Learning from Leaders

Audiopipe Rides a Wave of Success

With an early intro to car audio, a love for Latin music and a strong work ethic, founder Gonzalo Palenzuela’s focus has always been loud and clear.

WORDS BY JAMIE SORCHER

Growing up by the water can be inspiring. Seeing the vastness of the ocean, appreciating its beauty, and learning to respect it as a force of the nature has given many a creative motivation. It did for Gonzalo Palenzuela—and it even gave him the name of the company he would ultimately establish. Gonzalo’s interest in the business grew from his father’s involvement: His father was a distributor who started working with Pioneer Car Audio in the late 1960s. “He was a distributor for Puerto Rico initially and then opened up an office in Miami,” Palenzuela said. “I grew up with Pioneer Car Audio and I even got a chance to stay at the president’s home in Japan.” He learned a lot as a kid while visiting Pioneer headquarters, he said, and getting a chance to experience Japanese culture. “It was interesting to see their management style,” he added. “They were persistent and dedicated, detailed in everything.” While studying for a major in international finance and marketing, Palenzuela worked for his father’s business in the parts department. “We distributed parts for Pioneer, Zenith, Casio and TDK,” he said, adding that he got to know the parts and accessories business very well.

The Inspiration of Sound and Sea

Toward the end of his sophomore year, the person managing the parts department left and Palenzuela was the logical choice to take over. He noted that he kept attending classes in mornings and evenings while running the department. In the late 1980s and early 1990s, Palenzuela recalled all the big companies going direct rather than using distributors. “I decided to create my own brand,” he said. “I was just finishing college at the University of Miami. I decided to create Audiopipe.” When it came time to pick a name for his new venture, he drew on the inspiration of the ocean. “I like surfing, the waves, the ‘pipe’ is the perfect wave,” he explained. “I liked how it sounded. There’s also the ‘pitch pipe’ in sound, and that’s kind of the idea behind the original Pioneer logo.”

From 1969 until 1998, the Greek letter Omega—the symbol of electrical resistance—and a tuning fork made up the Pioneer logo. Tuning forks and pitch pipes are both sources of a reference pitch. Drawing from the inspiration of these terms, and of the vastness of the ocean itself, Palenzuela called his new company Audiopipe.

Learn to Understand Business From the Ground Up

Palenzuela said one of the best ways to understand business and be successful is to learn from the ground up in the “smaller corners” of a company. “Personally, I don’t know how you can do it without that,” he said. “It’s very difficult to pull off if you haven’t done the grunt work, coming in and then managing a business.” One of Audiopipe’s employees—who also came up in the old-school way—is one of Palenzuela’s fraternity brothers, John Messer. “He started working here helping out, first in the warehouse and then with invoicing, and he became our national sales manager. He’s been here more than 32 years,” Palenzuela said. “And he is still with us today.”

A high level of commitment to learn about all areas of a company, even the less-visible ones, will help a person understand how a business operates. “What we are seeing now with this latest generation,” Palenzuela said, “is that they have a tendency to want to skip all those little steps along the way.”

Get to Know Industry Trends

Since the company’s launch there have been plenty of ups and downs. More recently, Palenzuela said the pandemic has had an intriguing impact on younger folks. “Certainly keeping up with the styles is always challenging, but that’s part of the fun, too,” he said, “so I wouldn’t say that’s today’s biggest challenge.” Instead, he noted, the biggest challenge relates to the latest generation. “I call them the Uber generation. They really didn’t care for the car,” he explained. “It took the pandemic to get them interested in the car again.” For these folks, he continued, it was just easier to call an Uber. “I don’t see it necessarily with my own kids, but with their friends.” He didn’t observe the same rush to get a driver’s license that he recalled from his own teenage years.

Gonzalo Palenzuela (right) and Julio Rodriguez (left) representing Audiopipe at an event in Chicago about 12 years ago.

Audiopipe exhibited at KnowledgeFest Dallas this month, with representative Julio Rodriguez present to discuss the company’s product lines with attendees.

In the younger generation, he saw less of an interest in getting a car, or in different styles of vehicles. “There just wasn’t any of that excitement. My daughter is now 22, but I saw that with her and her friends a lot more than with my son who is now 16,” Palenzuela said. “His friends are more excited about cars. I want to say that the pandemic played a role in that. All of sudden the car is your private space and these kids see the value in that. And they want to make the car cool with audio.” The industry has certainly benefitted from this shift. Anyone in the car audio business has seen the spike in sales, Palenzuela said, adding, “We will see it continue because of that factor: Younger people are giving more importance to the car again.” It was definitely a major milestone for Palenzuela and those of his generation. He said he bought his first car when he was 16, adding, “Oh, it was horrible. I had a Buick station wagon with wooden panels. It was not a cool car.” While he

didn’t particularly care for the exterior, he didn’t do a thing with the interior either—no car audio upgrades. “I was going to school and working,” he said, “It’s one of those things: When you’re in the industry, you don’t necessarily buy what you sell or use what you sell. But I certainly helped all of my friends with their systems.”

Seek Creative Ideas in the Field

While the last 18 months have restricted travel, being on the road has been one of the most rewarding aspects of Palenzuela’s role at Audiopipe. “I certainly enjoy all the travel in my career,” he said. “I often go to Puerto Rico since we have a distribution center there. My travels also take me to Asia, but those trips can take a beating on you. It’s not the same thing as flying two or three hours somewhere.” One of the biggest benefits of traveling, he said, is the opportunity it affords him to maintain personal connections. “It is tremendously important,” he said. “A lot

of our distributors have those open house events which were fantastic because you got a chance to be one-on-one with guys handling your product. They would tell you the good, the bad and what could be improved, or they could share new ideas. I miss that immensely. All of that went away with the pandemic. And we have missed that personal connection. It was huge.” Traveling to Puerto Rico, Palenzuela said, is also important because it’s a source of many new ideas. “We specialize in producing the Latin sound,” he said. “Speakers that reproduce percussion and voice, very loud and very clear.” He noted that he enjoys the Latin sound, but also listens to a wide variety of genres. “I like everything,” he said. “Heavy metal, classic rock and reggaeton. I was a huge Eddie Van Halen fan growing up. I also love punk rock. Berlin, Blondie, Violent Femmes. And I love Bad Bunny. Recently I saw him in concert.” Palenzuela noted how much music around the world is coming out of

Puerto Rico. “Even clubs in Germany and Spain—it’s amazing how much of the music they’re playing is out of a small island in the Caribbean.” But the initial inspiration and focus for the design of Audiopipe’s speakers came from the distinct sound of Miami, Latin and Reggae. Palenzuela noted the unique, popular mix of Puerto Rican sound captured by “the Pittbulls of the world.” “I remember traveling to China with my colleague Julio Rodriguez (also known as JRod), and he was saying to me that Pitbull was local, just a Miami guy,” he said. “And as we’re getting off the plane and walking through the Shanghai airport, what’s playing on the sound system—Pitbull! And I said to him, ‘Nope, he’s not just a local guy anymore.’”

Endeavor to Control Your Destiny

Moving forward, Palenzuela is keeping an eye on the interests of younger consumers. One of the company’s newest products is geared to a younger generation and was recently introduced at SEMA. Because the younger

generation prefers to operate things from their smartphones, he said, Audiopipe is gearing their designs in that direction. “Our latest DSP is controlled on your phone, and you can do a million things with it. You can see your voltage, and it has all sorts of controls on it. It’s fantastic.” While they were present at SEMA and recent KnowledgeFest events, Audiopipe is skipping CES despite having been a regular exhibitor there in the past. “It’s just such high technology,” he said. “Imagine someone who owns a retail store going there—so, yes, you see the driverless cars, but what are you going to do with that? You can’t sell that.” For that reason, other venues make more sense for the company. “The installers are at SEMA. The guys who are getting their hands dirty. They’re the ones visiting the show and talking to us. It reminded us of CES 30 years ago.” Being at the right shows and connecting with the right folks is what will drive

things forward in 2022. “In business, it’s all about relationships,” Palenzuela said, noting that a willingness to do whatever you can for others will keep them coming to you, rather than the competition. “And if they want to go to your competitor, you at least want a heads-up. You want to work with people who are giving you a full scope of what’s happening in the market, so you’re not out in left field.” Looking back, Palenzuela is content with the choices he’s made. He’s especially happy with one decision in particular that’s given him more control over the future of his company: Audiopipe owns its own factory, and according to Palenzuela, the company is probably one of very few in the United States that can make this claim. “In the mid-to-late 90s, most of our parts were coming out of one factory in Shenzhen. The owner of that factory wanted to retire, so I bought that factory from him, and it’s been a huge advantage,” he explained. “When I go to a retailer and they tell me they have an idea, in two weeks I can turn it around and have a sample for them to test. That’s huge.” Even during the pandemic, as dealers ask for one model more than another, he said it’s easy to switch what’s happening at the factory and move to the model that’s in higher demand. “It’s made us very successful for the last year and a half,” he added. He’s left nothing to chance, sticking to the game plan he created back in high school. “My father worked with Zenith and I saw how big box stores controlled or dominated finished products. If you weren’t a big box store, it was hard to compete. I knew early on that I wanted to be in car audio—something that was specialized—where you needed an installer. If not, I would never be competitive in electronics.” This level of specialization, he said, was something big box stores could touch on the surface—but they couldn’t go deep. Certainly never as deep as a specialized manufacturer or retailer. “I always knew car audio was what I wanted to do,” he said.