Wednesday | February 08, 2012
Interview with Skullcandy President Jeremy Andrus
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By
Richard Park
20 March 2009
Jeremy Andrus, Harvard Business School graduate and President of Skullcandy, joined Skullcandy only four years ago. In case you’ve been hiding under a rock, Skullcandy is major producer of headphones. They use their own patented Link technology to deal with the common problem of having too many headphones. Skullcandy focuses on teens and young adults and active sports aficionado’s . With it’s targeted niche marketing, it is one of the fastest growing headphone producers in the country.
Richard Park: How did Skullcandy start?
Jeremy Andrus: Skullcandy was founded by CEO Rick Alden. The company was based on Rick wanting to listen to music while he snowboarded and being able to take a phone call at the same time. The concept was a simple one—developing a pair of headphones with two plugs, one for your music player and one for your phone.
That is not only the beginning of Skullcandy from a product stand point but also a cultural standpoint. We make products that enhance our lifestyle, whether it be from a function standpoint or a brand standpoint. But from a function standpoint, we’ve done things like use the Link technology, which is patented, into ski helmets. So we can listen to music directly from the helmet and if someone calls me I can switch over and switch back in between my music and phone calls. So it’s integrated into helmets and jackets.
We sold our technology to companies like Burton. It’s tucked into your jacket with a speaker and headphone jacks. We built it into backpacks so you can be walking down the street listening to music with speakers in your straps.
So a lot from a function perspective these products in which we believe help us live our life better because we like to have music. From a brand standpoint, Skullcandy developed in action sports like snowboarding, skateboarding, surfing. It’s active sports and it’s heavy music, hip hop and indie rock. From a brand standpoint and product standpoint we believe that what we do speaks about our lifestyle and that’s really what a good brand does. But no one has done it in headphones and in accessories before.
It’s all about lifestyle branding. We consider ourselves a lifestyle company not a headphone company because we are taking that lifestyle brand and putting it on all sorts of products like apparel, T shirts, belts, hats, and iPod cases.
Our consumers really appreciate and love our product.
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RP: It seems like you got a niche market, wouldn’t you say so?
JA: It’s definitely youth culture focused. I think our target audience is 14-24 years old. But we also find that we get older consumers as well. Conservative folks actually buy edgier products since it’s a little bit more interesting.
RP: So what about yourself? First off, congratulations on your promotion to President, but how did you get yourself into this business?
JA: I started the company as Vice President of Operations and then promoted to Chief Operation Officer and then to President. What this means is as the organization grows my role evolves from not only simply doing the day-to-day heavy lifting of the business, but it means focusing on leading people and making sure we are recruiting the right team.
At the end of the day small and grown companies win because of not only how good the concept is, but also how good the team is. It’s a big part of my responsibility to make sure I recruit the right leadership. I also make sure that we have a good process, so that sales are properly communicating with manufacturing, accounting, and marketing. When we started the small company with 4-5 guys, I was sales, I was accounting, and on a day-to-day basis I was managing accounts. And as we change it was not about how much I can do but about how the organization functions. Rick Alden focuses on the creative and I focus on the business.
RP: You started off with 4-5 people, and what is it now?
JA: We have 55 full time employees.
RP: And this was in a span of how many years?
JA: I joined about four years ago.
RP: How did you get into the skateboarding, surfing, and snowboarding market?
JA: Rick’s first venture was related to that field. He had a snowboard event tour, and his next business was again another entrepreneurial business. He developed the first boot binding/clicking system without straps. He really came from that industry. He knew pro snowboarders and he understood action sports. Sponsoring athletes has always been part of our motto because what better way is there to gain credibility amongst action sports enthusiasts then by having the best athletes in the world knowing that Skullcandy is cool. They are the ambassadors of the brand. The best snowboarder/skateboarder is going to speak better to the world then anyone can because the consumer will be reading a skateboard magazine and see someone skateboarding with headphones on their head. It’s a very authentic way of building brand, and we do it within every sports we operate in. We have a snowboard team, a ski team, skateboard team, we even built a DJ team, because music and DJ’s are important part our music lifestyle. So when we build our teams we go out and find the most iconic figures in their sports or in their music genres.
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RP: What other ways do you market?
JA: We focus on our core consumer like the skateboarders and snowboarders. We do a lot of event marketing. We market at skate events or clubs and parties. We give out products like music and stickers and also hold contests. We market online, we focus on building content on our website. The website is the place for our consumers to come and watch videos and enter promotions, and really to learn more about the brand. We sponsor tours, we are a big sponsor of the Warp Tour. We do some advertising in some very focused publications like Transworld Snowboarding. It’s really ground swell marketing. It’s creating a buzz without plastering it on every magazine in the world.
RP: How do you market your brand on the online social networks?
JA: We have Skullcandy TV. We provide information to blogs. We are working on applications that send announcements to people from their phones. We’ve done things like online widgets where you can have a Skullcandy widget to store your music on. We have a MySpace page.
RP: What new products do you have lined up?
JA: The Skullcandy product line really likes to get refreshed; like a fashion product line refreshes their products. At Skullcandy we believe our product is really lifestyle- and fashion-driven so we add new products at least once a year and refresh the lineup with different ear buds and designs. It’s really about introducing new products like Skullcandy apparel.
RP: Any celebrities attached to the brand?
JA: Aside from the athletes, we are launching a new series for artists. One of our first series is the Metallica headphone. We launched it with a music download so you can actually download the entire album after you buy the headphone. The second one that is getting a lot of buzz is the Snoop Dogg headphones. It’s called the Skullcrushers, which has a bass amplified subwoofer built into the headphones, so you get a real kind of bass. We got to know him because we saw him in various public places wearing Skullcandy headphones, and so we contacted him to do a signature Skullcrushers which he designed.
RP: Overall, how have these athletes and celebrities affected the company’s growth?
JA: It’s been huge. They give us an authenticity. Rather than us going out and saying Skullcandy is cool, it has well known people wearing it and saying it’s cool. Which appeals more to our audience.
RP: Has Skullcandy been affected by the current economic crisis?
JA: We have not felt the impact of the economy because we have such loyal consumers. Everyone has cut back in terms of the dollars they spend but everyone still has money to spend, and there is enough appetite for the brand for consumer spending. We had a great fourth quarter, it was the best quarter we ever had. And in fact we just had data which was released by the MPD that showed Skullcandy as the #2 headphone manufacturing company in the country. So we passed up a lot of big names and it’s pretty phenomenal. We are not a mature company. We are continuing to grow.
RP: What advice do you have for young entrepreneurs?
JA: Starting a business is about three things: having the right concept, having the right team to execute it, and having some money to do it. You got to have something unique and well-established in the marketplace. But it all starts with a great concept.
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