Hearing Customers Loud and Clear: A Lesson from Outdoor Audio

How does a small company compete against some of the largest audio equipment manufacturers in the world? In this episode of Mastering Innovation on Sirius XM Channel 132, Business Radio Powered by The Wharton School, guest Charity Hardwick, President of Soundcast, shared how to survive and carve out a niche in a highly competitive industry.

Soundcast is a company that specializes in wireless outdoor audio. Before Bluetooth was invented, they were first to market with a proprietary wireless system. But even with their proven products and strong following, they have no plans to become a billion dollar company. Their strategy as a small company is to know their customer segment inside and out. Hardwick also spoke about the company’s inverse pyramid structure, which places her at the bottom to support all the other functions, and her experience as a female executive in a technical and male-dominated field.

An excerpt of the interview is transcribed below. Listen to more episodes here.

Transcript

Charity Hardwick Portrait
Charity Hardwick (President, Soundcast)

Nicolaj Siggelkow: What does Soundcast do? Tell us a bit about the company and its history.

Charity Hardwick: I’d love to, especially on the topic of innovation which is your focus. Soundcast was started over a decade ago by a band of engineers who were innovators themselves. The parent aspect of the company was an original equipment manufacturer and supplier of speakers and wired systems for the home. Of course we’ve seen that in the home for a long time, but they got together and said, “We have outdoor issues where people want to have outdoor audio but they don’t have an opportunity to be able to wire that.” We have partners in Europe. You can’t run wires through the walls and things like that. And they thought, “What can we do? And what kind of attributes would it take to create something that would be a solution?” They developed this all-in-one speaker idea with the down-firing subwoofer and amplification and omni-directional array speakers in order to achieve a full outdoor sound, but this was back before Bluetooth connections. This was back before Sonos or any wireless systems for the house.

They were first to market with this brand new idea and created a transmitter that would extend the audio from the indoor of the home to the outdoor home on a proprietary wireless system. They were first to market with that, and what we are now as Soundcast. The company was purchased three years ago by an outdoor goods company that heavily invests in new technology and smaller companies that are bringing new ideas to light. When they purchased the company we went back to the marketing aspect and we started really refocusing this idea that they had originated. For instance, there are other companies out now that say, “Oh, we’re first to market with 360 degree audio.” But we’ve been doing this for over a decade. Now we’re in our next life. We’ve created a whole new set of products that are problem solvers too.

Siggelkow: Great. Clearly you’re not the only one out there, so who are the key competitors that you’re worrying about or thinking about?

Hardwick: It’s interesting because at this time in the market there still isn’t anything that directly compares or competes with us, although there is mind share space, right? There are markets there. So let’s speak about Sonos, for instance, or HEOS, or an integrated home wireless system. None of those companies have any experience with historical or current products on the market that address unique problems of outdoor audio. That includes rain, snow, blistering heat, and the elements that we have exposure to in the outdoor wireless arena. No one is creating that.

“We choose to be a small-focused company, and we choose to do what we do really well.” – Charity Hardwick

We have long life battery that we’ve been working on, again, for over a decade, getting it right, figuring out how to regulate power, how to deliver battery that lasts for a very long time so you can continually use this as a fixture in the outdoors and not be worried about charging it the way you do small Bluetooth devices every couple of hours or so. We created a niche for ourselves as an outdoor company with high performance really focused on the audio experience so you don’t have to sacrifice anything when you go outdoors. In that regard, we’re good.

Siggelkow: I teach strategy, and I was fascinated by kind of these stories of firms really focusing on a particular customer segment or need, and that focus allowing them to do certain things that maybe more general competitors are not able to do. Can you pursue that a little bit further? If you are saying, “Okay, we are focusing really on the wireless outdoor market,” what are some of the choices that you’ve been able to make by focusing on that that maybe others will have a hard time replicating?

Hardwick: Well, one of the things I really talk about with the Soundcast model is we choose to be a small-focused company. We choose to do what we do really well. If you get into a larger company, if we were to namedrop JBL or Bose or those types of companies, if they wanted to enter our arena they would have to sacrifice a lot of things that they really value, which is huge marketing budgets and huge profitability margins, because we’re really less concerned about making huge profits on a single unit. That gives us the flexibility and freedom to use premium components in order to achieve our acoustical goals that other companies, when they get into large arenas, really sacrifice. You have to sacrifice something when you get that big.

And for us, we have the luxury to focus on the outdoors, specifically the outdoor market and the idea of being weather-resistant while providing good audio and having ruggedized aesthetics so you can take it in transit with you. We know who our customer is down to the ground, we know what they like, and we know how old they are. We know what they do, and it’s all about listening. It’s all about going back to find out who’s under-served, and for us, being a smaller company, that’s a good enough market for us. We don’t need to be a billion dollar company. That’s not my goal. I have no plan towards doing that, but we want to provide a solution to a need in the market that is perhaps a little lower on the radar for companies that are looking for a big place.

“If a larger company wanted to enter our arena they would have to sacrifice a lot of things that they really value.” – Charity Hardwick

Siggelkow: That really raises the question: how do you survive as a small player? In particular, if I think about this as a technology area, I could imagine there’s some R&D involved, and size matters, right? If you can amortize your R&D dollars over lots of units, that’s easier than doing it over a few units. So how are you able to establish yourself and survive as a small player?

Hardwick: Well, we are lucky in that we’ve been doing this for over a decade. We do have inherited knowledge and engineering that’s been a slow growth in the collective proprietary knowledge that we’ve achieved over time. In that case we’ve had the luxury of not having to reinvent the wheel or put a significant amount of R&D and engineering efforts into trying to solve problems we’ve already solved over the last 12 years. For us it’s been a slow ramp-up when it comes to intelligence, when it comes to engineering and R&D. Even people in the audio space coming to solve this problem, or someone who’s coming into this space from portable electronics but not dealt with the audio aspect of it, they still have multiple years of ramp-up, of getting it wrong before they get it right. Soundcast had the same journey. Soundcast had many tweaks and tweaks along the way. Having been innovative so early in time before the idea of wireless audio, and before Bluetooth speakers were even invented, has allowed us to have a competitive advantage as a small company that with any other small company starting right now would be quite a hurdle to overcome.

About Our Guest

Charity Hardwick is the newly named President of Soundcast. She has been featured in Dealerscope’s “Powerful Women in Consumer Technology.” You can find more @GoSoundcast.

Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.

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