RØDE Microphones

//RØDE Microphones
RØDE Microphones 2018-01-09T16:52:20+11:00

Project Description

RØDE Microphones owner Peter Freedman is now enjoying the satisfaction and spoils of global success. But in the late 1980s and early `90s, he was a businessman on the brink – an ill-advised loan landing him in more than $1 million of bad debt and “six years of hell”.

Freedman had recently taken the reins of Freedman Electronics, a business that his parents Henry and Astrid founded in 1967. When his father died in 1987, Peter stepped up as managing director, and decided to put his own ambitious stamp on the business, taking out a huge loan in the process.

“I thought I could get myself rich by building up this company, without any business knowledge,” says Mr Freedman.

But his strategy didn’t work, the stockmarket crash hit, interest rates skyrocketed, and Mr Freedman lost everything.

“We had about six years of hell – constant hell,” says Mr Freedman. “We sold the house. We didn’t go bankrupt, but my father’s business was gone.”

Mr Freedman decided against declaring bankruptcy, opting to go through the hard slog of paying back creditors.

Eventually he came out the other side, and a decision to start making microphones saw Mr Freedman and his newly-named business, RØDE Microphones, start to gain ground.

After pulling apart a cheap Chinese microphone and rebuilding it with better components, Mr Freedman received positive feedback. He began selling the new model for around $500, which proved popular among musicians and others who had been paying $4000 to $5000 for German-made mics.

“The big moment came when I thought ‘I’ll see if I can sell this in the States’. I got a plane ticket and put it on my credit card,” says Mr Freedman. “I managed to get into one store and they bought 100 of them.”

That small victory gave him the confidence to do a trade show in the US the following year, and RØDE began to garner global interest.

These days the Sydney-based company is a world player, selling its microphones and other audio equipment to more than 100 countries. It also has distribution and marketing teams in the US, Latin America and Asia.

“We do half a million mics a year. I used to dream of doing 500 mics a year,” says Mr Freedman. “We’ve got some of the best machinery in the world.”

The average RØDE microphone now sells for about $300-$400, and is produced almost solely on the company’s high-tech, $30 million collection of automated machines.

As the whole process only needs a few seconds of human labour for the final assembly, the machines can operate around the clock, with very minimal labour costs.

“If you make a lot of product and you’ve got automated machines, your quality goes through the roof and your prices go down.”

Aside from making high labour costs a non-issue, the precision machines have also allowed RØDE to move at lightning speeds. While Chinese manufacturers might take three or four months to turn around a product, RØDE can have a microphone built the next day.

Mr Freedman began investing in his arsenal of machines many years ago, which has meant the company is now streets ahead of many of its competitors. The company’s success has also led to freedom in the way RØDE operates.

“I have no debt and I am in total control,” says Mr Freedman. “When you’re that free, that’s when the magic comes.”

RØDE places a heavy emphasis on marketing (among other things, it runs a short film festival) and investing in research and development, all the while continuing to invest in more machines to test the limits of what it can create.

A recent purchase was a machine worth nearly $2 million that can machine metals and plastics to a tolerance of less than half a micron. A human hair is 100 microns.

RØDE also has an automated painting line, which applies military paint via a custom-made machine with robotics spraying.

While the company continues to invest in the latest precision technology, it existing machines continue to spit out parts around the clock.

“The sun never sets on what we do – weekends, nights, all the time,” says Mr Freedman. “It’s Willy Wonka’s factory with these mics.”

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