Wednesday
Sep072011

« 3 Reasons Why I'm Going Back to CEDIA After 8 Years... »

This morning I'm jumping on a plane and spending 3 days away from my wife and kids for the first time since my son was born 14 months ago.

Why? I'm returning to the Custom Electronic Design and Installation Association (CEDIA) Expo in Downtown Indianapolis, Indiana after an 8 year hiatus.

8 Years? Seriously, Rich? Ok, I'll bite, why?

Well first, a bit of perspective:

When I first broke into the industry in the early 90's, CEDIA was just in it's infancy - unlike now, if you weren't a Consumer Electronics Chain, or a place that sold Refrigerators, Sofas *and* Big Screen TV's, or a High End Audio Boutique with at least quite a bit of "one to show, one to go" inventory - Reps for the AV Manufacturers often looked at you like you were that kid in the school lunchroom, trying to lick his crusted boogers out of his nostril.

No seriously, it totally felt like that - a lot of them didn't know what to do with guys who operated out of office spaces in industrial parks, or appointment only showrooms (their house) with only one, ONE! system on display or worse yet some of us with "mobile sales offices" ie. our trucks/vans or in my case a 1989 Cobalt Blue Mitsubishi Eclipse (hate the player, not the game, son)

Anyway, in 1990 some cats meet in Amelia Island, Florida with the purpose of making what we do be seen as a legitimate component of the Consumer Electronics Industry. Now in those early days there was a lot of "make it up as you go along". And I personally owe a huge debt of gratitude to those early CEDIA pioneers who figured that collectively there needed to be some way to come together as an industry and change the perception some had of us of "so-so musicians looking for paying day jobs" into real honest to goodness businessmen.

Now I didn't make it to CEDIA Expo 1 (was it even called that?), I missed it because I entered the industry one year later, but I did make it to CEDIA 2 in San Francisco (I even bought a suit but don't let the fact that it was some bizarro shade of Avocado Green distract you) and pretty much every one of them after that for a good 10 years.

Then I stopped going...And now I'm back and here's 3 reasons why:

1. I need CEDIA (probably more than it needs me)

For me, it was nice knowing that CEDIA was around, but after 10 years I didn't feel I needed it anymore. Business was good, there were all sorts of avenues available to make money, profits were VERY healthy, and you could make a really good living even selling small jobs.

Add to that, I was in my late 20's / early 30's and I pretty much decided that I knew what I was doing better than most of the guys out there and "Those who do, work - those who don't, teach at industry conventions and go to trade shows to BS each other about how good their business is doing"

Ah, the hubris of youth....

Fast forward and I'm 41 now, I'm the stereotypical father of two with dogs, cats, a turtle, and a mortgage. So nowadays I'm more worried about what I'm going to leave behind for my kids and I'm at the tipping point that business wise, I need to work even smarter and not harder if I'm going to enjoy spending time with them and seeing them grow up and not spend it all at the office. (generic stuff that lots of guys my age and in my position are feeling, hence my use of the word stereotypical earlier - see what I did there?)

So... As part of Reason #1 - I'm headed back and embracing the professional fellowship and support of my industry. I'm going to listen for once (those who know me, know this is a pretty big deal) and seek out the advice of my peers on how to make my business run better, and accept that they are my compatriots and not my competition. I'm even taking some classes while I'm out there on segments I think I'm pretty close to an authority on, in order to shut up and listen to someone else who has just as good if not a better perspective on things than I do (I'm even going so far as to audit a class that I took oh, 15 years ago)

2. The Go Go Economy is gone gone gone (for now)...

Now, I'm based out of the San Francisco Bay Area and I (barely) survived the tech crash in 2000 lovingly referred to in these parts as the Dot.bomb. In fact, after the tech meltdown bottomed out and people couldn't collect on their millions of shares of worthless stock options in pets.com, we gutted out a few lean years and then brushed ourselves off and actually increased business to levels higher than pre-Y2k figures.

Then we rung in 2008 and ...

In retrospect, the Dot.bomb was a wet baby fart (of which I am currently an authority on) compared to the housing crisis meltdown we are still reeling from and will be (I think) for several more years. The dot.bomb affected tech, but the nation's total wealth wasn't really affected, there was still tons of money to be made in new construction and with soaring equity values, people were heavily investing in home improvements and upgrades, all good things for the Custom Installer.

This time it's different...

Economic loss was hitting everyone, not only the people who were building new houses, or the ones who were doing home improvements, e.v.e.r.y.o.n.e. Did I mention that? Let me say it again - EV-ERY-ONE

Then just for kicks - there was the added salt in the wound of the remaining people who still did have wealth (Ultra CEO's, Mortgage Company Executives, ummm Bernie Madoff), stopped spending altogether, for fear of being seen as wasteful or extravagant in these hard economic times (it's not good company policy to build a 500 Hundred Thousand Dollar Theater when you're laying off 20% of your workforce).

Part of Reason #2, I'm going back to ask the same question over and over of the people in my industry who have weathered this downturn "How have you done it?" Heck, I've got a captive audience, I might as well make the most of it. At best, I get some really good, thoughtful answers that I can incorporate into my business model, at worst, I can see that I'm not the only guy that's been hammered by this, and even with just that I can take some solace and regain more resolve by sharing it.

3. The rules have changed: The Cloud, and the "I've-got-an-app-for-that  generation"

Gee thanks Apple (Yeah I said it...)

If you read the industry stories prior to the release of the iPad, many of us figured it would be a novelty, we had dabbled with CE Tablets as interface devices, and nothing really took hold. It was cute technology, but it never presented a threat to the traditional options that were out there.

It's only been out barely 2 years now and it's already sucked up an entire profit sector of the Custom Installation industry, the days of the $15,000 touchpanel are dead and gone, heck the days of the $2,000 touchpanel are gone (I m going to catch a lot of heat for this one, but regardless of the excuses and marketing material out there, I think we're trying to sell one another on a lost cause) - we have to adapt, stat.

But here's the bigger problem as I see it - we're also slowly running out of things to actually make money on...

TV's? um, nope

Video Gear? nein...

High Performance Audio Gear? nyet...

So what's left??

That's a good question, and this is the biggest Reason #3 why I'm returning to CEDIA, to witness a paradigm shift.

Much like the early days of the High End PC Server Industry and the heavy hitters ruling that roost, I think we're about to see our own versions of Sun Microsystems, Silicon Graphics, and Cray get punched squarely in the teeth, or even more insidiously we look back at it years from now as when they were given the "Five Finger Heart Palm Strike of Death", you know the one where the guy strikes you and lets his fingers breakdance all on your sternum and then he tells you once you walk away 10 steps you die.

In my estimation, the Shaolin Monk who's going to be laying down that strong Kung Fu - The One who did it once before and is flourishing in PC Economy 2.0 - The One that has bypassed the problems of obsolete hardware and eroding profit margins - The One is also known as the "software as a service" developer.

Why?

Because the cloud is real... It's not completely baked yet, but make no mistake, it's real and it's coming and it's going to totally throw 96 mile an hour fastballs right at your melon.

And who's that warming up in the bullpen that throws even harder? - Why we have a generation of adults just entering the prime demographic of the CI industry - but this generation is smarter, technologically savvier, and a whole lot less tolerant of paying prime dollars for something they've grown up seeing as a commodity product or worse yet, a free product.

All you can eat streaming music and video services are in their common lexicon, first weaned on the mother's milk of Napster, Bittorrents, and LOLCats. And now add a steady frosted mini-wheat diet of Netflix, Pandora and Angry Birds to their phones and oh-so-ironical sticker laden laptops.

A generation who will have no problem writing a bad yelp review or twitter blast, dragging you over the coals throughout the known interwebz if you make a misstep. The same ones, who while you're trying to point out the benefits of your meticulously put together proposal, will be clickety clacking google searches on your listed hardware and ask you why you're charging 17 dollars more for the same thing than "buy-my-gray-market-goods.com"

(unsolicited plug: Check out John Sciacca's excellent blog post here that touches on this subject "Are We Becoming Amazon Showrooms")

These are, if not already now, very soon going to be our clients. So me, I'm going to meet with the manufacturers that I think I have a reasonable chance of selling their products to them. And I'm going to be looking for the guys who are betting on the horse that I think has the best chance in the race - yup, the software developers.

Epilogue:

Now one could interpet the tone of these 3 items as a tacit admission of defeat or that I'm just doing my own 10 step shuffle of heart palm strike ouchiness, but in fact it's quite the contrary, I'm actually the most optimistic about the direction I can take my company in, than I have been in years. I'm just finally ok with setting aside my ego and my own preconceptions of "how it should be" and I'm walking in excited to see what we as an industry are about to become.

So with that said, Indy here I come....

 

 

 

 

 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>