Rob Mainiero exclaims, ” I want to show you one thing.” The Cambridge SoundWorks general manager pushes his chair away from the conference room table and disappears into his office. He comes back carrying a black suitcase-type box adorned with airline tags that looks like it might belong to either a well-traveled middle-school saxophone player or an international spy.
“Are you a music fan at all?” he asks. “This belongs to Flea of the Red Hot Chili Peppers. Every musician in the world worth their salt—I’m talking about thousands of them—owns this system.” Mainiero opens up the suitcase and starts pulling out speakers and an amplifier. “It’s a stereo system in a suitcase,” he says. “And then the suitcase becomes the subwoofer. It cranks like you wouldn’t believe.”
This is the Model Twelve, a favorite among musicians like Mick Fleetwood, who loved it so much he demanded a signature series version. According to the Model Twelve’s manual, it is “designed to withstand the rigors of being hand-carried, stored under an airline seat, or riding in the trunk of a car,” and as Flea’s airline tags reveal, this thing has been everywhere.
Cambridge SoundWorks speakers seem to be everywhere, too. You might be listening to them now without knowing it, if you use a certain brand of personal computer or ride a certain brand of world-class motorcycle. Mainiero says contracts prohibit him from naming names, although a shiny black Harley-Davidson is parked conspicuously among the cubicles in Cambridge SoundWorks’ North Andover offices.
Among audiophiles and consumers, Cambridge SoundWorks products are considered some of the best in the industry, with pricing so low you think it must be a typo. Its Web site is filled with glowing—and sometimes incredulous—reviews from critics and customers, saying things like, “this is how audio purchasing should be,” “fantastic value and performance,” and “great products for the best price.”
“You know your brand is on target when your customers are repeating what your marketing message is,” says Director of Marketing and Public Relations Maria Cataldo. That message—fantastic sound at a great value—has remained consistent since the company was founded in 1988 by Henry Kloss, a man who’s credited with revolutionizing the audio industry. “When Eisenhower was president and when Guys and Dolls was playing on Broadway, Henry Kloss, our founder, invented the loudspeaker as we know it today,” Mainiero says. Before then, speakers were huge, requiring lots of cabinet space to make bass, and Kloss figured out how to make it in a very small box. “It was a huge breakthrough,” Mainiero says.
Kloss worked for Acoustic Research before founding or co-founding a string of his own Cambridge-based companies: KLH, Advent, and Kloss Video Corporation, and his companies can claim a string of other firsts, like the first tape recorder with Dolby B noise reduction and the first table radio with built-in powered subwoofer. And speaking of table radios, Mainiero says Kloss was an MIT classmate of Amar Bose—yes, that Bose. In founding Cambridge SoundWorks in 1988, Mainiero says Kloss intended to skip the middleman and sell audio equipment directly to the consumer.
“Everyone told us, ‘You’re out of your mind. You’ll never sell a thing,’” Mainiero says. But Kloss and his companies had already built a stellar reputation in the industry, and the new company was banking on a combination of great product reviews and the power of brute-force advertising. Rather than spending money on relationships with resellers, the company funneled resources into advertising directly to the consumer.
Mainiero says Cambridge SoundWorks was not only the largest advertiser in most specialty magazines, but it also hit the mainstream media with ads in The New York Times Magazine, the in-flight magazines of every domestic airline, Forbes, Money, and many others. Cambridge SoundWorks knew its traditional demographic by heart: 35-50 year old men who own their own homes, went to college, and make about $100,000 a year. “They also drove a SAAB, we came to find out,” Mainiero says.
The company sold its products via catalogues and a call center and “the critics went wild,” Mainiero says. Around the time of the first Gulf War, though, the company turned its eye to the retail world. “We realized that during times of national crisis, people aren’t so crazy on calling a call center,” Mainiero says. “They’re a little distracted watching CNN.” So they opened stores in Boston and San Francisco, just stacking up the goods in no-frills outlet centers and selling at factory-direct prices throughout the 1990s and into the next decade. And the company kept growing, collaborating with and eventually being acquired by Singapore-based Creative Technology in 1997.
Around this time is also when the company moved its manufacturing to China. “There’s no one that’s at our level that’s building in the United States,” Mainiero says. Today, the company has three primary factories in China, where they work closely with very specialized manufacturers.
“I was in visiting our plants all last week. It may be unusual for most companies, but I visit often. I want to see for myself how it’s going.” He also emphasizes that these factory campuses are very nice; it’s important to him that people know this and that there’s nobody without shoes or being “hit with sticks.” “The quality of life in our facilities [is something that] we’re fanatical about,” Mainiero says.
After moving manufacturing to China, the company found itself sitting in an empty factory in Newton, so today it operates out of a refurbished brick mill building in North Andover. “Right here is the think tank,” Mainiero says. “This is the top level of all of our research and development, all of our engineering, all of our marketing.”
By 2005, many of the company’s retail leases were running out, and Cambridge SoundWorks made another forward-thinking move: it closed its retail stores two years ahead of the financial crash and avoided the fate of Circuit City and Tweeter. Mainiero says the company had managed to tie most of its stores’ lease-end dates together, so when they ran out, the company just walked away from retail in one fell swoop.
“We chose not to renew them because of a culmination of events,” Cataldo says. “Ten years ago, the footprint of our stores was much smaller.” In other words, flat-panel TVs have become the new hot item, requiring a lot of physical space for what’s essentially a low-cost, low-margin product. “So when the leases came up, it was just natural for us to choose to close the stores and redistribute our energy back to our founding roots,” Cataldo says.
The company blasted that message out to its retail customers through advertising, encouraging them to shift their shopping online and “recognize that our retail prices are now slashed in half,” Cataldo says. “The time the pricing was going down for our products was the time when the economy was taking a turn for the worse.”
Perhaps where the cost-performance ratio shows itself most dramatically is in Cambridge SoundWorks’ table radio, a product that sits in the same category as the Bose Wave, but sells for a fraction of the price. This is where it pays to listen to the audiophiles, who consistently recommend the Cambridge SoundWorks product over the Bose.
Don Lindich, who writes about audio, video, and other electronic products in a newspaper column that’s syndicated throughout the country, says his reviews of Cambridge SoundWorks products have been universally favorable. “The stuff sounds good, and that’s what it comes down to,” Lindich says. “My goal is to help people find stuff that sounds great, and with Cambridge, it’s a safe bet.” Lindich’s reader feedback has been great, and he says he’s never had a complaint from someone who has bought the Cambridge SoundWorks radio on his recommendation.
In addition to table radios, Cambridge SoundWorks makes products used for surround-sound with subwoofers in the home theater, as well as an architectural line of in-wall, in-ceiling, and outdoor loudspeakers that are installed by third-party contractors throughout the country. “We cover the entire range of the loudspeaker category,” Mainiero says.
That also now includes loudspeakers for the gamer, and as a result, Cambridge SoundWorks’ traditional demographic is starting to skew a bit younger. In addition to consumer products, Mainiero says a significant part of its business comes from being an original equipment manufacturer for other products. “Some of the companies that we build stuff for, you’d be surprised by their name,” Mainiero says. Think back to that Harley parked in the middle of the hallway.
So what’s next for Cambridge SoundWorks? Wireless. “Creative [Technology], our parent, is a wireless machine,” Mainiero says. “We’re beginning to incorporate more and more wireless into our thinking, into future products.” One of those future products includes a table radio with a transmitter inside that allows you to have a wireless rock speaker that you can either carry outside or leave in the yard. It can get rained on and will have a battery that will last for six hours.
Products: Radios, speakers, home theaters, MP3 players, iPod solutions, PC/multimedia, portables, headphones, accessories.
Parent company: Creative Technology, Ltd.
Number of employees: 500.