 I'm Alexis Ohanian. I've started startups, invested in them, and met amazing people using the internet to change the world. Our generation has an opportunity unlike any other. We can create small empires without anyone's permission. We're literally down under the Manhattan Bridge overpass, also known as Dumbo, and a lot has been said over the last decade about the decline of the American manufacturing industry. One startup here in Brooklyn, Makers Row, is actually doing something about it. Just want you to know before we get any further, I am an investor in Makers Row, but just like any other startup on the show, we're profiling them because they're cool. I also just happen to be an investor. We connect designers and brands with American manufacturers. Basically our mission is to make manufacturing accessible in the U.S. When I graduated from Pratt, I designed watches for Marc Jacobs, DK&Y, a few other designer brands, decided to leave that behind, start my own watch company, and there I was producing overseas. And I got a very difficult lesson in like sourcing overseas as an independent company versus being part of a large corporation. Got tired of that and I wanted to start a new company. Still very much in love with design, but now I wanted to have much more control over the manufacturing process, so I wanted to do everything locally. So everything I was getting was hyperlocal. The leather I was getting in Queens, the hardware I was getting in Bronx, and everything was assembled in Midtown in the garment district. So I knew every single person that was touching my product, and it was a world of a difference. I was working full-time. Where were you working? I was working at Goldman Sachs. Why did you want to leave Goldman Sachs? On one of my half days I visited a factory with Matthew, and so at that time I was working with him part-time like doing spreadsheet stuff for him and operation stuff, and I visited a factory and I was just blown away at, you know, at seeing what used to be a drawing of his that I had just seen like last week and seeing someone put it together and all of the steps that go into it and all the care that goes into it. It was just incredible. It was really interesting to see how long it took Matthew to find American Manufacturer because that was his, you know, domain of expertise. He wanted the best materials, the best contractor, and to be able to produce things with, you know, within two weeks, within a month, and so it was really hard. It would take us months to find these American Manufacturers. Tanya was really the one who saw the opportunity in that because we would meet other designers all the time, and they all had the same problem. They couldn't find the right manufacturers. It was much easier to find them overseas, but they were having problems with it. I would go to conferences and people were complaining not just about marketing and sales, but they were complaining about production and how do I find a contractor, how do I find an American Manufacturer, and one of my designer colleagues paid $2,000 for just an Excel sheet of American Manufacturers, and I was like, this is ridiculous how like brokered the information is, how hard it is just to find information. Like the Yellow Pages isn't enough. Google isn't enough. I'm from Detroit, and I've seen what manufacturing can do to build up a city, and I can see what the loss of manufacturing can do to a city and devastate it. So it means a hell of a lot to be a part of something that can make a difference. I love going to factories. Not only is it something that that's kind of like my roots, my family came to Detroit because of Ford, all that sort of stuff, so manufacturing is in my blood. I wanted to apply my manufacturing experience to the platform so that we're not just like a Yellow Pages basically for American Manufacturers. I wanted it to be a platform in which it made manufacturing easier to understand as well as access. I broke down the manufacturing process into six basically bite-sized steps so that from basic concept to product in hand, a beginner would be able to follow those steps to be able to create whatever they wanted. Before MakersRow, was it really that bad? Was the sort of market for knowledge that inefficient that even you, a Pratt grad, like couldn't get the access you needed as efficiently as you'd like? So I'm gonna throw numbers at you. Bring it please. So the first-time entrepreneur, over 75% of first-time entrepreneurs trying to produce physical products fail before they even get to the prototype phase. Many designers, they basically draw something up on a napkin and send it overseas. They have no idea what the process is, they have no idea what the materials are that are going into the products that they're producing, and that's really dangerous. We were both non-technical people, we didn't know how to code, we had never started a tech company before and so we didn't really know how to get started. So I started like signing up for mailing lists and going to meetups and and so on one of the mailing lists there was this application for an incubator. We applied, we put like our business plan, we did a video, and we got accepted. So we used the acceptance into the incubator as leverage to get a technical co-founder and so we found Scott and he came on board and and then within those three months of the Brooklyn Beta Summer Camp program we created Makers Row. What was the initial feedback like? It was awesome, it was awesome. I think that you know from designers they were just like oh this is really cool like I saw from my friends that went to Pratt with me they said this is really awesome like I was the guy who was kind of sitting back in class and just kind of like sketching out stuff and not really paying too much attention in class so I think that they were a little surprised that I would go back to the the rudiments of like how a product gets produced but it's very much something that I fell in love with and then to see from the factories to see how many people were reaching out to these factories and see that they were actually getting orders enough for them to make a new position whether it be in labor or management with something that you know I'm a strong guy you know it made me well up a little bit I will say that. Adapt or Die is a pretty well-known business tenant. A company has been manufacturing here in New York for longer than I have been alive and they've been able to take this age-old business online right here in the Garment District. My father actually started making belts and my dad is a very you know driven motivated person he immigrated to this country from Russia he had to make something. He started Flea Marcus and then he started selling he started making headbands and things like that and then finally he moved into handbags. What happened was he had a small little shop then he got bigger and bigger and he started selling wholesale and he made his own brand. It became pretty big they had a showroom on 35th Street in Manhattan they had an enormous factory just making their own merchandise. I actually saw their bags all over the world they were shipped everywhere I mean I remember being a little girl on vacation with my father and walking into a store like in the Caribbean and seeing their bags and saying oh they made that and they would be all shy and say no we didn't Nikki you know. For the first 20 years he made his own line of lower end bags so these were 10, 15, 20 dollar bags we cannot do that anymore I mean China took over that whole market so we've had to change in order to adapt otherwise we would be gone just like most of the handbag manufacturers in New York he said you know the business is changing you know I want to go do in a different direction you know I can keep the business open if you want to take a stab at it or you know we're gonna close. I was like okay I'll try it I was young I had no idea what I was getting into. I was 21. So this is right out of school? Yeah. So you graduated from college? Yeah. Where'd you go to school? Cornell University. Awesome all right so you graduated from Cornell and your dad's like here's a business good luck. We had to switch to a more luxury product a more niche product we can't compete with lower end bags there are just too many factories overseas. Makers Row they came to our office and they said we you know we have a new idea we're gonna be making a website and would you like to be featured there's very little marketing in the manufacturing world so if anyone approaches me with a good idea they seem very serious I'm gonna go for it we had pretty much immediate you know response from new designers. You all have been in this for decades now how optimistic are you about manufacturing in the USA? I know that new designers cannot just go overseas and start placing orders it's just too much commitment so from Makers Row from the website I mean we see that we get so many inquiries every day so many so we have a full-time person just answering inquiries all day long so there is there are so many people with ideas in the US that don't really have the option to go overseas so all those people have to come to companies like ours. Wait so you've so because of orders from Makers Row and online you've got an entire person like hired to handle inbound? Yes because of Makers Row and I think just the economy some people are you know out of work and looking for things to do and start new things and of course Makers Row I mean that we get emails all day long people like to hide their manufacturer if they find a good manufacturer it's kind of like you have to know the right person or ask the right questions. And but the people are that everyone is so protective of their manufacturers because it's just that's the nature of the industry? I would say a lot of people are yes some people are not you know they don't mind but most people try to keep their factory a little bit secret. Every founder wants to disrupt an industry right they're all talking about some big thing they're gonna change. You guys are going after a really entrenched one that has a lot to lose for basically having this information out freely you know if if Makers Row succeeds there are lots of people who've made it their business to hoard information about good manufacturers probably not gonna want to give it up so what's been I mean what's been the biggest challenge so far with dealing with that kind of disruption? So we've gotten scathing emails from consultants which oftentimes you're right they hoard this information so that entrepreneurs like myself will pay them $2,000 just for a spreadsheet of contacts and you know that there's no real critical information in there to let you know whether this is the manufacturer or not so you're still on the phone. There was this one time where I picked up the phone we don't put our phone number anymore because we just got too many calls but I picked up the phone and this consultant or this guy in the industry wanted to come over and talk to us so I was just like sure and come over and talk to us and so he came over and then it actually ended up being a bad situation because he threatened us. We sat down with him and he basically was like you know I'm gonna get what I want you know and I want to be a part of what you guys are doing like we have ways of shutting these types of things down but you know. Who is the we he's talking about here? It's always that we where it's not this big guy that's called tiny behind him. You know they always try to make it seem as though they have this crew of people that or this yeah basically crew of people that could shut you down. He's just like you guys are crazy for giving all this information away for free I charge people for this information if you don't work with me I'm not saying I'm gonna do anything illegal but I'm gonna get what I want and and we're sitting there in the conference room and we're just like what do I do? It's like a shakedown. And it's like this big guy. That is madness. Most startups don't have to deal with like a mafia style shakedown like that's like a really nice startup here be ashamed for something to happen to it like that's exactly but then he was also telling yeah cuz he was telling us other stories about like violent things he had done and I'm just like is that are you trying to put those two together? When he says shut down what do you think he's talking about? Oh you and I both know what he's talking about. He's using intimidation tactics to try to you know shut down the site which is understandable if that's if your only means of revenue is that spreadsheet you're gonna be pretty pissed because that's probably been supplying you you know for over five ten years. We didn't know that you know so many people are going to be upset because we were giving information away for free and so now we don't we don't take meetings unless we know who they are and nothing ended up happening he didn't end up you know shanking us or anything. As long as you don't wake up with any horses heads in your bed like yeah we still were a little bit shaky on that but I'm really happy that nothing came about so hopefully he's not watching. Got quite a few neighbors in here. Yeah yeah got a ton of companies here in the incubator it's really awesome to be able to network with so many different types of companies. You got there's just a maker bot here in the office for anyone to make stuff with? Absolutely. I feel like I don't know if it's a New York tech thing but there is a kind of I feel like there's an undeniable camaraderie at least. Oh yeah absolutely. This is our home right here in this area. You guys do not hide anything about this Made in the USA pride. If you couldn't tell what area was ours. What has been the most surprising thing on the job here rocking social media for makers around the world? The positive response we get from everybody. Everyone's really passionate about Made in USA and really excited and they want to see it grow. A lot of the stuff that you're using today was that education learned in the classroom or just learned from googling and stack exchange and just trial and error? I'm glad you asked this because no essentially it's all from trial and error googling from other people on the job. I actually went to college Syracuse University for design and I've just been coding since I was 13. So similar to what Raphael said I never went to school for this and I don't believe that you can really I mean you'll be better if you just learn on your own I think. It's nice to have the degree and you'll have like this foundation but in order to stay up with trends and stack overflow googling terms all the time I mean I think anyone can really do it if they put their mind to it and they're really excited about doing it. I encourage everyone to to start building a small empire. Because we recently met this amazing couple who were so incredibly in love that it made me feel guilty for being a not nearly as romantic as I could be boyfriend I want to make this special purse and now what would my experience be like if I say went to Google or went to Alibaba and tried to get this purse made overseas? There would be a little bit of a language barrier. You're just assuming I don't know Mandarin or Cantonese or Vietnamese or Laotian. Yeah I'm assuming that. You would probably have to act as if you were going to be placing a larger order in the future so they usually if they're making you a sample they might charge you a low fee for the sample but they expect you know a few hundred piece order afterwards. Their businesses are set up for the production side. So here's where a bag starts we take the sketch that the client gave us and we make a set of patterns then the pieces are hand cut and assembled after that into a finished prototype. He's cutting the leather, skiving it. What does skiving it mean? Skiving is when you take the leather and you thin out the edges. That was a course for the viewers I obviously know what skiving is I just wanted everyone else to know. So roughly how many bags would you say can be made here in a day? In a day about a hundred. I live in a world where all we do is like pixels so just watching physical stuff be made and start out as like a sketch over there and be a thing that I would touch if it would not get me in trouble. It's pretty cool. You're gonna place the rivet on there you're gonna press the foot down and the rivet is tight on the bag now. Okay all right it's in there. Push down. There you go. The rivet is on tight. You know if I've learned anything from just doing this for the last 15 seconds I am NOT cut out to do manufacturing. I think you're doing a pretty good job. I would get kicked off the line. Are you kidding at this rate? No I need to stick to keyboards. Your speed is a little slow but we can work on that. I know. That is riveting. Surprise the missus. I love it. It comes from the heart and the riveter. Just don't say you made it here then if that's what you're giving her. Wow. How much does it help you all that most Americans are now I think it's pretty safe to say aware of our dependence on foreign manufacturing. This was something this is not a new phenomenon but I feel like it's something that's certainly in the last 10 years has really peaked in terms of awareness. Does it help you now because you can actually say like yes we have manufacturers who are producing this stuff the United States. You know all of the benefits that are there are available not just for designers but also for consumers. Is the timing of this right? Whereas even like 10 years ago it wouldn't be nearly as optimal as it is today. I would say the stars are really aligned for us because it's a political issue. This is something where smaller communities are talking about jobs because they're losing jobs because factories are shutting down. But this is also a time that we're fortunate because the prices of overseas manufacturing are rising and they're rising really fast. The watches that I produced in 2007 have now doubled if not tripled in price of production alone. So we see this happening all across the board and now a lot of larger companies like GE and Apple they're looking for domestic manufacturing alternatives. Right so there isn't it's not just a kind of moral decision it's a business one. Right and I think that a lot of people basically relied on the consumer to make the choice to choose you know domestic over foreign based product but I think that's really unfair when you see only 3% of the apparel that's consumed in the United States is actually made here. You can't really blame the consumer. What we want to do is encourage the decision-makers, the brands that are deciding where their stuff is made and encouraging them to produce here locally so then we can switch it around where there's many more American goods that can be found in stores. We make a lot of very trendy things here. A lot of it is because we can stay on trend because the turnaround is so fast that people really can kind of see what the trend is and get sales. How often do your designers sort of rave about Made in USA? Like do you guys ever get asked to put little American flag tags inside or anything that? Absolutely we have we usually have Made in USA labels so if I take one of these bags we have a Made in USA right under the tag. Don't see enough of that. It feels like there's definitely a mission element to this company. You know what is the best-case scenario for a city like Detroit which has seen so much manufacturing disappear? I mean it's certainly coming back a little bit but what do you hope Makers Row can do for cities like Detroit? You can say that with your chest out because manufacturing is absolutely coming back. Well then when you're saying it I mean you can say it with conviction. It is a mission for us and I think that we found within the first few weeks we saw that this wasn't going to be something in which we're just calling people asking them to sign up. This is an on-the-ground effort and we've just recently you know formed this type of series in which we're going out to these communities so more recently we went to Newark and with the help of Cory Booker and the city and Brookings Institute and so many other sponsors that basically open the doors to these manufacturers that if you knocked on their door they're not going to open it unless they have that familiar voice. So we're taking that type of series and going across the country with it. We're going to make our way back to Detroit definitely. There are lots of reasons why manufacturing is coming back to the United States. Plenty of them are economic. What's so remarkable about Makers Row is that it's making it easy for anyone to take a sketch in their notebook and turn it into a physical good and all that efficiency means a lot more innovation.