Product Startup Podcast Episode 088: Plan Sustainable Product Manufacturing

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from the founder of an overseas manufacturing empire with eight factories and 1,500 employees on best practices for sustainable consumer product production.

00:00:12 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, product developers,

00:00:24 Narrator: and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store sheds.

00:00:32 Narrator: We're taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses.

00:00:47 Narrator: Now, onto the show.

00:00:49 Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Jacob Rothman to the show. Jacob is the CEO of Platform88, a manufacturer that helps startups with their first production runs in Asia. Platform88 is the division of Jacob's eight manufacturing conglomerate. called VLong Industries.

00:01:04 Kevin Mako: Today, Jacob's going to share some valuable knowledge on how inventors, startups, and small manufacturers should factor in manufacturing and production sustainability, how to do sustainability well, and what types of sustainable options are out there for your physical product. Now on the episode.

00:01:20 Kevin Mako: Jacob, welcome to the show. Hey, Kevin, how are you?

00:01:22 Kevin Mako: It's great to be on your podcast. Good, good, likewise, great to have you on. So I understand some of the talks that we had before the show, you've effectively been stuck in China

00:01:31 Jacob Rothman: with your factories for almost two years now because of the COVID situation. Yeah, I know that because I had a somewhat uncomfortable conversation when my father, who lives in California, reminding me on Sunday that I haven't been home in two years

00:01:43 Kevin Mako: and it really liked me to come home. So explain what's going on there in terms of like expats and travel and all of that because I found that very interesting.

00:01:51 Jacob Rothman: For the most part, traveling within China is okay. My family and I took a vacation to Xi'an, where the terracotta warriors are. That was okay. But there are outbreaks and now with Delta virus, and China is very strict about inland travel.

00:02:05 Jacob Rothman: I wanted to go down to one of our factories in the south this week. I was supposed to be there, and I couldn't go because there was a chance that I might be quarantined. But travel outside of China is even worse.

00:02:16 Jacob Rothman: So our visas get canceled immediately upon leaving, and it's not 100% sure if we can get back. And if we do get back, there's a two to three week quarantine in probably not the best of hotels, eating not the

00:02:28 Kevin Mako: finest of foods. Wow. So that really does stick you there. And it's amazing, you know, you've stuck by your factories. You have a number of them across the country and as well with Platform88. Why don't you give everyone just a bit of a background to how you got to where you are

00:02:42 Jacob Rothman: today as a successful producer overseas? Sure. Well, when I got out of school originally, I was going to be a rabbi, which I know is quite a departure from what I'm doing now. But I had

00:02:52 Jacob Rothman: signed up. I had applied. I thought I might be going to rabbinical school. And my father convinced me to go work in a factory that we had in Stockton, California, which was producing brooms and mops

00:03:04 Jacob Rothman: and brushes for retailers of the day like Costco and Price Club, which doesn't exist anymore, but smart and final, people on the west coast of the United States. And from there, I moved to

00:03:17 Jacob Rothman: Shanghai because we wanted to open a sourcing office after working in the factory in California. And after that, there was a couple ups and downs in terms of the economy. I've been,

00:03:28 Jacob Rothman: here for 15 years. So in those downturns, retailers and customers really started turning to factories to do the work that maybe trading companies were doing or sourcing companies were doing. So

00:03:41 Jacob Rothman: I sort of saw their writing on the wall merged my sourcing company or trading company at the time with a small factory that we've been working with and then grew what's called VLong

00:03:52 Jacob Rothman: industries into several factories and then a few more and then ultimately platform idiot.

00:03:58 Kevin Mako: So now you've got your mentioned 1,500 staff members across 8 plus factories. And the amazing thing is now with Platform88, you've got an avenue for early stage

00:04:09 Kevin Mako: companies or merging companies in the product space to actually get off the ground. And we'll talk about Platform88 down the road as well in this conversation. I want to talk today with you about sustainable manufacturing because I know that's a big

00:04:22 Kevin Mako: thing that's emerged within your factories and within your programs. Why don't we start with talking about the reason that sustainability has become so powerful

00:04:31 Jacob Rothman: in this global economy in and around consumer products? I think people are fed up with the way in which we've looked at products, used products,

00:04:39 Jacob Rothman: engage with products, and we're starting to see the repercussions of decades of plastic

00:04:46 Jacob Rothman: use, and plastic is in our landfills, in the ocean, and it's really destroying the environment. no matter what side of the political spectrum you're on, I think we can all agree that there's too much plastic in the ocean.

00:05:02 Jacob Rothman: And younger people,

00:05:05 Kevin Mako: younger consumers probably are driving this need for sustainable product and sustainable manufacturing. And the big companies are starting to get on board.

00:05:16 Kevin Mako: And you're seeing it kind of in the back end at the early phases with a number of these large companies. I know we've got Walmart, Woolies, you're mentioning Metro and Germany, Target.

00:05:25 Kevin Mako: There's a lot of big companies that are really starting to approach on the buy side with a lot of their vendors and look at the options that are available for sustainable manufacturing as a whole. Absolutely.

00:05:39 Jacob Rothman: Some of the largest, and people maybe you wouldn't consider as this being important to, people like to point at large companies and vilify them, I suppose. But Walmart is really leading the charge on sustainable manufacturing.

00:05:53 Jacob Rothman: If you look in their camping department, their Firefly brand is made of recycled fabrics for tents, sleeping bags,

00:06:02 Jacob Rothman: almost every department. If you're speaking to a buyer at a chain store and you're not talking about sustainability,

00:06:09 Kevin Mako: you're probably not going to win. So not only is it a good thing to do and the right thing to do, it's probably a good business move as well.

00:06:18 Kevin Mako: It's interesting. You know, you talk about the buyers and traditionally it's all about price. but it looks like as these major corporations are evolving and as more and more as you mentioned

00:06:29 Kevin Mako: kind of the younger demographic, which generally seems to be leading the charge in terms of even just on the consumer level of desiring products that are a little bit better for the environment or rising up or getting frustrated about these sorts of things.

00:06:43 Kevin Mako: While as these companies are evolving, they're getting to the point where they want to have a greater impact on the world and as well as their buyers and as their team are getting more involved in this sort of stuff, it really drives down to those conversations that are happening

00:06:57 Kevin Mako: in the buying room, which I don't think was so common,

00:07:01 Jacob Rothman: even just 10 years ago, it was all about price and functionality. Now you've got price functionality and sustainability,

00:07:08 Jacob Rothman: which is something that as you're developing the product, you can think about from day one.

00:07:13 Jacob Rothman: I think it's who, I mean, there's a number of things that are driving it. And cost is still a major factor, right?

00:07:21 Jacob Rothman: Any buyer anywhere on the planet who's not sort of urging euphemistically their vendors to have the best price. So I think that's still always going to be at play.

00:07:33 Jacob Rothman: But we tell different stories now than we and are able to tell different stories now because of social media, because of Amazon,

00:07:42 Jacob Rothman: because of selling direct to consumer, you have startups and brands that are able to reach a larger, audience. So maybe when I first started my career,

00:07:55 Jacob Rothman: Walmart was concerned about Dollar General and Family Dollar and off-price retailers and making sure that they were offering value. And

00:08:03 Jacob Rothman: they still try to offer and do offer value to consumers. And that's on every continent. Metro and Germany or Woolies in Australia, Tesco in the UK.

00:08:14 Jacob Rothman: But now you have people telling stories they're attractive.

00:08:19 Jacob Rothman: And we're flipping through our phones and we're seeing this product that's made in a certain way, like an ocean bottle from the UK and how's that made.

00:08:29 Kevin Mako: And they're now having to compete with these people direct to consumer companies.

00:08:33 Jacob Rothman: And they don't want to look dated. They don't want to look old. And I think they also, in many sense, I think their buyers have the right intentions as well.

00:08:43 Jacob Rothman: So how do you build a sustainable product? what do you need to be thinking about and let's talk first and foremost about materials okay um well

00:08:53 Jacob Rothman: it all starts with the bill of materials as you know right as an engineer so um it's about choices that you make in the beginning is how sustainable can i be what's the price value relationship

00:09:04 Jacob Rothman: can i be 100% sustainable is it possible first uh what materials do i need to use can i use

00:09:11 Jacob Rothman: can i make an affordable product because we still have to sell products that people can buy

00:09:16 Jacob Rothman: And so I think that in the ideation stage of your product, it's really looking at what part of it can be sustainable.

00:09:25 Jacob Rothman: You know, if it's a bottle,

00:09:27 Kevin Mako: can the plastic parts be made from ocean plastic or algae? Can the stainless steel be recycled stainless steel? If it's,

00:09:35 Kevin Mako: I think if you're watching the Olympics, Hewlett Packard just launched a computer that's, the casing is made from ocean plastic. And that's kind of a big deal. You wouldn't expect that from HP, but there they are. then it's a big deal on the advertising.

00:09:49 Kevin Mako: The beautiful thing about materials that I find, we're dealing with our clients and developing products, it's a really relatively easy, low-hanging fruit because you're simply selecting a material.

00:10:02 Kevin Mako: Now, of course, you have to make sure that the performance is there and whatnot, but as you mentioned, it doesn't have to be that your product is 100% from recycled materials, especially if certain elements cannot be. But as technology is improving, the technology around recycled materials is improving

00:10:16 Kevin Mako: as well. So every year, we have more and more access to more and more different types of recycled or sustainable or organically grown materials, as you mentioned with the algae. There's a lot of things that is emerging that is making it easier and easier for your product

00:10:31 Kevin Mako: development team to actually create those innovations or those pieces of the product that help with sustainability.

00:10:37 Jacob Rothman: And I noticed one of the things that caught my attention as we were talking before the show, Jacob, that you mentioned too, is when you're dealing with sustainability, As your example there where you said maybe it's 30% recycled materials,

00:10:49 Jacob Rothman: it's also key to be very transparent and honest with your customer base, that here is exactly and specifically how you are trying to improve your product from a sustainability perspective.

00:11:03 Jacob Rothman: Yeah, I think sustainability means a number of things, right? And the first rule, I think if you're going to sell a product, is honesty and transparent. We can do this much.

00:11:17 Jacob Rothman: Then you need to look at what else goes to sustainability. One is materials.

00:11:22 Jacob Rothman: Another is the manufacturer that you're working with. How are they dealing with not just power and waste and electricity?

00:11:32 Jacob Rothman: So sustainability means a lot of different things. It could be materials. It could be the manufacturing process. It could also mean, and again, to reference Walmart again,

00:11:42 Kevin Mako: Walmart urges that and IKEA urges their events, to be sustainable in your community. How are you helping your community? So it's not really just about the product.

00:11:54 Kevin Mako: It's about all the things that go along the chain to make something sustainable.

00:12:00 Kevin Mako: A lot has talked about now of circular economies or upcycled materials and it all goes into it. And I think we're making change incrementally, which is great. That's a big one that you mentioned.

00:12:13 Kevin Mako: You know, we first started talking about materials, but looking further beyond materials is a big part of sustainability. And one of the keywords that I always use when you look at that factor is community. How are you improving the community in and around the manufacturing facility?

00:12:27 Kevin Mako: That could be mean quite literally, or like you're building a school near a facility, or could mean other methods like how are you reducing your shipping costs or how are you

00:12:38 Jacob Rothman: encouraging innovation across the line? how are you improving the lives of the folks that you're manufacturing with or a part of? It's much bigger than just materials, but of course, materials is the easy one that's easy

00:12:51 Jacob Rothman: to see and realistically speaking, very easy to do from the onset. So let's break down those other things a bit further. And talk about what Platform88 and the factories that you have are, what are they doing

00:13:03 Jacob Rothman: to increase sustainability beyond just materials? Sure. Sure.

00:13:09 Jacob Rothman: So we opened our first wholly owned factory outside of China last year in Cambodia. And if you know the history of Cambodia, like many

00:13:20 Jacob Rothman: people do, it's had decades of violence and a complete breakdown of direct investment and the use of funds in that country for what

00:13:31 Jacob Rothman: they were intended for in the beginning, education and clean water and roads and things that. the country need and needed and still needs to get themselves at global standards.

00:13:45 Jacob Rothman: So at the factory that we have in Cambodia, unfortunately, it's been slowed down a bit by COVID. We had four stages and still have four stages. We wanted to do cut and sew material,

00:13:56 Jacob Rothman: which is up and going now. The second was tools because we do a lot of kitchen and grilling

00:14:00 Kevin Mako: tools. The third is small electronics. And then the fourth and final is building a school. We haven't decided yet if we're going to do it for the workers or for children. And for the workers,

00:14:12 Kevin Mako: it might be, how do you not be a factory worker in five years from now? What courses do you want? Do you want computer education courses or how to handle money or how to make investments or

00:14:24 Kevin Mako: how to build your own product? Or we might do a more basic education level for children. We haven't decided yet, but it's something that we're working on and passionate about for Cambodia. Yeah, it's amazing. And that all flows through to

00:14:37 Kevin Mako: the overall quality and caliber of the product, and it's a great story behind it, and you really can feel like you're actually doing something good, not just building this plastic widget, but you're a much bigger part of the global community, which is something you came around

00:14:49 Kevin Mako: to in the first place in this conversation, is really looking at the world as one whole planet, not as individual countries or companies or whatever else, but really one planet that we all

00:15:01 Kevin Mako: share together. And how can we collectively, even on our simple widget or gadget, how can we collectively work together, both with a design team, with your manufacturing partner, and with your buyers. And of course, that all trickles down to your end consumers. How can we all work together

00:15:15 Kevin Mako: as all these different stakeholders to make not just a widget, but a widget that also is being done in the best possible way that you can for the environment while hitting certain performance

00:15:26 Kevin Mako: criteria or whatever it is for your product? And I think if you really look at that from the very onset, I see it with a number of products, it's not that difficult if it's a goal from early

00:15:37 Kevin Mako: on in the business. And if it's a goal early on in the business and right from the early sketch design phases, as you're talking about looking at those materials, figuring out what options you have or don't have, you can actually make design and engineering decisions along the way

00:15:49 Jacob Rothman: to allow you to have your cake and eat it too, where you can use a material that you want if it's designed in a specific way so that when you get to the manufacturing phase, it's well thought out and you're actually putting your best foot forward in terms of how much of that product is sustainable

00:16:02 Jacob Rothman: and the types of sustainability that you're drawing forth. I want to go back to materials for a second because I know you've done a lot of work with some specific materials. And can you break those down so that as our designers

00:16:16 Jacob Rothman: or new product developers out there are listening, they can just on the onset at a high level understand what some of those emerging materials are, some of that technology that we can actually use in making our product sustainable going forward.

00:16:27 Jacob Rothman: Well, we have separate production lines within our factory to test new materials because using virgin material versus recycled material, you have different shot times, you have different results in terms of how the plastics,

00:16:43 Jacob Rothman: clarity or color or strength and durability. So we have a line set up at two of our factories to just test these materials. And a few that I'm proud of is we're using ocean bound plastic and ocean plastic.

00:16:57 Jacob Rothman: That was really the first one. The second one, we're using sugar cane. We're using coffee husk. We're using algae. Algae is kind of a silent killer.

00:17:09 Jacob Rothman: But if you love the environment and hiking and camping and an algae bloom takes over your lake or river, it kills everything in the environment because it sucks all the oxygen out. So we're working with algae-based products.

00:17:22 Jacob Rothman: And then one that I'm really particularly proud of is one of our, The southern factors were in Guandong province and the southern part of China.

00:17:30 Kevin Mako: And we just signed a deal with a company that's going to go around to Starbucks and Costa Coffee. And we have a tea company here called Haiti, collect the plastic trash, bring it back to our manufacturing town, pelletize it, clean it.

00:17:46 Kevin Mako: We just got our FDA and LFGB is for Europe certification. And now we're working on our process certification as well to make sure that we can prove it and that is repeatable.

00:17:59 Kevin Mako: And I like that as well. I mean, trash that's floating in the ocean is romantic and exciting, but so is the trash that's sitting in dumpsters, you know, in landfills in our communities. So those are the main ones that we're working on right now.

00:18:14 Kevin Mako: Those are three big topics, right? We've got your ocean trash, your land trash, and then your organic materials. All three of those are three different and very powerful options that you have as a design,

00:18:26 Kevin Mako: as a product company to use in creating a sustainable version of your product.

00:18:32 Jacob Rothman: And as we all know right now, there's a lot of it. There's a lot of ocean and land trash. It will be quite a significant amount of time before we run out of those recycled materials.

00:18:42 Jacob Rothman: And of course, you know, the utopian dream of everybody is to have a 100% recyclable system. As you get further and further up that chain from, you know, a few percent to 20% and

00:18:55 Jacob Rothman: onwards, that means more and more materials are always going to be cycling back into that development system, into that manufacturing system, especially the better technology that evolves around recycling products, the more and more of those, not only of the options available to

00:19:10 Jacob Rothman: you, of the technology available to you, but the more and more materials you can actually use in order to continue that recycle process. I don't think it's as long as you think or might think,

00:19:20 Kevin Mako: Kevin, because, I mean, just think of maybe four or five years ago before Tesla and the idea that everyone might be using,

00:19:28 Kevin Mako: you know, electric vehicles,

00:19:31 Kevin Mako: that seemed like something that was, you know, that would never happen, but it's happening. It's happening quickly here in China, but I know a still small percentage right now are EVs, but it's predicted, you know, in the not

00:19:45 Kevin Mako: too distant future that most cars would be EVs, right? And I think the same thing with material. and products as well.

00:19:52 Kevin Mako: The world's moving quickly, and I think, especially for your audience who are startups and just starting out, thinking about that from step one, before they even come to the

00:20:06 Kevin Mako: engineering phase or the design phase, I just think is critically important. Well, the important thing that you mentioned earlier on, you know, in 2021 right now, it's good business. So even if it, and especially to most of the folks listening here that are developing

00:20:19 Kevin Mako: products, you're developing something new, unique, proprietary of value. So generally, margins are built into it. We've talked a lot about margins on the show. When you're making something new, it fetches a higher price point generally.

00:20:31 Kevin Mako: And as such, that gives you some liberty or some luxury within those margins to build quality into the product, but also to build sustainability into the product. And at the manufacturing level, as you get into the product space,

00:20:45 Kevin Mako: as you sell products, you'll realize that a small increase in production costs because of recycled components is going to be minor relative to the overall retail price point they're actually selling for.

00:20:57 Kevin Mako: So if you can't sell for two or three percent more to cover maybe the 10 to 20 percent higher manufacturing cost, then you have to reevaluate the actual product value that you bring into the market, the innovation value.

00:21:09 Kevin Mako: It's presumably if you've come up with an innovation, it's because it is creating value

00:21:14 Jacob Rothman: or there's a need or whatever else in a specific part of the market, sustainability should not be one of those corners that you cut to try and reduce your cost. If anything, look to increase the value that you're providing with your invention or your

00:21:25 Jacob Rothman: gadget or your innovation or whatever it might be so that you can build in sustainable production into your cost. And what, of course, will result is people will actually be willing to pay a higher price. Buyers will, as you mentioned, even at the highest levels, even at the biggest retail company

00:21:40 Jacob Rothman: in the world, they are interested in that. that very well might be the difference between a go and a no-go conversation on the lines floor in the red brick building of Walmart. So this is where you really want to be thinking about this from the early stage of your development

00:21:53 Jacob Rothman: and make sure that you're just at least putting a certain amount or what you can at this point

00:21:58 Kevin Mako: in time based on current technology into that product to flow through. Can you explain, Jacob, how Platform88 fits into all of this?

00:22:07 Kevin Mako: Sure. But I just want to go back one second, though. I would say that if you're a startup and you're not thinking about this, I think I might be repeating myself,

00:22:18 Jacob Rothman: but we have an opportunity to work with large chain stores, large brands, but we also have our startup department, which we can talk about in a second. And I can tell you from the inside, large brands,

00:22:33 Jacob Rothman: large chain stores are already thinking about this and making very aggressive strides forward, which is great. but if you're a startup and not thinking about this and you're coming to wanting to sell either direct to consumer or to a chain store,

00:22:49 Kevin Mako: your competitors are thinking about this. So you really have to think about it. You really have to engage it. And so it's something you should do.

00:22:56 Jacob Rothman: And the nice thing is if you are, let's say you're too far along in your current production process, you've already made your first 1,000 units. You can always evolve your product into be a sustainable, sustainable product down.

00:23:09 Jacob Rothman: the road. So it's never too late to start thinking about or start having the conversation with your engineers about how you can start to incorporate sustainability into even an existing line.

00:23:21 Jacob Rothman: Yeah, I totally agree. And oftentimes it's not as harsh change as you think. It's just getting your manufacturer to agree to bring in sustainable materials, run them on their equipment

00:23:32 Jacob Rothman: and machinery. And, you know, in some cases it might be a mold change. It might be a minor mold change, but in some cases, it's a new mold. But in many cases, you can use the mold you have

00:23:44 Jacob Rothman: and shoot different materials if you work with your manufacturer.

00:23:48 Jacob Rothman: So just before we sign off here,

00:23:50 Kevin Mako: I really want to have the audience understand a bit more about Platform88 and how that's helping early stage companies enter into the overseas manufacturing process. Sure. So I think I mentioned

00:24:01 Kevin Mako: before. So V-Long Industries is the parent company, and we have the subsidiary, which is Platform mediate and it or a department within VLong that's just focused on helping startups and if we

00:24:15 Kevin Mako: circle back to the beginning of the podcast like I said I wanted to be a rabbi in the beginning so I'm getting to flex those muscles now and and help startups and you know for me you know providing

00:24:28 Kevin Mako: a little bit more mentorship guidance these are things that we didn't get when I first came to China. I'd go to a factory and they were making something for somebody and I wanted to know who

00:24:38 Kevin Mako: the buyer was at Walmart or Target or Metro or somebody like that. And we just couldn't get that help when I first started. So now that I'm 48 and I started in my 20s, I want to get back to startups

00:24:52 Kevin Mako: and this is a way I can do it.

00:24:55 Jacob Rothman: Well, that's amazing. It's much appreciated too. And we look forward to collaborating with you on a number of projects because there's always that transition period between you get to your final prototype and you're ready to go to production and of course

00:25:10 Jacob Rothman: that that's a big leap a lot of customers are going direct to consumers out of the gate through

00:25:15 Kevin Mako: Kickstarter and you go to platforms or even just direct to consumers via Shopify on their own website pre-selling some units and then of course rubber hits the road now you've got to produce and that is a

00:25:26 Kevin Mako: big leap and that's an under you know an under generally an underestimated leap between going from your

00:25:33 Jacob Rothman: you know, ready for production to actually producing. And this is where something like Platform88 can really smooth that process over, as well as with, you know, Jacobs of experience and huge manufacturing base and many manufacturing connections beyond that, I think it would be very helpful, especially to early stage startups,

00:25:47 Jacob Rothman: especially to startups, hardware startups that are going through the manufacturing process for the first time. So, Jacob, really appreciate that you've put the commitment into helping startups through Platform88. What's the, it's just platform and then the numbers 8.com, right?

00:26:01 Jacob Rothman: Yeah, it's www.

00:26:04 Jacob Rothman: Platform88, the number 88.com is our website. But we're on Facebook and Instagram. You can find us there, and we are fairly visible. But I also wanted to say I'm not alone. I have five different co-founders, so it's not just me fighting the good fight.

00:26:18 Jacob Rothman: I have other people helping me as well, and we're all committed to helping startups. And I'll put all the links within the show notes, so you can just click through to find any of those mediums that Jacob mentioned.

00:26:29 Jacob Rothman: And as always, really appreciate talking to you. And thanks for being on the show and sharing all that insight for manufacturing, especially around sustainability. Thanks, Kevin. I appreciate it. Take care.

00:26:40 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success.

00:26:50 Narrator: This podcast series is brought to you by Mako Design + Invent, the original and leading firm in North America to provide global caliber end-to-end physical consumer product development to startups, inventors, and small product

00:27:05 Narrator: business clients. If you're looking for product development help on your invention, head over to Mako-design.com. That's m-a-k-o-design.com for a free consultation from one of Mako-designs for

00:27:18 Narrator: design studios from coast to coast. Thanks for listening and see you next time.