from the crossroads of America in the hooer state of Indiana this is get in the podcast focused on the unfolding stories and extraordinary Innovations happening right now in the Heartland I'm Matt hunkler CEO at powderkeg and I will be one of your hosts for today's conversation I'm joined at Sweetwater headquarters in Fort Wayne Indiana with co-host Christ ER to day let's roll he's ready to roll CEO M again a little bit okay I'll back off now and Max yod co-founder of lesen Le and good friend of mine and and ours and the show thanks for having me awesome to have you here dude and on
the show today is Mike Clen president and CEO at Sweetwater sound let's just throw a little candy in the Box it just makes it a little bit extra special and it was just a little wow moment and and it's just like these you know for no reason other than just like could I just make someone's day a little better so but we became known for it and now you guys will not believe the amount of requests we get from customers like in the comments on the order it's like oh only Tootsie Rolls please or no Fireballs or my spouse is only letting me buy this
because of the candy ma is like I know I could do that I didn't know that was an option I won't use I won't use it I won't use it I would request Hot Tamales please Mike CLM is recognized as an innovator speaker and Mentor he has over 25 years of experience in retail e-commerce which began in the early days of the internet and includes many notable retail Brands Mike is a lifelong musician who is passionate about the music industry and he is a proud Fort Wayne native also very active in the community here uh and lives here with his wife and four children and
Mike thank you so much for hosting us today uh love having you guys here we are are so pumped to do this um I'm I'm I want to share this with our listeners because I think it's kind of fun uh I got halfway through this conversation and realize I did not hit record and I did that at like the headquarters of music in the world at Sweetwater sound like this is like my new dinner table story to be able to tell so thank you all for sharing that we are used to show biz so so here we go that's what they call me Mr Showbiz
I'm really excited to do this conversation again and U Mike you just took us on an amazing tour of Sweetwater sound here um there's so many things that you you showed us and I know we're going to dive deep into the inner workings of this business that is just doing business at a massive scale but wanted to start a little bit with your background uh can you tell us a little bit about how you grew up and first got introduced to entrepreneurship and Technology yeah so I'm a Hoosier so I'm from very near Fort Wayne a little small town and uh I always start the
story there because uh only recently really realized how impactful that was to to kind of my platform and even how I lead today growing up in a small town uh hard workk ethic and and so you learn from a very early age uh things don't happen unless you you just dig in with some Grit and in my house it was uh you know we're here to put other people before ourselves and and so those two things I think really served me well uh even today as I lead so thank you Mom and Dad um and then a musician from an early age it was a
creative house and so uh learned many instruments drummer primarily yeah uh kind of all the music I could do through through school and then I was all set to take a a a music engineering degree in in college and then kind of shifted right at the very end this is mid 90s I ended up at Purdue who had a very Innovative uh program at that time time that was like part computer programming part design but it was very specific to to building e-commerce and and website experiences and so I got that degree and then spent many years uh just kind of at agencies and building
some of that early retail Tech found my way here 2003 and and kind of married the passions as they say and and so uh having a blast doing that when you joined the business I know e-commerce was just a small fraction of what was happening I think you said less than 3 million in sales was happening online when you joined in 2003 tell me a little bit about what you decided to kind of dive into first and why particularly you saw all the opportunity that was out there yeah so so Sweetwater had a website at that time so actually went live in 1994 so one
of the very first websites oh that's early early not just in our industry but but really internet wide I think in '92 we were given emails at PR and nobody knew what to do with them thank you right how do I get in this yeah um and so uh but from uh very early on uh for for our founder Chuck Sak uh this internet was about how do we use that for Community for educating for building what what we now would call kind of the research destination in our industry and uh retail like selling online did not come until later at that point we were
very phone based so this is not like pure play e-commerce this is not call center this is like a very uh uh kind of outbound phone-based expertise relationship based sales which we can unpack uh and so at that time $60 million company but most of that was over the phone so it was you know $3 or $4 million that was online and so that was really my job to grow that up and not to compete with those phone sales but really as a funnel like how do we how do we leverage this new worldwide web to uh to uh bring those customers into this very
unique uh sales motion this very unique business model well and it it all seems very organic when you think about the founding story of Sweetwater uh nothing was intentionally meant to be I'm going to build a billion dollar company I'm going to uh go and take over the music industry it was literally the founder Chuck and his mobile recording studio right so the founding story so so Chuck a pro touring musician through the 70s and and uh the story famously goes he's in this VW bus that was you know inherited from his parents it was full of Bondo and spray pain and like this wonderful
you know starving artist story and when he was not out on the road he was uh here in Fort Wayne doing recording services and and uh founded in 1979 at that time there was not a lot of music technology and so he got really well well known for some of the early pioneering technical equipment in our industry and all of a sudden the phone is ringing and it's very major artist saying hey we hear you're the guy that's gotten really good at this technology is he designing that technology or is he reselling at at that point it's like other people are manufacturing it but uh
they're just like there was no internet so it was like you know how do I use this thing how do I and so he just kind of figured it out find tune tweak and make it all work right right and and so then let me help train you on how to get that sound and now let's start trading sounds and so like there was like this this uh just really started as a community and then that evolved into retail which was like oh well can you sell me though I don't know let me find out right and and and so just like this wonderful organic
growth just one step at a time but to your point M it was never designed for exit or like not a financial vehicle it's just about serving One customer at a time one detail at a time the most wonderful durable uh growth story that I've seen well and starting with like that you kind of put it as the top part of the pyramid right like the pro pro musicians like Stevie Wonder was hitting him up being like how'd you get that sound kind of thing like we're talking series Pros that are learning the instrument maybe even more than the manufacturers even know what what can
be done with it because back then the the gear was very expensive right like these were serious Investments and so like uniquely if the industry is a pyramid we kind of started at the top and a lot of our growth tends to be kind of down Market where normally you would it would be moving up yeah that's really unique well one of the things that I I think is really fun is that we have Max here uh in studio with us uh who's a big fan of sweet waterer how I initially got to understand and and better appreciate the brand so I was really excited
to be able to bring him along today thanks for bringing me along never been to campus uh received a lot of Sweet Water boxes uh over the last two years thank you for that my pleasure um been building a studio this small little studio for for myself and my friends to enjoy um but my actual musical Journey I'm excited to tell you started with a a Sweetwater um engineer uh who was a my my one of my best friend's cousins giving me a piece of gear it was the first piece of gear I ever got it was a Tas cam recorder to channel um I
did not know what to do with it I didn't know how it worked and I just got to Tinker with it plug in a microphone be like why can't I hear anything oh it's because it's not on the microphone line just mess messing around because he worked here and had access to that he had an extra recorder I get to start recording um it's what I do with all the free time I have now and it started with somebody who worked in this building love it it's six years ago I started you know dab dabbling buying some things and I and I got introduced to
Henry I'd like to talk about your model here cuz I think this is really set you apart H Henry Moore who's my my Sweetwater engineer I maybe buying one thing a year at the time but Henry knows who I am he checks in on me um he asks you know if there's anything else I need and most time then I was like not really Henry you know kind of kind of at stasis a couple years back I start buying more Henry's still the guy right I don't get switched to a different guy now that I'm starting to to buy more it's still Henry um and
Henry's like so what are you making so I send him some songs um and what I love about it is I don't usually get to touch the equipment that I'm buying I might be buying a compressor which is a very nuanced tool you can use it in a non-nan way but if compressors do things that are sonically like pretty nuanced so I don't necessarily know exactly what compressor I want and which one I need and I don't have 14 of them in front of me to try out so I talked to Henry here's what I'm going for here's what I'm looking for and he's like
I think this might might work for you you could also do these two um he maybe steers me away from something that I think I want and he's like well what are you really trying to do all these things I don't get anywhere else and I really need them in this process because Henry Likes music as much as I do so I'm guess I'm going out of my way to say that is unique to me in terms of how I interact with um Me growing up I thought thought of Sweetwater as an online store right but it didn't feel like an online store because I
knew a person there and I got to meet him for the first time in person today which was really cool anyhow I just find that to be special I don't think people know that I don't think people know uh necessarily uh that that is such a way you set yourself apart from many other e-commerce players yeah I love that and and it is it's a unique business model and so here here's Sweetwater about a billion and a half dollar company we uh serve musicians content creators about 10 million customers all the way from you know the school kid learning to play at at at band
up through people you know building a studio at home like you uh professional musicians but also a lot of uh B2B so so recording studios churches schools uh cruise ships NFL stadiums like these are all our customers very wide range of customers but the model is the same same for every one of those whether you're the the kid or the NFL stadium um at the heart and soul of our company is what we call a sales engineer so 650 men and women recruited from all over the country a very prestigious job actually you you come from a a pretty serious music school or I used
to record you know uh or used a tour with so and so and so like you you find your way to Fort Wayne Indiana you go through an incredible amount of training before you ever interact with a customer 13 weeks in fact we call it Sweetwater University it's a curriculum it's classes training and business and customer service we talk a lot about you're either adding credibility or you're taking away and so we invest uh deeply in these uh these sales Engineers before they get on the phone and and are part of our credibility um as a customer you get paired up with one of these
experts and so over time interacting with us you get that same person so that's why Max knows Henry so well is because we're not just waiting for the phone to ring I even feel like I know Henry right like this is awesome I want to be friends with Henry thank you uh so we're nurturing that relationship and and that's really the magic here it's it's this is not transactional e-commerce this is like true one toone relationships and so you get paired up and then we're actually making outbound we're checking back in six months later hey uh I thought of you today you told me you
wanted this kind of sound we actually have a product that's doing that now you got to check this out right so so that's the kind of relationship and so that times you know millions of customers is really what differentiates a major Moe right like I mean other people trying to get into this industry are going to have to do it that well if they're if they're going they have to displace Henry right right not easy to do yeah that's right and again starting at the top of the pyramid that that's why we were able to do you know we can invest in these really serious
accounts and then and then and then now it's just a matter of scaling so we used Tech and Innovation kind of to scale that that almost old school mom and pop customer service model can you maybe go a little bit deeper than that on on the tech side of things cuz walking through the Halls here I mean you see dashboards you see like crazy setups with multim monitors and quick hot buttons and and people having impassioned conversations about no I really think they might have recorded it this way like M that is is is so cool but to be able to do that a billion
half dollars a year at that scale how do you how do you do it can you you know you don't have to share the Trade Secrets the simple answer is we just know our customers at a more intimate level than than most retailers and it's because we're on the phone with you all day long we're not just looking at online Behavior clicks or searches like we're actually we know the passion the emotion under the sale oh you're trying to record an album oh you're trying to play live and so like we take the time to just understand and in a high passion industry like this
you you it's fun to talk about rock and rolls right so so we get to spend a lot of time with our customers even when we're not selling we're learning and so we have a really powerful CRM system we're we're listening to this call oh you collect guitars check oh you you oh left-handed guitars check and so we're storing all this understanding of you so that we can add more value for you like like some retailers with you know that's like a sales tactic and like for us it's like no we're just trying to support the relationship and add the most value at a very
human level and so when we learn all those things now I can just not uh not only do product recommendations but we can customize your content and now I can send you videos or I can send you articles that I know are relevant and so it's really about surrounding that whole musical journey and so we just understand our customers at a deep level like maybe talk a little about how the needs of of musicians professional Andor or versus hobbyists um in like how their needs changed and how like the macro changes in music yeah change those those music needs um and and how do you
and are there any other big things you think that are coming there be big shifts in the future Max was asking a similar question earlier too and I think it's uh really kind of the core of the question is like what does music making look like and how does it change over time and so you go back to the origin and it was like it was this early technology but basically we were all playing uh acoustic instruments and and and you know electric guitars but but but uh not computer-based music is my point yeah and so then I think probably the first evolution is okay
now there's computers now they're affordable now there's software at home to do recording and so like what used to have to be in a really expensive recording studio now we can do in our bedrooms right and now I think in recent years we're even seeing oh wow now it's really high quality gear that I can put in my my my room and I think Max is a good example of that and so it's affordable and so it's approachable and I think that's good for the industry because it's kind of lowered the bar to uh to creativity and and collaboration and so like we love any
one of these step changes in technology that kind of introduces more you know kind of a new generation into music making yeah soorry go ahead please no no 20 years ago uh Apple buys uh EIC I think was what it was called well done um and and and creates garage releases Garage Band maybe a year later I I would be so curious we don't can't know this how much your growth and the fact that garage ban became something that was on every hobbyist Mac computer I mean that having Garage on my computer made me more interested in music oh that's interesting and and how you
know that was a move you you didn't you weren't colluding right just two trends that come together to create so many more people who can make music and who need a microphone you know and then podcasting as well I'd be very interested to hear how you've seen all those things you know rise and I'm sure you've risen with them yeah for sure and so and so now it's on our phone and so now it's mobile now now I've got a literally a recording studio in my pocket right and and so now I can do mobile recording now I'm I'm you know on an app it's
like it's uh it's engaging an entire generation of Music Makers that otherwise weren't weren't going to be introduced to that so I think yeah great Point Garage Band I think has been wonderful and now we think about where does it go from here and it's like now we've got generative Ai and I you know you can't do a podcast anymore without talking about gen AI sure yeah of course um we actually get really excited about it I think it's going to be good for the the industry because it will lower that bar again and and so now I can sit it a prompt and I
can say hey make me music that sounds like this oh wow this sounds great and so now you know uh this generation will be introduced to wow this really sounds good I want to do more of that oh now I want to get more serious now I want to buy gear and so it will kind of change the entry point we believe totally do do you think general of AI will change um the authenticity of an artist versus someone who's creative at putting sounds together and not I'm not dimin I'm not diminishing um the G of AI the future of what music might be but
like like let's take you Michael Jackson or Madonna or Hank Williams or these these just amazing musicians that that are Timeless and reinvent themselves do you think the artist will change like the what makes you an artist will change in the future because of generative AI I think we've got a lot of to to figure out I think it will lower the bar uh you you know I can start making music with less Talent if you will yeah um sure that's good but it's but but like one of the challenges we have with uh especially music programs in school is it's like it takes a
lot of grit and effort to learn an instrument and in a world of instant gratification where I'm otherwise just want to be gaming or right um now I think for the first time it'll be like oh this is this is sounding good I can I can get some more traction what it means for more major artists is sort of interesting to to figure out and there's all kinds of like even the like the Grammy Awards is trying to figure out like they just publish some policy of like will geni songs be eligible for award like there's a whole lot to figure out what about Rights
Management what about when it learned from previous works and so whole lot to figure out I I think and Sweetwater thinks if you really are in it for Love of the Game in this industry that there's no replacement for just like really enjoying collaborating and making music so it will change the tools we've seen it before with other Tech but but at the heart of it is it's like uh nobody wants a computer to just replace such an emotional expression one of the things that Apple also introduced uh recently was these the airpod pro with the spatial audio and we got to experience here in
studio someone mixing and putting together in spatial audio experience which is hard to describe um but it it seems like that opens up so many other Pathways for people to think about sound Beyond just stereo um can you talk a little bit about other things like that or that specifically in how artists and music is sort of evolving with this new technology yeah so so spatial audio so so for our listeners so so you know stereo sound where I have a left and right speaker and then surround sound like many of us have around our TV like the next evolution of that is spatial or
or maybe you've heard of Dolby Atmos and so it's a very specific number of speakers around uh The Listener and now in in uh ear pods and so there's a whole momentum around this in the music industry where now you can take maybe a a a famous hit out of a back catalog now we're remixing those and we're doing some of that work here at Sweetwater for for for major artists that uh takes those instruments and puts them in space so I hear the guitar coming from over here I hear a vocal from over here and effect over here and so it's it's this wonderful
experience that that is opening up um it it's more enjoyable to to listen to and so so there's there's a real momentum around that and that creates uh new opportunities for artists and it creates new revenue streams and so that's important for our industry in a world where you know we don't buy albums anymore we just go to streaming services so there's a lot of concern about like can artists really support and so anything that kind of reinvigorates and creates more opportunities for artists and more more listening is is wonderful and we haven't had any really real step changes since stereo they tried quadrophonic you
know and there's surround sound but I don't hear a lot of people listening to their music in surround sound right we watch movies in surround sound um so it's pretty neat to think that this might actually be that I'm not sure if it will be yeah we we yeah there will be all kinds of use cases we think even live sound so major venues are looking at like what do spatial look like and uh the sphere if anyone has had that experience in Las Vegas there's some really cool audio technology going on in there so Edge sound research out of California is like using the
body right to proliferate edges yeah yeah right it's amazing technology yeah and so then you then you move out into augmented reality and virtual reality not just like listening to music but how will we uh how will educate music education change and so I just saw a really great video just yesterday of a kind of an augmented I'm playing the guitar but here's like these prompts uh in my augmented reality just showing me oops you should have moved your hand to here and so like another way another way to try that yeah that gives me hope I might learn how to play the guitar yet
I I believe in you I believe in you too Matt and I uh play do a lot of coming together and we were talking the other day we don't always have a drummer and how sweet it will be when we can have a drummer that is uh you know instead of having a drum machine that stays very consistent what if we have an AI generated drummer that is riffing with us has some feel it's hearing us and it's yeah it has some feel yeah I don't think we're too far away from that coming soon I agree yeah and so all this is musicians and then
we think about content creators uh and so like what we're doing right now podcaster streamers like that's a big market for us and a lot of momentum there and what's interesting there is I feel like we're kind of moving out of the first inning where we all had an iPhone and like we're doing kind of basic production and all of a sudden it's like wait this is working or I'm making money from my channel and so we're seeing this real momentum right now to kind of upgrade into intermediate and pro and so like there's this entire generation of when I grow up I want to
be a YouTube Star yeah um and we're seeing people like really uh start to to do it like it's working and so we're we're finding great momentum it really does seem that you you mention YouTube uh specifically I've probably watched hundreds of hours of Sweetwater content on YouTube um it it really seems like learning these skills techniques um has never been easier and it's only getting easier uh for those who are interested um tell me a little bit about how Sweetwater is currently educating its uh employees its customers its Partners uh because just taking the tour here amazing training spaces multiple different I mean you
had a theater setup you had a live stage sound setup uh you had a training seminar area it just seems like education is a really core part of your business yeah thank you and so so we we there's kind of three pillars like it's like these deep relationships with customers it's this expertise and and just um um knowing the most about the gear in our industry and then it's value ad there's things we're doing to just add more value than than if you bought it anywhere else and so investing in that expertise for us looks like what I said earlier the Sweetwater University this is
like the first 13 weeks of training but then there's this unbelievable amount of ongoing training which is know two two giant meetings uh each week where we have manufacturers flying in they're bringing the newest gear they're like you know Hey listen to what happens when I turn this knob it's like very in-depth product training and then Hands-On so they'll stick around in a room somewhere in the campus and I can come in and actually put my hands on it and hear it so uh again not a call center this is like uh you know I've I've had my hands on that gear so when I'm
talking to a customer I can explain exactly what's going on at a very high level um we do a lot of uh uh uh uh we have vendors who actually have offices on our uh campus vage vendor Village well done um that cool so like hey I don't know about this question let me just walk over and ask the manufacturer who has a presence here and then sometimes even jump on a three-way call and so a lot of investment there and then we just have the the the studio world class Studio on site the M the engineers can come down and actually put hands on
the gear in a live recording studio or in our store and so we make all these these uh uh investments into our our people so that they can speak speak out of a position of authority one of the things that uh stood out to me as we were kind of going through Creator row I don't know why you called that area of the of the campus uh but you literally have session musicians that can come join and uh obviously bigname artists come through here in Fort Wayne and want to record something and say hey I need a drummer it's like oh well we got a
worldclass drummer who play with Genesis and all kinds of other bands just let me go get him like it is incredible the the amount of ways you go above and beyond and it really seems like that um aligns with this I don't know if it's a stated core value but trust oh well done yeah uh and and I said earlier like this research destination so from a customer standpoint what we're trying to establish is like when you start a purchase journey and and I'm just in that first stage of like discovering a product like we really want you to think of Sweetwater first and so
that's why we go over the top with all these investments in video we write all of our own product copy we take highres photos of of nearly all the product we do video 360 spin like you will find more research tools about these products on our website than anywhere else and that's an investment so so that as a customer you can start your journey there um and then we add more value so so like like one thing we've learned over 40 years is it's just an incredible uh it's a competitive mode as Max said earlier but we in an industry where prices are very similar
we believe that that we want to invest more in giving you more value um there's a chuck a a phrase that chuck would use Lan Yap it's a southern term it just means give you a little bit more value than you expected and so for us that's you know we do free shipping we do a free 2-year warranty with nearly everything that we sell that where you would pay for that anywhere else we do a uh tech support on the phone after the sale like let's you know hey I'm having this error trying to install the software no problem let's help you out just call
in we'll take care of it we do a really unique thing with guitars so so we call it Guitar Gallery we take every guitar out of the box 3.99 and over it goes through what we call a 55 point inspection where we have technicians actually looking for cosmetic imperfections love that playability they're actually making adjustments so it's like literally better than Factory fresh condition and then it goes through this Guitar Gallery where we're taking highres photos of each guitar so on our website you can actually look at you know if we have several of that guitar in stock o I like that wood grain specifically
let me Reserve that serial number and we ship that one to your door so all these Investments not just in content but then in that value stack and and the reason we're doing all that is because we're really trying to bridge that Gap back to Brick and Mortar this is otherwise a very emotional purchase so I want to go to the local store feel it touch it hear it and so for us that's really um bringing you close so you feel like you got up close and personal with that instrument and and have all the confidence and trust back to your point of uh buying
online and kind of best best of both if you will I I think this is really smart and and so um I feel like we're going through a full cycle and so in in the old days you go back well what's what's old days but let's just say you go back back 30 40 years 100 years right if you're a merchant in the middle of town There's a one-on-one relationship I know who you are you know I'm selling to you I'm buying from you Etc it's an experience and so that's how businesses were built based on relationships and experience and then this thing called internet
comes along and we all became detached and so it's very transaction it got disembodied yeah disembodied and it's almost like humans subconsciously want to get back to the experience which is what you're deliv today is is I will all day long I'm just thinking about when I call you know MX or I call whatever I call the customer service number of I just want to talk to Max okay because I'll remember Max Max may not remember me if it's 10,000 customers but eventually Max might probably will right so like this is a message to all those companies out there because you do that naturally in
a startup because you only have three customers so naturally you're oneon-one relationship but then it breaks down at some point as as companies grow and and you've built the infrastructure Mike like maintain this cuz that's just it's in your DNA and so like what what advice and maybe it's hard to talk to other companies out there listening that are maybe more medium stage companies that have lost that one toone the ability to one toone touch their customer and the absolute requirement to get back in there because given the choice between that water bottle and that water bottle I'm going to choose the best experience every
time and if you know me and I'm going to remember your name because I probably only call there once a year um how what advice would you have or recommendations for companies to start thinking about that way because it does feel like the experience versus the transaction will win for the next 50 years what we've learned is uh we invest in the lifetime of the customer not any one transaction and uh we don't want to lose money on any one transaction but in a high passion industry like ours we can invest in these really long lifetime Journeys and so that's why we go so deep
with the relationship we can bring a human into the loop so we have kind of the same understanding of customers as other retailers do online but then we have this really unique ability to say oh it looks like you know Max is in market for for whatever next product why don't we just shorten that journey and get a get a human to come in and really just U uh meet you early in that journey and add more value in that way what you find out is like from a business standpoint we get this unbelievable retention and loyalty and word of mouth and because we invest
so deeply in these relationships uh it it you know you look at our cohort curves and and just saes over time and it's just like these wonderful straight lines like if you stick around you tend to stick around forever and ever and so almost almost resembles recurring Revenue business model where it's just like this really reliable Revenue stream also one of the things I love about the relation relational aspect and also the sort of surprise and Delight adding value is that every package comes with some candy in it and what a what a cool way to create an experience also hearken to the brand Sweet
Water yeah thank you is there a story behind how that that that started there is a story um so I think there's a story I like as I understand it it was just a Chuck Zak thing it's just like let's just throw a little candy in the Box it just makes it a little bit extra special and it was just a little wow moment and and it's just like these you know for no reason other than just like could I just make someone's day a little better and so but we became known for it and now you guys will not believe the amount of requests
we get from customers like in the comments on the order it's like oh only Tootsie Rolls please or no Fireballs or my spouse is only letting me buy this because of the candy Max like I know I could do that I didn't know that was an option I won't use I won't use it I won't use it I'd request hot tamali please that's so cool so we've become very known for the candy and I knew like I knew that that was a thing that Sweet Water did but still when I got my first package it was still a surprise and Delight moment you know cuz
it's like you get so many other packages you just ripping it out and you know okay time to recycle the box and then you know you get the you know most recent I ordered was a foot pedal for Nate's kahone to play in the team Jam that we were doing I was like oh yeah K this is great um so so fun are there other ways that um you you've kind of seen that in the customer Journey here at Sweetwater even thinking about the employee Journey um everyone around here seems so freaking happy to work here um it is it is uh palpable the energy
and excitement that people have and I know that that uh translates to the customer experience too so it's a relationship based company and so we we talk sometimes about the three-legged stool of of customers and employees and even vendors like like we just want to partner really well with vendors we want to you know the same investment we're making in customers and these long-term relationships we think the same way about vendors we think the same way about employees the the culture we've had to be very intentional about building and so I would say it starts with hiring we're looking for people that that have a
a bit of a servant heart like I want to be part of something bigger than myself like this whole business model is how do we just pour into the lives of these musicians over the phone and so you have to kind of start with your own heart to be able to reflect that into uh the these uh these uh phone calls with customers and so we're we're hiring the right people and then the space this campus we've made a huge investment in um just wrapping uh structure around what does it look like to have community and so we're bringing all these employees in from other
parts of the country and kind of displacing you from your normal support network so we really try to build that up with all kinds of opportunities to meet other families events that we do like we try to just like do life together not just business together that's an important there were kids in the cafeteria when we had lunch today you know there's families in there like like bring your family in and and now we're beating other people and it's like these little collisions like we just love that I thought that was cool um but then in in amenities and so we have this fitness center
this doctor this nurse this uh hair salon racka ball cord and so like we just invest in space uh because we think it matters we think that that culture and like building that um you know kind of putting your money where your mouth is I guess and just just building a space that we all enjoy and and it does you have you walk around around the building we saw it this morning all these people are smiling and get we get that comment all the time and they're like is this a cult like what is going on and like right um no and the signs all
over that say just do the right thing yeah and and which sounds so boxy but but we've just realized it's just it's very real and it shows up and we talk a lot about um take care of one customer at a time one detail at a time do that with passion and precision and and the growth will come the money will follow do you think that uh being headquartered here in Indiana has a positive effect in that way I think so don't you guys see it I think another places it's like there there's something very real about Midwest values and work ethic and I think
that's very real because we have a lot of presence also in Manhattan or LA or Nashville other music cities but there's just something special about this culture here that lets life slow down to zero we're not trying to be something you know you know it's just a we can be very natural and I think that shows up in the relation there's an old story out there that um I think I think it was Warren Buffett that um um I can't if it was directly or with one of the one of the companies I think it was one compan he invested in but that CEO would
purposely ask proactively ask people applying for jobs at that company Were You Raised on a Midwest dairy farm huh yes or no and if the answer was yes hired a Midwest dairy farm Midwest dairy farm specific did not matter college no College nothing mattered Midwest dairy farm yes or no you're hired automatically we'll figure it out I would I would have not gotten hired that is so funny we we did a I can't can't make this up to we did a promotion this week a young woman who grew up on a Midwest dairy farm and 100% it was like there's a work ethic you just
you understand a genuine desire to serve right right the customer and there's a grit and there's a a pace and a hustle and that that's you know we talk a lot here uh like how does Sweet Water win and I always it's like peeling an onion and at the very center is heart like this is a company with a heart yep um we surround that with an obsession over details like I've never seen anywhere else and then we wrap that like this this hustle this like entrepreneurial there's just a pace and a scrappiness relationships you know you can get that far out The Onion I
haven't said a thing about musical instruments yet like there's just a foundation here that's based in those those you know personality traits then you get to gear advice and then finally you get to Tech that just kind of scales and and kind of you know empowers the whole thing so so that's how we think about well you read my mind because I was just about to ask about musical instruments um it stands out to me that probably what 70 to 80% of your team are musicians themselves uh do you think that musicians make particularly better employees or do you think that there are things that
musicians in particular bring to the job that maybe non-m musicians yeah that's a fascinating question I think there's plenty of research that says yeah as musicians like it really trains our brains to think and problem solve and so like there's wonderful research around all that I think for us in particular it's like you really do have to kind of be at in love of the game like like to really kind of understand the customers as well MH and and it just um it just creates a better experience when when when you know passion is igniting on the phone because it's like we're speaking the same
language and so not just the sales team but like all throughout the company like when you kind of understand your customer at that level like what we've learned is that that really matters a lot yeah I I want to ask a few more music questions if you don't mind because we spent so much time getting business Knowledge from you um I'm this is a question I've asked only a few other times uh on the podcast um but I I think You' probably have some interesting answers uh one of the things I've noticed for me personally is that during certain seasons of my life there's an
album or a song that really stands out and it's just like for this season of my life this is the album like wild FL Tom Petty wild flowers like this is going to be on repeat for the next six however long um are there any songs or albums for you that stand out to any particular seasons I get this question a lot and I always have to answer like like no like we love all of our kids they're all they're all customers so that's like that's fair teams but what I've learned so a musician and I've gone through several seasons myself or different bands play
different styles or whatever uh so I have a pretty wide taste what what I love is like this world of Spotify or streaming services where it's just like I don't know Spotify you tell me and and like just I love discovering something new and and it I don't know that's how I that's how I I love that yeah I listen to a lot more Ethiopian music than I ever have in Spotify and I had no idea that I was big I was going to enjoy that at all and now it's a big part of my catalog which awesome which is bizarre yeah love it thank
you Spotify I'd be curious a similar vein um music oriented you've had some Legends come through here I have I assume they've dropped some nuggets of wisdom that have stuck you tell me um I'd love to hear you know even if it wasn't somebody who would we consider legendary to somebody who just said something here came through gave a talk answered a question and it's stuck with you yeah we we do we get all these artists to come through we we we had this discussion a little bit earlier in the day where you know there's like these major artists like these billboard artists or whatever
um that are wonderful and famous the the artists that we love that come through are the sort of players players it's like not a name I know but it's like just their their their work just sort of stands for itself it's just like these are the crafts people um the the best nuggets we've had coming through are from those folks it's like I've been in the trench I've made this album here's how I got this sound here's how I did and so yeah like we love those folks that come in and just have really refined a craft and are willing to share uh that's what
I love about this industry is it's like we're all just creators we just want to help each other get better and so the amount of people that are willing to come in here and just you know we'll have a workshop or a master class we'll have you know 100 people fill a theater and someone's just sharing their lifelong learnings and so we we love doing that a West duy is an example aea a ribbon microphones this is a gentleman who makes microphones he's he's famous if you really like ribbon microphones like if you don't know anything about ribbon microphones you would not know who Wes
was I bought one of his microphones and he we were supposed to sit down for 15 minutes and talk and he spent 2 hours oh wonderful and he didn't need to do that uh but he just I was interested in what he knew and he poured it he poured into me for two hours side onse never you know we've texted since but he he didn't need to do that but I do think that is something that uh comes with the musician Spirit of been like this person's interested in something that I might have been fortunate enough to have some time with and I like talking
about it too you know and so then we end up spending two hours instead of 15 minutes I don't know I'm sure that's in other Industries as well but I find it frequently in this one yeah I love that and it's and it's again for Love of the Game and and U and it just creates these connections with customers I think you know as advice for other people it's like what are the things you can do in your business that create the not just selling but how do I wrap that with these experiences with this other value ad and so it's authentic it's authentic and
for us it's that takes the form of Education or these guests the the amphitheater that we have in our you know part of our campus where we're doing concert series all year long we have the the studio where we've got workshops going on and so like we really invest in that almost as give back yeah um you know we certainly could charge for that sometimes we do but mostly it's like how do we just support this community well in those ways Sweetwater is a culture it's a it's a movement it's a community it's also a business and uh obviously businesses always have challenging times um
Sweetwater has seen growth through you know 2007 8 n uh growth through the pandemic can you share a little bit about those experiences because I know you were here for both of those uh time periods um blessed with with uh fantastic growth 20% compounded annual growth for going back to the 9s uh literally uh grew every year except one year uh 2009 uh which was just a little blip but but that's this was Great Recession we um uh learned a lot through that time frame and and and Chuck kind of famously says like I just refused to participate in this recession and we're like well
what does that mean Chuck I'd like to do that too I don't want to participate and and what it meant was this and it's a wonderful lesson which is like our entire uh industry and really all of retail like pulled back like like like it was a lot of uncertainty um a lot of concern let's turn off our ads let's pull back Chuck says I see that as opportunity uh we're going to push in and and we're going to go meet customers that are shopping and we're going to uh um you know so so as a result we took a lot of market share got
to meet lots and lots of new customers um but we also added on to the value stack at that point so it's like okay uh times are tough uh customers need more financing options so we actually in 2008 2009 we came up with an internal kind of 36 pay like an installment payment plan long before it was a you know clner a firm and so forth right um we that's when we did the two-year warranty like we uh listen customers need more confidence with with precious you know hard earned money and so like so so it was not just like market share but it was
like how do we help these customers have more confidence more trust and so that was what we learned in 2008 2009 and we pushed in it was a great accelerator for our business then we get to the pandemic your your second question um uh and listen I say delicately like there was a lot of uh you know some companies uh a lot of hurt and a lot of pain ours was actually a success story great accelerator again uh 2.5 million new customers through the pandemic that we uh brought to you know new customers um because we sell the kind of things you need to stream
from your home your business your school your church and so that was a a big acceleration and had the best way to research them uh thank you uh but also bucket list oh I always wanted to play guitar so now we have time we money uh by way of stimulus checks and so like the amount of people that picked up an instrument or re-engaged with a previous passion and now they're sticking around and and so because it's a high passion uh hobby um now we're not just going back to like you know pre-pandemic trend line it's like uh no they're sticking with it and so
so it's actually been great for us do you have any advice for leaders who need to lead through a challenging time like that because I imagine it wasn't like oh uh a pandemic this will be good for the business like I'm sure it wasn't like a initial thought in there was I'm sure uncertainty like any business had amongst its team um what did you see Chuck embody and what did you embody with your team that you think um others could learn from I I think I think a number of things we we try to be a very transparent company like like like this is the
kind of family oriented culture like we're all part of this fabric that that kind of passes down through through you know Generations if you will will and we all stand on the shoulders of of the leaders that were here before so we're very intentional about um even teaching you things outside of your functional area like here's how other things work in the company so you just kind of have this understanding of all the moving parts and that's been really effective wow we also uh we invest a lot in our Frontline uh leadership like like this uh idea like you you quit your boss not your
company and so like we take that very seriously and so we really do a lot of development training and at that that front line and uh and we lead in proximity uh this is something we've learned which is like um be in the trench with your team like they need to know that you're there I've got your back like we're in this together like like like you've got to be close to your teams whether that's remote or distributed or on site but just like you got to be with your people um and and have them feel that that that connection is there that's something we've
learned I would imagine it's a little bit uh the metaphor that has come up a couple times on the podcast is it's a little bit like a tuning fork uh if the if the leader is vibrating at a frequency that's like slow and steady it's a constant this is Middle SE or this is you know whatever that that uh frequency is the rest of the team can kind of uh gel to that Vibe resonates yeah yeah it resonates yeah and we wrap a lot of structure around that so so we have this is a company no shortage of good ideas we have we have great
people great ideas like for us the stretch is in the middle like our challenge is sometimes Focus which is like are we trying to do too much at once bet and so for us it's like getting really good strategic plans good scoping good requirements and then good operational rhythms that say do we have the right C in some meetings you know not too many not too few do we have the right people do we have the right prep and so like we put a lot of intention into like just kind of structuring the work itself so that we're being good to ourselves what's Chuck doing
these days now that he's uh not at the CEO Helm yeah thank you so uh so Chuck stepped away a couple years ago from the building after famously you know I'll I'll die in this chair I'll never you know um Chuck is uh listen Chuck is a man with a heart uh wonderful man so many things that he wanted to do from philanthropy to Comm development still has the same heart for Sweetwater chair of our board he's I have breakfast with him you know once every one or two weeks uh probably email him every day um very much invested um but he just has all
these other things that he wanted to do and so he's very passionate about Fort Wayne and and some economic development and and so he's doing those things he's got a foundation now that's doing some really really cool work in this uh region and just supporting uh lots of things and so we couldn't be more proud for him so a little bit out of the dayto day um but but only so he can multiply his time which I love I love that his DNA is still very much in this business you walk in the front door and there's a Volkswagen van that looks like maybe is
a little nicer than the one I've heard in the stories um and just some amazing gear probably the kurse keyboard that he uh you know learned to program early on um but at the same time like there is there is just like this uh energy and people are streaming you've got creators who are creating Tik Tok videos and short form videos all across the company so there there's this really neat um balance almost of like Roots uh but then you also got like these new leaves that are kind of sprouting all the time it seems just like a very healthy environment the one thing that
Chuck taught us like when we talk about obsessing over details like we just hold the bar incredibly high and and that's straight from Chuck that's a Founder Le like listen this is the level we're going to serve our customers because it's just the right thing to do for humans and shame on us if we're we're letting a a problem go or you know like like letting a customer walk away mad we talk about the Leaky bucket metaphor you know a lot of companies it's like well if I got enough customers coming in the top I don't care what falls out we we are literally a
why did any One customer fall out the bottom of the bucket kind of company and and like these meetings of like you know with with all of our Executives in one room chuck would why did this customer not understand the return policy and it's like wow like serious like and and so that's the culture and so we hold hold the bar at that at that really high level we have a a saying here um solve the customer solve the problem solve the system and and what we mean is like before you solve the problem get your arm around the customer like like like first of
all uh let's just get you back and make sure you know like we're going to take care of this whatever the answer is up being now let's go solve the problem and then let's look at the system because I bet other other customers are having that same problem and so we we think about that system I dig that a lot what are you excited about the most right now at Sweet Water yeah and what's the next category is there is there well we're running out of category so so so um Hey listen I said one earlier this Creator like like like you know when we
say that here what we mean is like Beyond kind of traditional musicians but just people that are doing creativity in other ways and and just gaming and streaming and podcasting wonderful momentum they really excited absolutely we have some really cool growth happening in the K12 like education space and and so just heartwarming just like like this is what I love just like these watching these young musicians just come to life and so like we're doing some really cool things there some Partnerships um the spatial audio that we talked about earlier like there's going to be a lot of innovation happening around that we see that
as great uh growth opportunity and um and then there's other I could keep going on but there's like uh used gear like we have really not done a lot with used gear and so there's a whole opportunity around that we don't do hardly anything internationally so like we have all these opportunities for growth what I would say though is our focus is not really any of those things as much as just staying true to who we are like like this is like take care of one customer one detail at a time and so like we just really think about just like how do we double
down on the existing relationships and just really serve well so that's always our our focus and then just very careful careful growth outside of that how can listeners of the show support you and support Sweetwater support Fort Wayne um and what you're doing for music here it's more like how can we serve you and and and you know if there's any um creativity happening in your house from music making to your kid in school to to Creator like we'd love to chat about that and uh and help in those ways well we are at uh Nate's favorite part of the show uh Nate who is
generous enough to give up his seat for uh our our MVP uh before you go Max I just want to say thank you so much for joining us uh and a pleasure I'll we'll do it again next week thank you do you have any burning questions before you go I I think I've gotten them in I'm excited to hear some Nate rapid fire from Nate all right cool all right Nate you're all warmed up yes sir uh oh this is the hot seat here we go first off I took a few notes during it um General Electric it was the David Becker episode who General
Electric had it on their application are you a Midwest Dairy Farmer yeah and if you were you got like Fast tracked on top of that oh and interesting humble plug to shouted him out Edge sound research yep valter salamaki is doing like sound experiences with vibrations humble plug to check out that episode as well from rally I interviewed him and it was uh it was a really fun time learning about the their thoughts on the future of s very cool sorry I had to those were burning a hole in my uh in my phone but I like it there it goes I just did the
same thing with my phone yeah saw that oh all right I gotta let's get going we have a lightning round um we have three typical questions for our lightning round I do have one extra I know that you bonus question you love all of your kids equally all music is great yes yes yes but this is what I want to know okay all right you're you're going into whether it's a meeting or a pickup basketball game or whatever it is where you need to be pumped up what's on your pump up playlist oh my word pump up besides thunderstuck Pump Up playlist I don't yeah
I don't know how to answer your question we've you're going to strike me out on this one so uh so it it's the Spotify playlist like it you just say you just say pump up and anything that comes on uh uh so yes yeah I type in pump up all right no listen hey I'm reaching for something so so '90s like I'm probably back to something that's it's going to be Rock oriented it's going to be alternative maybe it's like something in that all right something 90s rock gets uh gets mic ready to run through a wall there we go all right alt Rock alt
rock yeah is I don't know is that cool to say I yeah totally like like food Fighters kind of uh food fighters of count yeah okay all right some just trying to some all these Classics I like Mike didn't say it I said it so no one can pin that on you there we go exactly um this is great so three questions liting round first thing that comes to your mind outside of the amazing entrepreneurial ecosystem what is Indiana known for what is Indiana known for um okay so we're Music Company here so known for some musicians uh do you know any of them famous
whoer musicians Michael Jackson well done John Cougar melon Camp J Jackson well done there's more baby face oh baby face who who's baby face I don't want to steal the spotlight from Mike's you don't have baby face on your pump up should I um who else Axel Rose AEL Rose yes I went to high school with him and true story sh Hoon Blind Melon yeah well done right getting on a roll here go I don't know how we're doing what I gotta put these ones to memory right is is that all of them that's this is a Jedi level uh rapid fire cuz he has
answered zero question so far in the lightning group participation he just somehow got all of us to answer his just won the lightning round what the world I'm feeling thunderstrike all right hey next silent Silence from the peanut gallery Silence from the peanut gallery Mike what is one Hidden Gem in Indiana O A Hidden Gem in Indiana um listen here in Fort Wayne this Children's Zoo fantastic if you've never been U that would be high on our list uh for our family is like we're outdoorsy so uh Mingo cave would be high on our list down south so uh so that would be our hidden
all right that's a good we haven't we haven't gotten that one yet that's great and to wrap out the lightning round who is someone we need to keep on our radar someone who is doing big things things okay you know who I'm digging right now and and it's a friend of the show I think he's on your Show recently Dan hanran um and here's why I love what Dan is so I knew Dan from whatever 15 years ago when he was doing you know his his uh his early Tech stuff but now this focus on like hyper local like what Dan is doing is like
you know cool we can use technology for moonshots and self-driving cars or whatever but like this idea of like how do I just serve my neighbor and and like literally starting with this neighborhood and this city and kind of grown from there like I'm really into that uh concept I love that you said Dan because I got coffee with Dan maybe six months ago and I was talking about the podcast and I was like I'd really love an exec from Sweetwater on the podcast and he said oh I'll introduce you to Mike it's great and that's how it all got started full circle there you
go Dan shout out yeah the love is Flowing here in the state of Indiana and uh it it is definitely pumping through the veins of this company um Mike thank you so much for taking time thank you for your patience as I figured out how to use recording equipment today thank you for showing us around this amazing state-of-the-art facility this is just incredible hey so much fun and so much so so cool that you guys are doing this like lifting these stories up uh super fan of the of the show it's so cool so thank you guys that you are at the top of our
list and so now we can say we checked off Sweet Water and um thank you Mike this is awesome thanks Mike was awesome great job this has been get in a powder kick production in partnership with Elevate Ventures and we want to hear from you if you have suggestions for a guest or segment reach out to Matt or Nate on LinkedIn or on email to discover top tier tech companies outside of Silicon Valley in hubs like Indiana check check out our newsletter at powder.com newsletter and to apply for membership to the powdercake executive Community Check out powder.com premium we'll catch you next time and next
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