ON A PLEASANT DAY in May, Sam Millen stands on the first floor of the former commercial bakery in Somerville that now houses his consumer electronics company, Cue Acoustics. The sounds of WAAF waft in from the back room, where newly completed radios play for 24 hours before being sent to customers. He’s 38, and his black short hair has flecks of gray in it - a legacy, one might say, of two spectacular flameouts with outside manufacturers over five years of struggle to get his company going in the teeth of a recession.
Millen wants to make Cue the latest in a long line of great sound companies – Advent, Acoustic Research, Bose, Boston Acoustics, EPI, KLH, Cambridge SoundWorks, and Tivoli Audio – to come out of the Boston area. All of those firms manufactured here at various times, and they all sourced many of their parts in New England. But that’s no longer the case. Today, there are just two firms besides Cue that make radio, TV broadcasting, or wireless equipment in the state, according to the Massachusetts Manufacturing Extension Partnership in Worcester. That decline is part of a bigger trend; Bureau of Labor Statistics data show that Boston, Cambridge, and Quincy lost 51,700 manufacturing jobs between 2001 and 2010, leaving about 95,000 people employed in the sector.
Conventional wisdom holds that Boston’s economic future depends on its knowledge economy, its ability to innovate in technology and medicine, its universities spinning off high-tech firms. That’s why Governor Deval Patrick put up $1 billion for biotech, and Boston Mayor Thomas Menino is looking for clean tech and biotech to anchor the Boston Innovation District on the South Boston Waterfront. Yet this emphasis can overlook the value of good old-fashioned making things, says Roberto Mangabeira Unger, a social and legal theorist and Harvard Law School professor. “You couldn’t hope to change the whole structure of a regional economy just on the basis of high tech,” says Unger. “The tendency is for something like that to be an enclave. It would employ only a small fraction of the people.”
In other words, it would be good for everybody if some low-tech businesses again thrived in Boston. But that kind of theory isn’t what got Millen here.
SAM MILLEN has a connection to the days when audio was a thriving local manufacturing niche. He contributed to the industrial design of the Tivoli PAL, a small, stylish, battery-powered radio still sold today, seven years after it was introduced. Millen started his company because he was inspired by the vision of Tivoli’s designer, the late Henry Kloss. (Kloss, a member of the Consumer Electronics Hall of Fame, started or was influential at Advent, AR, KLH, Cambridge SoundWorks, and Tivoli.) “The idea is, what would he do if he were starting today?” Millen says. “So we did the Cue radio.”
“We” means Millen and his board chairman, partner, and main investor, Paul Zecchi. The two have been through a lot in the past five years, including spending around half a million dollars souping up a factory in Singapore, only to find that it couldn’t produce the high-quality Cue radio for the price it had promised. A similar nightmare unfolded closer to home, when a US manufacturer took tens of thousands of dollars upfront and agreed to produce important components, then delivered nothing, throwing a wrench into their production schedule. “That one nearly put us out of business,” Millen says. In his favor is his investor’s patient money: Zecchi happens to be Millen’s father-in-law.
But Zecchi is also an experienced investor who says Cue’s numbers would encourage him to put more money into the company regardless of his relationship with the founder. Zecchi also is a believer in the product. Cue’s r1 table radio is a sleek 10-by-6-by-4-inch box with an iPod or iPhone dock, the same fancy tuning knob as the radio in BMW’s cars, and the option of a programmable digital display (companies like to put their logos on them, consumers their photos). Millen says its use of separate tweeter and woofer speakers gives it a better sound than competing table radios. Reviewers don’t disagree.
So far, though, retailers have been harder to please. At Audio Lab in Cambridge, store manager Michael Volpe has talked with Cue about carrying its radios. Volpe has held off, in part because the shelves in his store already hold table radios from Boston Acoustics, Tangent, and Tivoli, as well as big-name electronics vendors. “The market’s gotten really, really crowded,” says Volpe.
Volpe likes that Cue is made in the United States and says it sounds better than many of its rivals. “But people don’t care about better sound anymore,” Volpe says. The success of the iPod shows that they care about size, price, and capacity. “For this new generation, sound takes a back seat,” he says.
Millen doesn’t believe that good sound no longer matters. He’s invested in the research and has filed for several patents. Cue’s research and development department consists of a couple of desks and a set of wire shelves crammed with amplifiers and speaker parts in various stages of disassembly. To the left is manufacturing, with a table and four assembly stations, a couple of them complete with screwdrivers. In the back is receiving and shipping, filled with parts. The place is clean, and a little too quiet today – there’s only one guy in R & D and one guy in manufacturing.
Millen doesn’t see that. He sees the future. “My goal is to build Bose-type quantities,” he says, “and do it all domestically.”
It’s a bold goal, and distant. Bose’s sales are estimated at more than $2 billion a year spread over multiple product lines, not just its famous Wave Radio. Cue might hit $4 million in sales if it were to run all year at the current factory’s maximum capacity of 35 radios a day.
But demand could blossom with the introduction of the company’s second product, a pair of sleek-looking speakers. On the second floor of the old bakery, across from Millen’s desk, is a scene out of the famous 1980s Maxell ad of the guy hanging onto his leather chair for dear life as his speakers blow him away. Here, the speakers are prototypes made of high-density fiberboard. They are smallish “bookshelf” speakers, but they sound big.
These speakers are wireless, but Cue says they outperform bigger standard models, a technological advance likely to impress high-end audiophiles tired of running speaker wire. They can connect to and play sound from smartphones, computers, and televisions.
“They put out bass like a low-rider Honda!” jokes Lewis Athanas, an audio consultant who serves on a contract basis as Cue’s R & D department. Athanas, once inventor-in-residence at Arthur D. Little, spends his time figuring out ways to get 27-hertz output from a 5-inch woofer (by contrast, the speakers in the Maxell ad are more than knee-high). He was an English major in college, but the books on his shelves run toward Radiotron Designer’s Handbook and Operational Amplifier. There’s a big bottle of Advil, too. “It’s useful in designing speakers,” Athanas says, laughing.
On June 23, the new speakers, called the Cue PS1, are announced. The price: $2,500 a pair. On July 23, The Wall Street Journal puts a picture of them on the front of its Saturday Personal Journal. Millen sees it when he is in Connecticut on sales calls and to meet with Zecchi, who’s based there in the summer. Monday morning finds a giddy Millen back in Somerville. He walks down the hill to his office pulling a trundle bag with a box that has the speakers in it and a few copies of the paper. “We pulled an all-nighter to get those ready!” he exults.
He may need to pull more all-nighters. The speakers are novel and have gotten the company attention. Now the company has to get them ready for fall delivery.
Millen is running his hand over one of the prototype speaker cabinets when he sees something he doesn’t like, an almost invisible separation at a joint in the cabinet. Athanas happens in, and Millen says: “Did you see this? This is too big of a gap!” The two huddle over the speaker case like seers squinting toward the future.
FOR A COMPANY that makes beautiful, expensive, unnecessary things, Cue’s employees dress down, favoring cargo shorts and polo shirts. Of the seven full-time employees, Millen tends to be the only person who wears long pants to the office in the summer, though today will be a sales call, and his sales and marketing manager, Rich Gorzynski, is also in khakis.
Millen and Zecchi decided that Cue would not become a mass-market firm selling through the Apple Store or Best Buy. “If they drop you, you’re done,” says Millen. Plus, dealing with a big retailer would have required Cue to produce tens of thousands of units before getting paid for any of them, which seemed like a lot of risk for a young company. Instead, Cue radios are sold through online retailers and specialty audio stores.
Millen and Gorzynski are heading to Natural Sound, a high-end home-theater store in Framingham. None of the roughly two dozen stores that carry Cue radios is in Massachusetts, a sore point for Millen. Cue representatives have been to Natural Sound twice before, trying to get it to carry the r1 radio, but it’s the first time Millen has come. Athanas recently devised a way to make the r1 sound almost twice as big, something Millen hopes will get Natural Sound interested.
Inside Natural Sound, they meet Larry Goldberg, the store manager. Goldberg is slender and wears glasses, but to Millen he’s a steroid-fueled bouncer keeping Cue out of the club. Goldberg shakes hands and says, “So, I’ve got about 10 minutes.”
Millen puts the r1 radio through its paces. Goldberg walks to different parts of the room, listening, then asks about presets and other features. Millen walks through those and mentions that its digital face can be programmed to display the store’s logo. The radio “could be a gift for people who buy expensive systems,” Millen suggests. Goldberg looks intrigued.
Millen shows off the Journal article on his iPad. Goldberg agrees to check out the new speakers in Natural Sound’s living room-like listening studio. Goldberg seems intrigued – he even asks Millen to wait while he takes a phone call. At Goldberg’s request to hear some music, Millen plays a female jazz singer, some experimental drum music, a classical pianist. They talk about the warranty and other details. After an hour, Goldberg accepts a demo radio and says, “We’re going to definitely give these a second look and second listen.”
A few weeks later, Millen drives his Toyota Land Cruiser out to Pine and Baker, a Tewksbury manufacturer that used to do big business in speaker cabinets before most of the other area companies closed or moved production offshore. Phil Baker takes Millen to a trolley of speaker cases in gleaming maple, shining cherry, and dull ebony. Millen is happy with the cherry and maple, concerned about the matte black. He wants a mirror finish for his $2,500 speakers, and it doesn’t have one.
“This is man jewelry. Who’s the 35- to 40-year-old guy who’s going to buy this? He wants a finish where he’s going to see himself,” Millen says, fixing his own hair. He and Baker discuss ways to go about it, including having Baker ship the cabinets elsewhere for finishing.
Millen packs five pairs of cabinets in the back of the Land Cruiser. He’ll take them to Somerville, where the speaker components will be added. He pauses for a moment before closing the back. “It’s our first small run,” he says.
August grinds into September, and with global stock markets shuddering, Millen frets about sales. Last month was bad, even for a down market. Millen is frustrated. He changes his New England sales representative and fires his public relations firm, even though it seemed to be getting Cue good press, only to bring it back the next day. He feels the company should be growing. But Zecchi is calm. He thinks Cue remains on a solid path. “Sam’s speaker system will distinguish itself,” he says. “We have some pioneering technology that’s going to be entering the market.”
Then Millen gets some good news: A Rhode Island retailer signs on to carry the radio; two more, in Boston and in New Hampshire, seem interested. He has a lead on a sales rep for New York. Millen won’t get to the 100 retailers he hoped for by year’s end, but at least he’s seeing some progress. He might even get his first Massachusetts dealer. Millen and Goldberg, the store manager at Natural Sound, have had another positive conversation, and Millen thinks Goldberg is on the verge of ordering some radios.
The speakers, too, are taking shape. Millen sends Gorzynski off to a big trade show with a pair of near-finished prototypes. He stays in Somerville to keep working on the final versions. Manufacturing (still a department of one) decides to make the speakers on the big worktable near the existing workstation assembly line. Cue’s engineering director, Adam Casey, finalizes the wireless code needed to let people use their cellphones as a remote for the speakers. More bling for the male-jewelry crowd.
It still isn’t clear whether Pine and Baker will be able to give the mirror finish to the black speakers, but the firm is making progress. Millen says that if he must, he has a supplier in China that can do the job.
It’s been five years since he started his firm. Millen puts together a timeline of his milestones, an internal measure of how he and Zecchi have felt about the company. Despite the economy, despite August’s abysmal sales, the chart peaks now.
“Things are coming along,” Millen says.
Michael Fitzgerald writes about technology and business. Send comments to email@example.com.