[sdiy] Korg shows us how to sell more synths for less and make more money

[Eric Wood]

To me, this is totally a good idea! I don't have the time at this moment to get into it; wanted to comment so I remember to expand on my response  
> On Nov 5, 2013, at 5:15 AM, "cheater00 ." <cheater00 at gmail.com> wrote:
> 
> If you still haven't seen it, Korg have released their first true modular:
> 
> http://www.synthtopia.com/content/2013/11/04/korg-littlebits-synth-kit-lets-you-snap-together-a-modular-synthesizer/
> 
> So far, Korg have been insanely successful in every type of synth gear
> they made. It's likely a good idea to sit down and think about what
> makes them so popular and so successful. Just saying "economy of
> scale" is a cop-out; there's much more to learn than "make more of a
> thing".
> 
> What's interesting is the fact that they've got a littlebits-style
> modular, likely in the $150 price range - the most expensive thing on
> http://littlebits.cc is $199, so it wouldn't make sense for Korg to
> position themselves higher than that. I'm assuming Korg will aim for
> the same value/price ratio as littlebits. And that littlebits stuff is
> so insanely overpriced - I mean they have a module that's literally
> just a LED and it costs $14. Even including the custom connector they
> use, they're still pocketing 90% of the price of that thing. So if
> Korg can go that low and still make mad markup like that - and I
> wouldn't expect them to do any less - it just shows where the synth
> market might be going if Korg keep this up. I think they've really got
> a tight hold on the niche that everyone else overlooked: the niche of
> "don't include the unnecessary bits that eat most of your product's
> price".
> 
> So the question is where that leaves musicians who want "a bit more
> quality". The circuit's obviously not the issue when it comes down to
> price, so what are we dealing with here? You pay for better plugs and
> wood sides and metal panels. Those are likely better supplied locally,
> in a standard format. Which shows that maybe we shouldn't only have a
> standard format for modular synth module dimensions, but for the
> panels as well. A few pre-made panels that can be produced in mass,
> and modules that fit them. Silk screened white labels under each hole
> to add your own descriptions and off you go. Are there really infinite
> possibilities of synth modules that can't be reconciled by just adding
> a second panel with more holes? People have been saying for years that
> the most expensive part of a synth is the mechanical bits. Korg have
> listened to that, made it into a business, and created instant
> classics JUST by doing this.
> 
> Some time ago I've spoken with EveAnna Manley about what her biggest
> complaint was when trying to price her products and she said "the cost
> of raw iron going up". True enough, there's a lot of that in every
> enclosure, mechanical part, potentiometer, and jack. We weren't even
> talking about the transformer. Parts suppliers follow the price of raw
> materials very closely, floating the price of parts off of that. I've
> gotten fairly scared myself when I was looking at prototyping some
> front panels.
> 
> If one agrees on holes large enough to fit a little more than a 1/4"
> jack, then that'll also fit a 1/8" socket, banana socket, a
> potentiometer shaft, a switch, a button, and an LED, and any connector
> that people will start using for polyphonic modulars (hint: SFF-8644).
> You'll need angle brackets for mounting - no more mounting by the
> pots, but that's a good thing rather than bad. If manufactured in a
> smart way, this could be just one piece of sheet metal, bent to form
> an angle.
> 
> There are very few modules that won't fit this format - and most often
> that's because they have an LCD, and this kind of thing can be
> provided for as well by having a second module panel with a
> rectangular cutout. That stencil could also fit VU meters, joysticks,
> keypads, capacitive pads, larger, uncommon connectors such as midi,
> etc.
> 
> By doing this we could decouple the business of making electronics (at
> which synth makers excel) and buying iron (which most synth makers
> have no idea how to do). This way, the company doing the electronics
> can stock their inventory at the right times, dedicate their skill to
> electronics (mechanical stuff takes a LOT of focus for someone who
> isn't doing it as their day job), and gear their business towards -
> exactly - electronics. And the company in panel making business can do
> this in their tempo as well - stock metal sheet when it's cheap, order
> it in bulk (much higher volume than any single synth manufacturer),
> and optimize their manufacturing process. Or put another way: would
> you ask Schaeffer AG to sell you VCAs? Even if they subcontracted to
> one of us, you can see the issues very clearly.
> 
> By using only one or a few simple formats we're removing the most
> important cost factor when doing metal work - the setup cost. A
> company that does front panels could set up once and build a thousand
> panels.
> 
> I conjecture that in the long run it'll be a better idea to just have
> a few sets of front-panel stencils to use, and have to use two panels
> for a single module every now and then - rather than have
> purpose-made, artisan metal-work supplied by companies who aren't in
> the business.
> 
> Say you had modules in sizes of: 16 holes (4x4), 8 holes (2 columns of
> 4), and 4 holes (stacked vertically). What's the worst thing that
> could happen? On the one hand, you'll have left-over holes. No big
> deal at all, just plug em with something. On the other hand, you might
> find your module has used up that 16-hole front panel and needs just
> one more hole to be perfect. Tough luck. Change your module to use
> another 4 holes (the minimum increment), or eliminate that one extra
> feature, or use a concentric pot, or do something else.
> 
> And hey, if you want to stylize the module to "mark your territory":
> just send them a vinyl sticker to put on the front panel. There might
> even be a spot left on the generic front panel to put the name of the
> module down, that's where a small sticker could go.
> 
> Going further, maybe most people won't use any front panels at all,
> lowering the entry point to modular synthesis for them. Or just use
> cardboard cutouts. Because seriously, how many people take their
> modular to a gig? And if you do, you can rationalize the cost of
> actually getting those bits of metal, because you're likely being paid
> to gig, and even the meager $500 gig can buy a lot of sheet metal with
> holes in it. Maybe a nice and cheap alternative would be a plastic
> front panel for those who don't want or need metal. If we come up with
> a mechanical standard that lets people put bare unpanelized modules in
> a simple modular case, then we've won a lot of customers who would
> otherwise turn away for the gear being too expensive. And we're
> scaring them off because we're pushing iron, forcing them to buy it.
> 
> On the other hand this could really help out the small synth
> manufacturers as well. The initial cost to build a run of modules is
> an excruciating load to bear, and having the cost of panels removed
> could help many more people enter the business, making this more
> popular and more lucrative for the bigger companies, who are
> established, and who gain new customers that the small companies
> reached. If a small mom & pop shop only offers two modules, the next
> place one of their customers will go is one of the bigger
> manufacturers.
> 
> The sales part is not lost on me either. It seems like nowadays the
> "in" thing is to show people bare PCBs, overwhelm the customer with
> the visual complexity of what they're seeing, and let their
> imagination go to town. There's so much of that happening on the
> "maker" crowd. Even with consumer electronics, people are mesmerized
> with teardowns. And this is becoming commonplace with synths as well -
> specifically because of Korg's unwritten permission to mod the hell
> out of their synths. You go to the Korg website and a bare PCB sits
> right at home.
> 
> If this lifts off, then plastic fittings that reduce the generic hole
> to the specific requirement (LED, button, switch, 1/8" jack, usb jack,
> ...) could be produced in amazing mass and used to make the things
> more pretty. Perhaps one of those could cost under 50 cents in bulk.
> But I wouldn't expect most people to cry if they don't have it at all.
> 
> Going further, perhaps the PCBs shouldn't include the most common
> mechanical bits such as jacks either, just headers to connect them.
> This follows the same kind of logic as with front panels.
> 
> I think all of this really applies to desktop and rack synths as well.
> How many different options do we have - honestly? There's very few
> things you couldn't do with a generalized stencil that has cutout for
> a single LCD and simply covers the rest in "generic" holes.  A similar
> thing has been achieved by the x0xb0x guys, who use the same PCB over
> and over, but offer it in different enclosures, based on what you want
> to spend. Or just look at the automotive industry - many inexpensive
> cars have control panels with blind holes where buttons for extra
> functions would go. Again, sure, a generalized layout might be a bit
> bigger than if you made it exactly to fit your layout... it might have
> holes you don't need or some knobs might have to be rearranged... but
> who's complaining when the price is much lower? Are we in it for the
> synths and the music, or are we in it for the metal front panels?
> 
> The way to start isn't too difficult. Once we've agreed on a specific
> kind of standard, start making panels in this format, for your own
> use. It likely won't cost much more, but you'll put yourself in the
> position to sharply minimize the cost of manufacture. This may mean
> that the format has to be somehow backwards-compatible to eurorack,
> but it might turn out to be unimportant as well if we think about it.
> 
> If you're offering modules lower in height than the format agreed upon
> here, you can still make your modules fit the raster. This way, in the
> future, your customers can retrofit your modules to the standard, and
> use the left-over holes for mults, mixers, or just leave them be.
> Never enough mults though.
> 
> If you're offering modules higher in height than the format agreed
> upon here, you could make sure the PCB will fit, and make sure the few
> front panel elements at the very top or bottom are not PCB-mounted.
> This way, in the new format they could be moved to a neighbouring
> panel, and you're still compatible.
> 
> An industry-agreed logo could be agreed upon, and manufacturers could
> use it to inform their customers of the compatibility. It could easily
> become an important selling point.
> 
> The panel work could be shared by manufacturers, allowing for
> purchases in even higher bulk. The cost is reduced again. Customized
> stencil work could be done, either just with a manufacturer's logo, or
> actually with the right labels for the connectors and controls.
> 
> Next up, once that's established, you could start offering some of
> your modules without the front panel. Maybe the customer doesn't need
> a front panel because he only ever uses his synth a thome. Or maybe he
> has an older module he doesn't want anymore, would sell the PCB, and
> buy a new PCB for the left-over panel. He's sending the PCB only to
> the next owner, reducing shipping cost.
> 
> If you go with jacks and other elements that aren't PCB mounted, the
> DIY crowd (which the modules without front panels are geared at) can
> easily attach those to a particle board sheet front-panel, or come up
> with one of a multitude of other options.
> 
> In the next step, once a lot of format-compatible offerings exist, the
> companies we've been ordering bulk panels from could start selling the
> panels directly. They'll be able to create a good pricing scheme,
> lower than any synth manufacturer could. This should happen in sync
> with the manufacturer's backlog, so that no one's stuck with front
> panels nobody wants to buy because they're more expensive. That's a
> trick that needs to be learnt, but also an investment to be made to
> reach the ultimate goal. Perhaps at some point they could supply
> stencils made with an industrial jet, which wouldn't have setup cost.
> One of those things that's like an ink printer, but it sprays lacquer.
> Extremely expensive, but, and here's the point: one of the things a
> front-panel manufacturer can rationalize buying.
> 
> Finally, you stop offering front-panels, populate your website with
> "example photos" rather than photos of the actual unit. Now, you don't
> need to worry about fasteners, sheet metal, iron prices, stencil
> quality, mechanical layout, knob quality, etc etc. You achieve Nirvana
> and can fully concentrate on pushing the envelope with novel designs.
> As a bonus everyone can finally order the kind of knob they prefer
> most.
> 
> I'm interested what you guys think. Do you see the front panel,
> fasteners, and mechanical bits as taking up an unnecessary amount of
> your product's price? Would you like to forget about that and get on
> with your synth designs? Do you think your business could work better
> if a standard like this existed? What panel formats do you think are
> necessary in order to satisfy 80% of all needs? E.g. 16 round holes, 6
> round holes plus rectangular cutout, 6 round holes plus three large
> round holes, you name it? Do you think this can be reconciled with one
> of the popular modular formats - or do you think it'll work with all
> of them?
> 
> Cheers,
> D.
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