How the ArkHAUS team excels under the most adverse conditions.
A note from the founders:
“Living in NYC, COVID hit our city exceptionally hard and fast. We however took that as an opportunity to help our city, and in doing so, we demonstrated a level of perseverance, grit, and execution that we didn’t even know we had. Even the story below doesn’t capture the scale of what happened in those 5 months. But it has emboldened us and empowered us, knowing that we can execute just about anything. Bringing ArkHAUS to life in Miami will require more than capital, it will require the exact perseverance, grit, and execution we demonstrated in 2020. We hope you enjoy the story below and get even more excited about your investment.”-Sam and Nathalie
This post was originally written for investors of the ArkHAUS crowdfunding campaign. You can learn more on the campaign page here.
It was the second week of March 2020, and the world was in a rapid shut-down mode. On that Friday the 13th of March, COVID reshaped the world as we knew it.
Only 3 months earlier, Nathalie and I had opened CSTM HAUS — a multi-faceted event venue in the heart of NYC’s Meatpacking District. We had taken out a substantial lease in the famed “Little Flatiron Building”. Initially, it was only an event space and the inquiries and events were rolling in. We soon added in a day time co-working business, which began to boom within weeks of opening. Everything was firing on all cylinders and we were about to become profitable in only our 3rd month of operations. COVID had other plans for us.
On that doomed Friday the 13th of March, we went home and had no idea how we would survive. Over the next few weeks, we thought through a variety of marketing activities and digital community creation. Nothing made sense. The only thing that felt right was we wanted to help our city and our community, but we didn’t know how. We were chatting with friends, colleagues, and vendors over zoom to see how they were doing. One of them told us he was making masks for his city. Through our retail technology business, we were already connected to a variety of manufacturers and materials suppliers, and clearly we had a physical space…so we thought we could do the same. We logged on to the City of New York’s website and found a portal looking for local PPE producers. After filling out the form, we soon received a call from the NYC Economic Development Bureau (EDC). They immediately told us they didn’t have a need for face masks, but instead had a tremendous need for face shields — the plastic visors worn by front-line medical professionals.
Over a few conversations the next few days, the EDC began asking what our production capacity could be, our pricing, materials sourcing, safety plans, and more. We were planning everything on the fly, and staying up until 3am every night to source materials from around the world. We told EDC we could produce 1,000–2,000 shields per day, and they asked if we can get to 10,000 or higher. In a couple more days, we had sourced more cutting capacity, materials supply, and identified a variety of ways we could source the labor to produce the shields — we said yes.
In the same few days we were working through production planning, we also produced two samples for the Department of Health. EDC was quite pleased with our second sample and awarded us with a contract to produce 250,000 face shields. We had to produce the order in about 20 days, which meant starting at 10K shields per day, and getting up to 15k per day. This was a monumental task considering we had only made 2 sample shields. We were now not only one of the 17 local manufacturers supplying NYC hospitals with their face shields, but this contract immediately made us the largest.
We were soon under way. The breakneck pace at which we were sourcing, ordering, and shipping materials, as well as hiring local talent to hand-produce, was unlike anything we had ever seen. Within only a few weeks, we hired 90 people that lived locally and were not allowed to take public transportation. Adding to a rigorous safety protocols, we couldn’t let workers go in and out for lunches and breaks…so we hired a kitchen staff to feed 40 people, 2 times a day. When they finished the meals, they would jump into the production line.
A few weeks into our order, EDC asked for a conference call. We were running behind on the first week of deliveries, and we were sure they were going to cancel our order. When we summarized for EDC what we were doing to get up to speed, they told us, “No, you guys are actually doing great. In fact, we’re going to cancel 12 of the other 17 manufacturers and double your order to 500,000 shields. But you have to hustle and get it done in the same amount of time.” We of course accepted the order and the challenge. When I told our team we had to get to 25K shields per day, we were all equally scared and excited. Our team was chomping at the bit.
Over the next 5 months, our team would work double shifts from 8am to 11pm. Nathalie and I would stay up until 2am or later continuing to order materials, managing staffing, and analyzing our processes. We scrutinized every detail of production to get our timing down — we initially made a single face shield in 112 seconds and eventually had it to 20 seconds. No detail was too small — we trained 90 people on which hand to use when they grab a shield to apply a label, so that they can shave off 0.1 seconds. Every fraction of a second added up.
We created a formula called “CSTM Pi” that would track our efficiency. CSTM Pi was simply the number of boxes (100 shields per box) per person per day. Our initial goal to get to breakeven was a Pi of 2.0, or 200 shields per person per day. If 30 employees worked that day, our target production was 6,000 shields. So to meet our 12,500/day goal, we had to double our team or double our Pi…or a combination of the two.
About a month in to the project, we realized we needed multiple daily meetings to highlight our morning, afternoon, and evening progress, continue to improve every aspect of our production line, and continue to motivate the team every few hours.
And on days where we made 200 boxes (20,000 shields), someone would yell out “SHOTS 200!!!”. We would finish the day and a round of tequila shots helped us all celebrate that day’s work. Pretty soon, we had to raise this to SHOTS 250, 300, and higher.
After the EDC doubled our order from 250,000 to 500,000 face shields, our production really took off. We made some major changes to the design of the shields, our materials sourcing process, and our production line and saw CSTM Pi begin to spike to 5.0 and beyond. We were now making an astounding 15,000–20,000 shields per day.
EDC notified us that the hospitals were asking for our shields over those of others. We initially didn’t know why but then we heard — not only were our shields much higher quality (the shape, strap design and foam placement had been perfected), but we were also the only maker of shields that had branded them with safety labels, making them much more attractive. Having made the decision to spend over $100,000 on labels actually paid off — EDC called us back. “Your product, price, and process is the best of the 5 remaining makers. We’re going to wind down 3 of them and 2 of you makers will continue to make the final shields. You’ll be getting the bulk of that final order.” With 500,00 shields almost finished, EDC added a final order of 1.1 Million shields.
The only hitch we had was how fast the plastic suppliers and cutters could get plastic to us. When we first started, one cutter was supplying more plastic than we could produce, and we were getting backed up. By mid summer, our production efficiency had spiked again. We now had 3 different plastic cutters sending us plastic, and it still wasn’t enough.
Outside of plastic supply, every aspect of our production was firing perfectly. CSTM Pi was consistently in the 9s. And on one unbelievable day, we hit a production level we never thought was possible — a CSTM Pi of 10.1 and a hair over 40,000 shields. Amazingly, we even ran out of plastic with 15 minutes left in the day…which means we could have done even better.
Having partnered with Century 21, we were loading 3 trucks, 3 times per week. This meant we were shipping out 60,000 face shields every Monday, Wednesday, and Friday. If that wasn’t enough, we were receiving major orders of foam and plastic at the same time. In short, we converted the hottest nightline corner in Manhattan into a shipping depot supplying the city’s hospitals with face shields.
abOur team and HAUS Pup Chili were featured in the New York Times. And Telemundo came by to capture the amazing hustle and grit our largely Hispanic team was showed every day.
Having never made a single face shield before, we built a global supply chain of materials in 2 weeks…and we did that despite the largest supply chain disruption since WWII. Over the next 5 months, we hired and employed 90 local workers, cut through 340 TONS of plastic (14 full trucks worth), processed enough elastic to wrap around the island of Manhattan 14 times, turned the Meatpacking District’s sexiest corner into our shipping depot, and made 1.7 million face shields, donating the last 100k directly to hospitals.
In other words, we hand-manufactured and supplied 36% of all the face shields that went to NYC front-line responders…and we did it right in the heart of Manhattan. It was the most fulfilling thing we’ve done in our lifetime. And with ArkHAUS, we’re going to do even more.
