What You See Is What You Get: My Autobiography (38 page)

I couldn't get out of there quick enough. When I got home, I told Ann what I'd experienced and called Ashley and Malcolm to report this pitiful sight. That was the last time I saw Dennis. He was sentenced to two years in prison and I have no idea what happened to him after that.

The inevitable happened at Global Audio and they called in the liquidators. They went well and truly bust, with debts of PS400,000, catching Amstrad for about PS20,000 in the process.

One of the side-effects of their demise was that my brother-in-law, Mark Simons, was out of a job and asked if I had a position for him in Amstrad. Mark was a good salesman and at the time we were weak in the sales area. With the addition of our tower system, we needed to expand our customer base to companies such as Currys, Rumbelows and other big chains.

Mark came onboard and was tasked with breaking into the electricity boards, which sold electrical goods in their High Street stores. The electricity boards were broken up into regions: London's was the LEB, the north's was Norweb and so on. They were a powerful retail force, but unlike traditional retailers, their employees were pseudo civil servants. They were not very commercial and were cautious in their approach to purchasing. Lots of testing had to be done to ensure the products were safe and they needed to see certification issued by the British Standards Institute via an authority known as BEAB (British Electrotechnical Approvals Board) which showed that our products fully complied with the relevant standards.

Our entry into the electricity board market would be like a domino effect in that once we'd cracked one of them, it was a much easier sale next time round. Mark targeted the LEB, as it was local, and after several months of argy-bargy, they eventually stocked the product and he was at the races.

I concentrated on Currys, which was trusted by the public as the place to go if you wanted a TV, a hi-fi, a fridge or a washing machine. I had tried to contact Michael Curry on several occasions, but he wouldn't take my calls any more, which fascinated me since many years earlier I
had
managed to get him on the phone. I think what happened was that their business had grown so large, he'd become a real bigshot who would no longer talk to suppliers.

I was therefore left to deal with the buyers - a real arrogant lot. I cannot tell you the number of times Dickie Mould, aka Boycie, and I sat in the reception of Currys House in Ealing looking at the fish pond. You'd see the buyers coming down in the elevator, then they'd look at you and simply walk past, saying they were going for lunch. We would have to sit around waiting for them to come back and only then would they graciously grant us a few moments of their time. Now you have to understand that Currys (and later Dixons) had huge buying power and could make or break a business. The buyers knew this and could not help but come across as high-handed and arrogant.

I managed to get an appointment with Ken Sladen, Currys' audio buyer,
and took Boycie with me. Ken was a bit of a cool character, trying to make out he wasn't impressed by the numbers I gave him on how many tower systems Comet and Woolworths were buying. Eventually, he agreed to sample a quantity of 200 units in selected branches to see how they went and I told him I'd add Currys' name to our advertising, along with the words 'selected stores' in brackets.

They started to sell like crazy in Currys. The speed at which the first 200 left the stores was incredible, so much so that, unusually (normally you had to
chase
buyers), I received a phone call from Ken. Again holding back, not wishing to show too much excitement, he told me that the units had gone
relatively
well and that perhaps he should roll them out to all the branches and he casually asked whether I'd be able to supply 2,000 units.

They were on the hook and it was time for me to have a bit of fun. I told them it was very nice to hear they wanted to roll them out, but my production was flat out. I couldn't deliver 2,000 units quickly, but I'd try my best. The truth was, they had taken customers' money and were now selling the samples. They already had orders for 450 pieces and they needed them urgently. It was funny to hear Ken suddenly switch from his laid-back tone into desperate mode. Of course, I was fully aware of the importance of a breakthrough into Currys and we managed to accommodate his requirements over the course of the next few weeks.

Before we knew it, we were making and selling approximately 25,000 tower systems per month, and we hadn't even scratched the surface as far as France was concerned, the place where the product was first conceived. On various visits to Garman Road, Pierre would see these tower systems knocking around and was constantly asking me when we would be able to supply the French market.

By this time, our business had got so big that we needed to open our first office in the Far East. Stan Randall was at a loose end, having regrettably had some matrimonial problems, so I approached him to see if he would like to start a new life running our Hong Kong office and liaising with all our Asian suppliers. He said yes. The Amstrad Hong Kong office was to become the hub of design. We recruited a couple of young mechanical engineers, Vitus Luk and Isaac Ip, who were to become two of Amstrad's longest-serving employees and, in fact, are still employed by them today.

Stan also appointed a secretary, Callen So. This highly intelligent young lady spoke perfect English and had a brain like a computer. She got to know every detail of the business within a month, and would remember every price, every shipment and every costing. She was so good, I eventually
brought her over to England and she became my right-hand 'man'. I have to say, she was the nearest thing to
me
when it came to knowing every aspect of the company. Simply amazing.

Stan had put together a good team who were going to become very important to the future prosperity of Amstrad.

*

Word got around the Far East about Amstrad buying large quantities of chassis from Morse. We had become a big fish in the pond and as a result I was contacted by the Taiwanese company Hawson. I had heard of them and knew that their expertise lay in making loudspeakers. Although our speakers were being made at our Eastwood plant, Bob Watkins and I agreed to visit the Hawson factory in Taipei, where we were guided around their speaker production lines.

They quoted some prices for speakers and, after a few calculations in consultation with Bob and Harold by phone, we found they were able to supply fully assembled speakers at a much lower price than ours because the speaker drive units inside the cabinets were made in Taiwan, whereas ours were made in Italy. Also, with lower labour costs and economy of scale at their factory (which was also supplying the American market), they had a greater buying power with the chipboard makers, the drive unit makers and, of course, the Taiwanese vinyl suppliers.

There was one problem - the bulky size of the finished speakers. While they were cheaper than ours, when one added 8 per cent duty and allocated at least $4 per pair for shipping, it didn't look so great. It occurred to me that if we got Hawson to produce the speakers in such a way that we could pack more into a container, then freight costs would come down.

This next statement is going to make the real hi-fi nutters cringe. The depth and height - in fact, the overall volume of a hi-fi speaker - is something that should be calculated scientifically on the basis of producing the best baffle effect for the sound, but my criteria were different. I asked Hawson to attend another meeting and, after lots of sketching and calculations, we worked out how to get the most speaker shells out of the eight-by-five sheets of wood. We decided the speaker's dimensions should be the most economic size to ship, rather than be designed for perfect sound quality. Under these criteria, we were able to stuff at least 50 per cent more pairs of speakers into a container, thus reducing the freight cost to about $2 per pair.

At the last minute, I also insisted that the price must include the speaker cables to connect to the tower system. This eleventh-hour piece of chutzpah
shook them a bit, but when I told them we were talking 25,000 pairs of speakers per month, they agreed.

The quality of the various veneer patterns one could obtain at that time was getting better and better. They looked authentic, with slight indentations deliberately made in the vinyl, as one would expect to find on real wood. Very clever stuff. We chose a pattern to match the main tower system Harold was making. Initially, Harold was a bit upset about this move, but I told him he needn't worry - all the employees would still be fully occupied. Sales of tower systems were rocketing and the staff could be redeployed to produce the racks, as well as the larger-sized speakers we were still selling with our hi-fi separates. This storm in a teacup blew over and, after his initial rant, he reorganised the factory with his usual efficiency.

Hawson was an aggressive and growing company who wanted to go into electronic production and, under their own initiative, they bought some of our tower systems from England and examined the chassis. They suggested that
they
could manufacture them in their newly acquired factory, which was fully equipped with Toyota-style production line belts and lots of auto-insertion machines. It was far more efficiently laid out than Morse's factory, which was a typical Hong Kong workshop, with people humping assemblies around left, right and centre.

Hawson's boss told me that he would tool up, at his expense and with no obligation, a copy of our tower system and make me some samples. I didn't want anyone copying my product, so I insisted that if he
did
tool up the front panel, then we would pay for the tool and have the ownership of it. In fact, I said that I wanted to pay the toolmaker directly, so there could be no misunderstanding, and he agreed.

The decision to go with Hawson turned out to be quite fortunate, as unbeknown to me there were problems ahead with Morse. Stanley Neichin, the managing director of Morse Hong Kong, asked if I would meet up in Hong Kong with his boss Phil Morse, whom he'd told about the success Amstrad was having.

Phil Morse was in his mid-sixties and looked like a cross between Walter Matthau and the Jewish comedian Jackie Mason. His opening gambit was that he was a legend in America - he was Mr Audio. Apparently, this was true at one time, but what he'd forgotten to mention was that he was talking about five years ago. Since then, his company had failed to move with the times and its finances were starting to wane. But what shocked me was that he started to talk about
his
tower systems and how he was going to display them at the forthcoming consumer electronics show in Chicago.

'Hold on a minute,' I said, 'they're not
your
tower systems, they're
my
tower systems. I paid a hundred per cent for the tooling.'

'Nah, you may have paid for the tooling, but we've put in all the effort and all the engineering. We lost a lot of money designing and developing them in the early days. Let's look at it this way - they're not yours, they're ours.'

'No,' I said, 'they're mine. And, with respect, you are not going to show these things in Chicago, as you would be exhibiting a product that belongs to me.'

'Don't worry, don't worry, I'll put them on display as samples. We won't take any orders. If we get any orders, we'll talk about it.' A compromise was reached on that basis.

Phil Morse was from a Polish-Jewish background and would come out with typical Jewish sayings. Surprisingly, he mentioned that Otake had been one of his suppliers in the past and I thought it quite interesting to pump him a little on his opinion of the Emperor. An arrogant meshuganah - you have to know how to deal with him.' Those few words summed him up beautifully. Meshuganah is a Yiddish word meaning madman - not mentally ill, but someone who's highly strung with some weird ways and crazy mannerisms.

Later that year, I attended the CES show in Chicago, the biggest electronics show in the world. It was held biannually, in Chicago in summer and Las Vegas in winter. We took a stand on the British Booth, sponsored by the UK Government. I'd naively thought that I'd be able to sell my products in America, but nevertheless this stand was a good meeting point for customers and suppliers, as everybody in the industry went to Chicago. Gulu, for example, would rent a big suite and entertain his customers lavishly.

I realised how big a company Morse was when I saw their stand, which was the largest one there, right by the main entrance. I'd agreed to meet Phil Morse at their stand and when I arrived, I couldn't help but notice my tower systems were on display. Before I announced myself to Phil, I thought I'd ask some of his staff about the product. Typical Americans, so full of shit. They spoke about how they'd developed it themselves and how it was the new direction in hi-fi, following the Japanese trend, and they told me it was red-hot as far as sales were concerned. I took that with a pinch of salt, but nonetheless they
were
taking orders.

To cut a long story, I had a blazing row with Phil Morse and started to get lawyers involved. I told Morse that I was finished with them - completely. What's more, they had to stop selling this product immediately unless they
came up with some financial compensation. This fell on deaf ears. Phil Morse didn't believe I would take it any further. He had a big shock coming because I'd already learned a bitter lesson about copyright.

I referred earlier to Malcolm Miller designing a range of car speakers, which basically we copied from Pioneer. This was to bite us on the nose. One day we received a very formal solicitor's letter containing lots of drawings and documents in legalese. I knew this was serious - it was certainly out of the league of my personal lawyer, who'd helped me buy my house and dealt with smaller matters such as leases. I consulted a partner at Herbert Smith - Tony Willoughby, a specialist in this area.