19 Year-Old Builds Staggering 200M Global PPE Medical Supply Chain Helping Millions During COVID
Jack (Bi Tian) Yuan was no ordinary college student. After spending time in China back in January of 2020 when the country began mandating the use of personal protective equipment (PPE) and quarantining cities in an effort to stem the spread of COVID-19, Yuan astutely anticipated the virus’s inevitable global impact. Quite early on, and even amid some reports to the contrary, Yuan foresaw that the deadly virus would quickly spread from one country to another and ultimately burden the entire world. With this profound certainty, Yuan stuffed two suitcases with masks and went back to California, where he was attending Stanford University.
Then just a college freshman, Yuan’s front-line experience in China’s chaotic, panic-laden early days responding to the pandemic stuck with him. In short order, those indelible impressions inspired him to spend his shelter-in-place “lockdown time” procuring more PPE supplies from the region—an effort that gained quick traction and duly morphed into a bona fide call-to-action-driven business. And so, then at age 18, Yuan became the incidental and unlikely owner of Tianchi Medical—a global B2B medical supply chain company that has since collaborated with hospitals, governments, nonprofits and businesses to help bring critical PPE to organizations around the world.
So successful is Yuan’s company that, since launching in early 2020, Tianchi Medical has supplied over 600 million PPE products and recorded a staggering $200 million in revenues. These numbers are made even more impressive when one considers the macro stress China was under during that period as, especially relative to supply chain and procurement activities, companies worldwide depend on production facilities in the region ... and the pressure was on.
Beyond Yuan’s stunning sales and revenue metrics, another of his company’s most valued accomplishments is exceeding one million PPE donations to nonprofit organizations worldwide. Beneficiaries have included Ronald McDonald House Charities of Philadelphia, Masks2all, the Pamela & Ajay Raju Foundation, Paper Bridges and the COVID-19 Mutual Aid Solidarity Network.
Below is a Q&A with Yuan, who not only explains some of what led to his surprising and early success in the medical supply chain sector, but also what he has his sights set on up ahead.
What exactly is Tianchi Medical’s overarching mission?
TianchiMed’s mission is to deliver low-cost, high-quality Personal Protective Equipment (PPE) to countries, organizations and businesses that are protecting their populations against the COVID-19 virus with the shortest amount of lead-time. At Tianchi, we believe that everyone deserves access to PPE and we have built factories, a 60-person team and more than six global partnerships to make that a reality. Since our launch in March of 2020, TianchiMed has worked with federal governments and local hospitals from the U.S., Canada, Brazil, as well as local pharmacies, sports leagues and corporations like Amazon and Home Depot to equip local communities with life-saving PPE for their frontline workers and citizens.
Tell me a little about your background and how it led to the idea to launch Tianchi Medical and build a PPE supply chain?
I started my Stanford education with a major in Symbolic Systems and a minor in Philosophy, but I entered the PPE industry in March of 2020 after returning to China alarmed at the serious nature of the COVID-19 pandemic. Understanding the need for PPE supply during this dire time, I left the Bay Area to establish TianchiMed in Guangzhou, China, to contribute to the fight against COVID-19. Using data on (1) the number of daily international inbound flights in the U.S., (2) the rate of use of public transportation, (3) the reproduction number of COVID-19 and (4) the number of healthcare workers in various part of the world, including the US and Brazil, I foresaw and understood the imminent threat of coronavirus and (5) began putting together a business plan. It was with this plan that I launched TianchiMed that began to supply masks to the federal government of Brazil in late spring and to other national stakeholders around the globe.
My idea for TianchiMed was simple: I wanted to create an effective solution to the PPE shortages across the world. I saw essential workers were not receiving enough PPE supplies as they were combating COVID. Part of the problem was that PPE suppliers were spending too much time negotiating on PPE commission, which caused long delays in getting the product to the end consumer. Also, on the product side, there was a lack of quality controls as new manufacturers entered the market with no previous PPE manufacturing experience.
To meet my vision to provide quality PPE as fast as possible, I vertically integrated all of the steps of providing PPE supplies to healthcare workers. Although initially I was simply a connector between different deals, I quickly became an exporter, local distributor with warehouses, as well as a factory owner for gloves. With this vertical integration, I am now solely responsible for the qualities of the products and can ensure my team to coordinate under my goal.
Another problem I was proud to help solve was employment for my workers. Through local hiring practices and job security, I was able to help my team have a livelihood during the pandemic. Unemployment rates skyrocketed and at one point I was one of a few employers actively hiring. I also leveraged my network to build out remote support teams at my warehouses in New York, Brazil, Hong Kong, Los Angeles and Canada.
What were the initial steps you took to get TianchiMed off the ground?
Upon returning to China, I surveyed mask factories and negotiated with no fewer than 200 manufacturers and 20 different freight companies to secure high quality PPE equipment at affordable prices for the end users. I then worked closely with friends back in the U.S. and Brazil to help procure PPE supplies for local governments and hospitals who were in dire straits.
Building a supply chain in a brand new space was tough. China’s annual production capacity has more than quadrupled within the span of two months, but that also brought forth many quality issues and fraud. Additionally, new regulations being introduced every few days disrupted all the existing orders. Fraud was also getting so bad with the masks that even just a few days ago we helped bust a dozen people replicating fake N95 masks. At the same time, coming in with zero knowledge of how mask production and procurement work, there was so much to learn about different mask standards around the world. Sometimes the factories themselves don’t even know if the masks are up to the standards of another country because the mask space had been relatively small before COVID-19.
Having little knowledge of how a supply chain works or how to differentiate quality standards didn’t help. As a result, I was trying to learn everything and also build up a team to help with all the legal, logistics, sales and quality control issues that I was encountering. I was responsible for making sure our factories were honest and of high-quality, our clients weren’t pulling out at the last minute, freight companies were delivering on schedule, lending money and making sure that our cash flow is healthy, while neither the Chinese nor the American customs were holding our stocks and also dealing with the everchanging customs regulations and politics in both countries.
In the morning I would wake up at 6 AM to receive daily reports and have meetings with partners and governments in the other parts of the world before they go to bed. And then lunch is a separation line. I would take a 30-minute nap after lunch and start traveling and meeting with factories, freight companies, quality control teams, customs teams and my lawyers all the way until dinner. Then I would take another nap right after and then go on meetings with my clients and partners from the Western Hemisphere again. I usually would end up going to bed at 1 or 2 AM, only to wake up at 6 AM again.
What marketing and operation strategies are you adopting—particularly those helping you be cost-conscious?
We try to vertically integrate the entire supply chain as much as possible so we could deliver the highest quality PPE to our customers at the lowest prices. This includes constructing our own gloves factory, building up our own logistics/exporting team instead of outsourcing, or establishing our local warehouses in New York, Los Angeles and Brazil. With almost 100% control of the product when they roll off the factory belt, I can ship or fly them into regions where I had existing customers or had foreseen demand under a week. Through vertical integration, we are also able to cut down a lot of the extra fat and therefore reduce prices for our customers. We also negotiate down the freight cost and raw material cost with our massive quantities.
Our No. 1 priority is quality and that will never change, so we will not cut any corners there. And in a cost versus quality analysis, quality always wins. In the case of PPE that can mean life or death. We take that responsibility seriously at Tianchi, which is why we only work with the best manufacturers and we do ongoing Q&A and rigorous onboarding testing. When we send out a shipment, we want to be confident that each item is of the Tianchi quality that our customers have grown to know.
Are there any strategy mistakes you have made and, if so, what did you learn?
Early on, I remember going out to talk to suppliers who claimed to have “masks” or factories that have zero quality control in place. Since it was my first time operating a business, I trusted people that I should not have, paid them and received products only to realize that they were counterfeit or not what was specifically listed on the contract … only after I received them. I was disheartened to see the level of fraud and low-quality products out there, especially when it came to something as important as PPE.
Another mistake that I made when I launched was that I was too cost-conscious and thought that I alone could have handled the majority of the exporting process. After being scammed for the first time, I quickly realized that I needed a collaborative team that could handle the detailed operational work so I could focus on scaling the business and the larger strategy. This is when I knew that I needed funding so that I could hire a team that could help me scout factories and perform quality control to work with some of the best-in-class manufacturers. With the help of a few small investors, as well as results from a few small PPE deals that we did, eventually we were able to raise $10 million dollars to prepare ourselves for the Brazil 240 MM Masks deal.
My strategy since has been to own part of the factory or build my own factory from scratch just so I can have peace of mind knowing my products are of the quality needed.
What challenges did you experience, and ultimately overcome—and did your youth factor in?
The PPE space is a mess. Last March, there was very little regulation in place for masks and gloves because only less than 1% of the entire population used them daily. And when everybody needed masks, the quality didn't matter as long as they looked like a mask. Eventually I learned to build my own quality control and regulatory team to help me standardize the mask manufacturing process at our partner factories and now we have also finished building our own gloves factory that complies with the International ISO quality standards.
One of the largest challenges that I faced when starting out was the lack of business experience that came with my young age. Although I have dabbled in a few science research competitions and tried launching my own startups with friends, this was my first time making transactions and deals with value larger than $1 million. I needed to learn everything from scratch—the exporting and importing process, taxes from Brazil, the U.S. and China, custom clearance, UPC codes and the packaging design of the masks and gloves, creation of a factory with high-quality standards and running a 50-person team. Prior to 2020, I had no experience with any of this. I failed fast, but I also learned fast.
Can you share a story when you have been customer-obsessed?
The ethos behind TianchiMed has always inherently revolved around being customer obsessed. However, I do not only see my paying partners as my customers. My customers are also the numerous non-profits like Masks2All, MaskOakland and Paper Bridges that I have helped donate close to one million masks to. A recent story of being customer obsessed was around Chinese New Year—arguably the busiest time of the year in China as we close out the year. While I had an endless to-do list, I prioritized reaching out to our non-profit partners Masks2All to ensure that they had all the PPE that they needed for the first half of the year. It turned out that they needed 100,000 more masks and I worked with my team to make sure that those were sent out. I started Tianchi to make a difference and our mission and supporting our partners will always be at the top of my to-do list.
When you started Tianchi, did you know you wanted to have a giving program? Or what inspired it?
Growing up in New York City, I saw firsthand the lack of access to resources in certain local communities. When I set up community programs to teach young students coding back in high school, I realized that the local, underprivileged communities will almost always come last when it comes to resource distribution. When COVID-19 hit, my first thought was that they would be the last in line to get access to life-saving PPE, just like any other resources, and that I needed to do something to help.
When I launched Tianchi, my top priority was to create a giving program to donate masks directly to non-profits like Masks2All. The goal of my giving program is to equip community partners with the protective resources they need as they help support the most vulnerable, at-risk populations here in the United States.
I recently delivered 50,000 masks to Masks2All and another 100,000 masks to FourOxen, bringing my total donations up to one million.
How do you choose where to donate your masks to? And how did you find Masks2All?
After COVID-19 hit the west coast and sent everybody home, I heard through a Stanford friend of the incredible work of Masks2All, a local organization in Berkeley, California. As I was launching TianchiMed’s giving program, I knew they would be one of the first recipients of our masks. At the same time, I reached out to many of my other friends at Stanford and UPenn looking for potential non-profits who I could partner with to distribute as many masks as possible.
When I launch new giving partnerships, I make sure they are a reputable organization in their community. My mission is to ensure that everyone who needs access to PPE has it and I want to work with organizations that align with that and do not discriminate.
Although you have adeptly built a $200 million PPE supply chain in an extraordinarily short amount of time, you’re known to be “ready for more.” What does the future hold for you?
We do anticipate demand for quality PPE supplies will remain strong over the near-term years ahead. We will continue to aggressively expand our reach into more hospitals and medical facilities throughout the countries in which we currently operate and we will continue to expand into new territories as well. Along the way, we’ll be cultivating longer-term relationships with end-users like doctors and other healthcare workers so that, even when the COVID-19 pandemic is under greater control, we remain a go-to source for quality, medical-grade face masks and gloves. We will also certainly be logistically well-positioned to respond and react to any new infectious disease crisis that may present in the future and will work to ensure that our industry customers are equally prepared. At the end of the day, it’s all about helping people stay healthy and, ultimately, saving lives.
In all, Yuan is a study in being bold and taking educated entrepreneurial risks. When he started out last March, he never dreamed that he would ultimately build a business that has distributed over one billion pieces of PPE around the globe. Yuan’s unlikely business success is proof positive that, regardless of age, as long as you have the drive, vision, confidence, tenacity, heart and a strong support team, what you build today could very well leave an enduring and meaningful impact on the world of tomorrow.
There is perhaps no greater company mission than that.