Private Equity and Edtech - what do they have in common and why they need to be built for anti-scale?
by Naveen February 7, 2023
1. Bose began because of Dr. Amar Gopal Bose’s obsession over finding a system that sounded as mentioned on the specifications of the speaker he had bought at Radioshack.
2. His dad fled Calcutta to avoid the British Police and came to the US where he took up a job as a salesman & married an American school teacher.
3. It was their son, Amar who had a penchant for electronics and used to fix radios when he was 10. Dr. Amar, went on to study at MIT and joined as a professor in the same college after he graduated.
4. The company was formed in 1964 and they faced immediate problems with the first speaker they launched. Moreover, the PR reviews were mixed that put immediate pressure on the company. It was through multiple product releases, that Bose was able to garner attention around the product, though its sound quality was vastly distinct from some of the other brands available.
5. Bose started his company at the suggestion of MIT professor Y.W. Lee, who provided Bose with $10,000 in start-up capital. That investment would later be worth an estimated $250,000 when the company repurchased Lee’s stock in 1972. It was this year that the company began selling its products for the first time outside the US through its relationship with an audio retailer in Germany.
6. Bose was started around a culture of research on music and this was ingrained in the company from the very start. It was the same DNA that stood the company during the first 10 years of the company.
7. Dr. Amar’s first employee was his student who went on to become the President of the company from 1985-01.
8. In the first 25 years of the company, the amount spent on research (R&D) was in excess of $100mm – one of the reasons the company was able to infuse such a large portion of the capital on research was because the majority of the company was owned by Mr. Bose. Mr. Bose went on record many times saying that, it was because Bose was private, did he have the capacity to reinvest profits in R&D
9. In the 80s, the company spent more than 3 years in R&D working on noise-canceling headphones predominantly used in airlines, which was officially launched in 1989.
10. Bose was able to make significant tailwinds in the Japanese market after its JV with Honda, where it manufactured speakers as an automobile OEM. The entire effort took 8 years to fructify but it gave the company a significant market share in the acoustics market in Japan.
11. Bose was able to scale its sales in the mid-90s through the sale of its Wave Radio, a small remote-controlled clock radio. Since it was expensive and had an unusual design, the product had to be sold directly to the consumer via direct mail and newspaper advertisements.
12. It was in the late 90s that Bose opened its first international store in New Delhi ( 1998).
13. Fast forward to today and Bose does an annualized sales of USD 4bn per year. Though Dr. Amar is no longer alive, his legacy around the brand continues.
14. In 2020, Bose took the decision to shut down 120 of their stores around the world in order to cut costs and encourage direct sales online to the customer. While the brand does face threat from the new age brands, the one thing that continues to be the essence of the brand is the focus on R&D through its growth
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