Episode 115 - Pivots in a Massive Sea of Change
For today’s episode, we brought back one of our favorite Faith Driven Entrepreneurs and Investors, Pete Ochs, and with him today is David Simnick, Founder of SoapBox Soaps.
They both shared their entrepreneurial journeys with us, but what we spent most of our time talking about was the way they both had to adjust quickly in the face of Covid-19. Their ability to nimbly pivot their businesses sets a great example for anyone wondering how to respond to uncertain times.
We can all learn a lesson from these two men. Let’s listen in…
Useful Links:
Multiple Bottom Line Investing with Pete Ochs
Episode Transcript
*Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDE movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.
Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast out here in beautiful, little bit warm Silicon Valley. I'm here with Rusty. Rusty, how are you?
Rusty Rueff: I'm good. Henry yourself?
Henry Kaestner: Great. We're comparing the haircuts before this and the fact that you look lean and mean and really, really good. And if I could look that good with short hair, I'd do it.
Rusty Rueff: Well, it took a while to find the razor, but once we borrowed the razor from our friend, it was all done after that. So just up and over.
Henry Kaestner: Well, as you can tell our listeners, because you can see me on video, I desperately need that. But two guys who looked really, really good are with us. And we've got the video going, of course, with them with some points. And we need to do a video version of this. Of course, if they see me, especially with this lack of haircut, I'll be one and done. But we've got Pete and David who both look awesome, coming to us from Wichita, Kansas, and Georgetown, respectively. We've got a podcast episode where we're going to talk about picots. And Pete, you've been on the podcast before. It's great to have you back. David, thanks for being with us. You're a first timer. And so let's start with you. Tell us about who you are and what soapbox is all about, where that idea originally came from and what your early days at the company looked like.
David Simnick: Yeah, so first and foremost, it's a privilege to be on. And Soapbox starts back in 2010. I used to work for the United States Agency for National Development as a subcontractor and wanted to change the way that we were building out a lot of water, sanitation and hygiene work around the world with a focus on hygiene, which seems incredibly relevant now. But let me tell you, as someone who's been encouraging people to wash their hands for more than 20 seconds for the past, like 10 years, you only now feel cool. Like I just spent about 10 years and telling people about proper hand washing technique via the CDC. They just say you're trying to sell the product. Yeah, pretty much. But the whole reason we started is every time someone buys one of our products, we donate a bar. So local homeless shelters, food pantries through Feeding America, Feed the Children, World Vision, just a ton of different partners, as well as various different agencies that we have the privilege of serving. So that's kind of why we started and how we got going. We had no idea what we were doing. I made the first batches of my college kitchen in 2010 and with lack of sleep, lots of coffee and a ton of prayer. We've been able to now get into selling into Walgreens and Wegmans and Rite Aid and CBS and Myer and Amazon and Wal-Mart and just a whole variety of different retailers across the United States. So it took us 10 years to donate ten million bars. And this year alone, we'll be able to donate ten million bars. And also probably is a testament to how fast we've grown, which I know that we'll talk about in terms of pivoting.
Henry Kaestner: Pete, I want to go back to you. You've been with us, of course, before and told us the story of what God has done through you and SeatKing but for those of us in our audience who aren't familiar with that story. Give us a flyover of SeatKing.
Pete Ochs: Great to be with you again. In the 90s we started an investment banking company and started buying privately held companies. Did that through the early 2000s. 2006, we purchased a company in a small town. It was manufacturing company. It was growing rapidly. We had a really difficult time hiring employees. So we found out that we could hire work, release inmates. Those were inmates that they would ship to us every day. We worked them throughout the day. They put them back on the bus and taken to prison at night. That really worked out great so went to the warden and I said, would you have some more of these fellows we could use? He said, I'm out of them. But we have just vacated twenty thousand square feet of manufacturing space inside of our maximum security prison. And if you could figure out how to move your business inside the walls of this prison, I'd get hundred guys looking for work. And so within about 90 days, we were manufacturing inside a maximum security prison. So today we employ about 200 inmates in a maximum security and a medium security facility. We have two different businesses. One is called SeatKing We manufacture industrial seating. The other is called Electrics. We manufacture industrial electronic components. And so we pay these men a fair market, value wages. So they'll make, let's say, a hundred dollars a day instead of a dollar a day. That they'd make for the state of Kansas. We give them less opportunity to create economic, social and spiritual capital. And we're seeing flourishing in a place that is destitute of flourishing.
Rusty Rueff: Pete, I love your story. In the episode I did with you earlier, just this spirit of serving those who need that job. You know, it was so touching to us. Hey, I want to dive in with both of you guys because this episode is a lot about change. And we definitely want to talk about how you've had both to either pivot or significantly change your businesses during the Covid 19 pandemic. But before we get there, I'd like to dove into each one of your personalities a little bit, because part of being a great entrepreneur, as we know, is about being focused and driven. Right. And we have a problem to be solved and we go solve it and nobody gets in our way...except a pandemic. And personality wise. How hard is it been for both of you guys to make the shifts personally before we talk about the business? And Pete, let's start with you and then we'll go to David.
Pete Ochs: Rusty, actually. It's been fairly easy for me. And here's why. One, I'm an entrepreneur. And so I love disruption, I love new deals, I love opportunities. A couple of years ago, I moved from being the CEO to the chairman. And it's been in one sense two of the most painful years of my life because I've been out of the action. But when the pandemic came about, all of a sudden all the other guys were busy doing our normal course of business. And this created an opportunity for me. So I have been in heaven the last couple of months creating a new business. But I do like disruption. But I will tell you that I do like planning. I understand the importance of planning, but it's been really fun for me. I can't tell you that first two weeks of this whole thing was fun. But after that, when we made the pivot, it got really fun, really fast.
Rusty Rueff: And how about you, David? I mean, you make soap, right? So it's very process oriented. You package, you market, you distribute. That's kind of routine stuff. How hard has it been for you to break the routine?
David Simnick: All the credit goes to our team. And just the amazing work that they've pulled off in so many different ways. I am consistently amazed and blessed to have the members that we do and new members. We've been able to hire a bunch of new people over the past couple of weeks. But I guess the greatest example that I can give is take something as simple as a pump. And I know that people can't see me right now, but I'm basically holding a bottle of our liquid and soap to currently get a pump. Right now in the American market is a 52 week lead time. You will wait a year if you put in a purchase order from any pump manufacturer that it's in North America right now is going to get it. So what's interesting is how deep into our relationships we had to go, because thankfully we've been around for 10 years and we've broken bread and had many cups of coffee with a lot of different people throughout this whole industry on the supply side, as well as the customer side, that when things really started to jam up at the end of February and the beginning of March, we were able to utilize all those relationships to get access to materials and pumps and caps and bottles and labels that other people were not. And I think what's also really crazy is because hand sanitizer, which is one of the things that we make right now, is a part of PPE. It is really fascinating to see all the new entrants that have come into this marketplace and how much distrust there is of these new entrants. And not everyone is bad, but some of them might not be there for the right reasons. So it is really, really interesting to see how much trust in relationships and built foundations has come into play over the past two and a half months.
Rusty Rueff: Wow, and I'm not going to say it was obvious, but it might have been a little more obvious for a soap company to go to hand sanitizer. But Pete, from you to go from making seats to gowns, that's a little bit of a bigger shift maybe. When did you make the shift? How do you see it coming? Take us through that.
Pete Ochs: Yes. So, you know, desperate people do desperate things. Right. And we were desperate when they announced the shutdown. We literally thought we would shut our plant down for four or five months. And, you know, we have a total of about seven or eight hundred employees in multiple countries. And that meant, well, should we shift some of our work to Mexico because we have plants down there. So we were going through all of these kinds of things. So within the first week that they announced the shutdown, it was a really bad week for me. I'll just tell you that I literally envisioned all of the work that I'd done for 40 years going away within a few months. And so the first thought was to slash and burn and cut and save whatever we could. It was interesting at night when I'd watch the news. The only thing I could hear about is PPE. And, you know, very simple. We make seats so we have seventy five sewing machines available to us with seventy five people sewing them. So very quickly, I got this idea. Why don't we sew private protective equipment, primarily gowns. So within literally three or four days we'd assembled the team. We began to figure out what we could do. And a week later, literally within the first two weeks, we'd sold gowns. We knew how we were going to manufacture them. We had great relationships with our suppliers. One of the problem was, you couldn't get materials, but we had great relationships with our suppliers. So we had literally truckloads of material coming in within a few weeks and we made the pivot and it's worked out well.
Rusty Rueff: So Henry and I both want to go in deeper organizationally and how this all worked and such. But I'd like to hear from both of you. Just for a moment, if you will. How hard was it to convince the team and then maybe give some practical advice to our entrepreneurs about the change that you made and how you communicated it? And then how would you suggest that they communicate what could feel like radical change?
Pete Ochs: Well, what you know, I would say I've been in business 40 years now, a little over 40 years. This is the fifth deep recession I've been through. I will tell you, the first three about killed me. And after those three, I said, I'm not going to live through this again like I had before. And so I would suppose 20 years ago, after 9/11, after that recession, I really began to change our philosophy of business. And I really changed it to a philosophy of what I would call, you know, a culture of courage, because I do think it takes great courage to be in business. And we oftentimes think of courage as being some testosterone filled spur of the moment heroic feat. OK. And that's what made us pivot or whatever. I just really don't believe that. I believe that courage is making a predetermined choice based on a God inspired strategy. And so what we've done over the last 20 years is we've tried to think of courage and build courage in our team, knowing that business is going to be tough every eight or 10 years. This recession has rolled around. So the last couple of years as a team, we've been expecting it. We just didn't expect it to hit the way it was.
And, you know, courage is not an act. It's a belief that leads you to an action. OK. And so it's demonstrated when opportunity meets preparation. And so if your team is prepared and we were fairly well prepared. So for us to get our team to make that shift. It wasn't all that difficult, actually, because we've been talking about that. So I think preparation is a huge thing. Also, you just have the sheer fear of what's going to happen. So the fear with preparation coming together. It wasn't an easy turn, an easy pivot, but we were able to pivot on that whole thing.
Rusty Rueff: And David, you made that pivot to what was it like that day that you said, hey, guys, out of the soap into the hand sanitizer business?
David Simnick: So I think more credit goes to Pete and what his company has done, given, you know, going from one type of manufacturing into a different type of manufacturing for us. We've always had hand sanitizer on the radar. I think it's just the massive volume of hand sanitizer that we've produced. So we did a recent poll, which basically just shows, you know, how many brands are selling in the marketplace. And we went from not selling hand sanitizer. Two out of two hundred seventy seven brands in the United States that are being registered. Basically, they're UPC. It's being picked up through the register. We are now the 18th largest brand of hand sanitizer in the United States. And there's multiple Purell has about like five of those different categories in which they have before us. So it's really crazy, like we've shot up over some pretty significant competitors. And I think for us, what we've been able to do because of our team quickly being able to turn around and say, OK, we went from one facility to two facilities to three facilities to seven facilities, and now we're probably gonna have eight factories around the United States just making hand sanitizer 24/7 with two of them had unfortunate covid outbreaks. And one of them ran out of ethyl alcohol. So then we had to go in and basically we had to buy 40 semi trucks of ethanol alcohol.
Henry Kaestner: How many trucks?
David Simnick: 40.
Henry Kaestner: Oh, my goodness.
David Simnick: One of my friends in Texas called me up and was just like you're a hand sanitizer cowboy. I'm like, no, not quite. But yeah, I think for us it was on the radar. But we also had an early tip off because we'd been working with, well, they kind of slapped my wrists and said, you are not to talk about us in public anymore. But the world's largest coffee retailer and soapbox have been working together for the past 18 months to potentially switch over their liquid hand soap in order to be able to expand our mission of giving.
Henry Kaestner: Nobody's gonna forget who that is, by the way.
David Simnick: Totally. Yeah, but it was really interesting because they emailed us mid-February and said, hey, do you make hand sanitizer because we need to take care of some of our stores in other countries. And we were like, huh? So we got a little bit of a tip off. But I think the call that blew my mind was we had talked to this coffee retailer on Thursday and then the next day we talked to Wegmans, whose name I can share, which is like a North-Eastern grocery store. And we were like, hey, you know, we can help you out with a quick hand soap, obviously, we currently sell you a liquid hand soap and they're like, cool, we want to order fifty thousand, fifty thousand is about a truckload. And we said, hey, we're getting in the hand sanitizer business. They are like, cool, we need a million. And we're like, awesome. How much of that can we do? And they're like a million. You can do a million. And we were like, what?
Henry Kaestner: So, that's 20 truckloads presumably?
David Simnick: You've got it. So, I mean, it must be the haircut, right?
Henry Kaestner: It's. Yeah. Or lack thereof.
David Simnick: Yes, but I think, like for us, the really humbling moments were back in early March. We had a couple of phone calls with procurement directors for hospital systems. We've never sold to hospitals. We've never even thought about selling to hospitals. And we got these emails and calls and just saying, like, we don't have this, please send this to us. And I will never forget, one of the procurement directors of a hospital started crying on the phone when we said we could ship her a couple of pallets. And like this whole process has been one of where our whole team has stepped up. And I think the other thing beyond the relationships that I mentioned earlier is we had always built for scale, like we had always built the systems, because we've always wanted to become a household name brand. So thankfully, as Pete was saying earlier, that opportunity met that preparation and we were able to immediately just flip the switch and get going. But trust me, there's been hysterical things that have happened. Government commandeered one of our semi trucks. That was interesting.
Henry Kaestner: Of hand sanitizer? The government took it over?
David Simnick: Of a thickening agent. So what basically makes like liquid hand sanitizer different from gel hand sanitizer is that you put carbon in itand we had one of our tanks going into one of our factories and just got taken, rerouted. And we're like, who? Who did? And they're like the government. We're like, yeah, they they get it. So, yeah, it's been a wild ride.
Henry Kaestner: So speak a little bit more to that, because at the outset of this, you talked about the fact that up until now you'd given away a million bars of soap is a function of cell bar soap, 10 million bars of soap, and this year alone you'll do 10 million. So you talked about equipping the company. Scale. And yet that's unparalleled growth. And so you may or may not be as much of a pivot story, though. Clearly, you've moved into adjacent product lines. You've had to develop different price. Maybe even some different brands and different packaging. We talked about that. But yours is one of some amazing growth. Talk to us about what that's been like on the culture. Tell us about what that's been like. Just logistically and because it's not just that you're increasing what you've done before 10x in one year, but you're also doing it in a resource constrained environment. What's it been like for the people who are working with you?
David Simnick: Well, one of the things that we do, which is a little odd, is we have a channel and our team Slack called Props. And I try to praise every single individual part of our team at least a couple times a week. It's a little weird because it's all public, but the idea is that you really want to celebrate things that people see other people doing that are exceptional. And I believe that when you're asking people to work really long hours and when you're asking them sometimes to pull away from their family, you need to recognize that. And not only do you need to recognize that, but you also as a leader, you're not seeing everything that's happening within the organization. So if you build this culture of people celebrating each other, I truly believe that builds resilience. And then I think the other thing that we do is we have an all team huddle that in basically most of March was every day and then most of April was every day. And then we started to move to every other day is you have an all hands and you basically coordinate everything that needs to happen that day. But just publicly celebrating people. And also as the leader communicating what the vision is. OK. So when is the next. Like this is functional speed. We're going to speed up and go really fast. But there is a time where we're going to be able to slow down a little bit. And whether that is hiring more people so that individuals can slow down their speed a little bit. But yet the company continues to move at a pretty quick pace or whether it's actually getting better technology or better systems or more contractors, whatever it might be.
We are a little unique that we have a couple of people from much bigger consumer product goods companies or conglomerates that have joined our team. And they're like, this culture is really something special and I can't take full credit of that. My co-founder, Dan Doll, who is not able to be on this, is a vanguard of this culture. And we really try to encourage people to be humble, hungry, open, honest and professional and really just build this culture to solve problems before they come problems and praise people as often as you can.
Henry Kaestner: David, tell me about what this period, this time of pivoting in season of change has meant to you in your own personal faith. And does that change the way you think of what you do? Does it change what you do in leading a group as a Faith Driven Entrepreneur, or have you just been too busy and just doing what's right in front of you to not have the chance to reflect on that?
David Simnick: The truthful answer is a little bit of both. There have been multiple times where we have stepped back and within a month we did all of what we did last year in terms of revenue. Our new forecast this year is to actually to do in profit what we were planning to do in gross revenue for all of this year. And then also our ability and relationship with some of our customers has been changing. So the thing that we keep on telling everyone a part of our team and our shareholders and our vendors is that we're building the plane in flight. And that's not my quote. It's one that's used a lot by fellow entrepreneurs. But. My religion and my relationship with God is one of. I get to go to him and be very vulnerable. And I get to take all the anxiety and stress and concern and lack of a better phrase. Just be absolutely who I am and naked before one's greatest fears. And I think, you know, for me, a lot of it is you're putting so much stress on the system by 10 xing it. And now it's about OK. You, as a co leader of this, need to be a source of strength and a cheerleader and a coach and someone that people can bend to. So who can you turn to in order to consistently be that wall of strength for others? So I think it's absolutely deepen my faith because we've been multiple times in a quiet room where I just. Heads down and pray. And I don't know if I'm necessarily praying actually for a solution. I'm praying for an increasing wisdom and reserve strength.
Rusty Rueff: Beautiful. Hey, Pete, you had set the business up from the beginning to really be a social impact type of organization. And now it's even more so, you know, making the hospital downs that are on the front line with our heroes, our health care heroes. How has God been speaking to you during this time and how is your faith continued to guide you as you've made these decisions?
Pete Ochs: Unfortunately, I think I look back on my life really. The times that I've grown the most in my state is during pretty difficult trials as I look back. I've spent a lot of time looking at the last three recessions and just from an economic perspective, saying what happened and what do we need to do and what can we learn? And then I've also looked at that just from my own spiritual growth. And each one of those was a major advance in my relationship with Christ. And so I continually talked to our team about what I call a James 1 moment. Consider it pure joy, my brothers, when you encounter trials of various kinds. Knowing that the testing of your faith develops perseverance of its perfect result that you may be mature and complete, not lacking anything. And so I think we need to embrace these times. We need to become more mature, more complete, get closer to our customers, become better, be more efficient. And the last two recessions that we came through, we always came out better because I think we took that introspective look and embraced the trial instead of trying to slide it off. So when it hit, I knew it was going to be difficult. But I know there's going to be a great story a year or two from now for a lot of people. And I think the Lord can really get praised throughout that whole thing.
Rusty Rueff: I am actually intrigued, though, to even go one layer beyond because the individuals that are making your hospital gowns are making seats before. But now they're seeing this very direct line of sight to purpose. Right. Maybe they felt it before, obviously, because you set up purpose and mission and values for the organization. But now, you know, when their day is done, they know that what they made was making a difference. How do you think all of that is showing up with them?
Pete Ochs: It's really interesting. We've had lots of discussion. Those men are so proud because when they made the shift and they learned to do something just within a matter of weeks. But I think the whole concept of being able to help your fellow man. It's been an amazing thing to see the pride that people take. One of the things we did was in every gown we printed up a little encouragement card and we'll throw a piece of candy in with that card every gown. So whenever anyone opens that thing up, they get a very nice scripture verse. That's very encouraging, in a word from us. And all of the guys that were sewing those gowns have signed those cards. And so it's been about everybody come back to something tactical.
Henry Kaestner: I love that. And I actually am somewhat embarrassed to come out with a tactical question. And that's something that's as moving as that. And yet, as so many, of course our audience are faith driven entrepreneurs and think about resource planning and logistics. What does it look like going forward for you guys as you think about the planning for next year? Are you needing to be setting up another 20 containers of ethyl alcohol? And Pete, are you going to need to be thinking about continuing to get more fabric? How do you balance the opportunity that you see in front of you? And then what must be some sort of active wondering about how long does this exist? People who have enough gowns are people and have enough hand sanitizer. And then all of a sudden it stops and then all the sudden you're left with 20 trailer fulls of ethyl alcohol or gowns in your, like, parking lot. How do you process that?
Pete Ochs: So we've been very fortunate because we have an operation in Mexico and we've got about 75 people down there who are sewers that sew our seat covers. We've added another 25 or 30 sewing machines. And so we have a very good supply of labor. That's a very variable supply in some sense. So we will be able to flex with that additionally in the prison. And this is once again, very fortuitous. Right next to our plant in the prison is a sewing operation run by the state of Kansas. And those men make 50 cents a day. So we've literally gone to the state of Kansas and said, could we commandeer your facilities for a time, maybe a long time, maybe a short time? So we'll build them some variable resources. So I think we'll be able to handle it. I think it will be a tough business long term for us. OK. And it may just be a short window that we've taken advantage of. We are working to try to make a long term business that would provide us a whole new source of revenue and another. We could add to our kit as a word.
Henry Kaestner: David, how would you answer that?
David Simnick: You know what we did at the very onset, and first off, Henry, I always love tactical questions. So go ahead, ask away. But I think what's so interesting is that at the very onset of this, we only made what we had a po for and we did that for eight weeks. And every time that we would, we like halfway through making for whoever, they would come back and say, can you double that ior triple it? And we just kept our running into the situation where we were like, look, we're not going to get left holding a bunch of inventory once the market starts to correct. And I'll just talk about hand sanitizer, because that's what we know. But there's something that's used a lot in consumer product goods called household penetration.
And that is just how much of a specific category is actually being used by American households. So toilet paper is a great example. Ninety nine percent of American households are buying toilet paper...we hope. Hand sanitizer was not that high. Hand sanitizer was the best that we can find is around the 30s. So not only did you have a tripling of, let's say that answer, right now in American households, has gone up to plus 90 or 90 plus. Not only is that, but also consumption. So how fast is someone actually going through a bottle this that has drastically increase. So you've basically had a compounding effect of not only do you have a lot more households using hand sanitizer, but you also have the rate in which someone's running through a bottle is so much faster. So every time that we thought that this was going to start to dip down, it just hasn't.
Henry Kaestner: Of course that habit is going to be difficult to break when they come out of this.
David Simnick: Yeah, like, look. God willing, there's a vaccine in the near future. Even with that, people who are plugged into the research side of our business that I myself are saying that health and hygiene habits have changed and that's not going to wear off for quite some time. So I think for us, the weirdest thing that our company has had to go through is we went from being a teenager to our mid 30s. In two months. And that's really, really weird. So, you know, the ability and the negotiating power that we have in our supply chain now, all of a sudden what we mean to our customers because of how much we're shipping to them. It really has been both a blessing as well as just requiring tons of prayer and asking the Lord for guidance in so many different ways because it has just been such a fast evolution for us. So we have been careful. But I also think that demand is going to continue to stay strong for quite some time.
Rusty Rueff: And you know going from your teens to your mid 30s and a couple of months. You didn't have to pay for college.
David Simnick: A bright side!
Rusty Rueff: Yeah. You know, I was actually reading something that, you know, a lot of the whiskey distillers began making hand sanitizer. So if you needed to pivot, you could pivot over to them now. Right. You could probably not. You're probably not going to start making whiskey.
David Simnick: It'd be funny if we actually just started making whiskey. Right. So, like, you just leapfrogged over from soap, to hand sanitizer. Whiskey.
Rusty Rueff: Yeah. Well, it's a good soapbox to be on. OK. So let's go here. Let's talk about U.S. manufacturing. So all of a sudden, because of this crisis, we see things being made here that weren't even contemplated being made here before. Right. It was just easier labor cost overseas. You know, just ship it in. What's the prognostication from both of you guys coming out of this around U.S. manufacturing? Is this the catalyst that brings us back? Pete, you want to start?
Pete Ochs: Sure. Rusty I would think so. I really think that we'll see a resurgence in American manufacturing. I think the issue there is that the American people are going to have to learn to live with higher costs simply because the manufacturing costs in the US are much higher than they are in China.
So it will be very interesting. The marketplace will ultimately determine how much is manufactured in the US. OK. And the consumer will figure that out. But I think it also then opens up a great opportunity because people there is probably some function there. They would pay a bit higher price. That may be a lot higher price. So I think for those of US manufacturing, I think the opportunity to bring technology into manufacturing and try to figure out how to lower those costs is going to be a really terrific thing. I will tell you, in 2006, about the same time we went into the prison, we had to move offshore because American labor rates in the wiring harness business did not compete. And so we moved.
We took a hard look at China. We took a hard look at Mexico. China at that point in time, if I remember correctly, was about a dollar an hour and Mexico was about a dollar fifty or two dollars an hour in labor. This is 2006 timeframe. We decided to go to Mexico because the body of water between here and China was just too big, and particularly for a wiring harness that goes on a machine if it doesn't work. You've got a big problem. OK. So we went to Mexico. So today, Mexican labor is less than Chinese labor. So I think the real manufacturing boom is going to be in North America, not necessarily in America, but I think Mexico is set up. We have an older population. Mexico has a very young, burgeoning population. There's growing into the middle class. And so I think the opportunities for Mexico and the US to partner and become a rival China in manufacturing is really there a trucking container versus a sea container, right.
Rusty Rueff: I mean, you're right. That's that's a big difference. That big difference. David, what do you think?
David Simnick: You know, it's fascinating because I think a lot of what's happened in terms of the drastic need for domestic supply is just all about capacity. So thankfully, there are and have been a lot of manufacturers that have niched out a special space within the market where for whatever reason, their products still have to be made here. And the customer, for whatever reason, was OK with paying a much higher price point.
What I believe we've seen is that the capacity for American manufacturers is just so limited. And, you know, Pete said this best. It comes down to the consumer. If the consumer's willing to pay two, three, four times as much for things that they're used to buy in for, a lot less than absolutely manufacturing in America will come back and a very strong way. I don't know if the customer is absolutely there yet. And I think you will see, as history has shown us, you will see a bunch of politicians, as well as public health officials urge the importance of having a central supply here. And I do believe that will happen to a degree. But I agree with Pete in a big way that I think we look more to our southern neighbors and what they're going to be able to produce for us, because just from our own supply chain aspect, it is far cheaper and more effective to work with either Canadian or Mexican suppliers, and that's to try to get from China.
What is fascinating, though, is we have had to buy components from China, put it on a plane, and that airfreight ends up meaning that what we're buying from China is more expensive, but we could have bought in the United States. The problem, as I said before, is capacity. It's just that, you know, as I said about the pump, like, I can't wait a year to deliver to HEB or to associated food stores or to Wal-Mart. I can't wait a year, nor are they going to wait for me. So I think we really have to as a society, I think, reflect on. OK. What are the essential things that we always want to have capacity for and that either we're going to subsidize as a society or that consumers are willing to pay more for? And what are we OK with if we're not willing to pay that price of potentially running into a supply net?
Henry Kaestner: So, Pete, what's it like for you to retool and get up a pump bottle business that can deliver something less than a year?
David Simnick: I'll be your first customer will be your first customer. I'll send you a PO right now.
Pete Ochs: We'll have it there in two weeks for you.
Henry Kaestner: Alright, you guys have been around the ecosystem long enough to know that we close out every one of our podcast episodes with same question. We asked our guests, what are they hearing from God through his word? Maybe it's today, maybe his last week, but something that you feel that guy is speaking to you about, that might be an encouragement to our listeners. So, Pete, start with you. What are you hearing from God and his word?
Pete Ochs: I keep going back to Proverbs 27 where it encourages us to know the condition of our flocks. And I think part of our flock is people, process, and property. We need to know those really well. But it all starts with people and we really work diligently to try to make our business the best place to work so we really try to look after our people. But this has even heightened that for me. I think God is normally we will have about 15 to 20 percent of our people in some kind of a small group. We had over 50 percent sign up here a couple of weeks ago in our last go round. And we've just seen the whole idea of faith and purpose. It's just been magnified during this time. And what we need to do as Christ centered faith driven entrepreneurs is to say we have the answer and let's share that. And so I just want to make sure that I'm being a good shepherd to the flock that God has given me.
Henry Kaestner: David?.
David Simnick: Express gratitude, praise others.
Henry Kaestner: Good word. Good words, gentlemen. We've been blessed. Our audience has been blessed by you sharing what guy's been doing through you, through this time of pivot and excited to hear about the way that you've been able to marshal your troops, your cultures, your customers, your vendors, and really lean into an opportunity. And I think that's symbolic of what we as followers have in front of us right now is and understand that God is sovereign, that he gives us an opportunity, wake up every morning to understand how we might know him and serve him better with our coins that we each have and were as a part of this podcast's in the marketplace. And you guys have done it. You set a great example. So we pray continued blessings and providence on you and just grateful for your time and your friendship. Thank you.