93
92
Te Later Years
Good Times and Good Tunes
Tom and I rented a small commercial space and started a hippie retail
store, more accurately described as a head shop± We named it Super
Sonic, a tiny establishment just off campus on Foothill Boulevard, the
main artery for students on their way to and from Cal
Poly± Initially, a fellow student, Roger Rohrs, was a
partner, but he was in ROTC and he le² to serve in
Vietnam before we got rolling±
³e commercial space was a shambles, but Tom and
I fixed it up, and crammed the new shelves with record
albums, eight-track tapes, car stereos, black lights, psy-
chedelic posters, Indian incense, and dorm room
accessories± We also sold all the stuff that law enforcement referred to as
“paraphernalia” – papers, roach clips, and pipes, as well as Trojans, the
most popular condom±
Tom and I offered at reasonable prices everything the college-age con-
sumer required in the late 1960s±
All of my ³ai sapphire rings and the
stereo equipment from Tokyo and Hong
Kong sold quickly, and I tripled my invest-
ment± Soon we needed more capital to
restock our inventory± I had no interest in
the jewelry business, but like most boys
my age I loved and was fascinated by the
latest stereo gear±
We quickly obtained lines of credit from
two big electronics companies, Sony and
Pioneer, and concentrated on selling com-
ponent music systems± Ironically, even
though Tom and I ran a head shop and
had a firm handle on what our customers
wanted and needed, we had no interest in
pot or alcohol ourselves, or anything that
might slow us down±
We started pushing the stereo equipment
and quickly hit around $30,000 per month
in sales±
I was 19 and Tom was 20
.
n
Cliff and Tom, inside their
first store – called Super
Sonic. The store was
located on Foothill
Boulevard, near Cal Poly.
No Fear of Failure
N
OT LONG
a²er returning from ³ailand to San Luis Obispo, I was
off and running with exciting new plans± My novel was just a
memory, and Richard Nixon’s dra² lottery gave my birth date a lucky
high number± Suddenly, like so many other students, I no longer had
the dra² hanging over my head±
Since high school, I had been philosophically against the Vietnam War,
but I’d also grown disenchanted with the anti-war movement± I was
disgusted by the behavior of many of my fellow college students toward
returning soldiers, many of whom were friends± ³ese young men had
been subjected to hell on behalf of our country and deserved respect and
better treatment from their fellow citizens and our government±
In the winter of 1969, I was again attending classes at Cal Poly, but at the
same time I’d started a small business, selling the sapphire rings and
stereo components I’d sent back from Asia± I’d become good friends with
a classmate, Tom Spalding, who was seriously smart, and we became
business partners± We were making the transition from students to – that
’60s dirty word –
capitalists
±
Tom and I were in the right place at the right time with the right
merchandise – we sold our goods like hotcakes to the people we knew
best: college kids who’d joined the counterculture±
³e Flower Children, the long-haired students with their unconventional,
anti-establishment tastes, were the springboard to our first success±
95
94
Te Later Years
Until I began to play with the band±
Immediately, I realized I was in way over my head± Te band members
were seasoned musicians± Te cruel fact was that I was a drummer
with no natural sense of rhythm, and I was embarrassed by my
lack of any real talent±
Another auditioning drummer asked the band if he could sit in±
He sat down with my drums and never got up± He was
really
good± I listened to him play for an hour and leF him my drum
set: His talent inspired the giF±
Life on the Fast Track
AFer I’d learned that my calling wasn’t in academics or music, almost
overnight I found myself wholly immersed in the world of business±
It was interesting, challenging and fun± It turned out that ²om and I were
pretty good entrepreneurs and we decided to expand±
In the spring of 1970, we had a total of $10,000 in start-up capital± We
asked Jim Smith (a local attorney) and John King (a local businessman)
if they wanted to invest and find additional investors± With their help, we
opened a much larger retail store, called Stereo West, in downtown San
Luis Obispo± We also added a record store and both ventures were successful±
Within a year, we needed more space for Stereo
West and our growing mail-order business± ²om
and I also wanted to open a second record store±
John came up with the idea of converting an
abandoned National Dollar Store into the
Network
Mall±
We
also
rented
the
10,000-square-foot basement for additional
warehouse space± Our stereo store is long gone,
but the Network Mall still exists in the same
spot on Higuera Street±
Te San Luis Obispo store did so well that we added retail outlets in
Monterey, Santa Maria, Santa Barbara and in the Cal Poly Student Union±
Within our first 30 months, ²om and I – with John, Jim and an additional
backer, Ben McAdams – had created a multi-million-dollar operation±
We called our nationwide mail-order business Warehouse Sound
Company, selling stereo components but also professional sound
equipment for rock bands±
The trap
set left behind
Jim Smith,
John King
and Cliff
in Hawaii,
late ’70s
Making Money vs. Higher Education
As ²om and I continued to succeed as hip entrepreneurs, our merchan-
dising efforts began to interfere with my studies± Before long I decided it
was time to leave Cal Poly and went to my counselor to check myself out
of school±
Like my high school baseball coach – who’d warned me not to quit the
baseball team – the counselor told me that I was making the biggest mistake
of my life± She insisted on calling my parents± I explained that they were
living in Bangkok, so the counselor reiterated in detail her main points±
I listened dutifully to her stern admonitions until I realized that I was late
for a business meeting± I put my textbooks on her desk, suggested politely
that she give them to another student, and asked her again to please drop
me from the roll of Cal Poly undergraduates± My college career was over±
A Drummer Without Rhythm
Like most of my fellow boomers, I loved music, and had my own cherished
collection of LPs± I dreamed of becoming a professional musician, but this
was just a fantasy I let go of about the time I dropped out of college±
I’d played drums in a surf band at Carmel High, taken drum lessons in
Santa Barbara and considered myself pretty hot with the sticks±
In the months before I leF Cal Poly, a rock band at the college was looking
for a drummer and I figured I was their guy± I hauled my Ludwig trap set
to the audition that was being held in a large practice hall at Poly± I was
nervous, but confident of my licks±
Tom and Cliff, inside
the sound room at
Stereo West, the first
in a chain of stores on
the Central Coast, later
sold to Pacific Stereo
(CBS Corporation)
97
96
Te Later Years
Te mail-order business grew even faster than our retail stores± Our
96-page full-color catalog was designed and written with a counterculture
flair, with lots of hip, slangy editorial copy extolling the specific qualities
and benefits of each stereo component±
Each month we received hundreds of personal letters from customers±
²o handle the avalanche of personal correspondence, Elaine Sullivan,
VP operations, suggested we install state-of-the-art
technology – IBM Mag Card II auto-typewriters with
memory – for our sales staff± I wrote many stock
paragraphs that were placed into the typewriters’
memory cards to make it easy for our employees to
respond with consistency to frequently asked questions
about our company and/or its products±
Our salespeople could access any of the personalized
paragraphs I’d entered into the “pre-computer”
typewriters± Reading off the memory cards, they could
quickly dictate to the secretarial pool, who then sent out
detailed “personalized”
letters that looked like original
correspondence±
We even programmed in a few x-outs so our customers
would not suspect that they had received a customized
form letter±
If an Ohio State University student sent us an inquiry, a member of our
sales staff dictated the personalized letter to a secretary – the salutation,
canned text, then a closing:
‘Hi John – I hope the Buckeyes do well this year, but I’m still rooting for
USC!’ Ten open the letter with paragraph C, then go to B, and then
paragraph E, and close with, ‘Stay warm in Columbus.’
Te letter might be two pages long, but it could be dictated and typed out
in a couple of minutes± At the time, no other mail-order companies used
this strategy – our customers were impressed and our credibility was
high±
²om and I understood that our generation had discovered that their
parents’ living-room-furniture “stereo” cost a lot of money and
sounded lousy± College students wanted to hear their music with good
fidelity, especially when the volume was turned way up± Our Warehouse
Sound Company offered compact stereo components pre-packaged
into complete systems that were affordable and sounded great±
“Only $721
and it cooks”
(Bob Oberg)
(Top) Railroad Square, the condemned brick building purchased to be transformed
into Warehouse Sound Company. (Right) Cliff and Tom. (Left) With Elaine Sullivan
in the mail room. Others who played significant roles in the new company appear
in the Scrapbook.
[See page 358]
99
98
Te Later Years
Not long afer we published our first catalog, we received a positive
write-up in the
Whole Earth Catalog
, a huge, bestselling catalog oF
counterculture tools and services±
Tom and I already had college reps distributing our catalogs on
campuses across the nation, in return For a credit toward one oF
our music systems± Among American college students, we had
become the most trusted source For stereo equipment±
Warehouse Sound Company Expands
Warehouse Sound grew quickly and in our second year in business, Tom
and I began looking For a larger building± Our Friend and investor John
King suggested an ancient three-story brick warehouse on Santa Barbara
Street as a new home For our mail-order business± It was on the railroad
tracks, had loading docks and it was cheap± ²ere was only one drawback:
²e building had been condemned and was about to be torn down±
John Felt that the late19th century building was structurally sound and
worth saving± I thought that was a grand idea and our real estate partner-
ship (which included Johm, Tom and me) bought the 25,000-square-Foot
Facility that no one could legally inhabit For $88,000± We
had a tough time convincing the city planning depart-
ment that our reFurbishing plan was Feasible but they
finally agreed± John King’s construction company
finished the remodeling to meet building codes, and
Warehouse Sound Company moved in±
Administrative offices were on the top floor, which lef
two floors For storing our products± We also had space For
an advertising agency and a recording studio± We loved
our new home± Ironically, when I wanted to make a
Few minor changes, the city council turned me down±
By then, a host oF new regulations prohibited any alterations to our
building, which was considered an historical site – a cherished landmark±
Afer leaving school to pursue my business career with Tom, I’d been in
regular communication with my parents, who were still in ²ailand
.
The
Whole
Earth Catalog
was published
by Stewart
and Brand
between 1968
and 1972.
It was the
first hip
“database”
and sold
2.5 million
copies. Our
write-up was
a major boost
for Warehouse
Sound Co.
WHOLE EARTH CATALOG
access to tools
Fall 1969
$5
It’s true. 10,000 retail stereo shops swear we don’t exist.
They don’t want to admit that the Warehouse Sound Co. offers
music systems and single components (of every major brand)
at such remarkable savings. Our new full-color catalog features
96 pages of the best equipment, righteous prices, and much use-
ful information. The people pictured above will be glad to answer
your letter, phone call or request for a price quote on any equip-
ment. Write or call, we’ll zip it to you fast and free, 805/543-2330.
RS-2A
A typical Warehouse Sound Company advertisement, early ’70s. We placed ads nationally in
Rolling Stone
and
National Lampoon
. Bellbottoms were the rage.
Playboy
magazine, 1975
100
Tom and I decided
to throw a concert in
an effort to properly test
a PA sound system we
had put together for a
Christian touring group
called “Up with People.”
The $55,000 sound system
was to be used at their
1976 Super Bowl halftime
performance, so it was
a good idea to make sure
everything worked
before we sent it off.
Recording artists
Tim Weisberg
(A&M Records)
and
David Riordan
(Capitol Records)
performed at
Railroad Square.
It was a great day of
music, and the airplane
banner advertisements
in the sky went off
without a hitch.
A second reason for
staging the concert
was to create a poster
I wanted to send out
with each stereo music
system, to show that our
mail-order business
truly existed.
The inset photos give
an idea of the ’70s crowd
– particularly the guy
smoking a joint.
The concert was
perhaps one of the
first “flash mob” events.
I was later called down
to the police station
because we did not have
a permit – but everyone
had a good time and no
one fell off the roof.
[See page 335]
Pro-Products Catalog
103
102
Te Later Years
Catching a Ride on
Rolling Stone
Te size of our Warehouse Sound staff and the reach of our catalog rapidly
expanded± By 1978, when
Rolling Stone
magazine ran a feature on our company,
our annual sales were exceeding $10 million – about $35 million in 2015 money±
It was an exciting time for ²om and me, our investors and our employees,
and the article in the world’s foremost rock-and-roll publication further
boosted our sales and credibility± Shortly aFer we were highlighted in
Rolling
Stone,
I was invited to give the keynote speech at the Consumer Electronics
Show in Madrid, and headed for Spain±
I didn’t know what to expect, and found myself on a stage in a huge ball-
room, at a podium under a spotlight± I gave a speech to several hundred
company executives, most of them twice my age± My presentation was titled
“Understanding the Pepsi Generation” and was well received±
²om and I had been keeping our eyes open for other business opportunities
beyond our stereo enterprise± Now we had some money of our own to invest
and had begun selling redwood hot tubs±
Later that year, I got a call from
Good Morning
America
± Someone there had written for informa-
tion on our new product line± Tey were intrigued
with the idea of California hot tubbing± Te caller
from the ABC network wanted me to sit with the
Midwest show hosts in one of our hot tubs in the winter snow so I could
explain to viewers across America “the allure of the new California craze±”
Of course, I was more than happy to oblige±
Some months aFer the
Rolling Stone
article was
published, I was invited to return to Cal Poly,
not as a student but to teach a course to graduate
students in business± Te offering would be
called “Youth Marketing in America” and I
gladly accepted the invitation± I even offered to
teach the class for free, but the head of the
business department insisted that I accept
payment, as it was required by
some sort of regulation± ³or a short time, I was
on the state’s payroll±
I even had a Cal Poly faculty ID card±
So many students enrolled that the venue was quickly moved from a
classroom to a lecture hall± In addition to my lectures, I brought in guest
speakers from around the country, the vice presidents of Sony, Capitol
I kept assuring them, “Tings are going really well,” but they had no real
idea of what ²om and I were up to – until Warren Groshong, a local
journalist, wrote a feature that ran in the
±elegram ±ribune
, the San Luis
Obispo and countywide newspaper± Te article headline read:
LOCAL BOYS MAKE GOOD AND $5.5 MILLION
I think my parents were a little shocked when they read the story±
It appeared with a photograph of ²om and me, and informed the reader
that Warehouse Sound employed more than 100 people whose average
age was 23±
My dad knew that I had gone into business, but I think he was surprised
by its scope± I’d told my dad that I was writing most of the copy for our
catalogs and sent him our latest edition± My dad read it and called to say:
“Good job! I’d buy a music system from you guys! I knew you would put
your writing skills to work±” Tere was fatherly pride in the tone of his
voice± We were both proud
.
A packaged
music system
offered by
Warehouse
Sound Company.
Most systems
were shipped
to college
students across
America. This is a
typical page
taken from the
catalog,
circa 1978.
105
Records,
National Lampoon
and
Playboy
– people Tom and I had met
through our electronics and hot tub businesses±
Obviously, some of the business professors were not thrilled by my
sudden appearance as a special, “expert” instructor± Two profs audited
the course and showed up for the first few sessions± I think they were
relieved that I taught in a fairly traditional manner and didn’t urge any of
their students to quit school and become renegade entrepreneurs±
Teaching the course was a blast±
Tom and I simply had no fear of failure± We were too naïve to
realize that our stereo sales company was seriously undercapitalized
for the speed of its growth – we just knew that we had to keep
growing to succeed± When capital was short, we always came up
with new promotions, and/or found additional investors±
We were lucky± In the early stages, a mere string of six months of
poor sales could have put us under±
In the late 1970s, our stereo company had become a big account
for Pioneer and JBL± We’d also started our professional products division,
which brought us into contact with rock bands from L±A± We sold Fender
and Vox guitar amps and other equipment from Teac and Altec Lansing,
as well as custom mixing boards±
It was during this time that I connected with David Riordan, a
former Poly student who became a professional musician and
songwriter± David had co-written “Green-Eyed Lady,” a hit song
that garnered national attention±
David and I managed to sign a deal with Capitol Records for David
to record a solo album, and we also produced other albums,
independently, for Warehouse Sound Company±
[See page 353]
Tom was in charge of our rock-and-roll products, but I o²en
traveled south to the Troubadour in L±A±, where I took in shows
that featured some of the best performers of the time, including a
young Jackson Browne, James Taylor and ³e Eagles, among many
others± ³e Troubadour was a small club, but the JBL sound
engineers used it to field test their equipment± I was admitted
gratis
, had
a great seat and learned about sound equipment± It was a terrific time
.
n
David Riordan,
circa 1976
C
ONSIDER FOR A moment the
difficulties of buying stereo components if
you happen to be a resident of the quiet rural hamlets of, say,
Duck Hill, Mississippi; Shallow Water, Kansas, or even
Purgatory, Alaska, below the Philip Smith Mountains.
Obviously you don’t have a hi-fi shop down the block des-
perately slashing prices to compete with the Pacific Stereo
store nearby. Indeed, you probably don’t even have a stereo
store acting as a monopoly. Obviously, you have only two
alternatives: to continue listening to your vintage Victor with
the worn-out needle or to buy a stereo system via mail order.
Mail-order stereo sounds at first like a legalized form of
the old traveling medicine show; I mean, for many people a
sound system is going to be the third most expensive item
they’ll purchase in their lifetimes (after a house and a car)
and is not the sort of purchase to be made sight unseen (or
more to the point, hearing unheard). Still, if your alterna-
tives are severely limited by geography, mail order is all that’s
left to you, and the unquestioned leader in mail order is
Warehouse Sound of San Luis Obispo, California.
Warehouse Sound grew out of a record and poster
shop opened in 1969 by a pair of sophomores at the local
Cal Poly State University – Cliff Branch, an English major,
and Tom Spalding, an engineering student. Recognizing
the lack of understanding for the stereo needs of the college
community among San Luis Obispo’s few hi-fi shops,
Branch and Spalding began stocking stereo components.
After ten months, they grossed $100,000, moved to larger
quarters and reopened as Stereo West.
“We realized the role music was playing in young peo-
ple’s lives,” says Branch, Warehouse Sound’s president, as he
sits in his office surrounded by bare brick walls and unfin-
ished redwood siding. In his Warehouse Sound T-shirt,
Branch exudes a boyish enthusiasm, which pervades much
of the Warehouse operation. “The old fogies who were in
the business at the time, they didn’t understand kids wanted
to get ripped and listen to Jimi Hendrix. Kids knew there
was a whole log of hypocrisy in that long cabinet with
nothing in it, and that these little components were func-
tional and you got good sound for your money. We just
exploited that.”
Stereo West quickly grew to five stores along the cen-
tral California coast and probably would have continued to
grow had not Branch and Spalding taken to traveling about
the country. What they found was that the situation in San
Luis Obispo existed almost everywhere. “We’d go to a town
like Columbus, Ohio,” says Branch, “and there’s 50,000 kids
there and one stereo shop where they sold Jesus with each
stereo. Literally, it was run by a religious sect. This kept hap-
pening over and over again, and we finally said, ‘Hey, we can
put together some sort of catalog and relate to the market
better than these guys face to face.’ We ran an ad in
ROLLING STONE and got like 5000 pieces of mail.”
In 1974 Branch and Spalding sold Stereo West to CBS
Corp., which also owns Pacific Stereo (“They made us an
offer we couldn’t refuse,” Branch says), and moved com-
pletely into mail order, eventually employing more than
100 people who process some 4000 pieces of mail per day,
which adds up to over $10 million a year in component
sales, making Warehouse Sound one of the top ten compo-
nent retailers in America.
To better relate to the kids who’d be buying equipment
for the most part on faith, Branch started an advertising
agency in San Luis Obispo (Different Circle), which pro-
duced the company’s carefully wrought catalogs. Until
recently, Branch wrote all the copy for the catalogs. That
copy, Branch feels, was essential in developing the trust a
mail-order stereo firm needed to survive.
“Kids buy stereo,” explains Cliff, “because they emo-
tionally identify with the music, and they want to hear it
better and they want to hear it louder. Even though it’s sub-
conscious, if you can’t have a fulfilling experience in buying
the thing, you’re bummed out to start with. So the thing we
did was say, ‘Hey, we understand where your head is.’ You
know, it’s no different than the people who sell cologne in
Cosmopolitan.”
Today, the workings of the Warehouse Sound operation
are a model of efficiency coupled with a personal touch.
The day an order is received – by mail or phone – an
acknowledgment is mailed to the sender. Normally, within
another day the merchandise is shipped out, with a T-shirt
and Frisbee on larger orders, and a letter under separate
cover telling the customer how the equipment is being sent
and, more importantly, the “Official Customer Care Kit,”
which includes a manual entitled “How to Hook Up Your
System without Blowing It,” a tiny red screwdriver, 30 feet
of speaker wire, various logo stickers and forms about how
to match up the boxes with the invoices and how to deal
with warranties. In short, it’s perfected stereo for the com-
plete idiot.
With Warehouse Sound’s business slowing down
slightly in the more competitive, big-city markets as a result
of the abolition of fair-trade laws, Branch has expanded his
mail-order techniques into a new firm called California
Cooperage, which sells hot tubs for $995 and up through
the mail. After eight months, Cooperage is the largest seller
of hot tubs in the world. “It’s the same thing as the stereo
systems,” says Cliff. “The timing is just right, it’s not even a
marketing function, it’s really a social phenomenon. We
respond to the social needs more than anything else.”
How to get hi-fied a
hundred miles from nowhere
By Merrill Shindler
Tom Spalding (left) and Cliff Branch, the mail order
wizards of San Luis Obispo
Cliff Branch and staff, in administrative offices.
September 1977 Issue No. 247
Rolling Stone