In 1977, Taylor Guitars linked up with a distributor in the hope of boosting sales. It would prove to be an unproductive move.
"We ended up getting only $150 for a 510, $380 for an 855," Taylor recalls. "That was a very unprofitable time, but it was a great learning time. It forced me to learn something about production techniques. I had to separate the chaff from the wheat -- what's important, what's not important. The main improvement was simply getting past a stupid mental barrier -- the notion that if you take a lot of time to accomplish a task, somehow it's better than accomplishing the same task, just as well, in less time. I'm glad I was very young when I learned that that notion just doesn't make sense."
Taylor and Listug ended their affiliation with the distributor in 1979, but for years, the company remained fixed at a plateau of making 10 guitars a week and not seeing a profit. Because they were unable to break into any new markets, newly finished guitars just lay, unsold, around the shop. Bills went unpaid.
"We were really stupid," Listug recalls with a grin. "We thought that if we simply made more guitars, we'd make more money. So, we'd hire extra people to turn out more instruments, and then we'd have to spend more time and money marketing the extra production. All we were doing was raising the overhead. And, without any capital to pay for expansion, we just dug ourselves a deeper hole of debt. Then, Bob got married, and one day he said, 'If I can't make a living at this, why am I doing it?'"
"Actually, by that time, I'd kind of mentally burned my bridges as far as doing anything else was concerned," Taylor allows. "Every once in a while, people would ask me, 'Well, what if it just doesn't work out?' And I'd say, 'It has to work out.' I detested the thought of having to explain to everyone why I quit. That kept me going more than anything else -- the fear that for two years or more, I'd have to run into people who'd ask, 'What happened?' and I'd have to explain that we weren't doing well and had to give it up."
To save the business, the partners fired everyone and slowed production. In the short term, that enabled each of them to take home $100 per week -- enough to make ends meet. Gradually, they paid past-due bills and retired ancient debts. It was, to be sure, a meager living.
"When we got to the point where we could take home $200 a week, I thought we were doing great," Listug says. "I had a friend who was making $300 a week, and I remember thinking, 'Whoa -- $300 a week!'"
Adversity, it would seem, is best visited upon the young, who don't know enough to be stymied by it. As lean as things were, the Taylor gang never was at a loss for good times.
"Matt Guzzetta [currently Taylor's Senior Machine and Tool Designer] ran a motorcycle gas tank manufacturing shop right next door," Taylor remembered. "We'd have these big, pot-luck, music-and-food parties once a month on a Saturday night. Everyone would open their shop and we'd have maybe four local bands going -- a lot of really great San Diego players. Matt ran his shop for years, and when it finally closed, I had him do a job for me at Taylor Guitars, and he's been here ever since. But if you ask Matt -- as much as he likes working here -- he'll tell you that we ruined everything and began going 'downhill' after we stopped having those parties."
In 1981, Taylor Guitars took out a bank loan to purchase equipment that would enable them to smooth out some production wrinkles. But without the benefit of marketing, unsold guitars continued to pile up. A year later, they sold a number of guitars to a single dealer, and used the cash to put Listug on the road in a quest for new dealers.
"I told him, 'Don't even come back if you don't get any orders,'" Taylor laughs.
Listug's new role of traveling salesman took him throughout California and as far as Maine. Being away from the daily grind of the business renewed his energy and perspective, but the trip wasn't without its disasters.
"I had second thoughts about all this when my car broke down in a snowstorm in Wisconsin," he says. "But the dealers I visited loved our guitars. On the way home, I sold the six guitars I had with me, so we had cash for Christmas."
In 1983, Taylor and Listug bought out Schemmer. Newly equipped with machines they'd designed to handle the most laborious aspects of tooling and processing raw materials, the streamlined company finally began turning a profit. The influx of money was spent on technical refinements that resulted in higher-caliber guitars. Things were looking up, but a breakthrough was needed. It would come from a most unexpected source.
In the mid-'80s, synthesized rock so dominated the charts and airwaves that acoustic guitars seemed anachronistic -- the implements of coffeehouse folkies and '60s diehards. Up to that time, Taylor Guitars had allowed its distributor to represent the company at the semi-annual trade shows of the National Association of Music Merchants (NAMM). But, in 1984, Taylor and Listug exhibited their own guitars at the winter NAMM show, and ran smack into that era's industry realities.
"Those NAMM shows were hard," Listug says. "We were set up near the Martin booth in 1985, when we showed our Artist Series [limited-edition, color-stained guitars]. Even Martin was singing the blues about how lousy business was."
Hoping to lure rockers into trying their acoustics, Taylor and Listug accepted a challenge from Glenn Wetterlund of Podium Music in Minneapolis to create a guitar for one of the day's superstars -- Prince, who needed a 12-string for some recording sessions. At the time, Prince was in his "purple" phase, so Taylor made him a purple-stained 655. But, there was a catch: Prince would not perform with instruments bearing a visible brand name. As a result, Taylor would make a guitar that would be seen by millions (Prince played it in both his Purple Rain and Live Aid videos) -- and the Taylor logo would be nowhere in sight.
Whether the "Prince guitar" in any way impacted the eventual re-emergence of the acoustic guitar is debatable, but it sure didn't hurt Taylor Guitars. By then, word of Bob Taylor's handiwork was spreading through the music world, and famous and unknown musicians alike were snapping up his guitars. In the hope of selling more guitars, the company felt compelled to expand its Artist Series to accommodate the sometimes peculiar demands of an elite clientele. Jeff Cook of the country-rock band, Alabama, wanted a green guitar for the cover of the group's Christmas album. Steve Stevens wanted abalone inlays shaped like the atomic-energy symbol. Billy Idol had the Saturn-shaped graphic from his Whiplash Smile album engraved all over his custom Taylor. Bonnie Raitt was so thrilled with her store-bought Taylor that she gave the company carte blanche to create a unique design for her.
In 1986, flatpicking pioneer Dan Crary collaborated with Bob Taylor on what would become the Dan Crary Signature Model. Momentum was building, and the company tried to stay ahead of the flow. In 1987, Taylor Guitars moved from its Lemon Grove location to a 5,000-square-foot plant in the Santee area, and two years later Taylor and Listug invested heavily in the computer-operated milling machines that remain the heart of the factory's wood-processing department. The staff, which now numbered 35, was producing 50 guitars a week, with an average price tag of $1,600. In 1990, Leo Kottke and Bob Taylor teamed to create the Leo Kottke Signature Model 12-string. Both it and the Dan Crary remain popular models to this day.
With business booming, Taylor Guitars soon outgrew its Santee plant. Over summer vacation, in July 1992, the company moved into its current location in El Cajon. Two years before the move, a local magazine had quoted Listug projecting that Taylor Guitars would gross $10 to $12 million annually by the end of the '90s. Instead, the company grossed $30 million in 1999, making that 1990 prediction seem conservative.
Today, the company employs 335 staffers, and occupies a 143,000-square-foot complex that includes two factory/office buildings (the 25,000-square-foot building that opened in 1992, and a new 44,500-square-foot factory/office building on the adjacent lot), a case factory, a Baby Taylor factory that opened in the summer of 2000, and additional leased space in new buildings near the Taylor factories. Taylor and Listug are able to pay their bills, and the company is in good financial shape. The company is making the best guitars in its history; business is better than ever; and the future definitely has that rosy tint of robust health.
Still, Bob Taylor has seen enough in his 28-plus years as a luthier/businessman to know that things can change in a hurry. Appropriately, his compass during any unforeseeable storms will be the lessons learned in Taylor Guitars' worst days.
"Those early years were nothing but day after day of bad news," he says. "But we're better off for it. It's a really great market for acoustic guitars right now, and I think there are some guitar makers doing well because it's a great market. They're getting a lot of money for their product, but they're wasteful in their thinking and in their handling of money and materials. So, if the market goes south again, and prices tighten up, and we're all fighting over the same sales, those people might not be prepared for it. We know what those conditions are like -- what that's all about -- so, we'd be in better position to weather the storm. I'd hate like heck to have to go through all that bad stuff again. But, right now, I'm glad we did. We're a better, more resilient company because of it."
