Schiit Happened: The Story of the World's Most Improbable Start-Up
Sep 21, 2018 at 10:20 AM Post #38,598 of 149,171
2018 Chapter 10:
Third Time’s the Charm, Part Two


Let’s get one thing straight: Mike started this.

Yes. Back in 2012, when he first came up with the idea for a $99 DAC, I thought he was a little bit nuts. How could we sell a complete DAC—a good-sounding DAC—a made-in-the-USA DAC—for less than $100?

But when he delivered the first Modi prototype, I realized: this ain’t nuts. This is very, very, very, very smart. And that’s when I began to be very, very, very, very happy that I’d started development on a small amp—Magni—to match the Modi.

Since then, Modi has grown and morphed into an entire line, like some crazy alien plant fed with supercharged Bayer-Monsanto chemical fertilizer. We’ve had Modi 1 and Modi 2 and Modi Optical (now dead) and Modi 2 Uber and, most lately, Modi Multibit.

But, oddly enough, Modi—at least in Modi and Modi 2 form—hasn’t changed much.

In some ways, it’s the second-oldest product in our line (losing only to Asgard 2). It’s the same basic architecture, the same basic design. Yes, we’ve added a mode switch (for higher rate input), better parts, and changed to the AK4490 DAC when the AK4396 went into the Great Delta Sigma Pasture in the Sky.

But, in the end, it’s pretty much the same as what we introduced in 2012. That makes it nearly 6 years old—in DAC evolutionary terms, it’s not even a dinosaur. It’s basically a trilobite.

Modi 2 Uber? It hasn’t changed much either since its intro in 2014. Like the Modi 2, it got the AK4490 change, but that’s about it. Four years old. Call it a brontosaurus.

So why haven’t we bothered changing up these DACs? Partially because we really didn’t need to. The $99 Modi 2 and $149 Modi 2 Uber performed well and sounded good. If it ain’t broke, don’t fix it.

Aside: lots of engineers are cringing right now after reading that phrase. Engineers who thought, “Yeah, it’s good, but what if I make some tweaks…” Engineers like me.

But life is never perfect.

And having so many damn Modis was always a source of confusion. “Which Modi should I get, Modi 2 or Modi 2 Uber?” is one of the top tech support questions.

And stocking so many different Modis was a real pain in the ass. Different boards, different metal, different packaging—literally nothing was the same between Modi 2 and Modi 2 Uber.

And we’d learned a few things from newer products, like Fulla 2, things that might be good to apply to the Modi 2 and Uber.

And Modi 2 was, seriously, pretty friggin old…

And all of these “ands” eventually led to a discussion between Mike and I, shortly after we’d launched Magni 3 and it was blowing up all our sales expectations. But it didn’t just go like, “We need to do a Modi 3.” Because nothing is ever that straightforward.


The Design Brief (AKA Shooting the Schiit & Complaining)

I’ll admit it: I was the instigator. I spend more time talking to Alex, and so I hear about the production and stocking problems more than Mike. I knew Modi 2 and Modi 2 Uber had been a pain in the rear end for a long time, and it looked like we were heading into another backorder at a particularly bad time: coming into the holiday season.

Mike was in to talk about, well, actually, I forgot. But I took that chance to chew on his ear about the Modi 2 and Modi 2 Uber.

“I wish we could just make one Modi 3,” I told Mike. “Like Magni 3.”

“Like an even cheaper Multibit DAC,” Mike said, a bit distractedly. Mike was busy working on pitch-shifting implementation, USB interfaces, and had mentioned trying to do a super-cheapo multibit DAC off and on, so he wasn’t really focused on Modi. Plus, he really likes Multibit.

“No, just like Magni 3. 3 inputs, delta-sigma, but $99.”

Mike frowned. “What about a cheaper USB Multibit DAC?” Did I mention Mike really, really, really, really likes Multibit DACs?

“How do we do the filter?” I asked him. “We can’t do NOS.”

Mike shuddered. “No. But you’re the analog filter guy. How cheap of a filter could we get away with?”

I sighed. “We can’t. It would cost more than your DSP.”

Mike opened his mouth to speak. I cut him off. “And you might have to trim them.”

“Ah,” Mike said, finally. “Nobody ever explained it that well.”

Aside: But, in the way of bizarre mind tricks, in that moment, I thought of a possible way to get around the analog filtering problem of an NOS multibit DAC. I haven’t played with it yet, because it’s really out there and might not work, but who knows. Maybe someday…

“Here’s the thing,” I told Mike. “If we could deliver a $99 3-input DAC to replace both Modi 2 and Modi 2 Uber, we’d have a winner. It’d be easier on production, easier for people to choose, easier for support.”

“Uber costs too much to do that,” Mike said, suddenly focused on the problem. “It’d kill us to sell Ubers at $99. It’s got the wall-wart, a whole linear supply, a pushbutton, and three LEDs that need lined up, plus programming of both the motherboard and USB.”

I grinned. I’d already been thinking about that. “And Fulla 2 has a whole headphone amplifier, a volume control, analog in, preamp outs, variable outs, and it sells comfortably for $99.”

Mike grimaced and recoiled. “But Fulla 2 uses a…a…switching supply.”

“And it sounds good.”

“But it’s a switching supply!” Mike tried to look affronted.

“A very good one. One that Dave even likes a bit.”

“But…it’s a switcher!”

“But if we get rid of the wall-wart and linear supply, we’ve gotten a lot closer to where we need to be on the cost,” I told Mike. “And we can throw out the button and LEDs, just use a switch like we use on the Jotunheim.”

“Hmm,” Mike said, then fell silent, mulling it over.

“And then we have a $198 stack that has three DAC inputs and a great headphone amp. And then it’s a logical step-up from Fulla 2. And then there’s no confusion over which Modi to buy.”

I kept pressing, because, let’s face it: a simpler lineup is better. We should have one delta-sigma Modi and one Multibit Modi, and that’s it. Magni 3 was a big eye-opener. If we had a Modi 3 in the same class—with an all-new design—it would be a huge step forward. And I already knew that we could get great sound out of a switcher-based design. Hell, both Mike and I have Fulla 2 on our desks.

Finally Mike sighed. “I guess it can’t hurt to build one.”


Too Many Sides, Operational Follies, and a Trick

It didn’t take Dave long to deliver a prototype board. Like most of our latest prototypes, this one fired up and ran pretty much from the start. No huge surprise, since it was essentially the offspring of a Fulla 2 and Modi Uber.
  • From the Fulla 2, it got the power supply, including two micro USB ports, one for power and data, and one just for power.
  • From the Modi Uber, it got three inputs and the SPDIF input section.
  • From both, it got the C-Media USB interface and AK4490 DAC.
So, in all, a whole lot of proven stuff.

Better yet, the power supply was even less stressed than in Fulla 2, where it’s expected to power a fairly beefy headphone amplifier as well. Dave made appreciative noises about how it performed, even for a switcher. In use, the Modi 3 ran almost entirely cool—a huge change from the linear supply used in Modi 2 Uber.

And even better yet, it sounded damn good. Dave knows a lot more tweaks than I do when it comes to wringing the highest performance out of a DAC, and he brought them all to bear in Modi 3. Even though it’s a low-cost product, it’s packed with a lot of high-value parts, like aluminum organic polymer capacitors, thin-film resistors and film capacitors, and full DC-coupled output.

And that might have been that…except for a couple of things.

The first was on Dave’s side. His first PCB design had parts on both sides. And when you’re trying to do a low-cost, high-reliability design, you really want parts on only one side. Having parts on one side means the whole thing can be run through the pick and place system once, then right through the oven and done. Double-sided stuff requires a lot more handling. And we didn’t really have the budget to throw at it. So, I sent Dave back to the drawing board on the PCB.

The second problem was on my side. I hadn’t fully thought through the ramifications of collapsing Modi 2 and Modi 2 Uber into a single product. Because Modi 3 had to work exactly like a Modi 2 and a Modi 2 Uber. Which meant it had to do two things flawlessly:
  1. It had to plug into a single USB port and work like a USB-powered DAC. This was the “Modi 2” case—just plug it into your computer and be done with it.
  2. It also had to work as an optical or coaxial-input DAC…with external power. This was the “Modi Uber” case—external power required for inputs like coax and optical that don’t also supply power.
My mistake was thinking you could just plug the Modi 3 into your computer for power to run optical or coaxial. That’s really stupid, because plenty of Modis are run as SPDIF-input DACs only.

Nor could we count on everyone having a compatible phone charger and USB micro charging cable handy to power the Modi 3. The game is changing too fast, with most stuff being USB-C or Lightning these days.

Aside: so why USB micro? It’s simple: cost. Same reason Modi 3 uses the AK4490 vs the newer AK4493—we have to be very conscious of cost. And USB-C is still pretty pricey. Don’t worry, you’ll see it in due course. The price of the connectors and cables is coming down, and it’s clear that’s where everyone is headed.

Aside to the aside: and don’t expect USB 3.1 when USB-C makes its debut. It’s just a connector, not a speed standard. And USB Audio Class 2 is plenty fast enough for everything we might want to send down it. Yes, even rates for music that doesn’t exist.

So, not only did we need to give people a USB micro cable, we also needed to provide a 5V USB-A out wall-wart. Yes, as in a DC-out wall-wart. Yes, as in, not like any of our other AC-out wall-warts.

Luckily, the company we use for wall-warts had a nice, fairly-low-noise, Samsung-esque-but-butt-ugly-gray 5V USB wall-wart that performed very well, so we put in a big order for those parts. Problem solved.

Aside: it’s interesting testing the DC output of USB wall-warts. There are some astoundingly bad ones out there. Apple, as you might expect, is by far the best, lowest-noise wall-wart out there. Everything else we tested—some from very large manufacturers—is at least 10x worse than Apple. Standard disclaimers apply: we have not tested everyone on the planet, and I’m sure there may be some wall-warts out there that perform better than Apple.

Aside to the aside: but, here’s the punchline: none of the DC wall-warts made a significant difference in the test results of Modi 3 on our APx555 audio analyzer, no matter how noisy they were. Nor does it matter if you plug the Modi 3 straight into the noisy USB output of a computer for power.

Aside to the aside to the aside: so why doesn’t a noisy wall-wart or USB port make any difference in test results? Because we’re regenerating all the power supplies internally with a +/-5V switching supply, and filtering the switcher noise. It’s relatively immune to the power supply coming in, unless it is just astoundingly bad.

So, with a supplied wall-wart and USB cable, Modi 3 is ready to go in pretty much any situation. Plug in the USB cable into your computer and you’re ready to go from a computer source. Connect the wall-wart to the USB power in and you’re set for SPDIF. In addition, using USB power in also causes the Modi 3 to report as a 0mA USB device, so you’re set for phones and tablets without a “draws too much power” error. (Though you will need a cable and/or dongle to connect to your phone or tablet…don’t complain to us about that, complain to the phone and tablet makers.)

When Dave delivered the second PCB (this one with parts on one side, but, like most of our boards these days, 4 layers in design), I thought we were done. It sounded good, measured good, and worked in all of its permutations, thanks to some custom firmware for both the USB input and the on-board microprocessor.

I thought we were done…but the curse of New Test Equipment hit.

We’d just gotten our APx555, so I ran the Modi 3 through its paces. Being able to do closed-loop USB measurements was new to us, and (when not glitchy, thank you ASIO), and was very helpful for sanity-checking the design.

And I was seeing something that only the new AP was sensitive enough to show. The Modi 3, while it delivered fine numbers, had a noise floor that changed when it got near full scale output. Now, this was more than 120dB down, and not unusual to see in a delta-sigma design, but I wondered if there was anything we could do to improve it.

Dave took the prototype back, and in a few days delivered a tweak that virtually eliminated the noise floor pumping…and made the DAC sound significantly better. A win-win, for just a few extra parts. He dropped the parts into a new proto to confirm all was well, and Mike gave everything the greenlight for production.

We’d already done the metal design and had first articles, so we were well down that road. We talked about having the firmware pre-programmed to further streamline production. It was February 2018. We’d be selling the Modi 3 by May, easy.

Yeah. Uh-huh. And now it’s September.


Global Parts Shortages, Backwards Inputs, and “Suggested” Parts

So why the big delay?

Well, I could hide behind the Global Parts Shortage excuse. Because, in fact, the parts shortage did hit Modi 3, when a couple of critical parts went from 18 to 37 week lead times, and we had to find alternates.

But in reality, it was more our boneheadedness than anything. I specified a new switch for Modi 3, and Alex ordered it…but then it disappeared into the bowels of our warehouse. We ordered them again…and got the wrong switch. We went to start production…and found that we were 8 weeks out on a new screw-mount coaxial input, when I thought we had plenty of stock.

And then getting into production got interesting. The first articles came in, but didn’t work. It turned out the Flash RAM was installed backwards. Dave fixed it, but then gave the board right back to the assembly house before I could verify it on the analyzer, so we wasted a couple of days shuttling the boards back and forth and making sure everything was really, really right.

Finally everything was ready. Boards started flowing in. They were working. We began assembly, and Alex started making noises about me announcing Modi 3.

Aside: he wanted it to be announced, because we’re in backorder on Modi 2. Those backorders are being filled by Modi 3. Enjoy your two extra inputs, and better DAC!

And just this last Wednesday, after I’d left the office, I got a text from Alex: POWER AND DATA INPUT CONNECTORS REVERSED ON MODI 3. I LEFT ONE ON YOUR DESK. HELP.

What the hell? That wasn’t possible! The power and data connectors were reversed from Fulla 2. I knew that. I was WAYYYYY aware of it, because it was different, and I knew I could screw it up.

I went back to the office and looked at the chassis. Sure enough, the screen was incorrect—it was the same as Fulla 2, rather than reversed.

But…I opened the owner’s manual file on my computer.

It was correct.

HUH?

I opened the “modi 3 screens.ai” file.

And it was correct, too.

Wait. No. What? Poltergeists? Alien abductions? Early onset Alzheimers? I mean, this made no sense.

And, you know what, it maynevermake sense. I did find one file on my computer, a modi 3 screens rev b.pdf file (but without a matching .ai), which was incorrect. But my email shows I didn’t send that to the chassis guys.

So. crap. No clue.

“What do we do?” Alex asked.

“There’s only one thing we can do,” I told him. “Get them re-screened.”

“Or if they have painted bottoms in stock with no screen, they can screen and send those,” Alex said. “It might be faster.”

“Yep, that works too. But save me one of the wrong ones.”

Alex frowned. “Why?”

“Because I want it.” Because it was the last in a series of kinda boneheaded mistakes. It was worth keeping.

Alex shook his head and laughed. “Maybe I’ll keep one, too.”

So that’s the end, right? Oh no. Not at all. Once we got the correctly screened bottoms in stock, Modi 3s started flowing to test. On the ATE, it all did well. But our techs started reporting one odd glitch: sometimes the optical input would buzz with no optical input connected.

This only happened some of the time, but it was persistent enough (it showed up on about 10-15% of production Modi 3s) to be troubling.

Screech! Production line halted again.

Dave and Ivana and Mike were working on some super-secret project, so instead of waiting for them to get done with that, I, the digital neophyte, decided to take a look at it. An optical input making noise sounded like it might be oscillating, which was something I could find, and, possibly, fix.

Aside: optical digital inputs are unique in that they are more than just a connector. They’re an active device. They require power to run, so it’s entirely possible that they might have a problem with oscillation.

Looking at the schematic, I didn’t see anything amiss. Dave had gone above and beyond the datasheet in bypassing and isolating the power supply for the optical input. Instead of a single bypass capacitor, he had an LC filter on the power supply. He also had a pull-up resistor to a linear-regulated 3.3V digital supply, which was also clean.

But despite this, the Modi 3 board would sometimes buzz with no input. I was able to easily replicate it on the analyzer. It wasn’t consistent. And, when I touched the pull-up resistor with a scope probe, it always disappeared.

Oscillation. Obviously.

Now, there was no reason something like this should show up on Modi 3 and none of the other DACs, because we use the same optical input everywhere.

But…sometimes manufacturers make changes to parts.

And…we HAD noticed that these new parts were much more likely to work at 24/192 with marginal cables and sources.

So…maybe something had changed.

I took a look at the datasheet again, and something immediately jumped out. The optical connector we used didn’t need a pull-up resistor, but it showed a 30pF capacitor on the output, with a parenthetical “(Suggestion)” next to it.

Suggestion? What was that, I wondered.

But hey, worth a shot. I pulled out the resistor, dropped in a small cap, and boom, no oscillation. Nothing. Completely quiet. Cursing a bit, I did it on a couple of other “buzzers.” All were fixed.

So, “Suggestion?”

As in, “Suggested if you want it to work right?”

As in, “Suggested if you don’t want it to buzz like an electric razor?”

Yeah. I guess “Suggested” like that.

In any case, it was easy to specify a change to the cap, so we were back up and running again the next day. Sometimes products are like a booger that you can’t flick. (Gross, I know. But it’s better than Mike’s analogy.)


The $99 Do-All DAC and the DAC Future

Okay, so now that we’ve delivered a two-figure do-all DAC with a very nice feature set, D/A converter, sound, and performance, while still making it in the USA, what does the future look like?

Well, for lots of people, Modi 3 is the present, the future, and the end. Because it’s a damn nice little DAC. Most of our customers could probably stop with Modi 3 and be perfectly happy. It’s exactly the same as Magni 3. When we say that Magni 3 is all the headphone amp you’ll probably ever need, we’re dead-serious. Same with Modi 3.

Sure, Mike (and I) both like Modi Multibit a lot better, but it’s 2.5x the price. That’s a big difference. For less than the price of the Modi Multibit, you can have a Modi 3 and a Magni 3. And that’s a hell of a value.

But enough of the commercial blather. Where do we go from here?

Well, you may have noticed that Mike recently said that we’ve gotten our own in-house USB solution working. And you may notice that it’s not in Modi 3. You should be happy about that, because you’d much rather have a tested-and-busted USB interface than something that’s still in the middle of beta testing. You really want us to make sure our USB interface really is all we think it’s cracked up to be, before we deploy it.

Beyond that, I think you can look at the USB development as a signpost—us developing our own technologies in key areas, so we’re not beholden to companies that may (a) decide to stop making products we need, or (b) move in directions that aren’t where we want to go.

What kind of technologies? Ask Mike. He may provide a few more signposts. Or not. We’ve been talking about a whole lot of things for the digital future, but it’s not my place to spill the beans. I have my own projects on the analog side, and hopefully I’ll be able to talk about a couple of those soon, including one that I’m really, really, really excited about.

In the meantime, welcome Modi 3: the $99 DAC…that seriously may be all the DAC you ever need.
 
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Sep 21, 2018 at 10:21 AM Post #38,599 of 149,171
I have never known your intent to be malicious Tom. There are facts and there are perceptions, perceptions are hard to put into words and often there are no clear meanings. Often audio reviewers have to work at describing equipment and those words are impressed upon the readers. I would hate that job!

Ok now where is the new product? if Jason makes an announcement can someone PM me a link so I can keep my searching to a minimum? I am off to yet another book club, after which I need to help with some audio gear, probably blue tooth.

I was not accusing Tom of being malicious. I am just critical of my own phrasing afterwards (as is evident by this post as well...). Something I am working on. I am enjoying this thread and the various diversions it takes.

Now to look into the Modi 3 more... I don't need it but, I may try being evil and introducing friends to better quality audio and that could be a stepping stone.
 
Sep 21, 2018 at 10:40 AM Post #38,600 of 149,171
I was not accusing Tom of being malicious. I am just critical of my own phrasing afterwards (as is evident by this post as well...). Something I am working on. I am enjoying this thread and the various diversions it takes.

Now to look into the Modi 3 more... I don't need it but, I may try being evil and introducing friends to better quality audio and that could be a stepping stone.
I was just talking about the post in general and I was in the conversation as well.
 
Sep 21, 2018 at 10:52 AM Post #38,602 of 149,171
I have friends who hear my system and want to get into headphones with a modest priced DAC and amp. I generally recommend the Sennheiser 6XX for $200 since the quality of sound is hard to beat for that price but I would be interested in thoughts on most bang for the buck within the Schiit line. Fulla would be the least expensive but Magni and Modi 3 would certainly be an upgrade at twice the price. Jotunheim with balanced dac for $499 still only brings the total price up to $700 plus shipping. Any thoughts?
 
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Sep 21, 2018 at 11:19 AM Post #38,605 of 149,171
I have friends who hear my system and want to get into headphones with a modest priced DAC and amp. I generally recommend the Sennheiser 6XX for $200 since the quality of sound is hard to beat for that price but I would be interested in thoughts on most bang for the buck within the Schiit line. Fulla would be the least expensive but Magni and Modi 3 would certainly be an upgrade at twice the price. Jotunheim with balanced dac for $499 still only brings the total price up to $700 plus shipping. Any thoughts?

A couple years ago I spent a couple days with 7 different pairs of headphones under $300 for a work setup and I ended up going with Audio Technica ATH-M50x which were only $99 at the time. These coupled with a Modi 2 Uber and a Vali 2 has been an amazing combination for me and was under $400 although I wish I had gone with Mimby instead of the uber now, however when I purchased the uber I had no clue what a multibit was and definitely didn't think it was worth the extra $150...
 
Sep 21, 2018 at 11:33 AM Post #38,606 of 149,171
A couple years ago I spent a couple days with 7 different pairs of headphones under $300 for a work setup and I ended up going with Audio Technica ATH-M50x which were only $99 at the time. These coupled with a Modi 2 Uber and a Vali 2 has been an amazing combination for me and was under $400 although I wish I had gone with Mimby instead of the uber now, however when I purchased the uber I had no clue what a multibit was and definitely didn't think it was worth the extra $150...

Had you tried the Sennheisers in that mix? I have had friends prefer them over headphones in the $1500 range. With the Modi 3 release, that is certainly a good place to start in the Schiit product line. My cost on the Audio Technica's is pretty low so I may try a pair sometime.
 
Sep 21, 2018 at 11:52 AM Post #38,610 of 149,171
Had you tried the Sennheisers in that mix? I have had friends prefer them over headphones in the $1500 range. With the Modi 3 release, that is certainly a good place to start in the Schiit product line. My cost on the Audio Technica's is pretty low so I may try a pair sometime.

I hear lots of folks love vali2 and senns. If you want to push your friends into cheap tubes Vali and modi 3 can't go wrong. If you aren't concerned about tubes vs SS the magni is fan freaking tastic. If you can get a deal on Audio-Technica see what their R70x runs for. Supposed to be awesome. Might be my next hp purchase. Super high ohms. Wouldn't have to wait for HD6XX to ship.

My understanding is the fulla 2 is a bit underpowered to get the HD6XX to their full potential (from schiit support themselves back in December 2017)
 
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