Working as a technology journalist is a privilege that allows me to play with hardware that I could never afford to own. Last week, while I was in Montreal for the opening of Sennheiser's new Canadian office, for example, I was able to spend some quality time with the company's crazy $50,000 made-to-order HE 1 headphones. For a guy that reviews audio hardware for a living, it was a ridiculous treat.
There are times that the privilege of doing what I do extends beyond all of the gear that I get to play with. Among the Sennheiser employees, audio nerds like me, and other folks attending the company's opening day bash was Dr. Andreas Sennheiser. Andreas, an electrical engineer by trade, has been co-CEO along with his brother Daniel of their family's 70-year-old audio company for the past five years.
Here in North America, Sennheiser is mostly known for their professional audio products -- microphones and reference headphones for the rich and musically famous, and conference-call hardware for high falootin' boardrooms. In Europe, Asia and Africa, the German company's footprint in consumer audio is massive. They’re one of the oldest names in audiophile-grade headphones and an early, much-respected maker of audio hardware designed to augment virtual and augmented reality experiences.
They make cool shit.
Once the celebration was over and the caterers had absconded with the all of leftovers, Andreas was good enough to spend a few minutes with me, talking about his company, his family and the notion of legacy. While I was primarily in town to meet with the company's PR and secure hardware samples for an upcoming project, I thought you might enjoy hearing what a man with access to Jame Bond villain-levels of technology and money, like Dr. Sennheiser, had to say about the part he plays in his family’s multi-generational venture.
SB: When you and your brother took on leadership positions at your family's company, you weren't just moving up the corporate ladder, you were becoming part of a legacy. Where is the balance between preserving what your family has built and risking new ventures to push the company forward?
AS: It is a balance. One of the strongholds of the company is our culture of innovation, and our family life -- the feeling of togetherness. We believe that it’s something that made us strong. It's completely independent from technology changes and from the way that markets develop. So that's one of the areas that we wanted to preserve while, at the same time, injecting new ideas. A good example of this that's only arisen in the past five or six years is our strong focus on [Augmented Reality] and [Virtual Reality] technologies -- we're working to make the sound right. These are entirely new areas for us. We carry the fire instead of worshipping the ashes. Whatever was great in the past, we'll carry on with: our culture and our spirit of innovation.
SB: You worked for a number of companies before coming back to the family business. Was there ever a point where you you didn't think that you'd be coming to work for Sennheiser?
AS: There was a time, when I was about 18 or 19, where I did a lot of music and acting at school. I wasn't really sure what I wanted to do in a creative area. But then I figured out that I wasn't talented enough to make a living. So from there, I went straight into electronic engineering, getting my PhD and working for Hilti. For me, it was straight forward. For my brother, very different. My brother is an industrial designer. He started his own computer animation company when he graduated from college. Then he worked for agencies and moved on to work for Proctor & Gamble. For him, it was clear that he wouldn't want to work for Sennheiser for a long time. Purely because he didn't see that he had a place in an engineering and technology-oriented company. We had a strong brand, but we never really considered using any real brand management or leveraging any of the competencies that my brother would bring. That changed about 15 years ago when he started to consider coming to work for the company. Then, a little more than ten years ago, he came to join the company.
SB: How do you decide when and if to move into an emerging technology like VR or AR?
AS: I think we've always taken chances on being very early to enter new markets. The probability's higher for you to have a good idea if you have many ideas. That's why we like to try new things. In the case of AR and VR it was really just connecting the dots in the industry trends that we were seeing. More than five years ago, neither were very wide spread, but what we saw was that everyone who was worrying about virtual reality was worrying about the picture. No one was worried about sound. You would have a 3D game, but you had mono sound. We saw an empty space. We felt that we could leverage some 3D audio technology that we had been researching for over 12 years.
At our San Fransisco research lab, we'd been experimenting with binaural 3D rendering and all kinds of fun stuff. At the time, we had no idea of how this could ever be commercialized. We just thought it was cool. That's the beauty of being a family-owned business. You can do things that you like and believe may have a future. As VR advanced and AR showed up, we saw saw that we could apply our technology to it. That was the first attempt with the VR mic that we made. The way that we brought this to the market was unique: we didn't develop a product to present. Instead, we brought our prototype of the mic to CES and asked everyone, "What would you do with that?" It was really a co-creation.
SB: So, you did market research while you were still building the thing?
AS: Exactly. And then we were lucky as Facebook took it to their annual developer conference and they presented it as the standard for 3D audio production, while it was still being developed. This is a good example where we had a good idea of what was going to happen and were successful.
Another example, where we didn't follow up orderly was that we brought the first truly wireless headphones into existence in 2008: the NXW1. It came with a dongle you had to connect to your audio device. There were no Bluetooth smartphones then. It was ahead of the game. We were too early with that. Years later, we're bringing a new truly wireless product to market, the Momentum.
SB: When you and your brother were set to take on the family business as co-CEOs, what sort of talks did you have surrounding who would be in charge of what?
AS: We discussed how to spilt the business, but we came to the conclusion that by splitting it, we were really not making use of the benefits of our different educations. If I were taking care of all of the engineering parts, I'd be looking at the engineering as an engineer. If he took care of the marketing, it would be from the viewpoint of a designer. But if we shared the responsibility, we would have two different viewpoints, on all topics. So he would look at manufacturing with a different set of eyes than I do. We step in for each other as needed. We've aligned our schedules. We have one day off every month where we have an in-depth discussion. We make sure to maintain a very close relationship, so that on business matters, we can disagree and discuss things from different viewpoints. Our relationship ensures that, so far, we always find an agreement.
SB: Who breaks the tie if you guys can't figure out what to do?
AS: It never really happened. We have a formal way of doing it, via the supervisory board. But that's a last resort. It'll probably never happen.
SB: I had a chance to listen to the HE1. Its design is beautiful and the sound the headphones produce is gorgeous. But all I could think about as I listened to them was that it was a product that would make shareholders have an aneurysm if they had to worry about the money it would have cost to research and produce. It doesn't feel like something that could happen outside of a privately-owned company. There's no way that you'd ever get it past a board. Pouring your resources into a product that so few people can afford to own: what makes that justifiable to you as a company?
AS: There are two targets that we focus on with a product like the HE1. One is an internal target. I mentioned earlier that our spirit of innovation is an important part of who we are. By doing such things, we stretch our minds. We had the best product on the market with the Orpheus. Twenty years later, trying to surpass this in every possible way -- manufacturing technology and material technology has advanced -- it's a little bit like saying, "Let's fly to Mars," for us. It widens the imagination horizon. The second thing is, we do it as a statement. It has a halo effect for other products, to show what is really possible. You're absolutely right saying that no many will buy it. But at the end of the day, those who have it, they rave about it. They're really loyal customers and that has an effect.
Images courtesy of Sennheiser