They say the apple doesn’t fall far from the tree. But if you mentioned the clichéd idiom to SOL Republic founder and former Beats By Dr. Dre exec, and current CEO of upstart headphone company SOL Republic, Kevin Lee, he’d proudly tell you the apple never fell and that It's still there—just swinging from a different branch. Those who have worked closely with Kevin during his Monster days can attest to the uncanny business acumen and familial bond shared between him and his father, Monster founder, Noel Lee.
Noel Lee has come a long way since he began building wired cables in his family's garage in the late '70s. He fought a long, hard battle to get electronics stores to sell his products even though there was no real market for high-quality cables. Since then his company, Monster, has conqured the home theater and audio accessories markets, as well as, most recently, the consumer audio segment with its partnership with legendary producer Dr. Dre. If you, like many others, have become a fan of the Beats by Dr. Dre line, you owe Noel and Kevin a debt of gratitude.
In their first-ever interview together, the Monsters chop it up with COMPLEX, while welcoming special guests Earth, Wind & Fire to sit in, as we discuss humble beginnings, the Monster legacy, competitive rivalries, the Beats project, and the future of headphones. Listen up.
Like Father, Like Son
Did you envision yourself grooming Kevin for the industry, or was he given the freedom to make his own decisions?
Noel: When I had my son, I was still trying to teach me. Forget about teaching him [Laughs]. When I started the company, I wasn’t in a place while he was growing because I was learning. An engineer who’s never been to business school has a lot to learn about business—leadership, finance, accountability, inventory, employee hiring, marketing, and all that other stuff. Those kind of things were not taught to me. So it was trial by fire, just learning.
Those days, I couldn’t get a credit card because there weren’t any. No Internet. It was just an Apple II computer when I started. It was crazy. When I first had Kevin, it was just the thought of having a son/father relationship. But business really didn’t enter into it because we were scrapping. I couldn’t even say we had a business. Today I can say we have a business, but in those days, no.
Do you think you could have accomplished what your father did during that time period?
Kevin: No way. I hope to be very successful in this new business, but I could never for a nanosecond say that I did it under the same circumstances or went through the same things my Dad did. I mean, from scratch with no money, as a Chinese guy in 1979, trying to convince half-priced stores to sell cables that they were giving away for free, and no credit—it took nearly 10 years before Monster became successful. So I don’t take the same sense of accomplishments in what I’ve done in the company so far, as I would credit my father for. I should be able to figure things out because I grew up under his wing.
Not many people know about Monster’s early beginnings. You originally started building products in your garage. When you look back, even though they were hard times and you were hustling to make ends meet, what goes through your mind after achieving so much prosperity?
Noel: I can’t image that’s where it started because it was so hard during those days. I don’t think I could do it again, now. But you had to be young, inexperienced, foolish, and think that there was nothing you couldn’t get done, which comes with not knowing. But when you look at other businesses that started that become larger, I’m sure a lot of the owners would say that was a time that could never be duplicated again. I had a good job. I was working for Laurence Livermore Laboratory doing research as an engineer.
Here’s what sons of Asian immigrants do: you become lawyers, accountants, or engineers. And it used to be where you got SAT credits if you were Asian. Today, you get minus SAT credits because there is so many of them. Asians aren’t entrepreneurs, that’s why there are so few Asian leaders outside of China—so few in Silicon Valley. I was one of the ones who said I wasn’t going to work for somebody anymore, I just said I don’t belong here.
Kevin: Can you imagine my Dad having a boss?
After hearing his incredible come up, getting the grand tour of the Monster offices, and checking out his insane car collection: I'm surprised he ever reported to everyone [Laughs]. He's a smart man. A leader, hustler, and go-getter.
Noel: Before that, I was a musician and went out on the road, that’s when he had a whole different degree of independence. I dragged Kevin with us everywhere and he slept inside the drum set.
Kevin: The bass drum, that’s what I used as a pillow.
Noel: You didn’t know what the future was going to be. Then you had these sleazy club owners who didn’t pay you. That’s when I learned about business, it was like an initiation. I ended up negotiating one of the best contracts in Hawaii: a year contract. It took a long time of getting kicked around. But I would of never learned business if I was still working for somebody. And how to handle yourself and negotiate, save, work and not work, but every musician knows that.
Speaking of bosses—how was it working under your pops?
Kevin: I hated every day of it [laughs]. Nah, the father and son relationship that we’ve had is the best. And on the work side, it was good and bad. I know exactly what he’s thinking, what he wants right. When he says, “Kevin, you gotta get this done,” he feels confident that I’ll give him exactly what he wants and get it done. On the other hand, he knows exactly what he wants.
They say the apple didn’t fall far from the tree. I say I’m the apple that never fell far from the tree—I’m just on a different branch. So sometimes I see things different. But like my father, if I’m passionate about something, I want it done that way too. The good thing for me is I know my dad was always supportive of me growing, and while he’s the boss, he was always supportive of my personal and professional growth. Even with things outside of the company. So any opportunity in the company that I wanted to try and do, he was like go for it. When I wanted to do my own entrepreneurial thing a decade ago, he was supportive.
When you brought Kevin into the company, was it ever in the cards to pass the baton and crown him the Head Monster?
Noel: Well, that was always the plan. But it doesn’t have to be the plan. You have your kids taking over and that’s both good and bad because sometimes they screw it up. And if he was ever going to do that, not to say it’s never going to happen because I ain’t dead yet: he’d have the experience. You have to meet certain guidelines, which if he didn’t have that good accountability, he probably wouldn’t do a good job running the company. Right? If it was his first main voyage out and he didn’t have that experience, the measures of success are capped. So if anything, he’ll have the experience, and if the time ever came that he was going to run Monster, he’d be well equipped to do so.
How would you feel about possibly running your father’s empire in the near future?
Kevin: One, I’d be honored. Cut me open, I’m a monster and will always be a monster. Doing that and being apart of the ongoing future of Monster, also running the company as good as he did, or even better, I would want to make him even prouder. On the other hand, like my dad said, he ain’t dead yet. He’s a workaholic and he’s gonna work till that day. I’m not like my dad in that sense. I always joke with him and say “Pops, we’re gonna retire together.”
So you don’t see yourself in the business or working as hard as your father when you reach his age?
Kevin: I have a balanced appreciation for all aspects of life including work. My dad has an imbalanced appreciation. He’s wired to work. If the day did come, I’d be happy to do it. But like he said, everyday I run this new company is another day where I feel more comfortable in my ability to run Monster if that day came.
Monster vs. SOL Republic?
SOL Republic's been gaining a ton of attention lately. I'm sure everyone wants to know: What's your view on Kevin's headphone line?
Noel: I’m really impressed with what Kevin’s done.
Kevin: That’s a big thing for me. When he gives me kudos, that’s like the fourth time he’s given me a pat on the back in my life. The third time was “good job on Beats.” So that was a big deal. I was like “my dad likes the headphones.”
How hard was it telling your father you wanted to move forward with your entrepreneurial aspirations?
Kevin: I think there were multiple reasons for me to do it, but from a business/strategy/marketing reason, it was to go to the rest of the music youth that wasn’t necessarily educated on sound like we did with our first product line. LRG was like my learning ground on that, about authenticity and being the brand. At first, I said, “we need to create a new company and brand” that stood for exactly just music headphones, as opposed to all the things Monster does. So that was the easy part, and me always wanting to expand my abilities, it just seemed natural to say, “OK, I helped you build a company. Now I have to learn the accountability to run my own company.” And my dad offered to help, financially. I said, “I’m not saying I don’t want your help, but I want to figure out how to do it without your help.” He said, “Good, you’re on your own.”
Well, Noel, what was your initial reaction?
Noel: I asked myself: What is a father to do for his son who wants to be in business? Well, you could bankroll it and do several things. But that’s not a learning process because you won’t feel like you accomplished it on your own. You can’t really call it your own unless you do it on your own. Kevin's been working with the company for years. But he was always protected. If he did something wrong, there was a net. He really had to fly without a net. If he was going to start his own company, I aint gonna catch you. If you succeed, you did it on your own, and if you fail, you’re on your own. So the initial conversations were if he was going to create something on his own, it’s important for him to know he did it himself. In terms of what I could do to make him a success: you gotta find your own money. You can’t go to a bank because you have no collateral. So you got to find investors. And you have to know accountability when dealing with investors. He’s going to be up your butt telling you how to spend money, and it’s not going to be daddy telling you. He never had that pressure when he worked for me.
That’s such a ethical and disciplined viewpoint. Kevin obviously played a huge part in the brand’s success, especially with the Beats By Dre project. We’re you sad to see him go?
Noel: Yeah, of course. It’s like you’re sad to leave your kid leave the house.
We know at the end of the day it’s all in the family. But level with us: Do you view your son as the competition?
Noel: Well, any headphone is competition. And when you look at what Kevin’s accomplishing, there’s always going to be a competitor. If not Kevin, it’s going to be somebody else. I rather it be Kevin than somebody else.
The both of you have products that are prized as unique and stylish. Touch on the innovative aspects and hardships of building a product from the ground up.
Noel: Nobody ever saw headphones as fashion. So we pioneered the concept that it can be fashionable. If you can’t do it differently or better, there’s no sense in doing it. There are leaders and there are followers. And some of the followers are copiers: counterfeit. So there’s hundreds of people out there, thousands doing that. If I make a headphone, I just got to China and there are a thousand manufacturers. It’s easy to pick one from the crowd and say, “you know what, modify the color on this one,” and that’ll be my headphone. And there are hundreds of companies that go out there and do that. Doing a headphone from scratch and being innovative, doing something that no one else has ever done, both in sound and innovation, is really hard.
Kevin: I felt comfortable starting my own business knowing the DNA I got from my father around innovation. My dad really did innovate what you could get out of a speaker and video cable. He did innovate on what you can get out of a power strip. Did innovate on what you could get out of cleaning products for your TV and laptops. And when we did headphones, we didn’t know for sure that we would get a headphone that looked or sound that good. But it was a part of our DNA to figure it out. And it took us a while to figure it out.
In the public eye, you’re viewed as the Head Monster. Then they’ve dubbed Kevin the “Little Monster”. Seeing how you’ve just launched a new headphone company, consumers might be mislead into thinking SOL is a subsidiary of your father’s company. Does it bother you that some people might view SOL differently because of your family ties?
Kevin: It doesn’t get to me. I don’t know if the consumers view it that way. Maybe like the trade press, like Billboard and all that stuff, but the consumers I think don’t get that at all. Even when we did break the story, with them knowing who I am, Noel Lee’s son, it didn’t get to me at all because all of this has come from a good place. I grew up with the same passion as my dad surrounding music and sound, and the same entrepreneurial spirit. So to me, this has been something that I’ve worked for and lived for all my life, in so many different ways. So stuff like that isn’t even on my radar.
When Kevin talked to you about SOL Republic, was there ever any discussion about doing a partnership to where you would have his company under the Monster umbrella, like you’ve done with Beats?
Noel: We had both talked about it. Not saying it wouldn’t have been a good idea. I might not have been or it would have been a better idea, but it wouldn’t accomplish the reasons why he started the company to begin with. He’d just end up in the same place—with a smaller company being part of a bigger company. Maybe sometime in the future, but right now, we’re not ready for that because he has to get to a place as successful as Monster is, or maybe even more successful.
Beats By Dre Origins & Success
Headphones are practically considered fashion accessories these days. Many attribute that change to Monster for the BBD brand. But the company’s always been admired for its wiring and cable accessories. What made Monster venture into the headphone market?
Noel: I gotta give some credit for the inspiration to Dre and Jimmy [Iovine]. We’d been thinking about headphones because we felt it was the next thing and speakers were not selling anymore. And we had done speakers, but nobody wanted big speakers in there homes. Wives wouldn’t accept them. As a passionate audiophile, that’s the way to go, but the practicality of making a business out of it wasn’t working. When Jimmy and Dre came to us and said they wanted to make speakers, we said you don’t want to make speakers because nobody really buys them anymore. They said “what do you mean nobody buys speakers anymore?” Really…nobody buys them. They had never thought a headphone could be a serious music reproduction instrument. They never thought that a pair of headphones could sound as a good as a pair of speakers.
It’s interesting to hear you say that because at all these BBD events, we usually hear Jimmy sharing the story of him and Dre getting into the headphone business. He mentions how Dre came to him saying he was interested in pushing sneakers and talks about how he told him, “Fuck sneakers. Sell headphones.” To clarify things up, would you say it was Monster that originally brought the idea of creating headphones to the table?
Noel: I don’t want to contradict Jimmy’s story. But let’s say we all came to that conclusion together because the actuality is in our first CES show, we said in our headphone booth, this is the new loudspeaker. In fact, that was our tagline: Headphones are the new loudspeaker.
Fair enough. The BBD brand is looked upon as the urban, consumer-centric product. Since most of the artists attached to it are pop and hip-hop stars, with the upcoming Earth, Wind & Fire headphone line under the Monster umbrella: Why not create an exclusive BBD pair for the legends?
Noel: First of all, music is not one-dimensional. I think what we did with Jimmy and Dre with the whole Beats brand, we defined a customer base. Urban and young kids who were taught there is music quality that they’ve never heard before. And with our venture with Earth, Wind & Fire, Gratitude, we’re targeting an audience that has big speakers, who’s experienced great audio. It’s not the first time they’ve heard great music. So bringing something to that audience is almost the antithesis of what we did with Dre. Here, yes we’re bringing it to a different audience, more musically aware and maybe had high-end speakers in the past, and now they’re experiencing it audibly.
Would you consider BBD the biggest project the two of you have collaborated on?
Noel: Oh, absolutely. And we couldn’t of done it without Jimmy and Dre. To blow up as big as it has become you needed a three-way collaboration. You needed us as the designer of the technology and engineering, the retailer who is willing to take a chance, that was Best Buy and Apple, and the marketing horsepower of Jimmy and Dre to make it part of pop culture. We’re the first ones. Nobody else could have done it. Maybe Sony could have done it because they had the music company and the electronics. It wouldn’t have come out good because Sony is not a culture thing. Although they could have done it, they couldn’t have done it.
The Future of Audio & Headphones
The two of you are at the top of the audio echelon. Where do we see both platforms go from here?
Noel: With Kevin, the fact that we scratched the surface because the headphone is at the end of the chain right now. When people start hearing content with great speakers or headphones, they’ll start to hear the imperfections. So the fact that headphones have gotten better, [it] allows one to hear the imperfections of content. So I see actually two things in the future: One people will have a greater appreciation for a lot less content. They’ll strive for uncompressed audio, and we see people doing significant work like that now—making that available to consumers. That’ll be the next big boom on the content side. But the headphones side, there’s still thousands of people that still don’t know about quality headphones than the ones that do.
The second side is the availability of the players. So you have 250 million iPods, but you have over a billion smartphones. So as soon as the smartphone becomes enabled with music, like HTC did with Beats, like we’re doing with Nokia, which will be introduced next year, now that’s just quadrupled the amount of media players out there. Most smartphones have the ability to play music, except people didn’t know about it. If you didn’t have an iPhone, you weren’t playing music off your BlackBerry. But now with the availability of Pandora, Spotfiy, and other music services, you’ve quadrupled the amount of players. So what does that say about the future of headphones? It’s massive.
Tablets is another thing, the availability of tablets and using that as a media player, now if we’re to look at the last 10 years of the generation of flat-screen TVs, the future generation is going to be the phone. That’s going to be your flatscreen. That’s where you’re going to watch your movies, YouTube, and music content. You’re not going to carry around a big music system with you. So that’s why headphones are so important.
Kevin: Even with our success thus far, we have yet to touch the total market we want to address. To get that I think it’s more different flavors and different people. Different aesthetics, sound, form factors, price points—it’s everything. I would expect that in the future, everyone has a headphone that sounds good, relatively speaking. And everyone has one that speaks to them, whether it’s in terms of fashion or functionality. But I also expect in the end that getting a headphone into consumers’ hands you still have the limitation of distribution.
There’s only so much space a retailer can put in front of a consumer. So while everyone is jumping into it, I think everyone will try and copy the formula, and you’re already starting to see that. What they don’t realize yet is that it’s not just a formula. A formula changes instantly. The other thing is consumers are so smart these days that they’re willing to pay more for something they feel is the real deal. And so authenticity is what I think is going to be the filter that cleans out everyone trying to copy.
Jimmy and Dre, authentically had a lot to do with it. My dad, authentically cares about music, has a passion for sound, and the nearest engineering innovation. I’m like my dad, so I’m the same way. I would expect companies like Monster or SOL to be the ones that succeed because it’s not just one thing: it’s marketing, authenticity, product innovation, distribution, and all of that coming together.
OK. How about functionality? Monster just introduced the Beats Bluetooth wireless headphones. Is that the new wave of enhanced audio sound?
Noel: There’s so much more to do though. We’ve accomplished a lot in a very short period of time. Wireless is the next wave. In fact, it’s one of our best selling products. And that’s because people don’t want to deal with wires. But they never knew how not to deal with wires cause everything that was wireless sounded bad. So we’re the first to really do a Bluetooth wireless headphone. I’m not gonna say it sounds like a wired headphone yet, but it sounds good enough to where people are really impressed with the sound.
We’re sure it’s extremely difficult to produce great sound quality via Bluetooth, especially since the technology hasn’t been perfected.
Noel: It’s not. So we have to make allowances for that technology to cater towards Bluetooth technology. Bluetooth hasn’t changed appreciably the past few years. Having to work with it and make it sound good, it’s taken a long time. So we’ve been working with it for two years. But it’s changing and going to change next year. And it’s gonna be better in sound quality than it is today. All the basic fundamentals of making Bluetooth sound good will become easier. We’ve come to a point where with Beats wireless people say they’ve never heard a wireless headphone sound this good.
Seeing how SOL headphones are open to limitless customizations with the removable headband and ear cups, when you really think about it, that fits perfect within the concept of wireless headsets. Would you see the company releasing a wireless pair in the near future?
Kevin: The goal of SOL Republic is to bring good sound at a more accessible price point. I think the higher the technology, like wireless, that requires batteries, built-in amplifiers, and the connectivity will probably not make that the right thing for SOL. You’ll see it in the Beats line and the Monster brand, but probably not in the SOL line.
What should we expect from Monster at CES and the near future?
Noel: I don’t think I’m gonna be able to tell you everything today, maybe next year at CES when we begin to unveil it. But like I’ve been saying like the sports category has been untouched. So with the new Monster iSport headphones, everyone says, “hey, headphones keep falling out of my ear.” Not with our headphones. Other stuff being asked is what happens when you sweat in them and the headphones get shorted, or if they’re destroyed—these are lifestyle kind of features. So that’s what we’re working on. How to make it smaller, lighter, more battery efficient, and waterproof, also how do you make in-ear headphones wireless.
Safe to say both Monster and SOL Republic will be in attendance at CES 2012?
Kevin: We won’t have a booth at CES. We can’t afford it [laughs]. I’ll still be there because I still have a job at Monster. The team will be there having meetings.
Noel: Well, been there and done that [laughs].
Did it ever come to mind to ask your pops if he had any space near the Monster table to showcase your products?
KL: Well, that’s how you started dad. If I asked, I’d be bad karma to say no [laughs]. Nah, my dad and I decided that this whole thing about keeping the new business completely separate lives on its own.