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Schiit Designed For The Real World

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Old 12-15-2017, 02:55 PM
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Default Really good chapter from "Schiit Happened"

The latest chapter from Jason Stoddard's 3-year long e-book, Schiit Happened , at Head-Fi just posted yesterday. I can't link to Head-Fi from here, so I've included the full text below. It is a candid and brutally honest look at the challenges and what it takes to run a very successful audio company that started from the ground up only 6 or so years ago, and issues around product mix, manufacturing and customer support. As usual, there's no bull-schiit from Jason, just complete candor...well worth reading.
___________________________
2017, Chapter 16: What We Did Wrong by Jason Stoddard, Copyright 2017 by Jason Stoddard

Oh boy! Now you get to read about all of our screw-ups for 2017! These are exciting times!

I only jest a bit. Because hey, sometimes you can’t look away from the car wreck on the 405 on the way home. Sometimes you can’t help but watch a video called, “Spectacular Fails” and cringe your way through a whole lot of stuff that didn’t work out for the people involved.

So, let’s start with this: no company is perfect.

Stop. Go back. Read that again. And then think about it. No, really. Have we gone too far in expecting perfection from every organization that serves us? Why is “leading with outrage” so popular when everything doesn’t go exactly right, before you give the company a chance to make it right? Has Amazon turned us into a bunch of entitled, buying-is-rental mindset automatons that immediately threaten a zero-star review for any tiny glitch or imagined slight?

Here’s the thing. Every company is made up of people. People are not perfect. Top management doesn’t have perfect vision of the future to make the ideal plan every single time. Middle management doesn’t always have the time and resources to implement the (imperfect) plan perfectly. Staff doesn’t always have the time, resources, information, and motivation to make the (imperfect) plan and (imperfect) oversight so that things happen 100% perfectly and 100% on-time.

So is it a miracle that anything gets done at all? Hell, ask me in three days. Or in three months. Because the answer may be different, based on how well our management and staff are implementing my (and Mike’s) imperfect plans.

So is that why we screwed up? Partially. And partially because of another business truth: there is no perfect time for any company.

What do I mean by that? I’m referring to the idea that “If we only got a bit bigger, we could do (insert X thing here.)”

You know, like:

If we only got a bit bigger, we could hire additional personnel to make things easier/better.

If we only got a bit bigger, we could buy a bunch of new equipment to make things go faster/better.

If we only got a bit bigger, we’d have additional leverage to get better prices/better quality from our suppliers.​

Here’s the funny thing: while you’re thinking “if we were only a bit bigger,” there’s a bigger company thinking, “if we were only a bit smaller.” Or a lot smaller.

So: There’s never any perfect time.

For the smaller company looking for relief through growth, they’re not considering the management needed for the additional personnel, or the possibility that the additional personnel could fail. They’re not looking at the upkeep and staffing they need to use the new equipment they want to buy. They’re not considering that their leverage on their suppliers might result in catastrophe—their suppliers may decide they are not worth doing business with.

For the larger company looking for relief through shrinkage, they’re not considering the ramifications on their staff and on the market. Cutting a line could seem like weakness—will this affect sales of their other products? Radical changes could undermine products that staff consider “their own,” causing lack of morale and lower productivity. Heck, their whole idea of simplification could be based on a faulty memory of an idealized past that never really existed.

Believe me, I know how both sides feel. Back when we were in the garage, growth (by hiring our first employees) allowed us to ship more and better products, and free up time to develop new products so we could grow. That made total sense back when we had 3 products.

Now that we have 23 products, the equations don’t work the same. In fact, there’s a definite siren call to the idea of simplifying the line. Burn it down. Do it right. I totally understand why Vibro Labs went to a single product, with no variations. When we’re deep in backorder on a couple of products because it’s hard to keep all the plates spinning, it seems totally right. Burn it down. Have Magni, and Big Magni (Jotunheim), and maybe Really Big-Ass Magni (Ragnarok) and call it a day. Who needs anything else? Why confuse people?

And yeah, look at the most valuable company in the world. They have only a handful of products, really, when you get right down to it. (Yeah, they have too many friggin phones right now, and nobody knows why the Airs are still around, but hey, no company is perfect.)

Again, repeat after me: There’s never any perfect time.

Or, going positive: it’s always the best time to make the most of what you have right now.

And that’s going to be the metric for a lot of the stuff we did wrong this year. Did we make the most of what we have right now? Or did we blow it?

Let’s have a look at the screw-ups.


Boneheaded Move #1: Not Killing/Consolidating (Even More)

Magni 3 was an eye-opener. Nobody—and I mean nobody—would have expected what happened after we consolidated the Magni line. We’re still trying to keep up. And this is even after we doubled the first run. And the second. The only reason I’m not adding the Magni 3 out-of-stock situation to our list of boneheadedness is that literally nobody saw this coming—not me, not Mike, not Tyler, and not even Alex (who usually has the best feel for the on-the-ground response.)

And, while sales have increased, inquiries have dropped to a trickle. No more “Should I get Magni 2 or Magni 2 Uber?” No more wondering if the $50 difference was worth it. Much less comparisons with other inexpensive amps, since the price went down while the specs went up.

Okay. Got it loud and clear. Lesson learned: eliminate confusing options keep the price shaved as close to the bone as possible.

Yeah. Too bad we didn’t look at the rest of the line. Because holy hell, there’s a lot of confusion. Three Modis. Three larger amp-only products coexisting with Jotunheim, which is about the same size and includes a DAC. Or not. Or a phono board. And sometimes the products are available in black. Sometimes not. Almost all not at the same time.

It would make total sense to have just a single Modi, eliminate the non-combo products, and make everything a single finish—black, because we could refinish it if there was a cosmetic problem.

“No way you can do that!” I can hear the howls now.

And yeah, you’re right. It’s too radical. And not super practical. Modi needs a USB-powered version, and the Multibit version is its own special thing. Combobulating the Modi 2 and Modi 2 Uber into a single product at $99 is a whole lot bigger job than Magni 3. It may not even be possible.

And, killing Asgard 2, Valhalla 2, and Lyr 2? Hell, two of those are products we started with. Yeah, sales of Asgard and Lyr are slow, but they’re also relatively steady, and relatively well-known. They’re reliable products. And yeah, Valhalla 2 tube prices have been creeping up, and I’m not sure how thrilled anyone would be with a $399 or $499 Valhalla 2. But if you’re gonna kill all those in favor of Jotunheim, what do you do for people who want a tube option?

And all black? Nope. Sorry. I just can’t do it. That’s a personal decision, not grounded in any reality.

But will we be looking and simplification and consolidation in the future? Absolutely.

It’s just that I don’t quite know where it will go. Just expect that we’ll be trying to keep the choices simpler—while improving performance and reducing cost. It’s a win-win all the way around. And we should have looked at it a lot harder in 2017.


Like A Broken Record #2: More Product Sprawl


At the same time we were missing chances to consolidate and simplify the product line, we were actively causing more product sprawl. Vidar, Eitr, Loki, and Jil are all-new additions to a line that can already be staggering on first glance.

I can rationalize Vidar. We needed it to finish off the 2-channel product line. (Even though we didn’t do such a great job of segregating and explaining the 2-channel line, more on that later.) One speaker power amp isn’t too many. And we made great efforts to ensure that it was a great amp for the vast majority of speaker amp applications. And it could be used in two configurations, so it was almost like having 2 amps.

Still, despite the rationalizations, it was a new product, and it increased complexity. And, in the shop, the impact was even higher—it required a whole new line, much greater storage (its parts are very large), new racking and transport systems, additional amperage to the burn racks, additional testing, etc. It was not a trivial exercise.

Eitr? Yeah, we could have done without it. But it seemed to be the right product to bring Gen 5 to DACs beyond our own. And it’s been a popular product. It would be even more product if we could ever get our act together and ship some (they should be shipping as of this writing. Finally. Yes, I know, we suck.)

But again, now we have Eitr and Wyrd. Do we need both of them? Or neither? Not an easy question, because they do two different things. Sales on Wyrd are slow, though, so maybe there’s an answer in that.

Aside: slow Wyrd sales are probably not that surprising. The problem it’s designed to solve—crappy USB power—has been much better of late. The software—or the hardware—has evolved.​

Loki? Yeah, that one is completely unnecessary. At least by conventional high-end standards. But I thought it would be a real winner—a chance to bring some degree of control back to the listener, together with high-end transparency. And sales have been pretty good. Not enough to flesh it out into a line, but enough to make Loki safe for the future.

Aside: slower-than-expected Loki sales may be due to the fact that most people wanting to do EQ are using software EQ these days. Maybe. We haven’t really looked into it that much. There are a lot of (much more exciting) things to do.​

Jil was an answer to a question nobody was asking. If it had been a $5000 multibit assault on the high end of ADCs, we probably would have sold more. Or not. The reality is that we don’t know the pro market so well, and the market for a $200 vinyl ripper may be limited. Ah well, both Mike and I will continue to play with new ideas—which means there will be a glitch or two in the Matrix.

Want more? Sure. I can criticize the Gen 5 as well. Gen 5 is not a single product. It’s actually five products with two physically different boards—one specifically for Yggdrasil, and one for Gungnir and Bifrost. Each must be programmed with firmware specific to the product (Bifrost, Bifrost Multibit, Gungnir, Gungnir Multibit, Yggdrasil.)

Did I say something about product sprawl and complexity? Yeah. Like that.

Maybe it’s time that Gungnir (delta-sigma) dies. Nobody buys it—only Gungnir Multibit sells. But Bifrost 4490s still move pretty good, so we can’t make the modular DACs all Multibit without affecting sales. (Even though I’m sure Mike would like to—and might just do that some day.)

Just thinking out loud. But you get the idea: we have a big, complex, confusing line—and we chose to make it even bigger. Durrrrrrrr.


Dumb Stuff #3: Allowing 2-Channel Confusion

Yep. We finished the 2-channel lineup with Vidar. Finally. And way late. Perhaps that’s another screwup, but when it comes to speaker power amps, I’d rather be late and reliable than early and scary.

But yeah, we finished the lineup! Cool! Now we had a power amp, two preamps, and four DACs to choose from. Except for speakers and a source, you could have an all-Schiit system! Very exciting!

Yeah, except we kinda forgot that we did two-channel stuff. There were no guides on the site on how to choose a speaker power amp or a preamp. Hell, the guides didn’t even include Jotunheim or Fulla 2, much less the 2-channel stuff.

So, while we had a full 2-channel line, we had absolutely no way for a neophyte to know what they needed to create a system! Yep, here’s dumbass Schiit, keepin on keepin on as if we only did desktop products.

And we let that situation continue nearly all year! It was November before we started looking at correcting the problem, with some guides specifically aimed at 2-channel sound. There’s a lot more needed, including diagrams and 1-2-3 guides, and maybe even some “click to add this system to the cart” kind of simplification. But it’s a start.

So why did we miss the biggest change in our lineup since we started? Lots of reasons, all of them pretty dumb:
Our line was too big (see #1 and #2), so it’s easy to miss stuff.
A lot of people here still are in the desktop world more than the 2-channel world, so 2-channel was confusing and new and different. That’s changing, but that’s the reality.
I was distracted with production process improvements and fundamental research.
Yeah. Stupid. But we’re starting to fix it. It will get better. The lines will become clearer.


Bad Choice #4: Backorders Continue, Some Avoidable

“You know that we sell twice the number of Yggys when they’re in stock?” is a question Alex probably got tired of hearing in 2017. Because, even 3 years after its intro, we’re still trying to keep up with demand.

To be fair, it’s usually not Alex’s fault. We have had parts shortages, bad metal, slow PCB production, and a host of other issues. But the reality is, Yggdrasil, and Gungnir, and Jotunheim, and Mani, and Eitr, have all seen more than their share of backorders last year. And, as noted before, we’re struggling on Magni 3.

It’d be one thing if all of the backorders were due to ungettable parts or crappy metalwork, like Yggy, . It’d be another if they were all due to unforeseen demand, like Mani and Magni 3. But Jotunheim, Gungnir, and Eitr were avoidable.

Jotunheim? It was due to the PCB assembly house using an old board rev. We thought we’d scrapped the 1.00 boards (all Jotunheims are 1.01). We’d only been ordering 1.01. But no, they hadn’t thrown away the 1.00 boards, so they showed up in production. And they didn’t fit. Boom. Big problem. This is one of the catalysts for a behind-the-scenes change that moved most of our inventory out of the PCB assembly house and into our distributor/sourcing partner. We should have done this long ago, though, because we also ended up over-buying like crazy for runs where the parts were just “lost in the shuffle.” Eek.

Gungnir? Yeah. When you can “find” nearly 100 chassis in the warehouse, you know there’s something wrong with your own internal inventory. Cue another reorganization.

Eitr? Would have been fine if someone had ordered boards. Yeah. Another reminder that we need to use the systems already in place, rather than copying everyone and hoping it happens. This has led to changes so that everyone can see what’s in process on the PCB side, and flags for when we’re out of stock.


Slow Children At Play #5: Gadget Limbo

The Gadget. Hotly anticipated new technology from Schiit. We’d invested in time and personnel (including a Ph.D) to develop it. People devoted tons of energy into trying to figure out what it was for most of the year.

And, by RMAF, we had a kinda-mostly-working, good-sounding version of a product that many people didn’t seem to understand.

When you start looking at the underlying technology, and its possible applications, there’s a whole lot of interesting stuff you can do. But technology isn’t a product, and The Gadget doesn’t do its best with short demos in a noisy show room. So some people were confused. Some people couldn’t hear it at all.

But some could. And the ones that did were over the moon about it. And even the people who didn’t like it said some profound things, such as the fact that we were able to change only the pitch of the music, without destroying anything else about the experience—the quality of the audio was unaffected. This is no small feat, especially when you understand exactly what we’re doing with the Gadget.

In an ideal world, we would have had a Gadget out at the end of the year, a small, affordable product that people could try out and see if it was for them.

But reality intervened, leading to Gadget limbo. You see, we need a ton of processing power for the Gadget—more than our typical SHARC DSP, if we really want to do a great job on all sampling rates. This means we need to look at alternate platforms. And those alternate platforms still have to be cost-effective.

At the same time, we need to be realistic about how people will use The Gadget. The prototype we showed at RMAF was coax in and out. Not great if you don’t use a transport with coax out. I told Mike I thought we should have USB and coax. But USB and coax is a lot to pack into a small box full of DSP power. And Gen 5 would be a complete no-go.

What we really needed was a different approach. Mike and I have discussed many different options for bringing The Gadget to production reality, but we don’t yet have a prototype that I’d consider sellable. So while The Gadget will definitely debut in 2018, it may be very different—inside and out—than what we showed at RMAF. And it will be even better.

But in terms of 2017, The Gadget was a bust. Next.


Wow, Really #6: Turntable False Starts

This may seem like a bigger deal to me than to you, because we’ve been playing with turntable prototypes for many years now. The earliest models go back almost 5 years. We’ve been noodling about the idea of bringing out a turntable for a long time now, but it’s never been the time to commit.

So what happens when we commit in 2017? Slow tooling, wrong sized carbon fiber tonearm shafts leading to complete re-engineering of the tonearm, glitches that ranged from the fact that we never figured out a power switch for the darn thing to power and output pods that stubbornly refused to be assemblable—and then, when assembly issues were solved, didn’t fit on the casting due to the draft angles.

Add to that a myriad of sourcing issues, including working with a host of new suppliers, storage issues (turntable parts can be big), new learnings in mechanical engineering and assembly subtleties, and yeah, the turntable has been nothing but a bunch of headaches and false starts this year.

Now, we’re starting to see some light. We have castings that look almost production-ready. We have a power and output pod that fits. We have a motor can that works. We have motors. We have sources for all the parts. Now, we’re only a bunch of orders and a production line setup from shipping.

Guesses as to when? Oh hell no. It’ll happen when it happens.


Durr #7: Slow to Fix Support

This one is my own boneheaded move. I was fully confident that the emails and forum posts we were getting about non-response to questions, or dropped support threads, were just stuff getting lost in spam, or customers using the wrong email address, or some other glitch that wasn’t on our side.

This, despite bringing on a second person to help with the amount of inquries we were getting (now up to about 1500 per month on the info@schiit email.)

This, despite the fact that these complaints were coming across via email and on forums.

Nope. Nothing wrong. We had good guys. They were handling it. Except, well, when things got lost. Because between two technical guys and three orders/customer support people, things did get lost in email. More than I thought.

Putting a ticketing system in changed all of that. Now, people are getting answers, even if they aren’t the answers they’re looking for (so many people want to know about fuses, cables, and stuff we have no opinion on.)

But we waited far too long to put it in place. Mea culpa.


Better Next Year?

So, after all that, what have we learned? Mainly that complexity seems manageable for a long, long time…and then it explodes and eats you alive. The complexity of our line, the complexity of new products, the complexity of support…when you get started, it all seems manageable. The progression seems linear. Then, you hit a knee and suddenly its overwhelming.

We’re going to be working very hard next year to manage complexity. Whether or not this will be successful is a matter of guesswork. Whether or not managing complexity results in other unforeseen problems is also another thing yet to be seen.

Because…no company is perfect.

And…there is no perfect time.

What I can promise is to do the best we can, and to fix problems when they crop up. And no, I’m not going to immediately delete all the original amps from our portfolio or anything so draconian, so don’t panic and go buy a bunch of Valhalla 2s or something.

Relax. 2018 is shaping up to be an amazing year. More on that next week.
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Lumin P1 streamer/DAC/preamp, Constellation Inspiration integrated TT: Michell Gyro SE MkII, SME V, Koetsu Urushi Vermilion, EAR324. Harbeth 30.2s, REL R-305, Shunyata Alpha V2 ICs, Alpha V2 SPs, Sigma XC, Sigma NRv2, Omega QR-s & Alpha NRv2 PCs, segmented Altaira SG stack w/ Alpha & Omega CGCs, Everest 8000 PD. Remote Server Room: Uptone EtherREGEN, AfterDark Master Clock & LPS, Alita, Battle Angel, (Akasa NUC Roon Core), iFi DC Purifiers (for SMPS used for Alita & router), Shunyata Gemini combo power distributor & Altaira-type CG GP-NR hub, Venom & Alpha CGCs, Shunyata NRv14 power cords for digital components.

Last edited by Puma Cat; 12-15-2017 at 02:59 PM.
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Old 12-15-2017, 03:37 PM
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His forte is writing. He makes a great DAC too!
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Old 12-15-2017, 03:39 PM
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Thanks for sharing. I have been researching their products for about a week and really considering the gungnir.
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Old 12-15-2017, 03:46 PM
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Originally Posted by rushca01 View Post
Thanks for sharing. I have been researching their products for about a week and really considering the gungnir.
Get the Multibit Gungnir...
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Lumin P1 streamer/DAC/preamp, Constellation Inspiration integrated TT: Michell Gyro SE MkII, SME V, Koetsu Urushi Vermilion, EAR324. Harbeth 30.2s, REL R-305, Shunyata Alpha V2 ICs, Alpha V2 SPs, Sigma XC, Sigma NRv2, Omega QR-s & Alpha NRv2 PCs, segmented Altaira SG stack w/ Alpha & Omega CGCs, Everest 8000 PD. Remote Server Room: Uptone EtherREGEN, AfterDark Master Clock & LPS, Alita, Battle Angel, (Akasa NUC Roon Core), iFi DC Purifiers (for SMPS used for Alita & router), Shunyata Gemini combo power distributor & Altaira-type CG GP-NR hub, Venom & Alpha CGCs, Shunyata NRv14 power cords for digital components.
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Old 12-15-2017, 03:46 PM
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His forte is writing. He makes a great DAC too!
Jason is one SHARP cookie...
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Lumin P1 streamer/DAC/preamp, Constellation Inspiration integrated TT: Michell Gyro SE MkII, SME V, Koetsu Urushi Vermilion, EAR324. Harbeth 30.2s, REL R-305, Shunyata Alpha V2 ICs, Alpha V2 SPs, Sigma XC, Sigma NRv2, Omega QR-s & Alpha NRv2 PCs, segmented Altaira SG stack w/ Alpha & Omega CGCs, Everest 8000 PD. Remote Server Room: Uptone EtherREGEN, AfterDark Master Clock & LPS, Alita, Battle Angel, (Akasa NUC Roon Core), iFi DC Purifiers (for SMPS used for Alita & router), Shunyata Gemini combo power distributor & Altaira-type CG GP-NR hub, Venom & Alpha CGCs, Shunyata NRv14 power cords for digital components.
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Old 12-15-2017, 03:51 PM
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Jason is one SHARP cookie...


Without a doubt!
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Old 12-15-2017, 04:08 PM
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Good read Stephen. Pretty typical problems for a small company that outsources for manufacturing of certain components and is experiencing growing issues. As a previous owner of a small business that employed over 50 employees for over 10 years, I can certainly relate. The important part is that they have real talent designing products that are actually in demand and receive praise. Not being able to keep up with demand is not a great position to be in, people tend to be inpatient and go elsewhere but it is even worse trying to rush a product out to consumers and foregoing Q/A and ruining your reputation.

I have been completely and utterly satisfied with 3 of the Schiit products I have purchased so far. All of them met or exceeded my expectations for price to performance and that is rare these days. If I decide to add another Schiit component, I would rather wait in line than be dissatisfied with fit, finish or performance.
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Old 12-15-2017, 04:46 PM
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Get the Multibit Gungnir...
What is the difference/advantage.
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Old 12-15-2017, 06:45 PM
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Good read Stephen. Pretty typical problems for a small company that outsources for manufacturing of certain components and is experiencing growing issues. As a previous owner of a small business that employed over 50 employees for over 10 years, I can certainly relate. The important part is that they have real talent designing products that are actually in demand and receive praise. Not being able to keep up with demand is not a great position to be in, people tend to be inpatient and go elsewhere but it is even worse trying to rush a product out to consumers and foregoing Q/A and ruining your reputation.

I have been completely and utterly satisfied with 3 of the Schiit products I have purchased so far. All of them met or exceeded my expectations for price to performance and that is rare these days. If I decide to add another Schiit component, I would rather wait in line than be dissatisfied with fit, finish or performance.
Truer words were never spoken, my friend.
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Lumin P1 streamer/DAC/preamp, Constellation Inspiration integrated TT: Michell Gyro SE MkII, SME V, Koetsu Urushi Vermilion, EAR324. Harbeth 30.2s, REL R-305, Shunyata Alpha V2 ICs, Alpha V2 SPs, Sigma XC, Sigma NRv2, Omega QR-s & Alpha NRv2 PCs, segmented Altaira SG stack w/ Alpha & Omega CGCs, Everest 8000 PD. Remote Server Room: Uptone EtherREGEN, AfterDark Master Clock & LPS, Alita, Battle Angel, (Akasa NUC Roon Core), iFi DC Purifiers (for SMPS used for Alita & router), Shunyata Gemini combo power distributor & Altaira-type CG GP-NR hub, Venom & Alpha CGCs, Shunyata NRv14 power cords for digital components.
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Old 12-15-2017, 06:55 PM
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Originally Posted by rushca01 View Post
What is the difference/advantage.
Go back and read Serge's wonderful reviews and my comments.

Just get the Multibit; trust us on this one...you will be VERY happy.
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Lumin P1 streamer/DAC/preamp, Constellation Inspiration integrated TT: Michell Gyro SE MkII, SME V, Koetsu Urushi Vermilion, EAR324. Harbeth 30.2s, REL R-305, Shunyata Alpha V2 ICs, Alpha V2 SPs, Sigma XC, Sigma NRv2, Omega QR-s & Alpha NRv2 PCs, segmented Altaira SG stack w/ Alpha & Omega CGCs, Everest 8000 PD. Remote Server Room: Uptone EtherREGEN, AfterDark Master Clock & LPS, Alita, Battle Angel, (Akasa NUC Roon Core), iFi DC Purifiers (for SMPS used for Alita & router), Shunyata Gemini combo power distributor & Altaira-type CG GP-NR hub, Venom & Alpha CGCs, Shunyata NRv14 power cords for digital components.
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