What You See Is What You Get: My Autobiography (23 page)

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Authors: Alan Sugar

Tags: #Business & Economics, #Economic History

BOOK: What You See Is What You Get: My Autobiography
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I don't quite remember how it happened, but me and my old friends Steve, Geoff and Tony kind of drifted apart at this stage of our lives. However, Malcolm and I were still in touch for business reasons. Human nature being what it is, you tend to make new friends as you get older, usually from the local community. And this happened in Chigwell.

Daphne's husband Harold had a cousin, Brenda, who'd been a bridesmaid at their wedding when I was a page boy. Brenda had married a chap called Ashley and they'd also recently moved to Chigwell, so Daphne got Ann and Brenda together. They became friends and, in years to come, would run each other's kids back and forth to school and all that sort of stuff. We socialised quite a lot with Brenda and Ashley and also with one of Ann's cousins, Myra, and her husband Lawrence. This, I guess, was our kind of social scene and we would, from time to time, go out to the West End and enjoy a meal or something like that.

*

The 8000 had done me proud. We made it for about eighteen months, but its specification wasn't good and I needed to bring a new model into the marketplace. There was also a big demand for higher-powered amplifiers, and this time I wanted to make sure the triangle player in the Royal
Philharmonic didn't get a complex. The quality of this amplifier and its frequency response really had to be the bee's knees.

Forsey had explained that the 8000 had been designed without a preamplifier. It had no guts in it to drive the bass and treble controls, the things that make the sound richer and sharper. This time, we were going to ensure that any new product we embarked upon was designed properly. It was time for Mike to show me what he could do. Stan Randall (who was now on the payroll as an Amstrad employee) and Mike Forsey came up with some research on the company Toshiba, who were selling Power ICs (integrated circuits). Again, I don't want to bore you with the technical stuff, but take it from me, ICs were
the
thing in those days, and I figured that if I could incorporate them into one of my new products and use the phrase 'Pioneers of Integrated Circuits' in my advertising, it would work well. The IC2000 amplifier was duly conceived.

Because our orders were now too big to produce at Great Sutton Street, I acquired new premises at 89 Ridley Road in Dalston. Ridley Road was famous for its market, where my mother regularly shopped and would take me as a kid. It was where I'd worked on Mr Phillips' stall as a young lad.

At Ridley Road, I took 4,000 sq ft of refurbished factory space - four times the size of Great Sutton Street. It felt like I had taken on an aeroplane hangar.

Stan Randall arranged the construction of the production line at Ridley Road and Mike Forsey got on with the design of the IC2000. I did the mechanical drawing for the cabinet and chassis. This time, we moulded some very fancy silver knobs and slider controls. The front panel layout design of the product was down to me. I designed some flash aluminium toggle switches and the whole thing looked a real mug's eyeful. Moreover, it was a bloody good amplifier and it ticked all the boxes as far as the specification was concerned.

There was a demand for a tuner to go with the amplifier, so Stan asked his ex-partner Roger to come up with a design for a tuner chassis, as by now my capacity on the mechanical engineering side was running out; it was getting beyond my comprehension.

Because the
look
of a product - the cosmetic design - was starting to assume great importance, we employed our first draughtsman. Enter Bob Watkins, a bearded, heavily built chap in his early twenties who had previously worked for the Ford Motor Company. We set him up a drawing office next to Mike Forsey's design laboratory.

The production line was being run by a no-nonsense fellow by the name
of Dave Smith, the accounting was done by Derek Burford and we had a secretary, Joyce, who answered the phone and did the typing. As with all electronic products, we did get returns, so we set up a service department which was run by Simon Angel, a young hippy lookalike who joined the company from the London Electricity Board. Simon took on a young man by the name of Ivor Spital, someone who's still employed by me today. I recall that he came in for his interview carrying an umbrella, but he swears he's never owned an umbrella, and this argument has gone on for around thirty-seven years now.

We also employed a couple of black guys who were brothers - Richard and Michael Davis. Richard worked on the production line while Michael became an unofficial assistant to my dad, doing odd jobs around the place, packing parcels, opening the incoming mail, sending the outgoing mail, running up to the bank and that sort of stuff.

In all, we must have had fifty or so employees in that building. The one who gave me the most trouble was my dad! There were times I could have throttled him, as he embarrassed me in so many ways with his penny-pinching behaviour. Because he'd struggled all his life to scrape together a living, he simply couldn't get it that I was at the races by now. Although I was only twenty-four, I was a mini-mogul - making loads of money and owning a nice house - yet he would carry on as if we were still living in the dark ages.

The staff had to bite their tongues when they spotted him getting up to his shenanigans. If it wasn't for the fact that he was the boss's dad, they'd have given him a real hard time.

He would intercept the incoming mail before the secretary opened it, to see if any of the stamps had been left unfranked by the Post Office. If so, he would steam off the stamp (probably using more energy than the stamp was worth) and reuse it. You would often see outgoing mail with LePages glue oozing out from around the stamp on a clean white envelope.

Another of his disgusting habits arose because he couldn't come to grips with the idea of the plastic cups from the vending machine being discarded after use. Many's the time Dave Smith would come to me and show me a cup of coffee he'd just got from the machine - the cup would have blackcurrant stains on the outside from previous use! I went berserk with him, but it seemed that the more I screamed, the more he couldn't resist doing these things. He said, 'I'm saving you money! I wash the cups before I put them back in.'

There was a corner of the floor where a heap of used brown paper and odd rolls of string were piling up. In a rage one day, I told him to chuck the whole lot out. He refused, so I asked Harry Knight, the van driver, to take it all downstairs and chuck it in the bin.

You would have thought I'd sent my father's prized Bentley to the crushers. It was a like a farce - he was grabbing bits of paper and lumps of string from Harry, saying, 'Don't throw that away, I'll take it home.'

'Take it home?' I said. 'Where are you going to store it all, and what the bloody hell are you going to do with it?'

One day, I lost my rag completely. I had a small office where I made my calls and met customers from time to time. The main floor heating didn't reach the office, as it was sectioned off, so I used a fan heater in the winter. My day-to-day routine was to walk the factory floor, talk with people and generally help out in all areas. One very cold day, I noticed that every time I came back into the office, it was freezing. The first time, I just thought that I'd forgotten to turn the heater on, but after the second and third time, I realised my dad was switching it off whenever I walked out of the office.

I called him over and asked a few others to come and witness what I was about to do. I opened the window, switched on the fan heater and placed it on the windowsill, so the hot air was blowing outside. I then locked the office door and told him that the heater would be staying there all day, as I was sick and tired of his stupid antics.

It was agony for him! He kept coming to me, saying, 'Okay, okay, you've made your point. Don't be silly - switch it off now and close the window.'

I punished him for at least an hour.

*

Around this time we started taking exhibition stands at the various hi-fi shows around the country. There I was, suited and booted, on my own stand at Olympia, exhibiting my own brand of hi-fi equipment.

There were some funny and embarrassing moments at the exhibitions. Some of the old customers I used to visit in my minivan would walk past the stand. They'd see me and do a double-take, as if to say, 'I know that face.' Sometimes they'd come up to me, as was the case with Clint Atkins from Brixton.

'Hello there,' said the big Jamaican. 'I haven't seen you for a while. So, are you working for Amstrad now?'

'No, Clint, I
am
Amstrad!'

'Ha ha, what do you mean, man, you
are
Amstrad?'

When I explained to him that this was my company, there was a look of shock, followed by the 'I suppose you don't care about your old mates now you're in the big time' look.

Similarly, the two brothers from Rex Radio would stop by to have a chat.
They remembered who I was and had been following my career. It was ironic that these former customers of mine were now too small for me to deal with - they only had the potential to buy one or two items. Mind you, the Rex Radio boys with their Bang & Olufsen shop wouldn't have touched my stuff with a bargepole. Amstrad was frowned upon as the Ford Motor Company of the hi-fi world. The so-called 'Rolls-Royce' end of the market was dominated by the likes of Leak, Wharfedale, Kef and a host of other posh brands.

I didn't mind Amstrad's image. My interest revolved around designing, manufacturing and selling. To manufacture, you have to be conscious of your costs. As for selling, it's always helpful if you have a good retail price that undercuts the competition. This was to be my philosophy going forwards. I wasn't cut out to be at the top end of the market. My formula was to observe what the higher-price market leaders were up to, then do the same (if not better), undercutting them on price to generate a mass market for products that normally would have been bought only by well-to-do people. There was no question about it - when I got going in the electronics industry, I was
always
going to be at the 'pile 'em high, sell 'em cheap' end of the market, targeting the truck driver and his wife.

Despite being viewed as the Ford of the industry, it didn't matter to me what the retailers or competitors thought - it was the buying public I was concerned about. I would bring perceived value to the average guy who could not afford the expensive kit, but wanted something that looked the part. And, let's face it, half of the people who bought the expensive stuff did so out of snobbery, simply because they were told it was the best. The truth of the matter was that playing a quiet passage of classical music on our equipment, perfectly set up, sounded superior to on an expensive but incorrectly set up system. In reality, the sound from the Amstrad kit was perfectly adequate for 99 per cent of the public, in the same way that today a seven-quid Swatch does the same job as a twenty-grand Rolex, if you get my drift.

I could have gone in the other direction - the Bang & Olufsen way - trying to sell high-price, superior-quality items, but my
character
most certainly is mass volume/low price. I couldn't pull off this high-quality Rolex-type image or indeed have the patience to schmooze and convince people to part with PS100 for an amplifier - mine was PS19.50! More by default, I was right, because as technology moved on and the microchip world became more advanced, it would be fair to say that most manufacturers used the same circuit, so there was no difference in the end, quality-wise.

6
A Taste of Japanese Culture

From the East End to the Far East

1973-6

In the early seventies, when the consumer electronics industry was in its infancy, Japan was the undoubted leader in technology. Some of the Japanese hi-fi equipment had wonderful-looking silver knobs, toggle switches and the like on the front panel. When trying to procure these items in the UK, I soon realised I was dealing with middlemen who imported these components from Japan and stuck on a profit for themselves.

I decided to go straight to the source. We were too small a company at the time to buy switches directly from giant manufacturers such as Matsushita; instead, we would need to use an agent in Japan. Looking through the
JEA,
a Japanese trade magazine, I spotted a small quarter-page advertisement for Shomei Trading Company which looked promising. Within it there were pictures of electronic components such as switches, resistors and capacitors - all very exciting for me. The advert gave a telex number and a telegram address: SHOMEI TOKYO. The contact name was Mr A. Imai.

I applied to the Post Office for our own telegram address and we were allocated AMSELEC LONDON. Initially, I sent Mr Imai a letter by airmail, inviting him to send me a telegram if he was able to help. About a week later, I received a telegram asking for more details. There followed a back-and-forth exchange of telegrams. Although telegrams were expensive, time was of the essence. For me, this was a new culture, dealing with Japan - product designs and specifications were changing rapidly and you had to be fast or get left behind.

Mr Imai airmailed me the Japanese Components Industry catalogue - a massive book, about four to five inches thick. This was the
Glass's Guide
of components; in it you'd find every type of component you could possibly require. I identified several manufacturers for parts I wanted to buy, and Mr Imai sourced them and sold them to me.

I was sending many telegrams and costs were running high, so I decided to invest in a telex machine. Those of you old enough will know what a telex was, but for the younger reader, the telex system was effectively electronic typewriters connected via the phone line. The Post Office allocated us a separate line for the machine. Naturally, I chose the callback ID AMSELEC LONDON.

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