 A little bit about me, obviously my name is Thomas Cho. I graduated from the University of Texas in Austin in 2004. Longhorn, I studied engineering, worked as an engineer for five years in my life. I went back to school because engineering was not for me. And I studied, obviously, marketing strategy. I got my MBA at Vanderbilt University, small university on National Tennessee. Nobody on the West Coast knows it. But I moved out here to Los Angeles, you know, manifest destiny with a dream to like, just to be on the West Coast. It's probably like the most progressive place that I've lived in my life. I've lived in six cities since I graduated college. And hands down, it's probably my favorite city. I love coffee. I will do any light roast from Burundi. I love pasta both making it and eating it, but prefer to eat it, definitely. And I think, again, like Los Angeles, I feel so blessed to be here with you guys. Once is that. I've had the opportunity to work with some great brands, some brands that you guys probably know. I started, initially, after graduate school, I started in product management, worked in CPG marketing, which is a very classical and traditional way to market. I naturally moved over to where I think the industry is going towards advertising and brand marketing. Currently, I work at Yamaha, but in the past, worked with Apple and Beats. So my colleagues over here from Beats that we had some amazing times together. Want to talk to you guys a little bit about product. Product, we can define product as an article of substance that is manufactured for sale, that's refined for sale. If you think about it like going way, way back then, like there was no like type of exchange other than like the bartering system. So people took literally products and trade them for other products. Now with the government, governments getting involved, they invented a currency, they invented a coin. So now we exchange products for coin. What we see, like before the invention of cash, that bartering system was that exchange for goods. Now products are obviously not just solid products that you buy, but services that companies provide you. So whether it's a service, whether it's a package good, whether it's a subscription, you pay for some type of service what's considered now a product. To kind of dumb things down and to simplify things, let's use a toothbrush and like identify how different companies will like market, sell, they'll operate, produce, and literally advertise a toothbrush. And we both look at an old traditional approach what you might see at a CPG company versus like a more modern company like a startup and how they would look at a toothbrush. So we can look at it from a few different angles. Product design, organization, leadership, marketing, growth, and innovation. From a traditional perspective, you'll see these traditional CPG companies and more antiquated companies like look at very process oriented when it comes to product design. So there's a stage gate process that you follow. It's gotta go by this certain person, that certain person. It's gotta follow these procedures versus like a startup where they're more innovation oriented. Let's get this product out let's make it as cheap as possible. That's like build the cheapest product that's feasible for our consumer. You look at organization, traditional organizations are more about employing people to build something. So for the toothbrush, you might have a manager that works specifically on the bristles and that tries to make the bristles better year over year. So your version 2.0 is just a toothbrush with a better bristles. You might also have a manager that works on the handle that tries to make the handle more ergonomical versus an organization that is more of a startup feel. They're gonna be focused on performance. What's working, what's not. Like who's delivering better marketing who's creating this operation or creating a process that's better for that organization. Leadership typically in older organizations are sales focus versus more modern organizations are both sales and marketing because this is the way that we market to our consumer. We want our product to be obviously front and center so marketing and sales is a very big priority for startup organizations. Again, marketing, we do product future marketing talking about what these bristles are made of versus who buys my product. Is it a Steph Curry that buys this type of toothbrush or is it a LeBron that buys this type of toothbrush and that way you have an identity to your brand, to your product. Lastly, or second to last is growth. Traditional organizations look at sales growth and more modern organizations look at social growth so they can expand their reach. And lastly from an innovation perspective, a traditional organization will look to make the best toothbrush year over year as opposed to more startups. They're looking to like eliminating dentists or going to or to Fudansha. The reason I bring up like the mindset of the organizations is because I think in traditional organizations you'll rarely see huge disruption. You'll rarely see huge evolution. It's usually step by step. This year we're gonna add a fifth wheel. This year we're gonna add another stick shift. This year we're gonna add another gear. Whereas like startup organizations they have the nimbleness, they have the dexterity, they have that kind of creative mindset of hey, let's create something and make it increment, not incrementally better but monumentally better. And so like from traditional organizations they typically transition organizations need to shift into that mindset to survive or they naturally they'll go bankrupt. What's awesome about I guess this world is with mergers and acquisitions you can have traditional organizations that just purchase these startups and have that as their kind of incubated form. So just to dive into history and I think when ideas and products reach the masses when they're completely democratized to the masses and these are like whether it's technology whether it's service this is when you start to see disruption in an industry. This goes for anything just information, design, aesthetic design, industrial design, transportation. So if we take a quick look at history we can see like what products have helped like proliferate ideas and spread those ideas to the masses. Does anybody know what this is? Who knows what came from this, the Model T Ford? That's one of them, anybody else? Assembly line, why was assembly line super important? Scale quickly, what also did it do in addition to scale? Sure, and what did that do to cost? Drug down cost. So if you take the Model T Ford I think before they had the assembly line it was tens of thousands of dollars which was obviously unattainable for the mass consumer but with the assembly line I think it dropped down below $7,000 and what did that do for just in general for consumers? You could travel more, you could share ideas more, you could buy things, you could trade more, exchange a lot of more things. And so like this liquidity in terms of like idea exchange became a lot more accessible which obviously changed the time and like stirred the economy. Moving to black, what they call black Tuesday of stock market crash of 1929. This was a really I think troubling time for products because obviously the need for like design, the need for products was not as important as the essentials that you had. So because I just needed to purchase something whether it was food or bread, I didn't care what it was, I just needed to buy the cheapest to feed my family and the same went for like cars, the same went for toothbrushes and everything in that time. So the Great Depression kind of erased the need for any type of desirable lifestyle. Sorry, I went, these notes are hard to read. And it wasn't until like mid-century when we went to mid-century design where we re-saw a lot of this design innovation. Obviously we had two world wars in between 1908 and 1946, but it was actually the aims and mid-century architecture that helped more than reintroduce that need. At a time, design was the idea that was democratized and that was shared around, shared with the mass population. But now we can look at this technology and this democratization of product design, how it's really changed culture and really affected history. Both from a revolutionary sense, sorry. Apologize, this is not in the slide. Let's move on to communication. In the past 10, 15 years, communication has evolved so fast and so rapidly. It's probably one of our best places to understand disruption and where disruption is going. With the advent of the radio, the advent of the TV, obviously the worldwide web, the iPhone, things evolve from radio to TV. Nobody thought the radio died. Nobody thinks that the TV will die. Nobody thinks that the internet will die. Nobody thinks the iPhone will die. So with that, communication, obviously, is more social. The way children are communicating are not through phone calls, not through meeting in person. They type a text, they send an emoji, now it's an emoji. And I hate to say it, but it's the brands that begin to pioneer in these spaces, whether it's AR, whether it's VR, whether it's talking to consumers at a, I guess, a dumber level when it comes to texts and emojis that are gonna win the game in terms of marketing and reaching consumers because they're on that level of communication where all the children are and all the kids are. So shifting over to brand really quickly because I think that space is something that's continuing to evolve. Currently we're in a very traditional marketing organization. We see, all right, these product features. Now we're seeing kind of a brand identity developed from this is a product to this is a brand, this is an identity I associate with and therefore I wanna buy it. Technology advancement can be evolutionary but it's, I think, marketing that's gonna really evolve once and really disrupt the space because brands resonate with people more so than products do. So let's talk a little bit about this company. It was a really interesting climate. I joined Beats in 2012. This is one Monster kind of owned most of the operation. They owned retail, point of sale. They took the headphone and sold it into different retail stores. At the time, it was roughly $150 million market when Beats entered the space. Obviously it's grown considerably amount. Beats was purchased in 2015 for over $3 billion. But looking at the market, both on the market, they own 25% of the market and the rest of the 75% of the market was owned by numerous brands. Sony, Sinehizer, JBL. And at the time, there was kind of one's perspective towards headphones. There was, in terms of marketing as well, like, hey, we have the best noise cancellation. We have the best sound. We have this type of high-fike capability. We use these types of wires. There was no, it was not very diverse in thought and so Beats came into the space and what Jimmy and Dre did, they saw the insights of what happened out of the iPod. They saw, okay, people are buying the iPod. People are wearing these earbuds and those earbuds represented something. So when you saw somebody with white earbuds in their ears, oh, this person not only loves music, but they identify with different artists. They identify not just with the quality of sound, but they identify more so with the purpose of music, the meaning of music, but the issues that music brought, the culture that it surrounded. And so with the industry moving towards democratized or proliferated media where you have MP3s being ripped on Napster and being easily shared, Dre and Jimmy, they discovered that, okay, we need to shift our model from running a music label to producing something else. And where I think Beats really won outside of intercepting Nike and Adidas in the sports realm, where I think Beats really won was when they started not just selling a product, but they started selling a service. So you bought the headphones, but also you subscribed to Beats Music, which was a service that got bought by Apple Music. What our advertising data at Beats wasn't necessarily talk about the best quality, didn't talk about the sound, didn't talk about noise cancellation, which were still parts of the headphones and the products that we created, but it talked to what the stories are of these people who would wear Beats. Would you identify with certain character who played this and wore this certain headphone, or would you identify with another character who's trying to achieve their best through this headphone? So our mantra behind the storytelling at Beats was really about storytelling and writing heroes that created that kind of identity at Beats. Often we're asked, and this is a question of was Beats an evolution or was it disruption? And we can debate, this is something that's easily debated. I think evolution is something that's gonna grow stage gate process wise, it's gonna grow incrementally versus a disruption, which is gonna grow overnight. And we look to certain brands, we can look at other brands like Dyson, Uber, Amazon, Bitcoin and Netflix, some brands that I can resonate, some companies that I can resonate, but my question is to you, which of these do you think are more disruptive or more evolutionary? But Dyson, anybody? Why is it evolutionary? It's still basically, it's a better value. Okay, anybody else? Uber? Disruptive. Disruptive, why is it disruptive? Because global right-hand companies. It pretty much took over the tax mark. We're attacking it now. It probably grew the existing market far bigger than what it was at the time. Amazon? Could you say it's also evolutionary as well? Everybody knew digital was the platform that people were gonna buy things on, Amazon just happened to dominate that space. I think what they're doing with fresh, what they're doing with delivery, like maybe that's revolutionary, maybe that's disruptive, because nobody could do that in the past. Bitcoin. What's interesting is I think when they started to introduce coins and exchange and monetary and created this idea of currency, that was government trying to control the system, trying to take the arbitrage of selling three fish for one bear skin out of the game and saying, hey, we're gonna have that arbitrage opportunity. We're gonna take that over, but Bitcoin is kind of that defiant sense of, hey, nobody else can operate this except for online. Lastly, Netflix, what do you guys think? Disruptive. Disruptive? Not evolutionary? Netflix is an interesting one, I think because for me, it's a streaming service that you purchase, but now they have a whole bunch of brands, a skew of brands that, like Stranger Things, that you can buy from, you can buy Stranger Things Monopoly. So it was a service subscription organization that's shifting over into a product mindset space. So I think that's absolutely brilliant. Consumer values today. Because of what we've seen with mobile handheld devices, namely the iPhone, I think access to information, access to design, access to the internet, and proliferation of social ideas on the internet. Consumers are asking more, they're asking for more technology, they're asking for better products, they're asking for better services with these following things. Obviously, industrial design is important. So, when Apple launched the iPod, it was such a simple device. Do you guys remember MP3 players? Do you have old enough to remember that? I had one of those, I had a mini-disk player too. They were shit, like you had 10 buttons on a book. The iPod, it was so simple. You had a swivel wheel, you had a center wheel. Did it have a volume up and volume down? On the iPod? Regardless, that user experience, that user interface for the iPod was extremely clean. So, from that, I think consumers now demand that that's part of the game. Moreover, I think consumers associate that product and that product quality, or assume product quality is associated to user experience and user interface. Obviously, it's gotta be something that's desirable and describes an aspirational lifestyle that you want to live and wear. For me, brands that I associate with are like, okay, I identify with them, therefore, I will buy them. Versus, this is just a commodity that I use, like a toothbrush. I don't identify with crest or caulking. I'll just buy whatever toothbrush costs themselves, because to me, it's a commodity. I'll just purchase it. On-demand economy. This is the age of swiping right to get laid. Double tapping to liking it. Whatever it is, this is the age of, I want it now, I want it fast. So, the Amazon Prime's a world that will deliver things, or the Amazon now is the world that will deliver things to you, for your doorstep in two hours, are gonna be the ones that win. Uh-oh, there we go. And lastly, content is king. The brands, the companies that start delivering amazing content, obviously grab your attention. And the way Beats approaches it, the way Nike, the way I think these big brands approach things is let's be in the, let's just be in the mind space of a consumer before they're even ready to purchase. Let's create content so that consumers come to us for content so that when they're ready to purchase, they'll look to our company. The reason I say these things is because these are like qualifiers to what disruptive brands do and disruptive product companies do. So, without these things, I think it's, it's hard to become disruptive. There are some identified factors, I've seen in the industry that are, that show the like ripening of industries, these kind of point towards triggers that can like, that might be a precursor to disruption or a disruptive industry. Evolving media platforms. When you see media evolving so fast, you technology moving so fast, once it hits like kind of its plateau and sits, I think something's gonna happen there. Something usually erupts. And same thing with that evolving consumer or the customer. So you see now we talk about the rise of women, the rise of minorities. That once they've kind of hit their peak, once they start to plateau, you'll see, I think a lot of disruption in the market in terms of what they want to purchase. Accessibility to retail and retail in a globalized economy. Naturally that's huge that the Amazon Prime, you can buy anything, anywhere, anytime. That's obviously gonna change the industry. I see if commodities, that's what we call a red ocean and I guess business strategy, but this is where you have a whole bunch of different things that have no brand identity to them. So you just go out and purchase whatever's the cheapest. When you have a category that has a sea of commodities, you'll definitely see disruption in that industry. I think iHome, the iHome that they were gonna release soon, the iHome is gonna do that for the wireless home, wireless audio in your home. So like traditional like receivers and stereos, we're gonna shift towards obviously a different experience because we are in a sea of commodities. And lastly, homogenous viewpoints design and lack of industrial design. When you see that in an industry, whether it's shoes, whether it's fashion, whether it's clothes, when you see everything kind of converging, there's gonna be one outlier that's gonna stick out and disrupt the industry. This is kind of just thoughts I put out there. I'd like to open up to questions. Initially I wanted just to have an open discussion, but do you guys have any questions? Where do you guys think that the industry is gonna go? Where do you think like the next disruption is gonna have? Obviously like artificial intelligence, AR, VR is a big thing right now with Amazon Alexa, Google Home. I think the auto industry is pretty interesting in terms of disruption. You see a lot of self-driving cars. You also see like big purchases in the auto industry. A car is not cheaper than what, $20,000, $30,000. So when does that shift into a service where you buy on-demand ride-sharing? Whether that's an Uber or if you need a SUV and you wanna personalize yourself, when can you just walk out into the street and pick up a SUV? You had a question? All right, all right. I think it's a good luck that with Bitcoin and Ethereum, they have the concepts of smart contracts, so embedding trust in that retransaction and different conditions to be embedding my shaker into that shirt involved with the connected lesson. Yeah. So on a fair account, it's just crazy stuff with that. Yeah, yeah, for sure, for sure. Should we like this fashion, wearable? Sorry. Wearable. Wearable in fashion. Shift in fashion. Yeah, it's interesting. I think like fashion really dominates the retail space too. If you look, one thing that we looked at and referenced when we were at Beats was what Burberry was doing. They were doing full-size screens that you could literally network into a hub and you could change the content from that hub anytime you wanted to. So whether you were selling headphone A or dress B, you could literally change whatever content you wanted and curate that at retail stores. Awesome. Any other questions? Any last thoughts? Yeah. I wanna share a little bit what you're doing now with Yamaha. Yeah, yeah, so it's interesting. Yamaha's a really traditional organization. I was talking to some of the guys about this. It's a really traditional organization. It's been around since like the 1800s. It's Japanese run. We're a hub here in the United States and it's primarily a sales organization here in the United States. But I'm at Yamaha now trying to help shift them into more of a modern organization. Everything from taking up a product marketing focus to a brand advertising focus. Because that's something that's not one of their strong suits. And that's like creating a brand identity. When you think of Yamaha, you think of like dad jeans. I don't wanna call it pathetic, but it's called a horse of horse. It's not a brand that I think young consumers or modern day consumers resonate with. You think of motorcycles. You think of, yeah, you don't think of the music aspect of it. You don't think of the pianos, the guitars, and the amps, et cetera. So it's a good question, yeah. Apple is interesting. And like you will see the tone, if you look at the advertising before and after the tone of the Beats commercials are very different. Like in the past, we would use like a Richard Sherman. We use a Colin Kaepernick, which are very like defined and very like loud and outspoken characters. Not saying that they're not using those characters anymore, but it's definitely been, I won't say, it's been muted a little bit. Apple's a very big organization naturally. They have a mass appeal. But I think like Beats was really, when it was on hot, there was nothing hotter than Beats at the time. So like, if you think about what Beats did during the World Cup, you think about like what it's meant for like the NFL. It was, do you guys remember when Jordan wore a shoe and they banned a shoe? That's like Colin Kaepernick wearing the headphone in a Bose owned NFL. Just extremely defined, extremely like controversial. So I think now Apple's, they're doing great things. A lot of their campaigns are awesome, but I think it's less out there than it was before. Do you think that there's a sustainable strategy that's not expectable? Was that like a necessary factor to get into where it was? And then you become more of that, not white label brand, but that inclusive brand that accounts for the people that you touch on. Yeah, you know, it's interesting. I think like, either die a hero or you live long enough to become the villain. That's like one of those things. It's like, they kind of wand and like, what did they just need to like own it? But I imagine like in 10, maybe 15, 20 years when Dre passes and people don't like, maybe like resonate with him as much. If they don't start like tapping these younger influencers that will be like Dre's prodigy or whatever, there's gonna be a new brand that's like the defiant one. When we were at Beats, all of our packaging was black. It obviously had a very like awesome open box experience. The headphone was like the prize jewel in there and you wanted to save the packaging, it was played on your desk, et cetera. They used to call Beats the black apple in the day. And I think now, because all the packaging shifted over to white boxes. I mean, it's, yeah, it's still got the same vibe, but like you live long enough to be the villain. Other questions? Just wondering, have you worked with any small companies kind of grow their brands and see what that would be like? Yeah, that's interesting. I think small brands are challenging. At the same time, they're like a little bit more exciting. When I worked in the toy industry, I worked on a few small brands. Pokemon at the time wasn't a huge brand. It wasn't what it is today, definitely. And they are typically, smaller brands are typically cash-strapped. So these big ideas that you have at like bigger corporation, it's harder to execute. So you really need to find ways to drive sales. You really gotta like make that ROI happen. And that's important for small brands. Your investment's gotta have some type of return. It's challenging. That's a good question. There's a question over here. We got somebody here that can answer that question for us. Take a stab at it and we'll throw it over the boat. I think, I mean, the identity of Beats was like, this is not your dad's headphone. That's like the attitude like, every father has had an experience where his father told him this is not real music. And that's where I think the brand identity of Beats came from and Colin Kaepernick was an unproven quarterback. He had a kind of a weird throw. And I don't know squat about squat for football. But he had like a very like, this is me, like I'm gonna work hard. He was a quarterback that was all tatted up. It was a lot of people. He was not the stereotypical of a court. He was no paid manager for sure. He wasn't that like good boy that did everything right. And I think that's like one of the reasons Beats picked him because that's who he was. That's who he was careful with. Oh Lou and I worked at Beats, he was our sports strategy guy. Do you have any thoughts on that or? On the verge of acting. So there the actors are. Hot. In the news, really good side of on the field or on the court, and always are in the news because of something else, like Kevin Gardner, another actor, who's been in a commercial, who's been on a campaign in the news, and now train my brain now as a warrior. All star player, but love to talk to the audience. Good question.