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Istanbul was Constantinople when Andy Kotsatos’ mother, an ethnic Greek who emigrated to America as a child, was born there. Kotsatos, too, used to be known by another name: Andy Petite. The previous surname, he had to explain countless times before reclaiming his actual family name in 1994, evolved from a nickname, Le Petit. His father had acquired it at the French restaurant in Manhattan where he worked after coming here from Greece as a boy.
The youngest of three sons, Kotsatos was born in Baltimore in 1940 and attended public schools before leaving for Harvard, where he majored in English and minored in biochemistry. Though Kotsatos took college courses that would qualify him for medical school (in part because his father, a lawyer, had warned him there was no money in his own profession), he soon decided against it. “I volunteered to work at Mass General [ General Hospital] in the emergency ward,” he remarked during a recent conversation, “and the first time they brought in a bloodied patient, I nearly passed out.”
At about the same time, Kotsatos was also discovering how much he enjoyed music and high fidelity, the electronic medium that conveyed it to him. He became what he calls a hi-fi “showroom gypsy,” spending an inordinate amount of his free time in audio stores (which included the original Radio Shack on Boston’s Washington Street). That led to a job at a Harvard Square store, Audio Lab, and subsequent positions at both KLH and Advent, where Kotsatos worked with and learned from master speaker designer Henry Kloss. In 1979, Kotsatos and Frank Reed founded Boston Acoustics, an immediate success that has just kept on growing.
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Did you listen to a lot of music while you were growing up?
No. In fact, high fidelity was the vehicle through which I became acquainted with music. For me, the pivotal event was seeing Around the World in Eighty Days, which had a six-channel soundtrack. Surround sound—in the ‘50s. I remember just being blown away by the sound and the whole experience. I ran out and bought the sound track recording and played it on my parents’ RCA console. It didn’t sound anything like the movie. First of all, it was mono. And second, the set was pretty bad, an expensive thing but a piece of furniture with mediocre stuff inside it. At that point, I decided there had to be something better. A close high school friend talked about these hi-fi components, which I thought were re ally weird: You would buy a phonograph in parts. You know, people who grew up in New York and Boston and Chicago, where there were retailers selling hi-fi components, were exposed to them. But Baltimore was notorious for not having any good hi-fi dealers. So I was part of the great unwashed until I had this disappointing sonic experience and thought, well, maybe my friend really does have something that I ought to pay attention to. When I went away to college in Boston, my freshman roommate had a component system; That was the first time I actually lived with a component system, and things sounded a lot better than they had ever sounded in my house.
What kind of music attracted you?
I was very curious and wanted to learn about jazz and classical music. In those days, Boston had four or five classical music stations competing for the same minuscule FM audience—remember, it was the late ‘50s—and I got exposed in a way I had never been while growing up in Baltimore. I re member vividly the first concert I went to. I was taking a music appreciation course; it must have been my junior year. We had these listening assignments, and one week in December or January we were supposed to listen to Mahler. So when a girl in the class said that the Boston Symphony Orchestra was performing Mahler, we went to an open rehearsal—it was the first BSO concert I ever went to—and I heard Mahler’s Second. I immediately fell in love with Mahler, Mahler’s Second, and the Boston Symphony. In fact, we went to the rehearsal on a Thursday and were glued to the radio on Saturday night when they broadcast it live.
It was about that time that you began hanging around in hi-fi showrooms. How did store personnel react to seeing you so frequently?
They were friendly, but I think they were a little puzzled as to why I came in so much and never bought anything. Finally, mid way through my junior year, in November of ‘59, I asked [Audio Lab owner] Dan Boynton for a job. I remember Dan saying, “I was either going to offer you a job or ask you not to come in anymore.” At the time, there was just Dan and a fellow named Bruce Humphrey. Bruce later went to work for Harvard and ran their language lab; I think he still does live recordings. He was the repair person, and I became the part- time salesman. Dan was the full-time sales man; his wife, Janet, used to bring him lunch.
Audio Lab nurtured several people who later went on to bigger industry jobs. Janet Boynton was one; she helped start NAD in this country. In fact, wasn’t the Boynton home the company’s first American head quarters?
That’s correct. Later on, a bunch of people went to work for Audio Lab who went on to bigger and better things, but the only one during my time working for the Lab was Joe Hull, who’s now at Dolby. Later on, Joe hired Roger Parker, who became an advertising guru for independent audio retailers.
Larry Daywitt, who would later head up the marketing effort at ADS, worked there as well.
Joe, Roger, and Larry all worked there together.
It’s tempting to com pare some of these Boston-area audio manufacturing companies to the turn- of-the-century European aristocracy, group of people who were quite of ten related to one another. We can trace the corporate genealogy as easily as we can that of the English monarchs: AR spawned KLH, KLH spawned Advent, etc. To push the com parison, King Henry VIII had six wives, and Henry Kloss, the most important professional influence on the Boston school and on you, has so far had five companies: AR, KLH, Advent, Kloss Video, and Cambridge Sound Works. How and when did you meet him?
I can’t remember specifically the first time I met Henry. He may have come into the store to pick something up on his way home. Even before I went into the retail business, I had become very fond of KLH speakers. I was really enamored with KLH and thought it was a neat company. I had this desire, this wish, this dream that some day I would go to work for KLH.
Yet when you decided to leave retailing, you went back to Baltimore and taught English at L your old high school. What prompted that?
I decided to do the other thing that I really loved, which was teaching. During Christmas vacation, I came up to Boston to see my friends, and I asked Dan Boynton if I could buy speakers at the employee price.
Dan said they wouldn’t extend that discount to me because KLH had a firm company policy about it, but the company might offer me a job. I jumped and went over and interviewed. They offered me the job, so I left teaching after the first semester. That was 1964, and the business was still dominated by Zenith, Magnavox, and RCA. The hi-fi component industry was tiny compared to them. It was hard to see the component industry becoming main stream, because our parents, who had all the money, wanted what Stan Pressman [ KLH colleague] used to call a monument to music in their living rooms.
Just as you did, though, a lot of people discovered music while in college.
True. Even when I first joined KLH, our major markets weren’t the conventional ones. We had really significant business in Ann Arbor, Michigan; Madison, Wisconsin; Iowa City, Iowa; and every other college town you could name that had a decent hi fi dealer.
You left KLH in 1969, Why?
Singer [ sewing-machine maker] had bought the company around the time I joined. The positive was that they had the funds to finance significant growth for KLH. KLH subsequently came out with more three-piece music systems. The Mod el 20, at the top of the line, had a stereo FM radio built into the turntable base and powered two full-size bookshelf speakers.
You’ve said that these systems helped bridge the gap between components and tradition al one-piece consoles, that they furthered the acceptance of components.
Yes. They were easier to buy than components and easier to use. And you couldn’t buy any thing else at the price. We used to sell these products not only to hi fi dealers but also to quality department stores. Almost every major department store eventually became a KLH dealer.
But you were still unhappy at the company.
Singer put their own person in charge of KLH, and the corporate culture changed. We didn’t use the term “corporate culture” in those days, but that’s exactly what happened. Henry’s employment contract carried him through ‘67, at which point he told Singer that he was interested in exploring large-screen television. They had no interest, so he formed Advent to develop it. By 1969, he wanted to generate some cash flow. I was part of a group ready to walk out of KLH—it included Stan Pressman, Fred Goldstein, Vinnie Fried, and Frank Reed— and Henry figured, well, here’s a top-notch sales/marketing organization that doesn’t come along very often. He decided to satisfy his need and our need.
...by putting Advent in the speaker business and hiring all of you. You were a sales executive at KLH and you went to Advent to head up sales, but your career at that point began to veer toward speaker design. How did that happen?
I took the prototype Advent Loudspeaker home, and I wasn’t completely convinced that it had the right tonal balance, so I came back and discussed it with Henry. He gave me an old Blonder-Tongue equalizer and said, “Take this thing home and change the sound. We’ll talk about it tomorrow.” I came back with a change that was pretty subtle but made the improvement I thought should be made. Henry accepted the change and incorporated it into the speaker system. Because it was so successful, he agreed to get me involved at an earlier stage on the second product, the Smaller Advent, and I ended up doing the cross over network, which essentially was the voicing. I could see Henry losing interest with the next speaker, the Advent/2. He’s the kind of person who gets his kicks out of new challenges, and doing another speaker was not necessarily the most exciting thing when he had other issues before him, like the big-screen television. He designed the woofer and chose the tweeter, and I did the network and the voicing.
After Henry left, I did the New Advent and the Advent/1. Between Advent and Boston Acoustics, I think I’ve probably been responsible for the voicing of more of the component hi-fi loudspeakers that have been sold than anyone else.
Partly because the company’s projection television effort was ahead of its time, Advent became mired in financial problems. In 1974, the company was on the verge of bankruptcy, and a financier named Peter Sprague stepped in. Who was he?
Peter operated like a lot of venture capitalists, in that he often got involved in companies that were in trouble and raised money for them. The one big success he had was National Semiconductor. He came in and eventually got control of Advent, but he and Henry got along like oil and water. Peter basically forced Henry out, and Advent went through the same kind of culture change as KLH had.
You’ve said that Boston Acoustics wouldn’t exist had it not been for your partner, Frank Reed [ died in 1996 at age 63]. He was certainly well known to industry insiders, but I doubt very many people outside the business know who he was. Frank was trained in economics, and the two of you met at KLH. What did he do there?
Frank was the credit manager at KLH and did the same thing at Advent in the beginning, but he was highly respected by the dealers. He not only collected money, he showed them ways that they could manage their money better and manage their businesses better. He actually started selling while he collected money, and he eventually became sales manager and ultimately vice president of sales for Advent. I made the transition out of sales and into marketing and product development.
A lot of people have said that you and Frank left Advent to go into business together, but he left the company before you, didn’t he?
Actually, Frank was fired, a fact of which he was very proud. He was fired while I was on vacation—on a Greek island, unreachable—and when I came back to civilization, I called the office and had an urgent message to call Frank at home. He said to me, “Let’s go into business together.” I told him that I wasn’t sure that I really wanted to leave.
The reason I had taken the vacation was that I wasn’t enjoying work anymore. I was working 70-, 80-hour weeks, and I thought I just needed a vacation. When I finally got back to the office, I quickly realized I hadn’t needed a vacation, I needed to get out of there. The company had really changed. So I resigned on November 1st, 1978, and was out of there December 1st. And then Frank really started calling me.
The first Boston Acoustics speaker, the A200, was not at all like the speakers you worked on at Advent.
That was one criterion, although we weren’t so hypocritical as to say that, suddenly, everything Advent had was bad. But the A200 was a product designed to deal effectively with speaker/room interface, partly through driver location but also with a large baffle to minimize reflection off the wall behind it. As a result, it was a very thin, wide loudspeaker. Conversations I had with Peter Snell [late speaker designer and manufacturer] influenced my going in this direction. Snell Acoustics had started, I think, the year before, and Peter and I discussed product-design philosophy. When did your second product appear? February of 1980. Now, bear in mind that was a year after Frank and I had left Advent, and Advent dealers were becoming so unhappy that they wanted to switch loyalties. So we changed our timetable and came out with the second product, the A100, which was designed to compete with Advent.
Boston Acoustics grew very quickly. Did this surprise you and Frank?
I think, in all candor, the thing that surprised us most was how fast Advent self-destructed. It was nothing we did; they did it all themselves. It ended up that we actually had to scramble to fill out our product line to sup plant theirs. That was the biggest surprise.
Do you see any of the first Boston products as landmarks?
I think the real landmark was the A40, which we brought out at the end of ‘81. Although there had been, in the ‘60s and early ‘70s, a small number of well-recognized, re ally good loudspeakers under $100 each, by the early ‘80s there were none. The A40 was the first good under-$ 100 loudspeaker in a long time. It was $75.
In home speakers, you’re positioned as an entry-level to mid-priced brand, yet in car speakers many people perceive you as skewing toward the high end.
In the case of home, we tend to be entry-level to mid-priced because we’re so efficient and we’re competing against companies that are fairly inefficient. We’ve spent a lot of money, all through the history of this company, improving our manufacturing techniques. I think we’re the smallest company in the world that has the kind of auto mated loudspeaker manufacturing machinery we have. If you actually took the price tags off, I think you’d find that our home speakers compete against far more expensive speakers. In fact, they have to in foreign markets, and they do so very effectively. One reason we’re priced where we are in home speakers is that I get my kicks out of redefining price/performance, and, if you don’t make expensive things, then you’re not a high-end company. In the car audio market, we compete in the mainstream, but we also manufacture the ProSeries, which we intended to be the best car speakers possible. We pretty much started with a clean sheet of paper and said, “Okay, cost no object, what can we do to significantly improve the performance of car speakers?” The ProSeries came out with die-cast aluminum baskets, high- performance crossover networks, and very expensive materials. We were the second company to use neodymium in a car tweeter; the first company beat us by only a matter of months, and it’s no longer around.
Why did you approach car speakers and home speakers differently?
For one thing, it was easier to innovate in car. We were the first company in the world to come out with a full line of car component speakers. And there’s another thing that differentiates the car market: It’s still an enthusiast’s market.
Just as the home hi-fi business was when you got into it.
Though car audio enthusiasts, for obvious reasons, accept flush-mount speakers, flush- mount models for home use haven’t attained the same status. Is it possible to re create a musical performance accurately with in-wall speakers?
Yes. The main problem with in-wall speakers is structural resonances you’re exciting in the wall itself. If you use a subwoofer and a high-pass filter to limit the bass going to in-wall speakers, you can eliminate that. Just keep the troublesome frequencies out of the in-walls; have them come out of the subwoofer.
You acquired Snell in June 1996. Was your intent to put Boston Acoustics solidly into the high-end home speaker market with the brand, to make it the corporation’s Lexus, if you will?
We see Snell as a separate, autonomous brand.
Why did you buy the company?
Part of it was emotional. Peter Snell and I had discussed a lot of issues related to speaker design, and I had a lot of respect for his work. He was a very principled, dedicated guy and, on a couple of occasions, turned to Frank for financial advice. After Peter’s death, we admired the fact that the company was able to maintain its reputation, and when Snell came up for sale, it looked like we could easily fix the things that were broken. The company needed capital. It needed operational expertise. One positive was that it was local; it’s a half hour away. The product line, though still great-sounding, was considered very long in the tooth, so we’ve spent a year or so completely revamping it. Dave Smith is running the company. He’s an engineer who had been at McIntosh, KEF, and JBL, and he’s really a great designer and a sensible guy. We’ve invested close to $4 million now, in both infrastructure and product development—tooling, things like that. The first new products came out last October, and the company’s turning the corner.
Does your relationship with Peter Snell tell us something about the Boston-area speaker manufacturing community? There seem to be bonds there that transcend rivalry. Didn’t Roy Allison help you when you were starting your company?
When we first went into business, in the very beginning when I was doing the prototype work, I didn’t have a magnetizer. I called up Roy, and he was nice enough to let me come over and use his magnetizer for my woofer magnets. There is a communal sense. I’ve always felt part of it is that, if you’re a speaker designer, you encounter problems that you can’t even talk to your wife about. She just won’t be interested, but another speaker designer will be.
You’re selling Boston- brand speakers to Gate way, the computer company. What credentials does a hi-fi speaker maker need to gain admission to that fraternity?
If you’re going to sell computer speakers, you are going to make them in the tens of thousands. There’s a lot of risk for a computer company doing business with anybody in the hi-fi speaker business.
You have to demonstrate you can make the quantities they need at the quality level that you said you can make them at.
Is the difference in sales between computer speakers and hi-fi speakers really so vast?
No comparison. In the first six months we sold half again as many computer speakers—in one model—as we sell of all our home speakers in a year.
Has your experience with the Gateway pro gram spilled over into music and home theater areas?
Our second computer speaker system, the MediaTheater, was the first in the world to create the sound of a Dolby Pro Logic home theater out of two loudspeakers. It uses dig ital signal processing; it’s an algorithm we license from Dolby. It’s easy to imagine a phantom center, but the surround is mindboggling.
You first expressed your enthusiasm for surround sound to me back in the ‘70s, when Advent, ADS, and Audio Pulse were showcasing time-delay. You said then that once listeners were exposed to it, they wouldn’t want to be without it.
If people can accommodate the additional speakers, it’s much more convincing and satisfying to listen to multichannel sound. One of our newest products, the Destination MediaTheater, is a full Dolby Digital surround system—five small satellites, a subwoofer, and a universal remote that will operate your TV set, a cable box, and a VCR. We’re not just putting amplifiers in the speakers, we’re also doing all the decoding: The decoder is in the center-channel speaker. For the Dolby Digital decoding, we’re using a new Zoran chip, but the rest of the circuitry had to be pretty much designed from scratch. Once you become involved with digital signal processing, there’s a lot of software that has to be developed, too; you have to program the chips and the volume controls, among other things. A year ago, we had one or two electronic technicians. Today, we have eight electronic engineers, a couple of whom are digital guys, and we’re looking for a full-time software programmer.