[pembrook]

> These businesses must overcome the ingrained purchasing habits of hospital systems, medical supply distributors and state governments.

I’m guessing this is the real crux of the problem. They’re trying to sell to some of the most glacial organizations on planet.

The bigger the organization, the slower it moves. Purchasing cycles can take anywhere from 6 months to YEARS if you’re talking big business or government.

This is also why B2B and B2G are such lucrative markets to be in.

Having a bunch of lazy, stumbling giants with basically unlimited money as your clients is the holy grail. Once they’ve been sold, they literally CANNOT stop buying from you if even they wanted to. It’d be a year before they could even get another supplier approved! Talk about low churn.

[lloydarmbrust]

I don't agree with this. I run ArmbrustUSA and can make about 1MM masks per day, and we started at the same time as this company.

I think they are just bad at sales.

We have government and hospital contracts. But, we are really good at sales. My team is really good at sales. Previously, My President and head of sales ran a medical sales division at a company with 300 sales people. We have about 17 sales folks. And we wouldn't be thriving without that team.

They also might not be great at manufacturing.

There stuff is really expensive. They are selling an ASTM Level 3 mask for $37.5 + $8 Shipping! That's $0.90 a mask delivered.

https://shop.demetech.us/collections/surgical-mask-astm-leve...

I can buy a Chinese made ASTM Level 3 masks delivered for $0.18 FROM CHINA.

How can they win charging 5 times more? Because "America"? That argument is many a 3x multiple :)

If I were to guess by looking at all their photos, it looks they have a very manual process for making masks and packing masks. We've had to semi automate the packaging process to survive (which no one else has done). When we fully automated it later this year we will be able to sell our masks much much cheaper than China can.

Our masks sell between $0.20 - $0.59 which is still too high, but all of our margins go directly into investing in the product.

[josefresco]

You guys are so good at sales, your N95's are sold out :( https://www.armbrustusa.com/products/pre-order-n95-mask-10-p...

"If we do not get approval, you will get your money back. You can also cancel at any time."

What does this mean? Are they sold out or are they waiting on government approval? Not very confidence inspiring.

[offtop5]

Really off topic, but I'm rather impressed you were able to get up and running so fast. Did you have a ton of experience in this space ? Did you have to raise funding ?

[johnchristopher]

> When we fully automated it later this year we will be able to sell our masks much much cheaper than China can.

Is not shipping from China to the US a big part of the cost savings ?

[jjeaff]

When things like masks are shipped from china via container, the shipping cost per unit ends up being exceedingly small. Probably less than a penny per mask.

[mathewsanders]

I worked at Monster.com (job posting service) ten years ago and this was essentially their business model: HR departments would be locked into a long term contract of 2-5 years, which was (anecdotally) a longer period than typical HR manager role who would approve a contract like this, so they would often not even be around for a renewal and whoever replaced them would be sucked into signing another long term contract.

[x0x0]

> The bigger the organization, the slower it moves.

That is in some ways true. However, the ability to manage a complex sales process is a good proxy for ability to manage customer stakeholders and do the project planning and management required for success.

eg if you can't manage a complex sales process, the probability a vendor is mature enough to ship eg 2mm masks/month on time, with appropriate quality levels, and with the resources to manage production disruptions is quite low. And that's what hospital systems want to buy.