Founded 25 years ago in Baton Rouge, Louisiana to develop affordable, innovative recording studio tools, PreSonus has grown to become a world leader in the audio production space with a product range covering everything from professional studio monitors, loudspeakers, headphones and mobile audio interfaces, to high end digital mixer systems.
The company opened its first overseas facility in Cavan in 2012. Eugene Greenan, general manager for EMEA with PreSonus Europe, takes up the story. “It was a typical technology start-up which was created in our founder Jim Odom’s garage,” he said. “He had experience making records for people and saw an opening for affordable studio products for the mass market.”
Greenan explained that the recording world was undergoing profound change at the time. The era of the big, expensive studio was fast drawing to a close and recording was shifting to the internet and PCs.
“The way music was being recorded had changed hugely,” he noted. “Damian Rice recorded his first album on a 16-channel mixing desk in his bedroom. Most musicians have a small desk which they bring with them on the road.”
The initial range from PreSonus was aimed at the lower end of the market with a price point of around €500, but the company quickly began to experience demand for higher level products due to the quality of its offering. “Demand took us into the thousands of euro price range, and we began to move into the professional market,” said Greenan.
The ‘blue ocean segment’
In the late 2000s, the company entered into what Greenan described as the “blue ocean segment” of the market. This might otherwise be described as disruption.
It involves the creation of new products at lower cost to create a new market space and generate new demand. In other words, create a new market through the creation of highly innovative products.
In the case of PreSonus, this saw the company take the traditional analogue mixing desk which had been the staple of the recording industry and add digital controls to it.
“Up until then, users had to manually change each channel,” Greenan explained. “With our product they could all be controlled digitally. There had been very little innovation in that segment for years and this brought us potentially to an inflection point.”
Demand surged and turnover was growing at 50pc a year as a result of the innovation. “By the end of the decade, the company couldn’t manage out of one base,” Greenan added. “They looked at Europe in 2012 and decided to set up in Cavan.”
Why Ireland?
As is often the case, the decision to locate in Ireland had a personal dimension to it, in this case involving the chair of the PreSonus board, Kevin Couhig.
“His father came from Cork and he always had a personal desire to have a connection back to Ireland,” said Greenan. “The time zone, the workforce, the fact that the country is English speaking, and our tax base were all important, of course. The simple and transparent tax regime and the competitive cost of employment were key factors.”
The company has a sub-office in Hamburg, and this serves to highlight Ireland’s advantages, according to Greenan: “Employee costs are much higher in Europe. The tax system is much more transparent here and the ease of doing business is very good.
“We work with many different customers in a lot of countries and we know how difficult it can be to set up in and get into some of those countries. Ireland is quite good in that regard.”
The lure of Cavan
The original Irish general manager of the business had worked for an import export firm in Cavan before moving to PreSonus and that influenced the final choice of location.
“PreSonus looked at what it wanted in Ireland and carried out some research,” Greenan explained. “The company didn’t want to be in heart of Dublin. It wanted a rural setting in a developed area with a skilled workforce. It could have been anywhere in regional Ireland, but the pre-existing connection attracted the company to Cavan.”
Cavan’s proximity to Dublin also played in its favour. “Dublin Airport is almost a second home for a lot of us,” Greenan pointed out. “Dublin Airport connects everywhere. It’s fantastic. We have a major customer in York, and we can get there quicker by flying to Leeds-Bradford Airport than someone driving from London can.”
The location also helps to attract talent. “We are able to tap into a cohort of people from Dublin who don’t want to work in Dublin and there is also local talent pool here,” he said.
“For example, we find it much easier to employ tech support staff than our colleagues in Louisiana. There is a good talent base in the region which is served by a very strong further and higher education infrastructure. We also have good relations with the local Education and Training Board Ireland office and with the Dundalk Institute of Technology.”
Cavan initially hosted the sales office for the EMEA region, but subsequently expanded into other areas. “At the time, our products were sold through distribution networks in the different markets. We supported the sales, finance, and logistics for those networks. We expanded into marketing, technical support and service. We now do everything apart from R&D and engineering.”
Service is a critical element of the operation. “For a lot of people who own our products, it’s their living. If the product is down for two weeks, they are losing money. A quick and reliable response is needed and that’s what we offer.”
‘The old distribution model is broken’
That mandate expansion saw employment in Cavan grow from four initially to 17 today with further growth planned for the coming months. “We have been building up our numbers slowly but surely,” says Greenan. “The company has been growing at a faster pace in EMEA than in US. We are still tapping into the market and developing it. The Middle East and African markets will also be important for us in future.”
The company is also adapting to changing market structures. “If we want to continue growth in Europe, we have to adapt to the new retail world,” Greenan explained.
“The old distribution model is broken. We have started to sell directly into certain markets and established direct relationships with retailers. Back in the days when you had hundreds of independent music shops – even in small countries – you needed distributors to reach them. Now it’s all about chains and online. We are seeing that in every country. The number of stores is in decline and there is no real place for distributors anymore.”
Future growth will come from a combination of new markets and new product development. “The company founder still works every day developing new products as our chief strategic officer,” said Greenan.
“Six years ago, we didn’t make products that make noise like speakers. Now we do 50pc studio products and 50pc sound products. We have changed a lot over the past six or seven years and will continue to change and grow.”
Barry McCall
27/08/2020
Ireland
