Tino Go on how Baru is Disrupting Manufacturing

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About Tino Go:

 

Tino Go is the CEO and Founder of Baru. Although Baru was formally incorporated in 2019, Tino Go started to build the company in 2015 after he discovered how expensive and inefficient it was to order a custom-made bookcase. Tino envisioned that digitally controlled manufacturing robotics should simply produce what was in a customer’s imagination. That idea is now a reality. Baru was recently awarded a patent for technology that lets customers modify product designs in augmented and virtual reality before manufacturing.

 

Baru’s carbon-negative platform leverages existing and underused robotics for on-demand local manufacturing.

 

Baru’s Patented virtual manufacturing technology leverages augmented reality to control hard goods manufacturing. The patented technology lets anyone order precisely the products they desire and transform digital models into made-to-order goods!  (The licensed patent can serve military applications, medical implants, and other uses.)

 

In the $35 billion addressable furniture and kitchen cabinets segments, Baru can eliminate up to $15 billion of waste.

 

Tino previously worked as a fractional CFO to help middle-market companies generate increased profits through the strategic intersection of finance and operations. Working closely with business owners and management teams, Tino strategically analyzes a company’s financial and operational functions and then developed innovative, customized solutions that allowed the company to achieve its profit potential.

 

Drawing upon more than 25 years of experience in strategic planning and business analysis, finance and accounting, IT systems implementation, and operational systems analysis, Tino helps companies optimize their operations and improve profitability. He has extensive experience working on business turnaround projects with clients in a wide range of industries, and he brings strategic insight into the hidden market potential and relevant operational efficiencies that can be achieved. With careful analysis and planning, he develops innovative solutions to help clients achieve sustainable cost savings. His industry experience extends from professional services consulting to aerospace manufacturing, environmental waste management, horticultural production and distribution, and advertising and talent management.

 

Tino holds an MBA in Finance from Indiana University’s Kelley School of Business and a BA in Economics from the University of Michigan. He completed a non-degree law program at Case Western Reserve University and advanced coursework toward a Master of Accounting at Walsh College. Currently a resident of Ohio and California, Tino has also spent a decade in Europe and is fluent in French and Italian.

 

Transcript:

 

Alan Olsen: Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Tino Go, Tino. Welcome to today’s show.

 

Tino Go: Hi. Nice to be here. Thank you.

 

Alan Olsen: Tino, you have a company that you’ve launched recently. But before we get into that, for the listeners, can you give your background of what brought you up to where you are today?

 

Tino Go: Yeah, sure, it’s eclectic. You know, a first generation immigrant from Indonesia, we moved to Michigan when I was a young boy, and grew up in Michigan. Leaving high school, I graduated high school with two art scholarships, principally for photography, one sent me to Europe, the other one was for college. And in Europe, I did an internship at one of the big photo studios in Paris, and then I returned to school and to see a huge disconnect between the real world and the curriculum. So I dropped out after six weeks. And I started my own company to do advertising production services. And I ran that company for five years between Detroit and then Los Angeles. And then I was recruited to Paris, where I worked for a Parisian company for seven years, three years during production, two years overseeing the Italian market and growing our market share, and two years, the two last years overseeing Northern Europe, out of Dusseldorf. And after 12 years of the frenetic pace of advertising, I was a little bit bored, I was looking at another 25 or 30 years of more or less the same thing. So I quit and returned to Michigan, I got a scholarship to study economics at University of Michigan, followed that with an MBA in finance. Follow that with most of the master in accounting, and started in corporate finance, which was my goal to really understand economics and finance because prior to that, I felt like I was a leaf adrift on a rippled wake. I didn’t understand how anything worked. And I wanted to understand. And so I started in investment banking. And then the.com bust in 911, came around and that imploded and went into workouts in turnarounds. So I did learn something from my econ classes, I did workouts and turnarounds consulting for a few years, that was that was a ton of fun. learned a ton. And then when I met my x in Cleveland, I moved there and started direct oversight of companies. My first job as a controller was for this small $12 million company, we grew it to 85 million in five years, through a couple of acquisitions and organic growth. And again, that was a trial by fire ton of fun. And my last company, I was overseeing $1.2 billion business unit of a chemical company, where I was the CFO for a year. Interim CFO. Well, someone was on medical leave. And that takes us to, what I’m doing now, which is, I’ll take it. I’ll call it my, third adventure.

 

Alan Olsen: This company you sarted from the ground up then? Right?

 

Tino Go: Yeah. Those are the from an idea.

 

Alan Olsen: I like to like to hear about bout how that idea came about.

 

Tino Go: Yeah. It was a kind of, like the triangulation between three observations. The first one was, well, the case was I wanted to get a bookcase for my home. And I couldn’t find it, which is very common occurrence because it had to fit a particular spot. And then, when I discovered to get one made was a medieval process. I was just shocked. Then in the 21st century, you had to go through this really antiquated, outdated process to get wood cut in custom sizes. So that was appalling to me. The second observation was, I knew the state of software and manufacturing automation through my through the jobs and through just general observation of the tech scene. And so the hypothesis was these, if these machines are digital, we should be able to translate what’s in our imagination, what we want. And those machines should just perform. And then, we built the technology around that we actually earned the patents on the use of augmented and virtual reality to control those manufacturing robotics. So as you’re changing the picture, in augmented reality, the manufacturing instructions are dynamically changing simultaneously. And then the third observation was, okay, there are 1000s of these machines. And just from my corporate finance experience, I knew that whenever you have capex, you have cycles of use utilization. And I was surprised to find that average utilization rate of some of these millwork machines panel processing machines was two hours a day. 1000s of machines highly underused, that was that was the you know, it’s like we can create a virtual factory out of these underused machines, kind of like an Airbnb or ghost kitchens type of business network. And so that’s what we’re building where we’re networking, underused machines into a virtual factory, so that people can get custom made products using those machines made in their hometowns. And on demand, hometown manufacturing, it removes 50% of the cost structure in the retail, manufacturing the retail channel. Usually, about 50% of the revenues are wasted on inventory overhead, just warehousing movement of inventory carry of inventory, and, and global transportation costs. And so that’s how we compete with the existing industry because we have a more efficient cost structure. And those savings led us reallocated to higher quality materials, local manufacturing services, creating hometown jobs, we get higher margins than the industry average. And because every item is customized for the buyer, we get lower return rates and thus higher net profits. And then, you know, the byproduct of reducing these, this global supply chain into hometown ecosystems is their, you know, immense social benefit. We’re creating jobs, we’re advancing industrial innovation, we’re avoiding immense amounts of co2 emissions from shipping things around the world. It’s so for all of these reasons. It was an idea I couldn’t get that in my head.

 

Alan Olsen: So Tino, in the first year you have 29 cities that you have sales and manufacturing partner network in 29 cities in just 12 months.

 

Tino Go: Yeah, because we’ve made it super easy for these local manufacturers to join our network.

 

Alan Olsen: When somebody comes into the network and signs up, how does that all work? Who’s giving oversight to the new orders coming in? What role do you play with these manufacturers?

 

Tino Go: We we do as much as possible so that the jobs for them; the execution of these work orders is extremely easy for them because they’re they tend to be smaller manufacturers under 20 employees. And so their organizations are all bottlenecked at the at the management level or the design and engineering level. Admin is always a mess. And the smaller companies and and but at the on the factory floor, there’s almost never any capacity issues on the machine. So that’s what we’re tapping into. And the way we make it easy for them is when a customer purchases from baru we, we provide the machine instructions, and we issue purchase orders for the materials to be delivered to the local shop. So it goes straight to the factory floor. The workers, they plug in the code, they process the materials, do a little bit of light assembly and it’s ready for delivery. So it’s as if we were in the internal engineering team providing more work orders. And that’s how manufacturers find it really appealing to join the network. Because ultimately, it’s just easy revenue for them.

 

Alan Olsen: So Tino, I want to jump into team building, because it seems like you’re onto something right here, that when, you’re bringing a team together, how do you how do you build a team out?

 

Tino Go: Very carefully. I look at three I have three high level considerations. One of them is what are their strengths? About a decade ago, I was exposed to Strengths finders, and so it categorizes our talents and our strengths into three main buckets and those three buckets, they align really well with different jobs. And then the strengths within those buckets align really well with things the talents that they’re born people are born with, plus the proverbial 10,000 hours of practice. So what I’ve learned is, when I’m leveraging my own strength, and what I’ve seen, when other people leverage their strength, they’re 10x better than the average. And not only are they 10x, better than the average, they enjoy that activity. And so I look for strength, and cross references it to the role I’m seeking. And then I look at the, behavioral expectations that I want in this organization, behavioral expectations, behavioral behaviors that will reinforce the business that we’re trying to build. And then the third thing is, they have to be not afraid of a certain amount of candor. Kind, but very frank talk.

 

Alan Olsen: So let’s go looking at the potential for Baru Business, what do you see? Where do you see the growth trend going? Let’s say in five years?

 

Tino Go: Did you ask where I’m expecting to be in five years?

 

Alan Olsen: Yeah. So based on where you are today, how big do you want to be in five years?

 

Tino Go: I think our goal is to become a global companies transacting about a billion or more business, because there are so many of these machines available throughout the world. And customization is so well aligned with upcoming generation of consumers and consumers under 40. They want things customized, they want it online and easy and fast. And and ultimately, our infrastructure is replicatable in every high labor cost country where these underused machines are located. And so yeah, one of our first investors said that he’s convinced we’re going to be the next Amazon because what Amazon did with distribution innovation, to serve unique customers desires. We are doing it at the manufacturing level. And so as you know, the first group of machines are panel processing machines, and but then we’ll fill up that manufacture manufacturing capacity by selling products that those machines will make to different groups, but we’ll eventually integrate other machines. And ultimately, it’s all about turning what’s in someone’s imagination into a physical product using digital fabrication.

 

Alan Olsen: So 3d printing is this playing into your model then?

 

Tino Go: Yeah, Absoulutely!

 

Alan Olsen: So let’s see if, as you’re looking into a billion dollar company, obviously it’s going to take some time capital to get there. Have you taken capital so far?

 

Tino Go: We’ve been funded by angels to the, in the amount of 337,000, we are raising a seed round right now with the goal is a million dollars, and with a million dollars, I expect that will within two years will be at a 25 million annual run rate and 6 or 7 million and margin which will just reinvest in infrastructure and and sales acquisition. We’ve already seen  the leading indicators that lead me to believe that’s very realistic, and beyond that, will continue to grow. Ultimately, it’s the growth rate is possible, because unlike a lot of marketplaces and platforms, they that take a big, we’re actually selling the product. And our margin is variable according to how much how much volume we put through these underused machines. Because with the volume that generates economies of scale, we share those economies of scale with the manufacturer, but also creates, you know, allows our margin to increase the margin rates increase. And so our average selling price is around $1,300. So far, but we just launched with custom kitchens to property flippers. And they’re pulling more demand than we can actually satisfy considering. I’m still, we’re still undercapitalized and understaffed. But we have very strong growth expectations. We’ve already seen that demand, we’ve already seen product market fit with the property flippers, they will be repeat buyers, and like they generate the volume for their economies of scale and margin.

 

Alan Olsen: So tell me about your patented method and how you’re integrating augmented and virtual reality into manufacturing.

 

Tino Go: So the general premises, okay, those machines are digital, we should be able to instruct them what those machines do with what’s in our imagination. And augmented and virtual reality is, is a way to communicate what’s in our imagination to into code. And so the typical way a customer or there’s a product to be made, is they, they they interact with an engineer and the engineer interacts with the manufacturer, and then goes through these iterative loops. You know, the engineer design something shows it to the customer. And the customer says, I like this, but I don’t like this, would you tweak it? And so it goes through that redesign process? That is super inefficient. The idea behind the patent was, why don’t we take the final picture and allow that to be the configurator So change the picture and that changes the manufacturing instructions. That’s generically start from the goal and and go upstream.

 

Alan Olsen: So Tino for a person wanting more information on Baru, how would they go ahead ahead and contact you or get a hold of the company?

 

Tino Go: My email is tino@hellobaru.com They can check out the website. Hellobaru.com. We are building a barukitchen.com website, which will be our second product category. Eventually we’ll have many others.

 

Alan Olsen: Very good. Well, I appreciate you being with us today on American Dreams.

 

Tino Go:It was fun. It’s one of my favorite topics talking about Baru.

 

Alan Olsen: Excellent! I’ve been visiting here today with Tino Go. He’s the founder of Baru. Thanks for joining us here on American Dreams.

 

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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan Olsen, CPA

 

 

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