Apr 28, 2022 · 30m · how-i-built-this
HIBT Lab! Armbrust American: Lloyd Armbrust
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This Lab, host Guy Raz interviews entrepreneur Lloyd Armbrust about rapidly establishing Armbrust American to manufacture surgical masks domestically during the COVID-19 pandemic and subsequently pivoting into HVAC air filtration.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 37.6% of the talking time here. How this is scored →
Guy as informed peer 2.6 Guest teaching 3.5 Guest disagreement 0.8 Guy pushing back 0.6
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 27:15 Direct pushback on why US manufacturing lags
Armbrust directly cuts across Raz's comparison to Germany and Japan with 'It's infrastructure guy,' asserting that the US lacks the fundamental component ecosystem rather than just low-cost labor.
Hardest push from Guy ▶ 26:44 Host counterexample on high-wage manufacturingRaz refuses the standard premise that high labor costs doom domestic manufacturing by pointing out that Germany and Japan maintain massive export powerhouses with high wages and strict standards.
Biggest teaching moment ▶ 25:27 The missing tier-two manufacturing ecosystemArmbrust illustrates how a single missing $1 sensor shut down his entire production line because the US completely lacks the deep domestic parts supply chain readily available in Taiwan and China.
Guy holds their own ▶ 26:44 Raz cites international economic modelsRaz leverages broader macroeconomic knowledge regarding Germany and Japan's industrial policies to challenge the conventional wisdom around manufacturing competitiveness.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Lloyd Armbrust's Software Background and Mask Inspiration | 4 | 3 | 0 | 0 | Raz sets the timeline of early pandemic disruptions and mentions Armbrust's prior company OwnLocal. Armbrust outlines his realization that domestic manufacturing could compete through automation rather than relying on massive import budgets. | |
| Sourcing Production Lines and Six-Week Operational Launch | 2 | 3 | 0 | 0 | Raz expresses astonishment at the six-week timeline from concept to operation. Armbrust explains the mechanics of wiring $140,000 to China for automated machinery and flying the equipment to Texas. | |
| Securing Austin Manufacturing Facility and Mid-Episode Break | 2 | 4 | 0 | 0 | Armbrust educates Raz on the technical hurdles of setting up automated mask lines, including mastering sonic welding frequencies and navigating FDA Emergency Use Authorizations and 510(k) testing. | |
| Sourcing Meltblown Fabric Amid Global Supply Inflation | 2 | 4 | 0 | 0 | Armbrust breaks down the raw material bottleneck of meltblown fabric, citing wild price inflation from $10k to $120k a ton. He also explains why he structured investor funding as debt to avoid an eventual forced VC exit. | |
| Pivoting Direct-to-Consumer and Shopify E-Commerce Success | 2 | 3 | 1 | 0 | Armbrust explains that institutional supply chains with hospital conglomerates were too entrenched to crack, prompting a direct-to-consumer pivot via Shopify that brought instant six-figure daily revenue. | |
| Recruiting Displaced Technicians and Maintaining Fixed Pricing | 2 | 4 | 2 | 1 | When Raz assumes domestic masks had to be priced higher than imports, Armbrust corrects the premise, noting that masks were unobtainable at any price and that he refused to price-gouge. He also explains recruiting displaced nail salon technicians. | |
| Managing Demand Drops and Expanding into HVAC Filters | 5 | 5 | 3 | 4 | Raz pushes back against the narrative that high labor costs prevent US manufacturing by citing Germany and Japan as high-wage manufacturing powerhouses. Armbrust emphatically counters that the core deficit is lack of domestic parts and specialized infrastructure. | |
| Long-Term Product Diversification and Hallmarks of Entrepreneurship | 2 | 2 | 0 | 0 | Raz summarizes the rapid establishment of the manufacturing business. Armbrust reflects on how naive optimism and diving in without calculating all obstacles is central to entrepreneurship. |
Statements from this episode (23)
Domestic mask production capabilities cost $5 million to build, Armbrust says
“I'm pretty sure for like five million dollars, you could make the capability of making that many masks.”
Chinese manufacturers sell surgical masks below production cost, Armbrust says
“I mean, they sell it for less than the cost of actually making the mask at this point.”
Pre-pandemic surgical masks were mostly made by hand globally
“And I found that mostly masks were being made manually one at a time by hand at the time.”
Armbrust American manufactures its own mask fabric to cut costs
“We were actually vertically integrated. So we make some of the fabric ourselves, which shaves off some of the cost.”
Armbrust's first automated mask manufacturing machine cost $140,000
“And by the way, it was like, I want to say that the base cost of the machine was a 140,000 dollars.”
Armbrust American built a fully operational mask production line in six weeks
“Yeah, we did get it up In, in six weeks.”
Armbrust's Austin facility eventually scaled to produce one million masks daily
“We actually eventually were able to produce a million masks a day in that facility.”
FDA rapidly granted Armbrust American an Emergency Use Authorization for masks
“The FDA actually did this thing called the emergency use authorization for. For masks, and they let us in that right away. And then we Actually, like I said, we did a lot of things, and we got lucky, and the batch of masks that we had created lined up, and we …”
Pre-pandemic meltblown fabric cost $10,000 per ton in China
“And at the time before the pandemic, you would pay probably about, I would say, 10,000 dollars a ton in China for that Melbourne layer, you would pay about 17,000 dollars in the United States for that Melbourne layer.”
Pandemic meltblown fabric prices in China surged to $120,000 per ton
“It was selling for a 120,000 dollars a ton in China. Wow. And it was going up every day”
Armbrust paid $100,000 for American-made meltblown fabric during early pandemic
“And so we paid a 100,000 dollars for this actually made in America milk loan.”
Armbrust raised $3 million in one weekend using a seven-minute deck
“And so we raised, I actually raised three million dollars in a weekend. I did the worst PowerPoint presentation of my life. I recorded a voiceover, seven minutes long. I sent it to all these people, and yeah, we closed about three million dollars based on that…”
Raising venture capital forces startup founders into emotionally wrecking company sales
“Like startups, the thing they don't really tell you is when you raise VC, it's like, you have to sell it. So you're building this thing. You put your blood, sweat and tears into it. And your job is to, if you're successful is you sell it. I mean, it's like, yo…”
Medical supply chains remain entrenched with 3M and overseas providers
“We really tried to get traction with hospitals and governments, but those existing supply chains, like, they already exist. The relationships are with three M or with overseas providers. That's kind of, it's very entrenched. It was, we still haven't broken int…”
Armbrust generated $320,000 in direct-to-consumer Shopify sales on day one
“I signed up for Shopify at seven a.m. And we did 320,000 dollars in sales that day.”
Armbrust recruited its initial factory staff almost entirely from Texas nail salons
“And so our entire staff was almost wholly coming from this the local nail salon industry.”
Armbrust kept mask prices flat despite surges and higher domestic costs
“And we haven't changed our price since. In fact, during Delta and Omicron Amazon went really high on their prices. People were complaining, but we have stayed exactly the same, but it is expensive because it costs more money to make it here.”
Armbrust American laid off approximately 70 workers before the Delta wave
“I mean, the last, before the last Delta wave, we had to lay off like 70 people.”
Armbrust American pivoted to home HVAC air filters using mask technology
“And so that's one of the reasons why we, we're taking our actual same technology and we're launching an air filter business for home HVAC unit, because that's something that everybody needs.”
Many US-assembled air filters rely on overseas-manufactured fabric
“A lot of filters are actually surprisingly they're formed here in the United States, but the fabric is made overseas.”
US lacks the manufacturing supply chain infrastructure of China and Taiwan
“They have that infrastructure in place in, in places like China and Taiwan that we just don't have here anymore. And so it is so hard for us to be actually successful because we do not have the infrastructure to actually make stuff anymore.”
Armbrust relies on Japanese robotics and pneumatics despite domestic manufacturing goals
“Even though we are sort of like supply chain proof, and that's something we talk about a lot, we're not really because of some of our parts, like our robotics, like our pneumatics are all Japanese. So what happens if we can't get our Japanese parts? Like they …”
US lacks specialized industrial talent like sonic welding technicians, Armbrust says
“I had to become an expert in sonic welding because there just aren't any experts in sonic welding where you could go in China or you could go in Taiwan. And like, there would be just like, there's people that, you know, are experts in plumbing. They're experts…”