265 Managing New Product Development Teams Skullcandy: Developing Extreme Headphones1 In 2001, Rick Alden was riding up a ski lift and listening to music on an MP3 player when he heard his phone ringing, muffled in the pocket of his ski jacket. He fumbled around with his gloved hands, trying to get to the phone before it stopped ringing, and at that moment he thought “ why not have headphones that connect to both a cell phone and an MP3 player?” 2 In January of 2002 he had his first prototype built by a Chinese manufacturer, and by January of 2003 he launched his company, Skullcandy. 3 Building an Action Sports Brand Alden had an extensive background in the snowboarding industry, having previ-ously founded National Snowboard Incorporated ( one of the first companies to promote snowboarding) and having developed and marketed his own line of snowboard bindings. His father, Paul Alden, had played many roles in the indus-try, including serving as the president of the North American Snowboard Association, which helped open up ski resorts to snowboarders. His brother, David Alden, had been a professional snowboarder for Burton, and a sales repre-sentative for several snowboard lines. Thus when Alden began creating an image and brand for the headphones, it only made sense to create a brand that would have the kind of dynamic edginess that would attract snowboarders and skate-boarders. Alden could also use his deep connections in the snowboarding and skateboarding worlds to line up endorsements by pro riders and distribution by skate and snowboard shops. As Alden notes, “ I’d walk into snowboarding and skateboarding shops that I’d sold bindings to or that I’d known for 15 years, and say, ` Hey, man, I think you ought to sell headphones.’” Soon he was developing headphones that were integrated into Giro ski and snowboard helmets, and MP3- equipped backpacks and watches. The graphic imagery of the brand— which draws from hip- hop culture and features a prominent skull— helped to turned a once placid and commoditized product category into an exciting and important fashion accessory for action sports enthusiasts. The company grew quickly. By 2005, the company broke $ 1 million in sales, and in the following year sold almost $ 10 million worth of headphones and accessories. By 2007, Skullcandy’s products were selling in Best Buy, Target, Circuit City, and most college bookstores in addition to the core market of action sport retailers, for total revenues of $ 35 million, greatly exceeding even the stretch targets the company was shooting for. In 2008, almost 10 million people purchased Skullcandy headphones for total sales of $ 86.5 million, and as of April of 2009, the company was on track to exceed $ 100 million in sales. 4 The company was careful in its approach to selling to the mass market, care-fully distinguishing between products that were sold to the core channel versus to big box retailers. 5 Alden’s philosophy was that “ Conservative guys b.