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Schiit Happened: The Story of the World's Most Improbable Start-Up

Discussion in 'Jason Stoddard' started by jason stoddard, Jan 23, 2014.
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  1. Jason Stoddard
    Hey all,

    I’m Jason Stoddard, the co-founder (with Mike Moffat) of Schiit Audio. You may have seen some of my posts on Head-fi. But you haven’t heard the full story of Schiit…why we started the company, how we’ve grown from June 2010 to today, the good stuff…and the bad stuff.

    So, in a burst of insanity, I thought, “Why not turn this into a book?”

    Why? Well, in addition to Schiit, I’ve written plenty of stuff, including about 30 published stories and 3 books. Jude and the team at Head-fi were kind enough to provide this space for me to serialize this story. The plan is to post a chapter a week until it’s done, which should take us through the summer.

    Now, you may be wondering, “Why the heck should I read some crazy book about Schiit?” Well, there’s nobody forcing you to. But if you’re interested in the inner workings of a true by-the-bootstraps startup (did you know we started in a garage, with no external investment?) or if you’ve been thinking about starting your own business (beyond the usual platitudes of “hey, you should incorporate, and there’s this stuff called ‘cash flow’ and stuff), or if you’re just curious about how a modern audio company works (from who’s actually engineering the gear, to how it gets made, to the ups and downs of the day to day working of the company), you may enjoy it, or find it helpful and informative if you want to start a company yourself. I have no illusions that this will be the next business best-seller—if it ever makes it into print—but I’m having fun writing it, and I’m hoping you’ll like reading it.

    Disclaimer: there’ll be plenty of technical stuff in here, because, after all, I am an engineer. You won’t have to understand it all, but you may be more entertained if you have a techy side. Later on, there’ll be some early photos from Schiit, as well as a video or two, that have never been seen before.

    For ease of reference, I’m putting the outline here. The chapters will be linked as they are added.

    Thanks for reading, and I hope you enjoy it!

    All the best,
    Jason Stoddard

    Schiit Happened:
    The Story of the World’s
    Most Improbable Start-Up

    By Jason Stoddard
    Co-Founder, Schiit Audio


    To Mike, for going along with this crazy idea.
    To Rina, for support, naming the company, and tolerating the whole mess.
    To Eddie, for helping us really get started when we needed it most.
    To Tony, for testing dang near everything we’ve made.
    To Alex, for taking over, making things right, and running the show.
    To Dave, for doing the hardest stuff.


    Forward: Christmas Presents Until the End of Time?
    Chapter 1: The Line is Down. Here’s an Undocumented Test Rig. Fix It.
    Chapter 2: 15 Years On the Marketing Front Lines
    Chapter 3: From Death, Rebirth: Armageddon 2009
    Chapter 4: “You Always Say You Have Schiit to Do, Why Don’t You Just Call It That?”
    Chapter 5: $800 In Screws?
    Chapter 6: The First Order Is…For Something We’re Not Selling
    Chapter 7: Metal Debacle, Valhalla Style
    Chapter 8: We Screw Up Sennheiser and Insult Some Big Guys
    Chapter 9: Powering Up: Lyr
    Chapter 10: Our First Employee, Our First Boardhouse
    Chapter 11: USB Sucks! Or, Mike Joins the 21st Century
    Chapter 12: Schiit Goes Evil?
    Chapter 13: “Isn’t the Symbol for USB the Long Flat Rectangle?”
    Chapter 14: Technical Help Via Time Warner, and The World’s Most Irritating Failure Mode
    Chapter 15: DAC in a Toilet Paper Roll
    Chapter 16: Growth, Garage Style
    Chapter 17: Resurrecting the Circlotron and Other Mid-Centuryisms
    Chapter 18: The Pinch-Off Problem
    Chapter 19: Every Road is a Dead End: Early Adventures with Magni
    Chapter 20: The HOA Problem
    Chapter 21: You Catch a Cold, We Die: Bigger Products, Bigger Problems
    Chapter 22: Introducing the Schiithole
    Chapter 23: “I Didn’t Know People In the Private Sector Were As Lazy and Incompetent As the People In Schools”
    Bonus Chapter: Perspective
    Chapter 24: Getting Our Schiit Together
    Chapter 25: Dead Media Ain’t Dead: NYT Strikes
    Chapter 26: Finally, the $99 Solution
    Chapter 27: Twilight of the Gods—Ragnarok from 2009 Until Today
    Chapter 28: “You’ll Never Do Any Upgrades Anyway.”
    Chapter 29: Worst. Customer. Ever.
    Chapter 30: Death of a Product
    Chapter 31: R&D Sometimes Means, “Try It, See if it Works”
    Chapter 32: Name Me One Non-Standard Format That’s Succeeded, Ever, Or, A Trickster Cometh
    Chapter 33: No Sample Left Unchanged: Digital Today
    Chapter 34: Black Friday, and How One Company Out-Did Us
    Chapter 35: You Want to Pay How Much? Or, How We Moved Again
    Chapter 36: A Real Company?
    Chapter 37: The Value of Diversions
    Chapter 38: Wyrd Schiit
    Chapter 39: Unto the Second Generation
    Chapter 40: Schiit Goes Vinyl
    Chapter 41: Completely Fulla Schiit
    Chapter 42: One Year, Twelve Products

    And now...

    Schiit Happens:
    The Ongoing Story of the
    World's Most Improbable Start-Up

    I had so much fun writing this book that I've decided to continue it on a roughly every-other-week basis. This part may end up being more nuts-and-bolts business, since that's what I'll be dealing with on a more consistent basis this year (rather than launching 10000 more products.)

    And so, here we go...starting with a "selling on Amazon" primer like none you've ever seen.

    Chapter 1: The Trials and Tribulations of Amazon
    Chapter 2: When to Listen, When to Act
    Chapter 3: Our Favorite Scammers
    Chapter 4: Bridging the Gap
    Chapter 5: A Life in the Day Of...
    Chapter 6: So You Wanna Get Into the Biz?
    Chapter 7: The Yggy Circus, Tidal Uprisings, and the Unknown Future
    Chapter 8: Reacting to Now vs Planning for the Future
    Chapter 9: Hints, Teases, and Solicitations
    Chapter 10: Knowing Our Place?
    Chapter 11: Food Scientists vs. Michelin Stars
    Chapter 12: Measurements (With a Side Order of Sanity)
    Chapter 13: Detours in Balanced-Land, or "Improving On 'Perfection'"
    Chapter 14: We Launched a DAC and Got a Movement
    Chapter 15: How Not to Start an Audio Company
    Chapter 16: When to Say "When"
    Chapter 17: The Multibit Revolution Gets Cheap
    Chapter 18: Death (and DNR) of a Product
    Chapter 19: The Most Difficult Design Brief
    Chapter 20: Looking Forward to 2016

    2016, Chapter 1: A Longer Discourse on Marketing
    2016, Chapter 2: What To Do While Waiting For Ragnarok (Or, Alternate Strategies For Creating Your Own Well-Capitalized Company)
    2016, Chapter 3: The Importance of Service
    2016, Chapter 4: How We (Didn't) Move Again
    2016, Chapter 5: The Subjectivist/Objectivist Synthesis
    2016, Chapter 6: Being Comfortable with What You Are
    2016, Chapter 7: On Modding, Hubris, and Reality
    2016, Chapter 8: A Perspective on This Moment in Digital
    2016, Chapter 9: The Elephant In The Room
    2016, Chapter 10: Because We Can
    2016, Chapter 11: The Road to Jotunheim
    2016, Chapter 12: Word of Mouth at the Speed of Light
    2016, Chapter 13: The Saga of Saga (and, um, Freya too)
    2016, Chapter 14: Why You Can't Always Get What You Want
    2016, Chapter 15: The Vidar Chronicles, Part I
    2016, Chapter 16: Even More Fulla It
    2016, Chapter 17: A Directional Assessment

    2017, Chapter 1: Why We Do What We Do
    2017, Chapter 2: "Obsolete."
    2017, Chapter 3: Leaving Marketing
    2017, Chapter 4: Deprogramming
    2017, Chapter 5: Back to the Past
    2017, Chapter 6: Conversations With a Stubborn Engineer
    2017, Chapter 7: Learning New Tricks
    2017, Chapter 8: The Vidar Chronicles, Part 2
    2017, Chapter 9: Skipping a Generation

    2017, Chapter 10: Failures and Flyers
    2017, Chapter 11: Audiophile Confessions
    2017, Chapter 12: Third Time's The Charm
    2017, Chapter 13: Sailing Off the Edge of the World
    2017, Chapter 14: Slouching Towards Kaizen
    2017, Chapter 15: What We Did Right

    2017, Chapter 16: What We Did Wrong
    2017, Chapter 17: Where We're Going

    2018, Chapter 1: Adventures in 3D Printing
    2018, Chapter 2: Engineering, Part 1
    2018, Chapter 3: Engineering, Part 2
    2018, Chapter 4: Engineering, Part 3
    2018, Chapter 5: Where Do I Start?
    2018, Chapter 6: Amplifying the Future. Maybe.

    2018, Chapter 7: Engineering, Part 4
    2018, Chapter 8: How to (Maybe) Succeed in Engineering (Without Going Insane)
    2018, Chapter 9: David Byrne, Progress Interrupted, and an Ode To DIY
    2018, Chapter 10: Third Time's The Charm, Part 2
    2018, Chapter 11: Class A. Ish.
    2018, Chapter 12: The Marketing Slur

    2018, Chapter 13: Closing the Door

    2019, Chapter 1: Zeroth Things Zeroth
    2019, Chapter 2: "Made" No More
    2019, Chapter 3: Here Comes the Sol
    2019, Chapter 4: The Ragnaroks That Weren't
    2019, Chapter 5: Buzzword Bingo
    2019, Chapter 6: Onsanity
    2019, Chapter 7: The Human Side
    2019, Chapter 8: A Plethora of Preamps
    2019, Chapter 9: The Ragnarok That Is
    2019, Chapter 10: *** This Ship!
    2019, Chapter 11: The Six and a Half Year itch

    2019, Chapter 12: Passing The Torch
    2019, Chapter 13: Chickenpowder and Cocaine! Or, Introducing Sol.
    2019, Chapter 14: The Current Craziness
    2019, Chapter 15: Game On!
    2019, Chapter 16: A Re-Introduction to Schiit
    Last edited: Nov 13, 2019 at 10:37 AM
    Schiit Audio Stay updated on Schiit Audio at their sponsor page on Head-Fi.
    https://www.facebook.com/Schiit/ http://www.schiit.com/
    pure5152, Athgar, yonson and 61 others like this.
  2. Jason Stoddard
    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…
    Schiit Audio Stay updated on Schiit Audio at their sponsor page on Head-Fi.
    https://www.facebook.com/Schiit/ http://www.schiit.com/
  3. kothganesh
    Big guy, I'll speak for myself. I'm subscribing to this space. Look forward to the other chapters and ............ to the Yggdrasil and Ragnarok !!! [​IMG]
  4. wewewho77
  5. paradoxper
    This is gonna be fun.
    DefQon likes this.
  6. moriez
    As a satisfied Bifrost-Uber, Asgard 2 and ex-Valhalla owner, yes I am looking forward to all that ^^
    Edit: can't let the 1500 posts mark go by without mentioning it. Headphoneus Supremus, lol! Take it from me that titles don't mean a thing. The journey has only just begun.
  7. Gerzom
    Great initiative from Jason!
  8. jaywillin
    sweet ! should be very interesting
    huge fan , the only schiit i don't have, or had is the gungnir, loki, vahalla , and some of the pieces that i've sold, i've turned around and bought them back ! lol
    i'm full of schiit so to speak !
  9. PXSS
    This will be a very good read! Thanks for the insider scoop Jason!
  10. Koolpep
    Can't wait to read more!
  11. UmustBKidn
    I'm all ears...
  12. kothganesh
    +1. I don't have the magni/modi and the valhalla.......
  13. Thujone
    This is some serious schiit. I'm excited.
  14. joebobbilly
    This should be fun reads.
  15. Tuco1965
    I'm in!  [​IMG]
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