Manufacturing Mavericks

Paul Van Metre is the co-founder of ProShop ERP and a true Manufacturing Maverick. Listen in as he talks with Greg McHale about some of the serendipitous moments that completely changed the course of his life and fueled his passion for manufacturing. Some examples include how his Mom saving a car magazine got him into machining, how a random lab partner assignment on his first day of school turned into a 30+ year collaboration, and why a customer’s dream of building a basketball court for his kids helped launched ProShop ERP. Paul’s love of manufacturing and the people who work in it drives him to help make “the hardest business in the world” a little easier. It shows in the hashtag he started #ThankaMachinist

Show Highlights / Skip To: 
  • Reading an article in a car magazine sparked Paul’s love for manufacturing and a move across the country (3:39) 
  • Trying to start a car company right out of college that turned into a machine shop (10:03) 
  • Advice for finding customers. Hint, it starts with a nice shirt (15:14) 
  • Diversification helped Paul’s machine shop thrive for 17 years (17:37) 
  • 9/11 and finding a path from being days away from bankruptcy back to triple-digit growth (19:52)
  • Trying to go paperless on the shop floor when monitors weighed 50 pounds (22:03) 
  • A customer’s desire to build a basketball court in his backyard plays a pivotal role in the creation of ProShop ERP (30:59) 
  • The first software customer in 2009 was able to transform their late order list from 10 pages to less than one and turn off the old ERP after 3 weeks. (33:26) 
  • The book Paul recommends to everyone who is good at something and wants to start their own business (38:49) 
  • Why he started #ThankaMachinist (46:33) 
  • The advice he gives his younger self (49:45) 

Links Referenced:

Creators & Guests

Host
Greg McHale
Greg founded Datanomix, a company delivering game-changing production insights and intelligence to manufacturers of discrete components. Datanomix was founded on the premise that the 4th industrial revolution would require turnkey products that integrate seamlessly with how manufacturers work today—not clunky workflows that depend on human input or complex data extraction. He brings enterprise data skills to a market ripe for innovation. Greg has held engineering leadership positions at several venture-backed companies and is a graduate of Worcester Polytechnic Institute.
Guest
Paul Van Metre
Former Machine Shop Owner, ERP QMS MES Solutions Creator & Industry Podcast Host

What is Manufacturing Mavericks?

Manufacturing Mavericks aren’t afraid to shake things up and stand out from the crowd. They are embracing the best tools and technology to showcase world-class American manufacturing and grow their business.

Join Greg McHale, founder of Datanomix, as he sits down with these exceptional people to hear their stories and explore the important lessons they learned along the way. Listeners can gain valuable insights they can use in their own facilities to improve their bottom line.

Greg: Welcome to this episode of Manufacturing Mavericks. I’m your host, Greg McHale. As the founder of Datanomix, I’ve had the privilege of visiting hundreds of shops all across the country and in those visits, I have met some of the most incredible and innovative people in this industry. Our goal with the Manufacturing Mavericks podcast is to highlight those leaders, those mavericks of manufacturing who are innovating not just with technology but with culture, people, and process too, so we can all learn not just what they do but why they do it. We’ll dig into what got them into manufacturing, what fires them up to go to work every single day and pour their blood, sweat, and tears into keeping the manufacturing dream alive in our country.

With that, I’m honored to introduce today’s Manufacturing Maverick, Paul Van Metre. Welcome to the show, Paul. How are you doing today?

Paul: I am great, Greg, and I’m so honored to be here. Thanks to you so much. I’m looking forward to our talk.

Greg: Paul, I have been looking forward to this episode for quite some time. I mean, your impact on the industry, your wisdom, your counsel, your presence on LinkedIn, and just what you do for the manufacturing industry, I know that there are a lot of folks who are interested in learning as much from you as they can. I’m first in line on that today, and the great news is I’ve got you on the other side of a microphone, so this is going to be fantastic, Paul.

Paul: Well, thank you so much. I’ve really enjoyed listening to your podcasts, and you’re a fantastic host and interviewer, so I knew this was going to be just a blast.

Greg: All right, well, we’ll try to keep that standard going as we have you on here today, Paul. So, I think one of the most fascinating things about you and about ProShop is, it’s so obvious to me, when I see your personal presence, you know, your professional presence, or ProShop’s presence on LinkedIn, that you guys are a hundred percent about community and having the back of manufacturers, and having the back of your customers, and non-customers, you know, just anyone who’s trying to solve a problem in manufacturing. And obviously what’s behind that is a deep and authentic connection to the manufacturing space, technology and people. So, I would love to learn as—you know, I know you pretty well, we’ve done a lot of events together, but I don’t think I’ve heard the, you know, the genesis story of Paul falling in love with manufacturing. So, why don’t we start right there?

Paul: Thank you, Greg, for all those really kind words. My and our passion for manufacturing is so deep, and it seems to get deeper every year. So, I got the bug through cars, first of all—so for all of my motor heads out there—my step— [laugh] my stepdad loved cars; I just got the bug when I was a teenager, and had all sorts of old cars that I would tinker on and work on. And I thought I was going to go into automotive engineering, so I actually started with a mechanical engineering program at Boston University. And then during that freshman year, on Christmas break, I came home—I grew up in New Jersey—I came home for the Christmas holiday, and my mom had kept some of my car magazines.

And I’m laying on the couch—and so this engineering program was—it was okay, but it was pretty dry, it was very theoretical. There was huge lecture halls with, you know, hundreds of students. And I was used to, you know, tinker around on my car on the weekend, and I’m like, “This just isn’t quite what I thought it was going to be.” And I read a magazine article about this tiny little program out in Western Washington—couldn’t be further from New Jersey—called the Vehicle Research Institute, and they designed and built cars, and your college degree is vehicle design and building cars. And I was like, “Are you kidding me? This exists in the world?” [laugh] like, “I have to go do this.”

So I, right from the couch, I called my mom. I’m like, “Mom, I’m leaving BU, and I’m moving across to Washington to go to this little school.” And she’s like, “That’s nice, honey.” You know, my parents were always so supportive. Anyway, I came out here—and actually, I just posted on LinkedIn a couple of weeks ago, a picture of me standing in front of an old American lathe, big, like, 25 horsepower lathe from probably, like, the ’40s or ’50s, and just burning chips, and I have a big piece of Plexiglas in front of my face to try to keep the hot chips out of my [laugh] my face.

But that is when I fell in love with manufacturing. I just, we had CNC machines, we had manual equipment, we had welders, we had—and I basically got really deep into the Formula SAE program that they did at Western, at this Vehicle Research—Western Washington University, for those that want to look it up. The program unfortunately no longer exists, but it was going for a good 40-plus years or so. And probably the best part of this whole story is, on my first class, first period, first day, I met Kelsey Heikoop, my business partner and dear friend. Yeah, we were paired up as lab partners.

And we have been—and that was in 1993, so it is more than 30 years later, and we have been with each other every step of the way, from building those cars and working literally 120 hours a week, sleeping in the lab, sleeping in old cars from the previous years to get up after four hours and just go at it again, trying to build these cars. And yeah, so that’s where the bug originally started.

Greg: Paul, that opens so many different questions for me that I almost don’t know where to begin. So, first of all, I mean, Boston University, no joke of a school, right? Top tier. You were a freshman at the time that you made that decision?

Paul: I was. Yep. I was a freshman. Yeah.

Greg: And it was literally that obvious to you. Like, it doesn’t matter. You know, I am going to this school on the East Coast, but I’m just not—I’m six months in, I’m not getting what I want, and you just knew that you were being called on a deep level to go do something different? I mean, that’s at 18, 19 years old?

Paul: In an instant, yeah. It didn’t take me—I mean, literally, I called to my mom from the couch. I’m like, “Mom, I’m leaving BU, and I’m moving to Washington State. I got something I got to go do.”

Greg: Not even a blink.

Paul: No. I came sight unseen, basically. Found a little apartment through some ad, you know, the internet wasn’t a thing back then. And so, through a, you know, newspaper or something, I forget exactly how I found this, you know, found a little apartment and moved out, and that was it. I was here.

Greg: That feels so wildly improbable that that ma—you know, that magazine still happens to be there; Mom didn’t throw it out. So, it’s still sitting there [laugh] .

Paul: Yeah, I mean, what are the chances? Interestingly enough that article, it was an automobile magazine. And it brought an incredible group of people that next year that had seen that article. And then Kelsey, who, you know, is my business partner through Pro CNC, the machine shop, and through ProShop today, the guy that started and founded the program, Dr. Mike Seal was Kelsey’s uncle, and that’s why Kelsey was there. Because he grew up with his uncle and tinkering on cars, and got the bug himself. And so yeah, that’s why he was there.

Greg: Wow. So, the one of the other questions you made me think of: what’s the most comfortable old car to sleep in, if [laugh] —

Paul: [laugh] Well, I think I, the picture I posted, which is the only one I have of me sleeping was a Viking 22, which was a Formula SAE car, and that is not at all comfortable.

Greg: That [laugh] —I don’t think—yeah—

Paul: But probably some of the old, like, Viking 6 and 7, and some of those had the very reclined position because they were kind of swoopy and super high mileage kind of cars. And so yeah, those were probably the—and they had closing doors, so that—you know, a little cocoon to sleep and get, you know, 2, 3, 4 hours of sleep before you go out at the next day.

Greg: So, you get out there; Kelsey, who becomes ultimately your lifelong business partner, you meet on day one as lab partners. That’s your first exposure to CNC machining at that point?

Paul: Yes, I’ve never seen a—didn’t even know what CNCs were. And yeah, so I walked into that lab and they had, you know, a couple different manual lathes, manual mills, they had a Haas VF-2, and a VF-4, and then next to our lab was another machine shop for the machining classes, and they had a Mazak, [cold] Mazak, you know, mill turn lathe, and a VF-2 as well. And—actually, you know, they got the VF-2 to while I was at school. The first thing they had was just this little, like, open bed—oh gosh, that’s going to kill me—little open bed, like, NC-style two-axis, two-and-a-half axis lathe—or two-and-a-half axis mill.

The machining instructor would have us—it was a brilliant solu—it was a brilliant concept—he would have us make tool holders to use for machining. So like, we would make a milling holder, like, a little, you know, insert indexable mill with little pockets for the triangular inserts. But that was the project: we start by turning a blank, and then we’d put that turned blank into a fourth-axis and mill the little pockets, and then we’d use those cutters to do other machining, so [laugh] it was kind of a self-perpetuating curriculum. Yeah, it was pretty, pretty cool. Clyde [Hackler] was his name, the machining instructor. Anyway, great memories from that time.

Greg: Awesome. So, you go through the program, and how about right after college? Did you jump right into your own shop, or what did you end up doing?

Paul: Yeah, so Kelsey was actually—when we met, he was a freshman, and I was a sophomore because I did finish out that next—you know, I finished up my freshman year, and then I transferred in as a sophomore, but so he was actually a year behind me, but we knew, me and him and a few other guys from the Formula team—there was actually six of us, if you believe it—we actually wanted to start a small, niche car company. So, we wanted to have a company that made these, we came up with this cool design that was very similar to the Formula SAE cars we built that were largely machined components with some carbon fiber structural components. But we didn’t have any money. We didn’t have—yeah, we had no money, so Kelsey is older brother, Darcy, actually took out a second mortgage on his house, and we decided that we would just start a machine shop because the machine shop would have all the same equipment, processes, people, and infrastructure that we’d need to start building some prototype, like a prototype car, and then go out and find some real investors with deep pockets.

And it was so incredibly naive because we [laugh] thought, you know, we were what, maybe 22, 23 years old, we thought that in only a couple of years after starting a machine shop, we would have enough free time, and free cash flow to build prototypes on the evenings and weekends and, like, and have all the money to buy all the parts and components to build a prototype and then go, you know, try to pitch this to some investors. Little did we realize that the machining business is the hardest business in the world, it is the most complicated, the most cash intensive, the most slim margins, with a million things that can go wrong, and everything has to go right to make your quoted margin on a job. And even just learning how to quote was, you know, was an exercise. But yeah, after two years, we didn’t have the energy to—or the cash flow—to, you know, build a prototype, so we just kept plugging away at our shop. And, you know, like I said, it’s not what we originally envisioned long-term, but we ended up with a much bigger prop shop than we ever conceived of when we ultimately sold it. But yeah, we just sort of went with the flow and just continued to learn and fall deeper in love with machining and with manufacturing.

Greg: So, you started out with the—so the second mortgage way of financing a business, which is always, always so fascinating, right, when people put everything they have on the line to get something off the ground. And how many machines did you start with? What kind of equipment did you start with? What kind of work were you trying to do to make ends meet?

Paul: Yeah, we started with a VF-4. It was a new one. And then we bought a used manual mill and lathe, and started with a 2000 square foot, little, you know, warehouse space near Seattle. We didn’t know anybody, didn’t have any industry connections, except for two of our professors from Western had gone off into industry while we were students there. One of them started a composites company, and another one went to work in, like, Boeing in an R&D capacity.

And so, some of our first jobs were for those two ex-professors. One was a snow shoe mold for a composite snow shoe, and I remember quoting $5,000 for that two-piece mold and thinking that was just a wild sum of money that was—you know, how could they possibly say yes to $5,000? And, you know, [laugh] it realistically should have been 15,000, not five. But we learned a lot. And we took the picture of that, put it on our first little brochure we made. We were very proud of it.

And then for the professor that went to Boeing, I remember we made this, like, chain. It was like literally a chain of, like, 20 or 30 links of, like, 7075 billet, sort of with a clevis and a blade, and then they would piece together with precision pins. And I forget what the chain was for, but it was for some, you know, big machine in Boeing. And then we just, you know, started knocking on doors, literally, looking up the, like, Business Journal, and looking for companies, or the yellow pages or the, you know, the Thomas book, and just looking for companies that might be involved with manufacturing.

And you know, I was—I could barely grow, you know, grow a mustache back then. I was, you know, 23 years so, and it was hard to, you know, have buyers and engineers take us seriously, but you know, we kept at it and our next machine was a VF-2, and then we bought a Nakamura-Tome lathe with live tooling, which was used, and I think still to this day is running in that shop. Incredible, incredible precision machine, yeah. And that was the beginning: Pro CNC.

Greg: So, you had to hustle in the pre-internet era, which also growing up in the pre-internet era, and, you know, I always say to people, if you wanted to speak to a girl, and you didn’t have to talk to her dad on the phone, you don’t understand [laugh] the pre-internet era.

Paul: [laugh] Yes.

Greg: “You’re calling for my daughter? What is it that you—who are you? Why do I want to let you speak to her?” [laugh] . You can’t just go direct to the source. So, you learned how to hustle in the pre-internet era. Obviously now, it’s gotten, you know, a million times easier, in some respects, more complicated, maybe more depersonalized in some respects. I’d love your thoughts on that.

Paul: Yeah. Well, you know, there’s some excite—you know, on various forums, and, you know, platforms, I hear people today, you know, shop owners of small shops, saying, you know, “How do I find work? How do I find customers?” And a lot of the advice is still the same as when I started in the late-’90s. Like, get, you know, get a nice shirt with a logo on it—I had a little aluminum briefcase that I had foam in it and I would cut out and put sample parts in it—and then literally go knock on doors, you know? Go try to, you know, sit in the lobby of a local aerospace company, or a medical device company and say, “Hey, I’d love to, you know, get ten minutes with a buyer.”

Because this is still a relationship business. No matter how much technology there is, people are not going to give you business or do business with you unless they feel some kind of personal connection and feel confident that doing business with you is going to benefit them, right? There’s just no two ways about it. So, all decisions are made, you know, emotionally not logically, even though people think there’s a lot of logic involved, and there’s got to be trust, and there’s got to be, you know, that sort of authentic connection. I agree the industry is harder than it’s ever been before, partly because it is so depersonalized, it’s so competitive, you know, there’s 17 or 20,000 shops in the US alone, but some of those principles of having human connection are still just so foundational.

I was reinforced by that with one of my podcast guests recently. Nathan Bourgeois from Ouroboros Space and Defense. You know, eight-year-old shop; young guy in his—probably, I don’t know exactly—but probably early 30s, and he just blew me away with his interview. Just, you know, he would go to a conference and just be relentless. And just being in the conversation, being in the room, asking to, you know, talk to people, meet with people.

It worked, you know? He now has the client list of, like, the crème de la crème of space companies. And just that perseverance and understanding the client’s problems, and how you can solve them, and your value statement, and making that personal connection wins the day every time.

Greg: You just got to want it more than the next guy, right?

Paul: The next guy or gal, absolutely. Yes.

Greg: Yeah. You just—you got to get out there and make it happen. No one’s going to do it for you. So, Pro CNC. Now, you mentioned before, ultimately sold the shop. So, how long did you have it? How big did you get to? What did you end up specializing in?

Paul: Yeah, we had it for 17 years. We got it to about 75 employees on three shifts with a little over 30 CNC machines. And we were an ISO and AS certified company for both manufacturing, as well as engineering work. So, we weren’t just a machine shop. And we were quite diversified, but biggest industries, ultimately, were aerospace and defense.

Like I said, we were quite diversified both in our industries as well as our customers individually. We had some really focus on not having any customer be too big. You kind of had our 10% rule or sort of… net margin rule. Like, if you have a client getting much bigger than your net margin, that’s a risky place, if they just fell off the face of the earth the next day, and we figured we could weather the storm if any client was less than 10% or so. But there were years where that fluctuated wildly, if we had a customer come on with a huge contract, but then we’d always endeavor to diversify more.

Yeah, so we did both prototype machining, we had a dedicated team of, like, journeyman-level prototype machinists that had, you know, Mastercam at their station right in front of their machine, and they just did, sort of, one-piece flow of programming and machining, and incredible craftsmen that could make things—like, you could give them a model, and then in less than an hour, they’re making chips, right? I mean, they’d literally program the roughing sequence, and just start it going while they’ve programmed the next tool, and, like, almost, you know, feed one tool at a time into the machine. And then we had our production department, and we had, you know, horizontals and verticals, and, you know, we had a three-spindle Toyota pallet system with 25 pallets. Ultimately, we did have a handful of five-axis machines near the end.

And then we had our engineering and assembly department. So, they would design and build—you know, design and build really complex tooling and machinery and mechanisms, and then we’d machine it in our various departments, and then they’d test it and assemble it and deliver it. We made really cool things that went on to the production line of the F-35. And lots of other cool, cool, you know, big, big things you can’t share with most people. It was just really fun, really fun, but incredibly hard at the same time, you know?

You know, anyone that’s run a precision manufacturing company knows there are… you know, there’s lots of highs, but there’s gut-wrenching lows, right? You know, after 9/11, we were days, maybe a week or two away from bankruptcy. At that point, not quite well diversified enough and pretty heavy into aerospace, you know, and they stopped, stopped— [laugh] you know, all the airplane orders stopped pretty cold after 9/11. You know, we had about a dozen people at the time and we didn’t want to lay anyone off because they were our friends and our work family, and so we just kind of kept them on for too long, to the point of just, sort of, bleeding, all the bank accounts and lines of credit, you know, down to zero. And found an advisor; quite honestly, you know, asked for help, and that guy helped us get—weather that through, and ultimately build back up to a place of strength and growth. Yeah, it’s the hardest business in the world. I’ll go into my grave saying it.

Greg: You were literally—so you say days away from bankruptcy. I mean, what was the—what was—when you’re in that situation, what was the rapid response? What started to get you, you know, out of the jam?

Paul: I mean, the owners had long since stopped paying themselves, you know, for months in advance, but we had to lay off people. I remember, we were having our typical, like, once a month, Friday Hawaiian shirt day, and that’s the day we announced layoffs.

Greg: Oh no.

Paul: I don’t think we had a Hawaiian shirt day for a really long time, if ever, after that. But yeah, we laid off, I don’t know, maybe half—like I said, we had about a dozen or so people, maybe 15, and we probably laid off six or eight people, and just really cut back down to the bone and figured out, just one day at a time, cash flow and what vendor can we pay, and how are we going to make payroll, and just very slowly kind of unburied out of that. And then after that, actually, we had several very good years. Because a lot of shops, you know, there was some attrition in the industry after that, as there was after 2008 and 9. But 2008 and 9 wasn’t nearly as bad for us because we had already done it once through a really you know, hard recession, and we actually only dipped very slightly and came out, you know, doing, you know, triple digit growth after those years.

But we made it on the Inc. 5000 five times, and similarly the Washington State’s 100 fastest growing companies five times, or six times, and also, best companies to work for, like, four times in the state. So, you know, we put our heart and souls into that business for sure. But one of the biggest things, ultimately, that we put our heart and souls into was designing this software program that we decided to endeavor on to run the shop with. Because when we started getting to like that, you know, dozen, 15-person size, and we went out to—we already had this, you know, coming out of college and being very computery and all that, we wanted to have, like, a paperless shop floor from day one. Yeah, so we actually put— [laugh] it was hilarious because back then, of course, computer monitors were are all these big CRTs—

Greg: [laugh] Twenty pounds, yeah.

Paul: Oh, 50, 70 pounds. Yeah, like, the 21-inch monitors? You know, yeah, holy cow, those things were heavy. But yeah, so we put a computer next to every machine we bought with a big CRT on it and full, you know, Tower Pentium III or Pentium II, whatever they were back then, and we had this really fancy system of spreadsheets, of Excel workbooks. And Kelsey, my partner, he’s not a programmer, but he made a bunch of Visual Basic macros, and so if you would—like, we would estimate on one sheet, and then if we won that job, we’d click a button, and it would spawn some new tabs and fill in information, and we’d have a work order page, and then we’d have an inspection page for the first article in the process, and then we’d have a page for your cutting tool list, and we’d have a page to put your setup notes.

And we had one of those workbooks for every part number basically, and we’d spawn new tabs for, you know, future work orders of the same part. And it was pretty spiffy, but it was—you know, we’re constantly saying, “Hey, can you close that sheet, so I can open it?” You know, across the shop, and because Google Sheets wasn’t a thing, of course, nor was Office 365. So, after a while, we’re like, God, this is getting tedious, you know? And we literally, you know, took down the Thomas book off the shelf and started leafing through the software section.

Like, what—you know, we’ve heard this term ERP; we don’t really know what it means, but there’s got to be some companies that have figured out something better than this Excel system that we’re using. And we indeed, you know, found the section, and had probably half a dozen software companies come and demo for us. And we were really excited for them to come. We were like, “Okay, you know, we’re going to, like, dig in here.” And like, “Show us how, you know, how you do cutting tool management. Show us the first article form. Show us, you know, for constructions.”

And universally, they’re like, “No, we don’t do that.” [laugh] . And we’re like, “Wait a minute, you’re, like, advertising in, like, the machine shops management software section. Like, that’s what we do every day.” “Yeah, but we don’t do that. You still need your spreadsheets. We do this other thing. We do inventory, you can make invoices,” you know?

We’re like, are you kidding me? You know, so after half-a-dozen demos, we’re like, “Okay.” And we also, given—and they all said, of course as well, “So yeah, you do it in the office, you make your quote, you turn it into a job, and then you print off your job traveler, and then you attach that with all your other printed pieces of paper.” And we’re like, “Are you kidding me? Like we’ve been paperless for the last three years. We’re not going to add paper.”

And then they also, you know, since we wanted to have it at every computer, every machine, they’re like, “Oh, that’s very expensive. You need all these licenses.” And it was just… it seemed so backwards to us. So, we’re like, you know, screw all these guys. We’re just going to build something that’s basically a replacement for our spreadsheets. Because the concept is sound, clearly, but you know, this, the Excel version isn’t going to work for us.

So we—actually, back into the sort of the family business, Kelsey’s uncle was a developer, and he—we talked to him, and he started, you know, helping us brainstorm. And he’s like, “You know what? I’m too busy with my regular job, but I know my nephew, actually is a young kid, and he’s a programmer, and he’s pretty smart. His name is Matt. And why don’t you guys talk to him?”

So, we talked to Matt. And Matt was actually a web developer, back in the year 2000. So very, very early in the internet. And we’re like, “Yes, this is the spreadsheet we’re trying to replace with, you know, something that we can have open everywhere.” And he’s like, “Yeah, web is perfect for that.” Now, it wasn’t on the internet, but it was a browser-based, you know, web technology application from day one. And he just started building, basically, at first, there’s just the replacement for the spreadsheets. And that’s what turned into ProShop.

Greg: So literally, you designed your own operating system, from the inside out for what the business needed to be successful, and you had this view of, like, “Hey, when we grow up someday, we’ll go to the software that all the bigger guys use.” You get the demos of those, the presentations, and you’re like, they’re not doing anything that they should be doing. I mean, that’s incredible.

Paul: Exactly. They seemed so misguided in their design. I mean, you know, in hindsight, they were all clearly, you know, built by accountants and financial people with pretty much zero manufacturing or quality functionality. And it’s like, you know, it’s important to keep the books clean, you know, don’t get me wrong, and you got to be able to do job costing and stuff like that, but the heart and soul of a manufacturing company is the shop floor. Like, you can’t make a profit without executing well on the shop floor.

And that, you know, and as you know, as I, you know, have said so many times because, you know, a precision manufacturing business is the hardest business in the world, there are a million—not literally—thousands of details, literally thousands of details that you have to get right for that part to turn out well, you know? And any one of those things being wrong can end up with scrap and lots of extra time. And so, you know, having a system and a process to manage that well, and make sure you have the very best possible chance of all those thousands of details, all the stars aligning, so you can hit your targets and make your margin, and have your scrap rate low, and get it on time, and have the customer like it, and packaged right, and everything that has to come together right, like, it’s really important to get all that stuff right or else you’re not going to have anything for the financial system to calculate, [laugh] you know, a net margin at the end of the year.

Greg: Right. There’s no invoice to send. If you don’t do—

Paul: Exactly.

Greg: —all that stuff.

Paul: So, anyway. So yeah, just very naively stumbled into, you know, how we thought this, you know, this software system should operate a business. It was out of—

Greg: That is fascinating. So—

Paul: Yeah, it was just out of complete inexperience and naivety that we decided this is the way we think it should be, and not, and not just buying into, you know, what we were trying to be—people were trying to sell us.

Greg: So, sort of refusal to accept the, kind of, default assumptions of the industry. But then also, I mean—so was this uncle of Kelsey’s the same one connected to the school, or does he have, like, multiple uncles—

Paul: [laugh] .

Greg: That are just, like, massive players in this story?

Paul: No. That was—I think it’s his sister’s husband, so not actually an uncle, but much older, you know, 10, 15 years old, or something like that. But Kelsey’s family has been very good to us over the years—

Greg: [laugh] .

Paul: — [crosstalk] story.

Greg: That’s so, so fascinating that, you know, those connections were available to you. You know, just—I mean, you come back to the couch, right, and the magazine, and I’m changing schools, and that sets this entire trajectory that you’re talking about in motion. I mean, you couldn’t draw that up if you wanted to.

Paul: Yeah, no, I mean, I think life is like that, you know? The tiniest little decisions, the tiniest, incidental things that happen can absolutely change the entire course of your life. So yeah, if there’s anyone out there, that’s a, you know, a fan of ProShop, you have my mom to than because she kept that car magazine.

Greg: Yeah. And she didn’t tell you, “Too bad, Paul. You’re staying here.”

Paul: Exactly.

Greg: “You’re not switching schools. What’s wrong with you?” So, you end up building ProShop from that experience, and then, I mean, the shift from growing from zero to, you know, even by today’s standards, a good-sized shop, right? 30 machines, 75 employees, three shifts: that’s a fantastic business. So, what then, you know, comes along and whispers to you, “Hey, instead of doing this shop thing, maybe you should do this software thing.” How does that come about?

Paul: Yeah, another wonderful part of the story. So, one of the earliest customers that we got as a shop was a company in Mill Creek, Washington, just northeast of Seattle, called Sealth Aero Marine, and they were largely an aerospace OEM. They designed and built hardware, and gadgets, and other sorts of little things for Boeing and for Bombardier, and for, you know, pretty much every airplane out there. So, you know, when you walk into one of those planes, their hardware is all through the galley. They make latches, they make hinges, they make, you know, little cabinets for storing things, they make just all sorts of aerospace hardware.

And they became one of our biggest machine shop customers. And they had nice volumes, it was wonderful to get an order for 1000, you know, 280 latches, which are these oval latches that we had to surface, and we figured out all sorts of cool ways to fixture them and make them efficiently. But ultimately, the production manager at the time who ended up being a, you know, a good friend of ours—and this I love, just love the story—he—huge sports guy. Probably the—his name is Rich Olsen, still a dear friend today—and you could not find a more diehard sports guy for a Seattle, you know? He was into the Sonics, he was into football, he was into baseball, everything, and he wanted to build a sports court in his backyard.

He had a nice big flat backyard, and he told his wife, “I want to build this sports court,” because they were—they had, I think maybe he’d—was—maybe—I don’t know if he had kids quite yet, but he ended up being, you know, have two boys, and he coached all of their sports for years. So, in the backyard, he wanted to build, like, this combo, like, you know, basketball, and just sports court for whatever kind of sport. And she said to him, “You can build the sports court, but you have to earn the money to build that entirely on top of your regular salary, your regular job.”

Greg: [laugh] . There’s a challenge.

Paul: “You’re not taking a penny of your paycheck and putting it towards that sports court.” So, he approached us and said, “Hey guys, I could use some extra money on the weekends. Can I come up and work for you guys, and just do setups, run machines, whatever.” And we’re like, “Absolutely.” You know, we were busy. I think they ran a four-day week, maybe, so maybe he even came on Fridays.

And so, for a couple of years he came up and worked, you know, just part-time at Pro CNC. And you know, being on the floor, doing setups, running parts, doing inspections, he used ProShop. And at one point he came to us, and he’s like, this is amazing software. Like, “This is way better than what we run our shop with. Can you tell me the name of the company you bought it from because I want to—we want to call them?”

And we’re like, “Yeah… so about that, you know, we built it and it’s not for sale, for sure.” Anyway, they, you know, ultimately, they, you know, they asked us if we would sell it to them, and through a lot of debate and discussion and navel-gazing, we were like, yeah, you know, maybe… maybe we should give it a shot. So, in 2008 is when we started, in I think two-thousand—yeah, end of 2008, or maybe 2009, they had a product called DBA, which was just this, you know, big database-driven ERP system, MRP system, and after—and I just recently got more details on this because I actually interviewed Rich for a new podcast that I’m launching—

Greg: Oh, great.

Paul: Yeah, it’s called Manufacturing Transformed. It’s going to be real shops, real stories, so it’s, that is the ProShop podcast. My other one, Machine Shop Mastery, is decidedly not a ProShop podcast. But anyway, after, you know, spending a couple of months of, like, transferring their database into ours, and just getting lots of data, they went live with ProShop, and three weeks later, turned off their old ERP.

Greg: No way. That’s not even possible.

Paul: Yep. After like—

Greg: You can’t even do that—

Paul: After, like, 20 years, you know, of data in their old system. And so, that gave us the confidence. We’re like, “Wow, this actually”—and it immediately transformed their company, you know, speaking of that word, transform. They had a late order list of jobs that probably, I think he said it was about ten pages long or so, constantly, for years. And every single day, they would meet for a couple hours, they had two full-time expeditors, they had two planners that helped plan everything, and very immediately, freed up those expeditors, they got that late order list of ten pages long down to, like, less than a quarter of a page, they dropped their inventory hundreds of thousands of dollars.

So, they were building tons of weapon inventory for not the right things at not the right times. You know, still a great company. Boeing loved them, you know, gold supplier, all that kind of stuff, but it was just incredibly challenging for them to try to run and maintain that business. And ProShop, you know, literally in just a few months, just completely transformed it. So, that gave us a bunch of confidence.

And then they said, the next thing they said, you know, you’re such a good supplier, and we can see how much this has helped us. Would you sell ProShop to some of our other vendors? And we’re like, “You mean our direct competitors in the shop space?”

Greg: [laugh] .

Paul: They’re like, “Yeah, those companies because their quality isn’t great, their communication isn’t great, their deliveries are always late, their paperwork isn’t very great.” And we had built in AS9102 forms and all that stuff by that time. And we’re like, “Yeah, okay.” You know, “We’ll try it.” So, we did it with another shop, probably a 50-person shop. Incredible results as well. And that’s when, like, it was clear we have something that seems to resonate, seems to make a difference. Let’s sell the shop and let’s go full-time into the software business.

Greg: That is an unbelievably impressive story. I mean, three-week ERP projects; I know ProShop can do it today, but you know, the benchmark in the industry today is not measured in weeks for getting a new ERP up and running, let alone, you know, 15 years ago.

Paul: Yeah. And so, they were about—in 2015, when we shot a video with them, when we were first launching—or early-2016 and were first launching ProShop to the market, we went and did a testimonial video, and I learned some things that I had never known about their implementation. So, at the time, they were about 35 people, and they were doing about $8 million a year in business, you know, which is pretty good. But it’s their own product, right? They get a pretty penny for it. Over the next five, six years, maybe seven by the time we interviewed them, they had grown to an $18 million company, and they were doing it with 40 people, not 35 people.

Greg: That is unbelievable.

Paul: So, they well over doubled with only five additional staff. And they said, “Yeah, if we were still using DBA today, we’d probably need at least 45, if not more, people.” So, they figured we saved them, like, ten overhead staff, just in the workflows and the things that we did. And that feels pretty good, you know, to help a company, you know, that much and that meaningful way? And you know, and also the part that was, when I was sitting there watching them do the interviews, like, you can see it on Rich’s face just, like, how much it meant, personally, you know, to them, to him, like, how much of a struggle it used to be, how stressful it was to have a ten-page late order list every single day for years, and to get it to the point where he could, you know, he could leave at 3:30 or four o’clock, and he could go, you know, coach his kids sports teams and know that the company was doing well, and they were on time, and it wasn’t—I think he said, “Barely keeping their head above water,” you know, prior to that, just from an operational perspective.

And that’s the part that just makes me so humble and grateful and excited to help the industry because having lived it, you know, firsthand, I know how hard it is to run these kinds of businesses.j and a lot of shop owners. I will—on every show I’m on, I recommend the E-Myth, the E-Myth Revisited. Just an amazing, great book, the E-Myth—have you ever read it yourself, Greg?

Greg: I have not, but I’m looking it up right now, on—

Paul: Okay. Put on your list [laugh] . Yeah, it’s an easy read, it doesn’t—takes only a couple of days. The E-Myth is the entrepreneurial myth, and the entrepreneurial myth is that if you’re good at a craft, like, you’re a tool and die maker or you’re a machinist, that you will be good at running a machine shop, or a tool and die shop. The fact that you are good at a craft makes no difference in how good you are at running that type of business because the skill set is totally different, right?

You can dial in vice and, you know, bore a bore down to you know, 50 millionths, but understanding sales, and marketing, and HR, and scheduling, and finance, those are totally different skill sets. So, the myth, which is busted in the book is that just because you’re going to be good at your craft does not mean you’re good at running that business. But that’s the way most shops start. They’re started by people that worked for someone else or decided one day they were going to start, you know, start or buy or something, you know, a business like this, and kind of like us being very naive at the beginning didn’t realize just how brutally hard it can be. You know, that being said, there’s lots of successful ones, you can learn to be good at those things, but having good tools to do that helps immensely, right, if you can tame the chaos, if you can have better systems, better processes.

And so, the real thrust of that book actually is that if you can design and build a prototype of a franchise model business, just like a McDonald’s, if your business can run as if it was a prototype of a franchise, even though you’re only ever going to have one location, that is the most consistent, profitable, process-driven way to run a business, which is easier to, you know, not work in the business every day. You can work on the business, you can go on vacation, you can have a succession plan, you can have more consistent profits, if you have standardized operating model to run that business. And so, those principles just got drilled into our head early. Like, we read that book in the early, you know, early-2000s, and that and a couple others were just so impactful to us about how to build, ultimately, an operating system that helps run this hardest type of business in the world.

Greg: So I definitely already clicked it: ‘Add to Cart.’ I’m going to have that one in the not too distant future, Paul. I deeply appreciate that. But really what it sounds like you’re saying is ProShop, and really Pro Shop customers in a way, have become franchises of Pro CNC because of the system you built and the best practices you put together. Ultimately, what you—you licensed software, right? You’ve licensed modules and methodologies to do inspection, and work orders, and tooling, and all that kind of stuff, but really what you were licensing was the model that made Pro CNC successful.

Paul: Yeah. Yeah, in many ways that’s true. And to be honest, you know, I’m the Chief Evangelist, I’m very much the face of ProShop, but the guiding principles of how that all worked are really the brainchild of my partner, Kelsey. He was the one that built those first spreadsheets that had the idea of if we have this sort of core of data for, like, quoting a part with, like, you know, manufacturing steps and times and materials and processes, and then that defined the workflow of cloning that and flowing it through to quoting, to part masters, to work orders, to procurement, to invoices, to packing slips, to inspection plans, inspection forms. Like, and then Matt, you know, our partner here and CTO and developer, sole developer for the first you know, 15 years or so, like, their combined, just, genius for the way to structure this data in a way that is immensely scalable, it’s really profound. So yeah, you know, our, you know, close to 500 clients out there are really running on a system that those guys built and designed, and it’s yeah kind of the franchise model of Pro CNC.

Greg: That is so impressive on so many levels. And the question that we usually like to close with on Manufacturing Mavericks, Paul, I mean, this—I’m going to be fascinated to hear this answer because I didn’t know a lot of those details of your journey, you know, going back again, the car magazine, the couch, supportive parents, you know, that say, “Okay, just switch schools. It’s no big deal. Yeah, go 3000 miles away. So, what? Yeah, have a good time, Paul.”

You know, that foundation and then connecting with Kelsey on literally your first day, and then the relationships that unlocks that, you know, we want to build cool cars. Okay, well, to build cool cars, you need machines. Now that we have these machines, these things have to make money. I mean, just an unbelievable, you know, tale of the American dream, frankly, of, you know, anyone can make it happen anywhere. You guys made it happen.

I mean, knocking on doors. I can picture an aluminum briefcase, [laugh] you know, with the foam cut out. I mean, that’s got—that had to be that, you know, the first time you did that was probably, like, there’s no way. There’s no way this is going to work, right? And then you’re like, wow, people find this impressive, you know? I can [show] with my parts.

I mean, just such an incredible and I know you said humbling. I can feel your emotion through the interview of, you know, just how meaningful this journey, and those relationships, and those friendships, not only with your partners, but with your customers and other folks along the way have been. And actually, you know what? Before I jump to the question I usually close with, there’s one more I wrote down that I meant to ask you earlier, which is how did that sports court turn out?

Paul: It turned out great. He built it. He [laugh] he’s now since moved, but he—yeah, I mean, he’s shared pictures of it, and it’s—yeah, if he hadn’t decided that he wanted a sports court, it’s very possible ProShop might not exist as a commercial product, you know?

Greg: Wow.

Paul: I don’t know if we would have had the ideas otherwise. But yeah, so many little serendipitous events through my life that have turned into what I could not be—and the part I also have not mentioned; I met my wife, you know, when I came to school, very shortly after coming. And so yeah, for sure, it was impactful in my life. But I can’t imagine doing anything more—anything other than what I’m doing. I feel just incredibly grateful, and humbled to be invited into these businesses that are incredible, and smart people, and creative and problem solvers, and yet, they still need some better tools, and some partnership to make it even better. And because manufacturing—and you know, you may have seen on LinkedIn, I’ve started this #thankamachinist hashtag—

Greg: I love it. I love #thankamachinist.

Paul: Well, when you think about it, and most people don’t, of course, out there in the world, machine—nothing, literally nothing in the world, modern, today would exist without machining. Not a single thing. Every human-made product, every single thing is either directly machined, or is a mold, or is made by a machine that was made of machine parts, whether it’s agriculture, whether it’s aerospace, whether it’s electronics, or, you know, fabrics or food, anything, it all starts with machining. So, even fabricators, and mining, and oil, and you couldn’t have any of those equipment without machinists. So, I really think that, you know—and I broaden that to, you know, precision manufacturing—the leaders and owners and founders of those businesses are absolutely the heroes of our economy. You cannot have a strong economy without a strong manufacturing base.

And we, you know, our country lost its way for quite a long time in that regard, and I think it’s getting it back slowly. But yeah, those shops are the absolute bedrock of everything this country makes, and because you combine that with it being the hardest business in the world, it’s so essential to support them, it’s so essential to help them thrive. You know, your software does the exact same thing. You’re helping them maximize their spindle hours and get more throughput, and there’s nothing that I can imagine that is more rewarding than helping these heroes of our economy. And that creates jobs, and that helps support communities, you know, and that’s our main mission statement is, really, you know, building communities through manufacturing.

Greg: I mean, you guys have done, as I said at the outset, an absolutely fantastic job of that. I know that, you know, when we’re at events together, you know, people love to seek your counsel and get your perspective. On LinkedIn, you know, some of these threads that you start or chime in on, you know, all of a sudden, there’s 40 perfect strangers collaborating with each other, you know, to help solve a problem, or find material, or a tool, or help with a job or, you know, really anything that falls in the realm of challenges that everyday manufacturing folks face. So, you have certainly, you know, demonstrated and lived up to that mission of building manufacturing community, you know, in thought, word, and deed, and I find that to be so impressive about you, Paul. So, you know, keep it up.

I know, a lot of people appreciate it, probably in pockets of the world and in shops, whose names you know, you might not even know, but I know there’s a lot of it out there. You know, the question that we close with on Manufacturing Mavericks is, if you could go back in time and talk to that version of you when that manufacturing torch was first lit, which in this case, is the Paul that is sitting on the couch reading a car magazine that I can somehow vividly picture even though I don’t know what you looked like 30 years ago, and I have no idea what kind of couch you had. But I know what couches looked like in the early-90s, so can make a good [laugh] —

Paul: [laugh] .

Greg: —I can make a good guess that it was probably floral print, or bizarrely—

Paul: Oh, my gosh.

Greg: —stripped.

Paul: That’s hilarious. That is so [crosstalk] .

Greg: If you could sit down next to that Paul, what advice would you give yourself?

Paul: Oh, gosh. I’ve been looking at this question for days now. I would tell myself back then—because I didn’t realize how essential manufacturing is. You know, I thought, you know, yeah, maybe car parts, maybe some of them have a machined hole, or, you know, I didn’t even know what machining was back then, but that manufacturing is so foundationally critical to our world, and that I was going to, you know, basically just—you know, not that I needed encouragement; clearly I, you know, when I see something that I want to go after I just do it, but that it was the right choice, and getting involved in this industry, and helping be an advocate, and supporter, you know, of these companies that make the fabric of our economy, just I would have just cheered myself on, and said, “Yes. You don’t realize how important this is going to turn in—you know, this is going to end up being.” I learned some hard lessons along the way about people, about systems, about you know, being a leader. I definitely made plenty of mistakes early on, but it would have said that’s okay to learn those mistakes. Just you know—or to make the mistakes, learn from them. Don’t be too hard on yourself, have confidence that you’re doing the right thing, and just go for it.

Greg: Love it. You never know what that first step out the door towards Washington is going to do for you [laugh] , who you’re going to meet, and how that’s going to change your life. Paul, I’ve so enjoyed this interview. You are 500% one of the Mavericks of Manufacturing. So, so honored to be able to spend this time with you on this episode, and learn about that journey.

Really looking forward to when this one gets released. I know that there are many, many folks that are going to love to hear about that journey and, you know, the twists and turns and the fate and the inspiration of the journey that you’ve gone on. So, thank you so much, Paul, for your time. Fantastic speaking with you, and looking forward to our continued partnership and friendship. It’s been a pleasure getting to know you the last several years.

Paul: You too, Greg. Yeah, thank you so much. You’re such an adept, great interviewer. This has been easy and fun. And yeah, likewise appreciate what you guys are doing the industry and the partnership we have.

Greg: Thank you for listening to Manufacturing Mavericks. If you’d like to learn more, listen to past episodes, or nominate a future Maverick to be on our show, visit mfgmavericks.com, and don’t forget to subscribe to and rate this podcast on iTunes, Spotify, Google Play, or your favorite podcast app.