Christmas Presents Until the End of Time?
“So, do you think it’ll go? Do you think they’ll sell?” Mike Moffat asked, looking at the first assembled Asgard on the engineering bench in my garage. He was being Mike-fidgety, rocking from heel to heel in the small, chilly space.
“Well, on paper it looks good,” I told him. “But you know how that works. They’ll either sell, or we’ll have Christmas presents until the end of time.”
Mike laughed, a little nervously. Because he knew how it goes. You can plan and study, do endless market research and cost studies, run focus groups and get tons of input from key prospects and do all the little things that companies do to procrastinate and dither and second-guess before putting out another “gotta have” product…and things can still go sideways.
But this isn’t a story about stuff like that. This is a story about gut feelings, good guesses, and not following the herd. And succeeding.
This is the story of Schiit Audio, the world’s most improbable start-up.
Yes. Schiit. Let’s start with that as an improbability factor. What company in its right mind would name itself that? I mean, if you were a marketing agency and proposed that name to a client, how would they react? You’d be picking your butt up off the pavement outside their headquarters, post-haste.
But that isn’t all that made us a crap candidate for succeeding. Consider:
• We started this with no outside funds, no VC, no crowdfunding
• We’d both been out of audio for about 15+ years—more on that later
• We went with direct sales, even though that had only really worked for one other company—Emotiva
• We started with no staff, in my garage
• We decided to make everything in the USA, even though the prevailing wisdom of the time was “China’s the World’s Manufacturing Floor, why even try to compete?”
• And, in a complete burst of insanity, we decided to start with inexpensive products
Ah, and it’s now probably past time I introduce myself. I’m Jason Stoddard, Co-Founder of Schiit Audio. Mike Moffat’s my business partner. Our official titles are “Head” and “Number 2” respectively. Hey, Mike asked for it. No, we don’t take ourselves too seriously here.
I won’t bore you with our full CVs (that’s fancy-speak for wut we dun), but you may have heard of Mike Moffat. He was the founder of Theta (the first one, the analog one), in the late 1970s. You can blame him, at least in part, for resurrecting tube audio. He was the first person to use 6DJ8s in audio. He installed Philip K. Dick’s stereo systems. He sold amps to L. Ron Hubbard (no, you can’t make this schiit up). Then, in the 1980s, he became the Father of the DAC with Theta Digital. His DSPre was the first standalone DAC on the market, and it was a showstopper—its own digital filter algorithms running on Motorola DSPs so powerful they couldn’t be exported into the Soviet Union, for a start. Theta mopped up in the DAC world for several years, then Mike founded Angstrom, the maker of the world’s first upgradable surround processor. From there, Mike moved into entertainment, creating complex systems for digital movie distribution. At least until I tempted him away with Schiit.
I’m…well, I’m confused. I’m a published, award-winning science fiction author (strangeandhappy.com), a summa cum laude BS Engineering analog geek (schiit.com) and 20-year veteran of the marketing wars at another company I founded (centric.com). I’ve done stuff as strange as lecture Harvard professors on virtual world marketing, and as driven as earning my way to Vice-President, Engineering at Sumo at age 25, which nominally made me Ed Miller’s boss—he was the founder of Souncraftsmen, Sherwood and Great American Sound, and head of engineering for SAE, to drop some names. Not that Ed cared, he just did his own thing. He was cool.
I’m the one writing this book. You can blame it all on me. I have no illusions of this being a best-seller, or of it changing the world. But I think we have an interesting story—one that others can learn from, both in and out of audio.
“Oh yeah?” you ask, leaning back and crossing your arms. “Well, I ain’t gonna read no sixty thousand words about some small-time company just to get few phrases that belong on Sucksessories posters.”
Cool. Gotcha. So I’ll cut to the chase. If you’re only interested in business intelligence, you won’t have to read any further than the next 7 bullet points:
1. Shooting to be the next billion-dollar mass-market company is insane—you might as well buy lottery tickets.
2. Niche is where it’s at—specifically a niche where people can get in fistfights over the color of a knob.
3. Pick a niche you know and love and do something nobody else can do—"me-too" never works.
4. Be memorable—this isn’t about getting everyone to like you, this is about getting some people to love you.
5. Go direct—distribution is a poisonous remnant of 19th century economics in a disintermediated world.
6. Run from both conventional marketing wisdom and the social media mavens—both of them are geared towards the mass market with eight-digit ad budgets and multiple decades to build a brand.
7. Don’t think this'll be easy—this is hard work, but you’ll also be having a whole lot of fun if you’re doing it right!
Okay, now you’re skeptical. You’re thinking: But I just read a book from (insert the name of some multibillion-dollar-valuation corporate CEO here), and he said it’s easy to reach the masses and change the world, and it seems like anyone can do it, why would I shoot for less than that?
That’s cool. That is, if you’re lucky enough to come up with something different enough to merit venture funding, if you get through all the rounds with the team and product intact, if something better doesn’t come out of nowhere, if the public whims don’t change, if you don’t get ousted before the real money starts, if you’re cool with 100 hour weeks and lots of travel and losing touch with the real fun of creation and becoming a new salesman with his dog-and-pony show for the money guys in Silly Valley or Singapore or wherever the money is in this moment, more power to you. Go ahead and create the next Amazon, Apple, Facebook, or Google. This book isn’t for you, and you can stop reading now.
But I have a lot of friends who have gone down that route. Brilliant people. Hard workers. They don’t have any problem with all of the above. They go even farther, begging and scraping to keep the team stapled together when the money gets thin, mortgaging everything they have on the One Big Idea…
…and doing it again when the first one doesn’t get past angel funding.
…and doing it again when the second one doesn’t get its second round.
…and doing it again and again and again, as many times as it takes.
Bottom line, there are plenty of billion-dollar ideas out there. Making one into a real company that succeeds isn’t just a lot of work. It’s about money, luck, connections, money, luck, money, and luck. And more luck.
This story is for people who don’t have a lot of the above. For people who are shooting to create a company that might do a million a year, or ten million, or maybe a hundred million, eventually, way out in the future.
So, if you’d like to know more about where we came from, how we got started, why the crazy name, where the fixation on Norse mythology came from, our first successes, our first failures, what we screwed up later (hell, if you buy anything from us after reading how much we mess things up, it’ll be a minor miracle), how we develop products and market and go to shows and work with suppliers and do everything in the USA except the Magni wall-wart, and about ten thousand other things, read on.
If you’re looking for a story that will make you an instant millionaire, cure cancer, repel an alien invasion, or thwart the plans of an evil CEO to turn the world into a dystopic corpocrat future, you’ve come to the wrong place.
Oh, and about those Asgard Christmas presents?
To date, we haven’t had to give a single one away. In fact, staying in stock through the holidays is one of the hardest things to do around here. Yes. Even 42 months later.
And with that, let’s flash back 20+ years…