FANATEC RESCUE PLAN REVEALED! - Exclusive Interview with Corsair CEO, Andy Paul

Hey guys, we're here. So something quite different for you today, but something that hopefully you'll find quite insightful. So earlier this morning I had the opportunity to sit down with Andy Paul, the CEO of Corsair, and have a pretty candid chat about the events of the last 12 months for the Fanatec brand, as well as his plans for the future with Fanatec now that they've taken over the Fanatec brand. So before we get into the interview, I wanted to give you a little bit of surrounding context: how this interview came to be, what my intentions were going into this, and a few other little bits and pieces, just to give you a little bit more insight into some of the things that have been going on in the background here. So to do that, we need to rewind back to the start of 2024. You'll remember there were all sorts of issues at Fanatec. They were coming off the back of a massive amount of sales during the Black Friday period, and basically customers weren't receiving their orders, customer service had basically ground to a halt, people weren't getting responses to questions, and it was just a really dark and bad time for anybody that was a Fanatec customer. So during the time that all this was playing out, I felt a very strong sense of personal responsibility to try and get you guys the answers that I felt like you deserved. Not because I felt like we pushed you towards any one particular product, but obviously we review hardware, people purchase hardware based on our recommendations on the hardware itself, and we had no idea that things were going to play out the way they did. We wanted answers as much as we felt that you guys deserved them. So I reached out to Fanatec at the time and asked if I could do an interview with the then CEO of Fanatec, Thomas Jackermeier, and they agreed to doing that interview. They also were happy for me to actually say to the community that I was doing that interview and have you guys present your questions to me, and that's what we did. So you remember back earlier in the year, we put up a post basically asking you guys for your questions. Your response was absolutely amazing, we had a ton of really great questions. Tom and I then sat down for the better part of a week, distilled all that into a list of questions that we felt best represented the sentiment of the community. So we then sent those questions back to Fanatec, and then it was basically just crickets. We didn't hear anything back for quite some time. And look, I was pretty upset about that because obviously I had created an expectation with you guys that that interview would be happening, and then because I wasn't getting any feedback, I had no way of updating you guys on what was going on. So it was a pretty darn stressful time for me, I will admit. Now fast forward a little while after that, and the announcement was made that Thomas had been removed as CEO of the company, and then of course it made sense the reason why that interview had never happened. So then we fast forward back to the takeover by Corsair. I reached back out to Fanatec again and said, look, is there a possibility for me to sit down with Andy, the CEO of Corsair, and ask him some questions? So look, honestly to my surprise, they agreed to it. I didn't think that they were going to. And yeah, that brings us to today. So basically what I've done is prepared a whole bunch of questions. Some of those are based on questions that have kind of been repurposed from what you guys asked months ago, in light of the events that have taken place since then. So going into this, my intention wasn't to grill the guy on all the events that have taken place over the last 12 months. Obviously he's only just come in, there's obviously a lot of discussion around the way that acquisition has taken place, but I think what's really important here is for us to gain a better understanding of who Andy is as a person and what his intentions are for Fanatec moving forward. So that's what I was aiming to achieve through doing this interview, and I felt like we did sort of come away with a better understanding of who he is as a person, what makes him tick, rather than just sort of getting those default PR answers that we might have gotten if we'd asked the questions a little bit differently. So that's why I've asked these questions the way I have, not only to provide the opportunity to give us more insight into the future of the business, but also give him the opportunity to be a little bit vulnerable in his answers as well. And after the conversation, I actually did feel like he opened up quite a lot more than I actually expected him to, which was pretty cool. Now it's also important that you guys are aware going into this that I am a Fanatec affiliate. We have affiliate relationships with most major sim racing brands these days. Now the reason we do it that way is because we want to provide a way that you guys can support us and the work that we do here at Boosted Media without it costing you a cent and without any bias towards any one particular brand as well. Now of course everybody is going to have their personal biases. My job as a reviewer isn't to try and convince you that I'm not biased; my job is to disclose any potential bias so that you guys can make your own judgments. So the way I've tried to set it up is basically affiliate relationships with as many brands as we can. That way it doesn't really matter to us what you guys buy. If you choose to support us by using our links, then that is a way that you're able to do that. So I think that covers off everything that you need to know as context going into this, and I'm really interested to see your thoughts in the comments down below. As I said before, he was a lot more vulnerable in this than I actually thought he was going to be, so really interested to see your take on that and whether you're excited for the future, what your thoughts are on the answers to the questions. So without further ado, let's dive in.

So hi Andy, and thank you very much for jumping on with us today.

Yeah, we really do appreciate you taking the time out of your very, very busy day, I'm sure, to join us today. So look, the sim racing community is extremely close-knit, and I think it's fair to say that within the sim racing community, a lot of people have lost a lot of faith in the Fanatec brand through the events of the last 12 months. Obviously a lot of things have been going on, you're only just taking over the company, but naturally there's going to be a lot of people, including myself, that are very curious to hear your take on what's happened over the last 12 months, how you plan to turn things around, and why they should trust the Fanatec brand moving forward. So before we get into the more specific questions, seeing as this is the first time most of us have met you, do you have anything that you would like to say to the sim racing community?

So you touched on this already a little bit, but the next question I had for you was: a lot of sim racing manufacturers are owned and operated by people that are actively involved in motor racing, or at least have been in some capacity in the past. So can you tell us a little bit more about your background? You mentioned before that you had done a little bit of karting and been around the track quite a bit, and I guess just what brings you to sim racing, what sparks your interest in sim racing both personally and as a brand?

Yeah, to hear your perspective on that. And the people that are involved in this, I mean we've got the product manager, we've got a reviewer, this guy Mark Park who's been a reviewer for years, a Dutch guy actually from Amsterdam, and he's been a reviewer of sim rigs for probably 15, 20 years, really good race car driver. One of the guys we brought in to lead sales at Fanatec is also a GT3 driver. So yeah, we've got plenty of experience in terms of the difference between a good and a so-so product. I'm not concerned about that.

Definitely. And I think from my perspective as well, just having dealt with a lot of the staff at Fanatec over the last five or six years, one thing that has always been very obvious to me being in that position is how passionate a lot of those guys are, not only about their products but about racing in general. They are genuine enthusiasts, not just engineers that are looking for a job basically.

Excellent. It sounds like it's a pretty good alignment there then. So yeah, next question I had for you is: you said in a previous statement that you've long admired the Fanatec brand. Now we know that you guys have already been developing some sim racing equipment on your own. So we saw the new cockpit that you announced a little while ago and had on display at ADAC just last week. So those were obviously developed completely independent of Fanatec. Can you shed a little bit more light on why this acquisition has come to be from your perspective? Because obviously you have the resources to develop products on your own. So yeah, if you can shed a little bit more light on that.

I mean, that said, their CSL Elite V2 pedals are actually some of my favorite pedals on the market at that kind of price point. So they definitely know what they're doing when it comes to pedals. But it has been a long time since we've seen that kind of Podium level product. In fact, I think the V3 pedals came out almost 10 years ago now.

Awesome, I'm very happy to hear that. So yeah, I guess we've already kind of touched on this a little bit, but most sim racing manufacturers are relatively small businesses, at least compared with a company like Corsair. So you guys had a market cap of over $700 million last time I had a look. Can you give the viewers a better understanding of the scale of Corsair? You mentioned already that you have factories that are producing equipment for you. I know that Fanatec previously had a factory that was basically they were paying for the resources there as far as I understand, rather than them actually owning the factory. So yeah, I think it'd be valuable for the viewers to really understand the scale of Corsair and what kind of power that gives you in terms of all the different various facets of manufacturing, designing products, and marketing them.

I guess one of the big differences there is that if you're comparing to Fanatec for example, obviously before the acquisition, all of their marketing, basically all of their resource, all has to come from direct sales of their own product. Whereas you've got the advantage here now of having an open pool of resources, and I guess you can pull funds from a different area of the business to help sort of get Fanatec off the ground initially. And then because you've got that scale and that massive amount of resource, you don't necessarily, at least initially, have to be making a profit on this particular business entity.

So with all of that in mind, what do you believe that you can bring to sim racing that hasn't been done before?

Fantastic. So your press statement said that you intend to make significant investments into the Fanatec brand. Where do you intend to focus that investment, at least initially?

We'll discuss software a little bit later on because I've got some specific questions around some things. RGB will be mentioned. But what are your... you've already touched on it a little bit, but can you expand a little bit more on your plans in terms of global distribution? One of the big complaints that we've seen for many, many years now with relation to Fanatec specifically is availability around the world. Obviously they've wanted to keep their profits as high as possible by not having to pay middlemen in terms of distribution, but that does limit their reach and it does turn a lot of customers that would have bought their products onto other brands.

So we've already touched on customer service a little bit there as well. One question that I had based on what you were saying before: you were talking about sort of integrating the customer service into your existing resources. Now you've also said that the current staff and structure of Fanatec will remain, at least for now. So what are your plans around actually integrating the customer service in? So obviously at the moment, people still, if they have an issue with a product, obviously you're honoring warranties and all that important stuff, but the process is still at this point that people get in touch with Fanatec through their support structure. Does that then now go to you guys, or is that still handled independently, or how does that actually look?

It definitely sounds like you've got a solid plan though.

I think that was a big part of the major issue around Black Friday sales and end of year last year was the fact that every single customer service inquiry was all going into the same bucket essentially.

Well, we recognized that very quickly. I mean, they recognized it as well at Fanatec, it's just that they couldn't do anything about it.

What about general brand communication? I think that's something that a lot of people feel has been lacking as well. People haven't really felt like they've had a clear picture of what's going on behind the scenes and when they can expect new products, sales, those kinds of things.

No, I think one of the big struggles that I've perceived at least for customers is just not having a clear expectation, or sorry, not having a clear picture of what their expectations should be. So somebody sends an email to customer support, they might not get a response for a week, and if they don't know that that's expected at this point in time, then they're going to keep on sending more emails, more emails, more emails, and it just creates this cumulative snowball effect. So I think that's definitely something that is going to be really important going forward, is having that clear communication so that expectations are set appropriately for customers. Because if people know what to expect, they're much less likely to complain in general, I think.

Well, and there's just no need to. I mean, there's no problem having multiple brands. It's a bit more expensive from a marketing standpoint, but realistically we have to accept the fact that we're up against competitors that are small and nimble. And so we don't want to be one company with one brand. We want to be 10 different brands all fighting against their competitor, and that's much more effective.

So you mentioned there at the moment about two weeks response time. So is that an official answer? If somebody were to contact Fanatec at the moment with a customer support inquiry, they should expect about two weeks?

Okay, great. Well, that's not too far away now. You've already got about a month, so exactly. So obviously this video is just a snapshot in time, so for the most recent information regarding that kind of thing, people should still be going to the Fanatec blog, I assume?

Yeah, I think just generally the direction that you're going with distribution is going to make things a lot cleaner and more simple anyway. One of the big issues I think at the moment is the fact that, at least here in Australia, I'm not sure exactly how it is overseas but I believe it's the same, individual items within an order ship individually. So people might receive their wheel and their pedals one day but not their base. So of course naturally they're going to jump online and say 'Hey, my base didn't come,' and that creates a whole bunch of customer support inquiries. So stuff like that...

So you've already touched on your plans to basically let Fanatec be Fanatec and just sort of help support them rather than absorb them into the Corsair brand. I assume that that is your long-term strategy to sort of keep that structure remaining?

In terms of long-term for current employees, obviously some of those responsibilities that are currently handled in-house are going to be moving external. So as it stands right now, from what I understand, all the previous employees have all just moved across and they're all kind of just going about their daily business as usual. Obviously there must be some sort of restructuring that's going to take place as part of that. There will be, I would imagine, some redundancies in there?

Okay, that's fine. So we already touched on manufacturing a little bit there as well. But obviously at the moment you have your own factories, Fanatec has the factory that they're using too. Is it a priority for you guys to sort of try to bring that manufacturing into your own, or are you looking at restructuring that sort of things too?

Definitely. And how involved do you intend to be personally in this entire process? Do you see this as being something that needs your direct involvement day-to-day, or is it more of a case of just opening up these resources as we've discussed and then just letting them do their thing?

So Fanatec currently offers a huge lineup of products spanning everything from entry-level direct drive all the way through to ultra-high-end steering wheels like what you would find in actual real-life race cars. Now while having something for pretty much everyone has certainly been a big part of the success story, I think at least many people, including myself, have at least partially attributed this to being part of the reason the brand struggled to scale with the fluctuations in the market. We were already talking about how there was this massive bubble around COVID, there was all of this additional income all of a sudden, and then it just falls away again. So you already mentioned that you were looking at different types of products for different markets, different resellers and so forth. Do you have plans to consolidate the lineup overall, and is there a specific segment of the market that you plan to or intend to focus on primarily?

Right, okay. Well, that's actually really encouraging to hear for me at least. I know a lot of people were very concerned that the moment you guys took over, all that high-end stuff, while it's not for everybody, a lot of people do love that stuff, they're worried that that's just going to disappear.

So Fanatec obviously had a lot of third-party relationships: Porsche, BMW, Bentley, and then of course Sony and Microsoft as well. Have they all carried over to Corsair now?

Okay. Now moving on into sort of more the marketing side of things now. Fanatec, as everybody knows, is pretty much everywhere at the moment. Any motorsport that you see, you're going to find a Fanatec brand there somewhere. To the extent that a lot of customers understandably are asking, 'Why is Fanatec spending all this money on advertising but not scaling their customer support?' It's a pretty reasonable question, I think. So what are your intentions in terms of things like sponsorships? Obviously there's going to be some contracts that you're locked into, you're not going to be able to just get rid of them. But do you intend to maintain that same level of presence that Fanatec has at the moment, particularly in real-life motorsport? I think that's probably the main area that people are sort of attuned to.

Okay, that makes sense. So we already talked about plans for the Fanatec brand in terms of products. What about software? You did touch on a little bit before, and I know that Fanatec also displayed their more consolidated software at the conference just last week as well. So there's obviously some things that they haven't released themselves yet. Now obviously you guys have your iCUE software, you've already got a pretty well-established basic structure for your software there. Do you have any plans to consolidate their software into your own, and what do you think that looks like? Obviously companies like Logitech, for example, have their G HUB software which kind of brings everything into one pool. There are advantages in doing it that way because it's one piece of software for everything, but then that can also come at the cost of some bloat as well. So it'd be good to understand a little bit more about the plans there.

Yeah, I mean, if you have a Corsair gaming rig, which we hope a lot of people will, a gaming PC to drive the rig, then you get iCUE in that. And if you want to use it to connect lights around the chassis, fine. But I don't see going through an iCUE portal to get to a SimHub kind of structure. It doesn't make any sense to me.

So getting into some more general questions now. What do you see as the biggest challenge that awaits the Fanatec brand?

Yeah, no, I remember my dad teaching me when I was a kid that you should always be developing the product that is going to put you out of business in three years.

So on that note, who do you see as your largest competitor in sim racing?

And what do you think sets Fanatec apart from other sim racing manufacturers?

Yeah, I think if it wasn't a desirable product, people wouldn't care so much.

So where do you see the Fanatec brand in 12 months, let's say, and if we zoom out, maybe even five and 10 years time?

Yeah, I think that's a thought I've pondered a lot. And I think the one thing that's missing, that maybe we'll never get at least at a size that's workable in a home, is the sensation of sustained G-force. So you can simulate turning into a corner, you can simulate acceleration, braking, all those things. But actually having something that simulates that continuous force as you go around a corner, the only way that I can think of to do it in an indistinguishable way would be to have something that is able to rotate in any direction continuously, but then you're going to be tethered and...

So you reckon the goal for sim racing in 10 years, one of my next questions was going to be what do you think sim racing looks like in 10 years. So you reckon 10 years time, indistinguishable from real life?

Definitely. So moving on into a couple of more general questions just to finish up here. As a CEO of a massive corporation, what do you think is least understood about how a company like Corsair operates?

And just to finish up here, what is the most recent thing that you learned that you think makes you better at your job?

Good stuff. And yeah, finally, is there anything else that you would like to say to the sim racing community that we haven't covered?

No, as I said at the start, the sim racing community is extremely close-knit. Everybody knows everybody, and it is a very, very, very passionate community. Sometimes that works both ways, that passion can be directed as negative or positive energy. But in general, everybody knows each other. It's a really great community to be a part of. So look, thank you so much for your time today. I'm sure the audience appreciates it as much as I do personally as well. And yeah, we wish you all the best with all the future endeavors. You've got a lot ahead of you, but it sounds like you've got the right idea. So looking forward to seeing what happens.

Sounds good. All right, well, thank you very much, Andy. We'll talk to you again soon.