Sonarworks technologies are used by Grammy sound engineers worldwide

Today, products of Sonarworks, a Latvian digital sound calibration start-up, are available all over the world, except Russia and Belarus. Even on the islands of Fiji, musicians can buy Sonarworks products from the company’s website or distributors and have them delivered there.

Katrīna Allikas, chief marketing officer at Sonarworks, believes that the key to success in exports is the products. The company has two products: one is SoundID Reference", which is a sound and speaker calibration software enabling audio engineers and producers to achieve the necessary reference sound. It is used by more than 100,000 recording studios worldwide, including 50 Grammy-winning sound engineers who produce and mix music for global stars such as Lady Gaga, Coldplay, Madonna, Adele, etc. The company has been successfully working in this area for ten years, but in the last three years it has turned its attention to the listener market, licensing its SoundID technology to other companies in America and China enabling them to improve their products. This year, at the world’s largest technology fair CES (Consumer Electronics Show) in Las Vegas, Sonarworks received an award for its second generation SoundID and for integration with Grell earbuds. The company had similar achievements last year when its SoundID solution received an innovation award as an independent technology, while HELM Audio earbud production won an award for SoundID integration.

From its very beginnings, the company’s business has been based on clear principles that the product should solve a significant task in the industry and be user friendly. “We have put a lot of work into the product design and usability improvement because we understand that our product should help creators of music to get to their creative work more quickly”, she stated. 

Streamlined logistics and continuous product improvement are as important as the product itself to ensure swift payments, quick deliveries and a strong team which can help customers with any questions or doubts. “And, above all, the team. We invested a lot of time to recruit new colleagues to our team. It is in line with our ambition and the company’s values, as we believe that we can achieve our goals only as a united team”, said Ms Allikas.

The largest market is the US

Exports made up 100% of Sonarworks EUR 3.85 million turnover in 2021. The largest market is the US with 40% of sales. “America is the largest music production market. Since early days of the company, we have been going there to meet with Grammy-winning audio engineers, and we understand how our product addresses a significant problem in the industry”, explained K. Allikas. Over there, music production has been developing more quickly and at a larger scale than Latvia, so our customers there have a better understanding of the problems Sonarworks can solve and its true value. She admits that in Latvia, things haven’t been that easy, as the local market is very limited and does not fully understand the benefits of calibration.

“We have attained a good understanding of what our largest markets are, and today, we are more focused on raising awareness of our product in those countries”, said Ms. Allikas.

After Russia’s attack on Ukraine, Sonarworks stopped all sales and deliveries to Russia and Belarus, including cutting ties with suppliers continuing to work with Russia. “We are continuing to deliver to Ukraine, only now we’ve had to switch from FedEx to Latvijas Pasts. It has increased delivery time, but the main thing is that we can provide the service and continue supporting the Ukrainian economy,” said K. Allikas.

First, market potential is analysed

When considering entering new markets, Sonarworks is mainly guided by the market’s potential and, of course, its size and paying ability. The company relies on the information available through Google Analytics, product data and user interviews. It buys targeted market research and requests data from its distribution partners. Ms Allikas explained that the professional audio market is difficult to grasp because there is no publicly available research on the market size and potential.

“In our experience, every company in this industry tries to find its own approach to assess their market potential. We get help from our distribution partners who share important information about regional markets and their development”, she revealed.

The main indices to look at and consider before starting to export to a new market are: a specific product’s potential in that market; the ability to pay; and competition. In addition, country-specific aspects, such as payment options, language barrier or company’s ability to work with local influencers should be taken into account. For example, in China, social media platforms are completely different, and working there requires significant resources and strategy.

Use support of colleagues and government

K. Allikas recommends any company considering going into exports to do their homework carefully. She recommends applying to organisations with relevant experience, such as the Latvian Investments and Development Agency, the Latvian Exporters Association “The Red Jackets”, the Ministry of Economics, the Ministry of Foreign Affairs, the European business support network in Latvia, Altum, etc. It is also important to ask other companies in the industry for advice. “Latvian companies are doing well in external markets, so it wouldn’t be difficult to find companies in the industry that could share their experience. Latvia’s wonderful advantage is its size and close ties in the business environment”, noted K. Allikas adding that both information and financial support is available from government and private companies and foundations. That is why she recommends taking time to study all the options. “Latvian society is very responsive; you just need to define your goal and the necessary support clearly”, she said.

Sonarworks is financed by venture capital so both the investor support and LIAA and Altum financing were important. “Every year, we try to participate in at least a couple of industry events to meet our users and hear what they think is important for further development of our product, to meet with our distribution partners and understand what kind of support they need to expand our regional business and to learn from the market to understand trends, innovations and how our product can be a part of the future of the industry. LIAA financing to cover costs of visiting fairs has been especially important”, K. Allikas said.

Relations are the precondition of development

“Working in a start-up, you have to overcome one obstacle after another. Initially, one of the biggest challenges was to build a distribution network and find reliable partners who understood the market better than we did”, said K. Allikas. These challenges were overcome through expanding the team and building connections, as well as going to America to meet partners and get to know our target audience in order to understand the best way to present the product.

“Business development in any market is continuous work because in the era of digital development target audience changes. Therefore, not to lose your place in the market, it is important to understand its needs and the place of your products in its development cycle”, noted K. Allikas. You should also keep in mind that your partners’ employees responsible for your product promotion on the market may change, so visiting industry events and partners and training and education are very important. During the Covid-19 pandemic, Sonarworks experienced a drop in sales due to employee turnover in its partner companies, which meant that all the work had to be restarted almost from scratch. “So we understand that building and strengthening ties is one of the fundamental conditions of successful business development”, said K. Allikas.

Source: LIAA (liaa.gov.lv). Publicity photo.