Want to Manufacture Your Products in America? Three Founders Share Hard Truths On What It Takes. Manufacturing in the U.S. today is not simple or cheap. "There is no playbook. You just need to be willing to jump in the deep end and figure it out."

Ten years ago, "Made in America" was a niche claim, made mostly by craft-conscious entrepreneurs. But today, Morgan Stanley is hailing it as a $10 trillion opportunity. At a time when even diseases are politicized, most of the country agrees that we erred in outsourcing our manufacturing overseas during the last several decades — a mistake the pandemic shoved in our faces as foreign supply chains crumbled.

The Biden administration passed several initiatives to bring production back to these shores, and President Trump has started imposing tariffs and duties on imports to do the same. The momentum is not lost on early-stage investors like Jared Friedman, a general partner at Y Combinator (YC) — the Silicon Valley cultivator of startups like Stripe, Airbnb and DoorDash — who put out a call last fall for founders with ideas to innovate manufacturing in the U.S. "We've allowed ourselves to be outcompeted by other countries," Friedman says. "It's of paramount importance that we regain the ability to make stuff here."

In many cases, this means going back to square one. Founders must piece together supply chains, manage those supply chains, and contend with skilled labor shortages and higher wages. It costs more to make things in the U.S., so founders must also convince customers to trust their more expensive product.

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"It's very difficult to build these kinds of companies in America now," Friedman admits. But YC has funded a few businesses that have hurdled the obstacles. "What I've learned is that there is no playbook," he says. "You don't have to know any particular thing in order to start. You just need to be willing to jump into the deep end and figure out each problem as it comes up."

So how do you do it? We take a look inside three very different companies that got it done.

Making affordable clothing in America by partnering with Walmart

Bayard Winthrop is a guy who likes big dogs and the textural aplomb of a classic Woolrich flannel shirt. He spent his early career running sports-equipment and footwear companies, and it started to bother him that as soon as the businesses got going, he'd have to do what everyone else did — ship the manufacturing to another country, usually China. Finally, in 2011, he decided to get off that treadmill and start his own 100% American-made company that produced the clothing staples he grew up loving: flannel shirts, sweats, and cotton tees. He called it American Giant and started with a humble hoodie.

After rehabbing a knitwear cut-and-sew facility in Middlesex, North Carolina, one challenge followed another. But all along, the biggest obstacle has been the cost. "It's just more expensive to do things in the United States," says Winthrop, "and for good reasons, by the way, because you have to comply with human rights and environmental laws here." But that translates to higher price tags for American Giant's clothes, with T-shirts running $40 to $65 and most sweatshirts $120 to $138. Despite the higher quality, the value proposition can get lost on consumers in the blinding dazzle of fast-fashion prices. And many folks simply can't afford the brand. Winthrop kept banging his head on how to get the price down, hoping he'd achieve enough scale or enough something. "But in the last three to four years, I began to think we weren't going to overcome that hurdle," he says.

Then in February, 2023 — a year when only 11% of the apparel purchased in America was made domestically, according to the U.S. Department of Commerce — he was on a podcast called The Way I Heard It. At one point, Winthrop was ranting against brands and big retailers — but paused to point out that Walmart had actually made a commitment to selling goods produced here, adding $350 billion on top of an earlier $250 billion to carry out the initiative. His comment made its way to someone at the retail behemoth, and Walmart invited Winthrop in to chat. Maybe they could collaborate on a line? "I had this internal battle of, like, Wait, isn't Walmart terrible?" Winthrop admits. "Haven't they hurt manufacturing and Main Street in ways that I'm trying to repair?"

He took the meeting anyway, and was happily surprised. The company offered him a durable commitment — "a long-term investment by agreeing to purchase a set number of shirts, providing American Giant the assurance to invest," as a Walmart spokesperson described it.

Winthrop decided to go for it. The sudden leap in volume was daunting, but Walmart's backing enabled him to start with a single T-shirt and scale up slowly. First, American Giant entered a joint venture with a manufacturing facility in Los Angeles — where skilled labor is much more available than in North Carolina — and they hired 75 operators. Next, the facility invested around $1 million to automate processes like fabric-cutting, screen-printing, and label-setting. Sixteen months after the podcast, American Giant had a T-shirt ready to sell at a competitive price: $12.98. It wasn't as high-end as the brand's original tees, with their combed fine yarn that's smoother to the touch and side stitching, but it was still the kind of hardy quality he could proudly stand behind. On it were the words "American Made," and in a marketing coup, it landed in 1,700 Walmart stores on the 4th of July.

After the T-shirt got what Walmart called "an encouraging response from our customers," American Giant launched a sweatshirt in January for $39.98, and plans to continue the partnership. The infusion of volume has helped Winthrop pull the company out of a post-pandemic slump: "2022 and 2023 were very tough," he says. "And '24 started slowly. But then just like, boom, boom, we were back to real growth, and this year is going to be really strong." With north of 220 employees and four brick-and-mortar American Giant stores, Winthrop is hopeful that as they continue to scale their Walmart line, they'll be able to bring the brand's prices down as well.

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Making watches in America by rethinking labor training

When R.T. Custer set out to make watches in America, it seemed he was up against the impossible. This was in 2013, a year before Custer graduated from college, and he quickly discovered that skilled watchmakers are practically an extinct species in this country. Almost no one is making the components, either. But, he says, "I believe you have to start somewhere."

For him, that place was the dusty drawers of pawnshops — where he discovered lots of American-made antique pocket watches in various states of disassembly. With a friend, Tyler Wolfe, Custer started buying the old parts and combining them with modern pieces and leather straps, and (with a little help from software and 3D printing) fashioning them into one-of-a-kind wristwatches. They founded Vortic in Fort Collins, Colorado, with $40,000 raised on Kickstarter. Twelve years later, Custer has a team of 10 people who create 300 to 400 unique timepieces a year that sell for $4,000 to $5,000 on average. "It's a nice American small business, and I could stop there," he says. "But I want to build a big American watch company with multiple brands, like you see in Switzerland."

In 2023, he took the first step. With another Kickstarter campaign, Vortic launched a new brand: Colorado Watch Company. This time, the mission was to make fully modern automatic wristwatches. The lack of skilled watchmakers, or horologists, has hardly gone away — a problem, apparently, even the Swiss are feeling. But he started finding talent in the most unlikely populations.

The first was disabled veterans. Custer came across the Veterans Watchmaker Initiative in Delaware, a nonprofit that teaches former military members the skills of horology. Now a supporter, he has hired one graduate so far. His big break, though, was meeting Kunal Naik, whose FTS American Manufacturing in Mesa, Arizona, trains local high school students and adults, including those with autism, to make watches. Naik had discovered that most people aren't attracted to these highly repetitive jobs that demand meticulous attention to detail and spot-on precision, but neurodiverse individuals often excel at them. By 2024, he had a whole team, including some with autism, building automatic movements — the fine machinery behind the face that Custer desperately needed for his new brand.

Custer now buys the movements, fully assembled, from FTS, and customizes them in his Fort Collins facility where he also produces the outer parts like the face, case, and crown. But FTS' movement pieces come from India, and figuring out how to manufacture them at scale domestically is an intimidating next step.

"The only way to solve that problem is to license or acquire the technology from a Swiss or Asian movement manufacturer; doing it with American engineers and designers would take 10 times longer and cost 100 times [more]," says Custer. "But I've found a few potential foreign partners who seem open to helping Americans bring at least some of this high-tech manufacturing here. I'm confident."

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Making chemicals in America by serving niche markets

The phrase "Made in America" is often associated with consumer products. But it's a powerful selling point in other industries too — like, say, chemicals.

Gaurab Chakrabarti and Sean Hunt have discovered this with their sustainable industrial chemical startup, Solugen — although their path to local manufacturing was unexpected.

Solugen itself was born from a longstanding poker game, where the two then-graduate students started talking about the technologies they were working on. They soon combined their expertise (engineered enzymes and metal catalysis) in a radical way to convert corn sugar and other plant substances into chemicals traditionally made with fossil fuels like petroleum — all with zero to low carbon emissions.

"Our original vision," says Chakrabarti, who now has an MD and Ph.D., "was to build a traditional chemical facility with better technology and fit into the existing supply chain," much of which comes from China. But without VC money and at no scale to speak of, they were hardly in a position to build a plant or wrestle clients away from industrial chemical giants. First, they just needed to generate revenue from their innovation. And in trying to do that, they discovered the opportunity to manufacture in America.

It started in 2017, when they took a trip to The Home Depot for a PVC pipe and other supplies, and cobbled together a prototype reactor. The first chemical they made was sustainable hydrogen peroxide, and they realized that — by adding some organic acid — they had exactly what float spas needed to clean their sensory deprivation tanks (a New Age fad revived by NBA player Steph Curry). The clientele wasn't exactly who they'd had in mind, but these were customers who typically didn't get great service from the huge chemical companies. That left the door open for Solugen to step in, offering a cheaper product along with a predictable supply and the ability to change the chemistry (say, to a lower pH) if needed.

"Pretty quickly, we were doing $12,000 a month in that business, which for two guys and a PVC pipe was pretty good," says Chakrabarti. "The big insight was that this middle market is not small. The chemicals industry is $6 trillion, and at least $1 trillion of that is accessible through this type of model. I'm of the opinion that if you have a niche that you can win in because of your technology, you should go all in. Then tell the bigger story later, as you're building up these profitable business lines."

So that's what they did. By 2021, they'd raised enough money to buy a polyethylene wax distillery in Houston that had exploded, and refurbish it with their technology. In the beginning, their plant specialized in water treatment chemicals serving clients mostly around the state. "It wasn't like we had this aha moment of like, Oh, we have to be the American chemical company," says Chakrabarti. "We stumbled on it out of necessity. We had to take this more localized approach to be profitable. We saw that with our technology, we could service a pretty big part of this industry that no one else wants to take care of. And this was our kind of white space."

It became increasingly clear, however, that "American-made" was a competitive selling point. With so many chemicals originating in other countries, especially China, Chakrabarti says it's logical to ask: "Where could this become a national security problem and a supply chain problem?" Chemicals are used in weapons systems and defense, for example, as well as data centers. "It's easy to slip a chemistry into that solution that effectively causes your whole entire server rack or GPU system to shut down."

Solugen began manufacturing chemicals for both of those markets, along with renewable fuels. Its American sourcing helped lead to partnerships with global multibillion dollar companies like Kurita and Sasol, and today Solugen ships over 200 million pounds a year of more than 20 products to customers in the U.S. and South America, while on track to open a new 500,000-square-foot plant in Minnesota. "Really understanding in intricate detail what the customer does on a day-to-day basis," says Chakrabarti, "has helped a lot."

For any entrepreneur looking to bring back manufacturing to America, whatever the product, Chakrabarti warns that it's inherently a plodding business. If you're an innovator trying to change the world fast, you'll have to be patient. He also stresses that if you're taking on a huge industry, don't go in trying to disrupt everything. Start by finding the micro pain points that you're literally the only person on earth trying to solve. "You know high density polyethylene?" he says. "Today it's one of the most widely-used plastics in the world. And that market dominance all started with the hula hoop."

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