Having spent his first 15 years there as a research engineer, today Bob Maresca is president and CEO of Bose Corporation. FRAMINGHAM, MA—Bose Corporation president/CEO Bob Maresca strode into the conference room, shook hands with assembled members of the pro audio press who’d travelled to the company’s headquarters in Framingham, MA, and got down to business. “We’re a privately held company and a little secretive,” he said by way of introduction. “Because we’re privately held, there’s not a lot of information on us.”
But over the next hour, Maresca became decidedly unsecretive, as he candidly discussed development of the company’s consumer and pro audio products; revealed the 20-year, $90 million R&D project that ultimately bit the dust without going to market; and divulged where he sees the company heading as it faces both the changing audio technology landscape and the passing of its namesake founder, Dr. Amar Bose.
The presence of Dr. Bose, who died in July 2013 at the age of 83, is clearly still felt within the halls of Bose Corp. While the company has had presidents like Maresca since its founding in 1964, Dr. Bose was always its chairman and technical director, building an audio powerhouse across the ensuing decades that now sits comfortably on Forbes’ list of America’s largest private companies, bringing in revenues of $3.3 billion annually and harboring a workforce of approximately 10,500 worldwide.
Being fiercely independent was key to Bose’s corporate growth after disagreements with a lending bank nearly shipwrecked the company in the early 1980s. In the aftermath, Dr. Bose vowed to keep the corporation self-sustaining and funded solely from its profits—and that has its pros and cons.
“There’s a real benefit in that we can invest in long-term research and technology,” said Maresca, who spent the first half of his nearly 30 years at Bose working as a research engineer. To illustrate that investment, he pointed to the company’s pro audio offerings, RoomMatch loudspeakers and PowerMatch amplifiers, introduced in 2011, citing them as “a great example…it took 15 years before we brought that to market, but we kept investing in it because we believed that it would deliver real experiences to people down the road. That’s the benefit that I have as the CEO of a company like this, where I can make those long-term bets and not have the stockholders beating me up to give them dividends instead of giving them R&D.”
While such autonomy may allow the company to think big, it nonetheless draws lines in the sand: “It does limit the pace at which we can grow, because when you’re growing, you’re adding inventory, accounts receivables investing in new technologies, and so we are constrained as to how much we can invest. It hasn’t really hurt us; we can grow 15-20 percent per year and self-fund that, but it prevents a [situation where] say we had an idea to double in size; we’d have to spread that out over multiple years.”
Sometimes the long-term bets pay off: While the company’s QuietComfort consumer headphone line was a hit, it was created out of noise-cancellation technology Bose originally developed for the military—an effort that by 2000 had cost $50 million and was on track to lose another $6 million that year. Maresca recalled being the bearer of bad news to Dr. Bose: “I’ll never forget his reaction; this was the master professor in him. He said, ‘$50 million?! If this was a publicly traded company, I would’ve been fired years ago!’”
Ultimately, the consumer version became a hit, but some long-term bets came up empty, too—case in point: Project Sound, the 20-year, $90-million R&D project that both succeeded and failed when Bose Corp. set out to reinvent car suspensions. “This thing could go around on turns, wouldn’t tilt, wouldn’t dive on breaking, it would pick the wheels up over the bumps,” said Maresca, who first came to Bose to work on the project. “Every major car company drove in it and said this is the best-riding car in the world. It was also the heaviest and the most expensive car in the world—and it turned out it wasn’t commercially viable. That’s a bitter pill to swallow…. it was heartbreaking that we had to finally come to grips with the fact that it wasn’t going to be a commercial success. But there were so many good things that happened as a result of that…from a technology enhancement point of view, from a personnel view bringing in top people into the company, and from the offshoot product of the Bose Ride [a seat for truck drivers], I’m very proud of that failure.”
Still, companies need more hits than misses and as Bose Corp. charts a new course in the wake of its founder’s passing, it is making changes, both on its consumer audio side— working with with content providers like Pandora, iHeartRadio, Deezer and others (“There are certain things we don’t do very well and we need expert partners to work with,” said Maresca), marking a distinct shift from its always-autonomous past— and stepping up its professional audio efforts after first entering that arena over a decade ago with the debut of the L1 portable loudspeaker system in 2003.
Addressing the industry’s adoption of RoomMatch and PowerMatch to date, Maresca admitted, “With professional sound systems, we don’t get a free pass, because there are other companies that have storied histories and we’ve had some missteps. I would say that our strategy wasn’t as clear as it has been since Akira [Mochimaru, general manager, Bose Professional Systems Division] joined us nine years ago. He came out of research as well and he focused our Pro Group. We’ve made some great strides [like a recent installation in the] Boston Opera House, but we’ve got to earn every single sale and we don’t take that lightly. We’ve got a lot of work to do to get the message out there that these breakthroughs, like the L1, RoomMatch and PowerMatch, are delivering experiences that are just unparalleled.
“On the pro-sound side, it’s much more about relationships and you’re not selling to the end user. I know there’s a lot of people we have to convince, and they have to feel confident in us that not only do we have products that are better and different, but that we’re in it for the long run and we’re going to be there to support them once we do an installation. With a pro sale, it’s one relationship after another; one bad link in that chain and it doesn’t get out to the customer [so] we do it a brick at a time. We have to build our credibility, build our relationships with consultants, front-of-house engineers, and we said we’d play for the long run, so we’re at it. We’re starting to get some good traction, so I’m optimistic.”
Bose Professional Systems Division