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Speaker 1: Welcome, Welcome, Welcome back to the Plot West Steps podcast.

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Speaker 1: My guest today the CEO Somost Patrick Spence publick, good day, Happy,

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Speaker 1: good to be here, Bob. So a hearted COVID nine

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Speaker 1: team effects so much. Well, wow, it's uh, it's sent

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Speaker 1: everybody home almost overnight. Uh. And if you would have

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Speaker 1: asked me, you know, back before Covid if we'd be

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Speaker 1: able to run the company, uh, you know, from everybody

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Speaker 1: working from home, I probably would have had a hard

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Speaker 1: time believing it, quite frankly. And it was incredible because

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Speaker 1: our team you know, just stepped up to really be

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Speaker 1: able to keep the business going UM during that period,

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Speaker 1: and in fact, we kind of threw out the playbook

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Speaker 1: that we had UM and we got re oriented on

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Speaker 1: a few key priorities. The first was supporting our people

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Speaker 1: and making sure that they were set up for success

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Speaker 1: and you know, able to balance kind of the demands

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Speaker 1: of life at that point, UM. And then we got

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Speaker 1: really focused on bringing the joy of Sonos to more homes.

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Speaker 1: So we had a whole bunch of our retailers and

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Speaker 1: distribution channels closed UM. And so what we did was say, okay, like,

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Speaker 1: how can we help people through this period and maybe

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Speaker 1: make life at home a little bit better. Yeah, so

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Speaker 1: getting focused really um, you know at that time on

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Speaker 1: Sonos at Home is what we called it. And we

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Speaker 1: launched a campaign to help people you know, for their

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Speaker 1: home office and how Sonos could help make their home

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Speaker 1: office a little better, make streaming at home a little better, um,

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Speaker 1: you know. And so so we were really trying to

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Speaker 1: just um, you know, play into kind of what was

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Speaker 1: happening and play our role right and kind of get

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Speaker 1: back to our mission to how we get out. Well,

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Speaker 1: let's slow down a little bit on a more granular level.

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Speaker 1: Tell me about the office use in helping people in offices. Well,

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Speaker 1: so you know, as everybody was going home, um, we

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Speaker 1: felt like, you know, we could bring music into people's

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Speaker 1: home offices, and so we I think it was the

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Speaker 1: maybe the one at that point we were saying, hey,

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Speaker 1: like think about putting a one in your home office

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Speaker 1: to have some background music. And we gave some sound

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Speaker 1: suggestions at that point, maybe some a s mr um

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Speaker 1: you know, kind of background music that could help people

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Speaker 1: kind of go through the day, um and navigate their

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Speaker 1: day a little bit with some um, you know, some

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Speaker 1: mood music. Uh. So it wasn't quite so stressful. Okay,

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Speaker 1: so you are the band new facturer. How did you

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Speaker 1: reach the people who have home offices? Well, you know,

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Speaker 1: the good thing about son Nos is that we have

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Speaker 1: all of our customers information from when they actually registered

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Speaker 1: their system. So we reached out to all of our

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Speaker 1: existing customers and then we actually so with with messages

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Speaker 1: basically a tailored campaign that we created, you know, overnight

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Speaker 1: as a result of Covid reaching out to them um

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Speaker 1: and saying, hey, you know, think about putting a sons

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Speaker 1: one in your office, um, and here's what you can

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Speaker 1: listen to, and some recommendations that we had. We reached

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Speaker 1: our existing customers that way, and then we actually went

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Speaker 1: out and promoted the story if you also know us

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Speaker 1: at home across all of the social media channels and

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Speaker 1: all the digital channels out there that we largely use

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Speaker 1: for a lot of our advertising efforts these days. Okay,

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Speaker 1: was there a discount for pre existing users? There was, yeah,

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Speaker 1: so we so in that period we gave some discounts

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Speaker 1: um to people. We created a bundle for streaming for instance,

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Speaker 1: during that period as well, so if people we knew

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Speaker 1: people would be watching more video, so if they wanted

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Speaker 1: at that point to get a playbar or a beam. Um.

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Speaker 1: We put that together with surround sound system and after

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Speaker 1: a discount on that to people as well. UM, so

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Speaker 1: we're really pivoted to try and quickly get people, um,

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Speaker 1: you know and meet their needs kind of where they

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Speaker 1: were at that time and kind of the changes, the

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Speaker 1: dramatic changes in the way that people were spending their

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Speaker 1: time at home. So how effective was that campaign? What

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Speaker 1: kind of percentage results are you're looking at, you know,

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Speaker 1: like direct mail one percent is what targets want a

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Speaker 1: campaign like this to existing customers, Uh, what kind of

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Speaker 1: response to well, well above that? So in that quarter,

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Speaker 1: Baba is the next one. You know, our director consumer

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Speaker 1: sales were up year every year we had an absolutely

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Speaker 1: incredible you know rise. Now, of course we had other channels,

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Speaker 1: physical channels closed at that particular point in time, but

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Speaker 1: we were able to kind of meet customers where they

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Speaker 1: were and at that point we had all these retailers

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Speaker 1: are closing, you know, the main um levels of distribretion.

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Speaker 1: At that point of our sales, we're going through, um

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Speaker 1: through you know, people that weren't us, weren't our stores,

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Speaker 1: weren't weren't our online session weren't weren't That wasn't our

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Speaker 1: online store pre pandemic, And so quickly we're like, okay,

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Speaker 1: what are we gonna do? How you know, and how

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Speaker 1: do we survive this period? Right? Because I think at

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Speaker 1: that point everybody thought, Okay, we're going into recession. It's

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Speaker 1: gonna be a very difficult period. Are people going to

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Speaker 1: spend money? What are they gonna do? And um, So

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Speaker 1: we we went hard in terms of directly to the

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Speaker 1: customers both are existing and then new and sending them

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Speaker 1: to Sons dot com. And we saw year of your

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Speaker 1: growth in that period. We clawed our way back to

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Speaker 1: I want to say, just short of the year before

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Speaker 1: results in that period, and then we actually built on

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Speaker 1: that afterwards and our business really took off. Okay, the

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Speaker 1: references what that was in uh, I think that was

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Speaker 1: our good the quarter last year where the pandemic um

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Speaker 1: you know, really first started. So that was probably our

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Speaker 1: fiscal key three of last year. When you're saying relative

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Speaker 1: to what the year prior, Yeah, to the year prior. Okay,

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Speaker 1: we're talking about quite quarter, correct, That's okay, let's just

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Speaker 1: go back when there's not a pandemic. What percentage of

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Speaker 1: equipment is sold direct by Sonos via third parties. Yeah,

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Speaker 1: uh so direct was about ten percent prior to the pandemic,

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Speaker 1: and what is it now? Um So through last year

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Speaker 1: we reported that it was about of our total sales.

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Speaker 1: Why do you think in a world that everybody is

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Speaker 1: so comfortable buying on Amazon that most of your customers

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Speaker 1: are buying through traditional retail channels? Um, you know, I

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Speaker 1: think people if they're going to buy a TV or

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Speaker 1: buy something else, you know, I think that's a time

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Speaker 1: where people, um will buy through the physical channels. Right. Convenience.

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Speaker 1: We've actually done some research to look at, but why

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Speaker 1: did somebody who is already a Sonos customer purchase at

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Speaker 1: best Buy or Costco? And in some of those situations,

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Speaker 1: they just wanted to get another product today. So there's

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Speaker 1: kind of like the convenience and I want it right now.

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Speaker 1: I'm not even gonna wait for you know, overnight or

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Speaker 1: two day shipping. But then for our um, you know,

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Speaker 1: for our home theater products, there's very much the match

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Speaker 1: of I'm buying a TV, how am I going to

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Speaker 1: make it sound great? Right? And that's where Okay, there's

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Speaker 1: these products from son Nos m whether you're s buy

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Speaker 1: or costco that uh makes sense in terms of purchasing

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Speaker 1: UM in tandem with a TV purchase. And so that's

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Speaker 1: like a compelling a pretty compelling fact. And then the

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Speaker 1: one thing that people underestimate is as well, the what

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Speaker 1: we call our installed solutions channels, the dealers that install

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Speaker 1: UM products in people's homes. And that's been an amazingly

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Speaker 1: resilient channel. You know, it's almost it's been about nine

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Speaker 1: years since I've been at Sonos, and when I first

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Speaker 1: came in, I thought that would be one that would

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Speaker 1: be decimated by a lot of the other channels that

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Speaker 1: exist out there. But I think the UM those partners

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Speaker 1: continue to show their value UM. They continue to solve

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Speaker 1: customer problems and they're a big part of our business

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Speaker 1: as well. And they've been amazingly resilient through the pandemic too,

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Speaker 1: and so that's a big chunk of the business. So

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Speaker 1: we we've got a nice distribution across a variety of

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Speaker 1: the variety of the channels. And I think one of

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Speaker 1: the other things, Bob, is some people may want to

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Speaker 1: hear it, you know, they may want to touch it,

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Speaker 1: feel it, hear it UM because because I would say

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Speaker 1: we have a you know, at this point, I'm pretty

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Speaker 1: surprised by the percentage willing to purchase online, you know,

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Speaker 1: site unseen as well. We launched new products in the

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Speaker 1: midst of the pandemic, are five sub recently Rome and

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Speaker 1: you know, so all of these products people were purchasing

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Speaker 1: site unseen, Sound unheard, which is pretty impressive and says

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Speaker 1: a lot about the brand. Do you know if people

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Speaker 1: who already own a Sonos product are disproportionately or much

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Speaker 1: higher ordering online as opposed to new customers. Yes, we're

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Speaker 1: we were able to tell if you're you know, if

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Speaker 1: you've registered your product to an existing system that you

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Speaker 1: already have, versus being a new what we call a

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Speaker 1: new home um and so into a new home. And

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Speaker 1: so as we see that, we can look at, okay,

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Speaker 1: how are people doing it? And what we see is

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Speaker 1: that existing customers are more likely to buy on Sonos

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Speaker 1: dot com. They've developed a relationship with the brand, um,

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Speaker 1: you know, and then they want to we announce a

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Speaker 1: new product, we make it really easy for them to

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Speaker 1: order on sons dot com. And so that's something that

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Speaker 1: we see. Okay, let's go back to COVID. Could everybody

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Speaker 1: do their job from home with a manufacturing or into business. Yeah,

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Speaker 1: a great question, and it's something that UM was challenging.

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Speaker 1: We ended up having UM probably at the end dozens

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Speaker 1: of people in each of our Santa Barbara and Boston

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Speaker 1: locations that started to come back into the office after

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Speaker 1: the first wave. So immediately what happened right at the

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Speaker 1: start is everybody had to UM and so uh you

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Speaker 1: saw amazing like test rig setups in people's kitchens and

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Speaker 1: bathrooms and basements UM in Boston and some of the

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Speaker 1: pictures were it was just inspiring to see the way

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Speaker 1: people were working to still launch a product. Right we

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Speaker 1: were we were in the midst of trying to launch

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Speaker 1: Beam five and sub and we weren't sure, Okay, are

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Speaker 1: people even gonna launch products in these times? And what's

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Speaker 1: going to happen as we go through this, And the

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Speaker 1: team just did everything they could to keep it on track.

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Speaker 1: And you know, having this test equipment at home, and

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Speaker 1: then we created the conditions in our Santa Barbara and

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Speaker 1: Boston offices where people could be distanced had ppe UM

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Speaker 1: so that they could actually come in and start to

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Speaker 1: use some of the test equipment, do some of the

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Speaker 1: things that they needed to do. And so the reality

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Speaker 1: is there's a number of jobs that you want, um

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Speaker 1: in building these products, to be in the office for testing,

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Speaker 1: for the manufacturing team in China, UM and our partners

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Speaker 1: there and Malaysia. We had to you know, abide by

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Speaker 1: the the local laws and that was a bit of

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Speaker 1: a challenge. But at the same time, the team, you know,

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Speaker 1: made it work. UM. We'd usually have people from Boston

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Speaker 1: and Santa Barbara on the ground in China actually with

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Speaker 1: those bills and those kind of things, but they didn't

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Speaker 1: via zoom. UM. They did a via pictures and FaceTime

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Speaker 1: and all the other tools that are out there, and

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Speaker 1: so that we just figured it out. But it was

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Speaker 1: it was hard to navigate in the early days. UM.

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Speaker 1: But the power of the human spirit in it, in

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Speaker 1: you know, kind of the creativity and just like figuring

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Speaker 1: it out. UM, I think it's pretty incredible. And why

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Speaker 1: are there two offices and what goes down in each

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Speaker 1: respective offer? We actually also have one in Seattle. UM.

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Speaker 1: So we started, believe it or not, in you know,

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Speaker 1: to office is so simultaneously in Santa Barbara and Boston.

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Speaker 1: And the thinking was trying to get the right talent right.

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Speaker 1: We we are in a very uh complex kind of

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Speaker 1: space in terms of marrying the worlds of hardware and

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Speaker 1: software together. UM, and we knew we probably couldn't do

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Speaker 1: it um and get all the talent we needed in

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Speaker 1: one particular location. So we've actually started into We added

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Speaker 1: Seattle to the mix about five years ago because we

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Speaker 1: needed to add even more software talent into the company.

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Speaker 1: And that's about two thirds of our engineering team is

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Speaker 1: on the software side, and so we actually have all

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Speaker 1: three offices. And I think Bob, this was a an

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Speaker 1: advantage for us as we went into the pandemic because

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Speaker 1: we've been working in a distributed fashion for years um,

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Speaker 1: and so we already were using Zoom religiously. You know,

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Speaker 1: we would have calls often where teams from all three

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Speaker 1: offices are on Zoom together. UM. We were using Slack,

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Speaker 1: we were using all the tools. We were on the

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Speaker 1: leading edge of using a lot of the tools that

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Speaker 1: some people only found for the first time when they

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Speaker 1: were forced to work from home them. So that transition

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Speaker 1: that probably served us well, UM in that transition. And

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Speaker 1: there you know, being forced to work from home is

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Speaker 1: very different than working from home and choosing to work

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Speaker 1: from home but nonetheless we had the tools, we had

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Speaker 1: the experience to actually make that work. UM, so we

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Speaker 1: kind of know how to how to handle those situations.

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Speaker 1: So if softwares in Seattle, what are the strengths in

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Speaker 1: Boston and Santa Barbara? There we have we have software

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Speaker 1: in all three offices. We have not we have not created,

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Speaker 1: you know, an office and said this is the only

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Speaker 1: place this can be. We've said, you know, talent, we

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Speaker 1: need to find talent, and you can be in Seattle, UM, Boston,

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Speaker 1: Santa Barbara. Uh, you know we have so, so that's

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Speaker 1: kind of the way that we've approached it. And so hardware,

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Speaker 1: you find a lot of hardware people in Boston because

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Speaker 1: of the legacy there of audio companies and um, you know,

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Speaker 1: just some amazing history uh there. And then you'll find

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Speaker 1: hardware and software people here in Santa Barbara as well. So,

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Speaker 1: um in all three and now we we've got a

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Speaker 1: small office in San Francisco as well as we'll find

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Speaker 1: both hardware and software people there. Okay, you talked about

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Speaker 1: this office oriented, home oriented plan when COVID hit. Did

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Speaker 1: you have enough inventory? Um? We did not, um. So,

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Speaker 1: And and as you've probably seen, supply chain has been

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Speaker 1: a huge issue over the past few months, and so immediately,

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Speaker 1: I think not just us, but everybody in the industry

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Speaker 1: and not just consumer electronics, anyone who builds anything immediately

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Speaker 1: went to freeze. You know, let's see what's going to

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Speaker 1: happen here, because our people gonna spend money, you know,

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Speaker 1: job losses, everything closing up, and so everybody froze for

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Speaker 1: a moment um. We saw that great momentum in Sonos

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Speaker 1: at home, so we started to kind of ramp things

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Speaker 1: back up and turn it back up, um and so

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Speaker 1: you know, then we started to crank the engine again,

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Speaker 1: but very quickly demand really started to move up, and

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Speaker 1: we saw even more demand for a products and much

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Speaker 1: more than we could actually um, you know build as well.

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Speaker 1: And so we started, you know, seeing a ton of

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Speaker 1: demand that we couldn't fulfill, you know, really as we

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Speaker 1: got into the the you know, the September October period

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Speaker 1: um of last year, and we've been trying to you know,

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Speaker 1: really catch up if you will, ever since. And so

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Speaker 1: that's been, ah, that's been an interesting learning you know

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Speaker 1: for me and thinking through the UH, I think we'd

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Speaker 1: all kind of been thinking, all right, we know what

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Speaker 1: will happen in a situation like this, and there's probably

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Speaker 1: it was probably time for a recession and some of

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Speaker 1: those things. Yet the injection of all the money into

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Speaker 1: the system, the ability for many of people in our

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Speaker 1: target audience to continue to work from home, continue to

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Speaker 1: have their job, you know, save money on entertainment, travel,

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Speaker 1: all those things actually ended up benefiting us in a way.

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Speaker 1: And so UM we did not know predict that, and

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Speaker 1: I think it's a good lesson in you know, really

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Speaker 1: being mindful that you probably don't know what's going to

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Speaker 1: happen in those situations pretty unprecedented and just having to

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Speaker 1: stay agile UM if you will, through that. So that's

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Speaker 1: been uh, yeah, that's been one of those things that

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Speaker 1: we've learned through this. And have you been affected by

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Speaker 1: the chip shortage? Absolutely, yeah, So that's been something that

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Speaker 1: our team has done a better job than most, you know,

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Speaker 1: in in managing, but certainly it's something that impacts us.

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Speaker 1: Impacts us UM today as well. As we've navigated through

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Speaker 1: UM all of this and the container shortage. You know,

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Speaker 1: the ports have had situations where the staff there UM

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Speaker 1: as well caught COVID right, and so we've had all

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Speaker 1: of these factors. I've never seen a year like this, Bob.

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Speaker 1: As I think back, I've been in you know, smart

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Speaker 1: hardware plus software kind of for twenty three years now,

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Speaker 1: and I've never seen a supply chain situation like this

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Speaker 1: and as many things kind of backing up as they have.

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Speaker 1: And that's why I'm so proud of our team and

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Speaker 1: the way they've managed it, because we've been able to

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Speaker 1: continue to grow and deliver as much as we can

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Speaker 1: to customers. But certainly we've been you know, we've still

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Speaker 1: seen more demand um than we have supplied for, and

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Speaker 1: we still have work to do and making sure that

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Speaker 1: we're able to fulfill all of the customer demand out there.

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Speaker 1: Do you believe after this crisis is over, the just

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Speaker 1: in time philosophy of worldwide manufacturing supply chage chain will

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Speaker 1: change or people just forget about this and we'll go

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Speaker 1: back to the other one. I think it will change

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Speaker 1: based on what I'm seeing right now in the industry, UM,

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Speaker 1: you know, and so I do think there'll be more

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Speaker 1: thought We've we've been more thoughtful in terms of Okay,

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Speaker 1: how are you building more resilience into the system. UM.

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Speaker 1: There are some high hurdles to get over in terms

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Speaker 1: of the capital outlays required to build the kind of

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Speaker 1: facilities and suppliers that we would need in the United

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Speaker 1: States for instance, or let's say North America more generally.

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Speaker 1: But I you know, I think even the government um

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Speaker 1: seems interested in this area. UM, the largest companies that

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Speaker 1: are in these areas are working on it. We're having

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Speaker 1: lots of conversations with our partners. So I do think

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Speaker 1: we have a window of time where we'll see if

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Speaker 1: we can get enough momentum behind the movement of having

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Speaker 1: more localized supply chains, if you will. And it will

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Speaker 1: probably be some you know, combination in between, because not

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Speaker 1: everything from an affordability perspective will make it work. But

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Speaker 1: I do think there are some things and I do

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Speaker 1: think for products like ours, UM, I think Apple's probably

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Speaker 1: in this boat too, like that there's there's probably a

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Speaker 1: way to you know, make it work over time. And

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Speaker 1: so that's something that we're certainly investigating and trying to

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Speaker 1: come out from a variety of angles, and that there's

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Speaker 1: a lot of people in the industry working on the

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Speaker 1: same thing. So I'm kind of optimistic UM that will

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Speaker 1: get a little bit more you know, back more locally

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Speaker 1: and I think that will benefit everybody from a resilience

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Speaker 1: resiliency perspective and hopefully, you know, quite frankly, from overall

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Speaker 1: society and economy perspective as well. So what is the

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Speaker 1: manufacturing design process and how long does it take? Who

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Speaker 1: comes up with a product? You tell me from beginning

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Speaker 1: to end? Yeah, So, um, you know, we're always thinking

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Speaker 1: and working on customer insights, so trying to understand which

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Speaker 1: is fancy term for behavior around customers and what's happening

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Speaker 1: there and kind of what's happening in the industry. And

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Speaker 1: we're trying to marry two things together. So we have

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Speaker 1: a team looking at how customers are using products, and

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Speaker 1: then we have a team looking at technologies and how

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Speaker 1: how do those things potentially come together? And so we're

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Speaker 1: always considering where's that going? And really we spend time

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Speaker 1: thinking about the next five years as we're thinking about

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Speaker 1: what we want to build, and so we'll be looking

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Speaker 1: at a variety of you know, opportunities out there as

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Speaker 1: we think about where does the speaker go from here,

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Speaker 1: where does the soundbar go from here? Where does sound

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Speaker 1: go from here? Um, you may have seen that recently

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Speaker 1: we launched a picture frame that's a speaker with Ikea

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Speaker 1: for instance, And so we're always thinking about what can

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Speaker 1: we do with you know, different form factors and our

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Speaker 1: software to create sound in different and new kind of ways.

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Speaker 1: And so we'll go through and we'll do some work

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Speaker 1: on that. We'll try to think about what it is

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Speaker 1: that we think will fit the market at the right time.

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Speaker 1: We work through um things like all of the design

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Speaker 1: and we start to get an idea on the design.

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Speaker 1: We start to get an idea and we have a

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Speaker 1: design team that works on that and it's looking at

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Speaker 1: materials and finishes and everything that's out there and kind

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Speaker 1: of what's happening in the world and what fits our

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Speaker 1: design language. And then we'll be looking at that technology

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Speaker 1: advanced technology team and what can we be incorporating in it?

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Speaker 1: Is it voices, it ultra wide band, is it Bluetooth? Like?

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Speaker 1: What what should be in the product? And it's what

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Speaker 1: should be in the product in the interests of the

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Speaker 1: customer experience, right and what behaviors we wanted to we

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Speaker 1: want to deliver if you will, um as we're going

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Speaker 1: through that and so so so then we'll start working

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Speaker 1: on what we call a product requirements document which says,

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Speaker 1: here's the thing we're going to build, and we'll have

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Speaker 1: an initial take on a concept with some UM, initial ideas,

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Speaker 1: some designs in terms of what's there, UM, an idea

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Speaker 1: of kind of where it will fit in the market,

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Speaker 1: and we think it can do UM, and we'll start

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Speaker 1: to put that together and usually you know it'll be

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Speaker 1: to market then. UM. In this day and age, which

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Speaker 1: is forever in the in the era of like software

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Speaker 1: moving UM quickly and shipping you know every day that

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Speaker 1: that's usually an eighteen to thirty six month process, depending

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Speaker 1: on what we're building. And so we are we're working

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Speaker 1: very hard in those situations to determine what's going to

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Speaker 1: be popular, what's going to resonate with customers, you know,

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Speaker 1: year and a half, three years you know from now

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Speaker 1: in some cases, which it is a is a high

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Speaker 1: wire act, right because that's a long time away in

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Speaker 1: this day and age in terms of determining, Okay, what

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Speaker 1: is it, what's going to look like, UM, what's gonna

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Speaker 1: fit with people's home decor, how is it going to

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Speaker 1: sound at that particular point in time, UM, what formats

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Speaker 1: are going to be out there at that time? UM,

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Speaker 1: and all of those things, and so it's really like

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Speaker 1: a process UM that takes a lot upfront and then

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Speaker 1: there's a lot of work, but work that we know

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Speaker 1: now after almost twenty years at this we know how

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Speaker 1: to go execute on and from there UM and so

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Speaker 1: it becomes very clear from the product requirements document, Okay,

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Speaker 1: here's what we need to do, and then it's a

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Speaker 1: matter of like managing it UM from that and making

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Speaker 1: sure that we can actually deliver on the vision that

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Speaker 1: we set for the product at the beginning. And we're

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Speaker 1: always doing stage gates and checks and saying, okay, is

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Speaker 1: this living up to the promise of the product that

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Speaker 1: we had envisioned back in the you know, the first day.

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Speaker 1: And so it's really a cross functional team, Bob. This

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Speaker 1: is why I think we've been successful. And what we've

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Speaker 1: done so design, sound UM, Technology, Marketing in their product

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Speaker 1: management UM all working together to try and create something

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Speaker 1: great UM shepherded by you know, a product manager at

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Speaker 1: the end of the day that's going to take the

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Speaker 1: ultimate responsibility for this product and delivering it to customers.

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Speaker 1: Let's just say I stamped my fingers today and there

424
00:21:48,920 --> 00:21:51,720
Speaker 1: was a big revolution in this sphere, and you had

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Speaker 1: an idea today lock stock and barrel. If you had

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Speaker 1: the idea, how fast could you get it out on

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Speaker 1: the street. Depend depend ends exactly what it would be.

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Speaker 1: You know, like there's some things that can be done

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Speaker 1: through software, So we've gone back and we've increased the

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Speaker 1: functionality of our products through software at times UM and

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Speaker 1: that can be a six month venture, that can be

432
00:22:12,800 --> 00:22:15,120
Speaker 1: a twelve month venture depending on what we're doing. If

433
00:22:15,160 --> 00:22:18,800
Speaker 1: it's a new hardware kind of idea, let's say, design concept.

434
00:22:19,200 --> 00:22:23,440
Speaker 1: If it's something that is known quite known, you might

435
00:22:23,480 --> 00:22:26,120
Speaker 1: be out in eighteen months. But if it's something revolutionary

436
00:22:26,160 --> 00:22:28,280
Speaker 1: that's going to take new technology, and even though you

437
00:22:28,320 --> 00:22:31,760
Speaker 1: know the use case that you want to create UM

438
00:22:31,800 --> 00:22:34,280
Speaker 1: and what kind of experience you want to deliver for customers,

439
00:22:34,480 --> 00:22:39,240
Speaker 1: if it's taking UM invention right and creating new technologies

440
00:22:39,320 --> 00:22:42,399
Speaker 1: or implementing them in different ways that UM that have

441
00:22:42,520 --> 00:22:45,200
Speaker 1: never been done before, that could take you know, thirty

442
00:22:45,240 --> 00:22:47,520
Speaker 1: six months UM in terms of doing that. So it

443
00:22:47,640 --> 00:22:51,000
Speaker 1: just depends on how much you're trying to accomplish in

444
00:22:51,240 --> 00:22:53,479
Speaker 1: the product that you're doing. Because and we have both right,

445
00:22:53,480 --> 00:22:56,560
Speaker 1: we'll have revolutionary products are bringing out like ARC which

446
00:22:56,600 --> 00:22:58,720
Speaker 1: is completely different and then we'll do things at times

447
00:22:58,760 --> 00:23:00,480
Speaker 1: like bring out the one s L which is the

448
00:23:00,480 --> 00:23:03,440
Speaker 1: one without a microphone. And so in a situation like that,

449
00:23:03,440 --> 00:23:05,440
Speaker 1: that'll only take us twelve months because we just need

450
00:23:05,480 --> 00:23:07,159
Speaker 1: to pull the microphone out and we need to make

451
00:23:07,200 --> 00:23:08,919
Speaker 1: sure that it all works, and we can do that

452
00:23:09,000 --> 00:23:12,680
Speaker 1: much more quickly now. Legendarily, when Steve Jobs came back

453
00:23:12,720 --> 00:23:17,320
Speaker 1: to Apple, he thinned the product line. You wanted to

454
00:23:17,359 --> 00:23:21,439
Speaker 1: make it very obvious, not confusing to the customer. You know,

455
00:23:21,440 --> 00:23:23,920
Speaker 1: there's thoughts that I've been in retail a long time ago.

456
00:23:24,320 --> 00:23:26,439
Speaker 1: If you show somebody to products will buy when you

457
00:23:26,480 --> 00:23:29,600
Speaker 1: show them five, Sometimes they're overwhelmed. They'll leave the store.

458
00:23:29,920 --> 00:23:33,159
Speaker 1: Needless to say, that is not the philosophy of Apple today,

459
00:23:33,200 --> 00:23:37,080
Speaker 1: but it's so nos you have varying niches. Do you

460
00:23:37,080 --> 00:23:39,720
Speaker 1: ever think, well, God, we're putting out too much, we

461
00:23:39,760 --> 00:23:43,720
Speaker 1: should limit the product line. What are your thoughts there? Yeah,

462
00:23:43,760 --> 00:23:46,240
Speaker 1: And you know, having come from you know, and growing

463
00:23:46,320 --> 00:23:49,760
Speaker 1: up inside a mobile phone company, um BlackBerry, you know,

464
00:23:49,800 --> 00:23:53,320
Speaker 1: really inventing the smartphone, I think there was there's a

465
00:23:53,320 --> 00:23:55,800
Speaker 1: different mentality, you know there. And one of the things

466
00:23:55,880 --> 00:23:57,399
Speaker 1: that I think we've been good at and one of

467
00:23:57,440 --> 00:24:02,400
Speaker 1: the things that I actually manned add UM was around

468
00:24:02,440 --> 00:24:05,720
Speaker 1: to at least two new products per year. I felt

469
00:24:05,760 --> 00:24:08,400
Speaker 1: like that was the right cadence. So this is purely

470
00:24:08,480 --> 00:24:11,119
Speaker 1: like an instinctual call, but I felt like, given the

471
00:24:11,119 --> 00:24:13,399
Speaker 1: capability of the organization at the time and then the

472
00:24:13,440 --> 00:24:16,240
Speaker 1: opportunities in front of us and creating things, that was

473
00:24:16,280 --> 00:24:18,760
Speaker 1: the right thing to do. And you'll notice we don't

474
00:24:18,800 --> 00:24:21,320
Speaker 1: this is very different than most and consumer electronics. We

475
00:24:21,359 --> 00:24:25,040
Speaker 1: don't have a TikTok where like every year we refresh

476
00:24:25,040 --> 00:24:27,240
Speaker 1: our entire product line. That is a classic thing to

477
00:24:27,280 --> 00:24:28,959
Speaker 1: do from a lot of the tech companies that are

478
00:24:28,960 --> 00:24:30,639
Speaker 1: out there, and they'll come about the new version of

479
00:24:30,680 --> 00:24:32,880
Speaker 1: product X, Y or Z, they'll do it every year

480
00:24:33,119 --> 00:24:35,760
Speaker 1: or every couple of years. We instead focus on building,

481
00:24:36,119 --> 00:24:38,480
Speaker 1: you know, a few great products and you will see

482
00:24:38,520 --> 00:24:41,959
Speaker 1: some that we do UM where we'll do a refresh

483
00:24:42,000 --> 00:24:43,919
Speaker 1: like we did with five, which is a build on

484
00:24:43,960 --> 00:24:46,480
Speaker 1: the play five UM and the sub last year build

485
00:24:46,480 --> 00:24:49,880
Speaker 1: on the the original sub right, and so those are

486
00:24:49,920 --> 00:24:51,359
Speaker 1: things that we'll do, but we'll do those on a

487
00:24:51,440 --> 00:24:53,760
Speaker 1: five to seven year cadence, and then we'll bring something

488
00:24:53,800 --> 00:24:57,280
Speaker 1: completely new out like an arc or um a beam

489
00:24:57,280 --> 00:25:00,360
Speaker 1: when it came out or Rome for instance, and so

490
00:25:01,000 --> 00:25:04,200
Speaker 1: those products, UM, you know, we we also will bring

491
00:25:04,200 --> 00:25:06,200
Speaker 1: in the mix. But I think bob the right thing

492
00:25:06,359 --> 00:25:08,800
Speaker 1: for us and the capabilities we have the customers were

493
00:25:08,800 --> 00:25:12,800
Speaker 1: selling to. Thinking about sustainability, thinking about building products that

494
00:25:12,880 --> 00:25:14,760
Speaker 1: last for a while and something you don't have to

495
00:25:14,840 --> 00:25:17,800
Speaker 1: upgrade every year. UM. You know, I like the cadence

496
00:25:17,880 --> 00:25:19,879
Speaker 1: of two per year. It gives us the right balance

497
00:25:19,920 --> 00:25:22,080
Speaker 1: of being able to tell our story. Again, so there's

498
00:25:22,119 --> 00:25:24,159
Speaker 1: two times a year you'll see s be pretty loud

499
00:25:24,640 --> 00:25:27,320
Speaker 1: in media and then as well with our advertising, which

500
00:25:27,320 --> 00:25:30,280
Speaker 1: is when we're telling the story around our new product.

501
00:25:30,320 --> 00:25:32,040
Speaker 1: But it's all part of the system, right and so

502
00:25:32,040 --> 00:25:34,879
Speaker 1: so NOS is usually told in a broader way at

503
00:25:34,920 --> 00:25:37,680
Speaker 1: that time. UM, And it's I think our approach is

504
00:25:37,760 --> 00:25:41,359
Speaker 1: quite unique compared to UM any other hardware company I

505
00:25:41,359 --> 00:25:44,960
Speaker 1: can think of. Okay, let's talk about home audio. I

506
00:25:45,080 --> 00:25:47,720
Speaker 1: want your take on the state of home audio. Just

507
00:25:47,760 --> 00:25:50,639
Speaker 1: going through a little history. If you go back forty

508
00:25:50,640 --> 00:25:53,879
Speaker 1: odd years ago, it was really about everyone getting a

509
00:25:54,000 --> 00:25:57,240
Speaker 1: large home stereo to get closer to the sound. Then

510
00:25:57,280 --> 00:25:59,720
Speaker 1: we went to the boom box, then we went to

511
00:25:59,760 --> 00:26:02,000
Speaker 1: the your bud needle. Let's just say, that's not a

512
00:26:02,040 --> 00:26:05,000
Speaker 1: market you're in. You're in the home audio sphere. What

513
00:26:05,160 --> 00:26:09,680
Speaker 1: is going on there? You know, I think people it's

514
00:26:09,680 --> 00:26:11,960
Speaker 1: been interesting. One of the things that that we've seen

515
00:26:12,080 --> 00:26:15,040
Speaker 1: through this period is I think so I'll go back

516
00:26:15,119 --> 00:26:17,160
Speaker 1: right to the beginning, and at the beginning, I think

517
00:26:17,320 --> 00:26:19,159
Speaker 1: really one of the biggest things with son nos was

518
00:26:19,520 --> 00:26:22,280
Speaker 1: making it easy for people to listen to audio in

519
00:26:22,320 --> 00:26:24,639
Speaker 1: their home and digital formats, right so at that point

520
00:26:24,680 --> 00:26:27,760
Speaker 1: downloads you know, eventually would get to streaming, and we

521
00:26:27,840 --> 00:26:31,240
Speaker 1: kind of democratized that to some degree because it was

522
00:26:31,280 --> 00:26:33,520
Speaker 1: a it was a much more difficult for people to

523
00:26:33,560 --> 00:26:37,400
Speaker 1: be really enjoying good home audio in the early days,

524
00:26:37,400 --> 00:26:40,000
Speaker 1: and so we tried to make that easier than it was.

525
00:26:40,359 --> 00:26:41,960
Speaker 1: Uh And I think that was the magic through the

526
00:26:42,000 --> 00:26:45,880
Speaker 1: first phase. Interestingly, you know, as the big tech companies

527
00:26:45,920 --> 00:26:49,760
Speaker 1: jumped into the space, um then there were these poks,

528
00:26:49,840 --> 00:26:52,639
Speaker 1: these you know, the small products Bucks or whatever it was,

529
00:26:52,680 --> 00:26:54,400
Speaker 1: and all of a sudden, those are being given away

530
00:26:54,440 --> 00:26:56,240
Speaker 1: for free when you subscribe to the New York Times,

531
00:26:56,280 --> 00:26:58,240
Speaker 1: for instance, are all these other things or they're you know,

532
00:26:58,240 --> 00:27:02,359
Speaker 1: there's cheap bluetooth products. And I think it brought sound

533
00:27:02,560 --> 00:27:04,800
Speaker 1: into the home in a different way. And what we

534
00:27:04,880 --> 00:27:07,600
Speaker 1: tried to do was tell our story on top of that.

535
00:27:07,640 --> 00:27:10,679
Speaker 1: So if people got a taste of you know, the

536
00:27:10,680 --> 00:27:13,680
Speaker 1: the Google products or the Amazon products at those those

537
00:27:13,760 --> 00:27:16,639
Speaker 1: cheap levels, we want to show them there's something better

538
00:27:16,880 --> 00:27:20,200
Speaker 1: there and something more premium for the longer term. And

539
00:27:20,480 --> 00:27:22,320
Speaker 1: I feel like we've been successful at that if you

540
00:27:22,359 --> 00:27:24,600
Speaker 1: look at our growth um kind of over the period

541
00:27:24,640 --> 00:27:28,239
Speaker 1: that those companies have entered the space, and and I

542
00:27:28,240 --> 00:27:30,600
Speaker 1: feel good about the fact that we're doing that because

543
00:27:30,600 --> 00:27:34,119
Speaker 1: we're bringing a better experience. We're bringing open experience right

544
00:27:34,160 --> 00:27:36,160
Speaker 1: supports all of the different services that there, so you're

545
00:27:36,160 --> 00:27:39,080
Speaker 1: not trapped in one ecosystem UM and we're bringing better

546
00:27:39,240 --> 00:27:42,600
Speaker 1: sounding audio um as the way the artist intended it

547
00:27:42,680 --> 00:27:45,040
Speaker 1: into people's homes in that way, and we're still making

548
00:27:45,040 --> 00:27:50,159
Speaker 1: it easy versus kind of the traditional audio solutions that

549
00:27:50,200 --> 00:27:52,320
Speaker 1: were much more niche for people and had to you know,

550
00:27:52,359 --> 00:27:54,439
Speaker 1: take a bit of a degree to figure out how

551
00:27:54,480 --> 00:27:56,399
Speaker 1: to use. And so I feel like we're at a

552
00:27:56,440 --> 00:27:59,960
Speaker 1: point where people are, you know, being thoughtful about the

553
00:28:00,040 --> 00:28:02,240
Speaker 1: products that they're putting in their home. UM. They're thinking

554
00:28:02,240 --> 00:28:05,159
Speaker 1: about the longevity, the premium, nous, the openness UM, and

555
00:28:05,200 --> 00:28:07,840
Speaker 1: I think all of that has benefited us. Now, I

556
00:28:07,880 --> 00:28:11,240
Speaker 1: would say the thing we push on is, Okay, what

557
00:28:11,480 --> 00:28:14,760
Speaker 1: you know, what's the future hold as we think about UM,

558
00:28:14,800 --> 00:28:16,720
Speaker 1: as we think about audio in the home, and one

559
00:28:16,760 --> 00:28:19,560
Speaker 1: of these things that we've been pushing with Ikea UM

560
00:28:19,600 --> 00:28:21,679
Speaker 1: and as well with our true play technology. You know

561
00:28:21,720 --> 00:28:26,320
Speaker 1: that really UM shape sound in the room is UM.

562
00:28:27,040 --> 00:28:28,600
Speaker 1: You know, do we need to be constrained by the

563
00:28:28,600 --> 00:28:32,480
Speaker 1: speaker form factor? UM? So this picture frame for instance

564
00:28:33,080 --> 00:28:35,560
Speaker 1: making sound is a great example, or the lamp that

565
00:28:35,600 --> 00:28:38,560
Speaker 1: we've done UM with Ikea in terms of making the sound.

566
00:28:38,600 --> 00:28:44,520
Speaker 1: Because I'm not sure that the future is necessarily dedicated

567
00:28:44,920 --> 00:28:47,640
Speaker 1: products in the way that they are today. The sound

568
00:28:47,640 --> 00:28:51,160
Speaker 1: can be integrated into other household products, and certainly there'll

569
00:28:51,160 --> 00:28:54,920
Speaker 1: be people that that want audio UM in such quality

570
00:28:54,960 --> 00:28:57,120
Speaker 1: and fidelity they want a dedicated product. But I think

571
00:28:57,160 --> 00:28:59,200
Speaker 1: for a lot of people, if you can find a

572
00:28:59,240 --> 00:29:04,600
Speaker 1: way to ring UM great audio into the home and

573
00:29:04,680 --> 00:29:06,640
Speaker 1: do it in some of the form factors or make

574
00:29:06,640 --> 00:29:09,520
Speaker 1: it disappear to some degree UM, I think that's going

575
00:29:09,600 --> 00:29:12,840
Speaker 1: to be even more compelling to millions more people. Okay,

576
00:29:12,920 --> 00:29:19,400
Speaker 1: let's talk specifically about quality audio. So there's nowhere near

577
00:29:19,440 --> 00:29:22,400
Speaker 1: the press nor the consumption of this stuff. But there

578
00:29:22,200 --> 00:29:25,360
Speaker 1: are tweaks will spend a hundred thousand dollars on their stereo,

579
00:29:25,800 --> 00:29:31,200
Speaker 1: no problem. Uh, there's magazines dedicated to that niche. There's

580
00:29:31,240 --> 00:29:35,520
Speaker 1: not a mainstream audio magazine anymore. There's sound in video,

581
00:29:35,560 --> 00:29:39,680
Speaker 1: which is an amalgamation of previous things. So how much

582
00:29:39,760 --> 00:29:43,760
Speaker 1: will people pay for good sound? And where does Sonos

583
00:29:43,800 --> 00:29:48,720
Speaker 1: fit in this? We've tried to democratize it as much

584
00:29:48,720 --> 00:29:51,400
Speaker 1: as possible. So we've tried to say, hey, can we

585
00:29:51,600 --> 00:29:55,760
Speaker 1: bring let's say, you know, probably with arc or soundbar

586
00:29:56,160 --> 00:30:00,440
Speaker 1: eight dollars for instance. Uh, you know, are be hitting

587
00:30:00,480 --> 00:30:03,520
Speaker 1: the point where most people would have to pay or

588
00:30:03,600 --> 00:30:05,960
Speaker 1: people in the industry would expect to pay fifteen dollars,

589
00:30:06,080 --> 00:30:09,960
Speaker 1: right Like, we're trying to bring it into um, you know,

590
00:30:10,000 --> 00:30:12,400
Speaker 1: a lower price point to some degree, but we're still

591
00:30:12,400 --> 00:30:15,400
Speaker 1: building premium products. And so we want that great sound,

592
00:30:15,480 --> 00:30:16,640
Speaker 1: kind of want to have it all. We want that

593
00:30:16,680 --> 00:30:19,240
Speaker 1: great sound, but we want to democratize it um a

594
00:30:19,280 --> 00:30:22,880
Speaker 1: little bit. There's no doubt of you can still go

595
00:30:22,920 --> 00:30:26,160
Speaker 1: out and spend tens of thousands of dollars right on

596
00:30:26,360 --> 00:30:29,280
Speaker 1: creating like an epic home sound system. You could do

597
00:30:29,320 --> 00:30:33,200
Speaker 1: the Dolby at most in sealing you know, seven dot

598
00:30:33,600 --> 00:30:37,200
Speaker 1: one dot for um in terms of like a full

599
00:30:37,240 --> 00:30:40,640
Speaker 1: set up if you wanted, and create just an incredible experience.

600
00:30:40,960 --> 00:30:43,120
Speaker 1: But that's not where we play. We play very much

601
00:30:43,160 --> 00:30:46,080
Speaker 1: at how are we helping what we call culture seekers

602
00:30:46,080 --> 00:30:48,320
Speaker 1: like really fill their homes with music? Do it in

603
00:30:48,360 --> 00:30:51,760
Speaker 1: an easy way, but not compromise on audio and certainly,

604
00:30:51,760 --> 00:30:54,760
Speaker 1: I mean, you know, you're getting, um what you pay for,

605
00:30:54,880 --> 00:30:57,040
Speaker 1: but we want to make sure that it's surprising sound

606
00:30:57,080 --> 00:30:59,480
Speaker 1: at whatever price point that we're at, so that when

607
00:30:59,480 --> 00:31:03,240
Speaker 1: people hear a one five and arc, they're like, wow,

608
00:31:03,400 --> 00:31:07,120
Speaker 1: that sounds great for that price. Your your top of

609
00:31:07,120 --> 00:31:11,560
Speaker 1: the line really music product is the five correct? Yes,

610
00:31:11,760 --> 00:31:14,600
Speaker 1: that's correct, Okay, in the present retail price of that

611
00:31:14,800 --> 00:31:19,760
Speaker 1: is uh four four nine nine. Who are your competitors

612
00:31:19,760 --> 00:31:23,000
Speaker 1: in that sphere? If anybody? Yeah, you know. The interesting

613
00:31:23,040 --> 00:31:25,120
Speaker 1: thing is Google took a run at that space with

614
00:31:25,320 --> 00:31:28,680
Speaker 1: the home Max a couple of years ago, but they

615
00:31:28,720 --> 00:31:31,840
Speaker 1: discontinued that. Apple took a run at it with home Pod,

616
00:31:31,920 --> 00:31:36,960
Speaker 1: and um they recently discontinued that. Um, there's there's not

617
00:31:37,040 --> 00:31:38,920
Speaker 1: a lot of people playing in that space. Bows has

618
00:31:39,000 --> 00:31:42,440
Speaker 1: a couple of products in that space. UM, but you

619
00:31:42,440 --> 00:31:45,760
Speaker 1: know five dominates uh really in that space. And I'd

620
00:31:45,800 --> 00:31:48,320
Speaker 1: say the other interesting thing Bob on that is we've

621
00:31:48,360 --> 00:31:51,760
Speaker 1: also seen over time, you know, where five would have

622
00:31:51,800 --> 00:31:54,520
Speaker 1: been maybe the speaker in the living room. I think

623
00:31:54,600 --> 00:31:58,200
Speaker 1: what we've done with arc and beam are soundbars have

624
00:31:58,320 --> 00:32:01,120
Speaker 1: actually kind of changed that a little it where maybe

625
00:32:01,120 --> 00:32:03,200
Speaker 1: instead what you're going to do is have an art

626
00:32:03,440 --> 00:32:06,120
Speaker 1: or have a play bar that or a beam now

627
00:32:06,800 --> 00:32:09,800
Speaker 1: under your TV. And now because you can use that

628
00:32:09,880 --> 00:32:12,080
Speaker 1: as your SONO speaker, do you really need to add

629
00:32:12,080 --> 00:32:15,160
Speaker 1: another speaker into the room. Um? Is it interesting question?

630
00:32:15,240 --> 00:32:17,360
Speaker 1: And so I do think we're seeing a little bit

631
00:32:17,360 --> 00:32:20,200
Speaker 1: of that and that convergence um to some degree, because

632
00:32:20,240 --> 00:32:23,880
Speaker 1: why not play your music on a beam or arc?

633
00:32:23,920 --> 00:32:33,000
Speaker 1: It sounds fantastic. Your product mix, how does it breakdown

634
00:32:33,000 --> 00:32:35,200
Speaker 1: in terms of sales? How much is television, how much

635
00:32:35,280 --> 00:32:38,640
Speaker 1: is audio, etcetera. Yeah, we we don't break it out.

636
00:32:38,680 --> 00:32:42,440
Speaker 1: I mean it's pretty even um across the board. But um,

637
00:32:42,480 --> 00:32:44,520
Speaker 1: you know we also don't forget like amp and port

638
00:32:44,640 --> 00:32:47,760
Speaker 1: as well, and those are those products which power in

639
00:32:47,840 --> 00:32:52,000
Speaker 1: ceiling in well speakers, UM, other company speakers as well

640
00:32:52,720 --> 00:32:55,840
Speaker 1: home theater systems, and so we've got a really good

641
00:32:55,880 --> 00:32:59,120
Speaker 1: mix across uh, you know, really are three now four

642
00:32:59,240 --> 00:33:04,680
Speaker 1: with portables, aduct lines and um, you know so and

643
00:33:04,680 --> 00:33:08,000
Speaker 1: and it's it's for us, it's about the system, right

644
00:33:08,120 --> 00:33:10,040
Speaker 1: and people you know, people have a mix and match

645
00:33:10,080 --> 00:33:12,320
Speaker 1: of all of those different products as well. And that's

646
00:33:12,360 --> 00:33:14,320
Speaker 1: kind of what we're always thinking about, is how do

647
00:33:14,440 --> 00:33:17,040
Speaker 1: we help customers with what they need next as they

648
00:33:17,040 --> 00:33:18,720
Speaker 1: think about sound in the home. And that's why we

649
00:33:18,720 --> 00:33:21,040
Speaker 1: got into home theater, so why we got into portables

650
00:33:21,120 --> 00:33:24,360
Speaker 1: after as well as good people saw that need. Uh,

651
00:33:24,400 --> 00:33:27,240
Speaker 1: And so we're always thinking about, Okay, what other categories

652
00:33:27,240 --> 00:33:30,360
Speaker 1: do we want to get into? Okay, in terms of

653
00:33:30,400 --> 00:33:35,280
Speaker 1: the traditional audio companies, is that really a completely different

654
00:33:35,360 --> 00:33:38,600
Speaker 1: vertical at five hundred and it's a completely different customer

655
00:33:39,120 --> 00:33:41,840
Speaker 1: or is there a competition? What's going on there? You know?

656
00:33:41,920 --> 00:33:45,360
Speaker 1: I really think for traditional audio companies, many have tried

657
00:33:45,360 --> 00:33:48,000
Speaker 1: to bring out Sono's killers over the years, and I

658
00:33:48,040 --> 00:33:49,920
Speaker 1: think the biggest miss at the end of the day

659
00:33:50,320 --> 00:33:53,800
Speaker 1: is on the software side. And we started, uh, you know,

660
00:33:53,840 --> 00:33:56,960
Speaker 1: with a team and software and hardware. UM. I've often

661
00:33:57,000 --> 00:34:00,520
Speaker 1: said that, um, you know, boring Mark Andresen's turn. I

662
00:34:00,520 --> 00:34:03,840
Speaker 1: think I see son No says software eats audio because

663
00:34:03,840 --> 00:34:06,080
Speaker 1: it is the difference. It is where we're born from,

664
00:34:06,120 --> 00:34:08,400
Speaker 1: and we've married the two, and I just don't. I

665
00:34:08,400 --> 00:34:11,560
Speaker 1: haven't seen any traditional audio company, you know, really get

666
00:34:11,600 --> 00:34:15,799
Speaker 1: serious about the software investment to create the kind of

667
00:34:15,800 --> 00:34:18,359
Speaker 1: experience that we do at Sonos. And so that's why

668
00:34:18,440 --> 00:34:21,320
Speaker 1: I think we could were the leader in home audio

669
00:34:21,600 --> 00:34:24,120
Speaker 1: UM and why we've been so successful. Now, does someone

670
00:34:24,200 --> 00:34:28,320
Speaker 1: go into a store and say, hmm, there's a Keef speaker,

671
00:34:28,760 --> 00:34:32,040
Speaker 1: here's the son speaker I'm comparing or is it really

672
00:34:32,040 --> 00:34:36,239
Speaker 1: two different customers? Yeah, I think there's UM. I think

673
00:34:36,280 --> 00:34:38,239
Speaker 1: there are some people that would be looking for a

674
00:34:38,360 --> 00:34:41,319
Speaker 1: speaker um, if you will, in those situations, and that's

675
00:34:41,320 --> 00:34:44,359
Speaker 1: where uh, maybe they're getting help from a blue shirt

676
00:34:44,360 --> 00:34:46,600
Speaker 1: of s buy and kind of navigating through the different

677
00:34:46,600 --> 00:34:48,960
Speaker 1: trade offs, if you will. But I also think that

678
00:34:49,000 --> 00:34:51,399
Speaker 1: there are people that are going to look, let's say,

679
00:34:51,480 --> 00:34:53,480
Speaker 1: like above, you know, a thousand dollars and above that

680
00:34:53,520 --> 00:34:57,840
Speaker 1: are very serious into audio UM that you know, maybe

681
00:34:57,840 --> 00:35:00,680
Speaker 1: would use and purport to power at the products that

682
00:35:00,719 --> 00:35:04,839
Speaker 1: they purchased, but they'll be looking at speakers from other

683
00:35:04,880 --> 00:35:08,040
Speaker 1: companies you know potentially there, but I you know that

684
00:35:08,040 --> 00:35:10,640
Speaker 1: that's not a huge market from what we see today.

685
00:35:10,960 --> 00:35:15,399
Speaker 1: What percentage of the marketplace do you have in television

686
00:35:15,520 --> 00:35:20,640
Speaker 1: Beames and subs UM, we're the leader in the you

687
00:35:20,680 --> 00:35:24,200
Speaker 1: know that we we play primarily in uh seven countries today,

688
00:35:24,280 --> 00:35:26,560
Speaker 1: you know, so in Western Europe and then North America

689
00:35:26,600 --> 00:35:30,720
Speaker 1: plus Australia. UM, and we're the leader by dollar share.

690
00:35:31,000 --> 00:35:33,280
Speaker 1: So when you add up the dollars of ARC and

691
00:35:33,480 --> 00:35:36,719
Speaker 1: you know Beam together where the leader, UM, we take

692
00:35:36,760 --> 00:35:40,719
Speaker 1: the revenue of the leadership position and revenue share UM.

693
00:35:40,760 --> 00:35:43,400
Speaker 1: But overall I haven't looked at it on the category recently.

694
00:35:43,760 --> 00:35:47,439
Speaker 1: Overall in home audio, we are about nine percent of

695
00:35:47,480 --> 00:35:51,440
Speaker 1: the annual spend in premium audio today. And who else

696
00:35:52,120 --> 00:35:56,719
Speaker 1: is in that neighborhood? Uh, you know Bowes would be

697
00:35:57,280 --> 00:36:00,879
Speaker 1: you know there, UM, J yell a bit because there's

698
00:36:00,920 --> 00:36:05,040
Speaker 1: some Bluetooth in there. Um, the Samsung with some of

699
00:36:05,080 --> 00:36:09,200
Speaker 1: their sound bars that they sell with TVs Panasonic a

700
00:36:09,200 --> 00:36:12,799
Speaker 1: little bit over in Asia and Europe, and then it

701
00:36:12,880 --> 00:36:15,200
Speaker 1: kind of goes into Europe a little bit. So there's

702
00:36:15,239 --> 00:36:19,400
Speaker 1: really no one dominant player. Now, explain to my audience

703
00:36:20,160 --> 00:36:25,799
Speaker 1: why the technology for sons is superior to competitors. It

704
00:36:25,840 --> 00:36:28,560
Speaker 1: gets back to the software that we've built. So we

705
00:36:28,719 --> 00:36:32,440
Speaker 1: from the beginning connected the system to the cloud UM.

706
00:36:32,480 --> 00:36:34,800
Speaker 1: So there's really a few different layers. So there's the

707
00:36:34,800 --> 00:36:37,520
Speaker 1: connection of the cloud, where we connect you to all

708
00:36:37,560 --> 00:36:40,560
Speaker 1: the services that are out there, whichever music services that

709
00:36:40,600 --> 00:36:44,160
Speaker 1: you want to use. UM. We also created obviously the

710
00:36:44,200 --> 00:36:47,120
Speaker 1: app UM that allows you to control that, and then

711
00:36:47,120 --> 00:36:49,680
Speaker 1: we created all the software that runs on the products

712
00:36:49,719 --> 00:36:52,680
Speaker 1: that ties into your WiFi network. And it's the marriage

713
00:36:52,719 --> 00:36:54,520
Speaker 1: of all of those things. And we took a very

714
00:36:54,560 --> 00:36:57,759
Speaker 1: complicated situation which you could have put together yourself, like

715
00:36:57,800 --> 00:37:00,239
Speaker 1: you could do certain things and bring certain l mints

716
00:37:00,280 --> 00:37:03,400
Speaker 1: together by buying a certain set of speakers, setting up

717
00:37:03,400 --> 00:37:06,239
Speaker 1: WiFi writer in a certain way, trying to tie into

718
00:37:06,239 --> 00:37:10,160
Speaker 1: different services, or maybe using proprietary protocols. But we really

719
00:37:10,520 --> 00:37:13,319
Speaker 1: sweat the details to bring it all together and just

720
00:37:13,360 --> 00:37:15,839
Speaker 1: make it easy, Bob, so that when you set it up,

721
00:37:16,040 --> 00:37:19,200
Speaker 1: you can be easily listening to whatever streaming music it

722
00:37:19,280 --> 00:37:23,560
Speaker 1: is or your music library. And that that is fundamentally

723
00:37:23,600 --> 00:37:26,640
Speaker 1: different than the way anybody else has really approached the space.

724
00:37:26,800 --> 00:37:28,480
Speaker 1: And then there's been a number of companies that have

725
00:37:28,520 --> 00:37:31,120
Speaker 1: come in seeing what we've done, started to copy what

726
00:37:31,200 --> 00:37:34,080
Speaker 1: we do obviously, and in some of those cases we've

727
00:37:34,080 --> 00:37:37,040
Speaker 1: had to um enforced the fact that they've copied what

728
00:37:37,040 --> 00:37:39,640
Speaker 1: we've done. But that is the key at the end

729
00:37:39,680 --> 00:37:41,800
Speaker 1: of the day, is is sweating the details of creating

730
00:37:41,800 --> 00:37:43,680
Speaker 1: that experience in the system so that you can add

731
00:37:43,719 --> 00:37:46,719
Speaker 1: these products on um over time and just make it

732
00:37:46,719 --> 00:37:48,800
Speaker 1: really easy for customers. So there's a lot of complexity

733
00:37:48,920 --> 00:37:52,440
Speaker 1: under the covers that we try to abstract from the customer,

734
00:37:52,480 --> 00:37:55,080
Speaker 1: and that's the secret to success. Actually in any part

735
00:37:55,080 --> 00:37:58,360
Speaker 1: of the consumer electronics. I would say Bluetooth was a

736
00:37:58,480 --> 00:38:01,800
Speaker 1: technology that I had a long ramp before it was

737
00:38:01,840 --> 00:38:05,040
Speaker 1: adopted by the public, and now things have really moved

738
00:38:05,040 --> 00:38:07,880
Speaker 1: in that direction. A lot of people have no idea

739
00:38:07,920 --> 00:38:13,400
Speaker 1: that Bluetooth is inherently the president standard, inherently not great audio.

740
00:38:14,400 --> 00:38:19,680
Speaker 1: So in your particular case, originally Sonos created its own

741
00:38:19,840 --> 00:38:25,839
Speaker 1: separate wireless network in the home, Hey, how does it

742
00:38:25,880 --> 00:38:30,560
Speaker 1: do it? Now? Still the same way? And can anybody

743
00:38:30,600 --> 00:38:34,359
Speaker 1: else equal the sound? There's no equal when it comes

744
00:38:34,360 --> 00:38:40,040
Speaker 1: to combining the wireless the way that we've created Sonos Net.

745
00:38:40,120 --> 00:38:42,120
Speaker 1: The wireless network that you talked about which you still

746
00:38:42,160 --> 00:38:44,759
Speaker 1: get if you use our boost products. So you can

747
00:38:44,760 --> 00:38:46,879
Speaker 1: still create Sonos net in your home, and some homes,

748
00:38:46,880 --> 00:38:50,719
Speaker 1: bigger homes actually require that. There's also UM you know

749
00:38:50,800 --> 00:38:52,840
Speaker 1: straight I P. So if you plug one speaker in

750
00:38:52,960 --> 00:38:55,000
Speaker 1: you don't have those products, you can actually run on

751
00:38:55,040 --> 00:38:57,920
Speaker 1: the WiFi network. Today. We still do the work to

752
00:38:57,960 --> 00:39:01,600
Speaker 1: make sure that that is reliable and the quality, the

753
00:39:01,680 --> 00:39:05,920
Speaker 1: quality of the sound coming out of the speaker obviously

754
00:39:06,040 --> 00:39:09,080
Speaker 1: is related to the WiFi network and everything in that.

755
00:39:09,160 --> 00:39:11,160
Speaker 1: So we we work to make sure that's a really

756
00:39:11,200 --> 00:39:15,080
Speaker 1: good UM and reliable connection. And I think you'll find

757
00:39:15,400 --> 00:39:19,920
Speaker 1: that even though we're not perfect, the reliability UM and

758
00:39:20,000 --> 00:39:25,240
Speaker 1: the consistency of the wireless connection delivers an ongoing quality

759
00:39:25,280 --> 00:39:29,040
Speaker 1: experience that still UM leads the way you know M

760
00:39:29,760 --> 00:39:33,760
Speaker 1: versus anybody else out there today. Okay, when you first

761
00:39:33,840 --> 00:39:39,000
Speaker 1: introduce your products, certainly the play products, you know, they

762
00:39:39,000 --> 00:39:44,040
Speaker 1: were moderately priced, but when Saunos entered the TV sphere,

763
00:39:44,080 --> 00:39:47,640
Speaker 1: these were premium products. A sub it essentially eight hundred

764
00:39:47,680 --> 00:39:52,640
Speaker 1: dollars you know a soundbar and the same price. You know, yamah,

765
00:39:52,760 --> 00:39:55,680
Speaker 1: there are some companies that's still manufactures something in excess

766
00:39:55,680 --> 00:39:58,920
Speaker 1: of a thousand dollars for either part of that component.

767
00:39:59,480 --> 00:40:02,520
Speaker 1: But all day long, most people know a flat screen

768
00:40:02,560 --> 00:40:06,239
Speaker 1: today comes with inferior speakers, So everyone buys a sound bar.

769
00:40:06,760 --> 00:40:09,759
Speaker 1: Based on my casual observation, incredible number of people buying

770
00:40:09,800 --> 00:40:13,840
Speaker 1: something in the hundred and fifty to two hundred dollar range. Okay,

771
00:40:13,880 --> 00:40:17,720
Speaker 1: are you leaving money on the table? Well, and just apply,

772
00:40:17,920 --> 00:40:20,839
Speaker 1: you know, appealing to a premium customer. Would so nos

773
00:40:20,880 --> 00:40:24,879
Speaker 1: ever make it less expensive product? You know, I think

774
00:40:24,920 --> 00:40:27,879
Speaker 1: the um you know, if you look at what we've

775
00:40:27,880 --> 00:40:30,239
Speaker 1: done on the speaker side, right, we've and we came

776
00:40:30,280 --> 00:40:33,360
Speaker 1: in with play five back in the day. We started

777
00:40:33,400 --> 00:40:35,799
Speaker 1: at the it was actually four hundred when it first

778
00:40:35,840 --> 00:40:37,520
Speaker 1: came out price point, you know, and then we brought

779
00:40:37,560 --> 00:40:40,520
Speaker 1: out a three and a one. Uh. We started with

780
00:40:40,600 --> 00:40:43,360
Speaker 1: playbar in home theater when we came out. We've replaced

781
00:40:43,400 --> 00:40:45,759
Speaker 1: that with Arc because Delbian, Host and a number of

782
00:40:45,760 --> 00:40:48,600
Speaker 1: other things felt we felt really compelled to create the

783
00:40:48,680 --> 00:40:51,120
Speaker 1: top end experience there. But we did bring out a

784
00:40:51,200 --> 00:40:54,799
Speaker 1: more moderate product in beam Um. So I certainly think

785
00:40:54,840 --> 00:40:58,040
Speaker 1: there's a lot of opportunity there. Um. We're always watching

786
00:40:58,080 --> 00:41:00,480
Speaker 1: and trying to figure out, Okay, what's the thing to

787
00:41:00,520 --> 00:41:02,399
Speaker 1: do and where's the right balance in this. I feel

788
00:41:02,400 --> 00:41:04,000
Speaker 1: like we get a lot of people that were looking

789
00:41:04,040 --> 00:41:08,120
Speaker 1: at you know, two hundred two fifty two fifty dollar

790
00:41:08,160 --> 00:41:10,680
Speaker 1: products to step up a little bit to beam um

791
00:41:10,800 --> 00:41:13,799
Speaker 1: being at three ninety nine right now, and so um

792
00:41:14,000 --> 00:41:16,520
Speaker 1: it's something we're always looking at. Bob is like where

793
00:41:16,640 --> 00:41:19,640
Speaker 1: you know, where does the price experience you know fit

794
00:41:19,719 --> 00:41:22,160
Speaker 1: and where's the market um in terms of what's there

795
00:41:22,200 --> 00:41:25,480
Speaker 1: and so um stay tuned in terms of the you know,

796
00:41:25,520 --> 00:41:27,719
Speaker 1: the next products you'll see from us. Okay, let's talk

797
00:41:27,719 --> 00:41:31,160
Speaker 1: about you. Originally you grew up in Canada where I

798
00:41:31,280 --> 00:41:36,320
Speaker 1: was born in Waterloo, Okay, outside of Toronto. And what

799
00:41:36,560 --> 00:41:39,080
Speaker 1: was your experience growing up? Were you a tech nerd?

800
00:41:39,160 --> 00:41:44,400
Speaker 1: Were you into electronics? I was so uh in second grade,

801
00:41:44,520 --> 00:41:47,560
Speaker 1: second grade, third grade? It was second or third grade. Uh.

802
00:41:47,880 --> 00:41:51,840
Speaker 1: My elementary school was fortunate enough to get a Commodore

803
00:41:52,120 --> 00:41:55,520
Speaker 1: pet computer. Uh. And I was lucky enough, I think

804
00:41:55,560 --> 00:41:57,440
Speaker 1: because my math grades were good and there was some

805
00:41:57,560 --> 00:41:59,200
Speaker 1: qualifying thing. There were four of us that got to

806
00:41:59,239 --> 00:42:03,480
Speaker 1: actually use it and created a math program. Was my

807
00:42:03,600 --> 00:42:08,719
Speaker 1: first programming assignment. And then I distinctly remember as well

808
00:42:08,800 --> 00:42:11,120
Speaker 1: creating a rocket shooting rocket that would go up the

809
00:42:11,200 --> 00:42:14,120
Speaker 1: screen back with the displays that were just green and

810
00:42:14,400 --> 00:42:16,440
Speaker 1: off green. UH. And I thought it was the most

811
00:42:16,480 --> 00:42:21,160
Speaker 1: amazing thing ever. And so I was smitten by that. UM.

812
00:42:21,680 --> 00:42:24,439
Speaker 1: You know, I grew up in a home we're making.

813
00:42:24,480 --> 00:42:26,640
Speaker 1: The purchase for a computer was a big big deal.

814
00:42:27,080 --> 00:42:29,000
Speaker 1: But my parents did it when I was in the

815
00:42:29,800 --> 00:42:33,560
Speaker 1: fifth or sixth grade. UH ran my own bulletin board system.

816
00:42:33,880 --> 00:42:36,800
Speaker 1: UM as well back in the days with the slow modems.

817
00:42:37,239 --> 00:42:40,600
Speaker 1: Did a hockey like I've basically a fantasy hockey UH

818
00:42:40,760 --> 00:42:44,160
Speaker 1: set up before it became a thing UM, and it

819
00:42:44,239 --> 00:42:45,480
Speaker 1: was a bit of a nightmare. I had to go

820
00:42:45,719 --> 00:42:48,839
Speaker 1: input scores like from the paper into that and keep

821
00:42:48,880 --> 00:42:50,880
Speaker 1: a scoreboard and it was ended up being a lot

822
00:42:50,960 --> 00:42:52,360
Speaker 1: more work that I thought it was going to be.

823
00:42:52,560 --> 00:42:55,000
Speaker 1: But UM was I guess on the early edges of

824
00:42:55,520 --> 00:43:00,040
Speaker 1: UM what was the precursor to the internet. UM. And

825
00:43:00,160 --> 00:43:03,200
Speaker 1: so that was pretty formative for me. I'd say there's

826
00:43:03,200 --> 00:43:05,640
Speaker 1: two formative things that I often look at. One was

827
00:43:05,719 --> 00:43:08,040
Speaker 1: the technology, and I was very interested in computers and

828
00:43:08,120 --> 00:43:09,960
Speaker 1: tech and where all of that was going. And then

829
00:43:10,040 --> 00:43:11,600
Speaker 1: the other thing for me was team sports. So I

830
00:43:11,680 --> 00:43:16,040
Speaker 1: played every team sport there was growing up and just

831
00:43:16,520 --> 00:43:19,880
Speaker 1: I feel today that's like a huge part of what

832
00:43:20,040 --> 00:43:22,920
Speaker 1: I put into practice every single day at work is

833
00:43:23,520 --> 00:43:26,120
Speaker 1: everything I learned from team sports and personalities and how

834
00:43:26,160 --> 00:43:29,160
Speaker 1: to manage different personalities, um to try and you know,

835
00:43:29,280 --> 00:43:32,160
Speaker 1: get us to a victory if you will, or just

836
00:43:32,280 --> 00:43:34,359
Speaker 1: to get people to work together. Um. So I think

837
00:43:34,400 --> 00:43:37,560
Speaker 1: those are the two kind of most formative things, uh

838
00:43:37,719 --> 00:43:40,759
Speaker 1: in my life. Okay, And what is your college experience?

839
00:43:41,520 --> 00:43:44,120
Speaker 1: I went to college I'm sure you've never heard of,

840
00:43:44,200 --> 00:43:48,840
Speaker 1: called Western in London, Ontario, and I took business there. Okay,

841
00:43:48,880 --> 00:43:52,560
Speaker 1: so you graduate from college, what's your first job? Yeah, so, um,

842
00:43:52,600 --> 00:43:54,800
Speaker 1: I've done an internship. I needed the money to finish

843
00:43:54,840 --> 00:43:57,880
Speaker 1: my last year at university, so I did an internship

844
00:43:58,120 --> 00:44:02,080
Speaker 1: at IBM in Toronto, works on the think pad, so

845
00:44:02,200 --> 00:44:05,080
Speaker 1: the very first laptop team that was there, and it

846
00:44:05,200 --> 00:44:08,880
Speaker 1: was incredible, had incredible experience. I thought I would probably

847
00:44:08,960 --> 00:44:12,080
Speaker 1: go back um to IBM and worked there for five

848
00:44:12,160 --> 00:44:14,879
Speaker 1: years and then start my own company. But I saw

849
00:44:15,080 --> 00:44:19,520
Speaker 1: an opportunity with this company called rim back in Waterloo

850
00:44:19,880 --> 00:44:23,400
Speaker 1: where I was born, and they had this They had

851
00:44:23,480 --> 00:44:28,200
Speaker 1: this idea of this mobile product, a pager kind of thing.

852
00:44:28,239 --> 00:44:31,040
Speaker 1: At that point, and I saw connecting to wireless networks

853
00:44:31,640 --> 00:44:33,800
Speaker 1: and I thought, huh, like, I've really seen with the

854
00:44:33,880 --> 00:44:37,200
Speaker 1: laptop the future of mobile computing. And we started to

855
00:44:37,239 --> 00:44:40,800
Speaker 1: put wireless uh we started put wireless modems into the laptops,

856
00:44:41,000 --> 00:44:42,759
Speaker 1: and I thought, this is the future. This is gonna

857
00:44:42,800 --> 00:44:46,040
Speaker 1: be huge, big part of it. But this idea that

858
00:44:46,200 --> 00:44:49,880
Speaker 1: this company uh in Waterloo of at that point hured

859
00:44:49,920 --> 00:44:53,040
Speaker 1: and fifty people had, I thought was really interesting and

860
00:44:53,080 --> 00:44:55,480
Speaker 1: it was massive. So this product at this this time

861
00:44:55,640 --> 00:44:59,000
Speaker 1: was this huge called the Hamburger product. And you flipped

862
00:44:59,040 --> 00:45:02,279
Speaker 1: it up and you saw like two lines basically at

863
00:45:02,320 --> 00:45:05,680
Speaker 1: that point of the screen and had these bubble keyboard keypads.

864
00:45:05,800 --> 00:45:07,200
Speaker 1: You still tried to hold it like this, but it

865
00:45:07,320 --> 00:45:11,320
Speaker 1: was something else. And I thought, huh, this is pretty

866
00:45:11,360 --> 00:45:14,200
Speaker 1: interesting because I've seen that mobile computing angle. This is

867
00:45:14,239 --> 00:45:19,000
Speaker 1: wireless coming into it, um and so uh, this is interesting.

868
00:45:19,080 --> 00:45:21,399
Speaker 1: And I went and met Mike and Jim, the two

869
00:45:21,520 --> 00:45:25,640
Speaker 1: co c e o's uh down there, and I was like, wow,

870
00:45:25,760 --> 00:45:29,080
Speaker 1: this is uh something something special it's happening here. I

871
00:45:29,120 --> 00:45:32,680
Speaker 1: just got that feeling. Um. I think my mom thought

872
00:45:32,719 --> 00:45:35,280
Speaker 1: I was crazy. All of my classmates thought it was crazy.

873
00:45:35,360 --> 00:45:37,160
Speaker 1: Most of them were going off to you know, big

874
00:45:37,320 --> 00:45:41,319
Speaker 1: established companies, to investment banks, to those kind of things. Um.

875
00:45:41,440 --> 00:45:44,840
Speaker 1: And my dad who worked at the the hydro electric

876
00:45:44,880 --> 00:45:47,920
Speaker 1: company in the province. We were in Ontario for thirty

877
00:45:47,960 --> 00:45:51,120
Speaker 1: one years. UM, he was my biggest supporter and saying

878
00:45:51,360 --> 00:45:53,279
Speaker 1: go for it, like you know, this may not work

879
00:45:53,360 --> 00:45:55,279
Speaker 1: out or whatever the case is. There You've got this

880
00:45:55,400 --> 00:45:57,960
Speaker 1: gut feel on this company and the people there. And

881
00:45:58,040 --> 00:46:00,400
Speaker 1: I was really, um just felt go out to be

882
00:46:00,480 --> 00:46:03,560
Speaker 1: part of it. Um, And so I jumped to join

883
00:46:03,640 --> 00:46:05,800
Speaker 1: this company called rim Um that nobody had heard of,

884
00:46:06,560 --> 00:46:09,520
Speaker 1: and uh we brought out. So it was after it

885
00:46:09,600 --> 00:46:12,719
Speaker 1: was about a year after I joined. Year what year

886
00:46:12,840 --> 00:46:16,120
Speaker 1: was that I joined? Ninety eight? And so really you early, yeah,

887
00:46:16,360 --> 00:46:20,319
Speaker 1: really early, hundred fifty people and you do you get stock? Yes?

888
00:46:20,400 --> 00:46:24,879
Speaker 1: I did? Did you ride it up and write it down? Well?

889
00:46:25,160 --> 00:46:28,320
Speaker 1: So I wrote it. My friend told a very funny

890
00:46:28,360 --> 00:46:31,400
Speaker 1: story at our wedding, you know, when our stock was

891
00:46:31,520 --> 00:46:33,600
Speaker 1: up to you know, we went public at five what

892
00:46:33,719 --> 00:46:36,160
Speaker 1: our stock was up to about fifteen? Um, you know

893
00:46:36,239 --> 00:46:37,839
Speaker 1: he called me and I was like, it's getting kind

894
00:46:37,880 --> 00:46:39,799
Speaker 1: of high. You know. It turns of where it ended

895
00:46:39,840 --> 00:46:41,799
Speaker 1: up running up Bob to like a hundred eighty two

896
00:46:41,840 --> 00:46:44,880
Speaker 1: hundred dollars. It turns where it was. UM. But you know,

897
00:46:45,080 --> 00:46:48,640
Speaker 1: like so I I I did you know again better

898
00:46:48,719 --> 00:46:51,320
Speaker 1: than I ever expected. UM. I feel very fortunate in

899
00:46:51,440 --> 00:46:53,799
Speaker 1: terms of what's there. But I certainly didn't get out

900
00:46:53,840 --> 00:46:56,279
Speaker 1: on top, that's for sure. So you live and learn

901
00:46:56,360 --> 00:46:59,160
Speaker 1: through that stuff. Did you make enough money at RIM

902
00:46:59,320 --> 00:47:03,640
Speaker 1: that the aically you wouldn't need a job again? No? No, okay,

903
00:47:03,680 --> 00:47:07,279
Speaker 1: it wasn't that fortunate. Go back to and what you're

904
00:47:07,320 --> 00:47:10,239
Speaker 1: doing there. So when I joined UM, I was our

905
00:47:10,400 --> 00:47:14,280
Speaker 1: first product manager UM. There were a couple of people

906
00:47:14,320 --> 00:47:16,480
Speaker 1: that they had brought in UM at a senior level

907
00:47:16,560 --> 00:47:21,200
Speaker 1: VP level, and I was starting to sell the precursor

908
00:47:21,320 --> 00:47:24,520
Speaker 1: to BlackBerry, pitching it, trying to get the story down

909
00:47:24,960 --> 00:47:29,839
Speaker 1: with the precursor to what's a T and T wireless today? UM,

910
00:47:29,880 --> 00:47:31,600
Speaker 1: it was Bell South wireless date at the time, this

911
00:47:31,760 --> 00:47:33,400
Speaker 1: is a this is a long time ago now, as

912
00:47:33,440 --> 00:47:36,560
Speaker 1: I tell it, UM and tried to we were really trying.

913
00:47:36,800 --> 00:47:38,920
Speaker 1: They had this will show you the difference, right. So,

914
00:47:39,640 --> 00:47:42,840
Speaker 1: what we started to believe at RIM was we needed

915
00:47:42,880 --> 00:47:46,440
Speaker 1: to tie it to email systems, and specifically to Microsoft's

916
00:47:46,440 --> 00:47:48,360
Speaker 1: email system because it was you know, that was the

917
00:47:48,440 --> 00:47:50,520
Speaker 1: future and there's going to be a lot more email users.

918
00:47:51,200 --> 00:47:54,080
Speaker 1: UM Bell South precursor to a T and T at

919
00:47:54,120 --> 00:47:55,880
Speaker 1: that point, was like, no, paging is the future, and

920
00:47:55,880 --> 00:47:57,719
Speaker 1: it's all about paging and you guys, you know, we

921
00:47:57,800 --> 00:47:59,920
Speaker 1: need to be able to do uh. They had this

922
00:48:00,080 --> 00:48:02,800
Speaker 1: future which was text to voice for instance, and so

923
00:48:02,880 --> 00:48:05,000
Speaker 1: it would call you and it would sound like Freddy

924
00:48:05,040 --> 00:48:06,920
Speaker 1: Krueger was calling you. Was just like there was some

925
00:48:07,160 --> 00:48:09,680
Speaker 1: it was fun, but it was it was not, you know,

926
00:48:09,800 --> 00:48:12,200
Speaker 1: something that you could see really taking off, and so

927
00:48:12,360 --> 00:48:14,080
Speaker 1: they wanted to go down that path to give us

928
00:48:14,080 --> 00:48:16,360
Speaker 1: a big contract to do that. I helped them in

929
00:48:16,480 --> 00:48:19,200
Speaker 1: terms of trying to market and sell UM and understand

930
00:48:19,239 --> 00:48:21,839
Speaker 1: the products and train up their sales team. And then

931
00:48:22,080 --> 00:48:24,520
Speaker 1: but in the background, you know, we were doing our

932
00:48:24,560 --> 00:48:26,160
Speaker 1: own thing, and so we made it. We we took

933
00:48:26,200 --> 00:48:30,239
Speaker 1: a huge chance for a startup in purchasing airtime from

934
00:48:30,320 --> 00:48:33,040
Speaker 1: Bell South in the United States and Rogers in Canada

935
00:48:33,400 --> 00:48:35,799
Speaker 1: so that we could put together a package and say,

936
00:48:35,960 --> 00:48:38,759
Speaker 1: for at that point thirty nine dollars a month, you

937
00:48:38,920 --> 00:48:42,719
Speaker 1: can get the hardware and the service that allows you

938
00:48:42,880 --> 00:48:45,440
Speaker 1: to connect to your work email right and receive it

939
00:48:45,560 --> 00:48:48,400
Speaker 1: on this product, UM, and so that was like that

940
00:48:48,560 --> 00:48:50,359
Speaker 1: was the bet and that was the BlackBerry, which came

941
00:48:50,360 --> 00:48:52,360
Speaker 1: out like a year after I had started. And what

942
00:48:52,480 --> 00:48:55,839
Speaker 1: I started doing BOB during that period, as I said,

943
00:48:55,960 --> 00:48:58,080
Speaker 1: it was, I was just it was crazy, like I

944
00:48:58,200 --> 00:49:00,480
Speaker 1: was so young. UM didn't know what I was doing

945
00:49:00,520 --> 00:49:03,080
Speaker 1: at all. But they gave me the chance to start

946
00:49:03,160 --> 00:49:07,200
Speaker 1: working with the banks and brokerage is UH in New

947
00:49:07,280 --> 00:49:09,480
Speaker 1: York City in particularly, kind of got in there with

948
00:49:09,880 --> 00:49:12,719
Speaker 1: UM some of the people that we were selling with,

949
00:49:13,280 --> 00:49:15,959
Speaker 1: and I started to seed all of the senior people

950
00:49:16,000 --> 00:49:18,439
Speaker 1: there with blackberries. So I gave them succeeding give giving

951
00:49:18,480 --> 00:49:22,239
Speaker 1: them basically blackberries to start using. And I would give

952
00:49:22,360 --> 00:49:26,080
Speaker 1: one to uh, you know, like an influential executive, but

953
00:49:26,120 --> 00:49:29,719
Speaker 1: I also give one to their administrator, their secretary, if

954
00:49:29,719 --> 00:49:32,120
Speaker 1: you will, And so they could communicate back and forth

955
00:49:32,280 --> 00:49:36,040
Speaker 1: and they absolutely loved it. And then the secretaries would say, oh,

956
00:49:36,200 --> 00:49:37,640
Speaker 1: you need to get you know, you need to give

957
00:49:37,680 --> 00:49:39,200
Speaker 1: this one one and need to give this one one

958
00:49:39,280 --> 00:49:41,520
Speaker 1: and like and all of a sudden, we created this

959
00:49:41,640 --> 00:49:43,799
Speaker 1: ground swell at all the banks of brokerages in New

960
00:49:43,880 --> 00:49:48,200
Speaker 1: York City of having to have a BlackBerry and UH.

961
00:49:48,360 --> 00:49:51,520
Speaker 1: It was absolutely incredible to see the kind of viral

962
00:49:51,640 --> 00:49:55,800
Speaker 1: nature um of that as well, and so uh it

963
00:49:55,960 --> 00:49:59,440
Speaker 1: was incredible. I did our first, um big corporate deal.

964
00:49:59,520 --> 00:50:02,600
Speaker 1: So our first big one was with mary lynch uh

965
00:50:02,800 --> 00:50:05,440
Speaker 1: for and it was for a thousand blackberries, which now

966
00:50:05,600 --> 00:50:07,399
Speaker 1: sounds like so small in the grand scheme of things,

967
00:50:07,440 --> 00:50:09,320
Speaker 1: but it was so massive for us as a company.

968
00:50:09,840 --> 00:50:12,160
Speaker 1: Our stock price went up like on the day we

969
00:50:12,200 --> 00:50:15,239
Speaker 1: announced that deal, even though I mean financial materiality, it

970
00:50:15,320 --> 00:50:18,680
Speaker 1: wasn't that material um, but it was such an exciting

971
00:50:18,760 --> 00:50:23,120
Speaker 1: time in terms of, you know, just watching the technology

972
00:50:23,320 --> 00:50:26,480
Speaker 1: really take off and people being so excited to use

973
00:50:26,520 --> 00:50:29,600
Speaker 1: at people being so passionate about it. Um. I just

974
00:50:29,719 --> 00:50:33,879
Speaker 1: feel so fortunate to you know, have played a role

975
00:50:34,120 --> 00:50:38,440
Speaker 1: in two different you know, technology companies that have built

976
00:50:38,440 --> 00:50:41,680
Speaker 1: products that people actually absolutely loved and you know use

977
00:50:41,760 --> 00:50:44,360
Speaker 1: religiously and have raved about the needless say, there was

978
00:50:44,400 --> 00:50:49,560
Speaker 1: an evolution at BlackBerry, and seemingly from the street it

979
00:50:49,680 --> 00:50:53,719
Speaker 1: appeared that the Palm Trio was ahead of BlackBerry with

980
00:50:53,880 --> 00:50:55,880
Speaker 1: a phone. How did we ultimately get a phone in

981
00:50:55,920 --> 00:51:00,359
Speaker 1: our Blackberries? Yeah? I think the technolog as you start

982
00:51:00,400 --> 00:51:02,440
Speaker 1: to evolve in that way, and it made sense and

983
00:51:02,480 --> 00:51:04,760
Speaker 1: the wireless network. So it was the next generational wireless

984
00:51:04,800 --> 00:51:06,680
Speaker 1: networks Bob, that was super important to that. Right. We

985
00:51:06,760 --> 00:51:09,920
Speaker 1: were writing on a data only network early on UH,

986
00:51:10,000 --> 00:51:12,359
Speaker 1: and then as we got to the two point five

987
00:51:12,480 --> 00:51:16,080
Speaker 1: G networks UM, we were able to actually put voice

988
00:51:16,160 --> 00:51:18,040
Speaker 1: into there, and at that point is just another app

989
00:51:18,200 --> 00:51:20,800
Speaker 1: that you can put in there. Another radio became pretty

990
00:51:20,960 --> 00:51:24,239
Speaker 1: easy to do that UM. And I think people miss

991
00:51:24,360 --> 00:51:27,080
Speaker 1: the fact that we integrated it all very well. We

992
00:51:27,280 --> 00:51:31,120
Speaker 1: tied into the back end of people's Microsoft Exchange or

993
00:51:31,480 --> 00:51:33,200
Speaker 1: I think at that point Lotus notes in terms of

994
00:51:33,239 --> 00:51:36,520
Speaker 1: the email services they were using companies like Palm and

995
00:51:36,680 --> 00:51:39,680
Speaker 1: other companies. They didn't do the software work often on

996
00:51:39,760 --> 00:51:42,000
Speaker 1: the back end to tie into those systems and think

997
00:51:42,000 --> 00:51:43,960
Speaker 1: about the encryption and do all of that. And so

998
00:51:44,080 --> 00:51:46,600
Speaker 1: in a way, it's not dissimilar to sons where you

999
00:51:46,600 --> 00:51:49,560
Speaker 1: would find that you know here at Sonos, you look

1000
00:51:49,600 --> 00:51:51,480
Speaker 1: at some of those traditional audio companies, they don't have

1001
00:51:51,560 --> 00:51:54,640
Speaker 1: the software that ties it into what's important to day

1002
00:51:54,680 --> 00:51:57,960
Speaker 1: to customers. Some of those hardware companies that were there

1003
00:51:58,000 --> 00:52:00,400
Speaker 1: earlier than us, like a Poem for instance, didn't do

1004
00:52:00,520 --> 00:52:02,680
Speaker 1: the work and didn't have the expertise to tie it

1005
00:52:02,800 --> 00:52:07,359
Speaker 1: into what mattered to users at that particular point in time. UM.

1006
00:52:07,800 --> 00:52:10,160
Speaker 1: And so you know, we were able to um out

1007
00:52:10,200 --> 00:52:12,480
Speaker 1: went over them. We were able. We were told we

1008
00:52:12,520 --> 00:52:14,560
Speaker 1: could never be successful. And I think this is part

1009
00:52:14,640 --> 00:52:17,719
Speaker 1: particularly of you know, being small town in Canada as well.

1010
00:52:18,280 --> 00:52:19,880
Speaker 1: People thought we were crazy that we were going to

1011
00:52:19,960 --> 00:52:23,239
Speaker 1: take on you know, Motorola and Glennair and these other

1012
00:52:23,280 --> 00:52:25,520
Speaker 1: paging companies in the early days. And then as we

1013
00:52:25,600 --> 00:52:27,520
Speaker 1: started incorporate phone, they said there's no way you could

1014
00:52:27,520 --> 00:52:30,160
Speaker 1: take on Motorola, Nokia, Sony Erics and some of those

1015
00:52:30,200 --> 00:52:33,360
Speaker 1: companies at that point. Um. But we did, and you know,

1016
00:52:34,040 --> 00:52:37,719
Speaker 1: obviously became very successful. What was the feeling inside the

1017
00:52:37,800 --> 00:52:42,120
Speaker 1: building when the iPhone launched two thousand seven, Yeah, so

1018
00:52:42,719 --> 00:52:46,120
Speaker 1: there was UM. I think that I think the public

1019
00:52:46,520 --> 00:52:49,279
Speaker 1: and there's a great book that I contributed to called

1020
00:52:49,320 --> 00:52:53,040
Speaker 1: Losing the Signal by um Sean Silkoff and Jackie McNish

1021
00:52:53,400 --> 00:52:55,560
Speaker 1: that goes through you know, all of this and and

1022
00:52:55,719 --> 00:52:58,279
Speaker 1: I think it's probably the best you know, history of

1023
00:52:58,320 --> 00:53:01,879
Speaker 1: BlackBerry lesson, if you will. But there was a perception

1024
00:53:02,000 --> 00:53:04,719
Speaker 1: that we you know, we were arrogant about it or

1025
00:53:05,040 --> 00:53:07,800
Speaker 1: not concerned about it. But we absolutely were so we

1026
00:53:07,920 --> 00:53:09,360
Speaker 1: saw it for what it was in terms of a

1027
00:53:09,440 --> 00:53:11,480
Speaker 1: threat and some of those things, and saw the innovation

1028
00:53:11,560 --> 00:53:14,360
Speaker 1: that was there. Um. Yeah, I think it's fair to

1029
00:53:14,400 --> 00:53:16,279
Speaker 1: say that we were all Apple fans, and many of

1030
00:53:16,360 --> 00:53:18,120
Speaker 1: us were Apple users as well. You know, at that

1031
00:53:18,239 --> 00:53:22,719
Speaker 1: point in terms of looking at it, um they you know,

1032
00:53:22,840 --> 00:53:25,279
Speaker 1: we one of the one of the biggest mistakes and

1033
00:53:25,320 --> 00:53:27,560
Speaker 1: one of the things I try to counsel others on

1034
00:53:27,719 --> 00:53:30,080
Speaker 1: and even you know, I think we've put into action.

1035
00:53:30,160 --> 00:53:32,759
Speaker 1: Here was one of the steps that we took, which

1036
00:53:32,840 --> 00:53:34,960
Speaker 1: was Verizon came to us. You'll recall that the first

1037
00:53:35,040 --> 00:53:37,920
Speaker 1: iPhone UM was an a T and T exclusive and

1038
00:53:38,000 --> 00:53:39,759
Speaker 1: a T and T and Apple had worked on that.

1039
00:53:39,880 --> 00:53:42,160
Speaker 1: So Verizon came to us and said, hey, we need

1040
00:53:42,200 --> 00:53:44,960
Speaker 1: a response, and you know, like let's do something together

1041
00:53:45,040 --> 00:53:47,359
Speaker 1: to do that. And yeah, they waved a big check

1042
00:53:47,440 --> 00:53:49,920
Speaker 1: in terms of building a product called the Storm, and

1043
00:53:50,800 --> 00:53:52,879
Speaker 1: you know, we went and we created our first touch

1044
00:53:52,960 --> 00:53:55,560
Speaker 1: screen product. We didn't build on our strengths. Instead, we

1045
00:53:55,640 --> 00:53:59,279
Speaker 1: were responding to what Apple had done and we brought

1046
00:53:59,320 --> 00:54:02,040
Speaker 1: a Storm and pretty much overnight when we brought that

1047
00:54:02,120 --> 00:54:06,040
Speaker 1: product out, Um, we threw away. You know, at that point,

1048
00:54:06,760 --> 00:54:10,319
Speaker 1: twelve years of hard work in building the brand and reliability,

1049
00:54:10,440 --> 00:54:13,640
Speaker 1: and people could count on their BlackBerry UM as a response,

1050
00:54:13,840 --> 00:54:16,520
Speaker 1: you know, and and you know, in the interests of UM,

1051
00:54:16,960 --> 00:54:18,839
Speaker 1: you know, really trying, I would say at that point

1052
00:54:18,880 --> 00:54:21,160
Speaker 1: the financials right and the money that was there. So

1053
00:54:21,920 --> 00:54:24,839
Speaker 1: to me, that wasn't the right response. UM. It would

1054
00:54:24,840 --> 00:54:27,080
Speaker 1: have been like us responding at Sonos to Google and

1055
00:54:27,239 --> 00:54:30,839
Speaker 1: Amazon launching pucks by launching our own twenty nine dollar puck.

1056
00:54:30,960 --> 00:54:33,279
Speaker 1: That's not what we do, that's not where our strengths lie.

1057
00:54:33,880 --> 00:54:35,520
Speaker 1: But that's what we did. And that was you know,

1058
00:54:35,600 --> 00:54:37,919
Speaker 1: that was that was to me one of those things

1059
00:54:38,080 --> 00:54:40,719
Speaker 1: that sent us down the wrong path at RIM. But

1060
00:54:40,800 --> 00:54:44,440
Speaker 1: we were concerned about the iPhone, UM impressed by you

1061
00:54:44,480 --> 00:54:46,800
Speaker 1: know what they've been able to UM, you know, to

1062
00:54:46,920 --> 00:54:50,439
Speaker 1: pull off UM. You may recall that too, is about

1063
00:54:50,440 --> 00:54:53,440
Speaker 1: two to three years post iPhone, BlackBerry continue to grow

1064
00:54:53,520 --> 00:54:56,200
Speaker 1: like crazy, right, And so there was also through their

1065
00:54:56,280 --> 00:54:58,720
Speaker 1: some period I would say from some people of denial

1066
00:54:58,880 --> 00:55:01,480
Speaker 1: and of like, oh, the touch screen will never catch on, right,

1067
00:55:01,560 --> 00:55:03,600
Speaker 1: So there was some of that in the organization, but

1068
00:55:03,680 --> 00:55:05,480
Speaker 1: I think much more was like no, no, the touch

1069
00:55:05,520 --> 00:55:08,759
Speaker 1: screens makes sense and it will happen over time. Um,

1070
00:55:09,320 --> 00:55:13,520
Speaker 1: but we uh we obviously um, you know, didn't make

1071
00:55:13,640 --> 00:55:17,239
Speaker 1: our pivot and the way we needed to um and UM.

1072
00:55:17,360 --> 00:55:19,520
Speaker 1: The rest is history. One of the two owners were

1073
00:55:19,600 --> 00:55:23,120
Speaker 1: the two founders of your company, went on and said, well,

1074
00:55:23,800 --> 00:55:28,040
Speaker 1: Blackberries had a very thin data profile and they dismissed

1075
00:55:28,120 --> 00:55:31,000
Speaker 1: the iPhone saying, you know, they're gonna hog so much

1076
00:55:31,120 --> 00:55:34,480
Speaker 1: data it will never play out. Now, factually that happened,

1077
00:55:35,440 --> 00:55:40,880
Speaker 1: but ultimately shifted people to WiFi and then uh networks

1078
00:55:41,000 --> 00:55:45,359
Speaker 1: became more robust. Was there you know, any wake up

1079
00:55:45,480 --> 00:55:49,800
Speaker 1: during that transition period? Not not really that that was

1080
00:55:49,920 --> 00:55:51,920
Speaker 1: one thing so you hit on it, and that was

1081
00:55:52,040 --> 00:55:56,640
Speaker 1: Mike Lazaridi's who is the father of BlackBerry. And you know,

1082
00:55:56,760 --> 00:55:58,719
Speaker 1: one of the things that Mike was so good at

1083
00:55:58,760 --> 00:56:02,640
Speaker 1: was understanding physics and understanding the fact that really in

1084
00:56:02,719 --> 00:56:04,960
Speaker 1: the early days that airtime we bought from Bell South

1085
00:56:05,040 --> 00:56:07,879
Speaker 1: and Rogers, nobody was using that for anything. They didn't

1086
00:56:07,920 --> 00:56:09,480
Speaker 1: think it could be used for anything. So we got

1087
00:56:09,560 --> 00:56:12,839
Speaker 1: it cheap, um. And but it was nationwide and Mike

1088
00:56:12,960 --> 00:56:16,360
Speaker 1: had realized, hey, we could actually do an email service

1089
00:56:16,680 --> 00:56:21,360
Speaker 1: over this narrow band wireless network. And so you know

1090
00:56:21,440 --> 00:56:23,600
Speaker 1: that that was a strength in that situation. But then

1091
00:56:23,640 --> 00:56:26,200
Speaker 1: when it came to three G and saying, hey, there's

1092
00:56:26,200 --> 00:56:29,279
Speaker 1: gonna be video, there's gonna be radio streaming all of

1093
00:56:29,360 --> 00:56:31,640
Speaker 1: the things that we're seeing today. You know, we're now

1094
00:56:31,760 --> 00:56:34,840
Speaker 1: five g um. You know, Mike almost couldn't get it,

1095
00:56:35,200 --> 00:56:37,040
Speaker 1: you know, couldn't get there in terms of this is

1096
00:56:37,040 --> 00:56:39,320
Speaker 1: going to work from a physics perspective and what it

1097
00:56:39,320 --> 00:56:40,920
Speaker 1: would mean to battery life and a bunch of the

1098
00:56:40,960 --> 00:56:43,360
Speaker 1: trade offs that people would have and the displays and

1099
00:56:43,400 --> 00:56:46,120
Speaker 1: those kind of things. And so we spent time trying

1100
00:56:46,160 --> 00:56:48,640
Speaker 1: to convince or Mike did in particular, trying to convince

1101
00:56:48,880 --> 00:56:51,440
Speaker 1: um any T and T for instance, like that that

1102
00:56:51,560 --> 00:56:53,760
Speaker 1: three G wasn't the future and instead we should focus

1103
00:56:53,840 --> 00:56:55,800
Speaker 1: on to an f G. And like, here's why in

1104
00:56:55,840 --> 00:56:58,520
Speaker 1: the late the physics case, which after the CEO of

1105
00:56:58,760 --> 00:57:00,600
Speaker 1: A T and T has spent twenty billion dollars in

1106
00:57:00,640 --> 00:57:02,840
Speaker 1: Spectrum doesn't really want to hear because they need to

1107
00:57:02,880 --> 00:57:05,680
Speaker 1: make that work. They've they've just met their career on

1108
00:57:05,840 --> 00:57:07,920
Speaker 1: making three G work. What they want to hear is,

1109
00:57:08,400 --> 00:57:10,080
Speaker 1: here's the three G phone you know you could sell

1110
00:57:10,160 --> 00:57:12,799
Speaker 1: in your network. And so even though you know Mike

1111
00:57:12,880 --> 00:57:16,680
Speaker 1: had like great physics argument. The business reality of what

1112
00:57:17,000 --> 00:57:19,400
Speaker 1: a needed at that time was completely different, and so,

1113
00:57:19,920 --> 00:57:22,840
Speaker 1: um so we missed it. How long did you ride

1114
00:57:23,040 --> 00:57:28,680
Speaker 1: the wave at BlackBerry? When were you done? Um? So?

1115
00:57:29,080 --> 00:57:30,880
Speaker 1: How long did it? Was? Fourteen years? I wrote it,

1116
00:57:31,000 --> 00:57:32,360
Speaker 1: And I mean, you know, if you would have cut me,

1117
00:57:32,360 --> 00:57:35,960
Speaker 1: I would have led BlackBerry. Um. I started our business

1118
00:57:36,120 --> 00:57:39,120
Speaker 1: in Asia Pacific. Um So, I started our offices there

1119
00:57:39,200 --> 00:57:42,400
Speaker 1: and through those countries and built the team there. Came

1120
00:57:42,440 --> 00:57:46,520
Speaker 1: back I lead our our relationships with all the carriers

1121
00:57:46,520 --> 00:57:49,080
Speaker 1: and our sales teams in North America and then eventually

1122
00:57:49,120 --> 00:57:51,360
Speaker 1: going went over to Europe, Middle East, Africa, ran that

1123
00:57:51,440 --> 00:57:54,120
Speaker 1: out of England, and then I ran our global sales

1124
00:57:54,160 --> 00:57:57,800
Speaker 1: and marketing team. And so I mean I was I

1125
00:57:58,000 --> 00:58:01,320
Speaker 1: was in um you know, and I grew up with

1126
00:58:01,520 --> 00:58:03,840
Speaker 1: Jim and Mike right uh and and everybody there, and

1127
00:58:03,880 --> 00:58:05,560
Speaker 1: I knew most of the people there and so and

1128
00:58:05,600 --> 00:58:08,120
Speaker 1: as a Canadian, I was incredibly proud right of what

1129
00:58:08,280 --> 00:58:11,400
Speaker 1: we had built. But um it got to a point

1130
00:58:11,560 --> 00:58:15,800
Speaker 1: where it was the It was early twelve where Jim

1131
00:58:15,840 --> 00:58:18,400
Speaker 1: and Mike handed um the reins to a new CEO

1132
00:58:19,080 --> 00:58:21,400
Speaker 1: who was one of my colleagues to to that point,

1133
00:58:21,600 --> 00:58:24,560
Speaker 1: and we just disagreed on what needed to happen at

1134
00:58:24,560 --> 00:58:28,120
Speaker 1: the company at that particular point in time. And I

1135
00:58:28,240 --> 00:58:31,840
Speaker 1: think that to me was like a moment where, um,

1136
00:58:32,080 --> 00:58:34,360
Speaker 1: where I just said, okay, like, if I'm not aligned

1137
00:58:34,440 --> 00:58:36,040
Speaker 1: to where we're going and what we're trying to do,

1138
00:58:36,680 --> 00:58:39,760
Speaker 1: I think it's probably time for a change. Um. And ironically,

1139
00:58:39,960 --> 00:58:43,400
Speaker 1: like you know, and the world works in mysterious ways. Um,

1140
00:58:44,080 --> 00:58:46,480
Speaker 1: I got a call from John McFarland, the founder of

1141
00:58:46,520 --> 00:58:48,680
Speaker 1: Sons at that time, and we had Sons in our

1142
00:58:48,720 --> 00:58:51,520
Speaker 1: house in England, and Bob I must have sold you know,

1143
00:58:51,760 --> 00:58:54,920
Speaker 1: dozens and dozens of other people on so nos to

1144
00:58:55,000 --> 00:58:56,920
Speaker 1: that point. And when I when I had set it

1145
00:58:57,040 --> 00:58:59,320
Speaker 1: up in our house in England, I had I had

1146
00:58:59,360 --> 00:59:02,040
Speaker 1: said to myself, Wow, that was so easy. And it

1147
00:59:02,120 --> 00:59:04,920
Speaker 1: reminds me so much of the magic of BlackBerry in

1148
00:59:04,920 --> 00:59:08,720
Speaker 1: the early days, and so um, you know. So, so

1149
00:59:08,920 --> 00:59:12,000
Speaker 1: John had reached out and even when I was at BlackBerry,

1150
00:59:12,160 --> 00:59:14,680
Speaker 1: Steve Jobs through an executive recruiter, like they had their

1151
00:59:14,720 --> 00:59:16,920
Speaker 1: own executive recruiting team, had reached out and said I

1152
00:59:16,960 --> 00:59:18,920
Speaker 1: want to talk to you about iPhone sales whatever. And

1153
00:59:18,960 --> 00:59:21,560
Speaker 1: I said no, I said no, I'm you know, loyal

1154
00:59:21,680 --> 00:59:24,200
Speaker 1: to BlackBerry into rim and you know, this company and

1155
00:59:24,200 --> 00:59:26,240
Speaker 1: those kind of things. So I wouldn't talk. But you know,

1156
00:59:26,320 --> 00:59:28,360
Speaker 1: and part of it is probably being naive and just

1157
00:59:28,440 --> 00:59:30,280
Speaker 1: having grown up inside the company. But I wouldn't talk

1158
00:59:30,320 --> 00:59:33,320
Speaker 1: to people and John, you know, but John called John

1159
00:59:33,400 --> 00:59:35,240
Speaker 1: was It was different with John because I also just

1160
00:59:35,320 --> 00:59:38,560
Speaker 1: wanted to talk to a founder who had built something

1161
00:59:38,640 --> 00:59:41,000
Speaker 1: special that I used and loved and was selling to

1162
00:59:41,080 --> 00:59:44,160
Speaker 1: other people. So I agreed to talk to John, and

1163
00:59:45,120 --> 00:59:49,680
Speaker 1: um we were on vacation um in France, was with

1164
00:59:49,800 --> 00:59:52,200
Speaker 1: my family, and I said, Okay, this is gonna be

1165
00:59:52,480 --> 00:59:54,600
Speaker 1: you know, an hour That ended up being two hours.

1166
00:59:54,800 --> 00:59:56,880
Speaker 1: The next day, we we flew back to Lendon that

1167
00:59:57,040 --> 00:59:59,760
Speaker 1: night and the next day I spent another two three

1168
00:59:59,800 --> 01:00:03,160
Speaker 1: hour talking to John. And we were just so aligned

1169
01:00:03,360 --> 01:00:07,520
Speaker 1: on because he had a company prior that had really

1170
01:00:07,800 --> 01:00:10,440
Speaker 1: you know, risen and done to some amazing things and

1171
01:00:10,520 --> 01:00:12,600
Speaker 1: then didn't have a good end. And you know, I

1172
01:00:13,200 --> 01:00:15,880
Speaker 1: obviously at BlackBerry we were having challenging times, and I

1173
01:00:15,960 --> 01:00:19,640
Speaker 1: think he and I were both so aligned on building

1174
01:00:19,640 --> 01:00:22,080
Speaker 1: a company for the long term and not you know,

1175
01:00:22,160 --> 01:00:24,520
Speaker 1: cutting the corners, not doing the kind of things that

1176
01:00:25,040 --> 01:00:28,320
Speaker 1: we had seen sometimes that um, you know, I think,

1177
01:00:28,720 --> 01:00:30,800
Speaker 1: uh it was kind of the downfall, right and some

1178
01:00:30,920 --> 01:00:34,320
Speaker 1: of those things. And so I was just uh, I

1179
01:00:34,480 --> 01:00:37,160
Speaker 1: was super interested, um in terms of the conversation, and

1180
01:00:37,200 --> 01:00:39,240
Speaker 1: it was happening right at the time that I was

1181
01:00:39,320 --> 01:00:42,120
Speaker 1: having a disagreement on strategy with the new CEO at

1182
01:00:42,280 --> 01:00:45,840
Speaker 1: m Okay, what was the pitch? Was the pitch come

1183
01:00:45,920 --> 01:00:48,040
Speaker 1: in at this level and you have a potential of

1184
01:00:48,120 --> 01:00:51,400
Speaker 1: being CEO. That's exactly it. It was, you know, come

1185
01:00:51,600 --> 01:00:55,760
Speaker 1: come in, you know, joined the team now, um and uh,

1186
01:00:56,000 --> 01:00:58,240
Speaker 1: you know me be my right hand person and have

1187
01:00:58,360 --> 01:01:00,160
Speaker 1: a chance. You know, John was very clear, if I

1188
01:01:00,200 --> 01:01:03,600
Speaker 1: don't see myself as CEO forever UM in this and

1189
01:01:03,720 --> 01:01:06,720
Speaker 1: so you know, come and join the group. And we

1190
01:01:06,840 --> 01:01:10,600
Speaker 1: sat we sat together in the same office, you know,

1191
01:01:10,760 --> 01:01:13,640
Speaker 1: for the first was that like probably two three years.

1192
01:01:13,680 --> 01:01:16,480
Speaker 1: Then we actually moved offices, but um, so we sat

1193
01:01:16,600 --> 01:01:19,040
Speaker 1: in the same office and spent so much time together

1194
01:01:19,120 --> 01:01:24,480
Speaker 1: going through it and just you know, really the debating, um,

1195
01:01:24,720 --> 01:01:26,600
Speaker 1: trying to figure out, you know, where to go, how

1196
01:01:26,640 --> 01:01:29,800
Speaker 1: to maneuver everything going on in the industry, and how

1197
01:01:29,880 --> 01:01:31,480
Speaker 1: to build a company the right way and putting the

1198
01:01:31,520 --> 01:01:33,880
Speaker 1: effort into culture and the effort into the people and

1199
01:01:33,960 --> 01:01:36,840
Speaker 1: the recruiting and some of those things, which UM, yeah,

1200
01:01:36,880 --> 01:01:38,760
Speaker 1: I learned so much from John, and I think he

1201
01:01:38,920 --> 01:01:41,560
Speaker 1: learned so much from he's just a sponge from other

1202
01:01:41,640 --> 01:01:43,480
Speaker 1: people and other founders, but as well from what he

1203
01:01:43,560 --> 01:01:46,680
Speaker 1: went through in UM software dot com and everything they

1204
01:01:46,720 --> 01:01:49,080
Speaker 1: did the first time around UM that we had a

1205
01:01:49,240 --> 01:01:53,080
Speaker 1: really really tight relationship and a really shared view of

1206
01:01:53,120 --> 01:01:55,320
Speaker 1: trying to build something that would outlast both of us.

1207
01:02:02,120 --> 01:02:05,440
Speaker 1: So how did the decision to make the handoff transpire?

1208
01:02:06,200 --> 01:02:09,960
Speaker 1: And when it transpired did John disconnect? Where did you

1209
01:02:10,000 --> 01:02:12,680
Speaker 1: continue to give input? Does he still give input these days?

1210
01:02:13,440 --> 01:02:16,280
Speaker 1: So this is this is the incredible thing, you know. UM.

1211
01:02:16,520 --> 01:02:20,000
Speaker 1: So John's wife, Patty UM, you know, came down with

1212
01:02:20,240 --> 01:02:24,200
Speaker 1: cancer UM and so he obviously was you know that

1213
01:02:24,400 --> 01:02:27,320
Speaker 1: that was a big focus for him. And she's fine,

1214
01:02:27,640 --> 01:02:31,600
Speaker 1: UM today she's battled that thankfully. And so that was

1215
01:02:31,800 --> 01:02:33,560
Speaker 1: you know, distracting a little bit. But I'll tell you

1216
01:02:33,680 --> 01:02:37,400
Speaker 1: the number one thing was UM that I had seen

1217
01:02:37,880 --> 01:02:41,320
Speaker 1: and I had rung the bell around voice and said, John,

1218
01:02:41,480 --> 01:02:43,600
Speaker 1: like this voice thing, there's something to this and we

1219
01:02:43,680 --> 01:02:45,600
Speaker 1: need to be on top of voice and be figuring out,

1220
01:02:45,680 --> 01:02:48,320
Speaker 1: you know, how voice interacts with our speakers and what

1221
01:02:48,440 --> 01:02:51,000
Speaker 1: the strategy is here, and John was like, Nope, not

1222
01:02:51,080 --> 01:02:53,480
Speaker 1: gonna happen, not gonna happen. And you know, so eventually

1223
01:02:53,560 --> 01:02:56,240
Speaker 1: I had the conversation with him of like, now you know,

1224
01:02:56,400 --> 01:02:58,880
Speaker 1: now you're you're kind of like some of the people

1225
01:02:58,960 --> 01:03:00,640
Speaker 1: at RIM of like the it said no, no, the

1226
01:03:00,680 --> 01:03:02,480
Speaker 1: iPhone isn't going to be a big threat, right, you know,

1227
01:03:02,560 --> 01:03:04,360
Speaker 1: and and some of that, and I said, like, you know,

1228
01:03:04,400 --> 01:03:05,960
Speaker 1: we need to be thinking about how this plays out.

1229
01:03:06,280 --> 01:03:07,920
Speaker 1: And so to John, that was one of the most

1230
01:03:07,960 --> 01:03:10,000
Speaker 1: important things. To John, one of the most important things

1231
01:03:10,400 --> 01:03:13,240
Speaker 1: that anybody could have is a sense of where things

1232
01:03:13,280 --> 01:03:14,960
Speaker 1: are going and what the future looks like. And do

1233
01:03:15,040 --> 01:03:16,640
Speaker 1: you see that? And he said, you see it better

1234
01:03:16,680 --> 01:03:19,320
Speaker 1: than I do. And so I think now is the time, um,

1235
01:03:19,480 --> 01:03:22,360
Speaker 1: to hand the reins to you. And Bob. This is

1236
01:03:22,400 --> 01:03:24,440
Speaker 1: the most incredible thing and the most important thing, and

1237
01:03:24,520 --> 01:03:27,400
Speaker 1: probably the most unique thing is that I said to John,

1238
01:03:27,560 --> 01:03:29,400
Speaker 1: stay stay on the board. You know, you own a

1239
01:03:29,400 --> 01:03:31,720
Speaker 1: big chunk of the company. Stay on the board, um,

1240
01:03:32,320 --> 01:03:34,000
Speaker 1: you know, and why you'd be part of it because

1241
01:03:34,000 --> 01:03:35,720
Speaker 1: I think it will be a shock to the organization

1242
01:03:35,760 --> 01:03:37,720
Speaker 1: for you to just step away. And he said, Patrick

1243
01:03:38,080 --> 01:03:40,200
Speaker 1: he said, if I'm going to hand the reins to you,

1244
01:03:40,280 --> 01:03:42,240
Speaker 1: I'm going to hand the reins to you. I've seen

1245
01:03:42,280 --> 01:03:44,600
Speaker 1: this go badly so many times, and there's going to

1246
01:03:44,680 --> 01:03:46,680
Speaker 1: be things that you want to change that I will

1247
01:03:46,720 --> 01:03:49,000
Speaker 1: disagree with, and like it'll just be bad for both

1248
01:03:49,040 --> 01:03:52,520
Speaker 1: of us, uh in going through this. And John literally

1249
01:03:52,600 --> 01:03:55,760
Speaker 1: stepped away, Bob, like he just he left one day

1250
01:03:56,160 --> 01:03:59,040
Speaker 1: and if anybody would contact him, he'd say, talk to Patrick.

1251
01:03:59,320 --> 01:04:01,920
Speaker 1: And at the same time time you know today, you know,

1252
01:04:02,040 --> 01:04:03,600
Speaker 1: more than four years later, like four and a half

1253
01:04:03,680 --> 01:04:05,960
Speaker 1: years later. If I called him right now because I

1254
01:04:06,040 --> 01:04:08,080
Speaker 1: needed something, I needed his advice or help or something

1255
01:04:08,120 --> 01:04:09,880
Speaker 1: like that, he would answer like that, um, and he

1256
01:04:09,920 --> 01:04:12,480
Speaker 1: would be willing to help me. Um. And I mean

1257
01:04:12,680 --> 01:04:14,880
Speaker 1: it is just having talked to a lot of people

1258
01:04:14,920 --> 01:04:17,240
Speaker 1: that have gone through these kind of transitions, it was

1259
01:04:17,360 --> 01:04:20,600
Speaker 1: the most incredible gift that um, you know, he could

1260
01:04:20,640 --> 01:04:23,440
Speaker 1: give me to set really me, but all of sons

1261
01:04:23,520 --> 01:04:25,720
Speaker 1: up for success because we didn't need to change some things,

1262
01:04:25,760 --> 01:04:27,560
Speaker 1: and we did need to move on certain things and

1263
01:04:27,640 --> 01:04:31,280
Speaker 1: do things differently. And he was so right because you know, Um,

1264
01:04:31,960 --> 01:04:34,840
Speaker 1: we made the transition in January and at the February

1265
01:04:34,920 --> 01:04:36,680
Speaker 1: board meeting. There are a bunch of things I was

1266
01:04:36,760 --> 01:04:39,240
Speaker 1: doing that I know would have been a huge debate

1267
01:04:39,360 --> 01:04:43,480
Speaker 1: between John and I. Uh so, uh, he was absolutely right,

1268
01:04:43,600 --> 01:04:45,880
Speaker 1: and I can't you know, I can't thank him enough

1269
01:04:46,000 --> 01:04:50,000
Speaker 1: for like making that decision and making the transition the

1270
01:04:50,160 --> 01:04:54,600
Speaker 1: right way. You know. The perception was that SOS was

1271
01:04:54,760 --> 01:04:57,320
Speaker 1: behind on voice and it might be the death of

1272
01:04:57,400 --> 01:05:00,240
Speaker 1: the company, that you were late to market. How did

1273
01:05:00,280 --> 01:05:05,520
Speaker 1: you catch up there? Yeah? So, um, this was you

1274
01:05:05,600 --> 01:05:08,240
Speaker 1: know from my rim experience. Like one of the things

1275
01:05:08,560 --> 01:05:10,960
Speaker 1: again that I don't think that I think too many

1276
01:05:10,960 --> 01:05:13,320
Speaker 1: companies do is respond in some way. So there was

1277
01:05:13,360 --> 01:05:15,640
Speaker 1: a faction of people that would say, we need to

1278
01:05:15,680 --> 01:05:17,720
Speaker 1: go do our own voice system, we need to make

1279
01:05:17,760 --> 01:05:20,400
Speaker 1: our own Alexa Google assistant. I said, no, like that

1280
01:05:20,560 --> 01:05:25,440
Speaker 1: is not Amazon has ten thousand people Alexa. We are

1281
01:05:25,560 --> 01:05:29,919
Speaker 1: a at that point company, Like this is not gonna work.

1282
01:05:30,600 --> 01:05:33,000
Speaker 1: And so, you know, so I said, we need to

1283
01:05:33,080 --> 01:05:35,360
Speaker 1: co opt what these companies are doing and they have

1284
01:05:35,560 --> 01:05:37,920
Speaker 1: a strategy around why they're doing these things. Let's go

1285
01:05:38,080 --> 01:05:41,240
Speaker 1: talk to Amazon, let's go talk to Google, and we

1286
01:05:41,400 --> 01:05:45,280
Speaker 1: can just like with streaming services, we can be Switzerland

1287
01:05:45,360 --> 01:05:47,080
Speaker 1: in this and we can offer all of the voice

1288
01:05:47,080 --> 01:05:49,880
Speaker 1: services that are out there, there'll be more. You know,

1289
01:05:49,960 --> 01:05:52,080
Speaker 1: It's not gonna be one that's going to satisfy everybody,

1290
01:05:52,160 --> 01:05:54,440
Speaker 1: So how do we go and do that? And kudos

1291
01:05:54,440 --> 01:05:57,160
Speaker 1: to our product team that very quickly came up with

1292
01:05:57,240 --> 01:06:00,200
Speaker 1: a way to basically retrofit and figure out how to

1293
01:06:00,240 --> 01:06:03,640
Speaker 1: put voice on microphones in a son nos Play one right,

1294
01:06:03,680 --> 01:06:06,160
Speaker 1: which we rebranded as one and got out very quickly,

1295
01:06:06,280 --> 01:06:09,680
Speaker 1: so that Bob was like a twelve to sixteen months

1296
01:06:09,720 --> 01:06:12,600
Speaker 1: development cycle, which was our fastest on record. Nobody thought

1297
01:06:12,680 --> 01:06:15,400
Speaker 1: was possible. Um our team did an incredible job to

1298
01:06:15,480 --> 01:06:17,880
Speaker 1: do that. It meant a lot of hard engineering work

1299
01:06:17,920 --> 01:06:20,080
Speaker 1: both on our side and Amazons to actually make it work,

1300
01:06:20,480 --> 01:06:23,160
Speaker 1: but it wasn't you know. I think it's really important

1301
01:06:23,240 --> 01:06:25,800
Speaker 1: that we looked at it in a way of partnering

1302
01:06:25,840 --> 01:06:28,440
Speaker 1: with these companies as opposed to building our own and

1303
01:06:28,560 --> 01:06:32,400
Speaker 1: trying to you know, outdo Amazon or Google, um at

1304
01:06:32,480 --> 01:06:35,280
Speaker 1: something like that. And so that was that was the strategy.

1305
01:06:35,320 --> 01:06:38,400
Speaker 1: It's kind of taking the momentum of those services and

1306
01:06:38,640 --> 01:06:42,080
Speaker 1: bringing them into the Sons ecosystem. Okay, perception from the

1307
01:06:42,160 --> 01:06:45,960
Speaker 1: outside was that you were essentially the first licensee when

1308
01:06:46,000 --> 01:06:49,120
Speaker 1: you approach these two companies, Amazon and Google, were they

1309
01:06:49,240 --> 01:06:52,960
Speaker 1: willing to license their technology and what was their perception

1310
01:06:53,040 --> 01:06:57,320
Speaker 1: and status? Yeah, thankfully we um. Dave Limp at Amazon

1311
01:06:57,640 --> 01:07:01,160
Speaker 1: absolutely fantastic in terms of thinking about this and his

1312
01:07:01,600 --> 01:07:04,120
Speaker 1: his respect for Sonos, and I think Bob at Google

1313
01:07:04,200 --> 01:07:06,560
Speaker 1: to like so many of the people that were involved

1314
01:07:06,600 --> 01:07:08,840
Speaker 1: in the executives all had and loved son Nos and

1315
01:07:08,960 --> 01:07:11,280
Speaker 1: saw the fit. And so I think we were in

1316
01:07:11,320 --> 01:07:14,080
Speaker 1: a unique position. We've been working with these companies before

1317
01:07:14,120 --> 01:07:18,280
Speaker 1: on music services, you know, cloud, a variety of different things,

1318
01:07:18,320 --> 01:07:21,400
Speaker 1: and so we had good relationships with the companies and

1319
01:07:21,920 --> 01:07:26,480
Speaker 1: they you know, my my impression was their goal was

1320
01:07:26,600 --> 01:07:30,320
Speaker 1: to get their voice services out in as many products

1321
01:07:30,320 --> 01:07:34,520
Speaker 1: as possible, as many places as possible, and and that

1322
01:07:34,680 --> 01:07:36,480
Speaker 1: was right, like, that's what they wanted to do, and

1323
01:07:36,600 --> 01:07:39,040
Speaker 1: so um, we just gave them a path to be

1324
01:07:39,080 --> 01:07:41,120
Speaker 1: able to do that. And having you know, some of

1325
01:07:41,200 --> 01:07:44,160
Speaker 1: the most important and affluent homes out there, Um, it

1326
01:07:44,240 --> 01:07:48,040
Speaker 1: seemed like a golden opportunity. And so it worked. Okay,

1327
01:07:48,120 --> 01:07:52,160
Speaker 1: let's talk about the lawsuits. Tell me the thinking and

1328
01:07:52,480 --> 01:07:57,280
Speaker 1: play out what happened. So um, you know, we we

1329
01:07:58,200 --> 01:08:02,960
Speaker 1: obviously have nineteen years at this point of hard work, blood,

1330
01:08:02,960 --> 01:08:06,360
Speaker 1: sweat and tears that people have poured into building the

1331
01:08:06,560 --> 01:08:10,520
Speaker 1: experience that you see today on so noes inventing a

1332
01:08:10,600 --> 01:08:12,880
Speaker 1: whole bunch of things that we've patented, and and again

1333
01:08:12,960 --> 01:08:15,480
Speaker 1: that's a that's a lesson. John and I both had

1334
01:08:15,560 --> 01:08:17,880
Speaker 1: equally learned from our first go round. Right So at

1335
01:08:17,960 --> 01:08:20,800
Speaker 1: RIM you I'm not sure if you'll remember, but there

1336
01:08:20,880 --> 01:08:25,120
Speaker 1: was a massive lawsuit where basically twenty three lawyers in

1337
01:08:25,200 --> 01:08:29,320
Speaker 1: Chicago had a patent and sued RAM basically tried to

1338
01:08:29,360 --> 01:08:33,519
Speaker 1: shut RIM down UM and it did shake us down

1339
01:08:33,600 --> 01:08:36,320
Speaker 1: for six d and twelve million dollars UM. When you

1340
01:08:36,400 --> 01:08:37,880
Speaker 1: know that that was a lot of money for us

1341
01:08:38,160 --> 01:08:41,400
Speaker 1: UM at that particular point of time, because we hadn't

1342
01:08:41,400 --> 01:08:43,599
Speaker 1: patented and hadn't like kind of ticked and tide things,

1343
01:08:43,640 --> 01:08:45,960
Speaker 1: And so I never wanted to be in like that position,

1344
01:08:46,000 --> 01:08:49,479
Speaker 1: even from a defensive side of it. And so early on,

1345
01:08:50,280 --> 01:08:52,919
Speaker 1: you know, John had made the decision to start patenting,

1346
01:08:53,000 --> 01:08:54,760
Speaker 1: and I was a huge advocate of that. So we

1347
01:08:54,840 --> 01:08:57,240
Speaker 1: were patenting all of the inventions that we had because

1348
01:08:57,320 --> 01:08:59,040
Speaker 1: we knew this was going to be a big category

1349
01:08:59,120 --> 01:09:02,000
Speaker 1: someday and we would get giants jumping into it. And

1350
01:09:02,439 --> 01:09:05,880
Speaker 1: so UM you know, and so one of the things

1351
01:09:06,120 --> 01:09:10,920
Speaker 1: that transpired was we tried with Google to be able

1352
01:09:10,960 --> 01:09:13,519
Speaker 1: to say, hey, look like you are you are copying

1353
01:09:13,880 --> 01:09:15,680
Speaker 1: what we do, like you can see it, you can

1354
01:09:15,680 --> 01:09:17,559
Speaker 1: see it and experience the marketing all of these things.

1355
01:09:18,080 --> 01:09:19,640
Speaker 1: We put our patents out there, Bob. That was the

1356
01:09:19,680 --> 01:09:21,840
Speaker 1: other thing that we did. It was around the same

1357
01:09:21,880 --> 01:09:23,960
Speaker 1: time Tesla. Did I think we were like maybe two

1358
01:09:24,080 --> 01:09:26,160
Speaker 1: or three months ahead, is just putting our patents out

1359
01:09:26,240 --> 01:09:28,960
Speaker 1: on our website saying here's where they are. You know,

1360
01:09:29,280 --> 01:09:32,160
Speaker 1: innovation is fine, but don't copy um what we're doing.

1361
01:09:32,240 --> 01:09:34,880
Speaker 1: And so we're just making people aware. And so it

1362
01:09:35,000 --> 01:09:37,479
Speaker 1: got to a point with Google where I didn't feel

1363
01:09:37,520 --> 01:09:40,360
Speaker 1: like they were taking it seriously, that they were infringing

1364
01:09:40,520 --> 01:09:43,920
Speaker 1: on our intellectual property. And so UM we decided that

1365
01:09:43,960 --> 01:09:47,040
Speaker 1: we needed to take the next step, which UM, I think,

1366
01:09:48,479 --> 01:09:50,960
Speaker 1: which you know, we're actually now close. It's been a

1367
01:09:51,200 --> 01:09:54,160
Speaker 1: it was what January of last year, August thirteen, will

1368
01:09:54,160 --> 01:09:56,360
Speaker 1: actually hear from the I T C on this UM

1369
01:09:56,880 --> 01:09:59,640
Speaker 1: is are they infringing you know the patents that UM

1370
01:09:59,800 --> 01:10:02,280
Speaker 1: we had there and did they copy what we invented?

1371
01:10:02,840 --> 01:10:04,160
Speaker 1: And I felt it was important. I felt it was

1372
01:10:04,200 --> 01:10:06,360
Speaker 1: important for all of the people at Sonos that have

1373
01:10:06,520 --> 01:10:09,400
Speaker 1: put um all that work into the products and inventing

1374
01:10:09,479 --> 01:10:12,280
Speaker 1: these things. I thought it was important for standing up

1375
01:10:12,320 --> 01:10:14,800
Speaker 1: for smaller companies, you know, in the face of what

1376
01:10:15,120 --> 01:10:18,160
Speaker 1: has been called efficient infringement, where these big tech companies

1377
01:10:18,479 --> 01:10:20,639
Speaker 1: just copy what smaller companies do and drive them out

1378
01:10:20,640 --> 01:10:22,960
Speaker 1: of business. UM. And we were in the position where

1379
01:10:23,000 --> 01:10:25,040
Speaker 1: we could afford to do it from you know, we

1380
01:10:25,120 --> 01:10:27,439
Speaker 1: had the dollars because we've gone public, and you know,

1381
01:10:27,520 --> 01:10:30,640
Speaker 1: we had a strong intellectual property, you know, portfolio, and

1382
01:10:30,760 --> 01:10:32,920
Speaker 1: so I felt a duty in that way to our people.

1383
01:10:32,960 --> 01:10:35,280
Speaker 1: But as well to this notion that you've got to

1384
01:10:35,360 --> 01:10:39,640
Speaker 1: stand up to these big tech players and UM, you

1385
01:10:39,680 --> 01:10:41,559
Speaker 1: know you're not. You can't let them trample all over

1386
01:10:41,960 --> 01:10:45,120
Speaker 1: the inventions that you've made. And so um, you know,

1387
01:10:45,280 --> 01:10:48,080
Speaker 1: we're full steam ahead on that. UM. I testified at

1388
01:10:48,120 --> 01:10:53,599
Speaker 1: Congress as well around the antitrust and dominant platforms as well, because,

1389
01:10:54,320 --> 01:10:56,439
Speaker 1: like I was saying, I've been in this the whole

1390
01:10:56,560 --> 01:10:59,040
Speaker 1: technology space for twenty three years, and I remember the

1391
01:10:59,120 --> 01:11:02,679
Speaker 1: days of Microsoft and Intel and the dominance that they had.

1392
01:11:03,280 --> 01:11:06,280
Speaker 1: Microsoft and Qualcom actually created a company called Wireless Knowledge

1393
01:11:06,360 --> 01:11:10,280
Speaker 1: to basically destroy rim and UM. But it was very

1394
01:11:10,320 --> 01:11:13,200
Speaker 1: different at that point, Like, you know, it wasn't something

1395
01:11:13,320 --> 01:11:16,600
Speaker 1: where they were willing to undercut price and you know

1396
01:11:16,840 --> 01:11:20,000
Speaker 1: sell you know, give things away, right to to basically

1397
01:11:20,680 --> 01:11:22,720
Speaker 1: undermine other companies and those kind of things. And so

1398
01:11:23,280 --> 01:11:25,479
Speaker 1: it was important to me to testify at Congress and

1399
01:11:25,880 --> 01:11:28,559
Speaker 1: share our experience with the dominant platforms and the way

1400
01:11:28,600 --> 01:11:31,720
Speaker 1: that they're um, you know, using their muscle if you will,

1401
01:11:31,760 --> 01:11:34,560
Speaker 1: because I think it's important for the country and for

1402
01:11:34,600 --> 01:11:39,000
Speaker 1: the future of innovation and entrepreneurship that we make sure

1403
01:11:39,120 --> 01:11:41,880
Speaker 1: that there's not a situation where it's you know, it's

1404
01:11:41,920 --> 01:11:44,720
Speaker 1: too much power in too few hands. Okay, how much

1405
01:11:44,760 --> 01:11:49,599
Speaker 1: does it cost to sue Google? Um should be available

1406
01:11:49,680 --> 01:11:52,720
Speaker 1: in our public records, but it's yeah, it's tens of

1407
01:11:52,760 --> 01:11:56,759
Speaker 1: millions of dollars. Okay, let's just say hypothetically you lose

1408
01:11:58,120 --> 01:12:01,719
Speaker 1: and they can continue to do with their away. Would

1409
01:12:01,760 --> 01:12:07,280
Speaker 1: that affect the future of sons? No? Um. The other

1410
01:12:07,400 --> 01:12:10,519
Speaker 1: thing I would say is one, just like on a

1411
01:12:10,600 --> 01:12:13,519
Speaker 1: more technical note, you know, we've you can only sue

1412
01:12:13,560 --> 01:12:15,280
Speaker 1: on five patents. We have a hundred and five that

1413
01:12:15,400 --> 01:12:18,400
Speaker 1: they are violating. So um, there's a lot more to

1414
01:12:18,439 --> 01:12:22,120
Speaker 1: go in this battle until you know where we are.

1415
01:12:22,160 --> 01:12:24,599
Speaker 1: We're confident about where we are. But also the other thing,

1416
01:12:24,680 --> 01:12:27,320
Speaker 1: Bob is that it wasn't and this was very important

1417
01:12:27,360 --> 01:12:29,400
Speaker 1: to me, is that it's a very small group of

1418
01:12:29,439 --> 01:12:31,960
Speaker 1: people that are involved in this matter. So it takes

1419
01:12:31,960 --> 01:12:33,240
Speaker 1: a certain amount of my time and I try to

1420
01:12:33,240 --> 01:12:36,320
Speaker 1: be disciplined about that. Eddie or chief general counsel obviously

1421
01:12:36,520 --> 01:12:38,439
Speaker 1: him and a few of our inn electoral property people

1422
01:12:38,560 --> 01:12:40,559
Speaker 1: very focused on it. And then outside Ferns that's why

1423
01:12:40,600 --> 01:12:42,800
Speaker 1: we pay the money UH in terms of going through it.

1424
01:12:42,840 --> 01:12:45,000
Speaker 1: But I also said to the company, we cannot let

1425
01:12:45,120 --> 01:12:48,000
Speaker 1: this take away from us continuing to drive innovation and

1426
01:12:48,120 --> 01:12:50,080
Speaker 1: bring at least two new products out every year and

1427
01:12:50,200 --> 01:12:53,080
Speaker 1: drive the business and get into more homes. And so

1428
01:12:53,400 --> 01:12:57,040
Speaker 1: we've successfully been able to do both UM and so

1429
01:12:57,680 --> 01:13:01,000
Speaker 1: I am not by no means like would I rely

1430
01:13:01,240 --> 01:13:04,080
Speaker 1: on that as the only way forward for so nos

1431
01:13:04,160 --> 01:13:07,200
Speaker 1: like we have to continue to compete and win UM

1432
01:13:07,320 --> 01:13:09,360
Speaker 1: and we've shown we can do that too. Okay, let's

1433
01:13:09,400 --> 01:13:12,680
Speaker 1: talk about the big software issue where it came out

1434
01:13:12,720 --> 01:13:14,920
Speaker 1: and it appeared to customers that you were not going

1435
01:13:15,120 --> 01:13:20,800
Speaker 1: to support old products with new software, and then ultimately

1436
01:13:20,920 --> 01:13:23,000
Speaker 1: to the point where like, I have a lot of

1437
01:13:23,080 --> 01:13:26,920
Speaker 1: stuff on son Nos one, but for the room I

1438
01:13:27,040 --> 01:13:30,880
Speaker 1: have to download Sonos two. Ye, So walk us through

1439
01:13:31,000 --> 01:13:35,320
Speaker 1: all that. Yeah. So, after by that point sixteen years

1440
01:13:35,360 --> 01:13:38,040
Speaker 1: of shipping products UM and then looking at what we

1441
01:13:38,120 --> 01:13:42,280
Speaker 1: wanted to deliver for the new products as well, we

1442
01:13:42,560 --> 01:13:46,479
Speaker 1: came to basically a point where we couldn't support the

1443
01:13:46,680 --> 01:13:50,240
Speaker 1: processor and memory and the limitations that we had on

1444
01:13:50,320 --> 01:13:55,280
Speaker 1: those early products three early products UM that were was

1445
01:13:55,360 --> 01:13:59,479
Speaker 1: required to do things like Debbiamo's music, Debbie atmos UM

1446
01:14:00,120 --> 01:14:01,799
Speaker 1: and some of the other things that we have planned

1447
01:14:01,880 --> 01:14:05,920
Speaker 1: and coming that we we UM that we're using with

1448
01:14:06,200 --> 01:14:09,960
Speaker 1: ARC and new five, New sub and now as well

1449
01:14:10,080 --> 01:14:13,360
Speaker 1: roam and so it was hard and we had lots

1450
01:14:13,439 --> 01:14:15,880
Speaker 1: of you know, we spent so much time trying to

1451
01:14:15,960 --> 01:14:18,040
Speaker 1: figure out the right way to work through these kind

1452
01:14:18,080 --> 01:14:19,439
Speaker 1: of things, and we thought we did the right thing

1453
01:14:19,479 --> 01:14:20,680
Speaker 1: and trying to get out in front of it. We

1454
01:14:20,760 --> 01:14:24,200
Speaker 1: flubbed the messaging in a in a big, big way. UM.

1455
01:14:24,760 --> 01:14:26,760
Speaker 1: But we're trying to alert people of like, hey, this

1456
01:14:26,920 --> 01:14:28,960
Speaker 1: is coming and give people a chance to get their

1457
01:14:29,000 --> 01:14:32,040
Speaker 1: system to S two if that was the right thing. UM.

1458
01:14:32,520 --> 01:14:36,240
Speaker 1: So that was tough. We you know, um, it was

1459
01:14:36,280 --> 01:14:39,840
Speaker 1: a communications issue. It was a it's a technology issue,

1460
01:14:39,920 --> 01:14:42,280
Speaker 1: and what a technology life cycle issue? You would say

1461
01:14:42,360 --> 01:14:45,360
Speaker 1: that we have to walk people through and thankfully, um,

1462
01:14:45,479 --> 01:14:47,639
Speaker 1: a lot of our customers you know, continue to stick

1463
01:14:47,680 --> 01:14:50,240
Speaker 1: with us through that. But we certainly flubbed the communications

1464
01:14:50,320 --> 01:14:53,040
Speaker 1: up front where we said, okay, like we almost gave

1465
01:14:53,040 --> 01:14:55,559
Speaker 1: the impression. I got a lot of emails, um, people

1466
01:14:55,680 --> 01:14:57,880
Speaker 1: my emails on our customer support site so people can

1467
01:14:57,960 --> 01:14:59,479
Speaker 1: email me directly. And I got a lot of emails

1468
01:14:59,479 --> 01:15:02,320
Speaker 1: from people who thought that meant their products for stopping,

1469
01:15:02,479 --> 01:15:05,320
Speaker 1: you know, in May of last year when we communicated

1470
01:15:05,360 --> 01:15:07,280
Speaker 1: it in the end of January, which is not the

1471
01:15:07,320 --> 01:15:09,160
Speaker 1: case and never been a plan to be the case.

1472
01:15:09,880 --> 01:15:13,320
Speaker 1: So yeah, so it's um, it's really about trying to

1473
01:15:14,200 --> 01:15:15,840
Speaker 1: how you balance I guess I would say from a

1474
01:15:16,600 --> 01:15:19,400
Speaker 1: you know, from a company perspective, is how do you

1475
01:15:19,920 --> 01:15:22,960
Speaker 1: make sure you are inventing the future and do everything

1476
01:15:23,000 --> 01:15:25,400
Speaker 1: you need to do to create great new experiences in

1477
01:15:25,479 --> 01:15:28,880
Speaker 1: the future, but not you know, not stranding the customers

1478
01:15:29,000 --> 01:15:32,519
Speaker 1: that have invested in the technology um of the past.

1479
01:15:32,600 --> 01:15:34,760
Speaker 1: And and look, I mean the reality is there's not

1480
01:15:34,840 --> 01:15:37,920
Speaker 1: many companies like ours where the products from fifteen years

1481
01:15:37,920 --> 01:15:39,960
Speaker 1: ago still work. So I don't think a lot of

1482
01:15:40,000 --> 01:15:43,439
Speaker 1: companies get caught up in these kind of situations. UM,

1483
01:15:43,600 --> 01:15:46,360
Speaker 1: but it's something that, UM, you know, it's important to

1484
01:15:46,479 --> 01:15:48,959
Speaker 1: us to make sure we're continuing to service those customers.

1485
01:15:49,040 --> 01:15:51,479
Speaker 1: And so yeah, so there's some customers, it's not that

1486
01:15:51,560 --> 01:15:53,200
Speaker 1: many at this point, but there are some customers that

1487
01:15:53,200 --> 01:15:56,360
Speaker 1: will run in like an S the first version software

1488
01:15:56,400 --> 01:15:59,200
Speaker 1: and then the second version software. But most customers have

1489
01:15:59,280 --> 01:16:03,439
Speaker 1: been moving to S to the new software. Okay. And

1490
01:16:04,080 --> 01:16:07,800
Speaker 1: you know this came up because unlike a phone, people

1491
01:16:07,880 --> 01:16:11,200
Speaker 1: buy home audio or tievs that they expect it to last.

1492
01:16:11,320 --> 01:16:14,760
Speaker 1: It's not a fungible item that you discard. So how

1493
01:16:14,840 --> 01:16:19,599
Speaker 1: long do you plan to support these legacy products? Um?

1494
01:16:20,160 --> 01:16:22,519
Speaker 1: You know, as long as we can. And the only

1495
01:16:22,600 --> 01:16:25,320
Speaker 1: thing that trips us up is if something gets changed. Um.

1496
01:16:26,120 --> 01:16:28,040
Speaker 1: You know, if a service, for instance, isn't gonna support

1497
01:16:28,120 --> 01:16:31,320
Speaker 1: or it's going to change something in the architecture, um,

1498
01:16:32,000 --> 01:16:33,600
Speaker 1: you know, those kind of things. So we're continuing to

1499
01:16:33,600 --> 01:16:35,479
Speaker 1: support it. UM. I don't see any reason why we

1500
01:16:35,560 --> 01:16:39,320
Speaker 1: can't continue to going forward. So uh, yeah, we'll support

1501
01:16:39,360 --> 01:16:41,080
Speaker 1: as long as we can. And is there any trade

1502
01:16:41,120 --> 01:16:44,760
Speaker 1: in trade up program for there is Yeah, so there is. Um,

1503
01:16:45,200 --> 01:16:49,120
Speaker 1: there is a trade in program off for customers that

1504
01:16:49,280 --> 01:16:52,880
Speaker 1: want to move to S two products. Okay, so how

1505
01:16:52,960 --> 01:16:57,200
Speaker 1: long are you going to do this? Do what run? So? Nos? Oh,

1506
01:16:58,720 --> 01:17:01,400
Speaker 1: as long as they'll let me. Absolutely, we have the

1507
01:17:01,479 --> 01:17:04,599
Speaker 1: best team in the world. Uh, it is so much fun.

1508
01:17:05,280 --> 01:17:08,360
Speaker 1: In terms of the company, I think we have so

1509
01:17:08,479 --> 01:17:10,879
Speaker 1: much opportunity in front of us. We have some amazing

1510
01:17:10,920 --> 01:17:14,759
Speaker 1: products on the roadmap. Um. I just feel extremely blessed

1511
01:17:15,160 --> 01:17:19,000
Speaker 1: um to have the opportunity to do it. And uh yeah,

1512
01:17:19,080 --> 01:17:21,800
Speaker 1: I mean as long as you know, as long as

1513
01:17:21,960 --> 01:17:24,080
Speaker 1: I feel like I'm contributing and leading in the right

1514
01:17:24,160 --> 01:17:26,720
Speaker 1: way too, and we're heading in the right direction, Um,

1515
01:17:27,200 --> 01:17:29,800
Speaker 1: then you know I'm I'm in. So you have a

1516
01:17:29,840 --> 01:17:36,160
Speaker 1: good record as a seer. Where's it all going? M hm? Where? Yeah,

1517
01:17:36,240 --> 01:17:39,200
Speaker 1: it depends where it is if we're talking about Okay,

1518
01:17:40,000 --> 01:17:43,040
Speaker 1: let me break it down first. In terms of Sons,

1519
01:17:43,640 --> 01:17:47,120
Speaker 1: these are essentially home audio products also aligned with TV.

1520
01:17:47,600 --> 01:17:52,400
Speaker 1: Do you ever invented envisioned sons broadening their landscape in

1521
01:17:52,560 --> 01:17:56,360
Speaker 1: terms of their purview their products? Absolutely, Bob, I think

1522
01:17:56,479 --> 01:17:58,840
Speaker 1: the I think the system we've built and that the

1523
01:17:58,920 --> 01:18:01,760
Speaker 1: connectivity to the cloud in the systems that are there, Uh,

1524
01:18:01,840 --> 01:18:05,160
Speaker 1: the ideas we have around future products, the opportunity and

1525
01:18:05,280 --> 01:18:09,479
Speaker 1: all of audio UM, there's just so much opportunity out there.

1526
01:18:09,560 --> 01:18:12,000
Speaker 1: I I do see us broadening absolutely over time. And

1527
01:18:12,040 --> 01:18:14,120
Speaker 1: I've said I think we have an opportunity to play

1528
01:18:14,120 --> 01:18:16,439
Speaker 1: in all the different areas of audio. So there's no

1529
01:18:16,560 --> 01:18:19,240
Speaker 1: reason we can't UM over the long term. The most

1530
01:18:19,280 --> 01:18:21,360
Speaker 1: important thing to me is doing it in a way

1531
01:18:21,840 --> 01:18:24,439
Speaker 1: that brings something unique to the table. Right, So something

1532
01:18:24,560 --> 01:18:27,120
Speaker 1: like Rome, how is that different than other Bluetooth speakers.

1533
01:18:27,160 --> 01:18:30,040
Speaker 1: We've got things like sound Swap Um, there's a different

1534
01:18:30,080 --> 01:18:32,519
Speaker 1: way that we've integrated the voice services, those kind of things,

1535
01:18:33,040 --> 01:18:35,479
Speaker 1: and that it's kind of connected together, right, And so

1536
01:18:35,720 --> 01:18:38,240
Speaker 1: each product you're getting with so no nos makes the

1537
01:18:38,280 --> 01:18:40,679
Speaker 1: experience better. And this is something we watch pretty carefully,

1538
01:18:40,800 --> 01:18:42,960
Speaker 1: is like our Is that true? So as people get

1539
01:18:42,960 --> 01:18:44,759
Speaker 1: more and more products, how do they feel about the system,

1540
01:18:44,800 --> 01:18:47,559
Speaker 1: and they feel they get even they become even bigger

1541
01:18:47,560 --> 01:18:49,920
Speaker 1: advocates over time, and so I think we have a

1542
01:18:50,000 --> 01:18:53,120
Speaker 1: lot of opportunity right across the whole audio spectrum over time,

1543
01:18:53,160 --> 01:18:55,800
Speaker 1: and who knows where it goes from there to me.

1544
01:18:56,120 --> 01:18:58,439
Speaker 1: To me, the biggest thing is are we building a company,

1545
01:18:58,640 --> 01:19:01,920
Speaker 1: you know, in a team that's adaptable, uh, you know,

1546
01:19:02,040 --> 01:19:04,719
Speaker 1: and building something that fundamentally is going to be enduring

1547
01:19:04,800 --> 01:19:07,000
Speaker 1: over the long term. Let's talk about the room. When

1548
01:19:07,080 --> 01:19:10,400
Speaker 1: what the room is a very small unit and you

1549
01:19:10,520 --> 01:19:13,120
Speaker 1: set it up and turned on, you were literally shocked

1550
01:19:13,240 --> 01:19:17,960
Speaker 1: by the quality of the audio and most portable stuff

1551
01:19:18,680 --> 01:19:24,480
Speaker 1: is adequate ad best? Okay, what was the thinking and developing?

1552
01:19:24,640 --> 01:19:26,479
Speaker 1: And also but the price. A lot of the reviews

1553
01:19:26,520 --> 01:19:29,120
Speaker 1: will say the price is significant, you know, and they're

1554
01:19:29,280 --> 01:19:32,040
Speaker 1: how hard to sell is it? Is this a portable item?

1555
01:19:32,120 --> 01:19:34,559
Speaker 1: Is there people buying on sound quality? They're just buying

1556
01:19:34,680 --> 01:19:40,120
Speaker 1: on price point they you know, for us, anytime we're

1557
01:19:40,120 --> 01:19:42,320
Speaker 1: gonna do something has to have that different experience. So

1558
01:19:42,439 --> 01:19:45,559
Speaker 1: it is different in this sound um, the build quality,

1559
01:19:46,320 --> 01:19:49,080
Speaker 1: the functionality as well that we have and it's hard

1560
01:19:49,160 --> 01:19:51,360
Speaker 1: to make it sound that good in that form factor.

1561
01:19:51,560 --> 01:19:53,840
Speaker 1: But uh, you know, Giles, Chris and the team do

1562
01:19:53,920 --> 01:19:56,200
Speaker 1: an incredible job at doing that. And I hope that

1563
01:19:56,360 --> 01:19:58,960
Speaker 1: every product we have, as people turn it on and

1564
01:19:59,040 --> 01:20:01,920
Speaker 1: listen to it, um, they'll be surprised by the sound

1565
01:20:02,000 --> 01:20:04,080
Speaker 1: that comes out of it. Whether it's Ark or whether

1566
01:20:04,160 --> 01:20:07,599
Speaker 1: it's Rome. Uh So there's a lot of debate. To Bob,

1567
01:20:07,680 --> 01:20:11,120
Speaker 1: you may remember, you know, Bluetooth was a sacred cow.

1568
01:20:11,200 --> 01:20:13,240
Speaker 1: It's us for a long time, long time, and so

1569
01:20:13,520 --> 01:20:15,479
Speaker 1: putting Bluetooth in a product and being able to do

1570
01:20:15,600 --> 01:20:17,720
Speaker 1: that and still live up to our quality standards was

1571
01:20:18,080 --> 01:20:21,000
Speaker 1: a big deal. UM. So we worked through that and

1572
01:20:21,080 --> 01:20:22,720
Speaker 1: figured out how we could do it and how we

1573
01:20:22,760 --> 01:20:25,600
Speaker 1: could do it better, um, which we're proud of. And

1574
01:20:26,680 --> 01:20:29,600
Speaker 1: I don't get too caught up. Like from a price perspective,

1575
01:20:29,720 --> 01:20:32,479
Speaker 1: it's very it's a very good deal for what you get,

1576
01:20:32,640 --> 01:20:34,920
Speaker 1: and we feel good about that. And there's some people

1577
01:20:34,960 --> 01:20:37,160
Speaker 1: that will want, you know, that twenty nine dollar product

1578
01:20:37,560 --> 01:20:40,560
Speaker 1: um from Google or Amazon, and maybe that's sufficient for

1579
01:20:40,640 --> 01:20:43,680
Speaker 1: what they need. But um, as you probably can tell

1580
01:20:43,720 --> 01:20:45,880
Speaker 1: from how long it takes to get one these days. UM,

1581
01:20:45,960 --> 01:20:49,320
Speaker 1: there's a lot of people that are very, very happy

1582
01:20:49,880 --> 01:20:53,080
Speaker 1: with Rome, and it kind of arrived. You know, we

1583
01:20:53,200 --> 01:20:55,439
Speaker 1: did do some last year at this time. We did

1584
01:20:55,479 --> 01:20:57,800
Speaker 1: do a little bit of tuning of our roadmap and

1585
01:20:57,880 --> 01:20:59,800
Speaker 1: moving things around, and so Rome was one of those

1586
01:20:59,840 --> 01:21:02,800
Speaker 1: things is that we tried to accelerate. UM and I

1587
01:21:02,840 --> 01:21:04,800
Speaker 1: think it's arrived at a really good time as the

1588
01:21:04,800 --> 01:21:11,080
Speaker 1: world starts to reopen. Okay, let's talk about audio. Used

1589
01:21:11,120 --> 01:21:16,040
Speaker 1: to buy a stereo, Now people buy television audio, okay,

1590
01:21:16,760 --> 01:21:21,400
Speaker 1: and audio is ubiquitous in general. Where is the audio

1591
01:21:21,640 --> 01:21:25,560
Speaker 1: landscape going? Do you mean from a format perspective or

1592
01:21:25,880 --> 01:21:27,840
Speaker 1: how do you think about it? I mean everything? You know,

1593
01:21:27,840 --> 01:21:32,480
Speaker 1: if we look at streaming services, the story today is lossless,

1594
01:21:32,960 --> 01:21:36,519
Speaker 1: and then even Dolby atmost and then there's another issue,

1595
01:21:36,880 --> 01:21:41,679
Speaker 1: the highest standard of Amazon and Apple services won't play

1596
01:21:41,720 --> 01:21:45,880
Speaker 1: on so go on. So so I think we we

1597
01:21:46,040 --> 01:21:48,720
Speaker 1: start with the customer and what do they what do

1598
01:21:48,800 --> 01:21:51,559
Speaker 1: they value? Right? We've not been that company that tries

1599
01:21:51,640 --> 01:21:54,040
Speaker 1: to put every logo or new standard on the box,

1600
01:21:54,120 --> 01:21:56,280
Speaker 1: if you will. Um, you see companies like that, and

1601
01:21:56,360 --> 01:21:58,760
Speaker 1: you see their boxes with just like the gobbling gup

1602
01:21:58,840 --> 01:22:02,120
Speaker 1: of every logo andvery new standard, and so you know,

1603
01:22:02,240 --> 01:22:04,200
Speaker 1: sometimes we've been accused of being a little slow on

1604
01:22:04,320 --> 01:22:06,160
Speaker 1: that front and looking at it, but we're thoughtful about

1605
01:22:06,200 --> 01:22:08,800
Speaker 1: what's happening in each space. And so even going back

1606
01:22:08,840 --> 01:22:13,280
Speaker 1: with soundbars, you know where Dolby was really the precursor

1607
01:22:13,320 --> 01:22:16,200
Speaker 1: to atmost was really taking off from streaming services, and

1608
01:22:16,240 --> 01:22:17,920
Speaker 1: we said, that's where we're going to focus as opposed

1609
01:22:17,960 --> 01:22:21,320
Speaker 1: to delivering DTS right because DTS was very much about

1610
01:22:21,400 --> 01:22:24,760
Speaker 1: the old school blue rays right that would have that technology,

1611
01:22:24,880 --> 01:22:27,320
Speaker 1: and so UM, we try to stay focused on what

1612
01:22:27,400 --> 01:22:30,400
Speaker 1: customers are doing. We we obviously support Dolmie Atmost with

1613
01:22:30,840 --> 01:22:33,240
Speaker 1: our arc product, and there's a lot of people that

1614
01:22:33,280 --> 01:22:35,280
Speaker 1: would tell you that the best way to listen to

1615
01:22:35,400 --> 01:22:40,200
Speaker 1: Delby Atmost out loud with one product would be arc Um.

1616
01:22:40,520 --> 01:22:44,880
Speaker 1: So we're watching, you know, carefully, pretty interested around what's

1617
01:22:44,880 --> 01:22:48,519
Speaker 1: happening with Dolbie Atmost music. You know, with lossless, the

1618
01:22:49,240 --> 01:22:51,280
Speaker 1: reality is, from what we've seen, is that a lot

1619
01:22:51,320 --> 01:22:54,519
Speaker 1: of customers just can't tell the difference or don't you know,

1620
01:22:54,560 --> 01:22:56,479
Speaker 1: aren't that into it in terms of what's there. And

1621
01:22:56,600 --> 01:22:59,200
Speaker 1: so the real question with Delbie Altmost music will be

1622
01:23:00,080 --> 01:23:01,479
Speaker 1: is it what people want at the end of the

1623
01:23:01,560 --> 01:23:04,920
Speaker 1: day and is it filling some need that they they

1624
01:23:05,040 --> 01:23:07,800
Speaker 1: are feeling they're missing today. I definitely see it and

1625
01:23:07,960 --> 01:23:12,519
Speaker 1: enjoy it when we're watching um, you know, watching streaming

1626
01:23:12,720 --> 01:23:15,479
Speaker 1: Netflix or videos or whatever the case may be. And

1627
01:23:15,520 --> 01:23:17,840
Speaker 1: there's a real place for that and I think the

1628
01:23:18,280 --> 01:23:19,880
Speaker 1: you know, I think we're starting to see it certainly

1629
01:23:19,920 --> 01:23:22,880
Speaker 1: seems like the industry is getting behind Delobie atmost music

1630
01:23:22,920 --> 01:23:24,800
Speaker 1: in a way that is going to make it um

1631
01:23:25,040 --> 01:23:28,200
Speaker 1: the next standard. But at this point, a lot of

1632
01:23:28,240 --> 01:23:29,920
Speaker 1: it's the industry talking to itself, and I want to

1633
01:23:29,920 --> 01:23:34,640
Speaker 1: see what consumers do. Okay, So depending on how you

1634
01:23:34,760 --> 01:23:36,640
Speaker 1: call it, they call him the thing stocks or the

1635
01:23:36,680 --> 01:23:42,560
Speaker 1: big five. You know, we have Facebook, Apple, Microsoft, etcetera.

1636
01:23:43,600 --> 01:23:47,759
Speaker 1: You intersect with these companies, Hey, do you ultimately believe

1637
01:23:47,920 --> 01:23:51,360
Speaker 1: since you went to Washington there will be effective government

1638
01:23:51,439 --> 01:23:56,240
Speaker 1: relations or in also government uh changes here? And you

1639
01:23:56,439 --> 01:24:00,800
Speaker 1: also believe that the sphere is more abu or can

1640
01:24:01,280 --> 01:24:06,920
Speaker 1: an interloper come up in triumph? Uh? The So I

1641
01:24:07,040 --> 01:24:09,360
Speaker 1: do believe that the government is going to take action.

1642
01:24:09,439 --> 01:24:12,160
Speaker 1: I think it's the probably the only bipartisan issue we

1643
01:24:12,240 --> 01:24:15,280
Speaker 1: see right now that's out there. And both sides, for

1644
01:24:15,439 --> 01:24:19,200
Speaker 1: for different reasons, are seeing the what the results are of,

1645
01:24:20,000 --> 01:24:23,120
Speaker 1: you know, having too much power into few hands fundamentally,

1646
01:24:23,240 --> 01:24:25,320
Speaker 1: and so I do expect to see more. Lena Khan

1647
01:24:25,479 --> 01:24:28,360
Speaker 1: being you know, chairperson of the FTC is a big move,

1648
01:24:28,479 --> 01:24:30,479
Speaker 1: and you know, I think that it's a whole new era.

1649
01:24:30,920 --> 01:24:33,320
Speaker 1: Tim Wu at the White House, So you're getting people

1650
01:24:33,400 --> 01:24:35,760
Speaker 1: that have been talking and writing about these things for

1651
01:24:35,800 --> 01:24:38,880
Speaker 1: a long time into positions of power to actually affect change.

1652
01:24:39,160 --> 01:24:42,000
Speaker 1: And I think it'll be good for society, quite frankly.

1653
01:24:42,080 --> 01:24:44,200
Speaker 1: And there's a lot of people that talk about the

1654
01:24:44,240 --> 01:24:47,160
Speaker 1: fact that even maybe some of these companies spinning out

1655
01:24:47,200 --> 01:24:49,880
Speaker 1: certain businesses may actually be better for everybody involved, right,

1656
01:24:49,880 --> 01:24:53,439
Speaker 1: and maybe foster more innovation. There's always the danger of

1657
01:24:53,520 --> 01:24:58,200
Speaker 1: like regulatory capture and um situations where the rules are

1658
01:24:58,280 --> 01:25:00,479
Speaker 1: put in favor of the incumbents it and they can

1659
01:25:00,479 --> 01:25:02,600
Speaker 1: actually solidify their positions. So we have just have to

1660
01:25:03,040 --> 01:25:04,920
Speaker 1: make sure that you know, that doesn't come to pass.

1661
01:25:05,040 --> 01:25:08,480
Speaker 1: But um, I'm encouraged by what I'm seeing, uh, fundamentally

1662
01:25:08,520 --> 01:25:10,800
Speaker 1: on that front. And then also on the flip side, Bob,

1663
01:25:11,040 --> 01:25:13,160
Speaker 1: you know, like we're continuing to innovate, We're continuing to

1664
01:25:13,200 --> 01:25:15,040
Speaker 1: do everything that we can right and that you know,

1665
01:25:15,560 --> 01:25:18,120
Speaker 1: as I said, that's super critical to us being successful

1666
01:25:18,160 --> 01:25:20,960
Speaker 1: in the future. Um, certainly I hope that there'll be

1667
01:25:21,120 --> 01:25:23,960
Speaker 1: other companies that challenge the ones that are out there today.

1668
01:25:24,560 --> 01:25:28,120
Speaker 1: I think, you know, again, it's it's a short period

1669
01:25:28,120 --> 01:25:29,640
Speaker 1: of time, a grand scheme of things. But I've been

1670
01:25:29,720 --> 01:25:32,640
Speaker 1: in technology for twenty three years. I will tell you

1671
01:25:32,880 --> 01:25:35,640
Speaker 1: the dominant position and the way that the companies that

1672
01:25:35,720 --> 01:25:38,360
Speaker 1: are there today act and how quickly they move to

1673
01:25:39,280 --> 01:25:44,640
Speaker 1: jump into any new potential threat is unprecedented. Right. So

1674
01:25:45,120 --> 01:25:48,280
Speaker 1: last year, you know, Google basically doing everything they could

1675
01:25:48,400 --> 01:25:50,439
Speaker 1: to jump in front of Zoom, right with the video

1676
01:25:50,520 --> 01:25:53,720
Speaker 1: solutions or another great example we saw last year, you know,

1677
01:25:53,840 --> 01:25:57,120
Speaker 1: Google Photos went from being free to starting to charge

1678
01:25:57,320 --> 01:25:59,720
Speaker 1: after they've driven all the photo products that you have

1679
01:25:59,760 --> 01:26:01,560
Speaker 1: to pay for out of the market, right, And so

1680
01:26:01,680 --> 01:26:03,720
Speaker 1: they went and did that, and those are those are

1681
01:26:03,840 --> 01:26:06,599
Speaker 1: things that um, we didn't see as much in the past.

1682
01:26:06,720 --> 01:26:09,640
Speaker 1: And so those kind of things I worry about in

1683
01:26:09,800 --> 01:26:13,200
Speaker 1: terms of driving you know, the up and comers out

1684
01:26:13,240 --> 01:26:16,040
Speaker 1: of the market. That so there's something there. But I also,

1685
01:26:16,479 --> 01:26:19,240
Speaker 1: you know, fundamentally believe that there will be some sort

1686
01:26:19,280 --> 01:26:23,160
Speaker 1: of change in the system. Is it Ai, is it blockchain?

1687
01:26:23,600 --> 01:26:25,400
Speaker 1: Is it you know, something we don't even see today

1688
01:26:25,880 --> 01:26:28,960
Speaker 1: that also helps hopefully you know, another company or a

1689
01:26:29,000 --> 01:26:33,240
Speaker 1: new set of companies emerge. Well, Patrick, I think we've

1690
01:26:33,320 --> 01:26:35,240
Speaker 1: covered it. We've come to the end of the feeling

1691
01:26:35,320 --> 01:26:37,600
Speaker 1: we've known. I think we have a great overview of

1692
01:26:37,720 --> 01:26:41,320
Speaker 1: Sons and its place in the market. Thanks so much

1693
01:26:41,360 --> 01:26:44,880
Speaker 1: for taking the time. Thanks Bob, I've enjoyed it until

1694
01:26:44,960 --> 01:26:47,120
Speaker 1: next time. This is Bob left set