Interview
A company that explodes onto the scene, crashes and then rises probably has an interesting story to tell and so it is with Tenor Audio. With our Internet-obsessed culture, lots of rumor and innuendo swirled as to Tenor's rise and fall. I invited François Lemay, now the general manager, to set the record straight and to discuss their future [below with Jean-Pierre].


First, how did you get started in Audio?


First and foremost I'm an audiophile. Since I was 18 years old, I bought all types of equipment, always looking for the best. This is my personal passion. Also for 15 years, I've been professionally involved in product testing. I understand the scientific process required to find the best. I'm not a scientist or engineer per se but my training and experience includes managing engineers and scientific data.


What led to the development of Tenor Audio?


During my audiophile history, I was using an OTL amp. This product gave me the uniquely superior sound I was looking for. But as good as it as it was, it was still lacking. Part of the spectrum was not correct - especially the right dynamics in the bass. But overall, the OTL amp came closest to providing my ideal.

Custom tube burn-in station

In 1998 at an audio show in Montréal, I met Robert Lamarre who was selling his speakers and I found him quite interesting. Six months later I learned that he was living a few blocks from me. He called me and said, "François, I have the new prototype of my speaker, would you like to listen?" We met and I introduced him to the OTL design. Up to that point, he had been strictly SET. For Robert, the OTL amp was quite a discovery. I told Robert that I knew Michel Vanden Broeck; he had performed a few updates in my amplifier, a few repairs and we had discussed OTL before. I suggested to Robert why don't we get some money for Michel and have him design and build two pairs of custom OTL amplifiers just for us? We could then see if his design skill was as good as we thought. We thus hired Michel to build a 15-watt OTL monoblock amplifier. And that's how it started.


Upon delivery of the first pair, we listened in surprise and said, "Oh my God, we really have something here!' We then continued our discussions with Michel to build an all-out "crazy" design OTL amp. We gave him our wish lists, he said it was feasible and we said, "Let's go." The result was a prototype all-metal chassis, exotic design with switching power supply. Unfortunately, the power supply led to instabilities and we had to go in a different direction.


The prototype led to the market version of the original 15i?


We did our first show in Montréal in 1998, with a static display of the new 15-watt OTL, because it was not yet finished. We announced that we were coming with something very special in OTL. In 1999 and 2000, we showed a 15-watt prototype again, our only working model. Three years in a row with a prototype. It became somewhat of a star because people were scratching their heads as to how a small 15-watt amplifier could sound as good as it did. In 2000, Ultimate Audio magazine reviewed the amp in what was ultimately their last issue.

Michel Vanden Broeck

The 15-watter was working perfectly and with the conventional power supply, we knew we could build a 75-watt version. Nine months later, the 75-watt version was designed.


2000 was really the beginning of the Tenor operation, although I was working part-time. We hired a cabinetmaker and Michel was designing and producing the first of our OTL amps. In 2001, we proudly introduced the OTL 75 at the CES. We went there with four pairs in three different rooms: one with Verity, one with Lamhorn and one with Sound Two and a German speaker manufacturer whose name escapes me at the moment.


Still, at this time the publicity had not yet hit...


It all started with Lars Fredell. He previously came to the Montréal show and we had virtually the same system that he had at home, including the Verity Parsifal, the Silversmith cables and the Sony SACD. His amplifier was the Lamm Ml2 on the top and the 1.1 solid-state for the bottom - about $50,000 worth of amplifier to drive the speakers in a special dedicated room. Of course the show room was far smaller but the rest of the system was the same except for the room and our 15-watt amplifier. 15 watts compared to his Lamm bi-amped setup made him very skeptical. He came with his own CD, was very professional and he listened for six hours without comment. We considered this a very good sign. At the end of the session he said, "I don't know how you do it. But this is better than what I have at home, more dynamic and more powerful. If you ever go to production with a similar product, let me know and I'd like to review it."


At the end of the CES, one of the four pairs went to Lars and he published the first review in May. The review was simply fantastic, ending with his announcement that he was selling his ML2s and keeping the Tenors.


Simultaneously as we were beginning production, Jonathan Tinn, who heard the Tenors at the shows, was the first to call us with an interest in the 75. He also compared the Tenors to the Lamms and Atma-Spheres in his listening room. Jonathan, like others who heard the amplifier, said that the Tenors simply remove the window between the performance and the listener. Distribution in the United States was successfully launched through Jonathan - a very good start.


The Golden Ear award from the Absolute Sound really catapulted Tenor into the spotlight?


Yes, in 2002 we did a show at the Tuscany, the first year when it was not at the St. Tropez, in the big room with the recently introduced Rockport Hyperion (although it was hard to convince Andy Payor to send the pair for the show). He heard the Tenors in his own room and knew them. We did a show with two pairs. Following the show, Jonathan Valin's review produced the Golden Ear award from the Absolute Sound in 2002.


The OTL 75s were a hit, why go into a different and riskier direction with the original 300M hybrids?


We said, this is it, it's going to work. The majority of the amps that we sold were 75s with the 15-watt version more of a niche product. But we also understood that there was a demand for more power. So we worked for six months developing a 200-watt OTL. But the problem was that if we wanted to keep the same sonic quality, we needed 2000 watts from the wall - per amplifier. Combined with the heat, this was clearly absurd. So the challenge was, how do you get the same sonic quality but with more power and no output tubes? Michel said the solution was to go hybrid.

Michel's laboratory

The first hybrid was designed in a record time of nine months. In 2003, we planned on introducing it at the CES. However, one of the amps along with an OTL was stolen. Amazingly, although no one had yet heard the hybrid, we had $500,000 worth of orders on hand for them! Prior to the Montréal show when the public had heard them for the first time, I'd never thought in my life that I would have a product that would sell before it was even seen. We were inundated with orders and had a nice problem to solve.


When did Tenor expand its operations?


We did the Montréal show with Kharma speakers and our prototype hybrid 300M. With production started and orders in hand, we had to grow and move from our small office. Calculating growth rate space requirements, we moved to our larger facility at a cost of over $100,000. Based on our orders, the banks supported us. In a very short time we went from 4 employees in a small office to 12 employees in a large 4,500 sq. ft. facility. Up to this point I was the entire administration - everything from answering the telephone to bookkeeping. One of the problems was that our accountants were not good enough. This produced a very difficult learning curve. However, production was on track and we were ready to deliver the first unit in September. But the pressure was enormous. We did not have the usual time to do in-depth troubleshooting and problem solving. We produced 70 units in the first year - just for the hybrid!


This sounds like a solid and successful business. How did the problems begin?


We were catching up on production but at the same time, money was not pouring in as quickly. At that time we had introduced the amps at $28,000/pr retail. The problem was that we were selling them below cost of production. This was our first mistake. We underpriced the amplifiers. Then the US dollar started to drop and our price list was in United States dollars. Additionally, Canada has a law that rebates a portion of R&D costs back to the manufacturer. It has to be scientifically approved with very strict rules. Since Tenor had massive R&D costs at the beginning, this rebate was integral to our cash flow. If everything is properly in place and the rebate is expected, often you can borrow against it. Unfortunately in 2003, due to a small technical glitch in the process, the government failed to refund our R&D money. In 2004, the same problem recurred and worse, we weren't given an answer or reason. By 2004, the government owed us $340,000 in very important cash flow. Although the orders were strong, the start-up debt combined with the failure of the government to refund the money provided an almost impossible cash flow position. Additionally, sales of the 75 OTL were down because everybody wanted the new hybrid. This required new production. In the Far East, specifically Hong Kong, there was the SARs medical epidemic, which essentially stopped Hong Kong purchases for six months.


A series of unrelated problems all hit at the same time. Additionally, we had a small production problem with the second stage and the first batch of transistors. We had to recall the first run of the amplifiers incurring costs of shipping and circuit repairs. We handled everything including shipping. This is somewhat unusual. Normally the customer handles the shipping to the factory. But in this case, we handled everything. Even though we are supposed to be a free border, it was a nightmare.


We continued to the CES and the response to the 300 was great. But as word spread about the initial production problems, orders slowed. We had no money and I was personally burned out - complete physical and emotional exhaustion. A friend of mine came to assist me. We downsized to cut out the wood-working department, which is very expensive. We started to build a new business plan and looked for investors. We made twelve presentations and ended up with two groups interested. With the belief that it was going to work, we continued to pour money, time and effort into our operation.


This led to the bankruptcy?


By December 2004, we could not continue and had to declare bankruptcy. We produced 85 pairs of OTL, 26 pairs of the 300 and 18 of the 150s all in three short years, very amazing for a start-up high-end company. However, the bank closed our operation and we consolidated all of our assets into one location. In Canada, when assets are placed as a guarantee for a loan and bankruptcy occurs, the list of those assets becomes public knowledge. To let you know how I do business, when we did the auction, every piece of the assets were sitting in the office. In some bankruptcies, it's typical for many of the valuable assets to have been removed to leave almost nothing for the creditors. Yet we had every piece, every tool and every component down to the cartridges on the turntables that we used in our showroom. The bankruptcy receiver claimed never to have seen this type of honesty in his life.


After the company closed, what role did Michel Vanden Broeck have?


He continued to service and support both the OTL and hybrid in the field. Michel was fortunate that after the bankruptcy, he was able to buy back his laboratory and equipment. Michel without his laboratory is like a writer without his pen. After new investors came aboard, Michel was able to get back into the design business.


When did the new investors join the company?


The same day that I went to our creditor bankruptcy meeting, Robert and I met Martin Labrecque, who was interested in the amplifiers. I told him of our problems and we began a discussion. I showed him our books, showing very honestly why we had failed. He responded that with a product this good and a genius like Michel Vanden Broeck, the company should continue. Of course I was not an expert in bankruptcy laws. I did not understand how the process works. But with the help of Martin and other new investors, Jim Fairhead, Tom Moynihan, and Jacques Pilon, we were able to buy back the Tenor assets at the bankruptcy auction.


It had to be difficult starting over. Describe the process to the road back


With the fortunate investment and help from the new investment group, we developed a new business plan. Originally we planned for one year of new research and development but in this case, it took a full two years. The result was worth it. The product has been improved so much and reliability perfected. We are so proud.


The new owners were able to give Michel additional equipment and funding to complete his research through the many prototypes. This included the hiring of Jean-Pierre in 2005. After several months, we re-rented our previous facility. But the most important thing was that we were able to save our intellectual property. We now have the time and the money to do it right. In the past, we [the old Tenor Company] were chasing our tail. Today, we are able to purchase in large quantities. Before, there were not enough hands. I was managing everything from sales to production to accounting.


What was the vision for the new Tenor 350M amp?


Our first objective was to redesign every element that could improve reliability. Michel, a very humble man, said to me, "I've learned enough so that I probably could get you a 15% improvement in the sound versus the original 300 hybrid." However, when we sat down to listen to the first prototype of the new monoblocks, Michel was obviously in error. The improvement was more like 50%! The improvement was stunning and even to us, somewhat unbelievable.


We made a choice to redesign the entire amplifier from scratch - every board. This is a totally new design that, while based on the original 300 design, has taken two years to bring to market.


Do you worry that the similarity of the exterior will confuse customers between old and new Tenor companies?


Certainly that is a marketing issue. We will have to explain to the customers through our website what is new. Although the box might be the same, everything else is new. The key is to listen. You will instantly distinguish the old versus the new. Sometimes while comparing amps, you have to switch back and forth and listen carefully and sometimes over a period of days. Each amp might have a certain characteristic. Then, what do you prefer? You're comparing compromise A to compromise B. With the 350, the improvement is immediate. Whether it's 40% better, 50% or 60% than the 300 is for the customer to determine.


A product at this level is certainly not a commodity. What are your plans to promote an amp at the ultra high-end?


The first step is to get people to listen. Advertising and product reviews are important but listening is the most important. Possibly we will lend an amp to certain speaker manufacturers so they can listen to their own speakers in their home listening environment. Once they hear how their own speaker sounds with our amps, hopefully they will pass that recommendation to their dealers and potential customers.


Certainly we are looking for the best dealers to form a true partnership. We are looking for long term, not just to sell a few units and then the dealer goes off to find the new product of the month. In addition to the US, Dubai, Hong Kong and Europe are excellent potential markets - as is China.

Montréal street scene

What is next for Tenor?


First and shortly, a stereo version of the 350. Next year we are planning to introduce our new preamp both with phono and line stage. After that, probably a smaller amplifier, maybe a 125-watt monoblock. Our long-term plan is to make the Tenor technology available at a lower price and to a larger audience. We also have a very special Redbook D/A converter planned.


As well, Michel has ideas for some revolutionary products, which would be all-out expensive assaults. For now, we are keeping these ideas to ourselves but if we pursue this direction, it will be a new technology never seen before in audio, a product whose sole purpose is to prove how far we can go.


Our goal is to make Tenor a reference company backed by a solid organization that will be here in 20 years with a product line that is built to last. We will not be changing models. The design is finished. There won't be any Mark I or 1.2s as elsewhere. We have a mature finished designed that, while expensive, is worth every penny we believe, both from the quality of build and sound.


As with the mythical Phoenix, quite a story...
Tenor Audio website