Audio Den is a custom audio and smart home installation business that services customers in New York City, Long Island, and the Hamptons. The company began in the late ‘70s doing high-end audio for audiofiles. Over time, owner James Feldstein has grown the company by following the industry trends toward home automation.
Why did you start your company?
My brother and I were ham radio operators when we were kids. I was always a tool guy – I liked to take things apart and put them back together. I went to college for a B.A. in American studies. During the vacation times, I would hang around this new high-end store called Audio Den. I started doing stuff there and one day the owners handed me a $20 and said, “If you’re going to work, I guess we have to pay you.” I just osmosed in, I was never hired. By the time I was ready to finish college, I was thinking of getting an M.B.A. and a Master’s in accounting. Then, one of the Audio Den partners decided he was going to leave. They approached me to buy his half. My mother encouraged me to take a shot at this. She said, if I failed, I could always go back to school.
How did you get the money to buy into the business?
In 1979-1980, the government started a loan program. I took the $5,000 they offered. I also took some loans from my parents and my relatives.
Managing the Company
How do you manage cash flow?
I believe you can’t let your personal lifestyle get confused with your business. I call a working, functional, profitable business a “golden goose.” You can take the eggs, but you can’t start chopping away at the goose. I’ve seen people with perfectly good businesses live a lifestyle that exceeds their business. Basically, they kill the goose.
Another thing that my mother told me is that everyone looks great when the economy is good. You separate the men from the boys when things go bad. I’ve been through three recessions in my life. The first one, I was ill-prepared for. Then, I learned the only time to prepare for the next downturn is when things are good. You need to build up your reserves so that when things do get difficult, you have the wherewithal to get through that period.
What’s the most challenging thing about running the company?
We’re in a very fast-moving industry. You need to learn to embrace the turmoil and the change. As soon as you think something is fixed, I guarantee you it’s going to come up and bite you.
What’s the most rewarding thing about running the company?
The same thing, really. I’m a guy who hates boredom. I need mental stimulation. Change forces me to rethink how to do things. Every day is a little different because the job’s a little different and the technology keeps changing.
What I’ve Learned
What’s the biggest mistake you made when you were starting out?
At the beginning, we were renting. We’d pay the landlord the rent and in the 11th month, they’d calculate what the common area was and things like that. All of a sudden, I had another $20,000-bill I didn’t know was coming and I was ill prepared to deal with. That was a case of learning that it was better to be the landlord. We ended up buying our property at a later date.
What’s the smartest thing you did when you were starting out?
I went into a business that I was passionate about. I’m lucky in that way. Every day that we go into a guy’s house, open up 20 boxes, and leave him with a working home theater, I have a sense of satisfaction that’s not related to the money.
What advice would you give to a new entrepreneur?
Learn as much as you can about what you want to do. Go visit someone who’s doing it or something like it. Do the homework.
There are some days that aren’t good and aren’t fun. If your underlying love for this thing isn’t there, it’s going to be miserable. I told my kids when they were going off to college, “Don’t worry about the money. Do something that you’re passionate about and excited to do every day, because you’ll get good at it and that’s how you’ll be successful. The money will flow from that.” If you do something to make a lot of money, the customers see through that. We got where we are today because the customers can see we really care and we know what we’re doing. It’s a combination of passion and skill.
What’s next for Audio Den?
We’re adapting to an online world. We’re trying to get our marketing and sales aimed a new demographic of younger people. We’re constantly pushing the envelope in that way. I know that in 5-10 years from now, things will be different. We’re adapting to this new environment.