Welcome to the Market Herald, I’m Brieanna McCutcheon, and this is The Top Line.
Content creation seems to be everywhere you look, from Twitch and YouTube gaming to podcasting, TikTok, and more. The content creation market is slated to grow into tens of billions in the next 10 years. The brand-new company, BEACN Wizardry & Magic, better known to customers as BEACN, launched sales in January of last year and is making waves with creators, offering an ecosystem of products that help them produce great audio easily.
Let’s jump right into our interview; we have the CEO of BEACN, Craig Fraser with us. Thanks for joining us today.
TMH: I understand you have 25 years of audio and product creation experience, and I am sure you could have gone down other paths as far as a career goes. So why this company and why right now?
CF: Saying 25 makes me feel older than I feel like I am on the inside. I think for me, the path of my life has always been fairly steady regardless of the choices that have come along. I’ve always had a fascination with technology, anything that’s forward-looking and can make the world a better, more exciting place to live in. Generally, that fascination leads to how I can help people by learning about these things and getting things going. So, my background actually came from playing in a band for a number of years and in that band, you are the performer, you’re the person on stage. So, I have that experience, and then also, somebody needs to run the PA and understand all of the gear and that kind of stuff.
So from that position, it led me to work in recording studios, getting more experience behind the glass and understanding the equipment and all of that and that led to a job at a company designing music gear for singers who were on stage and that really coalesced into this ability to design product and to interface with a lot of customers and sort of learn how that whole development process goes. As I was there, I’ve always been a video gamer, and I’ve always been interested in the gaming industry and how that all works then, Twitch came along, and people started broadcasting video games to their friends and to a whole bunch of people who wanted to watch them as an audience and of course it took a long time for people to wrap their heads around the fact that people wanted to watch other people play video games, but it resonated with me quite quickly, and as I was watching these folks play games, I realized how much of a struggle audio was for them, and that led to going to some TwitchCon’s and chatting with a whole lot of users and asking them what a challenge was and they all said audio that continued on its path to saying, Hey, we have all these audio bricks or all these Lego bricks as I call them, that would be appropriate to rearrange, to help the folks that are doing these online broadcasts to specifically help their workflow, their needs at the time. It’s a very hectic thing to do, to broadcast, play a video game in front of people and chat with them and manage audio and all that stuff. So that really led to making some products specifically designed for that industry when I was at another company.
Then it led to BEACN, and BEACN was really for two purposes. The reason I think that anybody starts a company is that they have this altruistic view. It’s a good, altruistic view of how they want to treat everyone and how they want the kind of core company culture to begin and to evolve in the future and then there was all of this stuff that I had wanted to do along the way that was really based on my gut. You can never test those things without testing them, and you have to be in a particular position in order to say, Hey, I want to try that and have everybody listen to you. So, when we decided to start BEACN, it was to fulfill those two things. It was to create this great company for people to work at, for the customers to engage with, for investors to engage with and then also for us to try out all the things that we thought might work and to succeed and fail and try again and do all those things. So that’s really the two components that led us to start BEACN.
TMH: As you know, there are lots of mics on the market, your company did not invent these specific items. What sets your product apart from all the others?
CF: Yeah, that’s a really great question, and I think you’re probably a prime example of the exact situation that a lot of people find themselves in. Typically, you compartmentalize the locations where you can go and pick up an audio gear to go to a big box store. You go to your Best Buy of the world, or you go to a music store and often, the Best Buy purchase is the quick and easy one, and generally, that’s a microphone that will plug into your computer directly with USB. The quality often or the features and the functions that you’re looking for are not represented as well in those products. Even though they’re easier and more affordable. You then jump over the fence into the music store, and now it’s lots more money, and lots more complexity but the quality’s higher, and you can probably achieve what you’re looking for. Still, there’s this super steep learning curve that makes it really difficult to get going with.
So BEACN really wanted to bring the best of those both worlds together, right? The quality and the audio expertise that we’ve had. We build our products right from scratch, every resistor and circuit board and all that is made by us, so we understand exactly what goes into it. Our audio nerd guys can totally make everything sound great, and how do we then package that and price that in a way that somebody like you could say, okay, I want a certain outcome, I want to sound like a radio person, and how do I do that without having to buy all these other things and learn all this other stuff? So, our microphone actually does all of the processing for your voice inside the microphone itself, so you don’t have to send it to the computer and then try to do a bunch of things afterwards.
It happens in the microphone, and then by the time the signal gets to you, it already sounds fantastic. Your headphones plug right into the microphone so you can hear yourself like, I’m listening to myself in real-time here with no delay or anything like that. I can perfectly hear what I’m saying, and then we combine that with a very sophisticated software suite that is required by all of the online content creators that we sell to. So, when you’re a Twitch streamer, you’re playing a game, you’re talking to your friends over some voice chat. You are text chatting with your audience, who are sending in text questions, and you’re reading it, but you’re trying to do all these things all at one time. So you may have very high requirements for how and when that audio is treated and sent and muted and shuffled around and all these things, but you need to be able to do it very quickly. So, our whole purpose of making the microphone and our other products was to try and streamline that workflow and make it so that you can buy something of high quality but plug it into what you need to plug it into, which is directly into your computer.
TMH: How did the initial launch of your products go? Was it as successful as you hoped? Did you run into any hiccups?
CF: We’re always super transparent about all of those things, right? There’s going to be good and bad with everything. So, the good thing is that started out as we started out with completely B2C selling directly off of our Shopify sites, so we could sit there in real-time and turn on the sales as everybody’s fingers crossed, watching the orders come in from around the world, and that went super well. We ended up selling out repeatedly on the website and had to get more products, and that’s really, you can’t be in a better position when you start, and then your products get in the hands of thousands more users than you could test with, and bugs start cropping up. So that was sort of the expected, but you hope you don’t get hit by it, but we did get hit by it where some bugs were happening, so we had to rejig our feature roadmap.
We had a plan for bringing the products to market and then adding features as we went and you kind of go back and forth with the users, and you figure out what direction to take the next iterations of the product. We had to take a bit of a step back there and start doing some bug fixing, and we always look at the products that we bring to market and have that doctor’s ethos of do no harm, right? We don’t want to be the reason why somebody’s stream went bad or somebody’s podcast went bad. It’s fine if life gets in the way of anything else, but we don’t want to be that thing that’s in their way, and when you learn that you are being that for some people, you really need to just immediately put the breaks and a hundred percent focus on getting those problems solved.
We took about six months and multiple iterations of product and software releases to get those things where we wanted them to be, and we did, which was fantastic there are always a few ongoing bits and pieces that you keep working on, but we were then able to shift back into a what now can we add that’s cool and new to the products, and so it’s great to be kind of back on that track again.
TMH: The products are for purchase directly on your website and Amazon, Walmart, Best Buy and NewEgg. It seems you have hit the ground running in terms of getting yourself out there. What do you have your sights on next, as far as expanding BEACN?
CF: There are a few things that we’re trying to do. Even just getting inventory localized to various countries, especially into the EU and the UK that’s been top of mind for us. The majority of the sales that happened at the beginning, as they were coming right out of our website, there were folks buying in Germany, and they had to pay shipping from the US. So things like that that we know are barriers to bringing on board more customers are the things that we’ve been working towards. So now we’re expanding our warehousing. We have warehousing in Canada and Great Britain, and we’re going be adding the EU as well, and that’s sort of on the direct sales side looking at firing up more Amazon FBA opportunities and things in Europe as well.
So that that’ll really start flushing out that side, and the other side is that we’ve had some B2B opportunities that have grown. So, we’re looking at, we have relationships with some system integrators. So,, if you get these gamers who really want to buy a high-end custom PC, having our products for sale alongside those is a really good thing. So, we’re working with companies like Meta PC and Power GPU to offer BEACN products when those folks come in and purchase, and then we’re also looking at the bricks-and-mortar, more traditional distributors and direct sales and things like that. We certainly have some exciting irons in the fire that I don’t want to count chickens before they’re hatched but very much leaning in the right direction on that one.
TMH: Why did you choose to focus on Windows as your platform for the launch of your products? Do you have plans to expand operating system support in the future?
CF: When we look at the gaming industry in general, about 99 percent are using PCs, right? It’s just that’s where games live. So that’s where we started, but when you get into the content creation space, and you start talking about podcasting like you. I was talking about before this that you’d probably use a Mac to do a podcast, we know that there’s another market there for Mac, and we really do want to support it. So, we’ve now taken the first steps to engage with some external contractors that will help us to really use their refined expertise in Mac to bring our audio to them. So, we’re doing like an internal-external combination of work that we’re putting into it to bring Mac to the market, and we’re very confident that we’ll be able to bring it this year, which is awesome.
TMH: Are there any new products that consumers/content creators get to look forward to?
CF: This is where I slyly say Yes. We have a roadmap of products that we’ve built out. You will see new products that come out this year. We have products that are slated for 2024. Beyond that, on the roadmap that starts getting into, what new and novel technologies can we potentially work on that could apply to wider audiences and wider markets? Again, that whole drive that we have to help people, as altruistic again as it sounds, really starts with we can help people in this kind of core ring of these content creators. Then you say, how do you repurpose and repackage these technologies and grow technologies to hit these larger and larger rings of users as we go? So, we’ll be looking towards how you help the larger gaming industry. How do you help all these folks who are working from home and struggling with their Zoom audio and all those things? So that’s sort of the path that we’re headed down.
TMH: Switching to the business side of things. How much capital has BEACN been able to raise so far, and are you looking to raise more this year?
CF: We’ve raised about $7.1 million Canadian to date. Founders and insiders still hold about 60% of that. So that’s from our perspective, having that ability to be close-knit with the folks who are heavily invested in the company is really fantastic. We have a very supportive group of kind of initial angels and early investors. Just under half of those shares are subject to an EBC hold. So that’s through May through July of 2025. So that means we’ve got long-term holders, which is fantastic as well and then talking a little bit about revenues and things for things that have been released as of January 30th, sales through September 30th, 2022, we have done just over $3.5 million in sales with a gross margin, about 42%. So, we’re looking at now the way forward is how do you start improving those margins? How do you make those small refinements in all sorts of aspects of the business to make sure that we’re taking steps in the right direction to make ourselves as profitable as we can be and then obviously expanding all those business opportunities to grow the sales is really the top of mind for this next year. We’re fully funded for the remainder of this year.
Thanks again for joining us and answering our questions, Craig.
We’ve been speaking with Craig Fraser, the CEO of BEACN. A leading disruptor of audio, an innovator focusing on content creators and gamers. Feel free to follow the BEACN Wizardry & Magic on the TSXV under ‘BECN’, or visit their website at beacn.com.
FULL DISCLOSURE: This is a paid article produced by The Market Herald.