Industry’s ‘Young Blood’ Fires Back

When editor Jason Knott called out custom electronics company owners for generally being old, it set off a firestorm of reactions — mostly from relatively young CE pros.

iPhones were drawn from holsters. Facebook pages were updated. Tweets were sent. Comments were posted. E-mails were fired off.

Apparently, even though the average custom electronics company owner is in his mid-40s, according to CE Pro readership surveys, there is a strong and vocal minority of young company owners out there.

We heard from the older CE pros, too. It just took a little longer.

The old versus young debate isn't silly. (One "old guy" wrote that he is so upset at CE Pro that he'd hit us with his cane if he could remember where he put it.) The issue is significant because the home electronics industry, in general, seems to be in transition.

As Jason put it, "the next era of custom installation entrepreneurs will be forming their companies around IP-based technologies, integrated services covering networking and control, remote access, portable connectivity and control, etc."

The flip side, of course, is that the companies that don't adjust will be left in the dust. Since most CE pros at least demographically are candidates to fall behind, it endangers the long-term viability of the custom electronics industry.

Hyperbole? Maybe.

But Jason points to electricians and locksmiths — the average ages of which are both well over 50 — as other endangered trades. At the risk of seeming discriminatory, he wrote that it's hard for old dogs to learn new tricks. "That's why many electricians have not migrated into low-voltage offerings, and why many locksmiths couldn't make the transition from keys to access control cards."

Things are a little more complicated in the custom electronics industry. If a majority of companies are, in fact, at risk of falling behind, what exactly is it that they aren't doing? Also, are young CE pros so brash that they don't recognize who built the industry in which they earn their pay checks?

We asked some of the custom electronics industry's "young blood." Here's what they say.

Advantages of Youth

When Ponce de León supposedly searched for the fountain of youth, it wasn't because he lacked IT skills. However, that skill set — and appreciation for it — is generally what divides generations in the CE pro industry.

So many CE pros in their 20s and 30s tell us that they design home systems using an IT-centric approach. Many of them went to school for IT or come from an IT support background.

Meanwhile, the term "IT" seems to trigger something in older CE pros. Many (not all) put their guard up and tout the value of "true high-performance" systems. The thing is, though, IT-centric CE pros tend to tout that, too. They don't view the two as mutually exclusive.

"My goal is to bring IT lifestyle while keeping in mind A/V quality, energy efficiency, security and ease of use," says Tommy Thibeault, a 24-year-old Quebec-based CE pro.

Aspen Custom Electronics, which is seeing its revenues double from 2008 to 2009, credits its growth to the referrals it generates with IT-centric control systems. Stillwater, Okla.-based Aspen doesn't sacrifice high-performance audio/video systems, says chief technology officer Matt Hall, who at 42 is the company's only employee over 40. "Our systems still sound very good. I think we just recognize the reality that it isn't the customer's primary interest in the system."

In Hall's experience, clients that are thrilled with their control systems "lead to many more referral systems and pre-qualified customers." Aspen takes an IT-centric approach to those systems, embracing iPods and digital content.

It's important to approach system design "through the lens of an IP-based world," says Luis Pena, 29-year-old CEO of PWM Technology, which owns JWE Corp. "Does this integrate with the network at all, and how? If not, will this product be replaced by an IP-based solution in the future?"

The IT advantage, though, isn't limited to system design, according to Pena. When employees have a high IT comfort level, he says, communication and efficiency improves. At JWE's Irvine, Calif.-based office, "every employee has a workstation set up with various monitors. Every employee is required to log into and use the company IM [instant messaging] system. Every employee is provided with a handheld device with SMS [short message service], e-mail and Internet access."

It's a similar situation at Southlake, Texas-based Futurian Systems, where 31-year-old president Jeremy Beck says he usually has "BlackBerry Bold on the hip, tablet PC in hand and Bluetooth in the ear."

Beck says his prior experience in the IT industry helped him implement internal systems that help to run his business.

Disadvantages of Age

Complacency, shortsightedness and inability to talk the talk are unfortunate characteristics of older CE pros, according to the young ones.

These can translate to some shortcomings on the technical side as well, according to 29-year-old Michael Maniscalco, co-founder of West Palm Beach, Fla.-based InvoStar.

He notices older CE pros "holding onto legacy communication protocols, including RS-232, and [being] slow to adopt standards like IP communications, which are faster, more robust and as reliable."

Maniscalco also recognizes a "build-as-you-go mentality" that he says limits system performance. "The systems today, with their ever-growing complexities, require a great deal of design, engineering and planning."

Some of this reflects years of clients being easy to come by, according to 33-year-old Darryl Kuder, president of Carlsbad, Calif.-based Red Dot Audio Video.

That, of course, changed for most companies after the construction bubble burst and the recession hit. Kuder wonders if some older dealers are up to the new challenge. "These older guys don't seem to know how to market to new customers. They have relied too long on business being given to them."

Beck, meanwhile, lists three characteristics of older CE pros that might make garnering new clients difficult:

1. Language: "They just don't seem to know the tech trendy words in the industry."
2. Foresight: "They always seem to be focused on the here and now and not the future."
3. Appearance: "[They] just don't look like the kind of guy that would know technology."

Pitfalls of Youth

What young dealers say when asked about any disadvantages of youth is less telling than what they don't say. Nobody tells CE Pro that their lack of business experience has led to challenges or mistakes.

That's relevant because it goes both ways. If young CE pros can be frustrated that old guys don't respect a fresh, IT-centric approach, seasoned CE pros can be annoyed that these whipper-snappers don't respect their business acumen.

That being said, here are the problems with being young:

Finding good help. The biggest downside to being a young CE pro, says Kuder, is that it's difficult to hire older employees. "Often times, someone in their mid-40s is going to have a hard time working for someone younger than them. This is most common when hiring sales personal."

Perception. When selling $300,000-plus systems, for example, Beck says "clients have a tendency to be nervous in dealing with a younger CE pro." He adds, "but that fades with the presentation of my portfolio."

Good ol' Boy Network. It can be difficult for a young CE pro to establish relationships with builders and other trade partners, according to Maniscalco and Stuart Rench, the 29-year-old co-founders of InvoStar. They claim builders like to stick with their existing relationships even if things are broken.

Lack of Credibility. "I am a firm believer that credibility must be earned over time, and many of us still have dues to pay," says Pena, respectfully.

Next-Gen Clients

The new crop of customers coming up the pike is a lot different than the traditional custom electronics client. They have downloaded more songs than bought CDs and most of the speakers they've purchased fit right in their ears.

As a result, "the audiophile thing is kind of going out the window," says 29-year-old Scott Cochrane, director of design and implementation for Aspen.

Obviously, CE pros should listen to their clients, educate them and ultimately deliver the types of systems they want. If they want their iPhone to be the centerpiece of their system, that's what they should get. "You either embrace it and use that market shift to your advantage or get passed by guys that do," Cochrane says.

Younger clients are also different in how they learn about technology, and CE pros need to adapt to it, says Pena. "Any possible advantages from which our industry has benefited through information scarcity are either gone or will be soon," he says.

The way clients learn about systems and seek post-installation support is also changing, according to Beck. Younger clients, he says, "are eager to learn the technology and will press every button to learn the systems on their own. They don't need manuals, just an online forum to post questions and the ability to share their experience through social networking."

Age-Old Sales Techniques

There is a distinct advantage to being young when selling technology — according to young people, anyway. The perception that young people grew up with and understand technology can come in handy for youthful salespeople. See if you notice a pattern here:

"They view me as the expert and when they come to understand that technology is second nature to me, immediate trust is developed. And the sale is so much easier." — Beck, 31

"There is a noticeable trust advantage that youth brings when speaking about technology with a client." — Pena, 29

"Meeting with our typically older clients they are often refreshed to see a younger representative, knowing that we have grown up and are very comfortable with technology." — Maniscalco, 29

Pena points out that any advantage young salespeople have in selling technology can be fleeting though. "This bonus trust is unearned and must be backed up with true understanding and performance. Otherwise, it's quickly lost."

Value of Wisdom

Surely, there is much to learn from CE pros that have been around the block a few times, right? "Those who are successful are clearly doing something right," Pena says. "Many lessons can be learned from those who have seasoned business experience, who have experienced an industry downturn before, who have formed relationships and alliances with customers, vendors and colleagues."

Maniscalco, meanwhile, says he can learn from mistakes made by those who came before him. Following the burst of the housing bubble, for instance, "we recognize how complacent many existing businesses had become," he says.

Maybe so, but the CE pros that are still in business — despite the housing collapse — must be sound companies. Definitely, says Beck. "There are still time-tested principles that the old dodgers have put in place that just work."

The average CE pro company has been in business for nearly 14 years, according to the 2008 CE Pro Readership Survey. That number seems likely to drop after a tumultuous 2009. Still, companies that have been in business that long deserve respect, just as young companies experiencing success through innovative, open-minded strategies deserve admiration.

Each side can learn from the other. Pena, for his part, isn't taking anything for granted. "This industry wouldn't exist if not for this first generation of entrepreneurs," he says. "Their wisdom should be seen as a necessary counterbalance to the energy and angst that comes from the next generation of CE pros."