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Schiit Happened: the Story of the Worlds Most Improbable Start-Up

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Schiit Happened: the Story of the Worlds Most Improbable Start-Up The Story of the World’s Most Improbable Start-Up by Jason Stoddard Schiit Happened: The Story of the World’s Most Improbable Start-Up by Jason Stoddard Typesetting by Lucas van den Bosch [email protected] lblb on Head-Fi.org Created with LaTEX and KOMA-Script Text in Bitstream Charter Headings in Lato To Mike, for going along with this crazy idea. To Rina, for support, naming the company, and tolerating the whole mess. To Eddie, for helping us really get started when we needed it most. To Tony, for testing dang near everything we’ve made. To Alex, for taking over, making things right, and running the show. To Dave, for doing the hardest stuff. Hey all, I’m Jason Stoddard, the co-founder (with Mike Moffat) of Schiit Audio. You may have seen some of my posts on Head-fi. But you haven’t heard the full story of Schiit ... why we started the company, how we’ve grown from June 2010 to today, the good stuff ... and the bad stuff. So, in a burst of insanity, I thought, “Why not turn this into a book?” Why? Well, in addition to Schiit, I’ve written plenty of stuff, including about 30 published stories and 3 books. Jude and the team at Head-fi were kind enough to provide this space for me to serialize this story. The plan is to post a chapter a week until it’s done, which should take us through the summer. Now, you may be wondering, “Why the heck should I read some crazy book about Schiit?” Well, there’s nobody forcing you to. But if you’re interested in the inner workings of a true by-the-bootstraps startup (did you know we started in a garage, with no external investment?) or if you’ve been thinking about starting your own business (beyond the usual platitudes of “hey, you should incorporate, and there’s this stuff called ‘cash flow’ and stuff”), or if you’re just curious about how a modern audio company works (from who’s actually engineering the gear, to how it gets made, to the ups and downs of the day to day working of the company), you may enjoy it, or find it helpful and informative if you want to start a company yourself. I have no illusions that this will be the next business best-seller—if it ever makes it into print—but I’m having fun writing it, and I’m hoping you’ll like reading it. Disclaimer: There’ll be plenty of technical stuff in here, because, after all, I am an engineer. You won’t have to understand it all, but you may be more entertained if you have a techy side. Later on, there’ll be some early photos from Schiit, as well as a video or two, that have never been seen before. Thanks for reading, and I hope you enjoy it! All the best, Jason Stoddard vii Contents 2014 Christmas Presents Until the End of Time? · 1 The Line is Down. Here’s an Undocumented Test Rig. Fix It. · 7 15 Years On the Marketing Front Lines · 17 From Death, Rebirth: Armageddon 2009 · 29 “You Always Say You Have Schiit to Do, Why Don’t You Just Call It That?” · 37 $ 800 In Screws? · 47 The First Order Is ... For Something We’re Not Selling · 57 Metal Debacle, Valhalla Style · 65 We Screw Up Sennheiser and Insult Some Big Guys · 71 Powering Up: Lyr · 81 Our First Employee, Our First Boardhouse · 87 USB Sucks! Or, Mike Joins the 21st Century · 97 Schiit Goes Evil? · 111 “Isn’t the Symbol for USB the Long Flat Rectangle?” · 119 Technical Help Via Time Warner, and The World’s Most Irritating Failure Mode · 131 DAC in a Toilet Paper Roll · 141 Growth, Garage Style · 149 Resurrecting the Circlotron and Other Mid-Centuryisms · 155 The Pinch-Off Problem · 169 Every Road is a Dead End: Early Adventures with Magni · 181 The HOA Problem · 189 You Catch a Cold, We Die: Bigger Products, Bigger Problems · 199 Introducing the Schiithole · 209 “I Didn’t Know People In the Private Sector Were As Lazy and Incompetent As the People In Schools” · 217 Schiit Happens (and Keeps Happening) · 227 ix Perspective · 231 Getting Our Schiit Together · 239 Dead Media Ain’t Dead: NYT Strikes · 249 Finally, the $ 99 Solution · 261 Twilight of the Gods—Ragnarok from 2009 Until Today · 269 “You’ll Never Do Any Upgrades Anyway.” · 287 Worst. Customer. Ever. · 299 Death of a Product · 313 R&D Sometimes Means, “Try It, See If It Works” · 321 Name Me One Non-Standard Format That’s Succeeded, Ever · 329 No Sample Left Unchanged: Digital Today · 339 Black Friday · 349 You Want to Pay How Much? Or, How We Moved Again · 357 A Real Company? · 367 The Value of Diversions · 375 Wyrd Schiit · 385 Unto the Second Generation · 395 Schiit Goes Vinyl · 407 Completely Fulla Schiit · 417 One Year, Twelve Products · 431 Mike Motivations, Musings and Opinions · 445 The back back-saga · 455 Yggdrasil: The back back-saga, Part 1 · 459 Yggdrasil: The back back-saga, Part 2 · 463 Yggdrasil: The back back-saga, Part 3—The Theta Digital Years · 469 Yggdrasil: The back-saga, Part 4—The Home Theater Detour · 475 Rina Anecdotes · 481 Alex The Deluge · 487 Answers and Anecdotes · 489 x Schiit Happens: The Ongoing Story of The World’s Most Improbable Start-Up 2015 The Trials and Tribulations of Amazon · 501 When To Listen, and When To Act · 515 Our Favorite Scammers · 523 Bridging the Gap · 533 A Life in the Day Of ... · 547 So Ya Wanna Get Into the Biz? · 561 The Yggy Circus, Tidal Uprisings, and the Unknown Future · 571 Reacting to Now vs. Planning for the Future · 579 Hints, Teases, and Solicitations · 591 Knowing Our Place? · 597 Food Scientists vs. Michelin Stars · 605 On Measurements (With a Side Order of Sanity) · 611 Detours in Balanced-Land, or “Improving on ‘Perfection’” · 633 We Launched a DAC and Got a Movement · 645 Tales of Odeon, or How Not To Start An Audio Company · 653 When to Say “When” · 669 The Multibit Revolution Gets Cheap · 677 Death (and DNR) of a Product · 687 The Most Difficult Design Brief · 695 Looking Forward to 2016 · 705 2016 A Longer Discourse On Marketing · 715 What To Do While Waiting for Ragnarok · 727 The Importance of Service · 741 How We (Didn’t) Move Again · 753 The Subjectivist/Objectivist Synthesis · 763 Being Comfortable With What You Are · 775 On Modding, Hubris and Reality · 783 A Perspective On This Moment in Digital · 793 The Elephant in the Room · 807 Because We Can · 821 The Road to Jotunheim · 831 xi Word of Mouth at the Speed of Light · 847 Into the 2-Channel World: The Saga of Saga (and, um, Freya too) · 859 Why You Can’t Always Get What You Want · 879 The Vidar Chronicles, Part I · 889 Even More Fulla It · 903 A Directional Assessment · 915 2017 Why Do We Do What We Do? · 925 “Obsolete.” · 937 Leaving Marketing · 951 Deprogramming · 963 Back to the Past · 973 Conversations With A Stubborn Engineer · 983 xii 2014 Forward Christmas Presents Until the End of Time? So, do you think it’ll go? Do you think they’ll sell?” Mike Moffat asked, looking at the first assembled Asgard on the engineering bench in my garage. He was being Mike-fidgety, rocking from heel to heel in the small, chilly space. “Well, on paper it looks good,” I told him. “But you know how that works. They’ll either sell, or we’ll have Christmas presents until the end of time.” Mike laughed, a little nervously. Because he knew how it goes. You can plan and study, do endless market research and cost studies, run focus groups and get tons of input from key prospects and do all the little things that companies do to procrastinate and dither and second-guess before putting out another “gotta have” product ... and things can still go sideways. But this isn’t a story about stuff like that. This is a story about gut feelings, good guesses, and not following the herd. And succeeding. This is the story of Schiit Audio, the world’s most improbable start-up. Yes. Schiit. Let’s start with that as an improbability factor. What company in its right mind would name itself that? I mean, if you were a marketing agency and proposed that name to a client, how would they react? You’d be picking your butt up off the pavement outside their headquarters, post-haste. But that isn’t all that made us a crap candidate for succeeding. Consider: We started this with no outside funds, no VC, no crowdfunding We’d both been out of audio for about 15+ years—more on that later We went with direct sales, even though that had only really worked for one other company—Emotiva We started with no staff, in my garage 1 Christmas Presents Until the End of Time? We decided to make everything in the usa, even though the pre- vailing wisdom of the time was “China’s the World’s Manufacturing Floor, why even try to compete?” And, in a complete burst of insanity, we decided to start with inexpensive products Ah, and it’s now probably past time I introduce myself. I’m Jason Stoddard, Co-Founder of Schiit Audio. Mike Moffat’s my business partner. Our official titles are “Head” and “Number 2” respectively. Hey, Mike asked for it. No, we don’t take ourselves too seriously here.
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