Leadership by Example - ResidentialSystems.com

Leadership by Example

Bill Anderson faced an amusing realization the other day on the sales floor of his Irvine, California, store. Anderson, president of Genesis Audio & Video, always tries to maintain a visible presence in his showroom, which is located at the conspicuous intersection of the "5" and "405" freeways in Los Angeles. This particular day was no different.
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Bill Anderson faced an amusing realization the other day on the sales floor of his Irvine, California, store. Anderson, president of Genesis Audio & Video, always tries to maintain a visible presence in his showroom, which is located at the conspicuous intersection of the "5" and "405" freeways in Los Angeles. This particular day was no different.

The front door of the store opened and in walked a young man and his wife. Anderson walked over and shook hands with them both, introducing himself to the potential customers. He didn't recognize the man with the boyish face, or his pregnant wife, but something told Anderson that this customer already knew him.
"I'm Brian Barry," the man said. "You might remember my dad."

It took only a couple seconds for Anderson's memory to flash back to the 1970s, during his very early years in business. Still new to A/V retail at that time, Anderson remembered, he sold one of his "better two-channel systems" to a man and his wife, who happened to have their toddler-aged son in tow. That man would remain a loyal customer for many years to follow, and Anderson always made sure to ask him how his wife and son Brian were doing. "Holy cow! This is Skip's son?" Anderson asked, both surprised and amused.

"Yes, I'm here to buy my first system from you for my new house," Brian Barry replied. "Oh, man..." Anderson thought, had that many years gone by?

Anderson, who is recognized by his custom installation and manufacturing peers as one of the truly successful veterans and leaders in the industry, is celebrating his company's silver anniversary this year. The milestone is cause for celebration in a young industry that breeds at least as many business failures as actual success stories. It also affords Anderson an opportunity to reflect on the four decidedly different decades his company has witnessed through its 25 years.

"We founded the company back in '76, and one of our first clients was a guy named Jerry Monroe," Anderson recalled. "He and I still chuckle about the disco we put in his bonus room upstairs--with a 10 1/2-inch reel to reel and some lighting. Then in the mid '80s he bought a house in Laguna [California], and we outfitted it entirely with what was about the coolest custom system at the time. We installed Bang & Olufsen audio and video products all over the house, including a central audio system with master control links."

In the mid-'90s, Anderson says that the same client bought a weekend house on Lido Island, California, and Genesis installed a full-scale home theater with THX and rear-projection in that residence. Now, mostly recently, Monroe has approached Anderson and his team to review the Laguna property, which he plans to remodel, wanting to now include lighting, automation and home networking capabilities as well as the standard audio/video fare that he has consistently upgraded throughout the years. "Now it's the new century, and a fourth decade, and he's contacted us for whole-house lighting and automation on top his high-end audio/video equipment. This is one customer, four different decades." Anderson said.

Telling these kinds of stories seems to please Anderson, even though he doesn't feel old enough to have seen that much time go by. In fact, to hear Anderson tell it, Genesis almost didn't make it past its first year of business. Coming out of college as a confident kid with a degree in economics by in '76, Anderson and some of his friends quit their jobs at Lafayette Radio Electronics, so they could open their own business.

"I began working at Lafayette, which was like a glorified Radio Shack, during my last year of college," Anderson recalled. "I was manager of one of their stores for a year and a half. Right out of college, the idea for Genesis came up when three of the managers for Lafayette got together and said, 'We can do this'."

Anderson and his friends then pooled "an incredibly small amount of money" to open the company, which would focus more on selling records in a speculative residential area outside of Los Angeles, than on selling A/V equipment. "We were able to get a short line of credit with a distributor for what they called a 'one-stop' for records," he explained. "We thought we could start off real small and grow this thing."

The business partners agreed to locate the store in an area that at the time, was no more than bunch of orange groves. Anderson says that he and his partners, "trying to be smart college kids," looked at demographics in the surrounding area and figured they had found the place to be in the future. The men concluded that Irvine and Mission Viejo were going to develop quickly, and that the next wave of new homebuilders would settle in this general area (southern Orange County).

Having secured space in the only shopping center in their area, Anderson and his business partners opened Genesis' doors on September 9, of that year, and despite their precarious financial situation, the future looked bright.

"We were all poor, because everything we had was in the store--mostly in records, but with some hi-fi the back," Anderson remembered.

Genesis was in business less than 90 days when disaster struck. "The entire 75,000-square-foot shopping center, except for three businesses, burnt to the ground," he said. "It took over a month for the arson investigators to do their job and then for the burnt buildings to be cleared away. Though our store survived the fire, it stunk to high heaven, and no one came in for weeks. We were scared; we were three young guys who really didn't know how to run a business, and all of sudden there was no money."

Anderson remembers that, somehow, he and his partners managed to "crawl" through that experience, and as the shopping center was rebuilt, they did their best to advertise their store. This was going well, up until their ninth month of business. If the shopping center fire had been a metaphorical boxer's jab to Genesis Audio's nose, then what happened next was a roundhouse right hook to the company's jaw. "Tower Records moved in right across the street," Anderson said, still amazed at the bad luck. "When that happened, we said, 'if the fire didn't get us, this is sure gonna do it. Here's this multimillion-dollar inventory giant moving across the street, and maybe we had $60,000 in records in a little community store. Boy that changed our business plan right out of the gate."

Genesis, got out from under their record department as quickly as possible by selling its inventory at cost and "jobbing out" the last third that wouldn't sell at below cost. At that point, the three business partners figured it was a good time to jump right into audio/video and car stereo sales.

Over the next couple years, Anderson says, Genesis grew as more homeowners settled in the area. Initially, as local residents spent most of their money on buying their homes and installing their lawns, Genesis played it conservatively by selling "mid-fi" audio products that new homeowners could more easily afford. Eventually, however, the community matured, and Anderson and his partners moved into the high-end.

"We pulled in Bang and Olufsen, Nakimichi, Yamaha and other higher-end lines," Anderson recalled. "And as soon as we cracked the '80s, Proton and Jensen were making standalone monitors and TV tuners that patched in through the stereo system. That's when we became full-on proponents of home theater. Our involvement in home theater is 21 years, now."

In one of the early examples of Anderson's knack for anticipating technology trends, Genesis installed its first in-store home theater back around 1980. Obviously pre-surround sound, the theater featured ADS digital time delays and custom matrix circuits to create ambience in the room, and a 10-foot diagonal Stewart Filmscreen on the wall. "We didn't sell one of those theaters until 1984, but between '80 and '90 we really helped develop the home theater market," Anderson related. "We were a real proponent of home theater because I saw it as a tremendous business opportunity."

Anderson seems to have been blessed with just the right combination of business vision and just plain luck, coupled with many savvy business decisions along the way. "Back in the '80s when we were just getting into the custom market, we got a group together with two interior designers, a custom cabinet shop, someone from Telawindows, a landscape architect and specialists in other fields. We would get together once a month, and discuss the custom building market," Anderson remembered. "Some of the trials and tribulations, even though we were in different businesses, were very similar between us."

As Genesis evolved in the late '80s and custom installation became a substantial business, Anderson and his team made other fateful decisions. When Lexicon rolled out its first A/V processor, Anderson says Genesis was waiting with their "hands in the air" to became their first dealer in California. Representatives of Genesis were also on the first bus to Skywalker Ranch, and were in the first group of 17 to get certified for installing THX theaters.

Anderson recalls other crucial decisions he helped make for his company. "When Runco formed as a company over a decade ago, we were their first dealer and also had their first projector--the Model 800-on display immediately in our store," he said. "When I saw that it had an aspect ratio controller and line doubler, I bought it on the spot."

A worldwide top 10 Runco dealer for eight out of the last nine years, Anderson also represents Genesis on that manufacturer's dealer council. Early on, Anderson also became Sonance's first dealer in the country and was in on the developmental stage with Philips' Pronto remote control and helped Pioneer with their remote control systems. When Madrigal first appeared with its Proceed-branded THX surround sound preamp product, Genesis made a rare exception and bought in for that one item. "We discussed their philosophy and business plan for future products, and we could tell they were going in the right direction," Anderson said.

"That company now has gone from one product to a full line that is sonically some of the finest products that I've ever heard."

Anderson has witnessed other technologies come to market, first-hand, while serving on Pioneer's Elite and now on Panja's dealer council. His company also has been honored as a top 10 dealer for Linn Products and Lexicon and as West Coast dealer of the year for Panja in 2000.

"I'm pretty proud that we were a top 10 dealer in the country for Lexicon, Linn and Runco in the same year," Anderson said. "Also, I'm happy to serve on the various dealer councils. I don't feel like I'm just donating my time away; I'm helping develop products for my organization's future."

Anderson contends that one of his keys to sales success is his philosophy to carry products "long and deep," he calls it. "When I carry a product line, I carry them deep and I don't spread myself wide with too many options and multiple brands."

For instance Genesis carries the entire Linn product line, where some dealers might only sell a segment of it. "This philosophy works; it's enabled us to become a top 10 dealer. It's mutually beneficial and the most profitable scenario.

Four years ago, Anderson decided to give back to the industry he had been a part of for so long. He was nominated, then elected to the CEDIA Board of Directors in 1997. A founding member of CEDIA in 1990, Anderson had waited six years before he felt confident enough to serve in a leadership capacity with the trade organization. Anderson has dedicated his time to chairing the membership and public relations committee for CEDIA.

"I'm glad I waited to get involved in CEDIA; the timing finally felt right and I was able to contribute immediately," he explained.

Anderson says his involvement with CEDIA has been an great benefit to his business. "I remember one of my most incredible businesse experiences occurring during my first strategic planning session when Mitch Klein was president. I learned so much from working with the brightest of most successful businessmen in our industry."

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