From Schiit to Shinola: The rise of the new American brand.
With today’s launch of Shinola headphones, I thought it might be a good time share some thoughts on Shinola Detroit and Schiit Audio (yes, that really is how it’s pronounced), two archetypes of what I see as a new generation of American brands.
While the offshoring of jobs has become a significant economic narrative, the observations below reflect a brighter and more optimistic counter-narrative: That we’re seeing a new generation of brands that are distinctly American, both in manufacture and in outlook.
I picked Schiit and Shinola not just because of the obvious pun, but because they represent two distinct examples that others might learn from, especially as technology brings a potentially drastic change to the cost equation of American manufacture.
First, some background for anyone who isn’t already familiar with these two brands.
Schiit started in 2010, and they tell their own story much better than I. The single paragraph version is that they’re a startup founded by two veterans of the audio industry looking to make great value audio equipment in the US. They initially focused on headphone amplifiers and DAC’s, sold direct via their website, and they’ve now established what I’d describe as something of a cult following within a highly engaged headphone-audio community.
Shinola started a year later in 2011. While they also make audio equipment (turntables, speakers, and now headphones) they’re known mostly for watches, bicycles and leather goods that are made in Detroit. They too sell direct, but also distribute via retail and through their own flagship stores. Unlike Schiit, Shinola have built a premium lifestyle brand that crosses functional categories rather than a value brand focused on high-performance within a single category.
Why is all this important? Well, on the surface these two brands couldn’t appear to be any more different. One is completely new, while the other re-interprets the old. One is a value player, while the other sells at a premium. One is about performance, the other about lifestyle. One is a technical innovator, the other focuses on design. One is very much about its founders, the other is not.
And yet, for all the things that are different more connects these two brands than just ‘Made in America”. Let’s take a look at what I think are some shared elements of their success.
1. Start with a clear niche and be a part of that community, don’t just sell to it.
Schiit benefitted directly from the growth of the headphone audio segment, especially those people seeking high performance audio from a computer. Shinola benefitted from the growth of people seeking to live a distinctly American-urban lifestyle with a clear nod to the past.
While these two areas of focus are radically different, they have two things in common that we can learn from:
1. They both started by focusing on specific product niches within which they established credibility, before scaling into further products and associated categories.
2. They both tapped into growing communities, especially online, accelerating the impact of limited marketing budgets.
Establishing your initial product as a definitive statement of what your brand stands for sets the scene for growth.
If we look at Shinola relative to point 1, they started by making and selling watches. It was the watch that established niche lifestyle credibility, that in turn gave them the permission to expand their product set and grow their role within their customers lives. Rather than simply making more and different watches, they scaled their innovations relative to the needs of a specific kind of person. Reflecting people who emotionally buy-in to the Shinola lifestyle: wearing their watch, riding their bicycle, using their wallet, writing in their journal and now listening to their turntable on their headphones. Without making that first watch, however, nothing else would have been possible.
Gaining active approval from an already engaged community accelerates growth.
If we consider Schiit relative to point 2, you see how critical an engaged community can be in accelerating growth. The two founders are active participants in online audio communities like head-fi and superbestaudiofriends, as well as regular participants at audio shows where members of the community physically gather to try the latest (and often each other’s) equipment. Schiit products are regularly reviewed, ranked and rated by community members, with the Schiit brand achieving considerable notoriety within these circles. Notably, part of their approach has been to write an ongoing book called “Schiit Happened” about the company, released chapter by chapter via a head-fi forum. Adding new chapters that take a peek under the hood of what they’re doing (and what they’re thinking) as their business grows and develops.
What we see from Schiit is that active participation within a community isn’t just an exercise in customer engagement or a PR strategy, it’s a core and underlying part of how they’ve chosen to do business. Schiit isn’t seeking to engage their community, they know it’s already engaged. Instead Schiit are fitting in to the community and adding value to it. And while today we see more of their products being reviewed in the audio press, their initial genius was in realizing almost eight years ago that community approval in aggregate creates more sustained value than any professional reviewer in isolation.
2. Made in America isn’t a value proposition (but it’s hugely defining)
Made in America has been used and abused as a marketing tool for years. The resulting evidence is pretty clear that no matter how much people might say they want to buy American, being American-made simply isn’t enough to act as a value proposition in its own right. Just because you have an American made product doesn’t automatically make you win against the competition, especially if that product is found wanting (as American car manufacturers found out to their cost).
Instead American manufacture fulfills two roles for the new generation of American brands, both of which are reflected by Schiit and Shinola.
Least important, from a product standpoint, American manufacture acts as a tie-breaker. If you have two products that the customer views as more or less equivalent, you’re betting that Made in America will tilt the balance toward your product over the alternative. Assuming the alternative is made somewhere else.
More important, from a brand standpoint, American manufacture increasingly acts as a statement of the kind of company you are. It’s a statement that you believe in the value of American workers ahead of absolute shareholder returns, that you view American quality as superior in some way, and that there are cultural threads to the DNA of your brand that have deeply American roots.
It’s this last point that’s very important. The Shinola brand filters American manufacture through an idealized view of Detroit as the heart of American manufacturing, which is critical to the urban lifestyle their brand lives and breathes. They show their workers, they celebrate the city, and they’re proud of both. Which means the brand simply would not work if Shinola Detroit was in fact Made in China.
For Schiit, the American-made aspect is less immediately tangible, and less driven to the forefront of their product messaging. Value and performance within their products comes first, but the importance they place on their company “being American” is just as critical to them as Detroit is to Shinola. In fact, they’re pretty open about how they’ve had to innovate in order to maintain balance within the value/performance/American-made equation.
“Made in America” may increasingly come to reflect a set of shared values than a simple call to patriotism.
What’s interesting for others is that these two brands are potentially reflective of a more thoughtful shift in society, especially among younger consumers where data shows a tendency toward a more socially and environmentally minded value-set. It isn’t too big a leap to suggest a future where Made in America may be associated less with direct calls to patriotism, and more with a set of shared values around labor and wages, sustainable manufacturing, high quality, and the basic social contract of the Henry Ford era: that workers are also consumers and that if we give workers better jobs then they will buy better products and we will build a better economy. And that if we can do this within our own communities then more people will win.
3. A great name is a great thing
I’ve said for years that if you have enough money you can make pretty much any name work. And while that’s true (just look at Verizon) small companies rarely have the kind of money necessary to make just any name work.
That’s why I love both Schiit and Shinola as names. They’re fantastic: memorable, cut-through, pointed, and they do it in very different ways.
In an increasingly crowded world, it’s much riskier to choose a name that nobody notices than one that some might not like.
Schiit is a deliberate disruptor. It’s meant to make you uncomfortable. It’s also deliberately meant to be a we’re-not-taking-ourselves-too-seriously statement within an audio industry that typically takes itself very seriously indeed. It screams “different” in an audio world that’s more comfortable in herds.
It’s very brave to pursue a name like Schiit, especially as it will attract almost as many detractors as it will fans upon launch. But I’d argue that this is exactly what you need to do to stand out as a new brand in a crowded space.
Reviving an old name might just be the kind of genius move you need.
Shinola isn’t a new name at all. In fact, it was first trade-marked in 1903. But because of a colloquialism stemming from WWII: “You don’t know shit from Shinola”, it’s one that has lived on in common parlance long after that original company closed its doors.
The brave and perhaps even genius move here was to co-opt an old name to reflect a new company selling a completely different kind of product to a completely different customer. Especially in making the connection to Detroit, which was not originally associated with the Shinola shoe-polish company at all. Two things drive the success of this name. First, the Shinola name is old and generally representative of an idealized nostalgia toward a past era of American manufacturing that Shinola today represents so well. Second, because of our pre-existing colloquial understanding of the word, it has just enough familiarity to stand-out. And yes, connecting to something slightly controversial is something both of these brand names share.
If you’ve read this far, you may be wondering why any of this matters beyond the two brands under discussion? What I find fascinating is that we might be at the cusp of a shift in how the world views an “American” brand because the very nature of what an American brand is, is changing. As the behemoths increasingly define themselves as global, we’re seeing niche specialists take on the mantle of what it means to be local, creating an ever richer diversity of what it means to be an “American” brand. Whether that be in headphones, DAC’s, watches, craft beer, flavored seltzers, farm to table restaurants, fashion, 3d printed cars or in other areas that I can’t even think of.
It’s being driven by a confluence of entrepreneurs who want to make things here in America and consumers who want to buy-in to brands that are distinctly American, both in manufacture and in outlook. Not just through a straightforward appeal to patriotism, but instead through a more sophisticated approach to building brands that become a part of the communities they serve, and that seek to embed shared values within their very DNA.
Note: I have zero affiliation or association with either Schiit or Shinola. I have, however, bought Schiit and listened to said Schiit while writing this post.
