The guitar company PRS is the namesake of its founder, Paul Reed Smith.  Not too long ago I  watched a video of him doing a TED talk about his life’s journey building guitars and whatnot.  I figured there might  be a little overlap in his company’s story and ours.

I have trouble watching those TED talks, with their busy editing and the blow-your-mind punch line designed to make you feel like you’ve been living your life all wrong up until now.  To his credit, Mr. Reed Smith did not try to blow my mind. He gave some down-home aww-shucks advice on how to get on in life, and then played a pretty good star spangled banner (I hope that was not supposed to blow my mind….sorry, but I’m surrounded by great guitar players).

No, the real zinger for me came less than a minute into the talk when he blurted out that to start the company he formed a limited partnership because that’s the only way a hippie like himself could raise a half a million dollars.

That was a bolt of lightning. ‘So that’s how you’re supposed to do it’ I thought.  Because that is totally not how we did it.  Chris and I did not raise a half a million dollars to start a company. We did not even really think about starting anything, Chris just wanted to work on guitars all day, and I wanted to do something else besides work at my crappy job.

There was a small amount of money left over from Chris’s  college fund, and an even smaller amount of money that I saved up at the crappy job I had just quit.  That’s what we used that to “start” our company.

We had no plan, did not know at all what we were doing, and had to figure everything out on the fly.  It was the mid  90′s. In keeping with the indie-rock, post-punk times, we were, a D-I-Y guitar company.

It’s all come full circle now, and I can totally see the value in starting off with money and a plan. There are definite drawbacks to living in our little boutique, niche of the guitar market.  It’s a question of scale, it’s hard for us to afford advertising in a market that’s geared towards PRS-sized companies.  And without advertising, no one knows who we are, and so we remain a small company.

While I may be too old now to be a punk kid, maintaining the do-it-yourself ethos has worked out alright for us.  Chris gets to work with guitars all day long, and I never work more than 30 hours a week and I even get to sleep in sometimes. The bills still get paid, the inventory comes in and goes out and the company hums along. Every now and then I think that maybe our time has come, and  we should so something conventional, like form a limited partnership with someone who can really invest in the company, but that’s an awful lot of responsibility and I’m still not sure if I’m ready to grow up just yet.

See Paul Reed Smith’s TED talk:

I have been thinking quite a lot about this post, it’s a big important issue. It’s a topic where the guitar mfg. industry is intersecting  with politics and the bigger world in general and that’s kind of fun.  But also, because it’s something that I really do care about, and though DiPinto Guitars is not nearly big enough to be a real player in this debate, I can certainly blab about it to anyone who is willing to listen.

If you don’t know about the Lacey Act, here’s the nutshell version…it’s a bill from 1900 that banned the importation of animal products from countries where it was illegal to harvest those products.  My best understanding is that it was written to try and stop the ivory trade. In 2008 it was ammended to add plant products too.  And that is what all the fuss is about. There’s your job-killing government overreach, or whatever they are calling it on the Wall St. Journal editorial page.

I would just like to point out right now that for the last I-don’t-know-how-many years we’ve had to get a Fish and Wildlife license because the guitars we import (made in South Korea) have abalone and shell inlays.  So that’s they way these things work.  At some point, we showed up on somebody’s radar as an importer of products that contain abalone and mother of pearl, they keep our info on file and we all make sure that our guitars don’t have any endangered shells used as inlays. I don’t really have a problem with  the extra 10 to 15 minutes  and $100  it takes every year to renew my license.

Gibson Guitars  is a huge company, and it takes them way more than 15 minutes and $100 to comply with the law, but this is basically why they are having such a tizzy-fit.  Ok, so they got raided a few times.  But you know how it is, raid me once, shame on you, raid me twice, shame on me.  Although, that’s not how how their CEO Juszkiewicz sees it, he’s got the whole industry up in arms, he’s got NAMM on his side (it’s not the only issue I disagree with my lobby group about) he’s got Tea Party activists drooling all over themsleves to point out the needless governtment regulation,  he’s got Ted Nugent ready to go arrow hunting to shoot down them pesky varmint government regulators.

But lets take a step back for a moment and see who does agree with this…

(source reverb.org)

OK people… Mick Jagger and Sting.  I don’t care WTF Ted Nugent has to say, you could not get higher profile artists than Mick Jagger and Sting.  I don’t know why Gibson doesn’t embrace that rather than fight it (I don’t know, but I do have some ideas. That’s a subject for another post)

I’m sure I’ll have more to say about this issue, but that’s all for now.

More info about the Lacey Act:

http://www.reverb.org/project/lacey/index.htm

http://www.eia-global.org/forests_for_the_world/Lacey_Resources.html

And we were all so excited!
But now, no more headlines like this:

Fender reports higher sales, lower profits
http://www.marketwatch.com/story/fender-reports-higher-sales-lower-profits-2012-05-10

The highlight of this article?

Fender, which has filed to go public on the Nasdaq at some point this year, saw its net sales rise 2.2% to $174 million in the first quarter, and its net income decline 73% to $1.9 million in the first quarter.

Wow.

That can’t possibly be right, can it?  And if it was, why would anyone (at least anyone who cares about money, which is pretty common among the investor class) invest in them?

But then you can also find data like this:

The above numbers are from Fenders own prospectus, so they’d better look good.  But still, look at that bottom line there.  Granted, the economy has been weird, but their net profit/loss is all over the place!  I have to say, if I was someone who cared about money I would not put it in a company that only shows a profit every other year.  And if I was someone who was thinking of selling bits of their company out to investors and then being beholden to those investors (an idea that scares the bejesus out of me) I would not think that those numbers would make me look in any way attractive.

There is a great story here about the whole thing:

http://finance.fortune.cnn.com/2012/07/20/why-fender-pulled-its-ipo/?hpt=hp_c4

The CNN article points out the Guitar Center connection, which is another company not doing so well these days

Guitar Center Opens Two Stores Despite Debt Downgrade 
http://digitaleditions.sheridan.com/display_article.php?id=1010001

Guitar Center Debt Downgraded, Capital Structure “Unsustainable”

Y’know one thing that might make it unsustainable?  Well, I’d guess one reason is because they owe Fender, what was that number eleven million dollars??? And maybe that is why Fender wanted to raise a little money, get some cash coming in from some place else, sell off a little stock, get things rolling again. But now it’s not happening.

I think it’s probably better this way. (Maybe not for Guitar Center, but that’s a whole other story) Sure, on some level we are a competitor of Fender, but honestly, I would not like to see them driven down a path of quarterly-profit fueled suckiness.  They have an awesome brand, they have the best players, a great history, it would be a shame to throw that all away to make the investors happy. It may be a rough few years ahead for them (welcome to the club) but in the end I hope it turns out that Fender stays with us with the intent of making great guitars instead of making great profits.

It’s a constant  in our industry, I imagine in most industries;  the introduction of weird,extraneous products.

Oh my god! They’re coming in through the walls!

OK, so this product is totally not useless. We all need to hang our guitars from the walls every now and then, but totally weird, right?  I cannot imagine what was going on in that product development group!

I don’t know what is more bizarre, the actual visual look of the product, or the fact that this particular series, finished in pretty metallic colors (what the company calls ‘vintage Fender colors’) is called the “Ladies Series” .  So, is this for the ladies?  Or is for the guys,  who before this could only fantasize about a disembodied, metallic, yet distinctly feminine hand gently cradling their guitar.

http://guitargrip.com/prod_GS%20Ladies.htm

Well, we set up guitars of course.  But yesterday was a little different.   Chris packed up a tote bag full of allen wrenches and screw drivers, a soldiering gun, and a cordless drill, with the kids packed in the car we went over to the Girl’s Rock Philly practice space to help them gear up (literally) for camp. I had to go back to the shop for some spare parts, pickup springs, knobs and screws, we had to take two guitars back to the shop for more work but all in all the day went pretty well, and all the other guitars and basses are ready to rock!

Chris working our makeshift set-up table

I have been teaching bass at the Girls rock camp here in Phila for the last 3 years, and am preparing for my fourth.  I am in the groove of it now.  There’s the big stressful buildup towards camp (where we are right now), there’s the crazy, frantic, but super-fun week of camp, there’s the showcase where the girls play and us counselors get all weepy, and then it’s over.  Till next year.

If you are not familiar with Girl’s rock camps, they are all over the place!  It’s a very cool thing.  A summer camp with all female counselors for all female campers.  The girls come in, form bands, get some instrument instruction, write a song & play a show.  All in one week.  Some people bristle at the all-female aspect of it, and I’ll admit I didn’t get it at first, but I totally get it now.  It’s not like anybody  hates guys, they certainly help out getting ready, but during camp week it’s all women run.  It’s more an equal- opportunity thing.

There are Girls Rock camps all over, even in Sweden!

There’s a few reasons why I volunteer at the camp.  First, it’s good to volunteer doing something.  I sat on my butt for years and years thinking “I should really get involved in some volunteer project” and then one day the camp director reached out to me and asked me to teach.  I could have been a little more pro-active on the getting out there part, and now that I think about it, I’m a little embarrassed that I waited for an invitation to get involved.

Second reason is a lot like the first reason, it’s a good thing to do.  I wish I’d had a camp like this when I was younger.  If I can make some slightly off-center teenager (I was a very off-center teenager) come in to their own, then that’s something worth doing.

And then the third reason might sound a little cynical but it really is not.  Is it so awful to say that teaching kids to play guitar and bass is good for business?  Or that there is business value in educating potential customers who will have a lifetime interest in buying guitars?  Okay, a little cynical, but at least I’m admitting it.

And the whole women-centric aspect of it? Like I said,  I was not sure of that at first, but it’s a great environment, and really safe place for girls to try on a different personality.  Some people might question why it’s needed, like I said, I  questioned it myself. But then this shows up:

Every year this gear guide shows up and I just roll my eyes.  What else can I do?  This is how new gear is marketed, with stripper girls.  And just last week I sent in a check for my ad in this very  guide , so am I complicit?  Am I trying to atone for my sins? (maybe)  I like to think I’m just trying to change the demographic.

More information about Girls Rock Philly here:
http://www.girlsrockphilly.org/

Find a Girls Rock camp in your area:
http://www.girlsrockcampalliance.org/