[FrivolsListener]

   
Curious, I googled RX-392. Clearly, since you say "50s" you don't mean the Yamaha surround receiver or the Dell laptop. Are you talking about a Rolex watch, or is there an antique piece of hi-fi google can't find?

 
Brain-fade on my part.  I meant, "R-392."  Specifically, "Collins R-392" -- it's a military receiver.  Not even remotely related to high-end audio!

 

[wink]

I guess the [REDACTED] has been redacted for now..... !  

 

[jacal01]

Not redacted, just decayed to another radionuclide.

 

[jsiegel14072]

  Will you accept good ol' vintage whiskies for a payment ? 

Ali

if you put away a good 18 year old whisky when you buy it, it should just about cover the bill when it need repair! 

 

[MrBucket]

I was wondering what was going on when I would try to play some albums with my Bifrost Multibit, now I know and you guys got a RMA request

 

[wink]

What this thread needs right now is the next chapter of Jason's ebook, or perhaps, more importantly, an in depth review of the [REDACTED] and why it will be the singular product of the last 100 years to re-define what high fidelity audio reproduction is and should have been all along.    

 

[Jason Stoddard]

How about the former...

 

[Jason Stoddard]

2016, Chapter 4:
How We (Didn’t) Move Again
 
If you’ve been reading this book, you’ve already heard about our first move (out of the garage) and the second move (out of the tiny Newhall office to our current industrial box)…plus, I know I’ve mentioned we expanded our current industrial box to make space for Ragnarok and Yggdrasil.
 
So, for those who are keeping score, that’s two moves and an expansion. And that’s plenty enough for me, like, ever.
 
Why? Moving is hugely disruptive. When we’re 1/3 of a garage in size, the disruption may be only a day or so. When we’re 1,800 square feet in Newhall, you’re talking more like a week total downtime. Now that we’re 8,300 square feet, the prospect of moving is really scary. We could be talking several weeks of disruption until we really got ramped back up again. Because now it’s not just about moving boxes—it’s about moving all the racking, fixtures, test benches, test gear, listening room equipment, office infrastructure, shipping systems, finished goods, ad infinitum. The racking in itself is a huge project, because we’re talking serious racks, 20’ tall and bolted to the slab, designed to hold tons of sheetmetal and transformers.
 
So it was with quite a large amount of dread that I heard Alex talking about needing more space, shortly after the beginning of the year.
 
“We can push back on the suppliers,” I told Alex. “Schedule things out. Have them ship only when we need the parts. You know, the old ‘just in time’ thing.”
 
Alex sighed and shook his head. “A lot of them don’t have the warehouse space.”
 
“What about finding new suppliers?” I asked.
 
“For boxes?” Alex said, gesturing up at the racks. Packing material—boxes, box inserts, and foam—take up an insane amount of space.
 
I frowned. Our box guy was really the best in the business. He’d been with us since the start. He’d engineered a dozen really cool boxes for us, to the price point we needed. He wasn’t late.
 
But he didn’t have warehouse space. I knew that. And I wasn’t about to throw him under the bus.
 
“Plus, there’s transformers,” Alex said. “Those take up a ton of space.”
 
By “transformers,” Alex meant “wall warts.” The only thing we buy from China and ship via ocean freight is wall-warts. We’ve tried and tried to find a US supplier, but everyone we’ve talked to has proposed prices that would make Magnis, Modis, Manis, Wyrds, and a bunch of other products unsustainable. So we order, like, a metric schiitton of wall-warts about 3-4 times a year. Tyler does the import dance with the powers that be (I imagine it is something like the dance a bee does when it finds a field of promising flowers, but with a whole lot less pollen) and pallets and pallets of wall-warts eventually show up at our back door. Due to the length of time involved in customs clearance and ocean shipment, we couldn’t do those as a just-in-time kind of thing. And they take up a ton of space.
 
“And we’re running out of burn-in space, in any case,” Alex said. “The new big products (meaning Yggdrasil and Ragnarok) are really killing us.”
 
“Can we put in more racks?” I asked, wandering back to the expanded space we’d leased a while back. It had looked huge at the time. Now it looked really cramped.
 
“We can put in bigger racks,” Alex said.
 
“Do it.”
 
“But I still don’t think it’ll take us past summer. And Mike has his Manhattan Project, and you have the (redacted) and the (redacted) and Mike says he’s gonna get the (redacted) back on track—”
 
“But things will slow down coming into summer,” I said. I really, really didn’t want to think about moving.
 
Alex was silent for a while. Then he laid out the single statement I really needed to hear, in order to think about this seriously:
 
“I look at it this way: we can move in 6 months, or we can move in 18 months,” Alex said.
 
“What?” I said, not immediately grasping what he was saying.
 
“We can move this summer, or the summer after. There’s no way we’re moving in winter. Ever.”
 
I shuddered, imagining a weeks-long business disruption, right in the middle of the December-January peak season. It wasn’t a pretty picture.
 
And Alex was right. If we were going to move into a larger space, it would have to be in the summer. Anytime from April to August would probably be fine (assuming no big product launches, and, well, that might not be such a good bet.) Beyond that small window, we’d be going crazy just trying to keep up.
 
So, did I think we could go 18 months in our current space?
 
Three words: No. Friggin. Way.
 
 
Why So Spacious?
 
Now, some of you are probably stifling yawns and wondering, Why the hell is this even an issue? Get more space and quit whining about it!
 
Well, leaving aside the business disruption aspect, space (or facilities, ifn you wanna be fancy) is one of the most critical aspects of a business. Get too little, and you’ll end up moving too soon. Get too much, and you can hang yourself out to dry.
 
The lease—or mortgage—on your space is one important component of your overall cost of doing business. You don’t want an oversized lease on space you’ll never use. That’s just money down the drain.
 
And—maybe even more important—it can have a negative psychological impact on your staff if you never fill up that space. Centric once took an office that was much too large for our staff, in the heady days of the last years starting with “19.” We expected the need for a much, much larger programming staff than was realistic, once the years began with “20” and ended with “01.” Sure, we weathered the worst of the Web 1.0 bust pretty easily, but we never really filled up the area we had allocated. So it was a giant, empty, echoing space with a few desks that the guys used to fly gliders and for practicing their putting. And, even though nobody said much about it, I could tell it weighed on them. When are we going to fill up the space? Are we doing as well as we thought we would? Are we doing OK at all? And we ended up staring at that space for seven years.
 
No thanks, not again.
 
But, in this case, we really were outgrowing our space. The question was how much to look for—and to lease or buy.
 

---

Aside: Buying. Yeah. Buying. Kinda like a (much longer) lease, except (hopefully) you’re building equity, plus you get to write off the interest and the depreciation on the building, minus you have to pay property taxes. If you have a conventional accountant run the numbers, and you have the money for a down payment, buying absolutely makes sense…
 
…well, that is, if your business continues to sustain its current sales and profitability (or expands), and if commercial real estate doesn’t have a big oopsie (read, ‘significant downturn’) and if you’re comfortable with the government looking down your shorts (most business property loans are SBA loans), and if everything goes well on the business and personal side (I’ve seen business partners get roasted by commercial real estate investments that went sideways).
 
Yes, that’s a lot of “ifs.” But still, we were thinking about buying when we started this process. You bet. It increases the pool of prospect spaces we could look at. And we thought we could manage the “ifs.” But, if there’s one thing I’ve learned, is never take business property investment lightly. There’s a lot of value in being more nimble and adaptable…hell, if you can do month-to-month without much penalty, do it. Leases still boil down to, “Pay us this much every month…every month…even if you can’t.”

---

 

Alex didn’t care if we leased, bought, stole, built, whatever…as long as he had his space. The more the better. Twenty-five thousand feet would do us just fine, in his opinion.
 
But 25,000 square feet is HUGE. It was bigger than any business I’d had, by a very long shot.
 
I figured we could get by with a doubling…to 15,000 or so. Especially if it was all floorspace. The upstairs area in our current building is pretty much useless—imagine carrying Ragnaroks and Yggdrasils up and down stairs for testing, or assembling static-sensitive components on carpet. Yeah.
 
But 15,000 to 25,000 was enough to start ballparking. Even if the small side made Alex nervous…and the larger side made me start biting my fingernails.
 
 
Looking for a Few Good Spaces
 
Funny about those “best laid plans” things. As soon as we started looking, we immediately came upon what seemed like a perfect candidate: a 21,000 square foot space about a mile from our current building. The space was:
 

1. A lot newer and shinier than our current space
2. Almost completely empty, with no second-floor buildout at all—it had been an indoor trampoline space (seriously, do people pay for this stuff?)
3. Near one of two local breweries—close enough to walk to, but not as close as the brewery that just opened up behind our current space
4. Directly to the side of the informal Paul Walker memorial

 
Yeah. As in, people would hang around with flowers and candles and stuff, right out to the side of our proposed new space.
 
“Perfect,” I told Rina. “You can get a bunch of friends to come by and do a big loud séance or something, when we go see the space with the realtor.”
 
“Which would do what, exactly?” she asked.
 
“Get us a discount, if we play our cards right.”
 
Rina looked at me askance, as if to ask if I’d been out to the brewery already that day. But I was serious. The space was for sale, not for lease. And if it had been on the market for a while, maybe I could talk them down even more…
 
Alex drove by and looked in the windows, then came back and pronounced it promising. “They have one big box office up front, but that’s about it. And they have a loading dock!”
 
“Great,” I thought, imagining someone driving the forklift off the loading dock one day. We already have a big gouge in one of the racks. But a loading dock would be handy for the big stupid wall-wart shipments.
 
So. Alex was thrilled. Rina was thrilled. I should be thrilled. But they didn’t know that an empty box meant a lot of buildout, and that a loan at prevailing rates didn’t give us any real month-to-month advantage over a lease, plus there’d be property taxes…
 
And, in the end, the whole thing ended up being moot. When we contacted the broker, they made sad noises and said, “Sorry, that’s in escrow.”
 
And the “perfect” building evaporated, just like that. Lesson learned: call the broker first, before making any grandiose plans.
 
Which still left the problem of where we’d end up going.
 
Not a big deal, I figured, and fired up LoopNet (a listing service for commercial properties.) I plugged in our min and max square feetage, selected “lease or buy,” and sat back, preparing to be wowed.
 
And got…basically nothing.
 
Ah, schiit.
 
 
 
The Duh Moment
 
“Vacancy rates are only about 2% in this valley right now, for the kind of space you’re looking for,” said the guy from the SCVEDC (Santa Clarita Valley Economic Development Corporation.) “And that’s factoring in at least one large building that isn’t completely ready for occupancy, and…”
 
Well, that explains the Loopnet results, I thought, tuning out.
 
“But the brokers may have some pocket listings, you said,” Sue prompted him. Sue was my business partner at Centric for many years, until she came to her senses and took a job with the SCVEDC. She’s looking much happier now. Marketing is a killer industry that can eat your life. More on that in a future chapter or two.
 
“Well, yes, but we’d have to contact them and see what they have,” said the SCVEDC guy.
 
“I think that’s what they want,” Sue said.
 
Alex and I both nodded vigorously. If we couldn’t find a space large enough to move into, we’d have to go to “Plan B.”*
 

---

*Plan B was to find another warehouse, 5,000-10,000 square feet worth, move all stock out of the current building and store it there, and set up the current building for nothing but production. We’d lease a truck to shuttle stuff back and forth as necessary. I don’t think I have to go into why this wasn’t a wonderful option—the ongoing business disruption, the need to have someone drive the truck, the inevitable Murphy’s Law crap about never having the parts you need where you need them, etc. But if it was that or nothing, well…

---

 

“Well, we can certainly make some introductions,” the guy from the SCVEDC said. “But have you talked to your current landlord about whether or not they have another building, something you can maybe swap into a lot easier? You still have time on your lease here, right?”
 
“Yeah,” I said. Almost three years, in fact. It would be another pain in the ass. We’d have to sublease it, or find our the extortion needed to break the lease. Another problem with moving—there’s always the old space to deal with.
 
“Well, that’s what I’d do,” he said. “Talk to them, first. Maybe you can get out of the lease easier, find something they already have.”
 
I looked at Alex. “You were right. We should have taken that extra space here, last year.” Last year, about 4,200 square feet of space—the unit next to ours—was available. We weren’t really large enough to use it at the time, though Alex had looked at it with a gleam in his eye. I’d nixed the idea, but if we had taken the space, it would have given us a total of about 12,500—and might keep us from having to move for another year, or even more.
 
Alex looked innocently at the ceiling, but I knew he was thinking, Yep, I was right.
 
“It’s probably best if we talk to some brokers,” I told the guy from SCVEDC. “I don’t know if our landlord has any more buildings around here, and this building is all leased up.”
 
“That’s fine. I’ll pass along some names.”**
 

---

**The Santa Clarita Valley Economic Development Corporation is a very aggressive local agency bent on bringing business into our neck of the woods—and retaining existing businesses. This is very important in California—and the US’s—fundamentally anti-business climate. I won’t go into a political screed, because this is not the place for it, but the reason companies do things like inversions and leave profits out of the country is that the USA has the highest corporate tax rate in the developed world. Yes. Seriously. Look it up. Plus California state income tax. Plus other “hidden” business taxes and fees. Without research tax credits, an IC-DISC, and other business tax credits available for hiring in California, it would be a significant drain on our competitiveness. Hell, it probably is anyway. But for some reason, it seems like it’s more intelligent to have us (and every other business) spend tons of money on multiple individuals and agencies in order to try to reduce their effective tax rate, (and, when large enough, keep money out of the country) rather than set a logical tax rate that companies are more willing to pay—and that their compatriots will call them out as cheap-asses if they aren’t willing to pay…but I’m starting to ramble here. Bottom line, if you’re in business, see if you have a local Economic Development entity, and see if they have some free advice for you. The SCVEDC has significantly impacted the way we do business, in a very positive way.

---

 

And that, I thought, was that. We’d talk to some brokers, see what they had…and if they had nothing, we’d proceed with Plan B.
 
But first, I figured, having Alex talk to the landlord and see if they had anything else wouldn’t hurt…
 
 
The Easy Out
 
And, surprise surprise: that 4,200 square feet we missed was going to be available as of Halloween, 2016.
 
Yes, that space right next to us.
 
Yes, that space we could just punch a hole into, like we’d did for our first expansion.
 
Yes, that space that would mean essentially zero business interruption.
 
I am stupid. I actually had to think about it a bit. Here’s why:
 

• It didn’t get us to what I considered “end game,” at 15,000-20,000 square feet. It was only 12,500. But considering I still don’t know what our “end game” is, well, that’s kind of a crappy argument.
• I wanted to see if the brokers came up with anything. Because, you know, the grass is always greener, or something.
• It would make us the biggest tenant in our building, by far. Another 5,000 square feet or so would make us the whole building. And the building is kinda old, and the landlord is a cheap-ass. But it’s not like it’s falling apart or anything. Well, except the air conditioning in Suite A. Which they (finally) just replaced after a catastrophic meltdown.

 
So yeah, I slept on it overnight. Then I sent an email to Alex and copied Mike, saying, “Well, it’s kinda like, ‘well, duh,’ right?”
 
Mike agreed. Alex breathed a sigh of relief. And I began the process of signing the lease to expand our space, come this Halloween.
 
And that’s how we didn’t move.
 
At least not yet.

 

[Tuco1965]

Well that was a really moving chapter Jason.

 

[jacal01]

Take a first option on the building in escrow.  Did they give you a estimated timeline on the conditions to be met?  Just sayin'...
 
The thing about hermit crabs is they have to go through their shell exchange dance several times a year until they finally stop molting.  I'd say keep your business as portable as possible if this is the paradigm you persist in.  Consider your racks as part of the old shell, for instance.  Painfully expensive, perhaps, but expedient and relative to the costs of overall business disruption.  And you could stage them back in during a subsequent floor expansion phase. 
 
Perpetual memorial for Paul Walker since 2013?  Seriously?

 

[Ableza]

In Feb 2014 I moved a 26,000sqft design and manufacturing center across the San Francisco Bay from Foster City (where the industrial park had been sold out from under us to make way for multi-million dollar condos) to Hayward (where the rent was less than half for a 28,000 ft building, so duh we should have been there all along.)  It was a 9 mile move across the Hayward-San Mateo bridge.  We contracted with a moving company who literally sent in a large crew on a Thursday morning who photographed every square inch of office space, work stations, production areas, inventory racks, large machine, QA labs, R&D skunk works, etc., shrink wrapped everything, unbolted things from the floor, loaded it numbered section by section into several semis, transported to the new building (which had been fully prepared, a process that took over a month) and set it all up in the new building so that when people located their desk or workstation, everything was exactly where they had left it.  Even pens and paper clips.  We were working and shipping products the following Monday with only four days down.  It was quite amazing.  Cheap, no, but amazing.

 

[G600]

Alex looks like a very anxious guy in your story !
 
A great chapter, more intimate than the previous, really nice.
Still lacking pictures, that said 

 

 

[Ali-Pacha]

   

---

**The Santa Clarita Valley Economic Development Corporation is a very aggressive local agency bent on bringing business into our neck of the woods—and retaining existing businesses. This is very important in California—and the US’s—fundamentally anti-business climate. I won’t go into a political screed, because this is not the place for it, but the reason companies do things like inversions and leave profits out of the country is that the USA has the highest corporate tax rate in the developed world. Yes. Seriously. Look it up. 

---

 

Mmmh...did you have a look at France business climate ? 

BTW, I've learnt a word today, escrow. In French escroc means "crook". Étonnant, non ? 

Ali

 

[RCBinTN]

Great chapter, Jason, thanks for sharing it with us.  Personally, I would look to outsource storage of RM's and FG's and keep your main testing spaces intact.  Grow those spaces as the [redacted] stuff takes off.  You will need more verification space, maybe soon?
 
The assembly / verification spaces are the toughest to move and reassemble - could cause downtime.  Good luck with growing your business.
 
Best regards,
RCB

 

[DougD]

  In Feb 2014 I moved a 26,000sqft design and manufacturing center across the San Francisco Bay from Foster City .... <snip snip> ...  set it all up in the new building so that when people located their desk or workstation, everything was exactly where they had left it.  Even pens and paper clips.  We were working and shipping products the following Monday with only four days down.  It was quite amazing.  Cheap, no, but amazing.

 
I like this story almost as much as Jason's. Amazing yes. Not cheap but being out of business for the better part of a month is also pretty darn expensive. (You may lose customers who never come back.)