If you're a fan of Shark Tank, you may remember John Devecka and Eric Berkowitz. They are the founders of Singtrix, the New York-based maker of a voice-enhancing karaoke machine that promises that even Mr. Wonderful can sound like an American Idol contestant. On season six of the show, in 2014, the co-founders came out dressed like 1980s-era roadies, belting harmonies and flaunting Singtrix's flashy audio effects.

They walked away without a deal, but their $350 device got them on Ellen and the Today show and in many major publications. The karaoke machine, which was developed with Guitar Hero creators Charles and Kai Huang, was everywhere, including Amazon and Guitar Center--about 3,500 retail locations in total.  

Until it largely vanished from shelves in 2017. Customers looking to buy new Singtrix machines as holiday presents struggled to find them online or in stores. The company told retailers not to expect a holiday shipment but offered few details as to why. The following year, they were given the same vague story. And then just as quickly as the Singtrix disappeared, it reappeared in an Indiegogo campaign in March asking supporters for $30,000 to bring it back.    

What happened? In an exclusive interview with Inc., Devecka and Berkowitz revealed the story of how two years of production mishaps brought the company to the brink. It's a cautionary tale about not planning for worst-case scenarios. It's also a tale of two founders who are determined to make a comeback and betting their fans will help them do it. 

Up in Smoke

After meeting in college over a mutual love for really loud music, Devecka and Berkowitz invented an arcade drum game called Drumscape, which they co-branded and licensed to MTV in 1997. Drumscape let people do their best Lars Ulrich impression in a simulated jam session. The pot of gold was the underlying patented technology--which they later sold to Activision for an undisclosed amount and was used to create Guitar Hero in 2005.

Devecka and Berkowitz went their separate ways until 2013, when they reunited to work on a new music product: Singtrix. They recruited the Huangs, as well as Al Roque, who had helped them develop what became MTV Drumscape. In 2014, they signed a deal with Voxx Electronics, a distribution firm in Hauppauge, New York, to manage the manufacturing logistics. After the Shark Tank appearance, Singtrix was on a trajectory of growth and profitability, selling tens of thousands of units between 2014 and 2017, the co-founders say, declining to disclose annual revenue.

Then in August 2017, Singtrix's CEO, Devecka, received an unsettling email from the owner of the Chinese factory that manufactured his karaoke machine. "It said, 'Oh, we had a big fire,' " he says, adding that the email included a video of the manufacturing plant engulfed in flames. "It was awful."

The facility was put on lockdown for two months while the fire was investigated, according to Devecka. The factory owner couldn't go in, he says, so the Singtrix team had no idea how badly the fire had damaged their molds and tooling. Worse still, he adds, the company was in the middle of ramping up production ahead of the holiday season. With the factory closed and no idea if their proprietary parts had been spared, Devecka says the team decided to cancel all orders and put the brakes on marketing. Singtrix planned to sell at least 37,000 units in 2017, but it shipped only 20,000, according to the company.

"To miss an entire holiday season--almost all of our sales happen around the holidays--it was devastating," says Berkowitz. He says they chose to gloss over the details with Amazon and other retailers, and simply said the Singtrix had "sold out" for the season. Meanwhile, he and Devecka were still trying to assess the extent of the damage--but the factory owner was unresponsive. "No answers, no answers, no answers, no answers," adds Berkowitz. "That's pretty much what was happening." The factory owner did not respond to multiple requests from Inc. for comment.

Since Singtrix did not have manufacturing insurance, Devecka explains, the sales losses were significant. The company's relationship with its distributor also became strained, he says, leading Singtrix and Voxx to part ways in what he describes as a mutual decision. While Voxx confirmed its prior relationship with Singtrix, it declined to comment further.

When the factory re-opened at the end of 2017, the manufacturer managed to ship a couple thousand units, which Singtrix sold in early 2018. But the year didn't get off to a good start, according to Devecka: The factory closed again for the Chinese New Year's celebrations, and conversations to restart production progressed slowly after that.

Another Bombshell

In May, as Singtrix's team began to plan for the holidays ahead, Devecka says, they got another bombshell: The facility was closing to rebuild and modernize. It wouldn't reopen until the end of the summer, leaving little room for the startup to meet its holiday goals--again. Singtrix was offered the use of a third-party factory, Devecka recalls, but it would cost about 40 percent more and require paying 50 percent up front.

Once again, Berkowitz says, he had to go back to retailers to apologize and explain they would miss another holiday shipment. "We spent most of our time fielding emails from people who wanted to buy and asking us what's going on," he says. "You don't have any real answers for people." New York-based B&H Photo, which carried the product, was one such retailer that was told Singtrix was sold out again. B&H's 2017 holiday orders went unfulfilled and it hasn't received any new Singtrix units since, the company told Inc. 

As Devecka and Berkowitz desperately searched for a new manufacturing partner, they noticed savvy re-sellers listing used Singtrix machines on eBay and Amazon for as much as four times the retail price. Berkowitz and Devecka say they took comfort in seeing continued demand for the Singtrix, but they were also furious. They had created a popular product consumers were willing to pay top dollar for, but they were not reaping the rewards. On the contrary, they say, the company was struggling to stay afloat.

"We were never going to close the company," says Berkowitz, but things have been tough. He and Devecka have not taken a salary in more than 12 months. The only reason Singtrix has been able to survive, says Devecka, is because the company has low overhead costs--its five-person team works remotely. 

"Even if we had to find other means to earn a living, this company was not going to die," adds Berkowitz. "Singtrix is a rockstar, and no matter what happens, it's going to outperform us."

Calling in a Lifeline

Last fall, Berkowitz and Devecka realized they needed funding to rebuild their company. They decided to turn to Singtrix's fans for a lifeline. Their Indiegogo campaign, launched on March 20, has already raised nearly $200,000 from crowdfunders who want to get their hands on a new version of Singtrix's karaoke machine for less than $300. The campaign doesn't reveal the ordeal the co-founders have been through--a company timeline says the device simply sold out in 2017 and again in early 2018. Singtrix also tells crowdfunders that it has secured a new "high capacity" manufacturing partner in China.

Devecka says he has been calling retailers about the karaoke machine's comeback. He says one of the company's former European retailers has already requested a year's worth of purchase orders but he declined to share specifics. However, Berkowitz and Devecka say they will keep their product off store shelves--including their own website--until Indiegogo backers get their units later this summer. They also pledge to donate $5 from every order to VH1's Save the Music Foundation.

This time around the co-founders are doing things differently. They're forgoing a distributor and say they'll be more hands-on with their manufacturer. A trip to China is in the works for April, and they're also purchasing "extra insurance for the things you couldn't even imagine could happen," Devecka adds.

It will be challenging, admits Berkowitz. After all, the company still has just five employees--including the two co-founders. And the Singtrix isn't the only souped-up karaoke machine on the market: competing devices, such as Singing Machine Studio, includes auto-tuning technology to enhance voices. Nonetheless, Berkowitz is confident.

"This is the brightest future I have felt for the company since inception," says Berkowitz. "It really is. This is the time."

Published on: Apr 1, 2019