This is part two in the Chuck Surack Interview. You can read part one here.
What do horse racing and Computer Digital Audio Workstations have in common? The Surack family for one.
If you already distribute computer software and peripherals, and have learned to provide effective support, and you already have built-in relationships it would make sense to offer the core brains as well, and that's what Sweetwater did when they released the Creation Station in 2005.
What have you learned since you started offering the Creation Station?
Let me back up a little bit. My dad worked for a Goodyear atomic plant in southern Ohio back in the '50s. He was responsible for getting rid of the heat when they did the nuclear reaction. He had access to a really, really early computer, a government computer, in the '50s. And he is convinced he was the first guy or one of the first guys in the world to analyze horse races on the computer.
He would go to the track close to where we lived every weekend and watch the eight or ten horse races and write down all kinds of detail about who the jockey was, weights of the jockeys, what the weather was like, what the track was like, who won. Then he went in Monday morning to his secretary and had her put all of this stuff onto punch cards to feed to a computer program for analysis. He probably shouldn't have done it, because it was a government computer.
When Radio Shack and others started coming out with the first personal computers, my dad taught himself how to program in Basic and wrote his own horse race analysis stuff. He did this his whole life, including when he moved out to Las Vegas. He lived there for ten years because he could play a dozen tracks at one time. He would bet based on statistics using those sophisticated computer programs he wrote. He was way, way into computers before it was a common thing to do. I've gone to many a race and watched him pick the winners of seven of the eight races or pick who's going to be the trifecta, and he would do it all based on statistics.
When I started my recording studio in 1979, we were doing lots of stuff on cassette. You'd get a sheet of cassette labels and put it in the typewriter and type out the songs. My dad said, "You're crazy. Why don't you do that on a computer?" So he helped me write a Basic program that could do cassette labels—we could crank out a dozen of them really quick. The same thing happened for invoicing in the studio; I wrote an invoicing program in Basic.
So I've been around computers a long time. I grew up on MOTU Composer and Opcode Vision and Studio Vision and all of those early software products. And Finale; I was one of the first people to do the Finale Class.
No doubt you've got the bruises to prove it...
[Laughs] Yes, I do. I still have nightmares about a thing they called an "EVPU." They came up with all their own terms for the graphics. [Ed. note: "EVPU" stands for "ENIGMA Virtual Page Unit," which Coda (original maker of Finale) used as a measurement for calculating spacing and sizes in Finale notation files. There are 288 EVPUs per inch.].
We became a Mac dealer as soon as Apple began selling to music stores. Macs did really well for us. But I've always had customers who said, "I don't want to do a Mac, I want Windows! They're powerful and cheaper." The advantage with the Mac was that it was all integrated, which made it stable. With Windows, who knows what CPU, motherboard, and power supply and on and on were used. Because of that, the Windows boxes weren't necessarily, out of the box, the most stable platform for music and audio. They weren't designed for graphics the way a Mac was.
But I kept having customers ask, so we looked for the best hardware we could find, and realized we had to sort of put it together ourselves. We took out all of the junk that made no sense for music and we put additional software in—recording/music tools. Because we knew the computer was optimized for music and audio, we basically guaranteed the performance. That's why we designed and started selling the Creation Station Windows computer.
So the Creation Station is an integrated system like a Mac, but on a PC with less-expensive hardware?
Exactly. It was cheaper, depending on what level of computer you were buying, but you could also make more powerful systems in some ways. With the Mac, you can only buy what Apple offers. But with the Creation Station, we could increase the power as soon as faster processors came out, and so on, to make them as powerful and up-to-date as possible.
From the beginning, we've had a simple set of instructions that came with it with pictures that essentially show you how to plug your monitor in, plug your power cable in, plug your audio device in...it's like seven or eight steps to set it up. You hit the power button and it comes on, ready to go.
It comes on with a Sweetwater screensaver that has quick access to our tech-support numbers and online services. It has tools built in so we can do screen sharing into your computer if you need us to for service or support. Depending on how you buy it, it's sold as a turnkey system with the software already on it configured for your hardware, ready to go. You don't have to install drivers. You don't have to download anything. We made that out-of-the-box experience as fast and as easy as it can be.
One thing that worries me about the future of software products for music making is price erosion. I'll give you an example: On the iPad there's Garage Band. Garage Band is $5 and it's a pretty powerful program for $5. Given the support costs and everything else, someone would be almost crazy to do something like a DAW on an iPad because there's so little profit in it at $5 a copy. Given that you're focused on support, I'm wondering how you're going to adjust so that you can continue to make money selling software down the road, when it seems to me the world is going to look more like a lot of very small developers selling apps for $5 and $10, and offering very little or no support.
You're absolutely right. Garage Band is the example I use for every banker or accountant or attorney that comes in when I try to explain our industry. It's an amazing product.
We look at the situation as a real positive. Sweetwater doesn't make money on Apple hardware either. With Garage Band coming for free, we do get a lot of customers that start with that and then they get to some of the limitations and they go "Oh, well I really want to go to Pro Tools or Digital Performer," so I think it's opened doors. We end up selling interfaces that plug into the ports, and we end up selling microphones and headphones and all of the other things needed for recording. So you could call it a "loss leader."
For another example, clearly I lose my shirt supporting a customer who bought an iPad from me and then asked a whole bunch of tech-support questions. There's no way I make any money on that, but over time that customer hopefully becomes loyal to us and sees the value we offer. When he is ready to buy a pair of speakers or a $500 or $5,000 microphone, he comes back to us.
I'm not naïve. I know a lot of the software manufacturers are selling their software direct to customer. But most of them realize that we have a relationship with our customers; we have two million customers that we communicate with regularly who are into this technology and who trust our Sweetwater brand..
One of my biggest concerns is, if you have companies like Avid and MOTU who I think are important to the industry, just a few years ago you got $1,000 for a copy of Digital Performer and then maybe you gave another $1,000 to Native Instruments for a suite of instruments. But now, for $199 Apple gives away all of that stuff.
I personally think that's hurt everybody over the last few years. Apple would argue that it's grown the market. I don't think so. I mean, our Digital Performer sales are not increasing enough to offset the discount. Of course, we don't sell Logic at all anymore, because that's sold only directly from Apple.
How has Sweetwater changed your life?
It's opened doors and created friendships for me, literally all around the world. I'm just blown away by the number of people we've been able to help and touch in music. I get credits all the time on albums. We send out a "how did we do?" questionnaire when someone purchases from us and I get a pile of them back every day. We get people writing back and saying "My sales engineer was awesome! He helped me and saved me money!" and on and on and on. I have to say that not only myself but my sales engineers have friends all over the country. I like to think I've been able to do it in a strong, ethical kind of way. I'm very blessed. I've got about a thousand employees between Sweetwater and several other businesses that I own. I have no debt, no shareholders, no board of directors. I'm living a fairy tale, dream sort of life.
Is there anything over the last 35-½ years that you might do differently or that didn't work out as you'd hoped?
Yeah, there are a couple of things, but I have to say that I'm a pretty positive, optimistic sort of guy. I suppose the failures have been on a personal level, not on a professional level. There's one that I think about a lot. I was really into Boy Scouts when I was young. I had all of the required merit badges and everything you needed to be an Eagle Scout, except I needed to do a Citizenship in the Nation project, which meant picking up trash along the road or building park benches or something like that—then I would've been an Eagle Scout for the rest of my life. I was probably 14 or so; I ended up getting my first girlfriend and somehow didn't do my Citizenship project, so I never became an Eagle Scout.
Can we talk about your band?
We can. The band is called PrimeTime. I play three weekends a month, so I play a lot. I play saxophone and keyboards and I have another guy that plays trumpet, trombone, and keyboards, and then an amazing female singer. We use this unbelievable "virtual backup band" that we've been working on since the Mac Portable days, believe it or not, and we continue to upgrade and add more songs and to redo songs to make them better.
What's the basic setup?
Today, it's on the most current, latest Macbook. We've got it loaded up with a fast solid-state drive. Digital Performer is the main engine of the thing. At the beginning of the night, I hit "load" in DP and it loads not only the Digital Performer file, but also all of the other software that I use. In that one file, I've got about 650 songs that load into RAM at the beginning of the night and that are instantly available for us to play.
Being that I play saxophone and the other guy plays trumpet, we do all kinds of songs with horns, as you can imagine. But our goal is to do #1 songs, so we go from old big band stuff to things that are on the radio now, across every genre. We have a versatile vocalist that can do just about any sort of song or genre.
I use a Kurzweil K2600 to drive Digital Performer from a remote control point of view, so I don't ever touch the Mac once I start it up. I call up the individual songs from the display of my Kurzweil; I just scroll and find the right song title and cue it up. I hit stop on the current song and hit play and Digital Performer instantly goes to the next song. When DP starts playing the song, it completely configures all of the instruments. They're all sample based and a lot of them are my own custom stuff, so it's pretty sophisticated, with all kinds of different instrument sounds covering the parts.
In addition to that, Digital Performer is using MIDI to control the light show. I'm using MIDI-controlled effects, so I've got exact reverb and echoes for each song, and then I've got an Antares harmony plug-in going, so we've got vocal harmonies going live. Plus we have all kinds of video clips synchronized to go with our tunes. We set up a 60" screen behind us. On that screen it's going to tell you who did the song, the title, when it came out and then it'll have some sort of video going on, depending on what the song is. If we do an Andrews Sisters song, you'll see a picture of the three Andrews Sisters, and that sort of thing.
The Kurzweil has sliders across the front that a keyboardist would normally use to control an organ or to bring strings up. I've actually turned the sliders into a control surface to control the mixer features of Digital Performer—so I don't use an analog or digital mixer. I control all of that right from the Kurzweil, or I can do it on the computer if I want. We use MainStage for a lot of the effects, as an effects plug-in player.
At home I've got a Pro Tools HD3 rig with a D•Command control surface; I've done several albums at home. I'm as much of a gear junkie as anybody is. I love trade shows. I love reading about the new stuff coming out. I love playing with it.
With 650 songs, do you have a screen that has charts and lyrics?
They're #1 hits so you know the songs, but with 650 of them you do need a little help remembering sometimes! I used to carry a four-inch thick—then it became a five-inch thick—notebook. Several years ago I put all of those charts on an iPad. I call the songs up on the iPad and I can read lyrics or lead sheets or whatever I need.
What advice would you offer to software companies in 2014?
Even though I've written some software through the years and sold software, I'm probably not the right guy to give a lot of advice. I understand the whole thing about copy protection and all that. But I would strongly encourage software vendors to make their software as easily installed as possible yet valuable enough to customers so they want to pay for it. I think copy protection penalizes good customers and it frustrates them to where they don't want to use the software.
I can relate to that. I go through it all the time as part of my job.
I totally understand protecting your proprietary information, but I think we've swung it way too far and penalized the good guy. Find some good hardware ways to protect yourself. Find other ways to do it. You put all of this stuff on your machine and you want to upgrade to a newer machine and you feel like you're a thief. You spend half a day, or more, trying to move it to a new upgraded computer.
I just went through this a little while ago. I got a new computer a few months ago, and it was very difficult to migrate to it on just about every level. Every product introduced another little problem...
I've been there. I totally get it. I think software guys don't understand how expensive that really is for us and for them from a support point of view. I don't get a lot of calls that say, "How do I use this feature?" I mean, you poke around and you figure it out. But man, we get a lot of calls on how to install software and how to get authorized.
One final note: Back in the early 90s, as president of Opcode I was introduced to Chuck Surack by our VP of Sales. Some of our dealers were complaining that Sweetwater was discounting products in a way that they didn't like. I proceeded to tell Chuck that bricks and mortar retailers were critical to our industry and expressed doubts about his business approach. Not one of my clever moments, and I still feel foolish about it.
Missed the first part of this interview? Read it here >>