Home Automation Podcast Episode #123: An Industry Q&A With Alex Camara
In this weeks home automation show of Automation Unplugged, Alex Camara shares thoughts on approaching conversations within the workplace revolving race and creating a safe space for all employees as well as the importance of a "restart" after COVID 19.
This week's home automation podcast features our host Ron Callis interviewing Alex Camara. Recorded live on Wednesday, June 3rd at 12:30 p.m. EST.
About Alex Camara
After an exciting career in technology startups including Coinstar and Redbox, London Native, Alex joined Seattle based Audio Control in 2011 and ultimately acquired the company in 2013.
At AudioControl, Alex and his team of obsessive audio experts focus on designing, engineering, and manufacturing in the USA some of the most innovative, high-performance audio solutions for residential, commercial, and automotive markets.
- Alex’s backstory in technology startups before acquiring Audio Control
- Alex's thoughts on approaching conversations within the workplace revolving race and creating a safe space for all employees
- Audio Control’s “restart” message means in light of COVD-19
- How demand for “home entertainment” has increased and what he is seeing in demand for audio control solutions throughout the country.
SEE ALSO: Home Automation Podcast Episode #122: A Custom Integration Industry Q&A With Ariel Gutierrez
Ron: We have a really wonderful person, a friend of the industry, innovator, and leader in our space here on the show today. I'm super excited to have Alex Camara CEO at AudioControl and I believe he's CEO and owner over at AudioControl and we're going to talk about a lot of fun topics and a lot of maybe topics that are maybe less fun and or create more anxiety or stress or uncertainty than we've already been dealing with and that's of course you know some of the terrible things that have happened in our country around George Floyd's murder, racism, prejudice police brutality, the unconscious bias that many of us that are not African-American or people of color may be carrying with us and making decisions or choosing to be silent and maybe not even doing that consciously doing it unconsciously.
There are all sorts of changes happening in our country, changes happening around the world right now. My audience here at Automation Unplugged is the integration space, residential and commercial integration firms that enjoy listening to guests. I bring you vendors and I bring you integrators business owners and other thought leaders from our space and given a lot of these uncertain times. I thought that you guys really enjoy, I know I will, interviewing Alex. He brings such an interesting and thoughtful perspective to how he runs his life how he runs his business and how he interacts with each and every one of you. I already see some folks saying hello. Let's go ahead and get started. Let's bring in Alex and let's get this show started.
Alex: Hey Ron. Great to be here. I know we talked about doing this for a while and I'm excited even at challenging times. This is cool to be talking to you. Thanks.
Ron: Thanks, man. I've been threatening to have you on the show for a couple of years. We started getting this scheduled back in January or February and here we are. For everyone that's listening and maybe doesn't know you, Alex, where are you coming to us from?
Alex: I'm here in AudioControl's factory, live here in Seattle. Probably 15-20 feet away there's a team of 40 people literally manufacturing product as we speak and another 10 people about 400 miles away in Spokane, Washington. Yeah, I'm live in the factory here and raring to go.
Ron: Awesome. And I know that you, like everyone in our industry has had lots of challenges. I don't even want to say they're interesting challenges because I know we would have preferred not to have these challenges but you have been fighting back and innovating and I know we're going to get to a bit later in the discussion this concept of a restart and how to really look at business moving forward. Before we get there, Kris, one of our regular listeners from the UK says, "Your show is so diverse you even got a rule-breaking Brit on it once." Alex is a Brit as well Campbell, so that makes two. Do you still call yourself a Brit or now that you're in America or are you an American? How do you identify, as British or American, or both?
Alex: I think somebody bought me a T-shirt when I became a citizen who says kind of American kind of British. I think it's a bit of both but really I'm a Brit. A Brit at heart and living in here in America and loving it but I'm a Brit.
Ron: Alex, I want to get to a couple of different topics here. Many different topics but I always like to start with your background. How did you land here? I know that you joined AudioControl in 2011 and then you ultimately acquired the company. But I'd love to just understand your background. When did your start in this space begin and what brought you to the present?
Alex: I was born in London, the Chelsea Kensington area. I'm a Chelsea supporter for those who are Chelsea fans out there. All my life, still am. I lived in that whole area of London for my school years. My first introduction to music and movies was actually I was in the original Star Wars movie which is a crazy admission.
Ron: Wait! You were in the original Star Wars movie? In 1977? Star Wars.
Alex: '76 or '77, yeah. My mother was an extra and she was there. She was in central casting and they were filming at Pinewood as she would basically phone up in the afternoon, any work for me? Have you been on Star Wars yet? No, not yet. OK fine. Be at Pinewood tonight for a night shoot at 11:00 p.m. By the way, do you have any kids at home? That was before the rules were how they are today. She said yeah, I've got my son. He is six years old. Can you take him with you? They may use him. She said Okay I'll take him with me. She's thinking oh, another fifty pounds or something. Basically, I got there and they put me in a small alien costume and I was in the cantina scene.
Ron: No way!
Alex: Yeah. I don't know which alien I am but there's a group of small aliens you can see. I'm one of them. That was my first introduction.
Ron: Oh my gosh, I thought you were cool before Alex. Now you just went up another five points.
Alex: I don't get any repeat fees or any money from it. It's not that great.
Ron: That's funny. Did you start in the movie business at six?
Alex: Yeah. I was an actor for a while. I always loved acting, loved drama. I love music and technology. I came from a divorced family and left school at 16. My mom couldn't afford to send me to college. Basically , I went into food retail . I actually had a great 10 years in food retail, learning about people, business, P&L's, selling because that's really what it's about. From there, it was probably redundant about 10 years later, my late 20s at that point. And during that time I'd been part of what was called the innovation team at this company and we were looking at new retail concepts around the world. We'd visited America. We visited Dubai, we visited all around and one of the things we found for those who may know it was a company called Coinstar which is the coin-counting machines at supermarkets.
You just throw your change into it. We had been looking at that for the company I was working for on the retail side. They said to me, "Hey, why don't you join us? We're going to start up in Europe and we need someone to run the business." I joined them in Europe in 1999 and spent about eleven years with them, first in Europe and then they brought me to the US. Big move for me, a big move for the family, came to the US. At the same time, Coinstar acquired Redbox. I started working with the Redbox group which is the DVD rental company.
Ron: I've rented from Redbox. Blockbuster had been around and then Redbox started showing up in grocery stores and stealing some of the market share from Blockbuster.
Alex: That's exactly right. It was technology, it was retail it was entertainment. Redbox had an amazing run for about four or five years six years with nobody else really doing. That grew the Coin Star business, it grew the Redbox business and then I got headhunted and you mentioned Blockbuster. I got headhunted by NCR, National Cash Register, out of New York. I moved to New York, worked for them on Blockbuster Express which was their own version of Redbox.
Ron: OK. I remember those.
Alex: Great idea at the time.
Ron: It served its purpose and then this whole technology thing advanced and made the whole category obsolete. But who knew?
Alex: Exactly and then Blockbuster Express was just a little bit too late into the game for a kiosk. But it was an amazing experience, a fascinating experience and we grew a team in two years and had a lot of fun with that. And then I think that the company realized they were just in it too late. They said Do you want to say or do something different? And to be honest with you, at that time I spent two to three years in New York, love New York. But I was ready to move back to the west coast. I came out to the West Coast and started a small consulting company actually in technology and entertainment, gave advice to companies and self-service kiosks which I was a professional in at the time. And then, while looking for future opportunities, I stumbled across AudioControl.
Basically, a friend called Mike Donegan, knew the owner, Tom Walker and said Tom's looking for someone to come in as CEO and help take the company forward. I visited, talked to him, and learned a lot about the company. I like to understand some of the details and some of the stories around the company so I went and visited a bunch of dealers and talked to people. I saw this company, this is back in 2011, which really had just this amazing brand, amazing engineering, manufacturing in the US, all this great stuff going on. But to some extent, as Tom would admit himself, said I really want to come in and really help to release this and create a path forward and how we're going to move this forward. I joined in 2011 and then in 2013, Tom retired and he's still a great advisor to the company. We have lunch every month and the rest is history.
Ron: I know there's a big component of AudioControl that's car audio. If you go back to '11 when you got involved with the business, you became involved with the business. What was the ratio of revenue? Was it all car audio or how involved were you in the home and where was the integrator channel in the channel mix at that time?
Alex: The company's always been steeped in this history of making good sound great, great products, very reliable, built here in the U.S. et cetera. About 60 percent was probably in the car side back then and about 40 was on the residential commercial side. To be fair, both businesses were learning from each other. That was one of the great things then and now. Now it's probably more like 50/50 at times. Both companies are growing. Car is growing still, incredibly. It's just a fascinating market to be in. Residential, for us, as we've developed and taken a more aggressive product development path, has really reaped some benefits. Particularly in multi-room audio and home theater. I often describe it a bit like schizophrenia. I can go to New York and I could spend the morning in a 10 million dollar home, scoping up a spec for a system there, and then in the afternoon, I could be in downtown New York with some amazing people, talking car audio. It's a very interesting sort of parallel world.
Ron: I'm ignorant on this subject. If you don't mind, educate me and our audience. What does the landscape of manufacturing look like? When you look at the types of products that you're making, the diverse set of audio products. It strikes me the fact that you're American made, it makes you rather rare.
Alex: I'm British made. Oh, you mean the company.
Ron: Yeah. I get it. You're a Brit. How many companies out there are there in the landscape that are actually manufacturing in America? As you know, the state of America and the state of the economy nationally and globally. I'm gonna predict, I don't think you have to be a rocket scientist that a lot of manufacturing is going to get brought back to the US from other countries, from foreign lands. And you're already here and you're already the made in the USA product. Are there many companies like yours in the U.S?
Alex: I mean candidly there aren't. I mean there are a few I think. James Loudspeaker, Leon, and a few others. The majority of companies have moved. They are born out of Asia in some way. We had many opportunities to do that over the years and we always decided not to. We created a cost model, a reliability model, and a way of being able to really test our products time and time again that we felt was more efficient and more in tune with our customers here in the U.S. Now we buy parts abroad. We have to, unfortunately. But we buy a lot of parts. All our metal is from the U.S. and probably 60% are from the US. However, we decided not to move. We decided not to move to Asia not to try and increase our supply chain from there too much and it actually works really well for us. We have great people that are passionate about what we do. One of the interesting things is we don't rely on having containers coming in. We can be pretty agile.
Ron: You weren't affected by the tariffs last year?
Alex: We were in parts.
Ron: You were on the electrical component.
Alex: I did a couple of interviews on this recently. What was really disappointing about that was American manufacturing and not just in the electronics business but in other industries, is a tariff for parts brought in from China. Yet, we're manufacturing the products here and that's a whole separate podcast.
Ron: That's a rabbit hole or a can of worms I shouldn't have opened maybe.
Alex: We're hoping that changes over time. We're managing it. We've absorbed much of that cost. But yeah it's not great.
Ron: OK. The elephant in the room is obviously that there's the COVID 19 shut down, quarantine and that's affected so many people throughout the world and here in America. And then layer on to that, the horrible brutality last week with George Floyd's death and really the rebirthing and the reawakening of what strikes me as a rebirth of the civil rights movement here in America. How are you handling and thinking about all of this?
Alex: I mean let's start with the movement that we're working and talking about this week. Obviously, as a British guy coming to America, I wasn't around during the Civil Rights Movement previously. But I've been shocked. Shocked by the events of last week, shocked by the death of George Floyd and I've spent a lot of time listening and learning a few things. I mean Sunday on the weekend, I had a good friend who she lives in Capitol Hill, which is here in Seattle, which is really one of the main areas for protests. And we were up there safely under COVID conditions on the weekend. We took some time to actually go and talk to people and really as a British person trying to understand the crux of not just the injustice of what happened to George Floyd but also just the deeper questions that have arisen.
Ron: Those deep roots in that pain and anger out there in society.
Alex: I spent probably two hours just talking, listening, and learning. I thought I knew it like you do sometimes. And I didn't know. I was probably in some ways as a fairly new person in America. I was scratching the surface of my understanding. I've learned a lot on the weekend in talking to people and making that point to listen and understand. And then on Monday, I spent a lot of time with my team here and we have about 40 people here, all mixed nationalities all mixed races. I did a bit of a talk to the team and then I spent quite a bit of time talking to people individually. Sort of an open door and just really tried to understand it. There is a movement here, clearly and it's an important movement. I think we have to listen. We have to make sure that people are allowed to use their voice really clearly at this point in time and be understood and heard. We can't prejudge anything.
"I spent probably two hours just talking, listening, and learning. I thought I knew it like you do sometimes. And I didn't know. I was probably in some ways a fairly new person in America. I was scratching the surface of my understanding."
There are lots of different ways and different facets where you look at this. Lots of different beliefs and meanings of how the best way to approach this is and I'm passionate again about understanding that and trying to help people create the right path and be part of a very important conversation. I hope more than ever that we learn from this and we take the right steps. It ain't going to change overnight, that's reality. However, I do believe that the majority of people not all, but the majority of people are good and mean well and I think a majority of people want to see the right change. And I think this movement at the moment, regardless of your beliefs on what's right and what's wrong in the way things have been done. I think this movement is important and we have to listen and learn and I'll continue to do that.
Ron: Any advice or considerations for the business owners out there? There are so many stresses on the integrator. The small business that you and I serve and here they are, probably in the hardest challenge of their business careers. Now, one of the most important movements in American history is happening right in front of them. I think it's incredibly positive. At the same time, it creates a tremendous amount of uncertainty. Any thoughts on how the folks listening can cope and manage and best support their team and their communities?
Alex: Yeah, I'm a general believer that ideally you don't bring religion or politics into work. Everyone has the right and the important right to have their beliefs and to be able to exercise that right and to be able to talk about anything. And I think business owners and companies like ours, today more than ever, with the movement that is currently happening, have a bit of responsibility there. I don't think what someone does is right or wrong. I don't think if someone doesn't post something, it means they're wrong. If someone does post something, it doesn't mean they're wrong. I think companies should just think about that. I do think most companies should be part of this conversation with their teams. With their families, with themselves and not be afraid to talk about it. It was pretty emotional and amazing on the weekend just talking to people in the street.
I wasn't involved in some of the troubles in Seattle. But I was talking to people in the street on Saturday evening and it was pretty amazing in some respects. And I think the same thing when I talk to my team here. I think what was interesting was a lot of people are far more deeply impacted by this than people maybe recognize who aren't necessarily marching downtown or protesting. I think having that conversation, opening up, someone said to me afterward, "Alex, thanks for doing that on Monday because we just didn't know what to really expect what to do. It allowed us to talk about it ." I would just say talk about it. It doesn't change the business directly obviously but at the same time you know we need to recognize this movement and understand how we can help understand and be part of it in the right way.
Ron: I appreciate it. It's a challenging topic, Alex. I'm putting you on the spot here in this public forum so I appreciate you speaking to it. I can admit here at One Firefly, we're also, like maybe everyone listening, figuring out what our role is and how to practice our beliefs personally but then also how to practice those beliefs professionally on behalf of our business or our brands. In my case, I'm now also representing many hundreds of brands in the marketplace within our space, just under 500 and so there's a tremendous amount of responsibility there as well. And actually, just a little bit later this afternoon we're having a town hall at One Firefly, virtually here and we're going to be discussing the movement and race and biases that we may have, whether known or unknown. I know that my leadership and I are just simply going to be doing a lot of listening.
Alex: That's a key thing, Ron. I think in the conversations I had on the weekend and here in the factory, there were a lot of views that I didn't really appreciate enough. I think that was one of the biggest things for me is how we're now looking at going forward. We're going to have another meeting on Friday. But I think it was interesting just to hear people in some ways more than I've heard in my time in the U.S. talk from the heart from their experiences you know and how do we solve it is the wrong word because it's not about solving it. This is a massive change required. But how do we be part of that change that's in the right way that is right for all?
Ron: Yeah. I agree. I think change is needed and a member of my team e-mailed me. I'm happy to say at One Firefly with a very open transparent relationship in our team. Anyone on our team can message me at any time or talk to me at any time and any member of our leadership team and I've had a number of communications and discussions. There's a fact that regardless of where you stand around race or prejudice, silence is a position. It's unacceptable and I think what is going to ultimately cause change, is all of us of all skin colors, of all positions in society, not staying quiet or trying to brush it under the rug but just addressing it and having the uncomfortable conversations. If we do that consistently over time, we can make progress. Talk to me about the restart. What does that mean? Because that's a term I've heard coming from AudioControl, I've heard it coming from you, in particular, you're being interviewed in different environments, in a number of different manufacturing discussion groups where you are very active. I'm on the Azione Board of Directors where you're a partner there and you're very active. What does the restart mean verses let's recover or let's deal with the recovery because you're not a big fan of the word recovery?
Alex: I think to me, obviously, recovery is a word. One of the positive ways to look at this at the movement for us here at AudioControl, and to be honest, the world is, it's time to restart. We're restarting our businesses, we're restarting our relationships. We're restarting our manufacturing. We're restarting so much that was really put on hold. To me, many companies have suffered greatly during this time. Unfortunately many or some have closed. And that, unfortunately, is more down to recovery at that point. But I think in our industry, from what I've learned in the last three months, honestly, in the beginning of this, I had some pretty big fears about what was going to happen.
Ron: I think you and I talked right when this thing went down and we both had a tremendous amount of fears as to the unknown.
Alex: Exactly. We're a U.S. company. We manufacture here, we have a cost base. Right at the beginning, no one really knew what was going to happen. It could have just fallen through the floor and that's the same for many companies small to midsize like ourselves as well as large companies.
Ron: Some businesses did fall through the floor and will never recover.
Alex: That's right. I went through four weeks with the team here and I'm just beyond proud of the team that I have here. And in the way that we approach the first four weeks. To us, it was almost three sets of four weeks. The first four weeks were really crisis management, cash preservation, and crisis management. Customer contact, we spent probably more time than ever, and we spend a lot of time working with customers. How can we not just protect ourselves and try and get our plan right? But how do we help our customers? And we did a lot of change in terms, change in payment things and we just did a lot of things. What was interesting is that as we came into the second four week period, we sort of looked back and thought OK well thank goodness the flow hasn't dropped.
Ron: It wasn't as severe as was planned in terms of the potential worst case.
Alex: Exactly and one of the things that helped us was that we stayed an essential business as we call it here in Washington state. By nature of in particular, the residential commercial business that we do. It's very hard to justify an essential business around a music system in a car. It's not quite so easy but when it comes to amplification and DSP and networking, we had a strong and a good story, the right story, and legal opinion on remaining open. That was pretty key obviously for us to have to do that. And actually, in the second four weeks, that really played well to dealers who many of them who were either staffed to come back on or had found a way that construction was allowable again and actually needed product very quickly. Again, because we're manufacturing here. We have finished goods but we also were able to ramp up and ramp down pretty quickly. We don't have to wait for a container to arrive from Taiwan or Japan. We can literally say we need four more of these. We have finished goods but we were able to really act during the second four weeks.
"Really then, as an essential business, the biggest piece for me personally was safeguarding our employees. We had everyone who asked to come into work on various different shift partners. Everyone came in. That was just amazing."
In the third-four period, we came out of that with the restart. We had eight ways to think about this. We basically had exercises here at AudioControl and we just shared this with all our dealers as well. We started with a launch map as we call it. How do we restart? We then really worked on safety guarantees. That was number two for us, safety guarantees for our dealers to build that trust. Not just the dealers have trust in our products but their customers also felt comfortable about the way our product was made and handled. We had dealers phoning us when things are much less understood saying who touches the product when it leaves the factory? Is the box cleaned down? We put some of those processes in place, we don't need it, but to reassure people. Really then, as essential business, the biggest piece for me personally was safeguarding our employees. We had everybody who was asked to come into work on various different shift patterns and moving hours around, everyone came in. That was just amazing. Everyone played a role and we have PPE, we have shields.
Ron: When your crews are out on the factory floor, are they wearing masks?
Alex: Yep. Everyone's wearing masks. When they're at their workstation, they don't wear a mask but when they leave that station that wears a mask. We have signage across the floor. Making good sound great.
Ron: I love the Jabbawockeez.
Alex: We invested in this. It's a bit of the AudioControl humor but on a serious subject.
Ron: Speaking of that humor you do. There is a thing called AudioControl humor. Because I have a piece of your gear, I recently acquired one of your DSP multi-channel apps for my multi-room audio here at my house. And I read it front to the back of the guide because I actually configured it myself. I was very proud of myself and you have Easter eggs all throughout your brochures. Where does that come from? Because there are these little random hilarious little nuggets. It's super serious and then random fact or comment.
Alex: We have a team member who writes our manuals has a little bit of subtle humor that we like to inject in. Some of them are very obvious. Some of them are, is that real?
Ron: Oh yeah. There are some super subtle references. It'll be in parentheses in a technical fact and I'll just be like does Alex know this is in the brochure?
Alex: I read every manual. The round to four hundred has three LED lights on it, red, blue, green. I think it has red and blue. In the manual, it says, red blue and the green. There is no green. Red is standby, blue is operational, green is coffee ready.
Ron: Your coffee's ready.
Alex: Yeah. Things like that so it's just it's subtle on our boxes. If you get an AudioControl delivery, it's worth opening the bottom flaps at the bottom. You may never see this.
Ron: Oh no, I didn't, I tossed the box but I wish I had known that. So what's underneath the flaps?
Alex: Oh it's things like if you open it this side, electrons will flow out or this is the wrong side. What are you doing? It just settles something. But it is par to your point Ron. It's part of the culture of the company it's part of who we are. We're a serious technology company, but we want to have some fun along the way. Not everyone gets it. We actually occasionally get a complaint. You need to be a little serious. This is just terrible. And I respect that.
Ron: You know listen to that feedback. You might disagree but you'll listen.
Alex: But most people get the meaning of it, it's just trying to bring a little bit of humor to the busy industry that we're in.
Ron: Yeah. Back to the restart. Go ahead. I then want to transition into the dealers and what does restart for them mean.
Alex: We send this to the dealer. We send a few of us actually originally. It came from the Kinsey report that if anybody wants please ask me for it. I know I can send it to you. It really goes into detail about this. Like I said it's safe for us and the same for a dealer. Launch map, safety guarantees for customers, protect your employees. That's non-negotiable. Then once that's in place, for us it was reviving the map. Understanding what our dealers need. Make sure all that's ready. Rebooting the supply chain is the next piece. And that's again the same for us or for a dealer. That's a major piece for us. Here in the US, we're manufacturing here and making sure that we start cutting back on parts so I don't know what's going to happen. And now we're ramping back up so rebooting the supply chain operations, shifting your I.T. is important, your infrastructure back to restart mode. People slow that down. Then the other two things. One is restarting your business with care to make sure that trust-building continues. Finally, I think it's about how you reinvest that point. The final one is sustaining your value, sustaining your team, and reinvesting. We use this as a framework. It's an excellent McKinsey report.
Ron: Yeah. If you can supply that to me, Alex, I'll make sure my team puts that into the show notes. For anyone listening on the podcast, just go to the One Firefly website Automation Unplugged to show 123 and look in the show notes and we'll make sure it's linked.
Alex: I think I'll just finish it by just saying, again to me it's not about recovery. It's about how do we restart successfully. Business is suddenly coming back strong for us at the moment. Partly because we're able to adapt and we're pretty agile. We have products available. We had a dealer last week come to us, he needed eight receivers because he couldn't get them from another company. He's always wanted to use us, thought about using us, and it's a great opportunity. He bought eight receivers literally and sent me a video I'll send you one of them in place in one home.
Ron: You and I were talking four or six weeks ago and you said you had actually received an order from the Middle East for that piece of gear that I have but it was like 50 of them or 60.
Alex: 40 of our 8 channel D2800s. They were doing a full Sonos setup but they needed to have DSP control and a good amplifier. They could just run a 1U amplifier with 4 Sonos ports. 40 of them. They wanted them in a week, they want ed 10 in London and 30 in Dubai.
Ron: Good Lord. I know that's a wonderful order but it's even better when you can actually ship it. Were you able to meet that order?
Alex: We shipped it, not within a week. We shipped the ones to London within a week and then the other 30 went one week later and we have finished goods in Norway. But that was a sudden big rush in the middle of COVID.
Ron: Yeah. What are you seeing in terms of you mentioned demand right this minute is good. What are you seeing across your dealers nationwide? I mean when my customers talk to me and I'm sure when they talk to you, they appreciate the perspective we have, that's a national perspective as opposed to just the singular market maybe that they operate in. They don't know whether what they are doing is above or below the average nationwide. What is the read? What are you seeing for the demand for technology in the home? And where is that demand? Have the categories pivoted or shifted in any way that's recognizable by you and your team?
Alex: Yeah. It really is coinciding with the reopening of the states. Obviously, in New York, California is a little bit slower because those are late to open up. Some of the mid-central states that perhaps weren't as badly affected at all started up earlier, are a source of demand. We've definitely seen it in conjunction with the restart. There are dealers in the New York area and California that are working on essential projects for essential businesses that are also needing product quickly which again we can react to so that helps. I think the other pieces that we're seeing is interesting I was on a call, I do a reading, listening, and following the various data and so on. I was on a call for a group I'm in and home entertainment came out as an area. No surprise maybe but it was really good to see the stats behind it, an area that is not just going to come back in the next twelve months, but the next three months onwards. And I think that's going to be, we've seen an increase in home entertainment with our new X and XR theaters receivers and amps, we're building them as we speak. We're shipping and getting a lot of demand for that, which is great. People are sick and tired of that substandard system in their homes.
Ron: I was tired of the substandard system in my home, that's why I reached out to you.
Alex: That's right. And multi-room, not just DSP amplifiers which is the core of what we do but also set and go. Even just good sounding, architect type amplifiers those products. The other one that's really taking off in the last four weeks is our 2 channel Rialto. Our Rialto Bijou type products, these are just high power 2 channel, home offices. People's home offices in the last eight weeks as they got more used to having to work from home or they thought they'd work from home for four weeks ends up being more. That's been a really big product both working with streamers like Sonos and others but also just in putting in two nice bookshelf speakers and have an amazing experience. Rialto and Bijous are doing really well. It's not a surprise but it's been good to see that feedback and U.S. manufacturing as well.
Ron: Yeah. The perspective that I'm seeing just to compare notes is as you said parts of California, not all of California, but parts of California and most of the Northeast are just still getting hammered with the lockdown the quarantine.
Alex: I spoke to a dealer in northern California, one of the larger dealers and he's slammed. I've heard that from many dealers that are coming back. They are slammed. I think the fear is all the time that we haven't been able to sell and create new projects. What potentially could happen?
Ron: I mean that in theory is going to work through the pipeline and it's going to create some segment of when they open up they're gonna be slammed. But in theory, maybe not proven but it seems reasonable or logical there'll be some gap.
Alex: The logic is definitely you're right. What I fall back on a little bit and I think is the potential, is the reports I read about home entertainment. That's basic multiroom audio speakers and theater media and so on. If we're smart and we are smart, we can create demand around that through marketing. That could certainly be a shorter-term project definition specification that could be. I think there's a lot of people that will not so much look to now but will look to the holiday season, Thanksgiving, and say I do not want to sit through this again. Potentially, I hope this is not the case, if my state shuts down again because of some spike, I really want to set up better for them.
Ron: I think there's no doubt, the reality, the likelihood of a second wave is very real. If you go back to the Spanish flu there were three big waves in 1918 and 1919. That seems real and whether it happens or not, we all hope it does not happen. There's no one here hoping that happens but the fear that it could happen is very real and tangible and how that's translating, what I'm observing my team and I, is that the consumer of technology the person and I'm going to focus for a moment on residential. They are not planning a vacation. They are believing they might be stuck for segments of time, weeks or months at a time in their home with their family and so they're upgrading their tech.
"I had no tea leaves or magic 8 balls to tell me what was going to happen. We're seeing levels of busyness from our channel, this essential channel of technology is contracting businesses at rates in certain markets that I've never seen in my 20-year history."
They're upgrading their home networks, they're upgrading their entertainment, their home theaters. They're upgrading their outdoor entertainment. I'm observing that. One Firefly, go back to early March, you and I were comparing notes. I was planning for a very bad run of it. I had no tea leaves or magic 8 balls to tell me what was going to happen. The reality is April and May for One Firefly were incredibly busy. Exceeded goals type of busy and we're seeing levels of busyness from our channel, this essential channel of technology contracting businesses at rates in certain markets that I've never seen in my 20-year history in North America.
Alex: That's why I think to me at the moment as a business owner, I'm navigating it week by week month by month. I was navigating it day by day. Now I'm back to week by week month by month. We'll stay ready next to our integrators out there.
Ron: Real quick. I didn't get to it. I know we're running short on time but I don't know this and I actually told you that I would love to hear this story live. What is the origin of AudioControl? What is the backstory of the company?
Alex: Yeah. 1974. 44 years now, since that day. We basically equalized the company. For those of you, that know the music industry and the mixer industry particularly, Mackie Mixes, a guy called Greg Mackie entrepreneur founder of the company and he was making equalizers. This is our first equalizer.
Ron: Is that wood?
Alex: Wood paneling. I keep threatening to do it today with wood paneling to see if we could sell it. But this is the first product and we did equalizers. I wasn't around. I wasn't born 40 years ago.
Alex: We did equalizers and started off on the residential side and commercial side. Most people think we started in car audio, we actually started in residential. He then brought the same equalization technology into the car as well. Had this concept really of how do I bring the experience in the home into the car and vice versa and that's something we still live by and talk about today. And then really developing a great team. Always been here in the north of the United States in the Seattle area which is where there was such an amazing history and legacy of audio. Unfortunately, most of that is gone now. But that's really where we started in the factory. We've built a factory as well, a small factory in Spokane because Boeing kept stealing our employees, all our engineers. So we had to deal with that. But we've been here ever since.
Ron: I'm going to say this story has a positive ending so I'm going to bring it up. I would not have otherwise but a very well known and beloved member of your team. Chris Cain actually came down with COVID 19 and he became very ill.
Alex: Yes he did. Chris braved the storm there. He contracted it at an industry event. He came back and you know luckily he wasn't working in the factory at all but a few days later, he felt ill and went to the hospital and had trouble breathing and it was pretty serious. This was right at the beginning.
Ron: This was at the beginning, he made national headlines right?
Alex: He was on CNN and I have to pay him appearance money to come to work now.
Ron: Because he's famous does he ask for autographs when he shows up now?
Alex: He does. I remember him phoning me saying Alex, I can't breathe or talk very well. He was in the hospital at the time, segregated off. But he said you know they're going to try me on this drug as part of an early-stage trial, I'm just going to do it. What's the harm? And he was one of the first to do it. And literally within a couple of days, I was talking to him and he was walking again and breathing without any assistance of oxygen and so on. He's now fully back at work and doing his stuff.
Ron: He's fully healed and fully recovered?
Alex: Yep. Because he was in this trial and monitoring everything from blood counts to oxygen levels. He has another COVID test the other day and he was fine. Antibodies are building and I think they're going to use his blood for something.
Ron: Is that drug actually now an approved drug to help treat it. Or was this just a random outlier in a data set?
Alex: This is one of the Gilead. Gilead is basically all over the news at the moment. I think they have some degree of FDA approval or accelerated approval and it's being used now in hospitals.
Ron: Well Alex it has been a blast. Can you believe we've almost been here for an hour?
Alex: I thought it was three hours.
Ron: Oh you're ready for three hours? We can keep going. No, I know you have a business to run so I'm going to get you back to that. Alex, it was a blast having you on the show my friend.
Alex: Great, once again Ron, thank you for raising the topic of the movement and the issues today. I think that's very important. I appreciate you raising that. It's a conversation that needs to continue. And I appreciate you talking about it on the show here.
"We can't hide from it and we need to bring it upfront, as fearful or as may be hard as it is. It's the only option. The only we'll make a change that's permanent."
Ron: Yeah, we can't hide from it and we need to bring it up front and as fearful or as may be hard as it is. It's the only option, it's the only way we'll make a change that's permanent. My pleasure and my honor and I appreciate you being willing and gracious to talk about it publicly here and how you're thinking about it and what you're doing about it and how you're acting. So thank you.
Alex: Thanks, everyone. Thank you.
Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing within the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.
Resources and links from the interview:
- McKinsey Global Institute
- Gilead treatment for Coronavirus
- D2800 amplifiers
- McKinsey Report PDF
- McKinsey Report Article
More Automation Unplugged:
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