Episode #74: Choosing Hard - Josh Waldron on Productive Difficulty, Vertical Integration, and Building a Mfg Moat
In this episode of US Manufacturing Today (powered by Veryable), Matt Horine interviews Josh Waldron, who describes how a car accident at 15 left him paralyzed and how he chose to remove the “comfortable retreat” by destroying his wheelchair to commit to walking, shaping his approach to challenges. Josh recounts building a precision manufacturing company from a garage during the 2008 recession, learning CNC operations from scratch, driving growth through vertical integration, and turning in-house anodizing into a profit center. He explains misconceptions about needing all answers upfront, critiques “best practices,” and shares his Productive Difficulty framework and a 2x2 tool for prioritizing work. The conversation covers AI as bandwidth expansion, retention through pay, recognition, and autonomy, navigating firearms regulation, lobbying to change laws, and his book “On Choosing Hard Things,” plus a recommendation to run a cultural audit.
Links
- Josh's Website
- Josh on LinkedIn
- Hard is Fun
- Matt Horine on LinkedIn
- Veryable Is Revitalizing U.S. Manufacturing
- Sign Up on the Veryable Platform
Timestamps
- 00:00 Welcome to the Podcast
- 00:41 Josh Waldron Intro
- 01:26 Accident and Resolve
- 05:00 Starting from Scratch
- 08:06 Vertical Integration Wins
- 11:03 Ditching Best Practices
- 13:27 Productive Difficulty Framework
- 19:56 Two by Two Priorities
- 22:52 AI and Bandwidth
- 25:56 Retention and Culture
- 33:50 Hard Corners Manufacturing
- 37:57 Changing Laws Long Game
- 43:25 30 Day Action Step
- 44:26 Book and Closing
Episode Transcript
Matt Horine: [00:00:00] Welcome back to U.S. Manufacturing Today, the podcast powered by Veryable, where we talk with the leaders, innovators, and change makers shaping the future of American industry, along with providing regular updates on the state of manufacturing, the changing policy landscape, and more.
Today's guest built a precision manufacturing company from a garage during the 2008 recession, grew it to a top tier spot on The Inc.500 and later led turnaround work inside larger product companies including a brand that doubled in a year during the pandemic.
He's also the author of a new book On Choosing Hard Things. Josh Waldron [00:01:00] welcome to US Manufacturing today
Josh: Thank you, Matt. Happy to be here
Matt: We are very excited to have you. A very inspiring story and looking forward to jumping into all of that as long as, as well as your framework. But wanna go back to some of the, the ways that you've made decisions in your life and a little bit of your personal story. You said the choice you made at 15 shaped how you've approached every hard problem since. Can you walk us through what happened and the choice in front of you at the time?
Josh: So when I was 15 years old, I was out with some friends at night and doing what young people usually do, driving too fast and going down a canyon. And basically went into-- slid into an oncoming traffic head-on collision the whole bit right? But that... What that l- left me with is a lifelong disability.
And I don't say that as a way to like say that what I have done with my life is, somehow better because I'm disabled. But what it did is changed my relationship with challenges and hard things and it started in a very young [00:02:00] age that those impressionable years created a habit basically or maybe this self efficacy that I needed to just lean in or choose to accept bigger challenges in my life and so when I was s- When I was This was several years after my accident .I was told I was never gonna walk again broke my spine paralyzed from the waist down ,and I was in a wheelchair The doctors just flat out would not allow me to even get the prescriptions that I needed to get leg braces So I found a roundabout way to get w-what I needed and so i found a physical therapist that basically got me out of my wheelchair Several years later I think around nineteen at the time I was still on the precipice of going full time walking versus wheelchair The wheelchair was just so much easier It was faster it was easier safer I didn't fall when I was in a wheelchair I [00:03:00] fell a lot when I was learning how to walk but the pain was f-much reduced Every single thing said stay in the wheelchairs A lot easier And I knew that the life that I wanted to live was not available to that decision.
Without having my framework, I hadn't written the book yet but this is where-- The, the birth of it all when I decided that I was... I needed to remove the option that was comfortable. I needed to remove the wheelchair option from the decision. And so I destroyed the wheelchairs, over $6,000 back in 1998 or '99 or whatever so it was a lot of money and threw all of the parts out on their driveway and my, just "I'm done."
And I haven't sat in a wheelchair since. I don't say that as trying to be heroic. It was the practical move. It was the-- I removed the comfortable retreat so that I would stop having to decide. It was just that simple, right? And th-that has taught me a lot going forward in business and then that started the journey basically of leaning into challenges building my [00:04:00] self-efficacy and realizing that if I choose these challenges, life becomes abundantly more significant with opportunity, with abilities, things that I, I can do, the way that I look at things, perspective.
Everything changes just b-by one mindset shift, which is, choose hard
Matt: Yeah. No, it's an incredible story and very, one of great resilience and way to apply it in a lot of things that we do in life that may not be as difficult as that experience. It's a very inspiring story, Josh, and I appreciate you sharing it with us because we talk a lot of business on the show, we talk a lot of manufacturing, but, people's where they come from and how they built themselves is is as much a part of that as understanding anything that we could be talking about the subject of the day.
Thank you for sharing that with us. It's, can you-- I think you can pretty much draw a direct line from that decision to how you run a business today. And, we can talk a little bit about, your no manufacturing background and jumping right in similar to demolishing the wheelchairs is what it what it sounds [00:05:00] like.
How do you draw that line? And you started the company with no background, what did those first months on the floor actually look like for you?
Josh: Man, those were some interesting times. I remember getting the first C- CNC machine on the floor. Got a Doosan two, two... Or live turrets dual spindles, the whole bit. Like feed it-- bar feeder, parts catcher, the whole bit. So we were trying to take one machine and make it as automated as possible so that we could, forego hiring employees right off the bat in a startup.
And I just, I got this giant machine sitting on this rented garage floor, and the books, the, the owner's manuals stacked, sitting on top of each other were like three feet. And I was just like, I don't even know how to ... I literally didn't even know how to turn on the machine. But, and most people take that as the gate.
They s- they see they see that as the full hard stop. A- and not... And it doesn't have to be even that profound, like buying a, a machine and starting a manufacturing company is a big move, but little moves too are the [00:06:00] same thing, and we tell ourselves. And it's literally I wanna harp on the mindset because...
An- and I know this, you guys are probably more metric driven being manufacturing based show, but like there is a mindset that's involved that you have to overcome basically to be able to do what it is that you want to do. And so telling yourself, "I can't," is a big problem, right? Telling yourself that you are not something, like I am not analytical or I am not creative or I am not something will basically shut that ability off forever and as long as you're telling yourself that.
With my accident saying everyone had credentialed degrees telling me, "You can't do this" and I did it, I was just naturally thankfully ha- I had that mindset given to me to where I looked at this machine and said this looks like a lot of… This is a challenge and let's lean in." And so you know I am more of the business sales side whereas my partner was more of the manufacturing and the [00:07:00] operations side.
We're in each other's roles quite a lot. And so I was out selling while my partner was creating the product or manufacturing the product. And y- we created our first product which caused massive obsolescence through the industry. And when I say massive obsolescence through the industry, that might sound big but it was a very small industry.
So there was a few other competitors. We basically made it so their product was no, w- was not desirable anymore and we saw a huge increase in demand and sales for this one SKU that we had and needed another machine. And we got that other machine and this time we're like let's set this thing up ourselves," right?
So instead of having a machine tool company put it on the floor, wire it up, get it all set up with double level, get it all of the things that you have to do. And the reason that we did that is 'cause we wanted to learn how to do it again because it's 15 to t- 30 grand Every time that you set up a center.
And then again, it's just more demand, more products, more sales. That's the fun side [00:08:00] of the of the driving the business and then you have to look inside to create the business model around that. And we had to make a decision at that time. It's like, okay, we can still keep buying machines with-- During a time that no banks wanna give you money, during a time where it was very difficult to grow in a very small and obscure industry.
Then I looked at all my competitors and, the shops that outsource, that people outsourced to, all have to be licensed, and so there's only a few competitors, or there's only a few vendors that all of the competitors are going to. How s- how do you differentiate yourself if you're running the same exact playbook?
We have to be vertically integrated, and those, those choices are, have to be made for each business by itself. It cannot be like, "Hey, vertical integration is the way to go." Depending on for what company, right? So yeah, we just kept doubling down and doubling down. But what we did and what made it s- so unique was that we did all of the implimation-- im- implementation ourselves.
So when we got to... [00:09:00] one of our biggest bottlenecks was metal finishing. Anodizing was really hard. We-- It was very specific, hard black, type three anodizing. And to, to get that, again, we were-- we had one or two shops that we could choose from, and the lead times were terrible. The the quality was hard to get consistent.
The variation of the black r- was all over the place. It was just very hard, and I'm like: Let's bring it in-house. Everyone said, "Do not do this. You have no business running a chemical company inside of your manufacturing." And I'm like: No, we've done really hard things. We're gonna do this. And so we brought that in.
Again, we hired a consultant, but we ended up doing most of the work with their guidance, right? Again, because we wanted to continue to learn and build that self-efficacy, build that, that culture within the company of we do things ourselves because it expands all of our capabilities. So we just-- We did that, and when we s- turned that line on, our quality was so good that we ended up become, that became a, a profit center for [00:10:00] us, and we started to do anodizing for our competitors as well.
And some, some big companies like Remington would send their products through through us. So a- again, it was just that one iteration or one, one step learning, understanding, growing, finding the right people to hire to have that same mentality and just keep going
Matt: Yeah, it's a incredible story. There are couple things that I caught in there. One is, the economics answer on vertical integration, right? It depends, not every-- it's not for everybody. S- it's not a one size fits all type of fit for every company. But you touched on a recurring theme that we get on our show, and especially in manufacturing, the mantra of you can just do things, and to, to your point, even that includes hard things if you just do them and learn them and stick with it. That's kind of the story of manufacturing overall. But you kinda gave me a little bit of a nightmare about, machine manuals stacked that high. No-no-nobody reads them, hopefully.
The practical exercise of learning it on the job makes sense, but directionally, that sounds like just about [00:11:00] everybody else I've met involved with a CNC machine. So, Yeah as part of that, what's the biggest misconception people have about what it actually takes to go from zero manufacturing knowledge to running a serious operation?
Is there... you kinda touched on it there maybe with, you're not credentialed, you're not qualified, you're not, analytical, you're not this. Is there a, a bigger misconception out there?
Josh: misconception in growing a company from zero to 70 million in revenue?
Matt: Yes.
Maybe a so the s- so the answers all have to be known at once is probably the biggest misconception. And I think one of the things that was the scariest thing for us when we were starting was, going down the wrong path for a long time is, y- every single day that you're on the wrong strategy, the wrong path, it compounds in the opposite direction that you want it to.
Josh: And so there's that fear all the time about oh, we have to get everything right. But you don't because manufacturing as fast as it is in the day, if you look at it over the course of a year, it's slow, [00:12:00] right? Slow changes, slow processes changes, slow batch batching or whatever it is, whatever methods that you use, it's very slow.
And so I think the min-- misconception is that what... oh, we have to have everything perfect now. And the problem with having everything perfect now is a lot of times you fall back on, 'cause you don't have a lot of the answers, you're gonna fall straight onto best practices, which is something that I loathe.
I hate the term. I can't stand going into a conference room and hearing people say what are the best practices?" The best practices are the floor on which everybody stands, which means that they are not the best practices anymore, right? They're just every- they're everyone's playbook. Best practices, that's a struggle to get over.
And so you have that natural draw to fill those questions with best practices instead of the right practices. And take a machine or a process and bring it in-house, or take a a program, like if you wanna say let's, hey, I wanna see what running five S is like on all of my stations and do one at a time.
You don't have [00:13:00] to do the whole thing all at once to to get the feedback that will tell you whether or not you should then go full force
Matt: Right. Yeah, looking forward to talking more on the best practices. I think when we first met that caught my attention because I don't like it either. It's one of those things that is baseline. It's a best practice for... it's similar to SOP and standard operating procedure.
When you're doing something new there is not an SOP looking forward to getting into that a little bit further down in the show. I wanna talk about your framework that you've developed. Your upcoming book is built around the idea that not all hard is the same and that, that really stood out to me. Can you walk us through the difference between productive difficulty and what you call pointless suffering?
Josh: Yeah, absolutely. And just to frame this up I, I started this process of writing based on the Hard Is Fun idea, which is the-- now the brand name. And, a- and that is the ethos, the psychology or the soil in which the framework or the books or all of the IP [00:14:00] that comes from that gr- grow.
So I wanted to give a little clarity around 'cause your listeners are hearing hard is fun, and then they hear the productive difficulty. And just to, to... The, the book is Productive Difficulty on top of a brand that is Hard Is Fun. But during the process of writing the book, I really wanted to understand what it was that separated The differences that you could actually make it seen and have a framework that was usable in real time.
That was very sta- standard and straightforward because both kinds of hard will exhaust you and only one of them actually builds a competitor or a, a moat or barrier that your competitors can't cross. And productive difficulty is the quadrant or the area that you wanna be focusing your efforts and staying away from pointless suffering, which is the opposite.
So the seven questions for that framework start w-- is does this solve a problem that your competitors are avoiding? And now, it's pretty easy to look at your [00:15:00] competitors. They all run best practices to some respect with just a little bit of variation on their business models. And so you can see very quickly who's avoiding doing the things that everybody...
Like usually it's easy to see an entire industry avoiding the same thing. Sometimes it's not as easy to find but it is fairly easy to see. Second question is, does it build capability that compounds or does it just res- pro- produce results that fade? Producing results that fade is just activity for the sake of activity or it's the wrong strategy obviously is not going to produce anything that compounds.
It's just purely the wrong direction so you don't get anything beneficial from that. Three is, will the failure still teach you something if that you can use elsewhere? If y- if you fail, can you still use whatever that is? And f- for an example, going back to anodizing, if we ran that and fi- found out that was in fact too difficult, the amount of knowledge that we would know [00:16:00] about anodizing we could then go to our our vendors that we would have to then go back to and help increase th- the...
Or help improve their processes, right? So you're gaining the knowledge and the expertise that you need to even ask the right questions or do the right things or help your vendors in the right place. So even if we failed in that we would've learned a lot that would've then fixed the problem with the vendors, right?
Question four, does it align with strategic differentiations and core strengths? I- if you're running something that's not in your core then why are you doing it? There has to be a really good explanation to pivot outside of your core strengths and and so that, that's question four.
Question five will it still matter in three to five years? A lot of times we chase quarterly wins. That's one thing about the corporate world that I couldn't wait to leave when I was president of Vista Outdoor and that was a fun company to be involved with. It had thousands of employees and four different manufacturing facilities to [00:17:00] visit.
It was a lot of fun, and I still couldn't wait to get out of there because it just-- Yeah, it was just the wrong place for me. And that, that short timeline, that short horizon it didn't allow me to make the decisions that would land me in productive difficulty because they were chasing the quarter or they were chasing the financial reporting instead of the strategy that takes a long time to build.
Strategies that take a long time to build are the ones that win for a long time. Six is can I afford to be wrong? And I think that one's pretty expla- self-explanatory. And seven, does the payoff compound or is it one and done? So those are the main questions to run through. And it's amazing to me because I've s- I've u- I've used this real time.
I was at a, It's like a pitch ni- or it's called a shark tank kind of a thing, but it was seal tank. It was retired Navy SEALs, right? It's called Seal Tank. And so these are Navy SEALs that are transitioning into private industry and they were they were talking [00:18:00] about their different businesses and I was their keynote speaker for the night, and one of the companies came up to me and said...
Or asked a question and said, "Designing is good enough and I can go to market." And I said let's run the, the ma- the s- the matrix," or the, sorry, the seven questions framework. And so we ran it with the two questions: one, keep designing; or two design for an avatar that and it, and create an MVP and get feedback and get it out within, yeah, I think we said a month.
We ran the questions and it was an overwhelming-- The, the keep designing had all nos and the other side had all yeses and it was just like okay. He made the decision and within two weeks he saw more movement in his company than he did in six months just because of that one decision. And so this, the f- the framework really is meant to use as a, like a daily guide.
And I actually have another tool that's even when you have multiple projects and multiple decisions and multiple tasks, it's easier to outline which ones to do [00:19:00] what with them, so
Matt: Yeah. No it's a great framework 'cause it asks a, a lot of really important questions. And to your point it's oftentimes the answer is a lot more clear than, than you maybe set out. When you have, seven stacked up seven O it's a no-brainer. But sometimes if without the framework, you just can't really see it.
Classic forest for the trees type thing.
Josh: Yeah. One problem with the, the framework allows you to stop the noise, right? The, all the other variables that usually are outside of your control or, they're not really applicable or whatever it is. Like the framework focuses on the actual things that matter in the decision structure, and then you can get that decision made and move on- Right
instead of ruminating about it forever.
Matt: Yeah. That's a really good point because a lot of times the best value in business is being able to make a decision and you see kind of the latency in deciding because people weigh too many things one against the other. Yeah I can remember my time in the military it was "Make a [00:20:00] decision." You know go left or right Make a decision suffer the consequences It's gonna be... i- it is what it is It's going to be what it's going to be But if you apply that framework ahead of time makes it a little more clear.I think you did mention you know the tool that you actually use to help apply those types ofum decisions The ...It's a two by two Strategic value against difficultyYou know you use this to sort your week prioritiesUm Your overall prioritiesCan you walk us through the four quadrantsand then we'll get into maybea practical exercise If you wouldn't mind
Josh: Yeah, for sure. So on the two by two, if you think about the two axes, it's how much difficulty and/or how much value. So high value, high difficulty would be the upper quadrant of pro- productive diffi- difficulty. High value with low difficulty is quick wins. Those are the things to do first, and a- and but t- they're not mistake of strategy.
These are easy wins. Get the win, [00:21:00] celebrate the win, build your self-efficacy, whatever it is that you wanna do with that win, and then move on to the productive difficulty. The low value, low difficulty, right? These are tasks that have to get done. They're blocking and tackling. Automate that stuff.
Get it out of your plate altogether, and something to come back to is-- 'cause I talk a lot about automations because I adamantly am opposed to them. If they are designing your life for comfort or giving you space so that you can relax, that's not what I think that you should automate for.
You should automate s- to give yourself more bandwidth to m- move that into productive difficulty. So that maintenance quadrant's very important, 'cause that's quite frankly most of what our activity is in a day, and if we can start working on getting that either delegated or automated, then we have orders of magnitude more time.
And then low value, lo- and high difficulty is pointless suffering. Kill it, escape it, whatever you need to do. I lived there with Vista Outdoor as [00:22:00] president for th- my entire contract, because the only skills that I was building there, for example, was politicking, was like learning how to deal with i- investors, Wall Street, quarterly reports, and all that kind of stuff.
Nothing did I want to take with me. Nothing was compounding. I couldn't I couldn't stand even being there. That was pointless suffering. So that's the that's the... So when you have a bunch of things to do, you can throw it in, map it all out, and you can see where the cluster of dots are.
You can see which tasks that you need to move into what quadrant and how to do that. It's, and it's a very effective way. I do it every Monday morning for my weekly task
Matt: Yeah. It's a, increased clarity cut noise kind of mentality that noises coming from us-- They're coming at us from every direction. Even in your daily role I can think of the amount of times people on our own team, we get noise constantly and it's deciding what priorities.
I think that was a really good way to frame it. We talked a little bit about AI, artificial intelligence and, it's a hot topic right now. Y- not just [00:23:00] kinda the big picture stuff with, data centers and this and that, it's more about the practical use of it. I think you may have answered that already by, saying is it ex- is it increasing bandwidth?
But just out of curiosity because it's changed the way so many people work, how does AI fit, in, into this structure? And I think it does pretty neatly from what I can tell
Josh: The amount of small things that I have to do as a business owner and a serial entrepreneur. I'm currently running or managing or working with four companies right now so I've got a lot going on plus family tasks plus... I don't have to tell anyone everyone is in the same boat we're all busy right?
And to me it-it's about opening up or increasing the bandwidth that's all--that's all for me that's all what AI is its adding employees without adding employees. Part of hot topic is and especially for Veryable right because you guys are--you deal with staffing this is a very specific topic for you a beautiful value to AI and I think we can all agree [00:24:00] with that but it's also very dangerous It's dangerous to the workforce it's dangerous to all sorts of things But that doesn't mean that we can't change our business models This is again this goes straight back to running productive difficulty We have choices that are gonna be really difficult coming up that are directly related to AI and without a framework were gonna making the wrong choices For sure So You know definitely Definitely utilize the framework when you can But y--I think b--the other side of it is the creative side And that's what I think most of us are really annoyed by Its just i-it gets really annoying to be on social media and see a video and your laughing then you realize that its fake and youre like "its not even funny cus its not real" Or people writing music People writing books or people write Like all of this kind stuff That like th no This is what humans should be doing Humans should be doing stuff that is high touch As well o-on manufacturing too Like You are not going to able use robotics and AI To create A hand casted Ferrari motor And The reason they still [00:25:00] handcast Ferrari motors Even still today Is because They built a moat With that capability Their known for their f-for Thats there brand thats their ethos An-and like it works for them So You know
Matt: Yeah. Very timely topic because I think to your point, viewing it outside of anything is additive where the, the fear in the early innings of this was, drawing away from the workforce. But I think we're finding out, just where priorities need to be and what people need to be doing versus what needs to get automated.
It takes a lot of the-- you get a sense that it takes a lot of the soul out of things. But, to your point, the, the AI slop that we see on, LinkedIn or X or Instagram, it's just, it's increasing and to your point, if it's additive, then it's a good thing. Yeah. Let's-- Oh, go ahead
Josh: Oh, I was just gonna to add one more note about the AI but then I forgot, so
Matt: Yeah that's okay. It'll still be there, running in the background all the time. But um, because y- because you mentioned it your time at [00:26:00] Vista and other, kind of interactions that you see from the managerial side of running a company or just being a leader in any capacity. One of the things that you were very proud of was the extremely low turnover rate at your first company, well below what's typical in manufacturing. What was actually driving, uh, that retention for you?
Josh: Yeah, that's a big deal 'cause the metrics are y- if you're losing an employee that's been there f- to a point where he's trained up and he's running smoothly One turnover is two and a half times the salary, right? On average. And like that's a huge expense for any company, and for a heavy product-based company that's-- That just eats margins very quickly.
And so I was like, "Man, I need to reduce." We were having high turnover, and we were having high turnover because of the demand of the job was so high. It wasn't because, bad management or any of the reasons that people leave. We paid them right and all that kind of stuff. It was just super challenging.
And so how am I supposed to get people to stay here when the [00:27:00] job is really hard? I'm asking a lot of them. I'm requiring a lot of overtime. I'm pushing my people. P- I literally remember several Christmas Eves that I was with my team on the assembly line trying to make the year numbers that we were trying to hit, right?
So how do you do that? First and foremost, get it off the table, make it so it's not even a thing. Pay your people well. Put it... if you're at the highest, y- you're not in the median, you're in the upper quadrant of how much you pay your people with their whole compensation package. And e- everybody's a little "Yeah, "That's really expensive."
Let's talk about turnover then. The first thing you need to do is make people not think about money. Like everyone's gonna think about money, but if they know that they're getting what they are fairly-- What they fairly deserve, then they stop thinking about it. It's not a thing anymore . And then we can focus on what people actually care about, because the first one and two things that people say are most important in your job is recognition and autonomy.
And so okay, recognition [00:28:00] and autonomy, tho- those are two very easy topics to then bake in your business model or your... The way tha- in which you manage. So let's think about autonomy. Punish failure number one, and let's give people support and enough rope to either succeed or hang themselves, right?
And that's a scary thing to do in manufacturing. You've got really expensive machines. You don't want someone smashing tura- into something or, like it's very scary. Just get good insurance like 'Cause what you really want is to create an environment where people want to stay because they feel fulfilled.
They feel part of something, they feel autonomous, like they can make decisions. They feel respected and appreciated. And if you run, if you're running that type of ef- mindset, then you s- you can start to bring in all of the support around that. So with S- with Silencer Co., for example, the company that I built from nothing to 70 million a year in revenue I wanted to keep these people so bad.
It was just killing [00:29:00] me with the expense. So I said let's start doing things that bring us closer together so that they feel like it's a family environment, right? So we started doing a lot of stuff like weekend or f- Friday barbecues once a month. We did shooting events a lot 'cause it's a gun company, so we were always shooting and hun- hunting and stuff together and we offered free concealed carry classes to everyone that worked there plus all of their family.
We did free s- Slurpee Fridays. We had coffee, like barista style coffee for any type of cup y- you wanted on all the time, and which was very expensive, but, like everybody was caffeinated and happy. We had what was called the Silencer Co Education In- Initiative, which paid people to take seminars to, to do certifications to continue their education.
And if it was during company time, we-- they still got their salary while they were there with it paid for. We gave people money for doing book reviews, so they would read a book and present to the executive staff what they learned on the book, [00:30:00] and we'd give them $25 gift certificate. We did so much stuff like that, that people were so engaged, and they just saw every single day that we supported them.
And who's gonna leave? Who's gonna leave that environment? They're like, "Where do you go from there?" And i- it... we just had such great success with that. It was an amazing thing to watch. And we saw the numbers go. We had about a 35% turnover in our manufacturing line down to 3%, which is almost unheard of, right?
Matt: Definitely unheard of. It's I would say industry best i- in a lot of ways. Sounds like a, a good summary of that would be making sure the grass is not greener, somewhere else. Which is hard to affect over there, but you can certainly make your, yours better
Josh: When people feel like they're making a difference in their life, in the company it goes a long way. And that support behind that too. So I've got a really great example. And I have dozens of examples just like this one. I'm just gonna pick this one. Guy came to me, wanted a job, was a entrepreneur ran a little welding company that made [00:31:00] kiosks and different things.
He was fed up with it, wanted a new job. I hired him at 15 bucks an hour. He came to me and said, "Hey, I wanna-- I have this idea to increase efficiencies." He gave it to me in a proposal. I was like this is cool. Someone giving me a proposal that's from the production line that's pretty neat.
Let's do it." So it was awesome. So then he did it for every cell on the entire manufacturing floor. Then he became the foreman, and then he became the vice president of operations, and then he became my COO. In three years, he went from $15 an hour to being my COO. And a lot of that, I would say 90% of that is because I hired right.
I hired the guy that was... I knew that was that type of driven self-starter. Was because he had all of the support, and he had all of the the the bandwidth given to him and available to him to do what he was proposing because I saw the value in it. And then I didn't punish for failure, and that's another huge thing for me is, i- is if we run the scientific method inside of our businesses where all of our activities are just [00:32:00] hypotheses, and a failure is just a failed experiment that we're learning from and then going back and re-hypothesizing and then rerunning the experiment, that is a very healthy way to run a company.
And if with that and the work/life balance and the family environment and all of the things working together, I saw a lot of that. People just wanted to excel. They wanted to stay. They wanted to be part of something bigger than themselves, and it was amazing. It was just a really wonderful time
Matt: Yeah. That's, I th- I think you said in our-- if I butcher the quote, please feel free to correct me, but you had mentioned during our first call that failure should be designed in the way science designs it rather than be punished. It's not a punitive thing. I don't think, most companies just one-shotted, got their product right out the gate and everybody was happy and made, you made payroll and made you know, gr- growth targets and all of it and it was just, it was perfect.
I don't think that exists. If it does let me know. But the, that's the-- Hopefully that's the summary and I got the quote right there. But,um,
Josh: you did. You got it right.
Matt: Wanted to double down [00:33:00] on something you mentioned earlier in the show on the best practices versus the right practices. How do you tell the difference between a best practice worth keeping and one that's just an industry inertia type, mentality
Josh: The easiest way is to just take all of those practices and run it through the m- or the, the framework. That'll be the easiest and the fastest way to tell. But a lot of times you can just tell because if you say it out loud in association with your company "Is this activity a Silencer Co thing?"
Or, "Is this activity a Hard Is Fun thing?" It's very... It's usually very easy to like-- You c- you can feel it. You can feel it not sitting right. It's a good first start. This is the sniff test but the framework is really the, the fail safe on that one
Matt: Makes a lot of sense. We could probably have a whole nother show on best practices or the air quote air quote "best practices," if anybody couldn't see that. But wanna talk a little bit about the, what you called the hard corners of manufacturing. You've built inside regulated capital-heavy manufacturing environments [00:34:00] more than once.
What do people consistently underestimate about what it takes to build a physical product in an environment like that? That would be my burning question because people oftentimes get discouraged from even entering the space because of, regulatory requirements or, the capital intensity or whatever the, the reason may be.
But what what is your take on that?
Josh: The, the barrier to entry in in manufacturing is naturally high because it's so capital intensive. But in within the firearm space when I s- started looking into how to grow and with Silencer Co., it was-- there were so many layers to it. It wasn't just a, a one thing. I had to create a new market, a new industry, and I had to do it in a highly regulated industry, and I had to do it during a really terrible time financially too.
So there's so many things like stacked against me at that time. And so you really start to look at th-the... Like you have to get really scrappy, like [00:35:00] really scrappy. And and so you start looking for ways to like f- play in the gray is the way I call it, right? So with regulations, the government does a very good job at creating booklets or pamphlets or documentation or whatever it is that says, "Here's the regulations."
They're terrible at saying what you can't do or sorry, what you can do. They just tell you what you can't do. And so there's a, i- there's a natural giant gray area, and I am a ask for permission before forgiveness k- type of a guy or forgiveness before per You know what I'm saying. You know the saying.
Matt: Yeah. Ask, ask forgiveness, not permission.
Josh: Forgiveness is not permission.
Matt: I almost
Josh: with the g- with the,
Matt: permission. yeah,
Josh: with the government that's even more scary and within firearms like y- that, that doesn't always hold up 'cause you could end up in jail. But I studied that booklet from the ATF that regulates firearms so deeply that I was able to find the areas in which I could push the envelope, right?
I could find the [00:36:00] competitive areas that I could say, "All right, if I create..." So for example, there was this really strange little regulation that says that once a serial number or u- leaves the building then it can't be, it can't be re-engraved, right? So that if-- So if that gets destroyed, then the product is therefore deemed destroyed.
And but what it didn't say was that when it's in the building, you can change the engraving on whatever it is. So I can... I would basically create these fake silencers so that I could start the application process so that I could get the paperwork moving because the paperwork was bottlenecking the flow of business.
And so I preloaded all of this paperwork with these little fake silencers, and then when the paperwork came approved, I would then change those fake silencers to the real ones so I wouldn't have to hold all that inventory, right? So I was looking for those ways to work around. The ATF then came audited us, saw that we were doing that, [00:37:00] said it was fine for three years, and then they changed their mind.
And we had to reverse a lot of it. Those types of things is what you have to look for. You have to look for the ways in which you can reduce the height of the barrier that is naturally there. And with s- with firearms we had to do that a lot. We had to figure out ways and, to ship faster and ways to to have better margins when you- we have high taxes 'cause there's excise tax on firearms and things like that.
There's the necessity to have a healthy business creates e- a way for you, th- the demand for you to
Matt: yeah.
No, it's
Josh: path.
Matt: Find the path. Yeah, that's-- I, one, one thing that's very specific to the industry is pretty f- it's pretty fascinating 'cause you were operating in a very heavily regulated industry. I think that, I don't even think that phrase does it justice in terms of, the regulation and oversight and levels of interest from certain, groups or whoever it may be.
But you spent, close to a decade pushing [00:38:00] for change in that industry that a lot of people told you would never happen. It finally landed this year. What kept you at it that long, and what does that say about where the real opportunity sits in the hardest corners of manufacturing?
Josh: Yeah. So like that's what kind of going back to the public company, quarterly result push that I-- a company like that has that mindset would never do the long play of changing laws. They do, they have lobbyists sure, but they're making backroom deals and things like that.
They're not actually changing things for the betterment of the co- of the country usually. So when I y- when I started there was so much Gray area. There's so much I should say obscurity around just the actual method in which you purchased or or some states y- people didn't even know is there a state level regu- or documentation or applications or...
there was so mu- there was so much confusion around it all that the first thing to do was just to get rid of the confusion. [00:39:00] So I did some market research and found that just education alone would win the deal and then after the education portion taught the existing market and we saw massive increase, then I wanted to expand it into the broader firearms market and I'm like how do you do that?"
States, most states don't allow purchase or if they do allow to purchase a silencer, then th- all the other states don't allow hunting or whatever it is. There was so-- There, it was just fraught with red tape, and so I just started removing that red tape one state at a time. And so over s- oh, and in the process, a-and I didn't have any concept of how to do lobbying or how to change laws.
I think my, my full understanding of the legislation process at that time was the video that we saw in elementary school, the Capitol Bill cartoon, "i'm Just a Bill." And and I had to then learn an entire skill basically, which was lobbying and government relations.
Created an NGO because I found out very [00:40:00] quickly that you, it's very hard to lobby for yourself when you're a company meaning it, it's impossible. They won't listen to you. So I needed an NGO, so then I had to get all the competitors to agree on an NGO, and that was very difficult. And then we got the NGO, got it funded, and started going state to state and just banging on doors and doing everything we could, holding shoots i-in, shooting ranges that were close to the capital so that we could bus legislators out so that they could understand what it is that they're legislating.
And we cha-changed 37 laws in five years state, on the state level. But in 2014, I was like the Holy Grail is to just remove this, remove silencers from the National Firearms branch, which is the branch of the ATF that regulate it. Just remove them altogether, get rid of the tax. There was a $200 tax every time that you bought a silencer, there was a $200 tax.
So that was the Holy Grail. So I started working with Congress back in 2014, found someone to sponsor the bill, introduce legislation, and for all intents and [00:41:00] purposes, it was gonna pass. And we, I had Senator Hatch and Paul Ryan Congressman Paul Ryan talking to him almost daily Everything was looking good, and then Vegas shoot- shooting happened.
And Hillary Clinton said, "Imagine if the shooter had a silencer." And then all of a sudden it was toxic. Fast forward second Trump term, Trump comes back. The bill was then reintroduced and passed in a different version which is eliminate tax but the product is still in the branch. So you still have to do the application process and the background checks and all that stuff, but you don't have to pay the $200 tax.
We saw 535% increase in the market over the f- first two months of demand, and that demand has been increasing even still. But now i- it's almost to the point where the, the suppressors are completely removed from the National Firearms Bran- Act Branch altogether which would then treat a silencer as a firearm, which would be just a over-the-counter background check and [00:42:00] same day purchase without a tax.
So yeah, it's 24... So 12 years that I've been working on this with, the entire industry. I'm not gonna take all the credit, but I definitely started it.
Matt: Yeah. If you've been to one meeting on something like that, y- to your point, the education process for policy change and especially in manufacturing, I... It's a, it, it's-- The comment strikes me because we talk about this a lot on the show about the regulatory environment, about what people do not understand about manufacturings, and what they see is not always, it's not as easy as people think it is.
You'll see, big rollout for a new facility somewhere and an X amount of jobs to be created. Who's accountable for creating the jobs? Who's, like when is the f-facility coming online? How much demand can it take? Those kinds of questions, it's, past the photo op sometimes.
People don't dig into the policy details, and it's im- it's important to manufacturing, so appreciate you covering it because I think it, it's applicable to a lot of things going on in the manufacturing world right now just as, as a matter of reindustrialization and growing growing our [00:43:00] manufacturing sector.
Josh: Yeah. I dare, I would dare to say before that last point, I would dare to say that the, the, the difficult, highly regulated, hard industries are where most of the opportunity lives because people avoid it. There's less people that are clamoring for it 'cause it's hard,
Matt: Really good point. Really good point. If you're looking for opportunity, there's your space right there. Not easy opportunity, but something certainly worth looking into. Last part of our show, and we ask this of j- just about everybody who comes on. For a manufacturing leader listening right now, what's the one thing you'd tell them to do in the next 30 days to start applying this framework or how to get started and think about it?
Josh: Run a cultural audit. The first thing that you have to do to make sure that your company is running a productive difficulty lifestyle or the hardest fun lifestyle, is to make sure that w- you know where you already are. And I have on hardestfun.com, I have an audit that you can download for free to get you started, and it's a really great way to [00:44:00] see like what your people think about your leadership.
And you can start to to really understand d-, do you punish people for failing? Or do punish people for-- or do you promote people that are kissing ass instead of actually failing, working hard and understanding what their capabilities are. So run that audit.
Understand your company and where your baseline is, and then you can start the process of improving. You always need to know where that baseline is though
Matt: Check baseline, take that first step. Last piece of this before we close out and this has been a fantastic conversation, but before we let you go, I wanted to talk a little bit about your book. "Official," it's coming out soon. Where should listeners go to find that?
Josh: Yep, you can get it on Amazon. On the-- It is releasing September 26th to the public and the the e-book is releasing on the 22nd of September and the, And then the audiobook is 45 days after that or so.But you can find it at Amazon or you can go to hardisfun.com and sign up for my mailing list.
You could actually get on the pre-order [00:45:00] list for the book and you can get the audit the cultural audit to start with and just-- And I do a lot of writing as well on like my blog for insights and things like that. So it's a great place to stay connected
Matt: Awesome. We'll be sure to link that in the comments. And I'm a hard copy guy, so I'll be putting in a pre-order. If you wanna check out the book the, the physical copy, I'm still maybe a little old school with that, but looking forward to that being released. Unbelievable story. Thanks for sharing so much about your background with us and the success you've had in the manufacturing world, which some people translate to this person did something, but the, working through the hard stuff it is fun because it leads to great outcomes.
So we really appreciate you joining us today.
Josh: I appreciate you having me on. It's been great. Thank you
Matt: Thank you. To stay ahead of the curve and to help plan your strategy, please check out our website at Veryableops.com. And If you're on socials, give us a follow on LinkedIn, X, formerly Twitter, and Instagram. And if you're enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube, and leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.