The PNW Section's season kickoff meeting on September 25 revealed the Man behind the mixers so well known around the world: Greg Mackie. Inspired by the Los Angeles Section's evenings chatting with many audio personalities, the PNW Section spent an evening hearing the history of Greg and his audio companies in the Pacific Northwest. Over 58 persons gathered at the Mackie Designs factory in Woodinville WA.
The mic was passed through the audience and everyone briefly introduced themselves. PNW Chair Rick Chinn moderated, and first asked for a show of hands: Former Tapco employees? Former/current AudioControl employees? Many hands were raised. These were all companies started by Greg Mackie.
"Wind the clock back to 1967..." began Chinn. He was working at a Seattle stereo store called Electricraft. Electricraft was THE hi-fi place in Seattle then (long closed). He first ran into Greg Mackie there, who was looking for some Altec speaker components. Chinn later worked at a local music store and was charged with delivering some raw speakers to the Tapco "factory." They would spend the day talking audio, and eventually Chinn ended up working at all of Greg's companies.
Greg was working on a new product in a funky old hippie house in Mukilteo, WA, an audio mixer that became a breakthrough in the history of sound reinforcement, the Tapco 6000. The small mixer designs of the day were not very good for rock music because they couldn't handle the signal levels coming right off the microphone. They were also relatively expensive and hard to find. The Tapco mixer worked with rock music, and was easily available and very affordable. This theme would continue throughout all of Greg's products.
Greg Mackie began to go through the history of his companies. Today he is aware of how naive they were back then, especially regarding manufacturing.
In the 60's, Greg was in the Army (he volunteered instead of being drafted and later worked for Boeing. He always wanted to be a manufacturer of some sort, jokingly because he figured no one would ever hire him for anything, so he started Tapco with boyhood friend Martin Schneider in 1970. They made guitar amps, speakers, and other music gear. A new product might take a week to design and a week to manufacture. During this time, a local music store contracted Greg and Martin to make a batch of 200 column speakers for $67 each.. "WOW," they thought. "We're going to get rich." "Obviously we didn't understand much about business or costing in those days," said Greg. They developed a box with three Eminence 12" speakers and an EV PA30 PA-style re-entrant horn. That horn is still sold today and still has the four holes in the casting that EV agreed to add to the mold for them so they would not have to hand drill the holes.
In those days, the problem with rock and roll PA systems was that the mic preamps were not designed for the high signal levels associated with rock and roll. Existing preamps had too much gain and overloaded. Greg thought he could design a mixer with variable gain mic preamps (a new idea then) in just a few short weeks. His friend Rodger Rosenbaum helped with the design (he made Greg's idea work). It took more like 6 months to realize a workable design. This was the Tapco 6000, which was fabulously successful.
Soon Greg met local physicist Bob Carver, inventor of the (then) new Phase Linear 700 amp. At the time, Phase Linear was located in an old 3-story house in Richmond Beach WA. When Carver's outgrew the house, Bob offered to design Greg an amplifier if he would help them move to their new factory located in the basement of a grocery store. Three Econoline van trips later and the deal was done. Bob designed a power amp used in TAPCO guitar amps, Phase Linear went on to great success, and moved again. When Phase Linear moved out of the basement factory, Bob offered it to Tapco, and the offer was graciously accepted. Greg says he owes a lot to Bob Carver for showing him some of the basic principles of business, and pointing out that the way to start a company was to first concentrate on one product that can be produced and sold in enough quantity to get cash flow started.
That product was the Tapco 6000 mixer. Greg now owns the first unit made, serial number 1001, which was a point-to-point wired prototype, but was actually sold and used, finally making its way back to Greg years (and two companies) later. He passed this unit around. In 1972, the Tapco 6000 sold for $147, parts were $22, and labor was the cost of a box of Wheat Thins. Once, Rodger Rosenbaum was working on a circuit and needed a certain resistor. He looked up at the ceiling in thought and found the resistor he needed in the ceiling, left by the Phase Linear engineers who apparently liked to flick them into the ceiling (.33 ohm 5 watt emitter resistors worked best) to see them stick. Rick Chinn added that since this factory was in the basement of a grocery store, it was convenient to go upstairs to buy snacks. The "coin of the realm" was the Twinkie (a snack food cake). Someone took a packaged Twinkie and hot-melt glued it to the wall in the factory. Greg claims it was there and in perfect shape, though somewhat stiffer, when he was looking for a new factory for Audio Control years after Tapco had moved out.
Greg liked to show the spirit of the early Tapco crew. Employee Russ Ringer was installing 1/4 inch jacks into the mixer chassis. The little cup washer used between the chassis and the nut was called a finish washer… so in true hippie fashion the box of nuts next to the box of "Finnish washers" was named "Swedish nuts."
Greg feels the external look and feel of a product is very important to the consumer. "Consumers have a tough time getting past a poor quality exterior even if the internal quality is excellent" They couldn't meet the quantity minimums to get the better Alps pots (used in Japanese-made stereo equipment), so they were forced to use cheaper CTS pots, which were wobbly and cheap feeling. Looking for ways to improve the pot feel they tried using things like STP, silicone heat sink grease, Crisco, even raisin juice on the shaft. (raisin juice worked best) Finally, Rodger Rosenbaum invented a gooey compound that worked. Using it meant having to disassemble and reassemble each and every pot, prior to installation. Sometimes the stringy goo sometimes got on the pot element, causing audible clicks. They tried many other methods of application before discovering that they just needed to lay a bead of goo around the shaft/bushing junction before heating the pot in an oven. Heat made the goo runny, and capillary action did the rest. Years later, they discovered that the goo glued the polystyrene knobs to the nylon pot shafts, making service a challenge.
Greg also recalled the time a batch of 6000RCFs turned pink due to bad anodizing. Unfortunately, this was discovered after the production run of mixers had been fully assembled and tested. They used Lemon Pledge wax polish to clean them up enough to ship.
Tapco grew rapidly into a multimillion-dollar success, which amazed everyone involved, with sales of $7-8 million and pre-tax net profits of an amazing 18%. Unhappy with the direction of the company, Greg left in 1976, with $20,000to start AudioControl in his 700 square foot garage. About 1.5 years later Tapco floundered and was sold to ElectroVoice.
Greg told a story about visiting Tapco shortly after he had left. He was told a mixer had come back for service, not working and they'd found a rotten sandwich inside. Two years later, Greg was talking to a soundman doing a show for the CES in Chicago. They get to talking. When the soundman figured out that Greg was the founder of TAPCO, he mentioned that his Tapco mixer quit once, he sent it back, and was told there was a sandwich inside it. Small world. Greg theorized that it was lunchtime, someone had their sandwich out on the production line, and it got hidden under an open chassis, which got slapped back into a case, and sent out. He also joked that it might have been one of the ex-Tapco employees at this meeting, PNW Committeeman Bob Gudgel. The AudioControl 520 was the new company's first product, a little speaker EQ. It was seven weeks from concept to production. He confessed to using "crummy" parts and available labor. The pots (the bane of his manufacturing) fortunately did not need "goo" in this product. The 520 sold for $119 retail (they eventually sold thousands). In the garage days they were $58 wholesale, $19 parts, and labor was now the cost of a pizza.
Greg said the AudioControl garage was a fun time in his life - everything from design to screening to production was in the garage with as many as five employees. They sold about 200 units a month. It lasted there about a year (he joked he grew tired of having employees eat breakfast with him at home). They moved to Mountlake Terrace WA, and grew to a $3.5M/year company with 45 employees in 3+ years. The 1980's economic slowdown combined with the competition of big Japanese electronics companies really put on the pressure. Interest rates had risen up to 18%, gas was scarce and the large Japanese companies were offering "net never" payment terms as an incentive to their retailers. Small companies like AudioControl couldn't offer those kinds of terms and as a result were paid last causing cash flow problems. They got into a "special credits" (please pay back your loan now or sooner) category at the bank. The hi-fi market was changing; rack systems came about, and EQs fell out of favor with the higher-end hi-fi market, so AudioControl moved into autosound components. Greg sold the company to Tom Walker, although staying on as an employee for 1.5 years and came up with items like their mainstay 1/3 octave RTA and the first line of autosound equalizers. Greg noted that due to Tom's effort, the company is still successful and profitable after 25 years.
Greg then went to work for Bob Carver at Carver Corp. for a year. They'd gone public and were doing well ($32M/year). Eventually Greg realized he was a fish out of water and needed to get back to his entrepreneurial past; it was time to move back to pro audio. He started Mackie Designs in 1988.
A byproduct of AudioControl was 50,000 "W" taper slide pots in his closet. Could he start a company using these surplus parts? Sure enough, the first Mackie product, built in his 3-bedroom condo,the LM-1602 line mixer, used these surplus pots. He used these pots in every circuit, requiring some odd circuitry, some of which Mackie still uses today. Everything, even the pan pots, slid up/down. They sold about 200 units. The pots had the famous center-detent (they were "supposed" to be equalizer pots), which was marketed as the Unity Gain position concept.. Since pots were central to products like mixers, he wanted to find a supplier of good, cheap pots. That supplier turned out to be Panasonic/Matsushita.
He told a funny story about some Panasonic component sales executives (American sales people with Japanese visitors in tow) visiting the condo. They asked for a factory tour. Sure, and then the older more distinguished gentleman from Panasonic put on his coat like they were going to drive out to a factory in the hinterland - instead, Greg led them upstairs to the "final assembly" bedroom. "Where's your inventory?" the older more distinguished gentleman asked. Greg opened the closet door and displayed a rack of circuit board assemblies neatly slid into grooves cut into a two-by-four. Luckily, the Panasonic pots were the best pots made and they were priced right. He mentioned that they probably wouldn't have taken him seriously were it not for his previous success.
With the first 1604 mixer the sheet metal tolerances around the pot shafts were made tight to control the pot wobble, plus they added genuine Nye Lubricants "goo" to each shaft at the hole in the chassis for a better feel. Mackie was the first mixer company to take what were TV trim controls and use them as primary controls on the working surface of a mixer. This ended up being the early key advantage Mackie Designs had over all of its competitors.
They moved to a factory space in Redmond, WA in 1990, a block away from the old Tapco factory. Chuck Jensen was the first employee, doing CAD design. The 1604 took about a year to deliver. Greg hired many people from his old companies, which was critical for growing this small company. Business was OK, making about $10k/month profit but production was getting ahead of sales. When he could no longer see the final assembly techs behind a growing wall of finished mixers, it was time to advertise.. Sales skyrocketed.
Just after the Tapco era, Greg took some heat for some "embarrassing" Tapco ads, Greg was determined that the ads in his next company (AudioControl) would be first-rate from day one. He looked at the audio advertising being done in Seattle at the time and discovered Ron Koliha, who had been doing the advertising for SpeakerLab and was an obvious pro. Greg approached Ron to see if he would be interested in doing his advertising. Ron agreed and has done advertising and marketing for Greg ever since. Greg credits Ron's innovative ads as instrumental to the public acceptance as well as overall success of both AudioControl and Mackie Designs.
In 1993 the celebrated the company having a net worth of "nothing," meaning the original investors had been repaid in full. By 1995, the company sales had grown to $60M/year with pre-tax net profits at 18%, they moved several times and had their own 90,000 square-foot building in Woodinville. They went public in 1995. "We didn't go public because the company needed money, but because a larger cash cushion enables making business decisions based on what's best for the business rather than being forced to make decisions because of cash flow," said Greg. " It was that it was a way to reward the original people at Mackie that were instrumental in the success."
In 1998, Mackie purchased Italian speaker manufacturer RCF which had sales of about $40M/year. They bought EAW (Eastern Acoustic Works) in 2000, which added another $40M/year of revenue. At this point, the meeting took a break for snacks. We returned for door prize drawings, provided by Mackie Designs. The Grand Prize winner of a Mackie 1202 VLZ-Pro mixer was Jake Perrine.
We then settled down to a question and answer session. (paraphrased here)
— by Gary Louie, PNW Secretary and Rick Chinn, PNW Chair