Amar Bose in Fortune's Famous Five
Wednesday, 29 September 2004, 19:30 IST
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NEW YORK: Amar Bose, chairman of acoustics major Bose Corp., has been featured by Fortune magazine in its annual roundup of five visionaries, giving a rare, personal insight on how he created his name-brand company. A former professor of Massachusetts Institute of Technology (MIT), Bose has been featured along with Jim Koch of Boston Beer, Catherine Hughes of Radio One, Anthony Maglica of Mag Instrument and Andy Taylor of Enterprise Rent-a-Car. "Bose, who still owns most of the $1.7-billion company, reinvests all earnings into R&D. That approach has created cult-like fans and innovative products - its wildly successful 'Wave Radio' took 14 years to create," says Fortune. The only Indian American to figure in the latest Forbes issue of 400 richest Americans, Bose recalls how he bought a radio kit when he was all of 12 in 1943 and, in building it, learnt how to read schematic diagrams and repair radios. "My father, an immigrant from India who used to sell imported mats and rugs, would go around to the hardware stores where he used to sell them and talk them into letting me repair the radios that their customers would bring in," he says. "It was a good business - no one was making new radios because of the war effort, and many of the radio repairmen had been drafted," he says, and adds, "I even hired a couple of employees." But it was in 1956, when he was finishing his doctorate at MIT, that he bought his first hi-fi system, played some violin records and found that the sound wasn't right. "Either the manufacturer was cheating on the specs, or the specs were not meaningful. It turned out it was both, by the way. So I started working in the MIT Acoustics Lab to find a solution," he recalls. He says his first product did not come out until 1965 - a speaker in the shape of an eighth of a sphere that could fit into a corner and reflect sound around the room. It eventually evolved three years later into the company's 901 system. "It was much different from anything that existed - I was able to patent it, but it was a hard sell at first. The 901 had no woofers and no tweeters," he says. The product went on to do well after he made a seven-minute audio presentation. Bose, nevertheless, says that the biggest crisis he ever faced was in the early 1980s, when interest rates rose to 22 percent, technology companies were going down, and banks put all sorts of restrictions on loans. "We were in the thick of developing our new car audio system for General Motors. The situation was pretty scary because it could have forced us to go public to raise capital, something I vowed I would never do," he says. Recalling how he managed to hang on, Bose says he got a call to visit Detroit when he told GM that his bank, which had given Bose Corp. a $14-million loan, was trying to constrain the company. The chief financial officer, who "loved" Bose's product, said: "'You've been working with us for almost a year now, and you've never asked for a cent... you've gone your mile a long time ago; it's time we go our mile'." The GM executive called a bank in Boston and asked them to assume a loan to Bose Corp. without constraints, recalls Bose. "That's what saved us. People just would not believe that a company as large as GM would do such a thing," he says. GM also sent equipment worth $700,000 without expecting Bose Corp. to pay for it. What is next from Bose's stable? "Our latest product is a new car suspension system," Says Bose. "We've worked on this system and tested it for 24 years now, and are finally ready to show it to the auto companies." The 73-year-old professor-entrepreneur, however, says he has no clue about its market potential. "We just know that we have a technology that's so different and so much better that many people will want it."
Source: IANS
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