Justin Spaulding, the145.com

Hello everyone, Jeff Jerge with the Oyster Aero PearlCast and I am thrilled today to have Mr. Justin Spaulding from the 145. Justin, how are you doing? Great, Jeff. Thanks for having me on. Absolutely. Now, everybody's going to say, "Wait a minute, why is one marketplace having another one on?" And the truth is is I met you back in 2012, I believe. And it was love at first sight. I mean, I always uh admired what you guys are doing and um love what you all have done over the years between 145, Top Shop, all that stuff. So, we're honored to have you here. Thank you. Appreciate it. Yeah. So, um I always ask the founders kind of the same thing. How when did you find the company? what kind of made you do it? Just a little bit of story time around the startup of what you were working on. Yeah, so I mean I've been in the industry now for uh 25 so 31 years and I had been living in Japan for a long time in Tokyo uh working for a company over there. Came back to California started working for an aerospace company down in Irvine.

Yep. And uh for six years I worked as a a broker. And because I speak Japanese, I would go over to Japan and uh buy up all their surplus parts from the Japanese airlines. Uh that was the best thing ever. If you speak the language, you get a long ways, right, in life. That's just kind of how it works. So we we would just go and we'd buy up everything that these guys were unloading. But at the end of the day, we'd bring all that stuff into our warehouse. Then they'd send me the list upstairs and say, "Okay, these are all the parts we need to get repaired." And sometimes it'd be thousands of parts in these packages. Well, you can imagine this is all pro before the internet, right? And so I'd have to get on the phone and I'd have to get a minimum of three quotes for average uh cost to overhaul, repair, and test all the parts in that list. It typically take me about was 3 to four months of work just calling up. You know, you call and nobody answers the phone or I have to get back with you with price.

And so anyhow, six years after being there, uh I I moved on. I started my own company, brokering parts, and one day I'm driving to work and I'm listening to this uh conversation that the uh the host of the show is having with with one of his cl I guess a C what do you call it? His guest, right? and it says um yeah there's this new product out there that you could do on the internet uh where let's say you need plastic surgery now you just say this is the type of plastic surgery I need done and then all of these plastic surgeons then would bid on the work right that was the epiphany for my business today there's got to be a way to use this and then the idea was what if you took repair and you were able to give people an average cost to overhaul, repair, and test the part.

That's where the 145 was born. And so all we did is we built the database. Be honest with you, I built the system and was going to go out and get it populated. And financially, my brokering business was crashing. Uh I was neck deep in debt. I'd taken out a second mortgage on my home, which that money evaporated in no time. Uh, I had about six to eight credit cards that were maxed to the hilt. So, I mean, Amx had a hitman looking for me. I had borrowed money from all of my relatives. Um, I even went so far as to borrow money from a drug dealer. I don't recommend that. So, yeah. Uh, so I borrowed money everywhere I possibly could just to keep my parts business going and I'd taken the idea for the 145 today and I had just thrown it on a back burner. Came down to the end of the year. I think I had $300 to my name, a family with four kids, living in Southern California, a lease that I couldn't pay, cars that I couldn't pay.

I mean, dude, I was in so deep. And um crazy thing, I went to church that Sunday and um in in my church, we paid tithing 10% of our income. Uh I paid my tithing. I had $300 left afterwards. I thought, well, Heavenly Father, I give it up to you. You're going to have to help me figure this out, right? And the thought was um a few days later, hey, why don't you revive that 145 repair database that you started building that you couldn't get off the ground? Why don't you take the, you know, take that ACPC book, get all the emails, and just spam the whole world that there's this database out there that there's some pricing in it. And so I did just that. And lo and behold, we started signing up three four companies every day for about 4 months.

Wow. Yeah. So, I guess one important thing to one thing to to let you know is when we built the system originally, I had no pricing data. Sure. No pricing data. Well, how am I any different from anybody else? I'm not. Nobody's going to use my database. I won't share the name of the person or the company. But I talked to a repair center one day and I told him my dilemma and he says, "You know, I've got 25,000 parts in an Excel file with pricing on them." I said, "Could you share that?" And he said, "Yeah, I'm retiring in 4 days anyhow." So he gave me this file, this Excel file with 25,000 part numbers. Well, I didn't have an average. So the only way to create an average is I said you know what add 5% and subtract 5% from the prices that he gave us in order to create an average price.

And so everybody that would show up on that part I suddenly had an average. Nobody knew that I only had one price. But that's how we started and people started using the system and it just really took off from there. But today I don't think people realize how lucky they are. they can go to a system and they get some pricing because in the day you couldn't. Right. Right. And your averages have gotten a lot better since then. For sure. Yes. They're much better than one price per part now. And uh I assume you did pay off all your debts. Probably the drug dealer first, right? Absolutely. Drug dealer was first in line. That guy would call me and drop the fbomb non-stop. And so I'm like I said to my wife, "Hun, we got to whatever we have to do, pay that guy first. Just get pay him first. Get him moved on." So what year was all this? When did the 145 start? Uh let's see. We launched in 2000.

Yeah. We launched in 2000 and then good old 911 hit. Sure. Yeah. Not long after. And we weathered that storm barely. Right. We made Yeah. Yeah. That's awesome. So, yeah. So, 25 years, 24 years. Um, so I guess um how how what are like how has the system evolved over those maybe not so much early, but let's just say in the last five years, what's what's been new in the magic from repair capability and pricing? Well, so again, our special sauce has always been our pricing matrix. It's a place you can go from the 145 to see what the average cost is going to be to overhaul, repair, and test the part and turn time data. That that's why people visit our site. Um, I would say we've recently just finished all the beta testing on our autoquote feature.

Uh we have a very good large repair center that called us up and they said, "Hey, what are the chances you can build an autoquote feature that you can leverage all of the pricing we've already got in the system with you guys and just have this thing just send the auto quotes out?" Uh because pricing is not as dynamic on repair as it is on inventory parts. Right. So, Right. Right. So, we built that and it is blowing up. I have got companies uh we just just released it and but we're we're doing it systematically. It's just on uh phone call basis. So we're starting with the customers that utilize our database the most. Right. And of those that I've contacted uh nearly everyone so far has said yes. And so that system's up and running. So now when somebody searches a part the minute they click send RFQ um an auto quote is sent on that price from the history we have in the database. But more importantly if I'm an airline or supplier I don't have to wait to even look in my inbox anymore. I'm seeing the pricing real time right now on my screen. So that really helps customers on that turn time, right? I mean, I don't have to wait and sort through RFQS and that type of thing. If I'm in Asia, I don't get a quote till tomorrow. If I'm in Europe, I have to wait till the end of the day. That's if they even get back to me. Now, I don't have to wait. It's I get the price literally that quick and I can go through, sort, choose, done.

That's fantastic. And that's just rolling out now. Just started uh actually two weeks ago. Just started marketing it. And um we're putting everybody on 90day free trial and then after that it'll be a you know a pay per RFQ kind of thing. So congrats. Thank you. Yeah. Um the 145 is a family affair, right? Juliana, your sister, Zeke, her husband, your wife is in the background a little bit. Nepatism is alive and well at the 145. Yes. Well, I think that's what actually makes your company so much fun and relatable, quite frankly. Um, I'm a sucker. Maybe it's because my kids are coming of college age. Like, if if Oyster can get to the point where our kids ever get involved, like that is just really like that's that that's pretty inspiring. Um, so Topshop, now we just rolled out the um, Pearl Award and full disclosure, Top Shop is our inspiration. You've been doing that for 15, 20 years, I think.

Um, how did that come about and and how's that grown into what it is today? Well, you know, um, Aviation Week has had their uh, awards that their laurate awards that they do every year. Um, and that's been a great award, but it always felt um, a little removed for me, if you will, for our customer base. Um, they were giving out awards um, for more uh, general higherend type of things like innovation. It didn't have anything that really applied to repair per se. Sure. And one day I was just thinking, you know, if it's too bad that the shops don't get the recognition they deserve because without all these repair centers out there, dude, we wouldn't be flying. Right. Right. Yeah. The OEMs could never keep up with the amount of repairs that need to be done. And so I thought, you know, it'd be wonderful to create an award where their peers in the industry essentially select who the top shops in the industry are. So every year starting in July, we open up the top shop awards, the nomination phase.

Uhhuh. And we we open that up to everyone. So whether they're a a shop, an airline supplier, doesn't matter. Anybody can nominate anyone, right? Uh once the nominations are done and they're finished by December 31st of the year, uh in January, that very first week, we send out a finalist list for 30 different repair categories. So, everything from avionics and instruments, pneumatics and hydraulics, uh safety equipment, landing gear, you name it. Once we have the short list for each of those categories, then we allow the airlines and the suppliers. Only shops can't choose the winners. Only the suppliers and the airlines cuz they're the repair customer, right? Sure. And so, um, that goes for about 30 days and it shows up every single day on the 145. And so they they get in there and you know, you're getting 30,000 votes uh to select the top shops in the industry and it's it's always fun. Every year it's just a blast. And then we do a a big awards banquet usually. We did it at the top of the um Willis Tower, which was formerly the Sears Tower a couple years ago. We did it at the um aquarium last year in Atlanta.

Uh, and then I think new for next year, we're probably going to go still do the banquet, but on top of that, we have going to have a top shop booth at the MRO, uh, 20 by 20, uh, where we'll share half of that space with all of our top shop winners. They can come hobnob with people, uh, you know, and talk about their companies, whatnot. It's just a way for them to get more exposure other than just three hours in an event. They're going to get three days. So, that's really cool. Wow. Yeah. Well, I'll tell you one of the things that I've always loved about you is um and the 145 is, how do I say this? Seems like some marketplaces have forgotten that their job is to help and shine a light on their customers, right? And you all have all been really good about making sure that the repair centers are taken care of and that the uh customer base is as well. like it's it's mostly about them, not about you so much. And that's something that um has always stood out and that's why I think the industry really appreciates what you do among many other things. So yeah, I would say that that's definitely been part of our culture since u the outset, you know, when we first got started. uh because at the end of the day the the database is only as good as as what people share with us on things that they would like to see incorporated or changed, right? Y so it's it's really a um uh it's a collaboration between us and the customers just like on this auto quote for example, we released it knowing there's probably going to be a lot of things we're going to need to change or we're going to need to add.

And so sure enough customers come back and they say hey can we blacklist certain companies and uh you know can you do this can you do that? So yeah I mean at the end of the day I think successful businesses if they focus on the customer and they focus on making things easy that easy button we talk about all the time. Yep. That's the special sauce you need to have a business grow and be successful. Well thank you very much and I agree with you 100%. So, um, last question. How is surfing going? [Laughter] Well, I'm landlocked at the moment, but uh I I am going I do live down in Costa Rica most of the year, so I'll go back down uh August up here in the States, spend some time with my family, but we'll go back down. And yes, the surf is great. Good deal. Good deal. All right, don't share that secret with too many people. No, we won't.

All right, Justin, it was great having you and um we really appreciate everything that you've done, everything that you're doing and uh we'll be looking