About this Episode
In this episode, how Mark Kuhn, CEO, and Co-Founder of Oat Foundry, go from an engineering student with an idea to CEO of a small business that builds innovative custom split-flap signs and other creative engineering marvels? We had the opportunity to catch up with Mark and the Oat Foundry crew recently at their new facility in Philadelphia to hear how Mark discovered a weird niche as an intern, how it sparked an entrepreneurial idea, and the twists and turns in the road from startup to small business.
Mark Kuhn 0:00
I was connecting the dots between product and revenue and expense and capital expense like the proto business kind of the mindset started to percolate.
Angela Giovine 0:13
Pop culture has become obsessed with entrepreneurship stories from Silicon Valley, and big startup. But the backbone of our economy is made of small local businesses. Every day, millions of small business owners deliver quality products and services, support the local economy, employ their neighbors and follow their passion. We think their stories are worth telling. I’m Angela Giovine, welcome to the extra ordinary small business podcast. Today on the show. How did Mark Kuhn, CEO and co founder of Oat Foundry go from an engineering student with an idea, to running a small business that builds innovative custom split flap signs and other engineering creations? We had the opportunity to catch up with Mark and the the Oat Foundry crew recently at their new digs in the Frankfort Arsenal in Philadelphia, to hear how Mark discovered a weird niche as an intern, how it sparked an entrepreneurial idea, and the twists and turns in the road from startup to small business.
How many times have you had an experience that left you saying there needs to be a product that… or there really should be a company that… Most people do have these types of thoughts regularly. What is not typical, however, is to actually do something about it. Most entrepreneurial journeys begin with a variation of that story. While most entrepreneurs may begin that way, the endings vary greatly from licensing of an invention, to the sale of a company, to an unfortunate flop. For Oat Foundry, it was this question that Mark Kuhn asked himself as a college intern that led to the founding of the quirky engineering firm known as Oat Foundry. From the initial Hey, we could build that moment, Kuhn set out to assemble his core team of partners that were willing to give entrepreneurship a go. The twists and turns in Oat Foundry’s road has led to the establishment of a thriving small business. We build cool stuff, is their motto, and well, they do.
Angela Giovine 2:47
Believe it or not trying to find a small business owner who is a young man is really hard. They’re either in like venture backed,
Mark Kuhn 2:57
Yeah, startup world.
Angela Giovine 2:59
Start up world, which is not the focus of this podcast,
Mark Kuhn 3:03
Angela Giovine 3:03
Not anything against them, It’s just not my focus, or they’re working in a regular job. So the ones that I do find who are younger on the younger side, maybe they’re running like a restaurant, but you are so interesting to me because it’s manufacturing and engineering.
Mark Kuhn 3:19
Angela Giovine 3:20
that’s so unusual to go into this day and age, really. So tell me about how you got into this world.
Mark Kuhn 3:29
Sure. So my background is mechanical engineering, and I went to school at Drexel University for that. I’ve always been interested in mechanical engineering. I’ve loved mechanical engineering before I even knew what it was and it was just taking apart VCRs and messing around with
Angela Giovine 3:43
Okay, you were one of those as a child
Mark Kuhn 3:45
For sure. Absolutely.
Angela Giovine 3:47
Mark Kuhn 3:47
Yeah, making stuff, breaking stuff ,
Angela Giovine 3:49
parents come home and like something’s taken apart and they’re like,
Mark Kuhn 3:51
Yeah, and like a blind confidence, also, like I’m going to take apart the dishwasher.
Angela Giovine 3:56
I will definitely know how to put this back together.
Mark Kuhn 3:58
Angela Giovine 3:59
Mark Kuhn 4:00
Often wrong but never in doubt.
Angela Giovine 4:01
That is a good indicator. Okay?
Mark Kuhn 4:03
Yes so precursors for engineering
Angela Giovine 4:04
It was all there,
Mark Kuhn 4:05
breaking things and hardware. So and much of my partner’s here are similar mindsets. Love tinkering with things, love taking things apart, loved repurposing remote control cars
Angela Giovine 4:15
Mark Kuhn 4:15
fireworks launchers or whatever, you know, you can pick something. So then when you look at what mechanical engineering is as a field of study it is, you know if the world is not exactly how you want it to be, you can make it exactly how you want it to be. It’s all the tools, the math, the background to be able to do that from design principles through to heat transfer calculations, and the aerodynamics and whatever you want to specialize in material science. It gets really interesting really fast. So we all went to Drexe,l and we had met it was sort of like the the great escape like we started a meet, you know, we had a core group and then we added another guy, and another guy and another guy and suddenly we’re at the six co founders for Oat Foundry.
Angela Giovine 4:53
How early on in your college career did you know you wanted to go out on your own?
Mark Kuhn 4:58
So Drexel has their CoOp programs,
Angela Giovine 5:00
Right, right. So for people who do not know, the Drexel Co Op program as an undergraduate, it’s a five year program instead of a four year program.
Mark Kuhn 5:08
Angela Giovine 5:09
But in between every is a trimester?
Mark Kuhn 5:11
The trimester thing came from, you’re doing three terms of school and one term of
Angela Giovine 5:15
Mark Kuhn 5:15
summer, but it’s a quarter program so for every, it’s basically six months on, so you do six months of work. So it’s six months of school, six months of work.
Angela Giovine 5:23
So this is like way beyond an internship. This is like you’re a working professional as a college student, you leave the campus, you’re no longer staying in the dorm.
Mark Kuhn 5:32
Angela Giovine 5:32
You find a job for six months and then you come back and you kind of do that in between each year so to speak?
Mark Kuhn 5:39
Yes, you finish freshman year, you have summer off, you come back to school, you’re either working for six months, or you’re in school for six months, and then you flip.
Angela Giovine 5:46
Mark Kuhn 5:47
So many of my partners we were on kind of a one fall winter rotation. Come back freshman year, you know and go work for six months, then you come back you’re in school for six months, then you go work for six months now you’re a pre junior work for, you know, go back to school six months and flip flop on and off until your senior year where you have, three straight terms of school and then you graduate.
Angela Giovine 6:05
Mark Kuhn 6:05
Angela Giovine 6:06
So you very early on had employee experience then?
Mark Kuhn 6:10
Yup, for sure. So I did three co ops, I did the US Army Research Lab, I was a material scientist down there in Aberdeen at The Proving Grounds, which was great. Met Luc Tenthorey, who’s one of our, you know, the Oat Foundry partners here. We met at that job.
Angela Giovine 6:24
So these places they tend to keep more than one Drexel Co Op?
Mark Kuhn 6:27
Oh, yeah, some so some employers will employ, you know, probably dozens serve that and maybe more. I don’t know, the larger ones like Sunoco, right? You have some mechanical engineers, you have some business folks, you have marketing people
Angela Giovine 6:41
Sure. Yeah, I’m x Johnson and Johnson, so we still always have some co ops. Yep,
Mark Kuhn 6:45
Yep. So at the army there was in our research lab, there was a couple, I was at one in mine, Luc was at the lab next door, and so we just became friends and met, I think there was five or six of us down there, At that time. I was making a motorized bicycles, I was putting a motor onto just a normal bike. You can get like little two stroke engines. And I needed a custom bracket board, I didn’t know how to weld. So the guy I was working with down at the research lab said Oh, my friend Jim actually knows how to weld really well. I’ll introduce you guys. And that’s James Vescio, who is another Oat Foundry partner. So we started get these they was like, Yeah, like saying the great escape, because it was like we’re accruing all these people.
Angela Giovine 7:19
But at the time, you didn’t know that you just kind of
Mark Kuhn 7:21
Angela Giovine 7:22
you weren’t talking about starting a business, so the pieces were all falling in place.
Mark Kuhn 7:27
So so your question was, did I always know I wanted to go,
Angela Giovine 7:29
Mark Kuhn 7:29
my own thing. That didn’t really click for me until really the second co op, which was for GE Aviation. They have a ceramics lab in Delaware. We’re making ceramic engine parts.
Angela Giovine 7:39
Mark Kuhn 7:40
lighter, stronger, save on fuel economy. And this was right when 3D printing was kind of becoming
Angela Giovine 7:44
Mark Kuhn 7:45
a real thing. So
Angela Giovine 7:47
What year was that?
Mark Kuhn 7:48
This would have been 2010?
Angela Giovine 7:51
Mark Kuhn 7:52
Yeah, something like that. So the lab I was working in there, we were contracting out this 3D printing and I was like, Man, for 40 grand, I can buy a printer, and we’re paying $2,000 per mold, It’s only
Angela Giovine 8:04
Be on the other end of that deal you saw. Uh huh.
Mark Kuhn 8:06
I was like we are paying a guy in his garage to do it.
Angela Giovine 8:09
Right. Right, right, right.
Mark Kuhn 8:11
So it I was connecting the dots between product and revenue, and expense and capital expense, like the proto business kind of the mindset started to percolate.
Angela Giovine 8:20
So it was more about upside then so to speak, like not wanting to be an employee?
Mark Kuhn 8:26
Maybe I’ve always had that inside me also, not wanting to be an employee. Anytime it gets challenging at Oat Foundry, I do you know, when I talk to my parents about it, they’re like, Yeah, but would you have it any other way?
Angela Giovine 8:36
Mark Kuhn 8:36
Would you rather be working for someone else? And the answer is still no, so
Angela Giovine 8:40
Right. And we were just talking about you come from a family where your father is a small business owner, your grandfather was a small business owner.
Mark Kuhn 8:47
Yep. And my mom is on the creative side also.
Angela Giovine 8:50
Mark Kuhn 8:50
So has done I think her degrees in education, but she used to write and do the crafts for highlights children’s magazine.
Angela Giovine 8:56
Mark Kuhn 8:57
So her office growing up in our house was like got AC Moore craft store.
Angela Giovine 8:57
So your upbringing was non traditional and that neither parent was going in, punching a clock somewhere for somebody else.
Mark Kuhn 9:09
Angela Giovine 9:09
So you had that subconsciously in your in the back of your head?
Mark Kuhn 9:13
Yeah, it’s in the DNA. So that was kind of when it first started to be like, I could do this.
Angela Giovine 9:18
Mark Kuhn 9:18
as a, you know
Angela Giovine 9:19
There’s money there. I could do this.
Mark Kuhn 9:20
Right, yes. There was money there and I just needed to be a little bit more opportunistic about it. But it’s funny because starting a business is has very little to do I think with the actual product itself. And people are always, like, I want to protect my IP about
Angela Giovine 9:32
Mark Kuhn 9:33
Angela Giovine 9:33
Early on, you’re trying to get everybody to sign your NDA.
Mark Kuhn 9:36
Nah, there’s nothing like that. Yeah and and really what matters is like the team that you have doing it, the experience, you know, can you make a business plan for it? And people always shy away from business plans, but like, you know,Oat Foundry is changing, we can talk about it too. Oat Foundry’s changed by five times since we started this company. It has course corrected as we find things we like more and find products we are better.
Angela Giovine 9:56
Whereas venture capitalists say pivot. That you’ve pivoted but in real world, you’of course corrected and found the niche found the demand.
Mark Kuhn 10:05
Always refining, right. Always getting better.
Angela Giovine 10:07
Mark Kuhn 10:07
We don’t say startup because we’ve never taken institutional money, but capital startup capital, and we’re more than five years old. So five years is usually the cutoff point for
Angela Giovine 10:16
Mark Kuhn 10:16
any kind of startup where you’re looking at either an exit event or an
Angela Giovine 10:19
Right, right. And you’re not trying to sell this, you’re trying to run the business.
Mark Kuhn 10:23
Angela Giovine 10:24
Mark Kuhn 10:24
Angela Giovine 10:24
Mark Kuhn 10:25
And I like when I get to spend time on figuring out the business too like, you know, my jobs, at Out Foundry are business development and sales, and then internally, things like hiring and firing and finding better people and good talent.
Angela Giovine 10:37
Working on the business rather than in the business so to speak.
Mark Kuhn 10:40
I love both of them but I have seen that many entrepreneurs do not focus on the business. They focus on
Angela Giovine 10:46
On the business. They work
Mark Kuhn 10:47
on the business, right.
Angela Giovine 10:48
not in the business. Absolutely. Absolutely. So it’s around your second coop,
Mark Kuhn 10:53
Angela Giovine 10:53
you see some upside and you’re like I can do this.
Mark Kuhn 10:57
Angela Giovine 10:58
You start to talk to your friends about It
Mark Kuhn 11:00
No that came later. So the second Co Op was this GE Aviation. We did a study abroad, and we found kind of a sixth man Sean Rossiter somewhere, you know, walking around Northern Germany and then we came back and we had to do this senior design project at Drexel, which was making a vending machine for the Philly Pretzel Factory,
Angela Giovine 11:18
Okay, like Philly Pretzel Factory partnered with the university?
Mark Kuhn 11:22
Yeah. So I think they acquire, or they solicit corporate sponsors, because you’re solving a corporation’s problems, whatever those problems may be. And in this case, Philly Pretzel had come to Drexel and said, we can basically contract some young smart engineers to do these this early stage, basically product development for us.
Angela Giovine 11:41
So it was it was like a contest and multiple teams were working on it?
Mark Kuhn 11:45
Internally, so they publish all of the projects that are available. And so the contest is amongst the teams of Drexel seniors to then compete for so they would say, you know, every team should apply for four or five of these projects, because some of the more popular ones will only go they can only go to one team.
Angela Giovine 12:02
Oh okay, so there’s more than one. Okay, got it now.
Mark Kuhn 12:04
And we we just stood up and we’re like everyone else can apply for multiple projects. We’re only applying for one because we want to do this Pretzel vending machine
Angela Giovine 12:10
Mark Kuhn 12:10
And we busted our asses to win it and then we won it and then we were like, Shit now we have to build the thing.
Angela Giovine 12:15
Mark Kuhn 12:16
Yup, so we did took nine months we built in a basement in West Philadelphia. It was functional. You know, it was a thing that could store pretzels and then
Angela Giovine 12:24
Like fresh, soft,
Mark Kuhn 12:25
They would come out and they would be hot and they would taste fresh. They come individually quick frozen, so it’s a lot of how like food is now transported back and forth. But it was like, you could leave them, they would get delivered to this holding box inside this frozen box. They would travel from there, throughout the whole heating apparatus,
Angela Giovine 12:40
Wow, so it’s like sort of cooking in there.
Mark Kuhn 12:42
Angela Giovine 12:43
Mark Kuhn 12:43
Couple ways of cooking too, so
Angela Giovine 12:45
Did you blow anything up while you were trying to build this thing?
Mark Kuhn 12:47
We learned a lot about microwaves. We learned a lot about how we had to get
Angela Giovine 12:52
Mark Kuhn 12:52
a microwave to- Oh for sure fires, yeah. We had to get a microwave tester because we were measuring these things and we’re like microwave, you know, we have this little meter and it’s boo boo boo boo boo, it looks like a little Geiger counter and we’re like, you know, microwaves actually leak a lot of radia- like it’s it’s microwave radiation that it sounds like such a nasty term, but it’s not ionizing that can’t really hurt you.
Angela Giovine 13:11
Mark Kuhn 13:12
And it dissipates so quickly, but, you know, we had this thing all hacked apart into pieces. And we’re like, Man, if I leave my hand there too long, it gets really hot. Yeah, exactly.
Angela Giovine 13:20
Mark Kuhn 13:21
So it wasn’t designed for manufacturer or anything like that but it proved out the concept which was like,
Angela Giovine 13:25
Mark Kuhn 13:25
And you heat up these soft pretzels in an automated way.
Angela Giovine 13:28
Mark Kuhn 13:29
Which was super exciting, and then we looked around each other, and we’re like, this was now the new 3D printer. We’re like, we should just be this vending machine company, like we could make these things, we’ll develop them for Philly Pretzel, we’ll sell them, like
Angela Giovine 13:41
To other people, yeah. We have IP, yeah.
Mark Kuhn 13:43
Exactly. It was like, the lights started to go off. We should form a company and do this thing. So that’s when the early ball started to roll for Oat Foundry about you know, let’s commercialize this technology.
Angela Giovine 13:52
Okay, so going into your graduation, you’re like, I’m not looking for a job. I’m starting this thing.
Mark Kuhn 13:57
Angela Giovine 13:58
And your Co founders as well?
Mark Kuhn 14:01
Ah, so some of them, yes, some of them no. So varying amounts of student loan debt. Some people were like, I have to basically jump into a job, immediately get cash coming to the door, which are some of the issues that become very apparent when you’re running cash flow matters, you know, is like really what you should pay attention to,
Angela Giovine 14:14
Right, like you said you weren’t going, what made you not want to get startup funding like from the get go?
Mark Kuhn 14:19
Yeah, it’s a good question. So part of it is that we were thinking we’re going to be this pretzel vending machine company.
Angela Giovine 14:25
And was there a potential there to then you did this project for Philly Soft Pretzel, were they going to use it?
Mark Kuhn 14:30
Exactly. Yeah, that was the idea. Yeah. So they, they were like, this is cool. We want to keep, you know, moving forward with this. We went to pitch them more formally, I think it was we graduated in June, we had an LLC, like 10 days or so after that.
Angela Giovine 14:42
Mark Kuhn 14:42
The shop came in August, it was a little bit after it was like a month or so later. And then yeah, so I think it was in August that we like formally pitch them and it was it just wasn’t going to work for their business case. So they looked at it like and this is my presumption, I don’t know if this is what actually transpired but they looked at it in their franchise business, I think it would have just completely steamrolled their franchisees
Angela Giovine 15:01
Cannibalize the franchisee?
Mark Kuhn 15:02
Yeah. Which is like a huge I think it’s called encroachment in franchise like a huge issue, you’re not allowed to do it. It’s just always leads to lawsuits. So we looked at it, and we’re like, you should buy this technology, you can put it in every Walmart, you can put it in every
Angela Giovine 15:02
Mark Kuhn 15:03
But that would have been, you know,
Angela Giovine 15:15
Bad for their franchisee?
Mark Kuhn 15:16
Angela Giovine 15:16
That makes sense. So it just wasn’t their business model.
Mark Kuhn 15:19
Yeah. Which is
Angela Giovine 15:19
So it’s like,
Mark Kuhn 15:20
Angela Giovine 15:21
You’re kind of banking on this thing to jumpstart your business. So that’s why you weren’t looking for funding because you thought we’re going to get this contract right away.
Mark Kuhn 15:28
Cash in the door, exactly.
Angela Giovine 15:30
Cash, we need to start business.
Mark Kuhn 15:31
Start working immediately.
Angela Giovine 15:32
Day 10 and you’re like,
Mark Kuhn 15:34
that whole payment
Angela Giovine 15:34
Mark Kuhn 15:35
Angela Giovine 15:36
Right, which is not uncommon, but you’re new to this game which probably a huge blow.
Mark Kuhn 15:40
And we knew when we started, we had some advisors who were saying, like, you know, you can’t just put all your eggs in one basket. So we went back to this 3D printing thing, thing and we get 3D printing, but now diffusion of innovation technology for Dd printing was becoming much less expensive. So so the lab I was in was bringing all that stuff in house as the market changes, right? The business has to change.
Angela Giovine 15:59
Yeah. So the things that you where you had originally seen dollar signs, those were no longer
Mark Kuhn 16:03
Angela Giovine 16:03
there, but you’re like now, I’ve committed to this idea of being on my own.
Mark Kuhn 16:07
Angela Giovine 16:07
but what does that look like?
Mark Kuhn 16:08
Yeah. So then you start kind of the grind, right? Like we had a box, we had expenses.
Angela Giovine 16:14
Mark Kuhn 16:14
Some of which we, you know, are my partners and I, we all kicked in a little bit of money.
Angela Giovine 16:17
Mark Kuhn 16:18
To discover things like-
Angela Giovine 16:19
So you did a business plan?
Mark Kuhn 16:20
Angela Giovine 16:21
before you graduated, you’re working on this business plan?
Mark Kuhn 16:24
All of the above, yeah.
Angela Giovine 16:24
Now, did you study business at all, while you were in college?
Mark Kuhn 16:26
Nat at all.
Angela Giovine 16:27
Not at all, so you’re kind of like googling-
Mark Kuhn 16:29
How to start a business. Yeah, and then and also acquiring knowledge from people who had done it before. Hey, how do I do this? Well, you need a product, you need a business plan, you need- who’s your market? Right?
Angela Giovine 16:40
Mark Kuhn 16:40
Who are your customers? Who’s actually going to part with dollars? How do I get the money from your wallet into my wallet? You know, it’s there’s this highfalutin way of thinking about it, and then there’s like, no, if you provide something of value and of service, people want to pay for it.
Angela Giovine 16:51
Mark Kuhn 16:52
Angela Giovine 16:52
So around you, you’re graduating, you’ve just gotten this amazing degree, your friends, your family, they think you’re crazy? Or they’re behind you?
Mark Kuhn 17:01
So friends were just like, this is cool. Like, Oat Foundry had such a- yeah, right. Oh and Oat Foundry has a fairly quick sonic, you know, motto we build cool stuff. So people are like, I don’t know what they’re doing, but they’re building something cool, like, is it pretzel vende-, we were known for pretzel vending machines for like, two years into the start of this business, right? It’s like, we built the machine in West Philly, but we never commercialized, we were never setting up a manufacturing
Angela Giovine 17:23
Mark Kuhn 17:23
or anything like that. It just was a really good way to start to kind of kickstart the company. So no one really looked at us like we’re nuts, maybe because of this, yeah, maybe this confidence from way back when like, Hey, Mark isn’t jumping from like, you know, he’s not like a painter, and then now he’s suddenly going to start an engineer campaign.
Angela Giovine 17:40
It’s also tangible, like you’re building stuff people can see, so it’s like, Oh, I get it. There’s a thing that they’re selling.
Mark Kuhn 17:46
Right, right. It makes our job a little bit easier than digital, there’s, you know, digital companies that build cool stuff, also products, digital products,
Angela Giovine 17:52
Mark Kuhn 17:54
It’s nice to- there is a tangibility to it that is very attractive. So
Angela Giovine 17:57
But that’s double edged sword, It’s tangible, but tangible takes space.
Mark Kuhn 18:01
Yeah, yep. So we had, we had a box in Bensalem, Pennsylvania, 1200 square feet. And our offices were there, and our shop floor was there. In these early days, you know, you’re kind of feeding the beast, we send notes to patent attorneys and say, Hey, if you get people contacting you who need prototypes made, send them to us, and we’ll help them make prototypes. You know, but we didn’t understand anything about how much things like that cost or paying ourselves or any of the rest of it, so
Angela Giovine 18:26
Right, so early on, you guys, no one’s taking any money out of the business. No one’s getting paid. You guys are just meeting in this office space that you have.
Mark Kuhn 18:33
Angela Giovine 18:34
Every day and you’re sending out letters to attorneys, and how else are you looking for business?
Mark Kuhn 18:39
Yeah, there was a lot of websites that had kicked up that were contract 3D printing services. So we were just doing that, we were having our services available through like, I remember we kind of gamed make XYZ was a company that did it. It was supposed to be local, but we realized like we could ship quickly so we made accounts in like every North American city, and then we would get people from like Dallas and Vegas.
Angela Giovine 19:00
Mark Kuhn 19:00
all over the place coming to Oat Foundry because
Angela Giovine 19:02
Mark Kuhn 19:02
effective and we’re cheap. And so we’re doing 3D printing for those early days also.
Angela Giovine 19:06
Mark Kuhn 19:07
But you look at the numbers and you’re like, great, this brings in, you know, 40 bucks a month. It’s like, Okay, well, our rent is $500.
Angela Giovine 19:13
Right, right, right right, right.
Mark Kuhn 19:14
It’s just blows it out of the water. So managing the P & L was like,
Angela Giovine 19:14
Mark Kuhn 19:17
Yeah, you start to look at like, the black numbers are not getting bigger and the red numbers are getting
Angela Giovine 19:21
Mark Kuhn 19:22
So the patent work was great, because it taught us about product development and we’re Great, we can apply this to this group of people who need this, this is great. What we realized was kind of what we’re talking about in the beginning, making stuff is not always the hard part. Marketing things is also a very hard part, and managing it. And we had clients that were they trusted us in these early days. And it was really great. We built some great stuff for them too. But it was, we started to see the challenges that they were facing where you know, to launch a kickstarter campaign now it’s like there’s a whole science behind
Angela Giovine 19:51
Mark Kuhn 19:51
To get the cash in the door for that, which is frustrating. You know, when we would try to disabuse ourselves from deeming whether a client’s project was going to be successful or not successful. We’re Like, Hey, we can build .
Angela Giovine 20:00
We just made the thing, yeah.
Mark Kuhn 20:01
We can make thing, we can make it really good, but that’s it. We you know,
Angela Giovine 20:04
Mark Kuhn 20:04
you know, we we don’t know how to sell it.
Angela Giovine 20:05
and also getting emotionally invested in every one of these things.
Mark Kuhn 20:08
Yeah, we would tell people if it’s your last $5,000, this is not your lottery ticket.
Angela Giovine 20:13
Mark Kuhn 20:13
Starting a product and project is expensive, takes a long time.
Angela Giovine 20:17
Mark Kuhn 20:17
Angela Giovine 20:18
Mark Kuhn 20:19
Yeah. So don’t do it, If that’s the case, you know, go on vacation. So we did patent work for a little while, we started doing fabrication work,
Angela Giovine 20:25
Mark Kuhn 20:25
So we were making signage and furniture and it got us in with a lot of cool clients. We were doing stuff for Saxbys coffee. They were a big early supporter,
Angela Giovine 20:34
Which is a Philadelphia based coffee company here?
Mark Kuhn 20:37
Yup, yeah. Nick Bayer’s a big early supporter of Oat Foundry. He loved our mission, too. He love what we’re doing as Drexel students, you know, post grads post
Angela Giovine 20:44
Now did that Drexel angle, get you a lot of meetings early on?
Mark Kuhn 20:47
I wouldn’t like say Hey, we’re Drexel students and people would be like, Great, like, come in
Angela Giovine 20:50
Okay, so it wasn’t like you had gotten some recognition for this Pretzel thing and people were like Oh
Mark Kuhn 20:55
No. no, no, no.
Angela Giovine 20:55
Mark Kuhn 20:56
No , yeah.
Angela Giovine 20:56
So let’s meet them.
Mark Kuhn 20:57
We didn’t know anything about marketing and PR in the early days. So for us, it was like, we probably could have publicized that a little bit more and really leaned on it and gotten like J&J snack foods or soup or someone to pay attention to that. But now we just didn’t have the chops for it. We didn’t know, we didn’t know, we didn’t know. But I did meet Nick at a like a Drexel event
Angela Giovine 21:14
Like a networking?
Mark Kuhn 21:15
Yeah. And I I think it was something through their entrepreneur school, which is now came after we had graduated. And I met him and was like, I went up and said, Hey, we build cool stuff. Do you need anything? And he was like, actually, yeah, we do all the time. Sure.
Angela Giovine 21:26
Mark Kuhn 21:27
We’re making like brand medallions for them, and some furniture for them, and it was a ton of fun to be like their local go to resource for this. And then
Angela Giovine 21:34
So that was an early break? Something steady,
Mark Kuhn 21:37
Angela Giovine 21:37
A little bit more financially lucrative
Mark Kuhn 21:40
Start to see cash coming in the door,
Angela Giovine 21:41
Mark Kuhn 21:41
Sure, yeah. So it was great. And then we started to do more business development around that kind of fabrication work too. You have some collateral you can use like, you take pictures of science
Angela Giovine 21:50
Yeah, yeah, you can show what you’ve done
Mark Kuhn 21:52
Well, we’re sending it to a experiencial marketers
Angela Giovine 21:54
Mark Kuhn 21:55
things like Oh, you know, grubhub is having a pop up. They need a call sign for it or Burt’s Bees is having a pop up, they need a cool sign for it. Got us some architectural work too, so we’re doing things like, Hey, we’re opening a new giant church, DC Calvary church, we want a big light up sign,
Angela Giovine 22:08
Mark Kuhn 22:09
that you know. So those kinds of projects were awesome. It taught us a lot about making things it funded a lot of buying tools for the shop, which is great. So we had met through Saxbys, the CEO of Honeygrow, Justin Rosenberg, who brought us in he said, You know what, meet with my brand officer, Jen Dennis, just brilliant. Their whole team is brilliant. Be with Jen and see if you guys can build some furniture for us. Or maybe she’ll just bet what you guys do. So we had a meeting with them. And we realized a couple things. One, Oat foundry didn’t want to be doing furniture anymore.
Angela Giovine 22:09
Mark Kuhn 22:11
We love making furniture, but it was just
Angela Giovine 22:25
It’s kind of far away from what you had started out.
Mark Kuhn 22:42
It was far away from where we started, it was not engineer like the team were not.
Angela Giovine 22:47
Not furniture people.
Mark Kuhn 22:48
They’re not furniture.
Angela Giovine 22:48
Mark Kuhn 22:49
And people who build furniture are really, really good at they love it, they care about the grain of the wood and and we kind of took our session with it, which was like the design part of it and the finish part of it. And then we’re like, we should focus back on engineering,
Angela Giovine 23:01
Right, but it was something that helps you pay the bills for a while.
Mark Kuhn 23:03
Angela Giovine 23:04
but it was like, let’s start to get back to our core.
Mark Kuhn 23:07
Yeah. So we looked at some circuits that we were designing, and a couple like electronics projects that Mike had brought in. And were you know, I had one I think it was this little circuit board and it would just light up if
Angela Giovine 23:17
Mark Kuhn 23:18
it was raining outside or something like like something’s ridiculous. And in the meeting with Jen, you know, where I’d said yeah, we do all this stuff for furniture, here’s our deck, we can build your tables or your signs or whatever. And then here’s like this we can also do like the other stuff too. And I think she had the wherewithal to be like these guys are actually product developers and they’re really good at it
Angela Giovine 23:35
Mark Kuhn 23:35
I don’t know what they’re
Angela Giovine 23:36
they just don’t know it yet.
Mark Kuhn 23:36
Yeah, they just don’t know it yet. Because she came to us and said, you know, Justin, I were in 30th Street station we saw this split flap sign, could you guys make one of those for us? That’s like cool
Angela Giovine 23:38
Mark Kuhn 23:39
No, for Honeygrow. Philadelphia is a fairly small
Angela Giovine 23:50
Mark Kuhn 23:50
CEO community and many of these companies like we all kind of know each other at this point, which
Angela Giovine 23:54
So they were like, We saw this thing in in the train station, which is 30th Street Station is the famous big station in Center City, Philadelphia. It has one of those old school train signs, the numbers flop down, and they were like, Can you do that? So she concepted that idea and said, Can you do that?
Mark Kuhn 24:12
Yeah. And send me a picture of that, the sign in 30th Street and said, We want this in like a cool, updated, you know, reliable,
Angela Giovine 24:19
Mark Kuhn 24:20
cloud controlled way.
Angela Giovine 24:21
And what did they want it to say?
Mark Kuhn 24:23
Can you do that? And we’re like,
Angela Giovine 24:23
like their menu, or just like,
Mark Kuhn 24:25
Yeah, they wanted it to show order numbers, marketing messages, maybe menu at some point, like specialty items
Angela Giovine 24:30
Controlled via a laptop,
Mark Kuhn 24:32
Phone, a laptop, the cloud. Yeah, back at home base, they could control the whole fleet.
Angela Giovine 24:36
Mark Kuhn 24:37
Yeah. So we look at that, and we said, it’s funny early days, we’ve said, know this is cool but, we’re not here to reinvent the wheel. There’s a company that does this already, reached out to them, they’re in Northern Italy. And we did. We reached out to them and it was like super expensive and not really customizable and would probably befall the same issues that the one in 30 Street has where it’s like falling apart and there’s no replacement parts for it. So we put together a proposal and said We can take this other way through from where we are now, which is ground zero to where we want to be, which is like full product development rollout. It works. It’s a fleet of them, you know, we’re doing a pilot program, really a product commercialization, and they said, greenlight, go ahead.
Angela Giovine 25:14
Wow. So that was your first massive project.
Mark Kuhn 25:16
No, I think we’ve done some work for Star restaurants that was like,
Angela Giovine 25:19
Mark Kuhn 25:20
technically complex, and but it was more on the architectural side.
Angela Giovine 25:22
And they were like, one project, one piece
Mark Kuhn 25:25
Yeah, it wasn’t like creating a product and then rolling with it.
Angela Giovine 25:29
the good thing was, again, in the Philadelphia area Star has a huge name, Saxbys is a is notable. So you were able to kind of take these brand names locally, and then go to someone like Honeygrow, and then turn that into a larger
Mark Kuhn 25:43
Sure. Yeah, and we also, we had good testimonials from people who said, even from the pretzel factory folks who said, Dan DiZio had written a recommendation was like, Yeah, these guys like they did a good job.
Angela Giovine 25:52
Right, right. We- we did not
Mark Kuhn 25:53
We didn’t want but
Angela Giovine 25:54
Mark Kuhn 25:54
they were great. Yeah.
Angela Giovine 25:55
Right, right, right, right. Well, that’s helpful.
Mark Kuhn 25:57
Angela Giovine 25:57
So what year was that?
Mark Kuhn 25:59
That would have been like 2014 2015
Angela Giovine 26:01
Okay, so was that a big inflection point for the business?
Mark Kuhn 26:05
Yeah. So the split flap was a big inflection point for the business because we started to learn about the value of product, of setting up a more rigorous manufacturing schedule. So when we looked at doing one off projects, that dollar value has to be very high, because you’re really spooling up these early
Angela Giovine 26:20
Mark Kuhn 26:20
of a product of the development part, which to date, we were like, you know, maybe Do we eat that cost? Or does the client that cost?
Angela Giovine 26:27
Mark Kuhn 26:27
And then we’re like, Wait a second, we, if we keep eating that cost, we’ll go out of business.
Angela Giovine 26:30
Mark Kuhn 26:31
So R & D is expensive. It makes sense when you’re rolling it out over a bunch of products that you’re inventing, you know, frequently people come to us and are like, I want to buy this thing, it just doesn’t exist yet.
Angela Giovine 26:41
Mark Kuhn 26:41
We’re like, Great, you know why does it not exist yet?
Angela Giovine 26:43
Mark Kuhn 26:43
And let’s talk about it.
Angela Giovine 26:44
Right, right, right.
Mark Kuhn 26:45
And if it makes sense, let’s build it for you.
Angela Giovine 26:47
Mark Kuhn 26:47
whatever that thing is. So it was an inflection point, because now we had you know that when the team first started, we all had sort of natural inclinations of things we like to do.
Angela Giovine 26:55
Mark Kuhn 26:56
And then also things like, my partners looked at me and they’re like, you were the employee number one, you’ve been here since the beginning, you know, Jim and Luc and I also started full time in the beginning. And then Luc had to duck out for a little bit, Jim might have duck out, John had came on full time. And then Mike and Shawn kind of came on, like a year or two later, when it was it made sense, we could start paying salaries and things like that.
Angela Giovine 27:16
Got it go, got it.
Mark Kuhn 27:17
So we, they looked at me and they’re like, you need to go out, be selling full time. be telling the story of Oat Foundry full time, will take care of the engineering and the project management. So we start to see this split
Angela Giovine 27:25
Started to be able to take stuff off your plate to spin them into roles.
Mark Kuhn 27:29
Absolutely. Yeah, more more rigorous roles and responsibilities. Then Shawn had been doing manufacturing of medical devices for a few years at this point. And he had climbed the ranks. He’s a intense, really smart guy. He climbed the ranks very quickly at a couple different local med device companies as their like Senior Manufacturing Developer.
Angela Giovine 27:46
Mark Kuhn 27:47
So he came into Oat Foundry, he’s a partner for Oat Foundry, but he came in to Oat Foundry and put in a lot of really valuable process in place about building products, things like quality control.
Angela Giovine 27:56
Mark Kuhn 27:56
we do that, things like lean manufacturing, you know, how we do that.
Angela Giovine 27:59
Mark Kuhn 27:59
So that was
Angela Giovine 28:00
And you guys are all quite young, but you’re able to know all of this stuff, mainly because you guys had all of these co ops, but they took that work and were able to get from co ops into real jobs in the area that they wanted to work in.
Mark Kuhn 28:13
Angela Giovine 28:14
And then they took that information, brought it back to you and were able to,
Mark Kuhn 28:17
I think I mean, I Shawn is just a brilliant guy. I think if he was a baker, he’d be the best baker in
Angela Giovine 28:21
Mark Kuhn 28:21
Angela Giovine 28:22
Right, right, right.
Mark Kuhn 28:22
This was a case where Yes, absolutely. You know, we all kind of had done some work before and had some work experience and knew what that was, and then a couple of guys had translated
Angela Giovine 28:31
Mark Kuhn 28:32
full time engineering careers. Yeah. So then we started to see also making a product and selling a product, what comes with that, so doing more rigorous sales and marketing, and and there’s, there’s kind of more to the story for Honeygrow also, but when we started to see, you know, dollars come in for things that now the engineers weren’t doing services on, were just making the same thing or the same couple of things over and over again. And it was still providing this like insanely high value for our customers. Where they we’re looking at this Wow, no one makes these things as good as you guys. These are awesome products, they make our customers like feel so happy. They’re
Angela Giovine 29:05
Mark Kuhn 29:06
They’re really cool.
Angela Giovine 29:07
No one else makes them but also no one else has them. So that makes Honeygrow super differentiated too. It’s a talking point.
Mark Kuhn 29:13
Angela Giovine 29:13
Oh, did you see that thing they have in the restaurant?
Mark Kuhn 29:16
They are focal pieces, wherever they are. They’re hot replacements for like chalkboards or TVs
Angela Giovine 29:19
Mark Kuhn 29:20
They are front and center, and you can’t deny them
Angela Giovine 29:22
Mark Kuhn 29:22
They just stood there. So what happened with Honeygrow is they did, we rolled them out, we rolled I think at almost all 20 of them out to locations. Some of them were retrofits, some of them were new construction. It works, you know, as designed as planned, where we’re showing order numbers, but a lot of the customers that’s psychology, they’re much more used to hearing someone shout out an order number. So that training of the customer was something that we kind of learned like, Hey, this is if if you’re going to roll out new technology, you have to train your customers,
Angela Giovine 29:47
Mark Kuhn 29:48
even at the end of our initial engagement, their CEO Justin said, eating local salads and salad bowls and noodles company, we’re not a split flap company.
Angela Giovine 29:57
Mark Kuhn 29:57
Why don’t you guys take this, you can continue to commercialize it. Just don’t sell it to our competitors.
Angela Giovine 30:02
Right, right, right.
Mark Kuhn 30:03
So we we looked at that and we’re like, This is awesome. We started to post it on our website as a product and The Cubs found us on like the fourth page of Google. And we’re like, we want to buy one of these. It was a month one that of like, doing split flap as a product
Angela Giovine 30:15
And you’re like, Wow, we found this crazy niche.
Mark Kuhn 30:18
We just were like, what?
Angela Giovine 30:19
So you bought so it’s the what the split flap in the stadium?
Mark Kuhn 30:24
The Ricketts family is the family that owns the Cubs, their doing a full renovation on the north concourse, I think it is. And they were putting in all these cool like shops and bars and restaurants. And one of them was this bar called Lucky Door.
Angela Giovine 30:34
Mark Kuhn 30:34
And they wanted it to be the whole thing behind the bar, was like an eight foot wide sign and it was beer and drink specials and marketing messaging, and they’d done a proposal on there and it was the you know was a bunch.
Angela Giovine 30:45
Mark Kuhn 30:46
Angela Giovine 30:46
this became a big product for you. You have your and to this day, you’re still doing a lot of split flap?
Mark Kuhn 30:52
Yeah, we do. And we have a couple products differentiated off of that also. So as we’ve seen, split flap grow, we’ve made it better over time, we’ve added at things internally to make the manufacturing easier, and then things like plans say I, you know, we want it with less lead time. Right now we’re like, we’re doing this just in time manufacturing, but with for customisations, the lead time is long. And we would say, Alright, let’s figure that out. What can we do? What can we change about the product to reduce the lead times. Make it less expensive to manufacture, but still keep the quality high, be able to do customizations easier. The software is always getting better. Now we do all kinds of cool software integrations for like flight trackers or websites and all kind of
Angela Giovine 31:28
So you guys are building the software and a hardware?
Mark Kuhn 31:30
Angela Giovine 31:31
And you’re doing it all here in house?
Mark Kuhn 31:33
In Philadelphia, Pennsylvania.
Angela Giovine 31:35
Wow. So so manufacture, so you have a software engineer, or engineers, as well as
Mark Kuhn 31:41
Two senior mechanical engineers, IT architecture is is what we call, it’s everything. It’s it’s not just forecasting and programming. It’s also this,
Angela Giovine 31:50
Mark Kuhn 31:51
like what kind of boards we develop a lot of our own boards
Angela Giovine 31:53
Mark Kuhn 31:54
So what boards were using and then also what kind of code and
Angela Giovine 31:57
Right, right, right, right
Mark Kuhn 31:58
planning stuff and then Project Management and Production Management, yeah.
Angela Giovine 32:02
So now how many employees are you now?
Mark Kuhn 32:04
So all the founders have now become employees of the company.
Angela Giovine 32:07
Mark Kuhn 32:07
us six and we have two other full time, Jeff and Tire, Tire does fabrication and assembly, and Jeff is full time sales and marketing, and then we have 10 part time employees that help also with assembly and fabrication.
Angela Giovine 32:20
Mark Kuhn 32:21
Angela Giovine 32:21
Mark Kuhn 32:22
On the docket for us coming up, we’ll probably be another product manager, some more Software Engineering, Computer Engineering. we’re interviewing some contractor co ops right now, for their next co op cycle, so yeah, it’s great. It’s growing.
Angela Giovine 32:32
Wow, wow. so you’re pretty focused in now on split flop? Are there new products that you’re also developing?
Mark Kuhn 32:38
Actually, my focus is primarily not split flat. My focus is primarily other than 30 Street Station and trying to get Amtrak to buy assign, my focus is primarily on, the product design and the engineering design side of our business. Which if you think of it as two things, it’s the development of products and then the building and sales of products. So we have one right now, where we did for an outside client called Beacon in BKON in Jersey, cold brew coffee manufacturing, so cold brew coffee normally takes 20 to 24 hours to drip, to make. You’re basically soaking coffee beans overnight, for a especially in the high summer you want to make that much faster, much more consistent and then also with less actual coffee itself. So they came to us, they had made a single cup brewer and they wanted to scale that up to 220 gallons. And so they came to us with this process document in a powerpoint deck, Hey, can you guys make this for us? It’s perfect project for Oat Foundry.
Angela Giovine 33:25
Mark Kuhn 33:26
Right? What do you need? You need all of the background, the the scoping, you know, figure out how much this thing’s going to cost and and what it’s going to take to build it. You need the mechanical engineering design, you need the software, the computer engineering, you need the management of the project, and then purchasing actually building the thing, testing it and then fulfilling the any future order. So now we’re putting those into production in this facility also of 220 gallon cold brew coffee machines.
Angela Giovine 33:49
Mark Kuhn 33:49
Angela Giovine 33:50
So they you mentioned they found you, so
Mark Kuhn 33:53
Angela Giovine 33:53
Is that starting to happen more and more?
Mark Kuhn 33:55
Yeah, especially as we do, you know, our focuses right now are on kind of like signage. technology, split flap and related, we’ve done like picture flap, is like 12 inch module.
Angela Giovine 34:04
Mark Kuhn 34:04
various versions of that. And then also food equipment technology.
Angela Giovine 34:08
Mark Kuhn 34:08
Angela Giovine 34:09
Mark Kuhn 34:09
we’ve done some projects for Luck Loom, packaging line equipment for their draft lattes for these guys for cold brew coffee. We have a couple other ones in the works.
Angela Giovine 34:18
Is it word of mouth? Is it one client telling another client? Is it PR? How are they finding out about you?
Mark Kuhn 34:22
Yes, so BKON found us through one of their engineers who worked at Saxbys, we met through there,
Angela Giovine 34:27
Mark Kuhn 34:28
they brought us on, Hey, we need some help just specking out a pressure vessel, can you guys give us a hand in it? As we uncovered that what they’re really looking for was a much more rigorous product development cycle. And we had the technical capabilities to wherewithal you know, we were we were competitive for pricing on how to do that for them, but they like us, because we’re a good partner. We really care about them. We try to make their stuff better, even when they’re not thinking about how to make better. I presume they’re always thinking about how to make it better, but
Angela Giovine 34:53
But you are too.
Mark Kuhn 34:53
But we are too, exactly. So how other people find us, so we’re working on some marketing campaigns for that now, and it’s things like, you know, case studies and video collateral and we describe our process, and then clients see that process, they see that we build cool stuff. And they’re like, yeah, that that resonates with me. Let’s do it.
Angela Giovine 35:10
Yeah. So you mentioned you were employee one.
Mark Kuhn 35:14
Angela Giovine 35:15
And we talked about the fact that it was, you know, no venture capital early on.
Mark Kuhn 35:19
Angela Giovine 35:19
So I presume you along with probably a few other people did not pay yourself for a while.
Mark Kuhn 35:25
Oh, yeah. Yeah uh, probably two years.
Angela Giovine 35:29
Two years. Yeah. That sounds, yeah about right.
Mark Kuhn 35:31
savings and went into credit card debt.
Angela Giovine 35:33
Right, right. And you know, it helps that you were new college grad. It wasn’t like you were married with children with a house and a mortgage,
Mark Kuhn 35:38
My expenses were right. I had very
Angela Giovine 35:40
Living at home probably or
Mark Kuhn 35:41
Uh I still lived in Philly. I had inexpensive rent.
Angela Giovine 35:44
Mark Kuhn 35:45
It was it wasn’t so bad but I can see why people move home for that for sure.
Angela Giovine 35:48
Right. Right. Right.
Mark Kuhn 35:49
Yeah. And it was. So even that even having, you know, because the the three guys who were doing part time at Oat Foundry as founders, were still like finishing their day jobs, and then coming to work for
Angela Giovine 36:01
Mark Kuhn 36:01
four five hours at night.
Angela Giovine 36:02
Right. Right. Right.
Mark Kuhn 36:03
And I tend to get a lot of credit for because I’m the face and the mouth of Oat Foundry, but it’s impossible to do without the
Angela Giovine 36:10
Mark Kuhn 36:11
And that’s not just like false humility like they, I don’t have the skill set to do any of the work that now my partner’s excel at. So
Angela Giovine 36:18
And it’s brainpower and also manpower, obviously, it’s being able to concept anything from software behind the split flap to how to drip coffee.
Mark Kuhn 36:28
Angela Giovine 36:29
That’s a huge range of skill sets.
Mark Kuhn 36:32
And it’s, it’s patience. You know, it’s like any kind of group project teams, they can fall apart for any number of reasons, conflict wise, and I always
Angela Giovine 36:39
I can- yeah,
Mark Kuhn 36:39
when we talk about it, when my partners aren’t talking about the business, and when we have our quarterly meetings or whatever, and we look at it we say it’s pretty rare that we get to actually peek behind this curtain of how corporations are run, you know, the architecture of how corporations are run. So now we get to apply this problem solving conflict resolution and engineering brains to that, which 1000 times
Angela Giovine 36:59
Mark Kuhn 36:59
this company could have gone off the rails in the beginning. But that’s I’m sure many companies are like that you just don’t hear about it.
Angela Giovine 37:04
Mark Kuhn 37:05
It’s walking a knife’s edge. And I coul definitely couldn’t have done it alone. I
Angela Giovine 37:08
For sure. So as the leader of the group, how did you sort of corral people, especially your peers, these are people you went to college with, these are people your age, how did you become a leader, so to speak, and how did you keep people moving in the same direction with the same vision?
Mark Kuhn 37:27
Angela Giovine 37:28
Mark Kuhn 37:29
Yeah, we would keep pretty good notes. I think that might be a cop out answer. I don’t know. It’s it really is a privilege because they trust me to keep bringing business in and keep moving us in the right direction. And I keep doing that. So results also, but you lead from the front and you have to be
Angela Giovine 37:44
Right, lead by example.
Mark Kuhn 37:45
By example. Yeah, for sure. So I always try to come in early and leave late and you know, you can’t be none of the I mean, no one here is superfluous or frivolous in any of their spending habits or fabrication techniques or any of it. So we run a pretty good shop.
Angela Giovine 38:00
Yeah, and I assume I mean, since you guys were all involved in the very startup, I feel like when someone’s involved in the startup, they know what it means to be scrappy.
Mark Kuhn 38:08
Oh, at least my partners were all owners of this business,
Angela Giovine 38:10
Mark Kuhn 38:10
So like, whether it’s taking out the trash or accepting an award, we don’t have the same exact number percentage ownership of the company, but we’re all owners of the company.
Angela Giovine 38:19
Mark Kuhn 38:19
So Thomas Keller has the quote, treat it like you own it, and one day you will. And it’s like that it’s like, well, now you own it. So
Angela Giovine 38:25
Mark Kuhn 38:26
So pick up the trash and yo take care of it, and when I have to travel for work, I’m not like eating out at five star restaurants every night because,
Angela Giovine 38:32
Mark Kuhn 38:32
It’s my money. It’s their money.
Angela Giovine 38:33
Right, right responsibility.
Mark Kuhn 38:35
Angela Giovine 38:36
So how long and before you were able to sort of stabilize the cash flow, and really feel like okay, this is gonna happen, we’re beyond sort of that early, shaky startup
Mark Kuhn 38:47
Angela Giovine 38:47
Mark Kuhn 38:48
Yeah, probably two and a half three years is when we had serious cash coming in the door, more rigorous accounting practices and finance practices. We formed the board of advisors, which I highly recommend to any startup or young company, just and even if you’re running a coffee shop, get people in there who you trust, who are product people, customer people,
Angela Giovine 39:07
And how did you select these board members?
Mark Kuhn 39:10
We looked at skill gaps for ourselves. So we knew I’m like my background like I said, it’s not business now it’s getting to be bit better at it, I think but was not business. And so we’d said, okay, we need someone who’s accounting, finance, business focus, like the nuts and bolts of it.
Angela Giovine 39:24
Mark Kuhn 39:24
Marketing, for sure. IP. So we had a patent attorney actually, when we knew at Drexel, Joe Maynard joined our board, friends and family who were had these skill sets, we reached out and said, We’ll pay you in beer and pizza,
Angela Giovine 39:37
Mark Kuhn 39:37
You know, and one of the guys John Halco Senior, who’s one of my chief advisors, for sure, is he was like, if you guys can hit these revenue numbers, I’ll buy the beer and pizza next month. You know, he would give us a kick in the butt to go do it and then so it’s really gratifying to prove him wrong, even though I know he loves us and he wants the best for our company.
Angela Giovine 39:56
So how formal was this process? It sounds like a lot of people you had relationships before you asked them to join the board. Do you have official meetings?
Mark Kuhn 40:05
Angela Giovine 40:05
Mark Kuhn 40:06
And that’s, and that’s out of respect for their time,
Angela Giovine 40:08
Mark Kuhn 40:08
more than it is, like the you have to do these steps in these orders to get a board of advisers, it’s more like if you’re asking someone for free help, you know give them an agenda more than 24 hours before hand,
Angela Giovine 40:18
Mark Kuhn 40:19
Stick to the time clock that you said,
Angela Giovine 40:21
Mark Kuhn 40:21
was like someone else’s time of 3 people drop out. You know, you still have to have the meeting even if it’s just one and and be like Sorry guys, like you dropped out but this person is giving me their time I have to respect it.
Angela Giovine 40:30
Mark Kuhn 40:30
Giving them follow up note and you know, and and making sure you’re keeping them accountable and they’re keeping you accountable.
Angela Giovine 40:35
Mark Kuhn 40:36
So helping them do that as much as possible.
Angela Giovine 40:38
And do they help with business at all I mean, that may be they have contacts that help yo find new business?
Mark Kuhn 40:43
That wasn’t the the purpose that we hire them for. I think there was product help in productions there. And especially when like we would be using our patent attorney and he’d be on the board and he had introduce us to someone else and and we’d say like like he would have to conflict of interest, step out, you know that kind of thing. But No, it wasn’t that wasn’t the purpose
Angela Giovine 41:00
More to help with the management of the company.
Mark Kuhn 41: 01
Yeah and strategy, I’d say.
Angela Giovine 41:03
Mark Kuhn 41: 03
So whereas like like non profit or arts and culture fundraising like it’s give or get where you have board members, and you have the money you have to either be providing cash, or helping me fundraise cash. It wasn’t that wasn’t the purpose of
Angela Giovine 41:14
Mark Kuhn 41: 15
So that’s another thing to be clear with what you’re using them for.
Angela Giovine 41:17
Yeah. So do you have people in your- as an individual that you consider mentors or your own personal board of advisers that help you develop as a professional?
Mark Kuhn 41: 29
So for sure like many of the other CEOs in Philly and and leadership in Philly, there’s a couple I could name off the bat, Todd Carmichael from La Colombe for sure,
Josh Goldblum from Bluecadet, you know where I where I reach out and just send a text Hey like it’s not passing the small test on this client, like what do you think about this? And they would give their advice.
Angela Giovine 41:48
Mark Kuhn 41: 49
on what that is. And still Nick Bayer from Saxbys absolutely and Justin from Honeygrow,
Angela Giovine 41:53
Mark Kuhn 41: 53
even though were not working together anymore.
Angela Giovine 41:54
Mark Kuhn 41: 55
Angela Giovine 41:55
Because like you said, Philadelphia , it’s not New York City, it’s not LA, it a little bit smaller of a entrpreneurship community, so you find it pretty supportive.
Mark Kuhn 42:05
Absolutely, and it makes me want to help more, for sure in any way I can. Yeah, and then reading, I read a lot, just at all kinds of things.
Angela Giovine 42:12
Mark Kuhn 42:14
Things related to business, things unrelated to business
Angela Giovine 42:16
Mark Kuhn 42:17
Just accruing and acquiring more information.
Angela Giovine 42:19
Sure. Do you ever feel like you need to go for like an MBA, or anything like that, or you feel like you’re learning on the go?
Mark Kuhn 42:26
Both. An MBA, I think would be valuable in some ways, but I I I don’t know if I would take the time off or spend
Angela Giovine 42:35
Yeah, I mean these days, all rely on that, I mean.
Mark Kuhn 42:38
It’s a little tough.
Angela Giovine 42:38
It’s little tough.
Mark Kuhn 42:40
And also, get you MBA with you heroes, you know like Oat Foundry can go do a project for La Colombe and
Angela Giovine 42:45
Mark Kuhn 42:42
I can spend a lot of time with Todd.
Angela Giovine 42:47
Mark Kuhn 42:47
what he cares about
Angela Giovine 42:48
Mark Kuhn 42:47
get lessons and all that kind
Angela Giovine 42:50
Mark Kuhn 42:50
So it’s , yeah, super valuable.
Angela Giovine 42:52
So we’re sitting here in a brand new facility, ah, the building isn’t new but it’s new for you
Mark Kuhn 42:58
Angela Giovine 42:59
You, we are in the Bridesburg section of Philadelphia?
Mark Kuhn 43:03
Angela Giovine 43:03
Why don’t you tell us about this area?
Mark Kuhn 43:05
Yeah, I can tell you what I know about it. So Bridesburg is a it’s a great mostly family centric neighborhood in Philadelphia. This, where we are right now is called the Frankford Arsenal,
Angela Giovine 43:15
Yes, I know I came through a brunch of gates and
Mark Kuhn 43:18
Angela Giovine 43:18
Mark Kuhn 43:19
Yeah, it’s a it is a gated compound facility, it was a military installation I’m sure for uh gosh, I think it was close into 70s, maybe?
Angela Giovine 43:26
Mark Kuhn 43:27
So it is, purchased by a family, this guy Henken family, I think something like that. And then recently, a company called Alliance have bought 5 buildings here and they were redeveloping them into kind of like what the navy art is, down in South Philly. So that’s what they, that’s their pitch is like Hey, there’s all this space let’s bring local industry back,
Angela Giovine 43:46
Mark Kuhn 43:46
And turn into something.
Angela Giovine 43:47
Mark Kuhn 43:47
So they call this street Ramsey street that were on, the street to beat Hitler, because we’ve made this apparently this facility made so many bullets. So
Angela Giovine 43:53
Wow, that’s awesome.
Mark Kuhn 43:55
Yeah, it was local Philadelphians, employing Philadelphians and yeah, was fantastic, but then, closed down didn’t need it to be you know a war facility anymore. actually there’s a charter school, a gradeschool and a high school.
Angela Giovine 44:05
I noticed that, yeah.
Mark Kuhn 44:06
Now, apparently award winning too.
Angela Giovine 44:08
Mark Kuhn 44:08
hire some of their high school students to come work for us,
Angela Giovine 44:10
Mark Kuhn 44:11
which is great, but we moved in, we found the Alliance guys 9 months ago or so, you know hammered out the deal with their first pending hear which is awesome, they built this whole facilty for us. It’s brand spanking new and
Angela Giovine 44:24
And it’s a significant increase in square footage for you.
Mark Kuhn 44:27
Yeah, yeah. So this is like 4 times the size of our last shop.
Angela Giovine 44:31
Mark Kuhn 44:31
Something like that which is great. And we also, we’re going to- we’re filling it up so we’re happy that there’s more room to expand here also, yeah.
Angela Giovine 44:39
So as a small business, what are the sort of securities you built in to say, Okay we have enough business to warrant this size, space and how much do you have in the pipelines to ensure that you’re continuing to fill this space and I imagine with like all of these different types of niche projects, it really varies in terms of how much manpower and how much space you need. So how do you manage that?
Mark Kuhn 45:04
Yeah, uh it’s a good question about managing, it’s really what you’re talking about is managing cash flow, because what we look at is, as part of our objectives we have, okay our monthly burn rate, you know for the sake of argument, say it’s a hundred thousand dollars. So we’re spending a hundred thousand dollars a month. di we have a revenue to cover those expenses? Yes. Well what about runway? We want to have some security,
Angela Giovine 45:23
Mark Kuhn 45:23
because we’re not a super not a super high risk, like walking on this knife’s edge company, we don’t want to be because it doesn’t feel good, you can’t take you want optionality when you’re looking at new projects and products you want to create. So engaging, so we said okay, for the sake of argument it’s 100K, we need to have X amount of dollars in the bank to be able to afford for this mental math. Say we want a year of runway,
Angela Giovine 45:44
Mark Kuhn 45:45
I need 1.2 million dollars.
Angela Giovine 45:46
Mark Kuhn 45:46
you know, so then if you have that much cash in the bank, and that’s like the untouchable money, then you have a lot of options about what you can do. You could start a new project, that might be $500 000, you can feel comfortable that you’re going to be able to keep open even if no revenues coming in the door, or you look and you say Well our you know our accounts receivable is healthy right now so we have no way of cash coming in the door, so we’re we’re going to be just fine.
Angela Giovine 46:09
So fancy that, you put money in the bank and you thought Oh we can use it. It wasn’t like Oh you know, we’ll finance this or we’ll
Mark Kuhn 45:17
There’s different ways to do it.
Angela Giovine 46:18
Mark Kuhn 46:19
You know, me and my partners we like to focus on things that can make Oat Foundry better and make Oat Foundry more money over time so like Okay, we’re going to be focusing on products,
Angela Giovine 46:26
Mark Kuhn 46:26
people and so we said, and we had some cash in the bank
Angela Giovine 46:30
Mark Kuhn 46:26
and it wasn’t, I wish it’s 1.2 million
Angela Giovine 46:32
Mark Kuhn 46:33
It’s not $1.2 million, we had some cash in the bank and so we had some security about that and there’s a lot of ways to kind of
Angela Giovine 46:38
Right, right. but rather than saying Okay we want to grow, we’re going to go find investors, we’re going to join a pitch competition, we’re going to go on Shark Tank, you just waited until you had the right amount of money where we can do this safely without
Mark Kuhn 46:52
Yeah, good example of the trade off for that decision making process is we would have preferred to buy a shop space and renovated ourselves but the cost was very high and what we needed was space immediately. We were bursting at the seams at our old facility. So we said Okay, here’s this of the lease is 5 years and we might expand in this facility, we might take up more space, or might buy another shop somewhere else depending on you know, what the financial landscape is at that time. So it ended working out great because our landlords are excellent, they did a great build out for us,
Angela Giovine 47:19
Mark Kuhn 47:19
And then they made a really attractive offer for us, but that was like also on the docket at that time, was like Hey we’re going to decide, are we going to stay in our current facility or are we going to expland, are we going to move away, are we going to buy a place, are we going to take this deal, you know whatever we going to do
Angela Giovine 47:33
Mark Kuhn 47:34
Angela Giovine 47:35
Well that’s great, I mean and it looks like you have plenty of room to grow and
Mark Kuhn 47:38
Yeah, we’re very excited to be here, we are probably going to fill this space over the next, you know 3 years or so. And then expand, we have plenty of room to expland here which is great and then yeah, keep building cool stuff.
Angela Giovine 47:50
So what are some of the key strategies for your short term future plan, what what is going to drive your business into the future?
Mark Kuhn 48:00
People. HIring and retaining good talent, yeah. I I know my limitations as as the CEO, as mechanical engineer also, and so finding people who are smarter than me, better than me and can help propel our
you know our company in the future, it’s always going to be people, In that game,
Angela Giovine 48:17
Mark Kuhn 48:17
So more products coming out, diversifications of products coming out, we’re entertaining some joint ventures to explore what those look like, so
Angela Giovine 48:25
How many employees other than yourself are sort of support staff meaning like non engineer, finance, marketing, PR, HR,
Mark Kuhn 48:34
Angela Giovine 48:35
Mark Kuhn 48:36
So Jeff, me, Shaun is both Shaun kind of toast the one
Angela Giovine 48:40
Mark Kuhn 48:41
Yeah, at small companies a lot of people wear a lot of hat.
Angela Giovine 48:43
Yup, absolutely. So really the burden of sales is really still on you?
Mark Kuhn 48:49
Yeah, well Jeff and I share that and yeah, we’ll probably hire some more sales people on in 2019 just because there’s more products coming in.
Angela Giovine 48:55
Right, right , right.
Mark Kuhn 48:56
which is great, but and we have now process that we can recreate couple times.
Angela Giovine 49:00
And so some of these products you’re building are products that you thought of and are going to sell as opposed to someone coming to you,
Mark Kuhn 49:07
Angela Giovine 49:07
and saying Please build this products for us.
Mark Kuhn 49:09
Yes, so if you think about Oat Foundry, like we always, we want to make our own stuff all the time, but that’s also expensive so it’s a risk to do that. So we know, some things that are lower risk, that we can take a jump into right now, and make those, we also take on clients who want us to build their cool stuff, and we’re very happy to do that especially when it involves a manufacturing contract and we’re going to be building things over time, but then, you know kind of jumping in like the crazy idea volp type products, those are they’re a little bit wackier. We we look at them with a magnifying glass.
Angela Giovine 49:41
Mark Kuhn 49:42
fine tooth comb because we can’t just dump a bunch of money into a product development to learn they’d already exist or shouldn’t exist or
Angela Giovine 49:48
Yeah. So you mentioned some joint ventures.
Mark Kuhn 49:51
Angela Giovine 49:51
That’s one way to grown without having to sort of take on capital or venture funding or partners,
Mark Kuhn 49:57
Yeah. It depends on what the joint venture is and how we’re working on it.
Angela Giovine 50:00
Have they come to you organically, just through meeting people or were they,
Mark Kuhn 50:05
Yeah, kind of both. There’s a couple of different and we we won’t go into too much detail on them but there’s a couple of different otions for those, so if it’s if you’d look at a partnership why it makes sense it makes financial sense, be it’s because you have complementary skills sets,
Angela Giovine 50:19
Mark Kuhn 50:19
or complementary intellectual propertiy and you’d say this makes sense, and we’re going to do it together, and we’re going to fund it together and you know here’s how it’s going to work, or we’re going to raise money together
Angela Giovine 50:28
Right, right, right, right.
Mark Kuhn 50:29
So those are separate entities and
Angela Giovine 50:31
Mark Kuhn 50:31
right now, yeah in the world.
Angela Giovine 50:32
Mark Kuhn 50:33
Angela Giovine 50:33
That’s awesome. So, what’s the most gratifying thing about, about what you do here?
Mark Kuhn 50:39
There’s a couple. Paying people’s mortgages, super gratifying.
Angela Giovine 50:42
Mark Kuhn 50:42
It’s great, yeah, it’s really great. So when we first, I think it was I said 2 year 2 and a half years is when we first start paying ourselves, that was like amazing, was like Oh my gosh we can afford to do this, and like do this for like almost in the reasonable salaries in the beginning, like we were working
Angela Giovine 50:56
Every 2 weeks.
Mark Kuhn 50:58
Exactly, right. Yeah. Well we’re I would just say we’re semi monthly not bi weekly, but yeah so so these are like the things you learn right? Like do I like 26 payments a year? 24 payments a year. So I’ll focus in the building cool stuff side.
Angela Giovine 51:11
Mark Kuhn 51:12
Watching the new products come out. So seeing the big split flaps walk out the door or seeing the giant
Angela Giovine 51:19
That have to be so cool.
Mark Kuhn 51:20
It’s so cool. It’s cool seeing them like we have wanted David Chang’s Momofuku, empire up in New York, we have one with his partner Christina Tosi at Milk Bar on LA, we have Startbucks Central America, So it’s it really is cool and it’s cool touring these facilities drawing the world and seeing our technologies out there. Then on the other side, on the product side, you know watching the cold brew coffee machine churn out the delivious cold brew,
Angela Giovine 51:43
Mark Kuhn 51:44
and you’re like Wow we build that thing.
Angela Giovine 51:46
Right, I can imagine especially you probably to go to so many iterations of some of these things. Almost like an inventor,
Mark Kuhn 51:53
Angela Giovine 51:53
before it works so that’s got to be immensely gratifying.
Mark Kuhn 51:56
Well I think that’s the real magic of product development is that you need to, you’re good at moving on to the next iteration, next iteration whatever it is.
Angela Giovine 52:03
Sure, sure. If you are going to go back to your alma matter, and give a speech to a bunch of Drexel students, what would you tell them, if they were thinking you know, maybe starting a business is something I’m interested in? What’s one thing you wish you had known going into college about this endeavor?
Mark Kuhn 52:25
Ahh… Pay attention to cash flow?
Angela Giovine 52:26
Mark Kuhn 52:27
But I don’t even think I would have had context to understand that piece of advise back when we first started because we didn’t have framework for it. That just sounds like business jargon. But that’s probably one piece of advice I would give is like is Look at these numbers and do it.
Angela Giovine 52:41
Mark Kuhn 52:41
Someone’s like Uh should I it? Should I not do it? Just do it.
Angela Giovine 52:44
Mark Kuhn 52:44
Do it and the you’ll learn, because there’s so many things that you don’t know that you don’t know.
Angela Giovine 52:48
Mark Kuhn 52:49
Right? Which sounds also kind of like jargony but it’s you only look at the downsides or the risks or anything like that, you don’t know what’s going to come after the 4th iteration your business that might be really worth pursuing.
Angela Giovine 52:59
Right. And that’s super important I think for young people to know is that, whatever you think your business it’s going to be, it probably is not going to be that.
Mark Kuhn 53:07
Angela Giovine 53:08
I mean that that’s how
Mark Kuhn 53:09
Don’t be tied to the one idea, absolutely.
Angela Giovine 53:11
Yeah, and along those lines, what is one piece of advice you would give your 18 year old self?
Mark Kuhn 53:17
Yes, so this is one you probably hear from people who aren’t just me as a CEO, part of this leadership and I say It is a priviledge because my partners trust me a lot, it’s also, you kind of have to persevere a lot of it. Because there no manual on how to do it. You might think there is, you might think like Well this company’s done it before, well that’s that company, you know someone’s selling a successful, they have a successful macaroon comany in New York, maybe they won the lottery. And like macaroons are never going to make a ton of money, maybe they will, I don’t know.
Angela Giovine 53:45
Mark Kuhn 53:45
So so the perseverance is part of it where I would say there’s going to be so many nights of self doubt,
Angela Giovine 53:51
Mark Kuhn 53:52
You don’t know what the future looks like and but worrying about it is not going to help you, is going to help you.
Angela Giovine 53:58
Mark Kuhn 53:58
Go back to work.
Angela Giovine 53:59
Right, keep your head down.
Mark Kuhn 54:01
Yeah, just I mean yeah look up enjoy it every once on awhile. Right, my partners are very cognizant of that, where we can look around and go like, this is cool. Like it’s cool we built this, we like having beer on tap here because we get to choose our story and make our own adventure but
Angela Giovine 54:14
Mark Kuhn 54:14
I would say that, I would say you know the times really freaking out about it, don’t beat youtself up.
Angela Giovine 54:19
Another question that I always like to ask is, finish this sentence: I would not be standing here today if not for?
Mark Kuhn 54:28
Angela Giovine 54:29
Mark Kuhn 54:29
Sure, yeah. I mean literally.
Angela Giovine 54:31
Mark Kuhn 54:32
People say nature nurture. I’m like I didn’t have a say in over either one of them, right?
Angela Giovine 54:34
Mark Kuhn 54:36
That, in so many ways my partners..
Angela Giovine 54:39
Mark Kuhn 54:40
Absolutely. Like well you know I cetainly wouldn’t be running a company like this without them.
Angela Giovine 54:45
Mark Kuhn 54:45
So, yeah. All of the above,
Angela Giovine 54:48
Mark Kuhn 54:49
Help I should say.
Angela Giovine 54:50
Mark Kuhn 54:50
This is not a solo activity.
Angela Giovine 54:52
Mark Kuhn 54:52
Angela Giovine 54:53
Mentally or physically, yeah.
Mark Kuhn 54:54
Absolutely not, yeah
Angela Giovine 54:55
Yeah. To that end I mean I’m also a small business owner, having that team, really helps you stabilize that roller coaster of being on, you know
Mark Kuhn 55:06
Keeps you sane, for sure. But it’s also difficult to be the business side of operations and then also the content creator, content provider.
Angela Giovine 55:13
Mark Kuhn 55:14
you know in in your case specifically. So versus Oat Foundry with like to be the guy in the shop weilding the things and the guy outside, selling the things.
Angela Giovine 55:20
Mark Kuhn 55:21
It’s a really tough business to do.
Angela Giovine 55:21
Mark Kuhn 55:22
My younger brother’s an artist, he has a tought time doing all the contract negotiation and then doing the creative part.
Angela Giovine 55:27
Mark Kuhn 55:28
Angela Giovine 55:28
Mark Kuhn 55:29
It really is challenging.
Angela Giovine 55:29
Right, yeah. Totally.
Mark Kuhn 55:31
So yeah, working with a a group, absolutely.
Angela Giovine 55:33
What do you do outside of the business, for fun or for stress relief?
Mark Kuhn 55:39
Let’s see, so I have um, I like to cook. I do cook, it’s been awhile and fitness is now reentering my life so I like to go to the gym and all the acitivities associated with outdoor lifestyle like skiing, scuba diving
Angela Giovine 55:51
Mark Kuhn 55:52
cycling and things like that. I I have a girlfriend, she lives in Green Point, so I like to go up to Brooklyn,
Angela Giovine 55:55
Mark Kuhn 55:56
spend time with friends and family, yeah.
Angela Giovine 55:58
Mark Kuhn 55:58
Angela Giovine 55:59
Well Mark, thanks for joining us today,
Mark Kuhn 56:01
My pleasure. Yeah, likewise thank yo.
Angela Giovine 56:04
Thanks for listening. For more information about our show and our company, head to extra ordinary small business dot com. And don’t forget to follow us on Facebook or Instagram. We would be so grateful, If you could help us reach more listeners. All you have to do, is go to iTunes or wherever you get your podcast and rate, review and subscribe. It would mean the world to us. Ratings, reviews, and subscribes are how iTunes decides which podcasts are worth sharing. Help us continue to bring these stories of extraordinary small business owners to the world. By rating, reviewing and subscribing, you’re helping our small business. It’s free and it takes just a minute. Thanks!