208: Chin Beckman — Client Case Study in the Audio Industry

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Welcome again to the Scaling Up Business podcast. I'm your host and scaling coach, Bill Gallagher. I want to remind everyone that all of our tools are available for download along with all of these shows. We have over 200 of these shows now available online. So on almost any subject around Scaling up you can think of, you want to go to scalingcoach.com to find those things. We'll also give you a copy of the book Scaling up for free if you just pay the shipping, handling, all of that and more. Scaling coach.com so today this is a client case study, a success story really. We're talking with Chin Beckman of DSP Concepts. Chin, welcome to the show.

Thank you, Bill. It's a pleasure.

So guys, DSP Concepts is an audio platform. They create a tool set, you know, and you can correct me if I describe it wrong, but I think I know you guys well. Powering over 40 million of the world's best audio devices and they're a leading supplier to the top brands out there. We're talking brands like Tesla, GoPro, Bang and Olufsen. They recently announced their series B funding which created a great occasion to share and talk about the success. And that funding was participated in by folks like BMW iVentures, Porsche, MediaTek, ARM IoT funding and it was led by Taiwania Capital. So I'm excited to have Chin Beckman join the show. Chin is the CEO of the company and her husband Paul can't join us today. He's out dealing with a family matter right now. But welcome to the show, Chin.

Yeah, thank you, Bill.

Again, so you're a husband and wife team, but you've got a funded, growing company in a very exciting space. So DSP Concepts create this audio tool set that that powers the audio going in and out of all the devices that we really love, the best ones out there. And things are talking to us with more and more speakers and we're listening to them, we're hearing music on things. All of that has to work together well. It's a really hard thing to do. So tell us, how did you get in this business? Why this business? Give some background, tell your story a little bit.

Good. Well, I like to tell people that we're the best kept secret behind all your favorite devices. Hopefully that after going through this scaling and like you said, we received B funding so the news is starting to get out about us that we no longer want to be kept a secret. We want people to discover us. But like you said, we are in all the well known products. In fact These are the most difficult products to deal with when it comes to audio. And the reason we got into this is audio is a subset of signal processing. And signal processing by itself is a difficult subject already. So anything that we touch in the world nowadays, most things deal with some sort of digital signal processing. Now the particular field in audio is even more aloof to people doing audio. Signal processing basically need a whole bunch of skill sets, and these are like skill sets that are not always overlapping. The only common umbrella it falls under is the love for audio. But other than that, you have PhDs with deep mathematical skill sets who need to calculate how signals are bounced around in the room, which signals are the important ones to capture, which ones you don't want to recapture, and have it feed into your microphone, for example. So you have to deal with reflections, you have to deal with all kinds of very complicated mass calculations. Then you have your people who need to then convert that calculation into very efficient code that runs specifically on processors. Now, it's not like a high level code. Audio is very, very picky about being real time. No dropouts, no distortions. In order for it to function very efficiently on a chip, it often needs to be whittled down all the way to assembly code, where you're moving bits of information from memory to registers to taking advantage of the hardware accelerations that allows you to do those calculations very quickly. That's another set of skills.

It sounds like you went to mit, but I know Paul went there and he worked at other major companies out there as he got started in this field, right?

That's right. So Paul got his PhD at MIT, but I credit myself for getting him into MIT because he used to copy my math homework in high school. So that's the backstory. But yes, he got his PhD from MIT under Professor Oppenheim's group in. And Professor Oppenheim wrote a book that is the bible of signal processing. So anybody who studies signal processing would have used his textbook. And so that's Paul's where he came from. And after MIT, he went to work for Dr. Bose, who was also a professor at MIT. And so he's very deeply ingrained into that whole audio world. And he was the first one to bring digital signal processing into Bose. As you know, traditional acoustics is very much analog. It has to do with amplifiers. And then it's not until, you know, I guess it's not. It's old now, but, you know, I still remember me as 20 years old, so. So that's when things turned digital.

Yeah, yeah. Well, I grew up in a hi Fi family and we had all kinds of fantastic high end hi Fi speakers and things like that. My dad, his friends were into that and my father in law's super bleeding edge that and those guys loved the old warm Macintosh tube amps and massive magna planar speakers and all kinds of things like that. But that's a different thing when your machine needs to. So far not our technical folks already know all this, but if you're not from a technical background, right, you've got these waveforms that you're familiar with looking at and those have to get digitized and sampled in order for a computer to send them in or out. And then what you were speaking at as we got started is the complexity of looking at all kinds of competing waveforms, reflections things and picking out what is the actual signal that we're interested in, right?

And in fact that is what created the need of this technology was Paul graduated from mit, he thought he was going to be inventing all these new things and instead he found that probably 10% of the time was used for invention. 90% of the time was coding to fit it into the target processor.

A little bit of invention time and then a lot of blood, sweat and tears actually cranking the code out, making something work, right.

And therefore, as you know, the best inventions come out of necessity. And that's where the idea sprung that he created this essentially framework, or you can call it an operating system of sorts of that basically now for people who would be entering into the workforce, unlike Paul, what we created allows people to actually do the invention and all the crummy stuff on the bottom that has to make it work and integrate on the chip and tuning it that can be handled by us. DSP Concepts.

So how long have you been working together as husband and wife in the business?

You know, it's funny because we've always been interested in entrepreneurial activity. So when we entered mit, we both joined the MIT entrepreneurial club. Now I'm not from mit, I actually graduated from Boston University right across the river. But the entrepreneurial club at MIT was open to everybody and I was, Paul and I were both there. So we started that since we were undergrads and then later on into grad school, we continue to always be thinking about entrepreneurship and just meeting up with a lot of people. So it's always been in our blood veins to do something like this. Actually. DSP Concepts came about after we moved to California. Paul came here because he was asked to join a startup by a friend of his. And two years after the startup, he joined the startup. IT pretty much got sold to another company, was doing sort of GPS global positioning systems. And then after he got sold, he wanted to return to the audio routes. And so he did his first gig as a consultant for Analog Devices. Analog Devices is well known for doing DSPs. So they had him go around and meet with all their customers. And then Paul realized that all the customers have the same problems. So that was exactly why we knew that we, we're solving a real problem. And that's how DSP Concepts came about. Our technology is called Audio Weaver. In fact, it weaves together the pieces of algorithms that one needs and allows you to deploy very quickly. And so you're not spending 90% of your time coding.

You have each found your different roles. You've really come and flexed and found your role as the CEO of the company and become quite an evangelist with it, helping with the fundraising and the business development. And Paul's continued to focus on the technology development, the engineering side.

Yeah, that's right. And Bill, thanks to you here, I think I can be very honest with your audience. I think I'm a reluctant CEO. So when you have two founders and one is a super smart technical founder, guess who the board's going to pick to run all the other crap? So, yeah, I'm a reluctant CEO, but I reached out to you pretty early after we raised funding because I knew I needed to have a system in place. We're getting traction in the market. We're hitting the right timing in the market where all the technologies is now coming together. Audio is becoming a very interesting place. We knew we're going to have to scale. I right away knew that I had to reach out to somebody for help.

Well, I mean, whether you choose to or not, everywhere around us there are speakers and microphones now and our interfaces. Increasingly, as I drive down the road, I don't want to talk to my phone. I want to tell it what to do, because I don't want to be looking at it and touching it as much. And as I'm cooking in the thing, I'm like, hey, start a timer for something. And in the mean, while in the background, all over my house and my office for that matter, there's Sonos speakers playing music out to me. Right. And whatever your particular brands and choices are, this, this Audio interfaces is growing rapidly.

Right, right. And let me just kind of give you some idea of what our technology is able to do.

Sure.

So typically, you see, thanks to Amazon bringing Alexa into Our world, you see how these companies have tremendously big teams to develop this technology. It's not an easy thing to do when you have to bring together this bunch of different skill sets. And on top of that, just the workflow process is just not easy when doing audio development. So using Audio Weaver, we're able to implement and surpass the performance of what you can get with audio with Amazon, what we're used to, the Alexa products with really a very small team of engineers and in a very, very rapid short time frame. So that's the power of, of Audio Weaver. And of course, before Voice came about, we were already doing this for our customers. So you mentioned GoPro, it's one of our favorite customers and we love them because they came to us, they say, you know, we're looking for wind noise reduction algorithm because, you know, our customers are wearing our products and jumping out of airplanes or mounting them on motorcycles. We can't just take one that says, you know, oh, we can handle wind noise of up to 10 miles per hour. They said, we need something that can handle 100 miles per hour.

Right?

So, so we said, well, okay, we don't. Nobody has that, but well, let us develop it for you. So over one weekend, we quickly came up with iterations and we sent it to GoPro and they were like, oh my gosh, this is better than anything we've heard. And so they quickly adopted to, to our platform. And you know, they have very creative people and they're innovative. So from the first generation that we did work with them was back in when Hero4 came about. And from there now, I don't know, what model are we up to now? Hero seven, eight.

Why does Taven. I think there's one more beyond now.

Now they're doing some fancy stuff. They have six microphone Sol and all kinds of good stuff. And they're just able to go off and do it. And the power of the ability to iterate using a graphical user interface is they send out these people whose job is to just go out and do activities. There's a person's job whose job all day long is to go jump off airplanes, right. Motorcycle and bring back recordings. And they sit there and they tune their systems so that they can make wonderful stuff.

That's awesome.

Same thing with when Tesla started with their Model S. Elon has a very specific thing in mind, right? Like he really cares about his product and apparently he's like a big audio fan. And so everything had to go through his approval. At that time, they didn't Have a team. And so they hired us to help them. Their spec was two pages long as compared to 2,000 pages in a normal automotive company. They say, well, we just have to make it good and we have to. This is what we want. Very simple, it wasn't very specified. But with Audio Weaver we are able to iterate very quickly and come up, you know, Tesla's has the highest rated sound systems and same thing. They started out with our help and now they have a very tiny team able to do all kinds of like all of their audio, you know, implementation. So that's the kind of stuff we're enabling people to do. Yeah.

So let's talk about the growth of the business and the tools that we applied because not everybody's going to be in tech and not everybody's going to geek out. But I think that creates a rich picture for what you're up to. So about the time that I started working with you guys a couple of years ago, you had developed this vision for being the primary, dominant main platform for audio processing, audio handling, that toolkit, to be that platform globally. And that's what always attracts me is somebody with a big vision, somebody who says we want to create the next billion dollar company, we want to dominate our category globally. I get really excited about that versus hey, we want to double our thing and I want a better car. It's way more motivating. And there have been a lot of challenges. We're going to focus on the tools that you used along the way. But how did you come up with that vision? What gave you the audacity to take on that kind of a goal?

So what we realized was the audio world is a very fragmented world. And the reason is it's always been a stepchild to everything else. So when you think about all your products, probably the first attraction you get is visual. So you can see in the video world, the graphics world, things move very quickly, whereas audio has always been a little more sleepy. We get audio and that's all good and you know, it doesn't need to move very quickly.

Right.

So as a result, everybody just developed their own way of doing things. So it's very fragmented, very artisanal. And when we saw in the past anyway. Yeah, when we saw how like, you know, with voice, that's where everybody got excited. So now you got people who are from non traditional audio companies wanting to become an audio company. If you think about the people who are making appliances and TVs, for example, they're not really audio companies traditionally. They have so many other things to worry about. And yet they all want to put voice on it. So we thought, well, now there's a reason for audio to be put on the fast track. And in order for any, any market to develop into a fast track, you have to have a standard, right? So for example, we all standardize on PCs or apples. You got two camps, but it's pretty much the standard. And you have standards. When you're developing web technology, you have standards on just about everything. But there was no standard in audio. So we thought, okay, what if we can become that standard? Because we have actually developed this process of doing audio development that is so streamlined that it could help everybody. And once people experience it, they'll all want to have this new way of doing things. And if that's the case, and we are supporting many, many chips. The reason we keep talking about chips is at the end of the day, all your products is going to be based on some kind of a processor that runs in it. It's a little computer that does your signal, your calculations, your process, those. Each chip company you know, you have, they usually pick an application area. So if you're going to be in TVs, then you're going to have certain chip guys that own the majority of the TV market. If you're going to be in headphones or headsets, that's going to be another set of chips because they need to worry about Bluetooth, WI fi connectivity or power consumption. And if you're going to be in industrial and appliances, that's probably another set of chips. So now you have all these different chips and application areas and they all want voice. Well, what better time and what better place to establish a standard and who better to do it than us? So I kind of took it as a calling.

Yeah, well, it's really great because a lot of people are far more timid in their thing. But I think that kind of a big declaring, taking on a big goal really changes who wants to play with you, who wants to join your team, what you're up to, and you saw an opening and I think it's great, it's to be applauded. So let's go through some of the tools you started. We first began at. One of the first things that we did is look at the functional accountability. Who's in what seats, who's on your bus. Talk to us just a little bit about what that was like, what difference that made.

Well, it was good to go through all the different tools that you brought with the scaling up system as you know, we grew very quickly up to. For over, let's see, 2003 to 2015ish. It was a little consulting company, no more than four people. And from there we started to grow. We are today at beginning of 2020 and we have close to 58, nine people. We're adding people every day, so I sometimes lose count. But the point is, when we started out, it was me and Paul and we were wearing like 20 hats each. Right, right. And it's figuring out like, how do we take off the hats? How do we grow in a way that is a sustainable growth, at the same time passing on information enough that we can continue to grow. And that's frankly, that's not that easy to do.

Well, as I started working with you, you had more bodies in there, but you didn't have yet distributed accountability. So there were lots of people helping with things, but we didn't yet have ownerships of key functions within the company beyond the technical things of the. Of the actual work you were doing.

Right, right. So that was a little bit first. Yeah, yeah. Because people do have to come up to speed. And then learning to like assign the accountability piece is also, you know, a learning curve for us.

And we did some of that also in processes. That work is ongoing as well, especially as you've grown teams and gotten more sophisticated in the engagements. But now you're in a surprising number of tools and products out there and the team's growing. We also then went into your meeting cadence and how you set priorities on a regular basis and pulling in that. What was that like?

Yeah, so in the beginning we didn't even have a meeting cadence. It was just whenever, whatever. And the meetings also tend to be more unstructured.

Right.

But now we've developed into a cadence of, you know, certain meetings and we kind of had to learn to adjust. Sometimes it got to too many meetings and then we cut back or consolidated meetings. And I think the key for us is to learn that what is the purpose of the meeting and then stick to it.

Right.

And so that to us was very helpful to do that.

It's hard to do, isn't it, to focus in and not just talk about everything all the time that occurs to.

You, Especially in the beginning when I mean, we're still grab. When we're still, you know, trying to figure out, well, what is the go to market strategy? And it just feels like all the time you just want to have, you know, just this free for, you know, free form conversation to like camera out and keep Working on that. Yeah. So it was very hard to be disciplined and determining who.

I think it's really hard to go from that early stage, forming, figuring things out company, and then impose some of these rigors if you didn't have any background in it. We just had a SaaS company spend a three day off site laying out all the things that they need to do at the. At startup before they were operating and then start to build in their team and their work around it. And they move very quickly through the revenue stages, Joined a prominent business investment accelerator, and then have grown significantly through then. But these were folks who'd been down the road a couple times, right?

Yeah. It always seems much easier when you join a company that has an established process. That's one thing I learned is as a startup, we didn't have any process. So when I hire people thinking that, oh, they excelled in certain skill sets and they come in, it turns out that that's not always what we need because it's easier when somebody comes from a company that already has process. But here we are trying to build the machine. The machine isn't going yet. Yeah, yeah.

So then along the way, you take a casual, informal, somewhat default kind of culture and begin to build a more intentional, thoughtful culture that's aligned to your strategy. What's that been like in the, in the company? Have you had resistance to that? What did you discover? What's it made easier?

So the culture piece has not. Has always been pretty clear to me. So even before I engaged you, we already had pretty much the core values that we wanted to keep.

Yeah.

I think the tough part is the enforcing the culture. And I remember in one of your meetings, early ones, you know, where you talk about traditions. Okay. And you enforce your culture by repeating that constantly. And then you actually. Have you said something that's always kind of burned into my mind. He's like, you said the. To keep the culture, what is it? The thing that you will sacrifice even financially? Take a hit and throw somebody off.

Yeah.

You know, to maintain the culture. So that's, that's the hard part.

It's really hard. Yeah. And sometimes it's hard to recognize it when you're in the middle of dealing with it. You don't go, wait a minute, so this person just doesn't fit our culture or this. In our last business, one of our values was products we were proud of. And, and I remember we would get in different production batches and they'd come through receiving and go to the warehouse and shipping and that kind of thing and somebody would call it out, they'd be like, this just doesn't look great or right. And so we, that would be, that would always be a all stop emergency. People would come in, they'd consult. We decide, are we proud of it? Are we not? What do we need to do? Do we send it back? And frequently we would send things back to get fixed and we would end up losing money on whatever that was because we still had a need for it and it fit an overall mix for a client. But we were willing to sacrifice that in service of the larger thing of upholding that value of not putting out things that we weren't proud of.

Right.

Sometimes very expensive and painful explaining to people, well, there's going to be a delay on that item or like that. Yeah, yeah. So you've grown now from 4 people to 30 people, 55 now 59. You've started to use some of the interviewing techniques, the job scorecards you're bringing. It's a big focus in the coming year with your new funding. Talk about the growth of the team size and what's happening.

Yeah, so we, we didn't grow too much last year, surprisingly. But we doubled revenue last year and this year we're expecting to, you know, double revenue. But this year we are also doubling in our, you know, team size.

Yeah.

And last year all of the sales were still inbound but, but this year we're building up more of the outbound going sales organization, customer support, sort of customer facing engineers. And so that's where we're growing. And then relatively smaller growth on the product side, but still some amount of growth. So we're basically, if I could do it, turn back the clock and do it again as a startup. One mistake I think we made was as a startup there's so much to do and you would just hire bodies to do things. So we always wanted to hire people to do things. But if I could go back it would be we need to hire more management. So it's like we need to spread out sort of these executive functions to make decisions and stuff like that. That, and that would have been, you know, sort of an easier growth in maybe, I don't know. But that was part of the thing. It's like, you know, you get stretched so thin, you know, having to manage all kinds of detail that, that, that, you know, in, in hindsight if I could hire in the senior team and then let them help hire what's underneath, that might, I think a lot of.

Times that happens for people in their second Third, fourth company where they have a cadre of people that they know and can pull from. It gets in the leadership space that it gets easier to do that.

Right.

So it's interesting. So we've got a growth going on. You guys just secured another round. You've allocated a bunch of that. But as we talk right now, we've got significant international crises going on with major financial market impacts and economic impacts and it's not yet clear how that by the time this show is aired it may be clearer. But undoubtedly with this there will be some opportunities to people get freed up. You'll. You'll have hopefully some more talent. You may be able to buy technology teams, customers, other kinds of things like that as well in this time frame. We haven't talked about that. That's not more of a question, but just kind of top of mind. I'm sure you're thinking about it a little bit.

Yeah. So I am being a little cautious as well. But all of our planned hires are still in place.

Yeah.

So I haven't seen like a slowdown quite yet because our products are often used in starting at the early phase. Right. The. The R and D phase of product. So that continues on. That's not going to stop. But where it may be greatly impacted maybe on the production side when you know, with the factories and could be right, could be.

But I think the category is going to people work around that before you know it. And that I think will be temporary in your space in particular, you know, if all you did was live concert sound tuning, we might have an issue because that'll go pretty quiet for a while.

Yeah.

I don't mean to laugh, but there's a ripple effect.

You know, it's like if the economy, if there's a reduction in force, then people aren't going to go and buy a new feature, you know, a voice speaking appliance. Right.

I think in your. Well, anytime an economy shrinks, the overall thing shrinks very little. But the dislocations are large. So there will be serious winners. And all the conferences that I speak at and many of our team meetings are moving increasingly online. So the need for audio and video conferencing and remote work and that kind of thing, that's all things that are, are part of your world. All that stuff goes up.

Yeah. And you know what? It's too late that I just found out. So March Madness, you know, been canceled, right?

Yes, yes.

Well, it would have been good if we could have delivered a software that people can watch from home. Fans can participate and then, you know, based on your cheers, it actually comes out on the, you know, at the stadiums.

Oh, a virtual. Yeah, virtual fan base. Wow, that's. You go right to big vision. I love that. That didn't occur to me at all. Well, I think we've given some folks a lot to think about. You had a bit. You had some ability and skill in an area, you saw an opportunity, created a really massive vision. You started to grow the team, get the functions aligned, build the culture, the right meeting and execution habits in, and now starting to bring good people skills around. The interviewing, hiring, recru recruiting and the development of people. Over time, you've attracted a whole big round of funding and are poised for continued growth. And I'm really excited to keep working with you guys and hopefully some of our listeners will hear something for themselves in all this.

Yes.

Yeah. So if you want to find out more about Chin beckman and the DSP Concepts team, just go to dspconcepts.com and check them out. All their stuff is available online there and you can read all about the company. Company and their cool tools and things like that. Thanks again, Chen, for coming on the show and talking to us today. My best to Paul and the family.

Yeah, in this time. Yeah. Thank you, Bill.

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