An Interview with OWC CEO Larry O’Connor on Innovation and Customer Centricity
I recently had the pleasure of hopping on a video conference with OWC CEO and Founder, Larry O’Connor. The following is a transcript of our conversation about innovation, the history of computing, and the power of the customer.
This interview has been edited for clarity.
Daniel W. Rasmus (DWR): First, how do you define innovation?
OWC CEO Larry O’Connor (LOC): As you know, solving a problem that a customer has, or proving somebody’s ability to use the technology and resources that they have.
DWR: Do you differentiate between incremental innovation? When you do innovation consulting, you tend to have people who are looking for a breakthrough. How do we create the next unicorn thing versus how do we make a better hard drive enclosure? Right? So how do you think about balancing those two?
LOC: We’re always planning for the future. We’re very customer-driven, certainly in the now, but that also drives an understanding of where things are going in the future. Our focus is more about making sure that the workflows they already have invested in continue to be productive and useful and have longevity, as opposed to saying well everything you have is great now, but you’ve got to throw that all away and buy something new.
From an innovation point of view, a lot of our products meet the needs of today—they’re already future-proof. Between different software aspects, and hardware design, simple solutions exist but with additional applications deeper under the hood. That keeps them relevant for a long time to come.
We’re not trying to be a company that has a flash-in-the-pan and clickbait headline; we’re really trying to be there for what our customers really need. The best innovations are things that serve the customers’ needs and don’t try to dictate to the customer a different way of doing things. And that’s not entirely true. It’s a different way of doing things behind the scenes but keeping it as simple as possible for the user—giving them the benefits without giving them the headaches.
DWR: Right. And one of the things that strikes me about your innovation, at least how I think about innovation, is that you go the extra mile to actually make things look good, including aesthetics. What drives that thinking? The difference between your hard drive enclosure and somebody else’s is yours is a much more elegant-looking, beautiful piece of machined engineering versus the plastic box from Amazon Basics. What drives that for you?
LOC: There’s a practical aspect to that as well. And actually, there’s all sorts of aspects. First of all, there’s a customer trust aspect in terms of what they hold in their hand. But a bigger piece of that, why are we using metal and some of the shapes that we use, as opposed to just a cheap plastic box, is that it dissipates heat. A big part of the design is heat dissipation and vibration reduction—all those aspects go into that design. And it’s great that we can put it into a form factor that you like versus the other enclosures.
When you look at our portable solutions, those literally can be almost run over by a tank and survive functionally. And even if they end up being crushed, the drive inside is amazingly still functional, and the enclosure keeps the little blade inside unscathed. So those are certainly aspects that go into the design that you don’t get with just putting a crappy bridge inside a cheap enclosure.
The other element of that is the power supply that comes along with all our solutions. When you buy one of those inexpensive drives you referred to earlier, they typically have a little tiny wallboard type power supply, which is enough to keep the drive spinning and it has a peak power output that’ll be enough to spin the drive up. But it’s using peak power, and if you do anything with audio, like turn up the amplifier, the closer you get to the max power of an amplifier, the more noise, the more distortion, and the less quality the output is. Further, more distortion can damage, even harm your speakers.
I’d say from our in-house philosophy for our drive enclosures, we build our power supplies as solutions to last as they come with a hefty power supply in terms of the DC going in the power circuitry inside the enclosures, which is very robust and more than adequate to support the highest load of the drive, not just the continuing load. We build these things so that our bridge and our power supply are not points of failure, which often can damage the drive and cause data loss.
Also, some people love the look of it. We do real pictures for products; we don’t do renderings as I always hate it being compared to a rendering of someone’s drive and to see that same product in person doesn’t look quite as nice. The looks are by design, really intended to support the functionality—again, heat dissipation, airflow. And we’ve done a lot with quieting the drives. We certainly can’t totally get rid of the head clicks, fan airflow and even dissipating drive noise, but that’s all in that design.
DWR: Well, as SSDs move along and, of course, those are completely silent and weigh almost nothing. I’ve got one of your new enclosures with a terabyte SSD in there, and I sometimes actually knock it over even when it’s flat because it’s so light in there. I constantly move stuff around on my very cluttered desk full of things because I get all kinds of review hardware at any point in time.
LOC: That’s fine. And actually, I just want to share a super quick story talking about enclosures. A friend didn’t want to spend much more than 50 bucks, as this stuff isn’t expensive. I mean, you’re going to depend on it for data. Our product was about 50 bucks or something on Amazon in the 30s. So, while it does the same thing, and it says it’s got the same performance, they don’t list their chipset so you don’t necessarily know that it was a plastic enclosure. He bought the cheaper thing, and then he brought it over and said, I’m buying an Other World Computing drive now as he brought over what was a melted enclosure—his drive melted the plastic casing of the enclosure.
DWR: Wow. Well, one of the things I didn’t tell you is that in the late 1990s, I was the head of advanced manufacturing systems at Western Digital, so I’ve seen a few things myself. Back when they moved into the disc drive manufacturing—you probably remember the company they bought, Tandon hard drives. I was the WD guy at Tandon at the time waiting for the lawyers to sign the deal to switch the Ethernet cables in the IT room (data processing back in those days) that took them off their corporate network and put them on the Western Digital Network. I was standing there in Silicon Valley to physically make that switch.
Sorry for the aside. Back to innovation. How do you think about improving your own creativity and problem-solving? Are there any tools or things that you think about, or rituals you perform, that help you stay innovative and creative?
LOC: You know, be in touch with our customers. I mean things like being at CES, NAMM, NAB, as well as you know a lot of the smaller conferences, give us a lot of in-person feedback. And we work with people in industry. With this company, a lot of the products that we built over the years were inspired from within our own customers. The biggest thing is always looking from the point of view of the customer: how’s this going to perform? We don’t just put chips inside a box, we build solutions to perform. And that came out. It’s almost second nature, it’s common sense.
Some of these things we didn’t really market as well as we could have. Look at the first set of portable docks we did. And it took off really strong and fast because podcasters figured out that they could actually use it for multiple camera views. And other docks they tried had the same or even fewer USB ports weren’t working. And the reason was, they had this low-end chipset and just a single chipset, and when we built this property, we knew people were going to be using lots of devices, and we needed to make sure the bandwidth exists in the ports. Little things like that, it’s in our DNA.
When we got reviewed and compared to people we’re talking about that is just one of the really main differentiators of our docks. Really, guys, you have a Thunderbolt dock and they skimped on the USB chipsets? It’s stuff like that—it’s a pretty high mission in terms of the philosophy and thought process that goes into these solutions. And it’s a really good team, but good vision is what brings these products forward, and it’s what we live, breathe and eat every day.
DWR: You also deliver your products with very sustainable packaging compared to some products that arrive wrapped in plastic with a blister pack that doesn’t have a recycling label on it.
LOC: We like doing the right thing, that’s the bottom line.
DWR: If a new employee, new VP, Director, manager, whoever, comes on board, is innovation something you’re looking for in the interview process? Is there any kind of onboarding that you do with them, that helps pass on your philosophy and insight as part of joining the company?
LOC: The biggest thing in the entire process, the recruiting is being realigned to make sure we’re actually communicating that when advertising for positions. We want to make sure people understand “the why” we’re here. It’s being here for the customer and always stepping up to meet the new evolving changes of our customers. And I must say, between Windows and Mac, going into the Windows space with SoftRAID and other cross-platform hardware, the Dock Ejector app, there are some really cool tools coming down the line that apply across platforms.
From an innovation point of view, that was understanding, seeing and hearing more and more about the needs of people who operate their own multi-platform environments, where they want to have the flexibility to be able to go from Mac or Windows. Or they’re working with Mac, but maybe part of their process ends up with some chink of the chain needing to be on a PC or vice versa.
We’re not here to just move trinkets, sell boxes and grow revenue; we’re really making sure that people understand our products and solutions, that we see them as important and that we’re customer-driven.
OWC CEO Larry O’Connor
I got off your initial question, but it’s more of a cultural thing as it comes in the interview. But we’re not here to just move trinkets, sell boxes and grow revenue; we’re really making sure that people understand our products and solutions, that we see them as important and that we’re customer-driven. Our goal is to improve the accessibility of those solutions so that everybody can benefit. And we believe that there’s a much larger market that doesn’t even yet know about us and will certainly benefit from the cool things that we’re doing. SoftRAID is probably one, if not the best, software-based solution for Windows. It is the only solution that’s cross-platform that lets you move a drive between a Mac and a PC that’s got a software RAID. That’s high up there…that’s innovation.
DWR: Right. That’s innovation with a bigger perspective.
When I’m writing about innovation, I suggest organizations create an innovation environment. You’re reducing the friction, so collaboration technology and the idea of permission versus incentives, as some companies say I’ll just pay people to have creative thoughts, versus saying, it’s okay to take some time to think about creative things and you have permission to suggest ideas. Do you purposefully or systematically think about embedding innovation into the company? And I know you’ve said a little bit about that already, but is that something from the design of the organization or other principles that you share with people or technologies you use? How do you go about that?
LOC: Yeah, I would honestly say that it’s extremely embedded. Anybody can join an engineering meeting and come in with an idea. People have assigned tasks, but ideas really come from all corners of the organization. Stuff also filters in from customers, things come in through sales customer support. We have mechanical engineers that are also looking over options for how we can remove and upgrade to solid-state machinery inside. If there’s a way we can change it, and within the organization, all of our gear is on display, and people can walk by and play with it. We have a large testing area with a lot of people involved, and people within the organization can wander up and chat with people who are doing QC and product testing and product evaluation.
I guess one way I would try to explain this is when we opened in Austin about a decade ago, we learned that we didn’t know what our culture was; we had no idea what our culture was until we started bringing people on that were absolutely counter to our culture. We started to recognize that there’s something really, really cool here. But in terms of innovation, it’s just common sense—it’s just part of the organization. I can’t say it’s from an environment if we’re using tools, but people chat. People will drop ideas, and at any given point, somebody from any part of the company will reach out to an engineer.
Actually, one of our engineers, Hector, pointed out to me an area that we can make this change, or we can create this brand-new product, can we make this happen? Again, it’s a very large part of the company. We have multiple software teams that work together and also work independently.
We have so many projects right now rolling in different directions in scope, there’s just an amazing amount of creativity. And look at the groups, as we’ve acquired a couple of software teams over the last seven years.
We went from being primarily hardware with dependency on others for software to bringing that software in-house. And those people that kept their independence when they integrated into the organization, still have their entrepreneurial freedom and headroom to continue to explore throughout and go and explore products. A software solution that we’ll be showing in the next few weeks is another product that’s been working through for the last couple of years and will start to take off this year. There’s very little friction to an idea within the organization.
DWR: You mentioned Teams and last night, I did a talk at a TechTalk Summit event. Over and over, people from hospitals, non-profits, and others shared that during COVID, and to some degree before that, their organizations installed too many collaboration apps. I talk about friction—Teams, Slack, WebEx, Google Meet all in the same company—but nobody knows where to put anything as they don’t have a standardized philosophy of knowing which repository something they are working on should go into.
For instance, on a project, someone will save a file to a Google Drive and then reference it in Teams, and then have conversations about the same thing in multiple places (Slack, Teams, Meet) with different people. Some of the consulting I do brings that to light and helps organizations rationalize their collaboration investments so they can bring people into consolidated and synergistic conversations, to reduce the friction.
How do you deal with collaboration technology?
LOC: Not anything like being in person with people. It’s just great to be back. Now we bring our teams and do a quarterly meeting out with upper management which includes a good chunk of people, including a lot of engineers and developers—all these folks getting together even just for a few minutes in person we can decide on things that might otherwise take days.
DWR: Two other questions for you: How do you personally experiment with new ideas? And when somebody brings you something, what do you do to play with it?
LOC: When I can I take it apart, I still plug it in. I’ve got multiple computers, but I still mostly use the Mac. I’ll be honest and say that I don’t dabble much on the PC side of the fence. I leave that to my neighbors, so I’ll bring stuff over to them.
If we offer items from the SSDs, ThunderBlades, the Thunder Bay Flex 8 to the U2 Shuttles, I’ve got them, and I play with them—I try to keep them on the front line. I don’t get as much access as I used to have when I was in Woodstock, as it was all right there. But I certainly have a wide variety of products and keep the latest machines in the Apple side of stock including the Mac Pros and the laptop with the new Apple Silicon. Our mind is its “hands on,” so that I can actually talk from experience and not just talk about our stuff.
DWR: Do you have rapid prototyping or 3D printers? If somebody comes up with an idea, what does that kind of environment look like?
LOC: We do. We’re not doing SMT—we certainly aren’t doing that sort of thing in-house. Most of it is software/hardware configuration and getting things put up. Taiwan does a lot of prototyping if it is a board-level thing, but we turn things pretty quickly.
For our next Accelsior product, for instance, it was an idea that went from concept to the first prototype in about three months, and it’s an 18-blade solution that’s going to be pretty snazzy and coming out real soon. But typically speaking, Jellyfish and the Enterprise Solutions Group are always putting pieces together. And we have to as they have a supply chain.
We are putting us at the end; we have a company that we rotate in that builds our memory and our solid-state drives, and we partner actually with Phison and we don’t have any ownership in, but we also dealt with InnoGrit as our push is on the firmware and the software side for compatibility.
On our hardware solutions enterprise side, it’s making sure that we’ve got options. The software is the key. The Jellyfish OS is probably where more effort goes into; the other side of the effort is making sure that on an ongoing basis, we maximize the options for controller cards, ethernet cards, and different pieces of the equation, so the supply chain doesn’t break these things down.
DWR: In the design of the enclosures, and from USB-C docks to hard drives, is that done in-house primarily?
LOC: Most of it is done in Woodstock and California. Our two industrial designers—one individual is actually in California, and the other will do rough design. And I should say, we have graphic design like the Envoy Pro that was designed in Austin, and then it was turned into a mechanical design in Taiwan. I guess I should say it could come from anywhere.
What I find interesting is when you go to a CES anymore, compared to 10-15 years ago, what you can produce on your 3D printer is often above and beyond what you could even get from some production staff going back a couple of decades. Nobody knows or one-offs anymore.
DWR: Did you have somebody you would consider an innovation mentor? And if so, what was your biggest takeaway from before you became a CEO from someone else that continues to inspire you?
LOC: I’ve been doing this for 33 years, so I started this as a kid, and it was driven by necessity. The one area from an inspirational point of view for innovation, it was really my Dad. The business he was in had nothing to do with computers, but back in the 70s, he had a Telex, he had a TRS-80, and he brought in Apple. He was early in the game, late 70s to early 80s, to bring a computer into his business, and I had access.
I saw that basically he went into uncharted territory to embrace new technology and the impact of it and having access to that. And it wasn’t just a means to an end, but being in the systems, upgrading them, seeing how they worked. That really got me going into this space, and I’m always pushing the envelope. It wasn’t just take it out of the box and go. That wasn’t true for the Telex, but I got to for the Kyocera and TRS-80. And that was awesome. It was understanding and seeing there is more than just how it comes out of the box—it was the opportunity and being allowed to tinker. Now, it’s come a long way from there.
DWR: Yes. I grew up with my father who was in sheet metal, writing Wedamatic punch press paper tapes on the kitchen table at night. He would have the blueprint sitting there, and he’d figure out how to tell the machine, and then he would write the code, and then he’d go back to work the next day and punch it into the teletype to create the paper tape that ran the punch press. So that was early computing—very early.
LOC: But it’s real. And you know people have no idea—they take so much for granted today. When they complain about a $300 drive that gives you 16 terabytes of storage…do you know how much a two-terabyte drive cost just 12 years ago?
DWR: Yes! I try to remind people of that every once in a while because I spent like $4,000 for my original RadioShack Model 3 with the cassette tape, which I then upgraded from the 32k one with a tape drive and I did my own upgrade to 48k and two floppy drives, and I thought I would never need another computer until I met the 128k Mac with two 400k drives, and thought, now I’ll never need another computer, right?
LOC: You know, I need to give credit to my mom as well. I forgot about the thing that changed everything in terms of my course was when they won a door prize: an Atari 400 XL with a cassette deck. And my mom basically said not for games, but you can learn how to code. And it was in maybe 1981 and it certainly put me into track once again.
Yeah, I learned things and enjoyed them, and she pushed me in the right direction. It was still fun. There were games, but this was much better than games, learning how to code. My parents probably kept me out of jail because they didn’t end up with a modem I could really use until about 1986-87…bad things may have happened.
DWR: Yeah, I remember the 300 baud modems that you waited for the signal and flip the switch to connect.
LOC: And then we had the US Robotics modems with amazing HSTs (High-Speed Technology).
DWR: Oh yes, absolutely. I had many US Robotic’s modems, and nobody even knows what that is anymore except for ‘old people.’ Who is US Robotics and what is a modem? Even though it still technically lives inside of the chipset of a wired 5G laptop, there’s still a modem in there. It’s still modulating/demodulating something.
Well, I appreciate the time and that was the last question I had, but let me ask if there is anything else you wish to share on innovation thinking before I let you get back to getting your next products out of the door?
LOC: For us, it’s all about remembering our customers—it’s not necessarily giving the customer what they think they need but understanding the need and giving them what’s going to actually fulfill the need they’ve got. That’s something we’ve been pretty successful with and continue seeing. Thinking about the future today is definitely something that keeps us young, keeps us engaged, and it’s a whole heck of a lot of fun.
DWR: Thank you and have a great afternoon. Hopefully, I’ll talk to you again at some point in person at a conference again.
LOC: Let’s hope and yes, stay in touch.
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