Category Archives: Lagniappe

Gibson bankruptcy: Can these guitars rock redemption?

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How many brands do you know that you thought were “cool,” then fell victim to investors’ growth demands, and cheapened themselves by falling into the AFAB (anything for a buck) trap? As Gibson, like other leading guitar-makers watered down their brands, they’ve become a bit like Playboy. You know, Playboy, the erstwhile aspirational lifestyle brand that’s now arguably best known the bunny air fresheners hanging on pegboards in dollar stores and car washes?

Alas, poor Gibson, the “entertainment lifestyle” brand hat couldn’t. Following years of expansion and brand extensions, the company filed for bankruptcy on May 1. And it may spell a better future for the only thing the company ever did that mattered: making great musical instruments.

Founded in 1902 and once-again privately held since 1986, Gibson lost its focus, found itself $500 million in debt, and is on the cusp of taking a $135 million loan from a new conglomeration of fund managers and bond holders. It’s a deal that’ll likely hand ownership to people who don’t know much about Gibson’s “120 Years of Innovation.” (As documented in Gibson’s  timeline.)

As musical friends reacted (no doubt worldwide) on social media, I found my own gut vacillating between two sentiments expressed by two musician friends in my hometown, Chicago:

“Rock is dead.” — Doug Hagman, Terrapin Flyer

“…if you are looking for Gibson, there are 20,000 hanging on music store walls as we speak. And that doesn’t include Europe.” —James Chrzan, Paradise Waits

Doug’s got a point; today’s guitars are something of an automated, high-tech echo of the design and handiwork of Les Paul and other greats, and company ownership has shifted to a conglomeration of investors. But James is also right. Those who want and can afford a Gibson can find a huge selection at music stores both brick and mortar and online. If they’re made well and play well, great. If not, there are many other companies large and small making guitars the old fashioned way.

Headlines like the one Rolling Stone ran on May 1 — “Iconic Guitar Brand Gibson Files For Bankruptcy” — were perfect for causing hand-wringing by Gibson aficionados.  But the deck (subhead under the headline) immediately followed: “Company will refocus on its musical instruments, shedding its audio and home entertainment business.“

Part of me — and many others — resent pure financial plays by investors whose moral fiber has no any steel strings attached. Other headlines similarly told a more cheerful story, such as Bloomberg’s “Gibson Files for Bankruptcy in Deal to Renew Guitar Business.” That’s the sentiment that led me to opine that the Gibson filing might be good news:

“If they shed stupid businesses like the boom-box business it bought from Philips, AND if all the good people don’t quit or get fired (or escape to Heritage Guitars!) — Gibson can restructure and get back to making guitars.” (More on Heritage below.)

Yeah, just one idiot’s opinion. But by “stupid” I refer to Gibson’s 2014 acquisition of Philips’ the audio, video, multimedia and accessories business, which turned out to be a financial albatross. At the same time, companies need to make money to stay in business, and the guitar business, with sales of $5.6 billion in 2017, has been relatively flat for years. It’s just not that exciting to investors. (Gibson’s lucky a few care enough to step in with loans.) As for firings, Gibson in March planned a pre-filing workforce reduction of 12-15%, following layoffs already made to its Custom Shop, Digital Music News wrote last month. That is NOT how a company seeking to shed non-core businesses treats the braintrust of its core business. It smells more like a move by execs who are about to pack their golden parachutes and bail out before the axe falls.

MarketWatch provided some good insight early in the bankruptcy filing news cycle with the “day-of” (May 6) story, “As Gibson files for bankruptcy, are people falling out of love with guitars?”  Another, filed May 10, provided more insight into why guitar companies are struggling and how to revive them. In that latter story veteran guitar pro Stevie Salas, said, “Gibson was pressured to get super-rich and they made moves that can destroy companies.” He lamented moves from Gibson, Fender and others watering down their brand image by slapping their names on $99 guitar packages sold in big-box and club-store retailers.

Writer Tom Teodorczuk added that “cheapening an iconic brand while at the same time raising prices through the roof is no way to engender loyalty by a new generation of musicians.”

Today, if I want a Gibson electric, my gut tells me to turn to Heritage Guitar, a spinoff formed in 1985 by employees who bought Gibson’s original Kalamazoo factory when Gibson moved to Nashville. Heritage has done only one thing: make  high-end American electric guitars. Surely THEY are heart and soul of the old Gibson we love, right?

Heritage Guitars: following in Gibson’s footsteps?

Heritage was 0ff to a great start, but in the 1990s it stopped advertising, lost sales and nearly shuttered the 90-plus year-old factory in 2007 — until, according to a Michigan news report, a local lawyer turned co-owner became a “guitar hero” and saved the company.

The company changed hands again in 2016, and in the fall of 2017, the new management team inked a partnership with Rolling Stone and a real estate developer to create at tourist shrine at the factory aimed at “incorporating a wealth of music and pop culture into a multimillion-dollar renovation” to possibly include a live entertainment venue, instrument store, museum, recording studio, restaurant and rooftop bar,” according to a news report. 

My opinion is that we don’t need another Hard Rock Cafe, we need companies that make amazing guitars. Well, actually, we need people who make amazing guitars.

Early this year, Heritage — which I thought was the soul of Gibson —fired 10 craftsmen and more quit in protest as the company automated with multi-axis  CNC and PLEX machines. I love automation, it’s a tough call to bash it categorically but man, is nothing sacred? Maybe it’s okay, maybe not. But increasingly, artisans are being left out, as expressed in the March 1 headline, “Firings of craftsmen take heart out of Heritage Guitar, workers say.” If Heritage was the heart of Gibson, and some of the best people have left, I hope they keep making guitars, either by banding together or working as sole artisans…for those deep-pocketed musicians who can afford to support them.

The grass isn’t greener at Fender, others

Roughly analogous to the Heritage/Gibson relationship is that of that other iconic guitar company, Fender and spinoff G+L (The “L” being Leo Fender. Like Gibson and now Heritage, Fender and G+L use CNC and PLEX technologies.

Back in 1965 when Fender sold out to CBS, purists decried the change. They were right to in some cases, including the devaluation of classic amps like the Twin Reverb amplifier and others whose circuitry was “enhanced” to be cleaner, changing the nature of the amps’ trademark growl. In 1985, employees purchased the company back and today, a holding company of multiple partners runs Fender. And like Gibson, Fender has made many acquisitions. One I see as particularly ugly is the 2011 partnership with Volkswagen to put “Fender Premium Audio” into cars. You don’t play it like a guitar, you play it like a car stereo.

So many brands have turned themselves into crap over the years just to make a Faustian buck. Of course, expansion and globalization has had various merits, business-wise for years (though my focus isn’t on them at the moment). In the 1970s, Japanese then-upstart Ibanez made a mint making cheaper knockoffs of Gibson’s Les Paul guitars, and over the years leading brands offshore their own knockoffs to Asian factories, even G+L. Rather than going into that tangled knot, help yourself to two good if aging articles I found, one from Acoustic Guitar  (2014) and another on USA vs. Chinese guitars from Guitar Player (2013). If they ask me to write, I’ll update them!

The cycle of innovation

As old brands face shaky prospects for rebirth, new startups should emerge to take their place. New growth in the form if small startups that succeed will always end up changing hands in the natural course of their lives. Retirement, death and other drivers of succession are just part of the corporate, and human, nature.

But it doesn’t have to be that way if companies can be innovative without losing their souls and core consumer/user proponents.

Any number of papers, presentations and tutorials are available to leaders who want to stay leaders. Just search “innovation management” or “cycle of innovation” and you’ll find links such as  the American Society for Quality’s Innovation Management Cycle and the “3 Key Principles for Maintaining a Cycle of Continuous Innovation” from Chief Executive magazine. In the latter, the first principle is: “Start at the top,” with the CEO leading by example. That doesn’t mean there’ll be greater handmade content in the products coming out of guitar factories. A case in point: Gibson’s G Force “robotic” (self-tuning) guitars. But it does mean, at least, that the Gibsons, Fenders of the world will have a better idea how to balance the need for profits against the effects of innovation on brand loyalists.

Love the instrument, not the company

I admit it’s painful when something like the Fender Stratocaster name is whored-out to Asia and Mexico to capitalize on the iconic guitar name and shape, but there are still “American Original” Strats for the purists. It’s just the nature of things.

In the late ’80s when I bought my Strat Plus in its debut year, I was choosing between that and a G+L, and chose the Fender because the G+L was heavy as hell…great sustain but heavy as hell. The neck wasn’t lined up with the strings as perfectly I thought it should be, so I went back to the music store where Larry, the guy who sold it to me, gave it a whack it to straighten it out, and said, “They’re all like that.” I wish I paid better attention to G+L but I still have my Plus and pretty much love it. 

In 2003 when I bought a Hofner Jazzica archtop hand-crafted in Germany and finished in the company’s violin shop. The label inside the F-hole indicated that it was “No. 1 of 50” of a limited run for the year. That year, the company’s musical instrument division was sold, sold again and a year later, sold again. A few years later Hofner established in 1887 and made famous by Paul McCartney’s “Beatle bass,” was making Jazzicas identical to mine in a factory in China. It bugged me a little to see the Chinese models hanging in a shop, but for me, it’s the feel and sound, not the look (despite its hand-rubbed violin shop finish) that makes my guitar what it is.

Hofner has changed ownership about as often as I change my underwear (well, not quite), and I sleep very well at night knowing that I have a quality instrument. The location of the factory making newer versions doesn’t affect the quality or intrinsic value of my guitar. 

There will always be artisans making quality guitars — for that matter, making all manner of good things. I suppose we’ll just have to do our best to have the things we like, and can afford, while doing our best to support the artisans who care about the work they do. As big names rise, fall and regroup, smaller shops will continue to spin-off, emerge, innovate.

And keep banging on your guitar.

War over water? Consumer brands brace for impact

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War over water? If we can have wars over oil, why not water, farmland and other resources that drive economic development? It could happen, according to Nausheen Kaul, principal with A.T. Kearney, advisor to some of the world’s largest corporations.

Worsening inequality and aging populations contribute to global destabilization.

But it struck me how, based on the data they get from firms such as Kearney, how global organizations react: They’ve already begun moving to acquire or otherwise secure the world’s water supplies and prime agricultural real estate, Kaul said.

That was just one nugget from Kaul’s presentation on global economic trends. (My straight-news version of it’s here.) His main goal was insight-shedding, not fear-mongering.

What are the implications of this war-over-water business, beyond pure monetary gain?

There are a few ways to look at it. One is that that massive land-and-water grabs by Western firms will stabilize developing economies. Another perspective is that this activity will amount to economic colonization and will fuel the conflict as surely as the British political colonization did…and will ultimately fail. A third perspective is that conflict is inevitable, and given the regulatory climate, Big Money in the West must do what it does because regulations allow it and shareholders demand it; if Coke doesn’t gobble-up the world’s water and land, Pepsi will.

As global financial leaders invest, governments will continue to buckle under the pressure of aging populations and worsening inequality.

Natural resource and political instability, Kaul said, is already causing a “Global Resource Nexus” in which the interplay between the supply and demand of food, energy and water are driving some troubling developments. By 2050, 70% of the world’s population will be “hyper-urbanized” into cities, governments will buckle under the pressure to accommodate aging populations and technology developments will make or break efforts to feed more people, sustainably and with fewer resources.

Kaul presented solutions for how companies can prepare, but they’re all about benefits to business. Is what’s good for business always good for mankind?

I’d like to know, but don’t comment here; drop me a line.

B2B chickens vs. eggs

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Go against the grain of conventional wisdom and be an egg. Innovate! Incubate!

Across traditionally print-oriented business-to-business (B2B) media, there are a whole lotta chickens. Most dead-tree publishers want to find the Next Big Thing , like everyone else, but there are very few “eggs” willing to risk investing in digital media of any sort.

Graphic: www.pdclipart.org

Forget about the new media vehicles,  they’re not going anywhere, right? You can save a lot of money if you unplug your Web site, tear-down your green screen and cancel your podcasts. Forget about social media!  You can drift blissfully along putting-out printed materials… like magazines and pamphlets that most of your recipients treat like ad flyers. You can Be a chicken, and for lots of good reasons.

Why most people are chickens:

  1. Budget: A lack of funds to invest in new media technology and human resources.
  2. Expertise: A shortage of skills to create and produce content on a regular basis.
  3. Revenues: A too-thin revenue stream of interested customers willing to fund new-media ventures.
  4. Interest: A dearth of enthusiasm on the part of your customers/audience members.
  5. Fear of Premium: A third-rail belief that a premium-content subscription model can’t work.

The list of reasons not to invest in new media goes on and on. A case in point: A major dairy company’s marketing folks researched its B2B customers to find “ZERO” interest in social media. If your company found that nobody wants to keep up with you on Twitter, LinkedIn or Facebook, why would you invest in any of those channels?

In the B2B trade magazine field, I’ve encountered numerous publishers over the past few years with varying degrees of interest and activity in social media, podcasting, the walled-in mobile media and related channels. Some produce horrid content, and some produce pretty fine stuff. Overall, I’ve found the industrial B2B trades dealing in services and supplies to a U.S. manufacturing sector to be relative laggards for the reasons I point-out above in those bullet points.

Dare to be an egg!

Of course, I set-up all the reasons to avoid new media — to ignore the march of progress — just to knock them down. I was a “print guy” until the late ’90s, the early days of the Web v.1 — the 1990s, before the Internet’s first Boom-and-bust cycle.

As one of a handful of Editorial Director of the once-mighty VerticalNet, I saw traffic across my seven B2B food-industry portals from 180,000 user sessions to 250,000 user sessions per month in a very short time. The company collapsed over a lack of commerce, not content, which was hopping with compelling content created in-house as well as through outside writers and media partnerships. We BLEW AWAY the audience numbers our print-magazine friends were generating.

We were eggs! By “egg,” I mean we were breaking new ground, serving as a proof-of-concept incubator that digital media could pull eyeballs to our very-sticky online communities. Today, lots of additional digital channels have joined the Web, but you get the point.

Now, let’s reconsider those factors I address above, but with a more optimistic prism:

  1. Budget: I’ve seen teenagers and hobbyists take the plunge; funding isn’t the issue; commitment is.
  2. Expertise: Ibid. There are plenty of smart people who will learn the skills if they don’t already have them.
  3. Revenues: Clients and customers would love to partner with you, even if you do some spec tryouts up front.
  4. Interest: Great content and a little hand-holding with opinion (and adoption) leaders can work wonders.
  5. Fear of Premium: Offer content that’s truly actionable and people will pay. (See WSJ, FT iPad app plays.)

No matter what I say, there will always be people from the old-guard, old-media mold who will say this is just lip service. But no one can deny that A) a generational shift is underway; B) trees are an outmoded way to convey content and C) there are just too many opportunities to be innovative and create something outstanding… viral.

Behold the egg. Become egg. Love the egg.

Innovate! Incubate!

In the Web v.1 days, people thought the “Field of Dreams” effect would drive eyeballs and, in turn, revenues to their Web sites. But today, if you build it, no one will come unless you take a more energetic role in producing inspired, targeted content.

Go against the grain of conventional wisdom and be an egg. Innovate! Incubate!

Consider what Apple has done in creating demand in areas you didn’t think made sense. They led in the 1980s with the 3M-inspired mouse-driven graphical user interface and people loved it; Microsoft took it and changed the face of business with Windows. In 2005, Apple introduced the iPod — an also-ran in terms of market timing in a market filled with languishing MP3 players. Nobody really knew what to do with them until Apple rethought them and created an iTunes ecosystem that changed the music industry. The same ecosystem is grabbing mobile talk, computing and advertising by the digital cajones. And Apple TV may not be the best, but it’s likely the most user-friendly digital living-room pioneer going today.

And yet also today in the industrial B2B world, I see some groups at LinkedIn, and a very few listenable/watchable podcasts out there that have both good production quality and content quality.

I see people continuing to talk about “paradigm shifts” without doing anything about it. Myself included… which is why I’m committing to doing more work across the digital mediascape. I’ll update you later on my personal travels and travails across the digital mediascape.

Are you a chicken or egg? Are you in the midst of trying to decide? Tell me your thoughts in the comments, here. Or for a more, perhaps proprietary discussion, talk to me. Find me at the contact page of my home on the Web, the Field Office.

Nantucket and back

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The song and video, Voyage of the Susan Elizabeth, combines my own inner-rockstar guitarbage and home studio chops with some iPhone video and iMovie editing. There were more spectacular moments to come, but hitting big water required a two-man crew — the Skipper needed the Gilligan to get back to work.

The soundtrack is a multilayered wall of guitars I recorded using my acoustic Martin D-28 and several tracks from my trusty Fender Strat Plus. I have versions with synth and drums; these are removed here. The bass track is my Strat, downwardly octavized with a pre-subwoofer 1970s sonic sensibility. As for the wind, waves and weather, it’s all from a two-week sail from Long Island through southern New England to Nantucket and back.

Had there been a crew of three instead of two on this 30-foot C&C, I might have had the luxury to shoot some of the taller waves and storms chasing us. The good news is that we beat most of the storms that chased us for days, especially on the return trip, until we reached Montauk and let it pass for an overnight before wrapping-up another find cruise.

If you’re inclined to hear more of the music I’ve made, there’s more. Ask and you shall receive.

Farmageddon at Elbo Room

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In the spirit of test-posts, here’s another bit of lagniappe: Farmageddon live at Chicago’s Elbo Room in October of 2003, just one of the vids in the old band archive. The tune is a Bruce Bowers original,”Crowns.”

Bruce (hat) leads the assembly; Mark’s on bass in the shadows, Mike C. plays keys, the other Mike C plays drums and I’m playing lead guitar on the Strat.

Farmageddon started in 2001 when a bunch of friends hanging at Chicago’s Old Town School of Folk Music (www.oldtownschool.org) started regular acoustic jams. By 2003 we got drums, got electric and got loud, for better or worse…but for sure, for fun.