Detroit’s Livio Radio Tunes in to NPR, Pandora, and a Passion for Pleasing Customers

7/22/10

At the close of 2007, Jake Sigal had a choice to make. He was a product manager at automotive supplier Delphi’s consumer electronics group, which manufactured XM Satellite Radio portable players. Then XM and Sirius Satellite Radio announced a merger and Sigal “saw the writing on the wall.”

“I always wanted to start a business,” says Sigal. “My background is in consumer electronics and there’s not a lot of consumer products that are made here in Detroit, and I figured, hey, it’s time to start my own company.”

So, he took a buyout at Delphi and in January 2008, in the guest bedroom of his home in suburban Ferndale, MI, Sigal launched what would become Livio Radio, a developer of standalone Internet radios. His flagship products are two specially branded radios—one plays National Public Radio programs and the other plays Pandora, the personalized online radio service that announced yesterday it has hit the 60-million-user mark.

Just a little more than two years later, Sigal has 10 employees, has moved the business out of his home and into an office down the street, and is the recipient of an investment from Beringea, one of Michigan’s largest venture capital firms.

The secret, Sigal says, is really no secret at all. It’s just to focus on what customers tell you they want, rather than trying to create a need where none existed. People want to listen to Internet radio without being tethered to their computers. Livio provides that service.

“We don’t invent technologies here,” Sigal says. “We only make the current technologies that people love more accessible.”

Sigal is 28 years old, but looks even younger, with an athletic frame—he bikes to work every day—and a faux hawk hairstyle. We sat down a few weeks ago in his office, along with a newly hired marketing person who comes to Livio straight from the Detroit Red Wings. Up until now, though, Livio has not really needed any marketing help. Even before the Beringea investment, word of the products has spread through customers and early media coverage that occurred kind of organically.

NPR approached Sigal at the Consumer Electronics Show in 2009 and asked if it was possible to create a specially branded, standalone radio that can access all of the thousands of NPR shows and member-station programs like Morning Edition, Car Talk, and Science Friday. NPR is undergoing a big digital-strategy push now, and it sees easy access to all its programming as an integral part of it. Sigal was amazed that, after only a year in business, he was “being approached by the gold standard in news.”

With all the NPR programming out there, it might have been tempting to create something pretty complicated. But Sigal’s emphasis has always been on listening to what the customers want. And what NPR wanted was something simple that a user of any age—or level of technical savvy—could use.

So, what Sigal came up with the NPR Radio, a $199 device that sets up in minutes and has an exclusive NPR menu that allows users to easily find, search, and bookmark NPR stations, podcasts, and content by topic or by program. And like all Livio products, it also connects users to more than 16,000 Internet radio stations.

He applied the same philosophy to Livio’s Pandora Radio. The device, also $199, provides easy access to Pandora’s system for creating radio stations customized to a user’s likes and dislikes, and is the only one with Pandora’s logo on the front and dedicated thumps-up, thumbs-down rating system buttons right on the front panel.

The question he asks himself as he designs the radios: Can his mom use it?

“What does that mean to my mom? It means that if she’s listening to her Mick Jagger station and a Frank Zappa song comes on that she’s not really crazy about, she can give it the thumbs-down and it learns from that without her having to go into a menu system,” he says.

This being Detroit, of course, the next phase is transferring Internet radio into the car. A couple of months ago, Livio released Carmen—a $59.99 DVR-style product that plugs into your computer and downloads Internet radio programming real-time, then plugs into your car’s cigarette lighter and plays it back. Carmen only records from live Internet radio stations, so no Pandora. However, individual NPR stations do have live Internet streaming that can be recorded. Yes, there’s also a $5 Livio iPhone app that works in your car, but Sigal argues that the Carmen is better for those who might be driving, say, up to the Upper Peninsula of Michigan through some areas of questionable AT&T coverage.

Sigal keeps in touch with customers on Facebook, Twitter, and through e-mail lists, and they help dictate future products and features. “It’s a very, very important part of our business,” he says. Livio is developing an iPad application now. One customer wrote in and asked for a sleep timer. “That’s a great idea,” Sigal told him. “Let’s do that.”

When Sigal started out, it was the worst time in Michigan to be trying to raise money. But, he says, after he met Beringea through a mutual friend—Josh Linkner, founder of the Michigan Internet marking success story ePrize—the VC firm got to know Livio over the course of eight months and saw the young company’s drive.

“I think the secret is passion,” Sigal says. “I think that my business partners, and more importantly our customers, our end users, they understand that we love radio, we love music, you know, everyone that works here loves music and it’s part of our lives. And we’re taking that passion and putting it into products.”

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