Noel Lee didn't listen to the skeptics when he started a business to make a premium version of a commodity product — speaker wire.

An engineer by training, Lee discovered that wires of different construction produced higher quality audio performance than the cheap lamp wire that was commonly used at the time.

Lee started Monster Cable Products in his garage in San Francisco in 1978. As a musician and avid audiophile, Lee was looking for ways to improve his sound system.

He experimented with different types and methods of winding speaker wire until he found the best solution.

People thought he was crazy to go into business selling premium speaker wire, because stereo retailers back then gave away speaker wire.

Lee knew his biggest challenge was to get past the cynics who felt that wire didn't matter when it came to transmitting music to speakers. Lee believed he could persuade retailers to sell his product if he simply demonstrated it.

The first question he would always get was, "Does the product really work?"

So Lee built a switcher device that could expose the difference between his cable and regular cable for retailers.

With the flip of a switch, retailers could hear the contrast in sound quality flowing from the speakers. The music coming through the Monster cable was more powerful, dynamic and clear, Lee says.

The strategy worked. One by one retailers signed on to sell the Monster Cable product.

Turn Up The Retailers

He ended up making thousands of little switchers for retailers to use to hear the difference in quality. The investment in switchers helped educate salespeople, who in turn would persuade consumers to buy the pricey cables.

He coined the term "necessories" to describe his products. They were necessary accessories for consumers who wanted the best audio and video experience, he says.

Lee didn't have a lot of money in the early days of the company, so he bootstrapped the business one retailer at a time.

"There was a lot of sweat equity in going from store to store and trade show to trade show to prove there was a difference and how much that difference was worth to people," Lee said in a recent interview with IBD. "It took a hell of a long time to build up to any sort of substantial business."

Lee gave retailers the facts they needed to persuade customers to buy Monster cables.

The result was Monster and the retailers benefited from the sale of the high-profit product. Lee created an opportunity for retailers to make money off something they had given away.

Lee didn't spend money on advertising to consumers. He focused his efforts on persuading salespeople to hawk his gear.

"We have a whole focus on making them successful," Lee said.

Monster works with its retail partners on product training, merchandising and educating the consumer, he says.

"It's not good enough to have just the product. You have to have the way to demonstrate and present the product," Lee said.

Lee rewards his retail partners with a free concert by a major recording artist every year at the Consumer Electronics Show in Las Vegas. Performers at the event have included Ray Charles; Crosby, Stills and Nash; Earth, Wind and Fire; Carlos Santana; and Rod Stewart.

When competitors such as Sony and Hitachi got into the cable product market, Monster worked with retailers once again to show consumers why his wire worked best.

Lee started an education program called "Cable Biology" that showed salespeople and consumers what was inside cables and why Monster's products were superior.

"You can put a gold connector on a cable today and call it a high-performance cable and it might not be," Lee said. "From the outside, the consumer doesn't know."

Monster's "Cable Biology" program showed people the mechanical constructions inside its cables.

That program evolved from hard work, part of Lee's fiber. He sums up his long hours this way: "24/7; sleep when you're dead."

That's one reason few firms have created a market and managed to maintain leadership in a category for 28 years, as Monster has done.

"We're the leader in our category. We have a huge following and a good name brand," he said.

He likes that brand so much, he prefers the title Head Monster, rather than chief executive.

Why Monster? He chose the name for his company because it sounded strong and powerful.

Lee credits his success to his focus on building quality products that are better than the competition. He also cites his drive to create new products and enter new markets.

Monster today is capitalizing on the trend toward home theater with high-definition video and surround-sound audio.

That is consistent with his business approach. He looks at existing markets where he can make a better product or provide a better value for consumers.

Now based in Brisbane, Calif., Monster Cable has expanded into surge protectors, power cords, professional audio products, TV cables, home automation controls, computer and video game cables, and mobile audio products.

Privately held Monster does not release its sales figures, but a 2004 story in the San Francisco Chronicle pegged its annual sales at more than $100 million. It makes more than 4,000 products that are sold in about 100 countries.

When some employees at Monster Cable didn't share Lee's knack for "out-of-the-box thinking," he decided to put his business philosophies into writing. The result was the Monster Mottos & Concepts. The document teaches employees a corporate culture and attitude designed to bring out their best.

Lee wants employees to understand his decision-making process and creative process. He doesn't want employees making easy, run-of-the-mill decisions.

Lee, 58, is a risk taker. His advice to entrepreneurs: "Don't be afraid to take a chance . . . because if you don't take that chance, you'll never know what could have been possible."

Lee has taken a couple of big risks in his career.

Music And Monster

Born on Christmas Day — hence his first name — in 1948 in San Francisco, Lee went on to graduate from California Polytechnic State University in San Luis Obispo in 1971 with a bachelor's degree in mechanical engineering. He took a job as a laser-fusion design engineer at Lawrence Livermore National Laboratory.

After five years, he left that secure job to go on tour playing drums with his rock 'n' roll band.

When the band went bust, he returned to work at Livermore.

He also worked nights in his garage perfecting his high-end audio cable. After six months back at Livermore, he quit to start Monster.

Lee has earned numerous accolades — including the 2000 Northern California Entrepreneur of the Year prize from Ernst & Young, Distinguished Corporate Executive from the Asian Business League of San Francisco, and Dealerscope Consumer Electronics Marketplace magazine's Hall of Fame award.

BY PATRICK SEITZ