Let’s just come out and say what many people are thinking, and more than a few are saying: Sonos needs a new chief executive.
I’ve written previously that I don’t particularly care who runs Sonos. I don’t know Patrick Spence. (I think I’ve been in the room with him once, at the Sonos One launch event in October 2017 in New York City.) I don’t own Sonos stock. I do, however, own a number of Sonos speakers and have enjoyed the system for years. Until this year.
I’d also like to think I can recognize a basic need for accountability after this summer’s major Sonos software meltdown.
Spence has been with Sonos since 2012 after spending 14 years at BlackBerry. His official bio at Sonos says: “He has played a central role in the development and launch of some of the company’s most successful products. Patrick has also led the company’s expansion into new territories including China, France, Australia, and Mexico.”
And there’s no denying that Sonos’ speakers — and now headphones with the Sonos Ace — are really good. They made short work of listening to whatever you wanted in your home or business. The entire company deserves credit for that, over a couple generations of products.
Spence has been at the helm of the company since 2017. The company went public in 2018, and Sonos stock peaked at about $43 a share in April 2021, about double what it debuted at. (That rise also coincides with the global pandemic that kept folks indoors throughout 2020 and 2021.) The stock has been on a mostly downward trajectory since then and, as of this writing, is about a quarter of that high-water mark.
It’s a tough industry, something Sonos has readily acknowledged. The addition of headphones to its product ranks was Sonos jumping headfirst into what it says is a new $5 billion market segment.
But the Great Sonos Meltdown of 2024 hasn’t just been an embarrassing blemish for the company. It’s a huge kick in the speaker cone that has led to two new (and as-yet unannounced) products — which Sonos has said are ready to ship — being delayed as Sonos fixes the problems in its app and in its platform “until our app experience meets the level of quality that we, our customers, and our partners expect from Sonos,” Spence said on the company’s August 7 earnings call.
With the app, however, my push for speed backfired.
For his part, Spence accepted responsibility for the debacle. Here’s an excerpt from his prepared remarks on the earnings call:
“While the redesign of the app was, and remains, the right thing to do, our execution — my execution — fell short of the mark. Since I took over as CEO, one of my particular points of emphasis has been the imperative for Sonos to move faster. That is what led to my promise to deliver at least two new products every year — a promise we have successfully delivered on. With the app, however, my push for speed backfired.”
Spence later referred to “the short-term pain that we’re having right now in that rollout.” Given the full timeline of a company, he might well be right. This likely will just be a bump in the road — a major bump, to be sure — but this, too, shall pass.
The question is how things look on the other side. Part of accepting responsibility is recognizing that once the fire is out and the immediate danger is over — and we don’t yet know when that will actually be — the person responsible for the fire in the first place is no longer the person to continue to lead the charge.
Part of a leadership change would be a PR function and would assuage angry customers, even if that’s not necessarily the biggest concern for the company. (That’s not to say Sonos doesn’t care about customers, just that the business end of things matters a lot, too.) And part of a leadership change would be to show that Sonos, as a company and corporate entity, recognizes the magnitude of the mistake, the loss of trust with customers and brand loyalty, and the loss of revenue that comes with this botched update. And that monetary cost comes in the form of a short-term $20 million to $30 million just to fix the code, Spence said, along with the loss of revenue from delaying two new products. (As well as customers being skittish to buy any other Sonos products in the meantime.)
When Sonos co-founder John MacFarlane announced in January 2017 that he was stepping down as CEO, he wrote that “I am always trying to find leaders who are capable of taking Sonos to the next level, part of that means assessing my own role.”
Spence should remain CEO while the Sonos app is rebuilt and the platform is brought back to its former usefulness. But after that, it’s time to assess that CEO role once more.
