"For 30 years, Lexington-based Thiel Audio has designed and manufactured top-of-the-line speakers to suit the ears of discriminating audiophiles worldwide. But as the audio industry shifted its focus to the sleek and integrated home theater components of recent years, Thiel has had to employ its own finely tuned senses in the audio business, reapplying the entrepreneurial resourcefulness that first launched the enterprise from a dirt-floor garage on Georgetown Road.
Thiel, which produces 15 models of premier loudspeakers ranging in price from roughly $2,000 to $16,000 per pair, had built a longstanding reputation for high-quality sound and customer service, but as recently as four years ago, consumer interest was drifting away from its product line. The company, lead by founding partners Jim Thiel and Kathy Gornik, had piled up stacks of honors from trade shows and industry magazines over nearly three decades in its continual pursuit of audio perfection, but it wasn't enough.
"It was like starting over," said Gornik, Thiel's president. "There was some excitement in that for me; there was a freshness about it that I liked, but at the same time we were losing business and losing money and not sure what we were supposed to be doing."
Thiel examined other successful companies and conducted market research to figure out what customers wanted, but an extensive R&D cycle, the source of Thiel's pioneering designs, still posed a significant challenge for a company looking to change its direction.
"We just don't snap and come out with products — especially ones where we have to rethink from the ground up what it is we are doing," Gornik said. "So even though we had started quite early in the game to adapt, it took a long time for us to get there."
For Thiel, its new line of thinking rose up off the ground in the form of new in-wall and surface mount speaker designs and speakers made to accompany plasma televisions, as well as a new powered subwoofer. New products, however, were only the beginning. Thiel also needed to reestablish its reputation in a brand-new audio arena. Independent specialty retailers that previously served as their primary distribution channel were giving way to custom installers, who operated without retail locations and integrated an assortment of electronics straight into the homes of consumers who had little interest in the technical intricacies.
"It's a very different business model that we had not ever encountered before, and we had to go knocking on those doors," Gornik said. Thiel was courting a whole new world of trade shows and trade magazines.
Today, Thiel has emerged again as a premier producer of high-quality audio components in the ever-changing global marketplace, shipping its products to 33 countries. Some of its biggest markets include Korea, China, Japan, France, Italy and Russia. Thanks in part to a weak dollar that has boosted Thiel's overseas sales, the company's export business now accounts for roughly 33 percent of the company's gross revenues. High-end audio is highly competitive in international markets, Gornik said, and Thiel has marketed its products internationally since long before the advent of e-mail and even fax machines, working to team with international partners who can make headway at the consumer level.
"I tell my staff on a regular basis that, as Darwin said, survival does not go to the most intelligent nor the strongest, but to those best able to adapt, and that is my mantra," Gornik said. "That is the creative destruction of the marketplace, which I am all in favor of, because all progress depends upon it."
And the company's products are still winning awards, with its soon-to-be-released CS3.7, a floor-standing speaker expected to carry a $9,900 MSRP per pair, garnering accolades this year from the International Consumer Electronics Show (CES) Innovations Design and Engineering Awards. Thiel has earned no fewer than 22 of these awards over its 30-year history, having attending its first CES event as a fledgling company in 1977.
Back then, the business endeavor of two brothers, Jim and Tom Thiel, and their former college friend Gornik, along with another college friend and non-equity associate Walter Kling, was operating on a shoestring budget financed mostly by friends and family and equipped with an array of used tools. Gornik still remembers packing meals prior to trade show trips in the early years because their budget didn't allow for fast food lunches.
In 1981, Thiel moved its operations to its current location on Nandino Boulevard, where its hands-on approach to designing and developing some of the most integral parts of its speakers, along with its workmanship, still sets it apart from much of its competition. The company assembles its own electronic crossovers, the "brains" of a speaker, in-house, using high-quality parts that contribute to the expense of its products but reduce the amount of distortion. And roughly eight years ago, when most manufacturers were looking to improve their efficiency through expanded outsourcing, Thiel brought the production of its speaker drivers in-house as well.
With 27 employees, the company takes pride in the amount of craftsmanship applied to its speaker sets. Thiel's floor-standing speakers are made from medium-density fiberboard (MDF), typically with laminates from any of eight to ten hardwood veneers in matched pairs or sets of five. Thiel can also stain or paint speakers to match a customer's dècor, and if a customer plans to purchase more speakers at a later date, Thiel will even set aside veneer from the same tree to be used when the additional order is placed later.
The speakers are shaped with computer-controlled routers run on programs developed by Jim Thiel, the company's product design engineer, to translate his designs into reality, an approach that the Thiel company refers to as "high-tech, high-touch." Ground marble and polymer baffles are also made on-site and painted black before being built into the speakers, making the product extremely rigid for better performance.
It's not that the company is opposed to outsourcing, Gornik said. Some of Thiel's bestselling products, including its aluminum in-wall speakers, are currently manufactured in China. However, the irregular angles and sloping baffles of Thiel's floor-standing models aren't conducive to mass production.
"(Chinese manufacturers) can do a lot of things very well, and the quality is actually quite high out of China," Gornik said. "But anytime you deviate from a standard box construction in a loudspeaker, you are getting out of the norm for what is really common in China, or anywhere for that matter. We couldn't get this (anywhere else) in the U.S. either."
In addition to its new products, Thiel is looking to develop more partnerships in the future, including original equipment manufacturer (OEM) relationships providing sound equipment for large corporations to incorporate into their new products. Also, plans are in the works for a new line of speakers expected to fall in the price range of a whopping $30,000 - $40,000 per pair, and customers are already lining up, Gornik said.
And with production close to home in Kentucky, an added benefit is that the development process for any new initiatives stays close to its designer, Jim Thiel, who still takes the lead from his hybrid office-laboratory space in his company's continuing quest for the perfect imitation of live sound.
Thiel is recognized as a pioneer of "phase and time coherence" in the industry, which involves the synchronization of multiple drivers in each speaker, coordinating sound waves to stir the listener's ear with the same well-timed accuracy as a live performance.
"It's something that's subtle, but if you live with it over time and your ear begins to clue in, you will never live without it," Gornik said. "It's like learning how to appreciate good wine."
It's a distinction that Thiel is continually fine-tuning in its products for the benefit of its customers, aiming to create what Gornik calls "the goose-bump effect."
Indeed, when everything falls into place, for a speaker or the business that builds it, there's no other way to describe it.
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