Bob Taylor and Kurt Listug co-founded Taylor Guitars in 1974 after buying a struggling guitar repair shop in San Diego for $3,700. Bob, 18, was the guitar maker who had developed innovative thin-neck designs, while Kurt, 21, handled business operations alongside third partner Steve Schemmer.

The conversation traces their journey from making 10 guitars per month by hand to becoming a global company with nine-figure revenues. They survived the disco era when acoustic guitars were unfashionable, thrived during MTV Unplugged's acoustic revival, and navigated the extreme demand swings of COVID-19.

Key topics include Bob's manufacturing innovations, their early financial struggles, the decision to focus solely on guitar making, their relationship with artists like Prince and Taylor Swift, and their recent transition to employee ownership through an ESOP structure.

From $3 Guitars to Guitar Shop Ownership

Bob started guitar making in third grade after buying a $3 guitar from a neighbor, then built his first guitar in high school woodshop when he couldn't afford a $175 store-bought model.

Both worked at American Dream guitar shop in 1973 - Bob as an 18-year-old guitar maker, Kurt as a 21-year-old hippie who 'wasn't that good at it' but loved music.

When owner Sam Redding wanted to sell for $3,700 in 1974, Kurt's father agreed to loan money only if 'the best guitar maker' Bob Taylor became a partner.

They discovered after purchase that the price didn't include the business name or phone number, forcing them to start fresh as Westland Music Company.

Revolutionary Neck Design and Early Manufacturing

Bob revolutionized guitar playability by shaving down thick 'baseball bat necks' and lowering string height, making acoustic guitars feel like electric guitars to players.

An older guitar maker taught Bob the crucial lesson: 'What would you rather have? Ten half-done guitars or one done guitar?' - transforming their production from batches to assembly line.

Bob worked 'two days a day' - first day making guitars, second day creating tools and jigs to make the next day's work easier and more consistent.

Early production was brutal: 'I try and make 10 in a month, and four of them would get ruined somewhere along the way' - Bob

Survival Through the Disco Years

After eight years in business, they were only doing $120,000-130,000 in sales annually, having grown from the original $30,000 when they bought the shop.

Around year six, they instituted weekly paychecks of $15 each: 'I want my $15. Gosh darn it. I worked two days a day for a week and I want my $15' - Bob

They survived the disco/new wave era when acoustic guitars were considered 'boring and old-fashioned' by staying small and adding pickups for amplification.

Bob viewed the struggle as education: 'There are people in college paying money for five years to learn architecture. Why do I think as a 19-year-old I'm worth money?'

The Purple Prince Guitar and Artist Relations

In 1985, they created a purple 12-string guitar with flame designs for Prince, who required all instruments to be custom-made without brand names visible.

The Prince guitar appeared in the 'Raspberry Beret' music video, providing crucial exposure during a time when acoustic guitars were unfashionable.

Their artist relations philosophy: 'We're sort of like the pit crew for them and their race' - helping artists get their music played rather than aggressive promotion.

MTV Unplugged Era and Explosive Growth

MTV Unplugged's 1989 launch, featuring legendary performances by Nirvana and Eric Clapton, transformed the acoustic guitar market: 'The world changed and we started growing like crazy.'

By 1988, they broke $1 million in sales for the first time after 14 years in business, finally feeling real momentum.

They hired consultants around 40 employees to professionalize operations, as most founder-run manufacturing companies get sold at 45-50 employees due to management challenges.

The Taylor Swift Connection

Taylor Swift's father Scott called Bob around 2005 when she was 14: 'I know that every dad thinks their daughter's special, but my daughter really is.'

Her first performance was at their Anaheim trade show booth with virtually no audience - Bob had to recruit people from the hallway to fill seats.

Bob gifted her the famous koi fish guitar for her 18th birthday, which became iconic when she brought it out during her Eras tour to massive fan excitement.

She held her 'Fearless' album release party at their El Cajon factory with 200 contest winners, cementing the Taylor-Taylor connection.

COVID Boom and Bust Cycle

Guitar demand exploded during COVID to 1,000 guitars per day: 'We were ripping boards off the wall to make guitars out of' - Bob

Knowing the surge wouldn't last, Kurt's sales team spent four months canceling $50 million in orders to prevent channel stuffing that would hurt retailers.

Post-COVID inflation hit hard with labor and material costs rising dramatically, but guitar prices can't be raised proportionally like other consumer goods.

Employee Ownership Transition

In 2022, they converted to an Employee Stock Ownership Plan (ESOP), selling their shares to workers rather than outside buyers.

Bob's philosophy: 'Invest in the inevitable. One thing that's inevitable is I'm going to die. I'm going to sell this company by accident when I die or on purpose before that.'

They remain as unpaid co-chairs of the board while Andy Powers, former head of guitar development, became CEO.

The company now produces over 700 guitars daily with 90+ percent sold through music retailers rather than direct sales.

Resources Mentioned

Fodor's San Diego with North County (Full-color Travel Guide)

would try to figure out how to advertise them. I'd run little ads like in the Daily Aztec, the newspaper for San Diego State, try flyers. I mean, anything we could think of to try to get the word out

help from Rermel Wood

was produced by Alex Chung with music composed by Ramtina Rablui. It was edited by Neva Grant with research help from Rermel Wood. Our engineers are Patrick Mark. Our production staff also includes