Jai Malik launches Advanced Manufacturing Company of America to consolidate critical aerospace and defense suppliers

directly. Welcome to the studio. How you doing? Congratulations. Hey, how are you guys? We're fantastic. Thanks so much for taking the quick moment to chat with us. Uh can you introduce yourself, the company, and uh what's the news today? Absolutely. Uh so my name is Jay Malik.

I'm the CEO of the Advanced Manufacturing Company of America. Um we call it affectionately AMA. Um and uh and so you know what we what we do is we design, manufacture uh and certify um the next generation of critical products uh that go into all aerospace and defense systems. So that's both existing and new systems.

You know, the stuff that that Boeing makes uh and the stuff that Ander is going to make. Okay. Can you break down a little bit more of like what the first products that you'll make will look like? We've heard about what Hrien's doing.

We've heard about, you know, injection molding, plastics, like there's a lot of different buzzwords. Obviously, everyone kind of wants to do everything in the long term, but what are you focused on first? Yeah. So, first, let me let me just start a high level, right?

Like, when we talk about the aerospace and defense primes like Lockheed or Boeing, um they don't make anything today, right? They've outsourced a lot of their manufacturing and engineering to thousands of suppliers.

Some suppliers are focused on high volume manufacturing things like wire harnesses, machine parts with hings during injection molding. There's a lot of great suppliers that are focused on that. But there are also hundreds of suppliers that are focused on critical engineered products.

Those are the products that that that uh you know uh basically determine system success or failure and are often you know very very highly specialized. So stuff like avionics products, um power units, um you know, specific engine products.

And so we're focused in those areas in the most critical areas where you need to both engineer uh and manufacture at relatively low volumes um for the end customer for their system to succeed.

So we're focused on a pretty different I would say part of the market compared to most of the sort of softwaredefined manufacturing startups that you often see today. Um, in terms of where we're starting, we're starting, you know, almost entirely on avionics.

Um, you know, the the part of the plane uh or the ground control system uh that involves, you know, controlling it, right? So, the stuff you see in a cockpit, for example.

Um, and so we're focused on things like switches, panels, displays, uh, power units, you know, things that are are critical to the pilot if it's a manned system. Um, and, you know, if it's an unmanned system, critical to communication, uh, and, uh, and executing on the mission.

So those are the areas that that we're we're mostly focused on right now. Can you talk about the timing of the announcement? Was it just a happy accident? You were always planning to to go out this week or or did you pull it forward due to uh the uh everything in the news? Little minor news this week.

We we we were supposed to launch this week anyway, but um we actually had a few reporters that I think got scared of the tariffs, you know, didn't want to cover anything. And so we basically said, I'm not sure if I'm allowed to curse on this podcast, but f that.

Uh, and said that this is actually the best effing time to like, you know, take our our company public. So, we just did it. Um, and so yeah, that it was it was planned, but but obviously timing is definitely in our favor. Uh, can you talk about uh this is obviously a big raise to come out the gates with.

Can you talk about, you know, kind of the use of of proceeds and and kind of like I'm curious about kind of like how you're thinking of the the structure of the business generally? Yep.

So, we're going to be uh we've already acquired one business um that is a critical avionic supplier um which you saw a video or some people may have seen a video about. Um we're going to be acquiring probably another two to three of them uh over the next you know 12 to 18 months.

We're also going to be doing our own clean sheet, you know, design and development um of adjacent products in this space um with our own manufacturing and engineering uh talent. So, it's a hybrid approach.

Um you know, I'm a firm believer that especially in this, you know, area of the supply chain, um you can't you can't just hack your way into it. You also can't just be a private equity firm and buy and and price it up.

you know, that's not going to achieve what like, you know, companies like Andre want to achieve, um, you know, for their customers. And so, we're taking a hybrid approach where we're buying, you know, uh, companies with products that we think are going to be hard, you know, to just redesign from scratch.

Um, and also developing ones that we think we can do a great job of ourselves.

And is part of your advantage over traditional private equity is just the time horizon you're thinking about of saying like we don't need to come in and just like immediately cut costs by 50% and and increase you know pricing to and then hopefully flip the business in three years.

Like I imagine you're buying to hold and that's part of why somebody would want to sell to you in the first place I imagine. Yeah, it actually goes deeper than that.

So, I would say the one thing that I have learned um building this business so far, I believe, you know, it's it's still early, um is is that owners don't really necessarily care just about the time horizon, your ability obviously to underwrite, you know, the deal.

They also care about one, not selling to MBAs, not selling, you know, to to traditional finance people. You'd be surprised. It's a big it's a big thing for them. Uh and that second, um that you know what you're doing, meaning like, you know, you're not a bunch of like search funders.

um you're not, you know, a bunch of people, you know, this is separate from the MBA argument, but like you're not a bunch of people that haven't spent time in manufacturing, you know, shop floor, etc. And so our entire team are engineering and manufacturing folks.

So we spend our entire careers, you know, designing things for SpaceX, manufacturing things. Um, you know, we're also young, which I think people like to see, um, when when they're selling their business.

They know that just looking, you know, looking at the person across the table that they're going to be there for that for the next 20 or 30 years. So, I would say all of those things combined uh make it a pretty strong pitch um for for wine to sell to us.

Did you have this idea in mind or a rough idea of it when you decided to uh go back, you know, enter your next chapter? I remember it felt like a year ago when you decided to um move on from from active investing. It felt like I just remember that like instantly you shared it and it just was like everywhere.

Um and uh because people at that time it was like every non deep tech hard tech investor was like starting to pile into the category and then everybody's like wait if you do it I'm screwed. What are we doing? Uh it didn't slow anything down obviously but uh I'm curious like you know kind of the origin getting in this.

Yeah. I'm curious like how how the idea and the opportunity came together. Yeah. So, I you know, I spent three or four years obviously my career at Countdown. Um when I was 24 years old, you know, I started the firm. I I spent a lot of time, you know, with with manufacturing startups and also with mom and pop suppliers.

Like as part of my diligence for whether I should invest in companies, I would, you know, talk to mom and pops. And so I'd spend, you know, three or four years in the space.

Um, and it didn't really click, I think, until after I shut down Countdown that one, uh, the mom and pops, you know, have, uh, both the expertise, uh, and, you know, in in some cases the qualifications that you need in order to develop, you know, and manufacture and and, you know, bring the product to market.

Um uh and then it also didn't occur to me obviously when I was venture investing um that you know maybe there is a path where you can combine you know the mom and pop you know uh advantages with the the spirit the culture the talent of a startup right like when you're venture investing you know three or four years you know every single day your your mind is just like you know startup startup startup new things new things new things that's you're not even able to think about what does the future look like using something that already exists right um And so it wasn't until I had actually shut down countdown had a had like a month and a half to reflect think about what I had learned wrote down some wrote down some key you know themes um and and then you know started to iterate from there you know talk to people talk to customers in the industry talk to people at companies that are already you know building very successful ones both in startup world and in mom and pop world and that's when the vision started to come together like hey I am I'm uniquely in the center of these two movements right like I I helped I think start and invest in a lot of startups in this space.

Uh and and at the same time I I know a lot of people who are in the traditional in the traditional world and I should use that uh to to the maximum advantage that I can. I have one last question and then I'll let you go because I know you're busy today.

Um Charlie Mer criticized Trans Dime for buying aerospace parts manufacturers and then locking uh primes and and aerospace companies into long contracts, raising prices. uh it was a little bit of a controversial strategy but it's performed very well for that company. What is your takeaway from the Transdime model?

Transdime is actually a phenomenal business um and uh it's actually not the cause of of any of those issues.

Um the cause of the cause of those issues um certification lock in um etc etc has to do with decisions that were made 30 years ago um at uh you know the the top of Boeing which a paper right here you know basically pillaring that decision um but the decision at the top of Boeing to outsource every single thing that they do from from engineering and manufacturing at the component and and part level up to the product level and so transime is just a recipient of the system that was instituted 30 years ago.

So if you really want to change things, we believe that you have to start from the from the bottoms up for with the critical products, build your way back up in partnership uh with the customer to reverse that type of decision-m and culture.

And so yeah, my answer to that is I think Transime is actually a great business. They have they have run businesses very very well. They are in an environment that that was not created by them. Uh they have taken advantage of it, but it was not created by them.

And to to fix that, it's going to take partnership with a company like Apps. Well, that's a fantastic answer. Thanks so much for hopping on on short notice. Uh, congratulations on the round and we'll have to have you back. Yeah, I have so many other questions I want. We can talk for an hour, I'm sure.

Yeah, very excited for you and the team and excited to back have you back on the show soon. Thank you. Let's do it. Take care, guys. Great. Talk to you soon. Bye. Well, we are moving on to uh someone from FAI, the Foundation of American Innovation, I believe is they call it. FAI. org. The FAI. org.

I've been to a couple of their events. very fun. Uh Gary Tan spoke at one. Trey Stevens spoke at one. Trey Stevens been has been involved. Uh I went to one in San Francisco and there were actually protesters outside which is kind of fun.

Uh but they were like in in very good spirits and kind of like taking pictures with everyone. It was a lot of fun. Anyway, welcome to the stream. Boom. How you doing? Hey man, how's it going? It's good. What's going on? Thanks for hopping on. Uh game is on point as usual. Chill week. Chill week for you. You just