Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: This week on the podcast, I have an extra special guest.
Speaker 1: His name is Jeff Poji and he is the CEO
Speaker 1: of Macintosh Group, makers of legendary audio file equipment. I'm
Speaker 1: a bit of a music geek, and when the opportunity
Speaker 1: came along to speak to the person that's running one
Speaker 1: of the most renown and highly respected audio gear makers
Speaker 1: that are out there, I thought I couldn't pass this up.
Speaker 1: If you're at all interested in c d S or
Speaker 1: LPs or music generally, if you're at all any type
Speaker 1: of a gear head, gadgethead, audio file music fan, well
Speaker 1: you're gonna find this to be a fascinating behind the
Speaker 1: scenes look at the maker of one of the most
Speaker 1: prestigious and high ends audio that's out there. If you're
Speaker 1: not familiar with Macintosh, they're one of the few brands
Speaker 1: out there that never stopped using tubes, even as technology
Speaker 1: changed the quality of music. That the warmth, uh, the
Speaker 1: natural sound out of a tube amplifier is unique. Their
Speaker 1: equipment is not only spectacular, uh it's beautiful looking. It
Speaker 1: it just has a unique visual feel and it costs
Speaker 1: quite a few sheckles. Their equipment is eye popping lee expensive,
Speaker 1: but for the people who can afford it, they say
Speaker 1: it's worth it. If you've never had a chance to
Speaker 1: check out McIntosh equipment, you should pop into an audio
Speaker 1: store as soon as they reopen and just be prepared
Speaker 1: for a live experience. That's what it's like. I found
Speaker 1: the conversation very interesting and I think you will also, so,
Speaker 1: with no further ado, my interview of Jeff Pogi, cocy
Speaker 1: E of the Macintosh Group VI is Masters in Business
Speaker 1: with Barry Ridholts on Bloomberg Radio. My special guest this
Speaker 1: week is Jeff Pog. He is the co CEO of
Speaker 1: the Macintosh Group, the legendary audio file equipment maker. The
Speaker 1: group also manufactures equipment under the Sonas, Faber and Rotel names. Previously,
Speaker 1: Jeff was at Harmon International and the Bose Corporation. He
Speaker 1: comes to us with an NBA from Duke University. Jeff Pogy,
Speaker 1: Welcome to Bloomberg. Thank you, Barry. It's great to be here.
Speaker 1: So I've been looking forward to talking to you for
Speaker 1: some time. I'm I'm a music buff and UH part
Speaker 1: of a decreasingly sized number of audio files. But I
Speaker 1: have to ask you about that good enough seems to
Speaker 1: have taken over the music and audio fields, whether whether
Speaker 1: it's IPO odds or MP three's or streaming. How big
Speaker 1: is the audience for better than just good enough? Well,
Speaker 1: it's a it's an interesting thing because the audience for
Speaker 1: our products has actually been growing every year. Our business
Speaker 1: continues to expand year over year and have done so well.
Speaker 1: McIntosh was founded in so we're looking at seventy one
Speaker 1: years in and this is going to be our best
Speaker 1: year ever. So I think that, you know, the prevailing
Speaker 1: wisdom that says good enough is good enough, maybe we
Speaker 1: need to rethink how we're defining good enough because we
Speaker 1: we seem to be finding an awful lot of fans
Speaker 1: for some you know, authentic high quality audio systems. So
Speaker 1: let's stay with that idea that the concept of just
Speaker 1: good enough, on other words, isn't harming the high ends
Speaker 1: of the spectrum. It really seems to be having its
Speaker 1: effect on the middle and low end. Is Is that
Speaker 1: a better way to describe that? Well, I think that
Speaker 1: it's really about I just try to define things about
Speaker 1: the customers, like how is the consumer thinking about the
Speaker 1: domain or the category of products. And if we if
Speaker 1: we want to do a look back at the industry
Speaker 1: and at how do people can consume music? We go
Speaker 1: back to our A M and FM radio. It's right,
Speaker 1: that's where we all started listening to shows and music
Speaker 1: and that was good enough for a long time. But
Speaker 1: you know, and we're still consuming more A M f
Speaker 1: M content than any other media. Right. That's still the
Speaker 1: massive amount of content that we're consuming, but it's actually
Speaker 1: quite low quality when we think about it. Um So,
Speaker 1: I think that as we've looked at other types of
Speaker 1: media to consume music, whether it was alps or tapes
Speaker 1: or CDs. Uh, then we started doing digital downloads, which
Speaker 1: only lasted sort of a blip in the eye, and
Speaker 1: we've moved on to streaming now. Um you know, the
Speaker 1: different media that we're consuming has changed dramatically over time,
Speaker 1: but there's always been a fan base and there's always
Speaker 1: been an audience for people who want, you know, a
Speaker 1: true high performance goose bump, generating emotional feeling to their
Speaker 1: to their music and sound. And that audience is actually
Speaker 1: quite large and it seems to continue to grow every year.
Speaker 1: Quite quite interesting. You're an engineer by training, what drew
Speaker 1: you towards the world of music and audio wents out? Well, Actually,
Speaker 1: I think it's uh, it's an interesting story that you
Speaker 1: and I actually have some overlap in because I know
Speaker 1: you're a bit of a car nut UM and UM.
Speaker 1: I was actually drawn into music through cars. UH, when
Speaker 1: I found a job. I wanted to get into the
Speaker 1: car industry. When I was a couple of years out
Speaker 1: of school and I was a mechanical engineer and I
Speaker 1: was working in factories and I loved building things and
Speaker 1: how things were assembled, and I thought getting into automotive
Speaker 1: industry would be fantastic. And I found a job at
Speaker 1: a company called Harmon International that was a factory making
Speaker 1: loudspeakers and Martinsville, Indiana, and it was a production engineer
Speaker 1: and a quality engineer in the factory and UH was
Speaker 1: in charge of you assembling loudspeakers for automotive use. UM.
Speaker 1: And that was my first real touch into UM, you know,
Speaker 1: the space that I ended up spending my entire plus
Speaker 1: year career in. But really I was attracted for the
Speaker 1: automotive purpose. But once I got into UM, the science
Speaker 1: and the design and the technology of loudspeakers and amplifiers,
Speaker 1: and room acoustics, um, and how it all comes together
Speaker 1: to make a great sound in the challenging car environment.
Speaker 1: It then you know, opened up my my love and
Speaker 1: appreciation for a really higher quality home music listening as well.
Speaker 1: Um and uh that's really how I got got attracted
Speaker 1: to it. And once once I got into the audio business, UM,
Speaker 1: honestly never looked looked back. It's been really a fantastic
Speaker 1: journey that has um you know, been fun from a
Speaker 1: product development standpoint of branding, a marketing and also just
Speaker 1: an overall emotional experience, a very rewarding time. So let's
Speaker 1: stick with cars for a moment. The quality of sounds
Speaker 1: in automobiles has just gone up and up. I have
Speaker 1: a BMW with a bang In oliveson system in it.
Speaker 1: Uh the I think Audie uses them. Also, Meridian seems
Speaker 1: to have found its way uh into maybe it was Lexus,
Speaker 1: I don't remember where that that shows up? What Land,
Speaker 1: What what's going on with the ultra high end space
Speaker 1: in automobiles and what is McIntosh doing if anything in
Speaker 1: that area? Yeah, it sound systems and cars is really
Speaker 1: it's been a fantastic uh, jur Ernie. Over thirty years now,
Speaker 1: from the early eighties when Bows actually first got into
Speaker 1: the business with Cadillac, and then UH Infinity got into
Speaker 1: the business with the Chrysler Group brands, and J B
Speaker 1: L was involved in Lincoln, and it really sort of
Speaker 1: exploded in the eighties and into the nineties, and by
Speaker 1: the mid nineties, UM luxury brands were really starting to
Speaker 1: look at UM the car the automotive o EM business
Speaker 1: as an interesting opportunity and that's where you saw Mark
Speaker 1: Levinthon get involved with Lexis, which was really the first
Speaker 1: sort of super premium brand UM, which then paved the
Speaker 1: way for others like B and O as you've mentioned,
Speaker 1: and Bowers UM. And the quality of the audio systems
Speaker 1: in these cars has just gone up really by leaps
Speaker 1: and bounds over the years UM. And there's a there's
Speaker 1: a couple of key reasons for that. One one of
Speaker 1: the best things about a car is you know exactly
Speaker 1: where the listener is going to be. UM. You know
Speaker 1: you you know the room, you know the size of
Speaker 1: the room, UM, you know where the listener is going
Speaker 1: to be, and so you can really do some amazing optimization. UH.
Speaker 1: And of course, in today's world, with all the BSP technology,
Speaker 1: we have at our fingertips UM you can really do
Speaker 1: some really precise tuning and optimization that we couldn't do
Speaker 1: years ago. UM. Obviously, the challenges of the car industry
Speaker 1: is that while you're in a car, you're moving, there's
Speaker 1: wind noise and road noise. UH, there's a lot of
Speaker 1: reflective surfaces like glass and leather. There's also absorption absorption
Speaker 1: with seats and carpets, so it's a really challenging environment
Speaker 1: to make good sound UM. But it's it's it's been
Speaker 1: an area that's been expanding, you know, year over year,
Speaker 1: and more brands have found their way into it, and
Speaker 1: I think ultimately it benefits consumers because they did a
Speaker 1: fantastic experience and in many cases consumers have the best
Speaker 1: audio system in their car, better than even in their house. UM.
Speaker 1: And with the with the Macintosh group, this has been
Speaker 1: a new area focus for us. So about three years
Speaker 1: ago we U we made a strategic decision to h
Speaker 1: look at the car industry and see if that could
Speaker 1: be the next category of products for us to come
Speaker 1: to market with. But for for the group, what's most
Speaker 1: important to us was to find the right partner. UM.
Speaker 1: We are let's say very conservative in our approach, and
Speaker 1: we are very highly protective of our brands and want
Speaker 1: to make sure that the brand DNA is retained and
Speaker 1: everything we do UM and that really touches all parts
Speaker 1: of our business. And so if we're going to partner
Speaker 1: with a car company, we want to make sure that
Speaker 1: it's a true collaborative effort that can have some amazing
Speaker 1: synergies for for both companies. And uh, you know, just
Speaker 1: recently in September, it was announced that McIntosh has been
Speaker 1: working with the Jeep brand on their brand new Grand
Speaker 1: Wagoneer concept vehicle that was unveiled by by Jeep first
Speaker 1: week of September. And we've spent three years working with
Speaker 1: them UM on that vehicle and we have been part
Speaker 1: of every concept design studio activity that they've been doing,
Speaker 1: working with their engineers on integrating all of the different components,
Speaker 1: defining where they need to go, how big they are,
Speaker 1: how we're going to integrate them, UM, how you're going
Speaker 1: to do the tuning, what the industrial design is going
Speaker 1: to look like, what the UI is gonna look like.
Speaker 1: It's been a massive, massive collaborative effort and and something
Speaker 1: we're really really proud of and we think that, you know,
Speaker 1: this collaboration between Jeep, which is arguably the most American
Speaker 1: of American car brands UM and Macintosh, which is, you know,
Speaker 1: the most American of American audio brands UM, and they're
Speaker 1: they're both of those brands being so i'd say, very
Speaker 1: fan base. They have a very strong passionate followings. They
Speaker 1: have a very good reputation for high quality, high performance products.
Speaker 1: And we put all these things together and I think
Speaker 1: it's going to be quite exciting. I would not have
Speaker 1: guessed Geep first as the automotive parallel to Macintosh. I
Speaker 1: was thinking somewhere along the lines of of Bentley or
Speaker 1: asked in Martin not just to stay with British firms
Speaker 1: but more expansive ultra lux products. Am I mischaracterizing who
Speaker 1: your audience normally is? Well, let me let me answer
Speaker 1: that in twofold, because there's a couple different sort of
Speaker 1: chapters of our automotive German journey UM. As you know,
Speaker 1: in addition to the McIntosh brand, we also have the
Speaker 1: Saunas Faber brand, which is our holy owned brand of
Speaker 1: high end loudspeakers that are handcrafted in Italy. Um SNAs
Speaker 1: Farber has recently announced, or I should say Maserati has
Speaker 1: recently announced their MC twenty new high performance vehicle and
Speaker 1: that vehicle is going to be equipped with a SNAs
Speaker 1: Faber system UM, which is really I think an amazing
Speaker 1: high performance luxury brand to brand match, made in Italy, craftsmanship,
Speaker 1: attention to details, looks you know, frankly as sexy as
Speaker 1: it sounds in our case, or looks as sexy as
Speaker 1: it drives in Maserati's case. UM. So that's a much
Speaker 1: more sort of high end premium to premium match, which
Speaker 1: I think works really well for both brands. UM. Coming
Speaker 1: back to the McIntosh question and its partnership with jeep UM.
Speaker 1: You know, McIntosh has a following that is a really
Speaker 1: passionate following of audio files for sevnly plus years UM.
Speaker 1: But most of the McIntosh buyers are very practical people. UM.
Speaker 1: Often times we will hear stories that the McIntosh buyer
Speaker 1: is the person who has saved money for two to
Speaker 1: three years to buy their first piece of McIntosh in
Speaker 1: the year and it becomes a you know, a cherished
Speaker 1: member of the family and that you know they are
Speaker 1: happy to sort of slowly acquire their Macintosh system. Over
Speaker 1: many years UM as opposed to let's they appear high
Speaker 1: net worth UM, you know, disposable income, individual cook and
Speaker 1: drop lots of money and an individual purchase UM. Those
Speaker 1: we certainly have for McIntosh. And there's many rock stars,
Speaker 1: movie stars, you know, Hollywood rich and famous that are
Speaker 1: are fans of our brand UM. And obviously they have
Speaker 1: the means to engage in a and a hundred thousand
Speaker 1: dollars two hundred thousand dollar McIntosh system at once, but
Speaker 1: they're really not the average customer. A Our average customers
Speaker 1: often times are even staring with used gear right there.
Speaker 1: McIntosh has a really unique UM attribute and that we
Speaker 1: have probably the highest residual value of the of used
Speaker 1: products on the market. That the brand just holds value
Speaker 1: UM for a long long time, which is very odd
Speaker 1: for audio electronics UM UH. Most brands UH you know,
Speaker 1: depreciate very quickly. But if you buy a new new
Speaker 1: piece of Macintosh, you can often sell it three to
Speaker 1: five years later for very little decrease in your original value.
Speaker 1: And then we're seeing people you know, use that that
Speaker 1: that sale to them buy up to the next next product.
Speaker 1: And so the used market often becomes the entry gateway
Speaker 1: for customers getting into the Macintosh. So back to the
Speaker 1: original sort of notion of his Jeep and McIntosh a
Speaker 1: good fit. I really do believe it is because I
Speaker 1: think that it's this practical view um of of the
Speaker 1: world that both McIntosh and Jeep consumers share. UM. But
Speaker 1: that appreciation for really good, rugged, high performance products, which
Speaker 1: is what you you know, what you get when you
Speaker 1: buy buy a Jeep or or a Macintosh quite fascinating.
Speaker 1: Let's talk a little bit about some of the equipment
Speaker 1: that you guys make. Macintosh is legendary for still using
Speaker 1: tubes today to create a much warmer, more natural sound
Speaker 1: than just pure chips. What is it that makes your
Speaker 1: products such best in class? Macintosh has had a long
Speaker 1: history of designing and manufacturing really the most high performance
Speaker 1: precision audio electronics in the industry UM, and a piece
Speaker 1: of this is, frankly, our focus on not only design
Speaker 1: but also on manufacturing and doing both equally as well. UM.
Speaker 1: The the engineering process and the manufacturing process all take
Speaker 1: place in Binghamton, New York, at our manufacturing and engineering
Speaker 1: center that's been there for close to seventy years UM,
Speaker 1: and the engineering and manufacturing teams are working very closely together.
Speaker 1: When you look at a Macintosh product, UM, you see
Speaker 1: these big blue, beautiful meters UM staring at you. That's
Speaker 1: instantly recognizable, the black face, the silver handles around knobs,
Speaker 1: you know, a Macintosh. When you see that consistency of
Speaker 1: product over such a long time, to have such a
Speaker 1: strong visual DNA UM is one of a you know,
Speaker 1: it's a it's proven the test of time. The fact
Speaker 1: that uh the audio circuitry that we design UM uses
Speaker 1: the highest quality components that is a variable available to
Speaker 1: the industry is an important piece of this. Uh. The
Speaker 1: fact that we take the sort of the time and
Speaker 1: effort UM to wind our own transformers in our own factory.
Speaker 1: We actually bend our own metal or form our own
Speaker 1: metal for the cases. We have our own paint line
Speaker 1: that pends the products. We have our own screen printing
Speaker 1: area to do the printing. We have our own printed
Speaker 1: circuit board manufacturing area where we populate all of the
Speaker 1: components on the circuit board. Of course, we have a
Speaker 1: very intricate uh testing uh uh system that uh you know,
Speaker 1: uniquely tests and identify every product so that we can
Speaker 1: make sure it meets all other requirements. UM. So really
Speaker 1: having this UH integrated manufacturing process guarantees us that the
Speaker 1: product that we're putting out UM meets all of the
Speaker 1: requirements for McIntosh. So I think it's really this unique
Speaker 1: combination of collaborative engineering and design work that that goes
Speaker 1: hand in hand UM that that that guarantees that that
Speaker 1: that precision and high performance. And I'd have to say
Speaker 1: that that's that culture is probably the one thing that
Speaker 1: really binds together McIntosh and Sonas Faber. So as our
Speaker 1: two main brands that we manufacturer, UM, Sonas Faber is
Speaker 1: sort of appear equivalent to that manufacturing process and design process,
Speaker 1: but for loudspeakers made in Italy and with Sona Swaber,
Speaker 1: we have a very old world craftsmanship process for everything
Speaker 1: from design to sourcing to manufacturing, where our engineering team
Speaker 1: again is all co located with the factory UM and
Speaker 1: all of our suppliers are local to our factory. You know,
Speaker 1: these are very small volume, high precision manufacturers that supplies
Speaker 1: products and then our own assembly people are hand assembling
Speaker 1: the products. In Italy, were hand populating printed circuit boards,
Speaker 1: hand soldering them, or hand wrapping leather around cabinets. It's
Speaker 1: just a really intricate process that helps us, I think,
Speaker 1: design products better because we know how to assemble them
Speaker 1: very well. Let's talk about that design process a little bit.
Speaker 1: How much of what you guys are creating or improving
Speaker 1: or updating is in response to the marketplace and how
Speaker 1: much of it is just, Hey, let's sit down and
Speaker 1: figure out what we can do on our own, using
Speaker 1: our own expertise and talent to to push the envelope
Speaker 1: to the next level. Yeah, it's it's a balance, um.
Speaker 1: You know different innovation processes. Some companies are looking at
Speaker 1: sort of consumer driven innovation where it's very much outside
Speaker 1: and other companies are very much inside out where it's
Speaker 1: it's sort of that coming out of the R and
Speaker 1: D technology portfolio and sort of comes to the market.
Speaker 1: We have a balance of both, and we have a
Speaker 1: bit of a structured product development process that includes, um,
Speaker 1: you know, the marketing group, the engineering group, the sales
Speaker 1: group coming all together, um, along with feedback from key
Speaker 1: dealers and distributors in the sales channel. So we're sort
Speaker 1: of doing that constant sensing of the market to see
Speaker 1: what's going on and to bring those sort of key
Speaker 1: trends in for instant examples would be you know UM
Speaker 1: in the home theater business, when Dolby goes from Dolby
Speaker 1: five point one to seven point one to atmost right,
Speaker 1: there's different trends that are happening in the technologies that
Speaker 1: we need to be sensitive to to make sure that
Speaker 1: we're grabbing those technologies and introducing those to our products
Speaker 1: at the right time. UM UH with the different wireless
Speaker 1: technologies and Bluetooth, Bluetooth High death or UM you have
Speaker 1: the different you know WiFi, UM we have home control
Speaker 1: system integrations. All of these technologies are sort of third
Speaker 1: party technologies that we want to make sure that are
Speaker 1: monitoring and bringing into our products at the right time.
Speaker 1: But then there's the stuff that only we can do
Speaker 1: UM and one example of that would be the recently
Speaker 1: released MC nine oh one. This is a truly only
Speaker 1: Macintosh could do this product. It's a nine watt monoblock
Speaker 1: amplifier UM with a retail price of seventeen And you
Speaker 1: need to write because it's a monoblock, so you have
Speaker 1: to buy drew them together. But the really interesting piece
Speaker 1: of it is it combines we call it a dual
Speaker 1: mono products, so there's actually two audio outputs. One is
Speaker 1: two based three hundred lots of tube based amplification plus
Speaker 1: six hundred lots of solid state amplification, and it's designed
Speaker 1: for a large loudspeaker where you're going to buy amp
Speaker 1: that product and you're going to use the tube power
Speaker 1: stage to drive your mid ranges and tweeters, and you're
Speaker 1: using the solid state to drive your whoofers. It's it's
Speaker 1: really kind of a wacky, crazy product that UM doesn't
Speaker 1: exist on the market anywhere, and it was something that
Speaker 1: our our technology team, our engineering team came up with
Speaker 1: and as soon as we launched it, we sold out
Speaker 1: and we've been back ordered ever since UM because it's
Speaker 1: it's such a unique fun you know, Macintosh on my product.
Speaker 1: But yeah, that's that's part of the fun of the engineers,
Speaker 1: right to let them loose once in a while, to
Speaker 1: do something that you know the market doesn't know it
Speaker 1: is coming. And it certainly seems to have responded to that,
Speaker 1: which which makes me wanna go back to what you
Speaker 1: mentioned about pulling all the teams together. You mentioned engineering
Speaker 1: and sales, but you also mentioned marketing. How do you
Speaker 1: guys market I want to say the product cells itself,
Speaker 1: but I know that's not true. Do you guys advertise?
Speaker 1: What do you do to the Macintosh brand name in
Speaker 1: front of the consumers who were likely bias. Yeah, the
Speaker 1: biggest part of our marketing, UM, we focus a lot
Speaker 1: on PR. We do try to get drive the awareness
Speaker 1: of our new products UM, you know, through various media
Speaker 1: channels to try to get as much exposure as we
Speaker 1: can UM. Over the last many years, like every other company,
Speaker 1: we've moved from you know, traditional print advertising to more
Speaker 1: digital UM search SEO activity because that's how people are
Speaker 1: searching for products these days. You need to be you know,
Speaker 1: online and available and have your products UM be discoverable
Speaker 1: through the digital side and social as well. And we
Speaker 1: spent incrementally every year we and a little bit more
Speaker 1: of our budget UM into the digital social space than
Speaker 1: the year before, so that becomes a you know, a
Speaker 1: bigger portfolio for us to try to engage in communicate
Speaker 1: with customers UM. But for us, a big part of
Speaker 1: our marketing is still a bit old school and it's
Speaker 1: really about UM frankly, getting butts and feet right. If
Speaker 1: I can get you to sit down and listen to
Speaker 1: a pair of Sona Sabra Olympica speakers or Macintosh MC
Speaker 1: six eleven amplifier. I can probably get you to buy it. Um.
Speaker 1: It's the emotional experience that you get when you listen
Speaker 1: to a really great audio system. UM is amazing, right,
Speaker 1: It truly is one of those wild moments, goose bump
Speaker 1: generating times. And if you haven't heard it, you need
Speaker 1: to hear it. UM. And if you have heard it,
Speaker 1: you know what I'm you know speaking of and and
Speaker 1: so a big part of our marketing is really working
Speaker 1: with our dealers and distributors to do events to bring
Speaker 1: people into the stores, to get them in front of
Speaker 1: the product, to get them exposed to the product, and
Speaker 1: give them that emotional uh uh, that emotional opportunity to engage.
Speaker 1: Because these products may look interesting online you can get
Speaker 1: great rite ups and reviews and people can you know,
Speaker 1: from the High five Press can review the products and
Speaker 1: you can get five star awards and it's all great,
Speaker 1: and it all absolutely helps, but there's nothing like actually
Speaker 1: experiencing it for yourself. And it's it's no different than
Speaker 1: any other Passion product. Right. It's one thing to say,
Speaker 1: boy that that you say you drove a BMW that BMW, Boy,
Speaker 1: that looks nice, but it's a different thing to get,
Speaker 1: you know, behind the wheel on a test track and
Speaker 1: really to you know, put it to its uh it's
Speaker 1: full potential. UM gives you a different experience and a
Speaker 1: different appreciation for the product, and so really driving people
Speaker 1: UH into getting great quality demos is the best way
Speaker 1: to market our products. Interesting, it's like the old joke
Speaker 1: writing about music is like dancing about architecture. Doesn't really
Speaker 1: convey the full sense of the moment. There was one
Speaker 1: of my my first mentors, Floyd Tool Dr Floyd Tools
Speaker 1: from UH. He was the the c c TEO of
Speaker 1: harmon Um. He said that basically our job is science
Speaker 1: and the service of art. UM that the job of
Speaker 1: the manufacturer of products right is to preserve the art
Speaker 1: of the creators. And I've that's stuck with me for
Speaker 1: twenty years now that you know, my responsibility is really
Speaker 1: too the musicians, to the producers, to the recording engineers,
Speaker 1: to the people that are creating the art. I'm just
Speaker 1: trying to do our best work to to make their
Speaker 1: effort worthwhile. Quite quite interesting, Let's talk a little bit
Speaker 1: about your title, your co CEO. You don't see a
Speaker 1: lot of that these days. How does that work. What
Speaker 1: are the benefits and challenges of having co CEO SU, Yeah,
Speaker 1: it's for our business. It works honestly extremely well. UM.
Speaker 1: So I joined McIntosh Group just over three years ago
Speaker 1: now as the co CEO. Charlie Randall is my partner
Speaker 1: UM and Charlie has been with McIntosh his entire career.
Speaker 1: So he actually started in McIntosh as an intern engineering
Speaker 1: intern out of our I T and has been there
Speaker 1: ever since. Has been president of McIntosh for over a
Speaker 1: decade and UH together we've been co CEOs now for
Speaker 1: the last three years. And the way it works for
Speaker 1: our company is that we are organized really by by brand.
Speaker 1: So Charlie is running McIntosh, I am running SNAs Faber
Speaker 1: and Somko. So those are our three main businesses. Um.
Speaker 1: Everyone knows McIntosh mclabs with all of its products, Sonas
Speaker 1: Faber being our Italian uh loudspeaker brand, and then Smiko
Speaker 1: is our distribution company based in the US that distributes
Speaker 1: many other hi fi audio brands, including Project from Austria
Speaker 1: and Rotel Electronics. And we also distribute Basso Continuo, which
Speaker 1: is a high end Italian hi fi racks um for
Speaker 1: your gear, as well as our own cartridge brand for turntables,
Speaker 1: UM Simico for a cartridges. So the co CDEO job
Speaker 1: works well because, um, we have a very thin group structure.
Speaker 1: The group basically consists of four people. Charlie and I
Speaker 1: are two of them, so there's not much group level
Speaker 1: work to do. So we're allowed to really run our
Speaker 1: businesses as our businesses, and Charlie gets to run McIntosh
Speaker 1: day to day as he always has, and I I
Speaker 1: have the opportunity to lead the Sona Slab and Samiko
Speaker 1: business and we can pretty much work independently and then
Speaker 1: have the advantage of actually use each other as sounding
Speaker 1: boards and um, you know, appears to collaborate with as
Speaker 1: as we as we see fit um. So it gives you, frankly,
Speaker 1: it gives me a great person to bounce ideas off
Speaker 1: of two uh, you know, build strategy off of and uh.
Speaker 1: Then together we sit on the board of directors with
Speaker 1: our investors and represent the total group level performance. So
Speaker 1: it's quite quite a good collaborative effort. We both happen
Speaker 1: to be engineers, we both happen to come from small
Speaker 1: farming communities, and we both happen to love the Pittsburgh Steelers.
Speaker 1: So we've we've got similar backgrounds and and a lot
Speaker 1: of sort of common shared experiences that we can we
Speaker 1: can play off of. Quite interesting. So I was having
Speaker 1: a conversation with a friend about how crazy has been.
Speaker 1: He owns Park Avenue Audio in Manhattan, and he mentions
Speaker 1: that he's projecting is actually going to be a better
Speaker 1: year for the sale of high end audio equipment then
Speaker 1: he saw in which itself was a record breaking year.
Speaker 1: You mentioned something similar, Given all the mayhem of this
Speaker 1: year and the lockdown and the pandemic, why do you
Speaker 1: think this is such a ban a year for high
Speaker 1: ends audio equipment. Yeah, it's It's certainly been the most
Speaker 1: interesting year of my professional career. And as we were
Speaker 1: looking at the world in front of us, you know,
Speaker 1: back in the March April May time frame, it certainly
Speaker 1: didn't look like a banner year. Uh. McIntosh had to
Speaker 1: close its factory for six weeks, right because of the pandemic.
Speaker 1: Sonna's father had to close its factory for a month
Speaker 1: because of the pandemic. Um And it's hard as the
Speaker 1: manufacturer when you build all your own stuff to sell
Speaker 1: things when your factories are closed. Um. So it looked
Speaker 1: a little bit dark for a period of time, for sure,
Speaker 1: But UM, what has happened in the industry is that
Speaker 1: as people have spent more time at home, UM, they
Speaker 1: have spent less time or less money as well on
Speaker 1: other discretionary purchases. And so what seems to be happening
Speaker 1: is the money that used to be spent on vacations,
Speaker 1: on food and dining, on live concerts, on going to
Speaker 1: the opera or different shows, that discretionary income is being
Speaker 1: basically used now to upgrade your home. And we see
Speaker 1: a lot of that industry booming. White goods sales are booming,
Speaker 1: remodeling projects, home refinancing is booming, and audio and video
Speaker 1: is booming as well. As consumers are spending more time
Speaker 1: in their home, UM, they're investing in their audio systems.
Speaker 1: And really from June forward, UH, every month this year
Speaker 1: has been our bust month effort. It's been sort of
Speaker 1: a record breaking year for the company UM, which is
Speaker 1: quite amazing and we're we're obviously quite thrilled with that
Speaker 1: UM and I'm very very happy UM and we hope
Speaker 1: UM that meant much of this trend continues UM. And
Speaker 1: actually it's more than just the hope, because when you
Speaker 1: start looking at other sort of dynamics that are happening,
Speaker 1: there's actually a number of things that are very quite
Speaker 1: favorable for our industry. I think you mentioned earlier that
Speaker 1: LP sales are are booming, um, and actually they've LP
Speaker 1: sales are are at a record level this year than
Speaker 1: they have been and they've been growing now for a
Speaker 1: decade straight. UM. So if more people are buying records,
Speaker 1: they're going to be buying more audio systems. So that
Speaker 1: trend doesn't seem to be slowing down. It seems to
Speaker 1: have been accelerated by the pandemic, but it's it's going
Speaker 1: to be here for a while. But the other trend
Speaker 1: is as movie theaters and the whole movie industry changes, um,
Speaker 1: that's having a really interesting effect on our business too. Um.
Speaker 1: With AMC announcing its bankruptcy, we know that more consumers
Speaker 1: are going to be watching movies at home, and guess what,
Speaker 1: they're going to be putting in more home theaters, which
Speaker 1: is going to help our business. The latest announcement by
Speaker 1: Warner Brothers and HBO with the director streaming releases of
Speaker 1: movies for the next year, that's going to help us
Speaker 1: as well. So there's gonna be more people, you know,
Speaker 1: watching more movies at home. So I think there are
Speaker 1: some other trends that are really favorable to the to
Speaker 1: the industry quite interesting. So that's some of the changes
Speaker 1: that have taken place in Obviously, the shift in in
Speaker 1: movies and streaming video is pretty significant. What sort of
Speaker 1: products are you going to make towards that direction? Obviously
Speaker 1: you've been all audio and and a surround sound either
Speaker 1: preamp or receiver makes sense. You guys aren't going to
Speaker 1: venture towards the video side, are you? No? Uh? The
Speaker 1: way we are looking at uh, this is the industry
Speaker 1: has been shifting from a let's say, a traditional what
Speaker 1: we would call specialty retail store right, which would sell
Speaker 1: goods uh the consumers, towards a project based business, if
Speaker 1: you will, the custom installation business or CDIA channel. UM. So,
Speaker 1: the audio video business really has been moving for a
Speaker 1: number of years from a retail based environment to a
Speaker 1: project based environment. That trend is only accelerating now as
Speaker 1: consumers are they're doing things more than just audio and video.
Speaker 1: Of course, they're putting in wireless networks and lighting controls
Speaker 1: and home controls, safety and security. So stems, and so
Speaker 1: when they think about investing in their home, they're looking
Speaker 1: at a variety of different products and and audio and
Speaker 1: video becomes part of that. And so one of the
Speaker 1: big changes for us is how do we provide more
Speaker 1: products that that fit into that sort of project based
Speaker 1: business for your home. On the Sona Spather side, we've
Speaker 1: launched our first line UH in wall and in feeling loudspeakers,
Speaker 1: things that are going to be permanently built into your
Speaker 1: home as opposed to your traditional floor standing or bookshelf speakers.
Speaker 1: So that's been a new development for us that we
Speaker 1: think will be a very good investment and and be
Speaker 1: a good product line for us going forward. UH And likewise,
Speaker 1: Macintosh continues to expand fit line of audio video processors
Speaker 1: and multi channel amplifiers that are more designed for customer
Speaker 1: installation home theater usage. So we think that there's a
Speaker 1: lot of ways that we can tap into that, let's say,
Speaker 1: growth of of movie watching or TV watching at home
Speaker 1: UM through the audio space UM. And there's there's a
Speaker 1: very good trend there and one that we we see
Speaker 1: nothing but uh, you know, double digit type growth for
Speaker 1: the next few sers. So it sounds like there's a
Speaker 1: little bit of an inherent tension between marketing and sales
Speaker 1: and these projects. Um, as someone who has done a
Speaker 1: couple of these projects from my own home, I know
Speaker 1: what it's like to work with a designer and an
Speaker 1: audio store and say, here's what I want. What technology
Speaker 1: makes this work? With equipment like Macintosh, you really want
Speaker 1: to get those butts in the seats to experience, you know,
Speaker 1: the sound and the whole emotional moment of that. How
Speaker 1: do you reconcile the two? Very often in the homeowner
Speaker 1: is just giving marching orders to an architect, a designer, whoever, whatever.
Speaker 1: And then on top of everything else, the Internet is
Speaker 1: in the middle of all this, and you obviously don't
Speaker 1: get the same experience, especially with audio from the internet
Speaker 1: as you would live and in person and in a
Speaker 1: high end listening environment with top of the line products.
Speaker 1: How do you navigate that sort of complex minefield. Yeah,
Speaker 1: for for us, it's you know that demonstration is still
Speaker 1: very important, and so we we have a strong program
Speaker 1: to try to encourage our dealers to set up proper
Speaker 1: demonstration systems right in their show rooms and even the
Speaker 1: project based business, there's many of them. Have you know,
Speaker 1: they're more consumer experience centers. UM they're not retail trade
Speaker 1: trade show stores. But um, these experience centers can often
Speaker 1: house a nice audio video demonstration room, and so we
Speaker 1: do think that that's still an important piece of this.
Speaker 1: But the other advantage we have is that, um, we
Speaker 1: have a very strong brand. Actually we have a you know,
Speaker 1: two very strong brands, McIntosh and Sona's Father, as well
Speaker 1: as the other brands were representing and distribution. But if
Speaker 1: your brand carries that quality and trust factor, oftentimes the
Speaker 1: you know, the designer can sit down with a client
Speaker 1: say you know, I'm going to install a McIntosh home
Speaker 1: theater for you, and here's the you know, the components
Speaker 1: that are going to be used. A lot of clients
Speaker 1: will just trust that it's going to be amazing, right that.
Speaker 1: You know, if if you your brand carries that um,
Speaker 1: that reputation UM for for quality and performance, then you
Speaker 1: can you can make it a sale without without the demo.
Speaker 1: I still would prefer the demo because I know that's
Speaker 1: only going to surprise and delight the customer even more.
Speaker 1: But um, that's the power of the brand, and that's
Speaker 1: why the marketing and the pr and the reviews of
Speaker 1: products is still important because you know, oftentimes consumers are
Speaker 1: buying things, uh without actually hearing them first. So let's
Speaker 1: talk a little bit about vinyl sales. For the first
Speaker 1: time in decades, there are now more sales of albums
Speaker 1: in vinyl than in c D s. What do you
Speaker 1: think this means? Yeah, we saw this coming. Honestly, four
Speaker 1: or five years ago. The number of albums have been
Speaker 1: growing for a good decade. A year over year, album
Speaker 1: sales continue to grow, and over that same period, CD
Speaker 1: sales have continued to shrink, and so there was you
Speaker 1: know of actually we knew there was a crossing point. UM.
Speaker 1: I think it says two things. One, it says streaming
Speaker 1: has dominated and streaming has killed CDs, and that the
Speaker 1: idea of owning CDs in the current generation of consumers
Speaker 1: is a lost art um, and that that is going
Speaker 1: to be the main way to consume music going forward. UM.
Speaker 1: On the LP side of things, I think it's actually
Speaker 1: a bigger reflection on sort of a I guess a
Speaker 1: psychological or an emotional sort of change in consumers behaviors.
Speaker 1: People that buy LPs and turntables and want to listen
Speaker 1: to UM. Vinyl frankly want to disconnect from their digital
Speaker 1: fast paced, uh sort of hyper daily reality. Right. It
Speaker 1: is so easy to put on a pair of headphones
Speaker 1: and stream Spotify, your title or your favorite service. Um,
Speaker 1: you can do that in an instant and then you
Speaker 1: can jump from song to song, track, the track, album,
Speaker 1: the album instantaneously into all sorts of mix that being
Speaker 1: replaced by a turntable vinyl listening experience. Now you're talking
Speaker 1: about I have to actually invest in the activity of
Speaker 1: listening to music. And I really get excited by this
Speaker 1: because that means somebody is saying listening to music is
Speaker 1: important to me. I'm going to spend the time to
Speaker 1: find the album, you know, dig through the collection to
Speaker 1: the one I want put you know, clean it off first,
Speaker 1: put it on the platter, turn it on, sit down,
Speaker 1: probably grab my favorite beverage and listen for minutes until
Speaker 1: I have to flip the album and then repeat the process.
Speaker 1: People that are doing us are truly engaging with their
Speaker 1: music more and it's really exciting because when you look
Speaker 1: at what albums are selling, Um, you have artists like
Speaker 1: Billie Eilish and Taylor Swift right in the top ten artists.
Speaker 1: These are new modern young artists that are are selling
Speaker 1: you know, albums through the roof UM. And to me
Speaker 1: that's exciting. It's not just um the Bruce Springsteens, are
Speaker 1: the Pink Floyds and the Rolling Stones and the Beatles,
Speaker 1: which have classically always been in the top ten, right
Speaker 1: because those are people like maybe me buying the albums
Speaker 1: for the second or third time. UM. But now you've
Speaker 1: got this whole new group of artists that are really
Speaker 1: putting their content out on vinyl and it's really creating
Speaker 1: a whole new experience for a whole new generation of
Speaker 1: of listeners that I think was very well for the
Speaker 1: for the industry, quite quite interesting. And I will make
Speaker 1: note that when I was in college, that's when CDs
Speaker 1: really started emerging and they cost to double what albums do,
Speaker 1: and that situation seems to have reversed. Vinyl LPs are
Speaker 1: now considerably more expensive, UH than c d s. Is
Speaker 1: that a function of albums being embraced by the audio
Speaker 1: file community and there's still some UM negative perception of
Speaker 1: the coldness and harshness of compact discs. No, Actually, I
Speaker 1: think that the UH that price change, which is absolutely true, UM,
Speaker 1: is more of a function of a basic ask curve
Speaker 1: of an industry. UH. When albums were dominant and c
Speaker 1: d s were in their uh infancy, right, the technology
Speaker 1: cost of producing c ds was very high. People were
Speaker 1: scaling up factories. You had the technology investment to actually
Speaker 1: produce those that was new. There was R and D
Speaker 1: that you had to amortize into the cost of the
Speaker 1: CD to produce them, whereas albums were is a very established,
Speaker 1: uh sort of manufacturing process at that point, and so
Speaker 1: you had some volume efficiencies. While you fast forward twenty
Speaker 1: five years in the future and a lot of things
Speaker 1: have happened to the industry. Now c ds cost very
Speaker 1: little because the actual capacity is so underutilized. Right, they
Speaker 1: had all of these factories that built all these c
Speaker 1: ds that now there is no more demand for. So
Speaker 1: the cost of that is down dramatically because you have
Speaker 1: an oversupply of capacity and an under under demand. Whereas
Speaker 1: albums actually the capacity dried up and um, the we
Speaker 1: lost a lot of production capacity for albums when when
Speaker 1: CDs were booming. And so now that album sales are
Speaker 1: growing again, UH, manufacturers actually now has to start investing
Speaker 1: back into making albums again. And and so you've got
Speaker 1: a reinvestment curve that's going to drive some costs. So
Speaker 1: there's there's that dynamic which is fundamental. But then I
Speaker 1: think there's a second piece on top of that which
Speaker 1: really gets more to the marketing angle, where uh, in
Speaker 1: albums as they traditionally were, they are a source of
Speaker 1: art and inspiration. Right. There's more content when you buy
Speaker 1: an album because you have the five page or six
Speaker 1: page booklet right with all the lyrics of the music
Speaker 1: and art and uh, you know, different content that they
Speaker 1: can deliver to you. And so I think that artists
Speaker 1: are investing more into the album to try to make
Speaker 1: it something that has a higher value, um, and they're
Speaker 1: for it's going to have a higher price now. The
Speaker 1: I guess the third dynamic if I was to think
Speaker 1: about this, was the fact that artists can make from
Speaker 1: a royalty perspective. Their royalty rates on physical sales of
Speaker 1: albums are much much higher right than a streaming service.
Speaker 1: And so artists are actually really promoting LPs right now
Speaker 1: because their whole financial world has been thrown upside down
Speaker 1: by streaming. Because they're not selling as much physical media
Speaker 1: c ds as they used to be, they've had to
Speaker 1: either two or more, which obviously in the last twelve
Speaker 1: months is impossible, or they have to produce albums as
Speaker 1: their physical media to try to make up for that
Speaker 1: that you know, lost c D royalties. So you you
Speaker 1: mentioned people like Taylor Swift and Billie Eilish. What sort
Speaker 1: of changes are taking place in music? How does change
Speaker 1: eaging music taste effects the way you think about the
Speaker 1: equipment that you guys are are creating. UM. You know, honestly,
Speaker 1: we do not believe that the musical styles or genres
Speaker 1: or people's musical preferences have any bearing on the equipment
Speaker 1: that we are producing. UM. It kind of goes back
Speaker 1: to the common I made earlier that our job is
Speaker 1: to give people the best possible experience when they're listening
Speaker 1: to their music as possible, and I want them to
Speaker 1: get those goose bumps, to have that emotional moment, whether
Speaker 1: it's a tender moment or it's a dynamic, you know,
Speaker 1: violent moment, depending on the type of music that they're
Speaker 1: they're listening to. UM, they should enjoy that in the
Speaker 1: best possible way. And therefore, you know, if our equipment
Speaker 1: UM is able to give them extremely high fidelity performance,
Speaker 1: high dynamics, great sound quality, low distortion, amazing sense of
Speaker 1: space and imaging. Regardless of whether you're listening to wrap, classical,
Speaker 1: rock and roll country, I don't think it matters. So
Speaker 1: my stereotype as to who the audio file component purchaser is,
Speaker 1: it tends to be somebody who's more of a classical
Speaker 1: music fan who wants to hear the nuances between the
Speaker 1: third violinist and the second viola and really capture the
Speaker 1: full spectrum of a of a big orchestra. Is that just,
Speaker 1: you know, a tired stereotype? Is that long past? As
Speaker 1: to who the purchasers of Macintosh equipment are, I don't
Speaker 1: think it's an old stereo type. I think it's just
Speaker 1: five percent of the population. UM. I think that there's
Speaker 1: a lot of people that are passionate classical musical fans
Speaker 1: and that they really can get extreme value from a
Speaker 1: high quality audio system, and that for all the reasons
Speaker 1: you you just describe, because of the level of detail
Speaker 1: and dynamics that you can really get and there's an
Speaker 1: appreciation for the are in a very strong way. UM.
Speaker 1: But I do believe that that's a that's a small
Speaker 1: part of the population. I would say it's if I
Speaker 1: drew a parallel back to the car industry. Um, you know,
Speaker 1: BMW makes the the the M M three and they
Speaker 1: also make all the three series. Well, the M three
Speaker 1: is only less than five percent of the population of
Speaker 1: those vehicles, but they advertise it all the time and
Speaker 1: they use it as their performance halo. But most people don't,
Speaker 1: you know, don't go there. They just drive around to
Speaker 1: the grocery store and back and they're their three stories. Um,
Speaker 1: so they don't don't really use it for that. And
Speaker 1: I think maybe that's a similar parallel where you don't
Speaker 1: have to be a classical musical fan to get all
Speaker 1: the enjoyment out of a high quality loudspeaker um system,
Speaker 1: high quality audio system. You can enjoy it for what
Speaker 1: you do, and it's going to give you an immense
Speaker 1: set of pleasure, um, whether you're listening to you know,
Speaker 1: classic rock or not. I am a huge classic rock
Speaker 1: san and that is my my go to genre. And
Speaker 1: I can promise you that I much enjoy listening to uh,
Speaker 1: you know, Bruce Pinksteen and Pink Floyd and I led
Speaker 1: Zeppelin on my Macintosh and sona spaper system much better
Speaker 1: than you know, my Apple. I wouldn't doubt that for
Speaker 1: a second. You know what's kind of fascinating is that
Speaker 1: we when I was younger, your entertainment options were far
Speaker 1: more limited than they are today, and and the thought
Speaker 1: of having friends over having a listening party for a
Speaker 1: new release was was not uncommon. Today. I have so
Speaker 1: many different ways to listen to music, but I find
Speaker 1: myself doing much less of Let me just stop for
Speaker 1: forty five minutes and listen to an album straight through,
Speaker 1: as opposed to having something playing in the background while
Speaker 1: I'm I'm doing something else. So the question I want
Speaker 1: to get towards is is the LP is the album
Speaker 1: still the sort of entertainment events that it once was?
Speaker 1: And if it's not, how long is that audience going
Speaker 1: to continue to engage age and that sort of behavior.
Speaker 1: I think that the way I see that dynamics between
Speaker 1: consumers engaging in albums, let's say, versus streaming UM is
Speaker 1: streaming becomes the first choice for convenience. Right, that's just
Speaker 1: easy to access, easy to use. UM I can take
Speaker 1: it anywhere with me, and it's great for music discovery. Right.
Speaker 1: I can find new artists so quick and fast when
Speaker 1: I when I do searches and it can give me
Speaker 1: recommendations of what artists are similar to others, And that,
Speaker 1: honestly is such a great power that we've never had
Speaker 1: in the industry that I think it's a super benefit
Speaker 1: because it's introducing people to many more types of music
Speaker 1: and many more artists and maybe they would have found
Speaker 1: on their own, let's say in the old days, um.
Speaker 1: But then if they really attached to something, they're going
Speaker 1: to go out and buying a physical copy of it, right,
Speaker 1: and then exploring that same content that they had on
Speaker 1: the streaming service. But then inn LP UM or possibly
Speaker 1: a c D or s a c D if they
Speaker 1: still enjoy those. But that's how I see the dynamics.
Speaker 1: So I do see the the album or the vinyl
Speaker 1: experience not as a everyday listening experience. I see that
Speaker 1: as a special moment in time, right. It's it's it's
Speaker 1: it is a time that you're investing with your music.
Speaker 1: That it's something you you you you have to sort
Speaker 1: of plan for because um, it's not a five minute,
Speaker 1: instantaneous um sort of response. So I think that that
Speaker 1: the fact that LPs are growing um year over year
Speaker 1: is really good because it's saying more consumers are willing
Speaker 1: to spend more time with their music and that they're
Speaker 1: getting more value out of that. Um, that that experience.
Speaker 1: And so I think that these two very different mediums
Speaker 1: actually cohabitat together co you know, survived together in a
Speaker 1: very interesting way and can actually help each other. I'm
Speaker 1: gonna uh sell me an upgrade my home system. I
Speaker 1: have a couple of different ways I listen to music
Speaker 1: just for background. In the kitchen, we have a Sona
Speaker 1: streaming system outside a so Nance system that I have
Speaker 1: hooked up to a blue Sound vault drive. In the den,
Speaker 1: I have a Hotel home theater preamp driven by a
Speaker 1: Class A amp going through Bowers and Wilkins speakers being
Speaker 1: w speakers. What what should I do? And a Rotel
Speaker 1: c D player? What should I do? If I want
Speaker 1: to upgrade that system to the next level? You know,
Speaker 1: I uh, I would want to know more things about
Speaker 1: your room and your room size before I was to
Speaker 1: be presumptuous to define it for you, but um, you know,
Speaker 1: I think that um, it's it's really about your level
Speaker 1: of enjoyment, you know. And we have obviously a wonderful
Speaker 1: range of products at Sonas Faber. Our entry level product
Speaker 1: for your loudspeakers goes from our Luminus series that are
Speaker 1: starting at around two thousand dollars for a floor standing
Speaker 1: pair of speakers all the way up to our Aida
Speaker 1: which is you know, a hundred and dollars UM. So
Speaker 1: it's really all about the physical size of the room. UM.
Speaker 1: That's a big part of of how you would size
Speaker 1: your loudspeaker, and also about the UH you know, the
Speaker 1: overall sound quality that you'd like to achieve. And depending
Speaker 1: on those specifications, there's lots of choices that I think
Speaker 1: can be amazing UM. And then the Macintosh amplifier family
Speaker 1: and pre amplifier and CDs and turntables all scale in
Speaker 1: a very similar way where we offer consumers the ability
Speaker 1: UM to UH everything. Our renewest McIntosh turntables actually is
Speaker 1: a full integrated yet that as the amplifier D class
Speaker 1: amplifier built into the turntable with a Bluetooth Apptex receiver
Speaker 1: in it. So if you wanted to just have one
Speaker 1: piece of electronics, you could buy UH this product and
Speaker 1: actually do your streaming and your LP playing all from
Speaker 1: one and all you need is a pair of speakers.
Speaker 1: So so it's a very flexible product line that has
Speaker 1: lots of different solutions. UM. But I'd want to know
Speaker 1: a lot more before I give you specific recommendations, all right,
Speaker 1: So so let me flip the question on. You tell
Speaker 1: us about the system that you have at home. What
Speaker 1: do you enjoy your favorite classic rock albums? On? What?
Speaker 1: What's that system look like? Oh? Yeah, thanks, it's uh,
Speaker 1: it's I guess my third child, if you will. UM,
Speaker 1: the I have sonas Farber Olympica Nova fives, which we
Speaker 1: just launched about a year and a half ago. Really
Speaker 1: a fantastic flour standing a loud speaker, and I have
Speaker 1: a full McIntosh set of electronics behind that. UM, a
Speaker 1: C tube pre amplifier, the m T five McIntosh turntable, uh,
Speaker 1: the m c T s, a c d CD player
Speaker 1: because I one of those old old guys that still
Speaker 1: has a rack of hundreds of CDs and I actually
Speaker 1: pick them out sometimes. UM, and an MC two which
Speaker 1: is a stereo amplifier driving the whole thing. UM. And
Speaker 1: for streaming, I added in projects stream box that's to Ultra,
Speaker 1: which is a fantastic little streaming box that allows me
Speaker 1: to connect with ruined title Cobus and do all my
Speaker 1: my streaming interesting. I too, am one of those old
Speaker 1: school c D users, but I recently started moving them
Speaker 1: all to a hard drive in a lossless fashion. It's
Speaker 1: the Blue Sounds Vaults, and my plan is to eventually
Speaker 1: just put a few thousand discs on that and then
Speaker 1: just keep them shelved in the basement where I don't
Speaker 1: have to hunt for exactly the one I'm looking for it.
Speaker 1: I'll just be able to scroll and find it and
Speaker 1: theoretically have full CD quality sound. Let me throw a
Speaker 1: curveball at you. And espresso machines are the MP three
Speaker 1: audio of coffee makers discuss. I disagree. I think espresso
Speaker 1: machines are fantastic for their convenience and speed. Um. And
Speaker 1: I have one in my home and I think it's fantastic. Um.
Speaker 1: I you know, I think it's It's a fun copy
Speaker 1: to me is a really fun topic. I very much
Speaker 1: enjoy it. I love nothing more than when I'm in
Speaker 1: Italy to go to a proper barista and get a
Speaker 1: proper espresso and and really enjoy it standing up at
Speaker 1: the bar with the colleagues and chatting, which is the
Speaker 1: only way to do it. Um, but honestly, it's not
Speaker 1: something I have the time or patience to do myself.
Speaker 1: And I think it's one of those wonderful things in
Speaker 1: life where everybody has their they're thing that they're willing to,
Speaker 1: you know, go that extra quality step and and really
Speaker 1: put the time and effort into doing it just right.
Speaker 1: And if you wanted to come over and make me
Speaker 1: a proper espresso, I would happily enjoy it, but I
Speaker 1: don't have the time to do it myself. Now I
Speaker 1: have to imagine that that sort of comments is what
Speaker 1: a lot of people who are audio purchasers say. Yeah,
Speaker 1: that that's a nice system, but I just want convenience.
Speaker 1: I don't want expense, I don't want complexity. Just just
Speaker 1: give me a simple sort of thing. And on the
Speaker 1: coffee side, the technology has advanced to the point where
Speaker 1: you could get practically those sort of instant coffee convenience.
Speaker 1: Take a look at something like the Brevel Oracle Touch,
Speaker 1: where they literally do everything from the grinding to the
Speaker 1: tamping to you know, your job is to to move
Speaker 1: the container of steam mill to pour it into the
Speaker 1: shot of espresso, which seems to be worth it for
Speaker 1: the for the improvement in quality both fields coffee and audio.
Speaker 1: The law of diminishing returns kicks in as as the
Speaker 1: price goes up. But this really seems to be something
Speaker 1: that the technology has advanced dramatically over the past couple
Speaker 1: of years. So I'm going to steer you in that direction.
Speaker 1: So I was just so amused that that you were
Speaker 1: not as ritualistic and obsessive about your coffee as I
Speaker 1: assume you are about your your sound systems. And to me,
Speaker 1: that's part of the same continuum. It's it's how much
Speaker 1: do you want to spend an effort, energy and time
Speaker 1: for that next level up in quality. Yeah, I love this, uh,
Speaker 1: this kind of conversation because I think it applies to
Speaker 1: so many different aspects of life, and I think it, frankly,
Speaker 1: is what makes the world go round because each of
Speaker 1: us have our own sort of passion areas that we're
Speaker 1: willing to you know, we're willing to do whatever it
Speaker 1: takes to get that perfect level of performance, and in
Speaker 1: other places we we shortcut um. You know. I I've
Speaker 1: been accused of being unsophisticated because I don't wear a watch.
Speaker 1: I've just never been a watch player, and a lot
Speaker 1: of people are in a similar domain with watches where
Speaker 1: you can get these amazing time pieces which which I
Speaker 1: really can appreciate from it afar, but they just don't
Speaker 1: fit you know, my DNA A right. And plus every
Speaker 1: one of us walks around with a phone in our pocket,
Speaker 1: which gives you precise atomic set time. Um So, so
Speaker 1: watches have become um as much decorative as as anything.
Speaker 1: Um So, I know I only have you for a
Speaker 1: limited amount of time. Let me jump to my favorite
Speaker 1: questions that I ask all. I guess so we mentioned
Speaker 1: video earlier. Tell us what you're streaming these days? What's
Speaker 1: your favorite Netflix or Amazon Prime or or podcast? What's
Speaker 1: keeping you entertained? Oh yeah, so there's there's some great
Speaker 1: stuff that we're uh, we're engaging with. So with the family,
Speaker 1: we are absolutely in love with Ship's Creek. Um that's
Speaker 1: I don't know if you've ever enjoyed that, but it's
Speaker 1: a it's a wonderful program that we discovered too late,
Speaker 1: and so we're trying to catch up. Um And that's
Speaker 1: that's our family entertainment. My wife and I are watching
Speaker 1: Go Mora, which is an Italian uh sort of crime
Speaker 1: you know, mob drama, that's that's that was produced, you know,
Speaker 1: in an Italian and I think I'm watching that to
Speaker 1: to help me with my you know, my Italian for
Speaker 1: my my Souna's father team as well. So that's that's great. Um,
Speaker 1: those are the two shows that I'm watching regularly. And
Speaker 1: then um uh, the other thing that I enjoy uh
Speaker 1: privately is books on tape by I do a lot
Speaker 1: of listen listening to books on tape and I just
Speaker 1: finished the Iliad, which I had never read or listened
Speaker 1: to previously, So that that's been pretty interesting. Tell us
Speaker 1: about your early mentors who helped shape your career. Well,
Speaker 1: it all, well, it all starts with I think my mom,
Speaker 1: uh is she Uh, She's a fantastic lady. Single mom,
Speaker 1: raised myself and my older sister, just you know, really
Speaker 1: hard working, uh sort of small tarn a small town,
Speaker 1: uh you know, sort of. I'd just call it country farm,
Speaker 1: hard working values, truth, honesty, hard work. I'll started there.
Speaker 1: And my first uh, one of my first bosses, Paul
Speaker 1: Nate from Harmon great sales executive. He I attribute him
Speaker 1: to really helping me. Um. I can remember the moment
Speaker 1: where I went from being an engineer to going into
Speaker 1: the sales group, which I can still remember a Dilbert
Speaker 1: cartoon about this, saying, you know how insulting that is
Speaker 1: for an engineer to move into sales. And he actually
Speaker 1: sold me on the benefits of going into sales as
Speaker 1: an engineer to learn about customers and to learn about
Speaker 1: what the customers want, the need to how to how
Speaker 1: to help them. That if you you understood your customers
Speaker 1: and you listen to them, you will be a better engineer,
Speaker 1: you will be a better product developer, and then it
Speaker 1: would be an important skill for you to develop. And
Speaker 1: um I was really an important sort of moment for me,
Speaker 1: and he was a great mentor for me in that regards.
Speaker 1: And also just uh, to teach the skills they don't
Speaker 1: teach you in engineering school. You know about person building,
Speaker 1: relationships with people, customer relationship management, influencing skills, all of
Speaker 1: the soft things that really, over the course of a
Speaker 1: career end out being probably more important than the hard
Speaker 1: technical skills that you learn in school all those years ago.
Speaker 1: So Paul was really a fantastic mentor for me um
Speaker 1: early on in my career. Interesting, tell us some of
Speaker 1: your favorite books. What what are you reading now? What
Speaker 1: what are some of your all time favorites? This is
Speaker 1: how a passionate reader usually multiple books going on at
Speaker 1: any given time. UH. My most recent reads this year
Speaker 1: I fell in love with Simon sin Um start with
Speaker 1: Why was the first book he put out probably a
Speaker 1: decade ago, really wonderful book. Uh. He did a couple
Speaker 1: others after that. Leaders in the Last Infinite Game was
Speaker 1: his most recent one, and it's really a great content
Speaker 1: to help companies. I think really remember sort of more
Speaker 1: of a personal truth and keep grounded and why we
Speaker 1: as businesses exist um, which is much much more than
Speaker 1: profit and loss. UM. So Simon Sinek, I have to
Speaker 1: say as a really highly regarded and one of my
Speaker 1: my latest reads UM all time favorites. UM. I go
Speaker 1: back to Stephen Covey seven Half at the Highly Effective People,
Speaker 1: probably the most influential book on me in my entire life. UM.
Speaker 1: Still have a copy right and back at my desk. UM.
Speaker 1: Really a great foundational book I think for for young
Speaker 1: people that about how to approach the world. UM. Some
Speaker 1: of the more business focused books like Jack Welsh's book
Speaker 1: Winning UM Ram Suran Larry Bossy's book Execution really sent
Speaker 1: a core managerial books of you know, how to run
Speaker 1: a business or a company. I think those were fantastic. UM.
Speaker 1: John Maxwell's got a bunch of books on leadership, uh
Speaker 1: five Level Levels of Leadership that I think was a
Speaker 1: spectacular book on leadership UM. And actually another book I
Speaker 1: just reread, UM Clayton Christiansen, famous innovation author from that
Speaker 1: had passed away last fall, his book The Innovator's Dilemma UM,
Speaker 1: which was written probably fifteen twenty years ago. Now, UM,
Speaker 1: which I read a long time ago. I reread just
Speaker 1: sort of an honored his passing. That's a fantastic list
Speaker 1: to start with. What sort of advice would you give
Speaker 1: to a recent college graduate who was interested in a
Speaker 1: career in the audio industry. The advice I'd give to
Speaker 1: a recent college grad would be find find a career
Speaker 1: that you love, find something that you are passionate about,
Speaker 1: and do it with conviction. UM. Don't chase promotions, salaries, titles.
Speaker 1: Be true to yourself and what makes you happy, because
Speaker 1: in the long run, you're going to be way more
Speaker 1: successful if you if you follow, uh, follow the things
Speaker 1: that are really interesting to you. That's sort of you know,
Speaker 1: you're emotionally connected with UM. That's foundational. I would also
Speaker 1: encourage them to UM learn about emotional intelligence early. It's
Speaker 1: not a topic that they teach in universities UM, and
Speaker 1: it's usually not something as young people were very good at. UM.
Speaker 1: Usually we're as a young person, you're out to prove
Speaker 1: yourself and what your own abilities are and what your
Speaker 1: contributions can be UM. Really being reflective on on what
Speaker 1: you're good at, what your colleagues are good at, where
Speaker 1: your weaknesses are in being humble UM and recognizing that
Speaker 1: teams win championships, not individuals UM. I think that's the
Speaker 1: foundational sort of spirits that I think set everybody apart.
Speaker 1: I don't think anything in business has ever been done
Speaker 1: by one person, or at least not anything that's worth anything,
Speaker 1: let's say, or anything of of a sort of material impact.
Speaker 1: You really do need a group of people to get
Speaker 1: something done and and really building those those sort of
Speaker 1: team skills UM, I think are critically important early on
Speaker 1: in your career. And our final question, what do you
Speaker 1: know about the world of audio and audio file equipment
Speaker 1: today that you wish you knew twenty or so years
Speaker 1: ago when you were first ramping up in this business. UM.
Speaker 1: You know, the audio file or audio industry is a
Speaker 1: it's a very small, hobbyist industry with lots of really
Speaker 1: super passionate people. And UM, I think that the thing
Speaker 1: I've learned the most over the years is that our
Speaker 1: business is less about competing with other audio file firms
Speaker 1: or other audio firms, and it's more about growing the
Speaker 1: entire industry. We together as a community of audio companies. UM,
Speaker 1: if we do a better job getting those butts and seats,
Speaker 1: getting more consumers to come two dealers and listen to
Speaker 1: the gear, regardless of the brand that it is, we're
Speaker 1: going to build a bigger basic consumers for everyone, and
Speaker 1: that's gonna effectively grow the industry across the board. And
Speaker 1: so I think that building of a collaboration amongst companies
Speaker 1: together to build the industry UM is something that's really
Speaker 1: important to me today, UM, but not something I was
Speaker 1: aware of many years ago. Quite fascinating. Jeff, thank you
Speaker 1: for being so generous with your time. We have been
Speaker 1: speaking with Jeff Pogi. He is the co CEO of
Speaker 1: Macintosh Group. If you enjoy this conversation, well be sure
Speaker 1: and check out any of the other four hundred or
Speaker 1: so such conversations we've put together over the past six
Speaker 1: and a half years. You can find that at iTunes, Spotify,
Speaker 1: wherever you usually feed your podcast fix. We love your comments,
Speaker 1: feedback and suggestions right to us at M I B
Speaker 1: Podcast at Bloomberg dot net. Give us a review on
Speaker 1: Apple iTunes. Be sure to sign up for our daily
Speaker 1: reads at Rid Halts dot com. Check out my weekly
Speaker 1: column on Bloomberg at Bloomberg dot com slash Opinion. Follow
Speaker 1: me on Twitter at rit Haltz. I would be remiss
Speaker 1: if I did not thank the crackstaff that helps us
Speaker 1: put these conversations together each week. Nick Falco is my
Speaker 1: audio engineer. Michael Boyle is my producer. Mike Batnick is
Speaker 1: my head of research. Attica val Bron is our project manager.
Speaker 1: I'm Barry Riholtz. You've been listening to Master's Business on
Speaker 1: Bloomberg Radio.