Lessons from the CEO of Sonos on how to build a billion dollar hardware company

The CEO of Sonos, John MacFarlane, has done something rare in Silicon Valley: he’s built a consumer electronics startup into a business approaching a billion dollars in annual revenue. In an interview at the Structure Connect conference on Wednesday, MacFarlane discussed some of the lessons he’s learned along the way about how to create a connected music hardware company.

“Hardware is, as everyone says, hard,” said MacFarlane. He explained that hardware makers have to stay on top of the supply chain, and the quality of the supply chain, at all times. Before Sonos he worked at a software company. Sonos makes connected wireless speakers and audio devices.

But those same suppliers also need to be your friends, and you need deep relationships with them, said MacFarlane — because sometimes you’ll over forecast, and sometimes you’ll under forecast, and you need those companies to be flexible with you. The difficulty of building hardware products has given him a great appreciation for what Apple does, he noted.

Because hardware is so difficult, it’s also crucial to get has much help from others as you can. “Egos are your worst enemies in hardware,” said MacFarlane.

But the single worst mistake a consumer hardware company can make is to go to market with a product that isn’t finished, said MacFarlane. “There’s one first impression, don’t blow it,” he said.

Photo by Jakub Mosur

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