What Does It Take to Make? The Built Oregon & MadeHere PDX PEP Talk
Our friends at Built Oregon and MadeHere PDX recently partnered up to create the Portland Entrepreneurial Project (PEP), a new event series for the local maker community. At their first PEP Talk on Tuesday, a panel of makers shared their journeys building businesses, how to bring a craft to a wider audience, funding, crowdfunding, and capital options available to makers, and a lot more.
Our CEO Josh Lifton moderated the panel discussion, which included:
Paige Hendrix Buckner, Founder of ClientJoy, as the event Emcee
Dawn Yanagihara, Co-founder and Creative Director of Kiriko Made, a brand based on traditional Japanese textiles, apparel and accessories
Justin Pyle, Creative Director for JBird Collective, a soft leather goods company, and former designer for Icon Motorsports and FOX Racing
Anna Cools, founder of Roots Soap, locally handmade gifts and soap
Kjell van Zoen, Co-founder and CEO for Plywerk, a fast growing company that puts art and prints on plywood
For lack of Liftonâs Stenosaurus, we did our best to capture the conversation in full. Read on for great first-hand lessons from makers on what it really takes to make. Biggest takeaways? Hint: Manufacturing, production and shipping.
Josh: How did you become a maker in the first place? Weâd love to know the genesis story of each of your businesses.
Dawn: Â I found this beautiful fabric during a trip back to Japan. I decided I really wanted to recontextualize them, so I brought some home and started this brand with a line of 12 scarves and pocket scarves. The story of the brand is really the fabrics themselves, which come from these family run, small organizations.
The audience there isnât big enough to support them financially, and many are backed by the government, so weâre happy to be able to help where we can and bring these fabrics to the US. Â We were bootstrapped, and found it really hard to find funding. That was the biggest struggle until we found Craft3, who gave us a loan to start out. One of the hardest steps building a business as a maker is finding funding for your business.
Justin: Coming from a background in Industrial design, I really wanted a brand for myself. I originally launched JBird on Kickstarter. The experience really felt like the Made in America movement, but with a new take on that story. I wanted to create a brand that sourced everything locally, using hardware and fabrics from only the US. I use military hardware, for example which has to be made in the US.
Anna: I was lucky enough to receive a family loan for $2,000 to start Roots Soap, starting with a line for the bathroom first. Iâm trying to be more local in my ingredients, too. I use Coconut and beef Talo in a lot of my products, so Iâm looking to source it more locally, as well. The growth has been slow and organic, but now Iâm hiring a helper and moving out of my kitchen and to a production facility.
Josh: Question for Justin... how did the Kickstarter campaign go?
Justin: The Kickstarter campaign was two years ago, and it exceeded our expectations. We had a $10K goal and ended up raising $110K. It was a lot more than we were planning for, and a lot more than we told the factories what to make from the beginning.
Our biggest problem was with the manufacturer. It took 10x longer than what they told us it would take. You canât ask people to wait 10 month to a  year for a product they paid a lot of money for, so we had to cut ties with a manufacturer because they couldn't keep up with our needs.
Crowdfunding can give you a false sense of demand and success our the gate, but can be a foundational boot camp for your business plan. The success can also be a curse in many ways, but it made us evolve quickly.
Josh: I moved here 4 years ago. Are you from Portland, or did you come to Portland to do this? How does it work here? Have you tried anywhere else?
Dawn: I used to be in LA. In Portland, more people want to collaborate and connect with you than in other cities. I think Portland is such a unique city for that reason, it has cache, but for a good reason. People here want to collaborate.
Justin: Itâs a unique city, but itâs not the only city. You can get this kind of community in places like San Francisco, which has a huge maker community, or Brooklyn and others. Â But the fact that there are spaces like this (referring to MadeHerePDX), with this much stuff, in a city this small, is amazing. In Portland, everyoneâs making something or knows someone whoâs making something. Per capita, there is probably no other city in the world like it.
Anna: My business thrives here because of the appreciation for design and branding. I love Portland because it supports the makers - but without design, artistic ideas, and support, I wouldnât be this successful.
Kjeil: I came here from Netherlands and London. Here, itâs much easier to start a business like this, because the community supports it. No one trusts a new business in the Netherlands - here, itâs the other way around. We sell to other places in the US and are planning on expanding to other locations, as well. But Portland is also a double-edged sword since itâs full of makers, so when youâre making a high end product thatâs out of most peopleâs price range, sometime you canât sell it.
Josh: Is that the new norm? Is the future of all goods heading toward the high end?
Anna: I donât consider my product high end - our tagline is âFine soap for the working class.â We are high end in the ingredients, but we also want to be accessible to the masses. However, Iâm not sure my prices will be sustainable at a low price. If you charge less you might not put as much passion into it. You have to pay for good ingredients - It's impossible to be authentic and low-end.
Justin: If youâre making a small volume, the cost has to be higher.
Audience Question: How do you handle the anxiety of starting a campaign?
Dawn: You need to have a sense of humor, and you have to believe in your product  You also have to know that other people like the same things as you like - and you have to find that audience.
Justin: The thing that helps you success, and the reason you're so afraid to fail, is the passion behind it in the first place
Kjeil: I just seek out validation from the media about Plywerk.
Audience Question: What was the biggest unexpected expense in the process?
Kjeil: Labor and marketing are our two biggest expenses. I think the amount of labor was a shock. When i went back into lean manufacturing in 2009, our manufacturing was out of control. We had massive inefficiencies. It was amazing how little a grasp we had of what others were doing.
Josh: Is that whats the most difficult part of being a fast growing maker? The efficiency?
Dawn: Production. When youâre growing, you have to transition from small amounts of units to 10s of thousands. It can be a very real problem - we lost a big PO because we couldn't get their materials in time and missed the ship date.
Anna: Working out the efficiency of the production. I have some engineer friends that Iâm hoping can help us figure this out.
Kjeil: We double the production size between November and December. In our first year, for example, we realized we had no idea what was orders were in the system and what was going on. It was a total mess. We stayed up all night fixing it. Ultimately, we bought our own production software, and since then have probably put $100K into it. But Christmas is easier every year. We had two friends that were process engineers that know what theyâre doing, thankfully. Engineers are you best friends. But explosive growth is also not a great model. I'm going to look to grow Plywerk more naturally.
Audience Question: What was the biggest unexpected expense?
Josh: What aspects make Portland a Maker City - and how big do you think the economy really is?
Dawn: A maker is someone who makes things - but making things is so abstract. It can be a concept, you can be an idea maker. Portland is a maker city because unlike other cities, my experience is that people are more concerned with connection and helping people out. Thatâs been so invaluable to being a maker here
Justin: There are not many cities where you can find two or three supplier and manufactures within a few miles from you. I consider myself a maker, but Iâm a designer. Itâs anyone whoâs producing something new.
Kjeil: I donât know if Portland is a maker city. I never considered myself a maker actually - we just never used that word. I always consider myself a manufacturer, itâs just what we do.
People come to Portland because itâs a fun place to live, itâs relatively inexpensive to live compared to the Bay or other cities, and you can chase your dreams.
Audience: Do you want to stay small? If someone came to you with a PO of 100K units how would you feel?
Anna Iâd love to, but need the efficiency in production. Infrastructure is what Iâll need.
Dawn: I guess Iâd ask the PO if they will pay upfront or not. Then weâd have to consider, do we want to take on investors to make it happen? Do we want to take on that side of the business?
Audience: What kind of investment did you get? Did you ever raise venture capital?
Dawn: We were bootstrapped completely - I started the company as a part time gig while working a full time job.
Justin: I couldn't take on investors until I filled my orders from the Kickstarter campaign, and had I known how long it would have taken, I would have moved to another factory much sooner.
Crowdfunding gives a false sense of success because everything happens so fast. but thatâs not the way it works. Â You have to ramp up for a huge production, then ramp down, then build it back up again.
Anna: Iâve had investors try to offer me money but Iâve always said no. (Josh replies - good job.)
Kjeil: When we started Plywerk, we went for go big or go home. I tried that, I got investors, but I ended up gicing them a decent churn of money. We maxed out our credit cards, and it didn't work out the way we wanted it to.
Itâs about doing whatâs right, not what makes the most money. How i feel about business - the more you put yourself into  business - if you want to be sustainable, you canât have every manufacturer scale as big as possible - there aren't enough natural resources to do that
Josh: Venture capital is the celebrity of funding - it's all you hear about...not the only option. Great ideas are cheap. The perspiration matters. Now more than any other time in the world, is it a great time to be able to mitigate risk and try things without taking a second loan on your house. You can test the waters, which is an efficiency that weâve never had before.
A lot of products fail out the gate - what if we could reduce that to 50%? So much effort and human capital  - there are tools you can use from your desk without ever leaving it - including shipping it and selling it. You wouldnât want to do that... but you could.
The reality is that sometimes, itâs (venture capital) a trap. Itâs not free money - itâs something you have to control.
Audience: As the next generation maker, as you grew, how did you handle that transition?
Dawn: I had a lot of support and lived at home as long as I could.
Justin: Iâm very stubborn about failing, and Iâm an optimist. I didnât really think about it. You hit dark spots but ultimately, you just have to think itâs gonna work - all the time.
Anna: I was lucky to have a second income so i could focus on this.
Audience Q: How do you handle work/life balance?
Dawn: I grew up in Hawaii - life there is about your off time. I don't work more than 50 hours a week, but I do work every day. A lot of technology today helps you compartmentalize and be more efficient. Itâs about how you structure your business.
Justin: I took on a full time employee for that very reason.
Kjeil: Thatâs what Iâm stepping down as CEO - for work/life balance.
Anne I havenât had any work/life balance. My kids are a lot of energy, and honestly Iâve become a little burnt out. Â I have help now, and as time goes on, then Iâll be able to come back in as i have more time and energy.
Audience: Did you have a business plan?
Dawn: Yes, seven times yes (laughs). I look back at our plan, and I have to laugh at ourselves. So much is unforeseeable - but business plans are good for laughs. If youâre approaching investors to get initial funding, itâs just a necessity you have to do.
Justin: When you have a board meeting, itâs a good tool. But Itâs also a lot of BS - youâre only kidding yourself. The more you do it, the better you get at it. Â You have to be realistic - are you doing the research? Writing a good plan really takes a long time.
Josh: Â Plans are the worst - itâs a document that tricks you into thinking thereâs only one way of doing it.
Josh: Kelley and I went to Washington DC last month to a Makers roundtable at the White House. The conversation was very different in that room. No one was making anything to sell to anyone. It wasnât about building a business at all. It was more about educational technology, STEM education and STEAM, and a lot of it was self selecting the crowd. But it highlighted just how unique Portland is in combining entrepreneurship and craft.
Kelley Roy, founder of ADX and PortlandMade: This movement is so powerful on the local level. We did a survey recently and found that the 126 members at the time created over 1000 jobs locally, and drove over $70M in economic activity.
We now have over 500 members. When you start doing the math and seeing the numbers, itâs a huge horse, and a big movement. Itâs only growing. Portland is internationally known for our products, and many members are exporting them. Itâs creating great local jobs, itâs such high-quality, and itâs authentic. Itâs something that (they) need to pay attention to and support.
