“Inspiration is easy, innovation is really hard.” How Shokz built its open-ear empire – from struggles to success

When you think of the best earbuds, your mind may venture to those you see en masse in public – whether that be AirPods or one of many other brands – but there are also specialist market players that have fought for their place too.

One such brand is Shokz, well known for its bone-conduction earbuds and, more recently, air-conduction solutions – which hold great success with many in the running community, as one example demographic.

But as the whole 'open-ear' market explodes – with Bose joining the party last year – Shokz is doubling down, releasing its OpenDots 2, and, in a rare presentation with questions to a small group of journalists last month at Shokz's HQ, Ken Chen, one of the co-founders of the company, told his story – from the struggles to success.

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Chen, who trained as a mechanical engineer, is now a successful businessman – but that's not always been the reality. He's a humble character and a surprisingly open and honest presenter – delving into the company's development from AfterShokz LLC to today's Shokz, while contemplating what the future holds.

From producer to innovator

“Inspiration is easy, innovation is really hard," began Chen, who co-founded then-AfterShokz back in 2011. But the work had begun well before that date, of course.

“At the beginning, we were a two-way radio earpiece manufacturer. We were a factory. We produced a lot for international brands.”

Applying his expertise – and that of his colleagues – to products for other companies wasn't where Chen's mind was though. There was ambition, spurred by inspiration.

“If it is something new that really makes a difference in our society, then that is innovation.

“When I first tried bone-conduction, I was thinking ‘wow, there are so many things that we [AfterShokz] can do with that.’”

That was the catalyst; the spark. With his established engineering background, he could see practical options to create a consumer brand – and not just produce for other companies.

Trials and trepidations

“But there was lots and lots of hard work down the road. We tried a lot of new stuff because we were engineers triggered by education [of bone-conduction's existence] – but none of them were successful with our customers.

“Certainly, if we wanted to become a consumer brand, it seemed an impossible challenge. Whatever you create is not popular – at the beginning, at least.

“We thought that we could do more with the technology – and we had passion. So we founded AfterShokz LLC in Syracuse, New York. At the Consumer Electronics Show in 2011 [or CES for short], we had a little booth – the smallest possible – and we were showcasing our headphones.

"But nobody understood what we were doing. Nobody knew anything about bone-conduction technology. Nobody paid any attention to what we were trying to say.

“But you know, not everything was bad. If that were true then we wouldn't have made any further investment. So we saw the silver lining in our failures ... and we needed to seek out sales and marketing. Engineers don't know anything about that."

Upward trajectory

“After the launch of AfterShokz, we participated again at CES in 2012 – and this time we made a little bit of a bigger investment. We had twice the size of the smallest unit – the booth was modest, as it was just $500 – and it was shipped [to Las Vegas, Nevada] in twenty-three boxes.

“Our PR was sick because the work was overwhelming; she made a lot of effort and noise at that CES. But it worked. The Wall Street Journal gave us one of the ‘top gadgets of CES’ [that year].

"Then the booth was so crazy. Groups of people arrived – they brought their friends and their colleagues, and the word spread about bone-conduction.

“So we were really encouraged. We rocked CES. So we went on to make more investment.

“After that show, we spent the entire year building Bluez – the world’s first Bluetooth bone-conduction headphones.

"Bluez was so complicated for our company at that time. But we were doing something new, so the media reported about us."

Got the Bluez

“However, Bluez was a difficult product – and it was not a great product. But we still had to go to market with the goods.

"The expectation [in retail] was [to sell] one piece per store per week. Higher than that and you get a bigger space.

“So when the first report came back it was eighteen sales – that from one thousand stores. Eighteen in total. That's was horrible.

“Between 2012 and 2015, business development became a kind of guerrilla war. We were in Best Buy, then out. In Apple Stores globally, then out again. We entered Fnac and MediaMarkt – and were later rejected. We moved from one distributor to another, from one sports store to another. We simply couldn’t find stability.

“However, people didn’t reject the idea of open-ear audio, they rejected our execution of product at that time.”

A long Trekz

"So instead of giving up, we went back to the fundamentals – we focused on our technology and our product.

"We realised that we needed to improve the underlying technology first. The bone-conduction solution needed to be louder, we needed to reduce sound leakage, to reduce vibration.

"So we worked on that. We invented these layers to reduce the leakage. We invented and re-invented the premium pitch to make the sound more balanced. And we also mastered the titanium frame and flexible fit.

“Eventually, we created this product, Trekz. Trekz actually changed the business type and changed people's opinion about bone-conduction technology.

“For the first time, consumers felt like ‘this actually works!’. That moment changed our business.”

On a viral run

“In the old days, some of my friends would give good suggestions and kind words of encouragement. When Trekz came out, they just asked for Trekz samples.

"And it's very interesting that when you create these good things, they naturally become viral. Good things should be viral. That's how you grow a brand – it's that chain reaction.

“We were really proud of what we did with Trekz. But we were still struggling on the business side. If we couldn't sell it, we thought: 'how about we let them try?'

“So, half a year before Trekz was released, we were working on these demonstrations so that people could try [out Trekz in person in store – first in South Korea].

“If you are innovative, it's also your responsibility to educate the market about your innovation.

“But we have to beg these stores to give us space. We said: ‘If you give us space, we will train your staff even better, and give them Trekz [to understand the product].

“Brookstone was eventually one of the early adopter stores in North America. At the peak, one third of their revenue came from Trekz. We were selling tremendous volumes of product.

“Finally, our bone-conduction headphones had great value to their owners.”

Long-distance marathon

"We found spaces in the running stores in the UK. We succeeded among runners and became more successful.

“As we went grassroots, we touched early adopters – and they turned around and championed us. They recommend us to their family and friends – and the word of mouth effect is huge.

“We became a meaningful statistical number in an industry report. And that's when the MediaMarkt, the JB Hi-Fi and so forth took us in.

"But it's all the grassroots and underlying work where the value was created.

“The early days were a struggle, but the determination and the work ethic was always to tackle the problem.

“For quite some time, I would not allow us to release new product unless they showed significant improvement on the technology.”

To the future

Shokz has released plenty of innovative products since those mid-to-late 2010s, too, from the OpenRun Pro and beyond – with air-conduction products released later.

Queried about Shokz's future, Chen was ponderous: "Bone-conduction is, of course, a fantastic technology. But the market is relatively limited. As we continue to go more mainstream, open-ear audio allows us to serve a much border audience."

The latest release, in the form of OpenDots 2, reinforces that. This product release is more about refinement; about mainstream desires – adding IP57 ingress and water protection to add sports and mass appeal.

Chen is clearly confident in the technology: "I always feel very proud. When we produce a product, it would have to be good enough for us first."

And what about beyond the next 5 years? "As we grow, inevitably we have to cater to a broader consumer base. But we still emphasise technological development.

"Our mission has not changed: we still want to build the most wearable headphones ever. That means staying focused on the fundamentals, being true to ourselves and to keep creating value.

"But, of course, the future is always going to be challenging – and we're not kidding ourselves about that".