podcast over there in the Inventures Club.

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Don Skaggs: Don, much appreciated for having you on the show for all your words of wisdom and we'll talk again soon. Thank you so

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Narrator: much. We're looking forward to having you. Thanks. Take care. Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really

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Narrator: takes to bring your product to market and turn it into a big success. This podcast series is brought to you by

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Narrator: Mako Design + Invent, the original and leading firm in North America to provide glory,

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Narrator: caliber in-to-end physical consumer product development to startups, inventors, and small product business clients.

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Narrator: If you're looking for product development help on your invention, head over to MakoDesign.com.

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Narrator: That's M-A-K-O Design dot com for a free consultation from one of Mako-designs for design studios from coast to coast.

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Narrator: Thanks for listening and see you next time.