SurOUND is a wireless speaker system that uses a hub and wireless dongles to create a mesh network and synchronize audio playback across multiple non-proprietary speakers. The system allows users to play audio from any source through any speakers anywhere without needing an existing WiFi network. A prototype will be built using off-the-shelf components like an ESP8266 chip to demonstrate the core functionality and test technical challenges of scaling the system before pursuing commercialization.

1. 1

2. 2

3. Table of Contents
Introduction … 4
Elevator pitch … 5
Technical Evaluation
Product … 5
Any Source: Analog Input … 6
Any Distance: The Wifi Mesh Network … 7
Anywhere: Ad-Hoc Networking … 9
Any Speakers: Synchronization … 10
Stage of Development … 11
Total Prototype Components … 13
System Outline .... 13
Moving Forward: Prototype … 14
The Market and Customer … 15
The Target Customer … 16
Competition … 17
Market Challenges … 19
Manufacturing Finance … 21
Business Model … 24
Executive Assessment … 25
Appendix … 28
3

4. Introduction
Millions of people across the globe utilize one or more speakers to create communal
listening experiences. This can be achieved in numerous different ways for various applications.
High-end wired surround sound systems allow for robust, synchronized sound for home theater
or multi-room home entertainment. These high quality audio experiences come with an
investment of time and money to install the system, as well as significant commitment as these
systems often become permanently integrated with the surrounding infrastructure. Wireless
systems like Sonos, Play-Fi, and Wisa (certified speakers) attempt to address these pains by
using wireless technology, but they too come at a financial cost. At the other end of the market
are individual bluetooth speakers. While portable and financially accessible, these products only
provide single point audio streaming from a single device. Across all facets of the speaker
industry, a lack of flexibility and accessibility leads to frustration and discontent. SurOUND was
created to address this pain. Using wifi, mesh networking, and ad-hoc technology, SurOUND
provides a synchronized, expandable network for use with non-proprietary speakers. Packaged
as a hub and set of wireless dongles, the system establishes its own network which is then used
to broadcast an audio signal through the hub and out to the dongles. The speakers connected
to each of these dongles then play the audio signal in perfect synchronization. If more speakers
are desired, simply use more dongles to connect them. The dongles can be “daisy-chained”
together to create an essentially limitless network. Ultimately, SurOUND allows users to play
synchronized sound from any audio source, through any set of speakers, anywhere… even
without an established network connection. As a plug-n-play agnostic system, SurOUND gives
people the desired flexibility at a level that other systems simply cannot match.
4

5. Elevator Pitch
SurOUND is a plug-n-play agnostic system bringing new levels of flexibility to the
wireless speaker industry. There are many products currently available in this $54 billion dollar
market. However, limitations and restrictions lead to frustration and discontent when using even
the most popular of these products. SurOUND finally alleviates these frustrations. Packaged as
a hub and set of wireless dongles, SurOUND provides an expandable network to automatically
synchronize any number of non-proprietary speakers. Utilizing the perfect combination of well
established technologies, the system allows users to play synchronized sound…
From any audio source, just connect it to the hub.
Through any set of speakers, just connect them to the dongles.
Anywhere, no established network connection necessary.
Anytime, system setup happens automatically in minutes.
Across any distance, daisy-chain the dongles to achieve an essentially endless range.
Your sound. Your way. SurOUND lets you achieve it.
Technical Evaluation
The Product
SurOUND is based on a rollup of technologies that have been around for years. The
combination of ad-hoc networking, and wifi and audio processing hardware components create
an immersive system that brings people together. The product itself is a hub and a set of
corresponding dongles that communicate with the hub and ultimately deliver a synchronized
audio signal to a set of speakers. A ​dongle is a small piece of hardware that wirelessly connects
to another device, providing it with additional functionality. A ​daisy chain is defined as several
devices (dongles) connected together in a series. SurOUND is the wireless daisy chain for
5

6. speakers. The technology behind the SurOUND product is a roll-up of multiple well-established
technologies including audio processing hardware components, wi-fi mesh networking, and
ad-hoc networking.
Any Source: Analog Input
The audio signal processing side of the technology is relatively straightforward, and can be
achieved using simple components including converters for audio signal processing, as well as
integrated circuits for the wireless transmission, and reception of these audio signals. A local
analog audio signal is the source for the system. This signal can come from any source whether
that be a mobile device, a computer, or CD player, etc. This differs from many wireless system
solutions today that receive an audio signal from an online streaming service, often through a
proprietary app. SurOUND eliminates this limitation on the source end by establishing a direct
connection between the audio device and the hub. This connection picks up any audio signal
being played, regardless of what software it is coming from. In the initial SurOUND product, this
connection will be a 3.5mm audio jack.
At the onset, this analog signal is converted to its digital equivalent, processed and
transmitted throughout the system via the network, and then converted back into an analog
signal fit for driving speakers. Existing signal processing chips are a proven technology that can
handle these tasks at high quality. However, the more complicated, but also proven technology
in SurOUND's audio streaming system is Wi-Fi ad-hoc network known as the Mesh Network.
6

7. Any Distance: The Wi-Fi Mesh Network
The system relies on a type of Wi-Fi networking known as the Mesh Network to support
its core communication functionality. This type of network makes the most sense to implement
because its throughput (signal strength and efficiency) is the highest compared to other Wi-Fi
topologies, it has longer range, and has features that allow for optimal synchronization of the
audio [q].
A more traditional router network is built with one device serving as the main data
transmitter. The rest of the network get transferred data solely by communicating with the router.
This fixes the range of the network to the transmitter’s location. However in a Mesh Network,
each device in the network serves as a “node” to the network, where data can be relayed to the
other devices[p]. The figure below [o] shows a Mesh Network that is connected to the internet
through an external router.
Because each device simply needs to be within the range of another device in order to
be on the network, the Mesh Network increases the range of the network. Data is linked
together in a linear fashion and “hops” from device to device until it reaches its destination.
The Mesh Network has more features that lend themselves nicely to the streaming of audio,
which include Path selection algorithms (network chooses the shortest and best path for the
7

8. distribution of data), self-forming automatic connections between all configured nodes, and
path-healing where links replace themselves when a link crashes. Mesh networking has been
successfully implemented in multiple wireless audio systems, including the industry leader in
multi-room audio Sonos [r].
Mesh Networking has many benefits, but may come at the cost of technical complexity.
These complexities can be handled by the network when the system is small, but will provide
major issues as the number of devices in the system increases.
The first problem with Mesh Networking is that multitasking for these devices is difficult. Any
device can only be receiving or transmitting at any given time, which limits the available time to
do either function [p].
When creating a Mesh Network the number “hops” also needs to be minimized because
each hop comes at the cost of bandwidth and latency. As the number of devices increases, the
number of “hops” on the network increases. One half of the bandwidth is taken away for each
hop and each hop takes tens to hundreds of milliseconds, which can add up [p]. A SurOUND
system holds more value when the number of supported devices is larger. However, as the
number of devices on the network increases, these issues become increasingly more prevalent.
There are some solutions to these problems, but they come at a financial cost. Placing bridges
at strong key nodes to create a core network underneath the overall network can increase the
power and efficiency of the overall system. Bridges can be set up in the network that can
facilitate transfers between two “clusters” of nodes if many devices need to be supported.
However this adds additional hardware to the network and adds a layer of complexity on the
programming implementation.
A Wi-Fi Mesh Network theoretically has an unlimited range, but the practical
implementation utilizing this feature would be expensive and complex. In an audio streaming
8

9. application, it would most likely be necessary to compensate for the bandwidth and latency
issues that occur as the system size increases.
Anywhere: Ad-Hoc Networking
In addition to Wi-fi mesh networking, the SurOUND system will also follow an ad-hoc
networking protocol. An ad-hoc network is any connection of arbitrarily connected nodes that
can communicate with each other in the absence of any centralized administration or
infrastructure. Each node acts as a router that can discover and maintain routes to other nodes
in the network [d]. Information generated at one node can bounce through the network to any
other node. Thus, using an ad-hoc protocol perfectly aligns with the mesh-networking already
established. One added benefit of ad-hoc networking is the automatic configuration
requirements. Details for discovering, establishing, and maintaining connections with other
nodes are all included in the protocol. This allows the SurOUND system to achieve the intended
plug-n-play functionality. An even more impactful benefit of ad-hoc networking is eliminating the
need for an established network, and hence the ability to function properly in any environment.
Ad-hoc networks are used in a wide variety of applications including sensor networks, military
communication in a battlefield, and disaster relief situations [d]. These high risk applications are
required to function without existing network infrastructure. This confirms that ad-hoc networking
is a reliable technology to use in the SurOUND product. Overall, benefits of ad-hoc networking
include “ … intrinsic flexibility, ease of maintenance, lack of required infrastructure,
auto-configuration, self administration capabilities, and significant cost advantage …” [d]. All of
these features make it a perfect fit for SurOUND .
9

10. Any Speakers: Synchronization
Another incredibly important aspect of the core functionality of the SurOUND system is
its ability to produce synchronized sound through multiple nonproprietary speakers. Another
product currently on the market is the Cassia Hub [n]. The intent of this product is to expand the
capabilities of Bluetooth networking from one-to-one communication to one-to-many
communication. Therefore, audio could be played from a single source over multiple bluetooth
speakers at the same time. However, failure to synchronize these nonproprietary speakers is
one of Cassia’s major downfalls. This was discovered first-hand when the SurOUND team
purchased a Cassia Hub.
The Cassia Hub sends out a synchronized bluetooth signal to all of the recipients, but
then it loses control over the communication. Different hardware, system clocking, and buffer
rates in each receiving speaker results in unsynchronized audio ultimately heard through the
speakers. There are two ways to solve this problem, as demonstrated by other products trying
to achieve this same feat. First, there can be proprietary hardware on either end of the
communication. This is how Google Chromecast audio achieves synchronization. In this way,
system clocking, chipsets, and buffer rates are all consistent across all recipients. Another way
to achieve synchronization is through system configuration.
WISA is an organization that standardizes wireless audio systems mainly for use in
home theater settings [e]. Their protocol includes a complete configuration process that limits
the latency between speakers and ensures predictable communication. Although WISA
speakers can be made in many different varieties by many different brands, they all must follow
this protocol. The SurOUND system achieves synchronization with a combination of these two
methods. The product already includes hardware at both ends which will process the signals in
a consistent manner. Furthermore, mesh networking and the ad-hoc protocol maintain route
10

11. information including the latency between hops in the network. This information can be used to
buffer signals accordingly, and deliver them to the speaker in sync when all of the recipients are
ready to do so. Thus, there is confidence that the technology behind SurOUND can achieve the
synchronization that is vital in this type of system.
Stage of Development - MVP
Right now the SurOUND team is in the prototyping stage of development to understand
and initially integrate all of these technologies. Substantial research was performed online to
begin this process. A rough draft of the system was then designed and shared with University of
Minnesota professors who work with wireless technologies. Minor concerns regarding
bandwidth and data transmission were expressed, but in general their feedback was highly
supportive. After receiving this valuable feedback, the system design was adjusted accordingly
and component choices were finalized. The components were then ordered for physical testing
and prototyping. When these components arrive, prototyping the design is to be completed next.
The intended prototype is described below.
Prototype Components - MVP
The prototype core will consist of the following main components and associated
supporting hardware such as batteries and power regulators:
1. Analog to Digital Converter Cirrus Logic CS5343 ADC
2. NodeMCU powered by ESP8266
3. Digital to Analog Converter Cirrus Logic CS4334 DAC
4. ~8kilo-ohm Resistor
11

12. These components were chosen among many options because they were cost effective and
provided by proven manufacturers. Cirrus Logic provides audio processing chips for all Apple
products, and the ESP8266 module is proven to work in a Mesh Network.
These components with be used to create an overall system as depicted by ​Figure 1 below.
Figure 1: Block diagram of proposed SurOUND system including the hub and two dongles
System Outline:
Starting from the top left of the figure shows “audio source” (phone, laptop, TV, professional
audio systems, etc). This plugs into the “hub” via a standard 3.5mm audio jack. SurOUND will
provide alternative ways of inputting audio in the future via add-on adapters for devices which
do not use this hardware format.
Once the audio signal is in the hub, it is then converted by a Cirrus Logic CS5343
Analog to Digital (ADC) converter. This converts the analog audio waveform into a digital series
12

13. of 1’s and 0’s. The bitstream of 1’s and 0’s is then fed into the wireless module via Integrated
Inter-IC Sound Bus (I2S). This is a well-known audio format capable of streaming stereo audio
in high resolution.
The wireless module is a NodeMCU with ESP8266 at its core. This module basically
reads the I2S data and broadcasts it via its own ad-hoc network, separate from and
independent of any existing internet wifi connection. This broadcast is streamed via User
Datagram Protocol (UDP) to enable real-time, low-latency streaming. The confidence behind
ad-hoc networking comes from proven performance with the mentioned components. The
NodeMCU chip with ESP8266 wifi module have already been used in various independent
projects. Examples are provided in the appendices maybe? In one example, the ESP8266 was
used in a near range ad-hoc network to blink five independent LED lights [f]. Another individual
used a computer simulation to display the extended ad-hoc capabilities of the chip with over a
dozen nodes [g]. The range of wifi communication using the ESP8266 was also tested under
various conditions and mounting options. These tests achieved ranges of over 4km for line of
sight communication with proper antennas[h].
On the receiver end, another NodeMCU will connect to the ad-hoc network set up by the
hub and reads the UDP packets broadcasted. It then decodes the UDP packet into audio data,
and sends it via I2S to a Cirrus Logic CS4334 Digital to Analog Converter (DAC).
This DAC reverses the transformation, converting digital 0’s and 1’s into an analog
waveform. This waveform is then suitable to be output via a standard 3.5mm audio jack. A
separate amplifier is not needed, as the DAC outputs filtered line-level audio signal, which is
already sufficiently amplified. By including a variable resistor in the circuit in series with each
output, a volume control can be implemented.
13

14. To provide power to the device components, the ADC, DAC, and wireless modules can
all be fed with 5v DC power to supply their power needs. In the hub, this would be achieved by a
standard “wall wart” power supply, similar to those used to charge mobile phones. Regarding
the dongles, this would be achieved (in prototype) by using a portable battery “powerbank”
which is commonly used to extend a phone’s battery life. In production, the dongles would likely
be powered by a small, rechargeable battery similar to a powerbank, but integrated as part of
the dongle for the convenience of the customer.
Moving Forward: Prototype
Achieving a working prototype as described above will provide much insight regarding
the magnitude of technical challenges, especially those involving Mesh Networking. Streaming
audio from one device to another is relatively easy; each device can maximize the channel’s
bandwidth and there are minimal interferences. However, add more devices to the network and
now the time must be split between the devices to communicate with one another. This could
result in engineering challenges where more expensive hardware and robust software will need
to be written in order to achieve a design that will compete in the market place.
The Market and Customer
Based on product, the global wireless audio device market is classified into four
categories: soundbars, wireless speaker systems, wireless headsets & microphones. Wireless
speaker systems are further divided into three different categories: embedded Bluetooth
speakers, embedded Wi-Fi speakers, speaker adapters, and dedicated speaker docks. The
SurOUND system current falls in the speaker adapters category. The system will provide a
network for those want to connect multiple non-proprietary speakers together, whether that be
14

15. many speakers in one environment, or multiple speakers connected throughout a multi-room
environment.
Wireless audio is redefining the home audio market. Bulky and e​xpensive audio
receivers and frustrating home theater set-ups are expected to continue to decline in favor of
the simplicity and portability of wireless speaker systems.​ With the wireless audio market ringing
in at $54 billion and the compound annual growth rate (CAGR) being 23.2% between 2016 and
2022, market shows that consumers are vying for wireless solutions.
Due to the wireless connectivity explosion, t​he market for audio speakers has grown
into a $10 billion market. However, for the market really take off, implementation needs to be
simple. If there's any complexity involved, the mass consumer will not adopt it. Trends appear to
be in the direction of small, cheap and without wires. SurOUND follows these with its
affordability, and functionality. ​ According to research firms, wired ​hi-fi surround sound retail
volume sales tumbled by 21 percent last year while $80 million wireless audio speaker units
shipped globally (i).
As increasing numbers of millennials reach the age where they are outfitting their own
homes with audio upgrades, SurOUND can provide them with the flexible connectivity for all
their audio enhancements & add-ons. The explicit need in this market stems from many current
wireless solutions that require expensive proprietary equipment with limited functionality.
Target Customer
SurOUND will be on the path to create wireless speaker adapters in the consumer and
home application space. ​As the technological age continues to make drastic changes to the
world around us, the appreciation for music remains universal.
15

16. In regard to the book ​Diffusion of Innovations, innovators and early adopters are the
groups who will buy this product (i & ​Figure F). The niche market within these two can be
segmented into two important target customers: Young (tech-savvy) Millennials and Event
Planners (​Figure C).
Young Millennials: Focusing marketing attention on college age students living in
dorms and fraternities is a safe bet. The value of having a simple, small dongle plug into any
speaker without latency issues or tedious setup is unmatched, especially for that type of
crowded environment. Say SurOUND gets into a fraternity and music begins playing throughout
the house. Curious questions arise regarding how the connectedness is happening- and that is
where the beauty of word-of-mouth comes in handy.
Event Planners: Events are happening everyday all around our world and a variety of
them would benefit from SurOUND , especially if the technology gets to a place that can support
many dongles. A few event samples include:
● Tradeshows- ​Businesses can get creative with the use of SurOUND . At large
tradeshows, companies tend to have at least 2 or more booths with at least one
speaker/display projecting something for prospects to get dragged into. Now
booths can be connected.
● Community/Church Gatherings- Local school, neighborhood, and church events
happen daily but if the event is outside or on the go, a stereo setup might not be
in place. Local event planners can create interaction with event goers adding
immersive, and memorable value to that event.
● Marathons-​ Utilizing the mesh networking feature, speakers can be set up around
a track to create a connected PA system or music experience that motivates
athletes along the way.
16

17. Competition
Overview
The competition space in the wireless audio world is becoming more crowded.
SurOUND's main competitor’s lie in the wireless speaker market, and the wireless adapter
market. The wireless speaker market is a growing segment that is aiming to change the way
consumers experience home audio. The wireless adapter is a niche segment that has started to
release products to the market, but with no one product providing a proven solution to date.
One of SurOUND's largest competitors in the wireless speaker market is Sonos​. They
have created wireless speaker systems that utilize mesh networking, however it is not an ad-hoc
network. A bridge to the mesh network has traditionally been required to be hard-wired to the
home router to access the internet. Now, many competitors are now entering the market to
compete with Sonos multi speaker wireless technologies. These companies include Samsung &
Bose, LG​, Sony, DTS, and more.
The wireless audio adapter market has traditionally been dominated by bluetooth
technologies. But as multi-room multiple output systems become popularized, start-ups are
looking for an alternative solution. Companies are starting to pop up that can transform old
speakers into connected wireless speakers. However, none of these start-ups are proven and
mistakes are inevitably going to be made by these “first through the wall”.
The Competition: Continued
Industry competition for wireless audio devices is thick, but if concentration is put in the
wireless audio adapter segment​, the following competition is found:
● Google Chromecast Audio: Requires proprietary app & home WiFi network
17

18. ● Ekko Hub: Similar idea, launched kickstarter and raised $189,200 from 1,009
backers in less than a year. Launch in 2017.
● Rocki: A product to bring “new life to old speakers”. Poor reviews on the
Amazon page about connectivity and functionality. ~$60.
● Tivoli Audio ConX: New product on the market to transmit/receive and playback
audio. Poor reviews. Listed at $60 per dongle.
In the ​wireless speaker category​:
● Sonos:​ SurOUND is the affordable, universal version of Sonos. Why spend
$1,000+ on speakers in which you have to use a specific app and music sources
for.
● Samsung & Bose​: Will push to wireless speaker space forward, but currently is
limited in streaming sources and expandability.
● Play-Fi Systems​: DTS created the Wi-Fi networking protocol and embeds
multiple brands of speakers with Play-Fi technologies. Any brand of speaker with
Play-Fi technologies embedded may be connected together.
Other:
● Cassia Hub​: Bluetooth router that connects 3 speakers together and extends the
range of other low energy bluetooth devices (led bulb). Even with 3 connected
speakers playing music through their custom app, music synchronization was still
lacking and very annoying.
18

19. Market Challenges
The landscape in audio is changing more towards the wireless solution which has
created the lane for SurOUND to take advantage. However this growth, specifically in the
wireless speaker segment of the
market, will inevitably result in
the decline of SurOUND's
market.
One way to visualize this is by
looking at the market through
the “crossing the chasm”
diagram. Today, networked
wireless speaker technologies
have crossed the chasm and are
entering the early majority. If innovation persists and costs are reduced in this market, consumer
trends indicate that they will move into the late majority section of the market. If the wireless
speaker market has a hold on the majority of the market, SurOUND will fight for the tail end of a
fading market, with sales only going to the laggards who have not yet adopted wireless
technologies. This is an issue that cannot be overlooked by the SurOUND team given that the
long road to development is still ahead. The market is crowded and more big players such as
LG, Sony, Bose, DTS, and Qualcomm are all entering the market with goals of creating better
and more affordable wireless speaker technologies. Today, affordability and compatibility are
these systems two biggest downfalls. However, these big companies are leaving the wireless
adapter market for startups like Ekko Hub and Beep because the long term value is not there.
19

20. The long term value is in redefining the audio market and making wireless speaker systems like
Sonos more affordable and more compatible.
There are also many challenges that need to be addressed. In such a crowded market,
one of the most obvious challenges is intellectual property. An initial patent search already
revealed several possible patent infringements, a sampling of which is listed below.
1. Distributed wireless speaker system with automatic configuration determination when
new speakers are added ​(US20150208188 A1)
2. Digital wireless speaker system ​(US5946343 A)
3. Wireless speakers ​(US8290173 B2)
4. Transmitter and receiver for a wireless audio transmission system ​(US8223881 B2)
5. Wireless audio/video signal transmitter/receiver [sic] ​(WO2014091317 A1)
Patent number ​US8223881 B2​, filed in 2005, is the closest patent SurOUND strives to
achieve. It describes a system that consists of an analog/digital converter, digital signal
processor, a radio transmitter, a radio receiver, and a digital/analog converter. In terms of
hardware, it is really similar to SurOUND's core product offering. Patent ​US8290173 B2​, filed in
2006, also contains a wireless system similar to the first patent but with multiple channels. The
latter patent seems to be an improvement over the former, and that the reason why the latter
patent does not violate the former is because of ​semantics.
Clearly wireless audio is a very crowded area. Since the SurOUND team has no formal
legal training, it is crucial to obtain outside assistance to understand the validity and possible
implications of these patents. To address this necessity, the SurOUND team has planned a
meeting with Jeffrey C. Robbins, ​Attorney for Entrepreneurs and Angel and Venture Investors at
20

21. Messerli & Kramer P.A. to learn more about this patent space and hear his thoughts on
SurOUND .
Manufacturing / Finance
SurOUND , in the MVP stage, has very few administrative or capital outlay requirements.
In fact, the product development would be bootstrapped due to the low cost nature of the
product components. The following is an outline of financial requirements for achieving an MVP
to sell, and then an analysis of the benefits of manufacturing. The analysis will include channels
of distribution, revenue streams, cost structure, and manufacturing. No traditional retail outlets
would carry SurOUND .
1)​ ​The SurOUND website:​ The first channel would be the SurOUND website where
customers can see the details of our product, see tutorial videos, and purchase the
system. This allows us to have the most margin and would be our direct face to the
customer. This option would allow for a larger margin for fees wouldn’t have to be paid to
a third party seller. This option would require self fulfillment, which makes it more
appropriate at lower sales forecasts.
2)​ ​Ebay:​ The second channel that SurOUND would utilize would be Ebay. Using an
Ebay professional seller account would allow us to have exposure to over 165 million
active users [Statista]. The professional selling account on Ebay would suit surround well
with built in inventory tools along with forecasting tools.
21

22. 3)​ ​Amazon:​ The last, and most important channel that would be utilized would is
Amazon FBA. This channel would be very efficient for the fact that once we have
manufacturing capacity in batches we never touch the inventory. All shipping and
customer service claims are provided through Amazon, so this would enable SurOUND
to effectively manage early growth. Amazon is about twice the size of Ebay with a
current 244 million active users. This channel would allow SurOUND to scale up rapidly
with fewer fulfillment related growth pains.
Within each of these sales channels SurOUND would have the return flow of cash in
exchange for product. To appropriately manage these incoming cash flows 3 main tools would
be used. The first being a simple credit payment system integrated into our website for direct
purchase. There would be fewer fees in this scenario, but it is limited in management tools. The
second tool is a professional PayPal account that could be applied to the website and Ebay
channels. This would allow for easy cash collection, with an added amount of security. The
second tool that would be utilized is the proprietary Amazon professional seller revenue
management system. This platform from Amazon is the intermediator between us and our
customers that allows for easy payment and added security. Amazon professional seller just like
PayPal links directly to your account to make revenue collection easier than ever.
SurOUND has very few capital costs to incur for a MVP available for sale. This allows for
a business model with minimal costs incurred beyond components. The components
themselves to construct the MVP (one hub and 2 dongles) is approximately $51.25 at with
current component prices with no economy of scale [​Figure A]. Each dongle can be constructed
for $12.25 and the hub for $14.50. These costs for components are only expected to decrease
22

23. as economies of scale are reached. Packaging the product was quoted at $.75 per item when
done one the manufacturing line. If packaged on a batch basis before manufacturing it is likely
this cost would be $1 per item [​Figure B]. This is another case where increased economy of
scale would reduce our product costs. It should be noted that as SurOUND scales up there
would be added administrative costs for managing production and inventory levels, however in
the MVP stage this is not as pertinent.
The manufacturing at the MVP stage would be a series of key activities. The first units
would be created primarily through batch processing. This would include batches of systems to
be programed, assembled, and connected in groups by the SurOUND team and then tested for
quality control. Packaging would be done after the batch programing in simple blister pack
eliminating the need for machines. As sales past 3500 units the ability to outsource would
become available. At first this would be accomplished with off the counter components, but as
manufacturing progresses the components would decrease in price due to economies of scale.
The added benefit of outsourcing would include inventory holding and auto shipping.
23

24. Business Model
Given the information already stated our business model would consist of selling the
SurOUND system through our three main channels: Website, Amazon, and Ebay. Our cash
collection would funnel back through Amazon Pay, Paypal, and direct credit payments. This
model is very barebone in nature, but it should be noted that this is through the lens of a MVP
stage. The infographic above further lays this out.
Because SurOUND is entering into an already crowded space, marketing is both an
important activity and cost in our business model. Some popular Marketing tactics include,
channel Marketing, guerilla marketing, direct sales, interactive marketing. Another huge part of
Marketing is social media, relevant content about the market, adding incentives and sponsoring
posts to get your name at the top of people’s search engines and news feed is a great way to
gain awareness.
24

25. Executive Assessment
SurOUND has explored the feasibility of manufacturing a set of devices that can
transform any collection of non-proprietary speakers into a wirelessly networked system.
SurOUND's proposed system provides many benefits from the current solutions, in that it is
more flexible, more affordable, and more expandable. However, the opportunities in this market
are outweighed by the team’s limited time, resources and strong threats posed by the market.
The team acknowledges that the market is ready for a product like this today, and if
development can occur quickly, there are definite short term gains to be made. However, the
SurOUND team claims that a long term business model based solely on selling audio “dongles”
for non wireless speakers is ​unfeasible.
The main argument for this is the claim that wireless speaker market is growing and
bigger players are entering the market. The wireless speaker market is set to stake its claim at
the majority of consumers in the wireless audio market. Unfortunately for SurOUND, this means
that the value of a wireless add-on device will degrade with time.
One of the large benefits of today’s wireless audio speaker systems is that in many
cases they are reliable and provide instant gratification. As a result, it can be easy to forget the
layers of complexity behind the design of these products. At a technological level, there is a long
road ahead for the SurOUND team to develop a system that can perform and compete with the
industry standard. Streaming audio from one device to another is relatively straightforward.
Each device can maximize the channel’s bandwidth and there are minimal interferences.
However, add another device into the network and now time must be split between the devices
to communicate with each other. This may present many networking issues like decreased
25

26. bandwidth, decreased throughput, and latency issues. However, it is difficult to truly gage the
technical task at hand without beginning the prototyping stage.
During the time that SurOUND spends in the development stage, the market will shrink.
The market is ready for a working product like this today, and this can be seen as start-up
companies have already been investing in creating a similar product. But will not have a need
for it in the near future.
A possible path the success with SurOUND may see the company entering the market
with an MVP and making modest gains at the right market. This could prove to be a successful
business venture in the short term. A pivot in the future would be inevitable if SurOUND is to
become a sustainable business. In the end, the SurOUND team concludes that an expandable
network to automatically synchronize any number of non-proprietary speakers is technically
feasible, however given the progression of the market it is not busines-worthy at this time.
26

27. Citations
a. https://www.statista.com/statistics/242235/number-of-ebays-total-active-users/
b. Appendix A
c. Appendix B
d. Jayakumar, G., Gopinath, G. “Ad Hoc Mobile Wireless Networks Routing Protocols - A
Review.” ​Journal of Computer Science. 3(8): 574 - 582. 2007.
e. Ferguson, L. “Wisa Whitepaper.” ​www.wisaassociation.org. 2014.
f. “Esp8266 ad-hoc network.” ​https://www.youtube.com/watch?v=ulbjkI8DsdE. 2016.
g. “ESP8266 Network: Tree Topology Simulation”
https://www.youtube.com/watch?v=Uh84sQyQWXs. 2016.
h. “ESP8266 Wifi Range / Distance Tests”
https://www.youtube.com/watch?v=7BYdZ_24yg0. 2014.
i. https://en.wikipedia.org/wiki/Diffusion_of_innovations#CITEREFRogers1962_5th_ed
j. http://www.cnbc.com/2016/01/02/home-entertainment-systems-quiet-revolution.html
k. http://www.persistencemarketresearch.com/market-research/wireless-audio-device-mark
et.asp
l. http://news.ihsmarkit.com/press-release/technology/wireless-redefining-home-audio-mar
ket-ihs-says
m. http://blog.euromonitor.com/2016/07/understanding-consumers-preferences-portable-wir
eless-speakers.html
n. “Cassia Networks”
http://www.cassianetworks.com/consumer?gclid=CJX6jNiy4tACFRuewAodTE4MQQ​ .
2016.
o. http://www.espressif.com/sites/default/files/30a-esp8266_mesh_user_guide_en.pdf
p. https://commotionwireless.net/docs/cck/networking/guidelines-for-mesh/
q. http://www.ti.com/lit/wp/swry024/swry024.pdf
r. http://www.sonos.com/en-us/sonos-explained
27

28. Appendices
Appendix A: Supporting Figures
Figure A: Financial evaluation of various distribution channels
Figure B: Cost evaluation of system components
28

29. Figure C: Visualization of Target Markets
Figure E: SWOT Analysis
29

30. Figure F: Stages of Growth (Geoffrey Moore- “Crossing the Chasm”)
30