Taylor guitars is a phenomenon. Prior to its arrival on the acoustic guitar scene, the popular wisdom was that no one could possibly challenge the markets big boys - particularly Martin and Gibson. Occasionally, an outsider would make the bigtime, like Ovation or Takamine, but no one was going to challenge for the top. That's what they said. As so often, 'they' were wrong. Two young Americans, Bob Taylor and Kurt Listug not only challenged the established status quo, they took the market by storm.

Elsewhere on this site is an interview I did with Bob Taylor which was published in early 2006. Earlier this year, I had the opportunity to interview his business partner, Kurt Listug. This article appeared the January issue of Music Trade News.

Since its publication, Fender has taken on worldwide distribution of Taylor, though Messrs Taylor and Listug still own and run the business.


 

INTERVIEW WITH KURT LISTUG - TAYLOR GUITARS

Ask anyone, who is the brains behind Taylor Guitars and they'll tell you it's Bob Taylor. Ask Bob Taylor and he will tell you that much of the credit for the Californian acoustic guitar maker's success is due to his business partner and co-owner, Kurt Listug. Listug it was who would pack guitars in his car and drive across the entire United States for weeks at a time, visiting shops, trying to persuade them that there was room on their walls for another brand of acoustic guitar, beside Martin.

Everyone knows that Listug eventually succeeded and Martin themselves will confess that the innovative style of Taylor's acoustics, with their ultra-slim, bolt-on necks made even the venerable Nazareth maestros eventually sharpen their act. But the question on many people's lips now, as Taylor kicks off the New Year by launching its first ever solid bodied electric guitars is, does Listug have to find his car keys and do it all over again, this time trying to persuade the world's up-market guitar shops that there is room on their walls for more than Gibson, Fender and PRS?

Maybe the biggest question for Taylor is, why do this at all? Why has the company decided to move into the electric guitar business - is it driven by what it feels it can sell, or by what Bob Taylor wants to build?

'It's because Bob and his crew have been tinkering,' Listug laughs. 'You know, Bob and his crew are always tinkering with new ideas and some of them will rise to the surface and we'll develop and some don't. There wasn't a plan to make a solid bodied electric - but it's something people have asked us about forever, saying that because we could make such great acoustics, it would be easy for us to make great electrics, too. But we don't want to make something unless its original, unless we think we've added value and we haven't had anything to offer up unto this point.'

Listug goes on to explain that in many respects the new Taylor solids are the natural outcome of the development of the company's revolutionary Expression magnetic pickup, which in turn led to the T5 hybrid and which has now been refined into the pickup design for the new solid bodied models. Taylor is being very tight-lipped about the technology it is using, but suffice it to say that the pickups on the new solids are distinctly different from what guitarists have been offered before. In short, and judging from early US reviews, it appears the company is using a unique type of magnet, which offers a higher output, fuller frequency response and less inherent distortion. Like the rest of the components on the new Taylors, Listug says, not least the aluminium bridges, they are bespoke, built by Taylor, and the result of a complete overhaul of electric guitar design which the company been working on for a long time.

Which, of course, doesn't guarantee they will sell. That's Kurt Listug's job, so how does he plan to go about it in a market that is, by common consent, awash with products?

'I'm always sceptical about new ideas,' Listug admits. 'I have to be convinced, because my viewpoint is we have a hard job as it is. We sell everything we make and now here's something we have to focus on in addition, so it really has to be right, so not everything that people here get excited about makes it onto the market. But I got convinced that these guitars were really special and that the positive feedback we were getting meant we should go ahead and do it.

'And yes, the whole guitar market is very crowded now, especially compared with when we started in 1974, when there was just a handful of brands. Now there are zillions of brands, but most of them are "me too" products with very little innovation in my opinion and we think there's always room for original new ideas.'

Which may well be true, but guitarists are notoriously conservative, which is why the walls of most guitar shops are still festooned with Fenders and Gibsons, with the occasional patch of PRS and a smattering of others. What does Listug say to a retailer faced with customers who just don't seem to want to even try anything else?

'You'd have to say to that retailer why does he want to carry another guitar? Is it just to make better gross profits because the brands he's carrying are discounted really hard? And that is a business purpose for it. But, you know, the way we got started still applies, I think. We were a no-name guitar. I would take our guitars out, visit stores and hear the same story "yeah, it's a great guitar but it doesn't say Martin on it". So you find enough people that are passionate about what you do and get excited about the product and want to show it to their customers and I think that holds true today.

'I think the key thing about selling our guitars is that, after thirty three years, we've spent hundreds of millions of dollars developing them and the means to produce them consistently and we've spent tens of millions of dollars building the brand and I think there's a brand experience to be had when you see our line. I think, through our marketing, we have communicated a brand promise. I think if a retailer stocks enough of our products, so that when a customer comes in he can have that brand promised fulfilled by having that Taylor brand experience, then the retailer will win and the customer will win and he'll sell a lot of guitars.

'If he wants to take the other approach, a kind of spreadsheet approach, where he says "I need to fill these price points with these features" and he cherry picks from all sorts of lines, then it doesn't really stand for anything. He tries to have something for everyone and I think it falls short. So if a guy commits to our brand, or any brand, and gives customers that brand experience, I think he'll have plenty of sales.'

Part of the challenge facing Taylor is that it has now to cross the great conceptual divide that seems to exist between companies that are successful with electrics and those that are successful with acoustics. Few, with the exception of Gibson, have ever managed to achieve strong sales in both areas. Does that strike Listug as an area in which he might have difficulty?

'Absolutely! I think it is really tricky. I think a brand can't mean too broad a concept, but then look at other industries, look at Sony. Sony's image is a high quality innovative brand in consumer electronics, well I think Taylor is an innovation brand as opposed to a legacy brand in guitar terms. Obviously, people think of Taylor as acoustics, however we're a younger company with a more contemporary acoustic guitar and we've changed the industry with guitars that are easier to play, with our electronics and how easy our guitars are to service. So I think people are willing to give us a chance with our solid bodies.

'I think if we had launched them before the T5, it would have been a different story, but I think the T5 gave us agreement to go ahead with these. I think people look at us as an innovation brand and a high quality brand, so they'll at least give us a chance - but we're going to have to earn it.'

Assuming the world's guitar players do give Taylor a chance and start to sell in serious quantities, does Listug think that they will ever go down the Epiphone/Squier/SE route and start producing a lower cost range in the Far East?

'It's really hard to say, because we have to do what our hearts demand and if our hearts aren't in it, we don't want to do it. There are a lot of things you can do to make money but we do the things that we're excited about we work hard and hope we'll make money out of them, but we don't pursue things just to make money. So you have to ask, what would be the strategy of selling a Korean-made guitar? Maybe there would be a business strategy, because there are people right now selling knock-offs of our guitars, because we're not selling at a lower price point - people making what are almost copies or our acoustic-electrics. So you could, from a business standpoint, say we're missing the boat, because other people are enjoying sales because they copy what we do and offer it at a low price point, so maybe that would be a reason to have guitars made in Korea? But then you have the whole branding issue - would you take Taylor downstream? Would you start a sub-brand and then, if yo
u're going to make something, you want it to be particularly good and how much of our expertise and know-how would we want to export? Would we want to teach factories who make copies how to make better guitars?'

In short, Listug doesn't think they will.

This, of course, is something that the big two, Gibson and Fender, have developed unique approaches to and have managed to handle successfully, but, then again, both seem to be turning into brand storehouses in recent years - snapping up maker after maker. Taylor, meanwhile, is in the unique position of having grown to a very significant size in the past thirty years - a size where it not only attracts would-be buyers, but also smaller manufacturers looking for a lifeline. To date, Taylor and Listug have resolutely refused both type of advances, but what does Listug make of the bed-hopping that seems to be going on lately, with so many brands being absorbed?

'I think there have been a couple factors at work in the M and A activity in our industry. One is that we've been getting older. Many of us started in the '70's, and are thinking towards retirement and getting our money out of the business. This has been a factor here in Guitar Center's growth, and it may be there, as well, as they start buying stores to establish a presence in Europe. Many independent stores have sold to GC, or Brook Mays.

'There's also the factor of ambition, which I would say is one of the ingredients in growth and acquisitions. Some people want to build a bigger company. There's also the financial factor. A bigger enterprise would potentially trade at a higher multiple than a small company. So if one were to buy other companies and combine them into a larger enterprise, and make it work, the larger enterprise would bring an added value to it, which means a bigger pay-day in the end.

'Then you also have the highest motivation, which I would call duty and dedication to the company and to the brand, where one wants the company and brand to grow and succeed and prosper, and employ more people, and satisfy more customers.'

So nether he nor Bob Taylor have ever been tempted?

'Well, especially in the past couple of years, when there's been a sort of M and A fever over here, I'd get calls from investment bankers probably three or four times a week, but we love what we do, we're not trying to retire, were not trying to hand the reins over to somebody else, so we just say no. As for buying someone else, we're just not interested in that either, going out and borrowing money - why? We have inventors here, a whole staff that comes up with new ideas and so we want to do what we want to do and it's cheaper for us to do that than it is borrow money to go and buy somebody else's ideas. We have zillions of ideas - we've only developed and produced some of them, we still have a lot of others. It's like we're songwriters and someone comes along and asks if we want to write a song with them to make money and our response is no, we want to write our own songs.'

Though Listug no longer lives out of suitcases, cross-crossing the USA with a bootful of guitars, as he once did, he is still closely in touch with the US market. So how is it today? Are tales of an imminent recession justified, does he believe?

'If you take a short-term perspective and ask how it is this year compared to last year, then the answer is a little bit slow. However, if you look at a five or ten year perspective, we're maybe a little off our high, but we're still many, many times greater than we used to be. I don't think it's anything to complain about. I don't see the popularity of the guitar going anywhere.

'I remember what it was like in the early eighties. I can't remember how many guitars we were making then - hardly any - and Martin were only working a couple of days a week, Fender was making something like ten or 20 guitars a day and we had just come off that whole synthesiser and sampling thing - guitar was just not even popular then.'

As it's not likely that one half of Taylor Guitars is likely to turn up in your store to explain why you should stock their new products, we asked Kurt Listug what he would like to say if he had the chance.

'I think Taylor is a known commodity as a brand and I think our solid bodies give customers another reason to come into the shop again to see an original product that is not just another copycat imitation guitar. I think that's the biggest thing - that and, of course, the opportunity that's there to make money with a new product.'

Listug is almost certainly right when he says guitarists are likely to look kindly on his company's solid electrics - and there is another, important factor that could play right into Taylor's hands. Historically, the customers who first went for Taylors were electric guitarists who wanted acoustic guitars that felt as much like their Strats and Les Pauls as possible. That means a lot of Taylor users are already electric guitarists and, as such, already enjoying what Listug calls the brand experience.

If the company manages to successfully launch itself into the electric guitar business it would be good news for retailers who need something new and exciting to generate interest and sales. It might not be such good news for the companies whose market share Taylor eats, if successful, but that's, as the say, just how it goes. Either way, given Taylor's track record of success in a sector of the industry people once said no one could ever crack, it would be a rash man who dismissed their chances of pulling of a second amazing coup.

Sound Technology 01462 480000
Web www.taylorguitars.com

Ends.

2008 Gary Cooper