Hey, guys!

I have found less details on productiom model in newsletter#13 than I hoped. There was nothing there Rob hasn't already told us. Perhaps you can post some more details on voice recognition status, Ethernet support etc.

What was new was the mention of home network player prototype. What's that, guys? And do you plan to change your production and distributiom model only for that, presumably mass consumer product, or for empeg car too. What will that mean to us?

Have a succesful trip to Vegas!

Cheers!

Dragi "Bonzi" Raos
Zagreb, Croatia
#5196

> I have found less details on productiom model in newsletter#13 than I hoped

I'll put something more comprehensive together at a later date after we've decided some key things, such as a discount plan for existing clients.

> What was new was the mention of home network player prototype.
> What's that, guys?

Again, more information later. In brief, it's a home networked player that streams audio from your PC or from an internet streaming service. I can't give any more details right now because we've signed a pile of NDA's as tall as a house.

> And do you plan to change your production and distributiom model only for that

The home player isn't something we'll manufacture ourselves - it's quite possible that we'll not even be associated with the final product(s), which is why I can't give too many details away. The Car player, on the other hand, will continue to be the public face of empeg for time being.

Rob

In brief, it's a home networked player that streams audio from your PC or from an internet streaming service.

Oh, no, there goeas another part of my savings [sound of piggybank trying to hide under the bed] !

I hope you get obscenely rich, guys! BTW, as small enterpeneur myself, let me ask you about your financing (if you want to share that info, of course): did you attack you piggybanks, or was it possible to secure some venture capital for such an unconventional enterprise? If so, does it cost a proverbial arm and leg?

Cheers!


Dragi "Bonzi" Raos
Zagreb, Croatia
#5196

> was it possible to secure some venture capital
> for such an unconventional enterprise?

I've been wondering about this myself, and I think I already know the answer. The Empeg folks probably aren't ready to discuss their capital situation with the general public, but I've got speculation here for ya...

Hasn't the company been around for nearly two years now? Let's do the math... They've sold, what, about 150 of the Mark1 players so far? At, let's say, an average of $1300.00 a piece? That's optimistic, and that comes to only $195,000.00. Seems to me that a high-tech company like Empeg would need a LOT more cash than that to survive for that length of time. Plus, there's the situation of their plans to gear up production next year. I'd bet that needs a significant advance component purchase from their suppliers. Which, I'd bet, makes that 195k look like peanuts.

So, I think we can pretty confidently assume a few things:

1) Of course they're using venture capital.
2) It's a really REALLY big chunk of venture capital.
3) Empeg UK must have had an AWESOME business plan written up to attract that kind of investment.
4) Both Empeg and their investors are counting on next March's big push to really take off.

Personally, I want to know who's investing in them. They must have some real balls to invest in something so unusual and risky. Don't get me wrong, I think the Empeg Car is the best thing since sliced bread. It's just that with Sony and Matsushita tying up the consumer electronics markets, it seems like it would be really hard to get enough market share to be profitable. I definitely think that Empeg UK deserves to be successful and profitable in the long term. They are genuinely concerned about their customers, and are committed to making the Empeg Car the best it can be.

Anyone got any other comments?

As you guessed, we can't discuss our financing in any great detail. As we've stated in the past, the Car player represents our public image - it's a flagship product designed to show the sort of thing we can do. Our major business interest, however, is in developing technology for other people to market - and by their very nature, these are not projects that we are free to talk about :-(

We hope very much that within the next 12 months empeg will have become a key leader in the digital audio technology market, but the chances are that our name will not appear on any of the boxes. But hey, who needs fame and glory anyway? :-)

Rob

I can't go into a lot of detail for obvious reasons, but:

- We've sold many more than 300 players, plus have done consultancy work and produced custom versions for a major car audio OEM.
- We've not used any VC (yet). We've just done things in a much more English way - as opposed to a Silicon valley startup: ie, we don't have pots of cash, so we just work smarter instead. Money is obviously required for some things, but if you're careful enough you make sure that every prototype works first time by doing a lot of careful checking...
- We're privately funded by one investor. As with all UK companies, all the details are in our limited company accounts filed with companies house, uk.
- Most of our money is used for financing component stock as you guessed!
- Up until the beginning of 99, we only really had one permanent employee (me), though Mike was contracting and Rob was working from home too, plus Patrick working on hardware when needed.
- Up until the August 1st 1999, the hub of empeg was my house in Cambridge, which at one point had Mike living downstairs and both of us working in my spare room. We had some get-togethers with everyone (including Toby and Patrick's cat) staying at my 2-bedroom house, but it did get a bit cramped. Mike still remembers sleeping & working near Pixel (the cat's) litter tray!
- Myself & mike still work on our own machines - I don't have any company toys (this is about to change, though ;) )
- Our future plans expand into many areas, and they're all must-have toys. They still run linux, too...

It's not that we havn't been able to find investors - we've had them falling over themselves - but we want to make the *right* partnership. When things happen, you'll know :)

Hugo