Famed guitarist Les Paul was frustrated. The board of directors at Gibson Guitars again rejected his idea for a new concept. It was 1941 and he had just shown them his new prototype for a solid body guitar he made himself. They showed no interest in pursuing it.
While it wasn’t pretty, it was composed of strings, a bridge, and some pickups attached to a piece of 4×4 lumber; he knew it was the future. Les Paul referred to it as “the log” which probably didn’t help.
It didn’t even look like a guitar, so this time, Les cut a hollow body guitar in half and glued it to the sides of the log to make it look better, but it was too late. They were bound to a format they knew worked, a traditional hollow body guitar.[1]
Meanwhile, on the West Coast, an unknown, nearly broke electronics shop owner was tinkering with something different. A former bookkeeper, he had started an electronics repair shop on a shoestring budget.
He found that local Southern Californian musicians needed public address systems. Being mechanically inclined with an attention to detail, he started building and selling them to a growing market. With a foundation in amplification, he started thinking about an instrument that would work with the PA systems he was building and repairing. He had no musical background, but he spent time with musicians. He listened. He learned.
His name was Clarence Leonidas Fender, and in 1949 he launched the Fender Esquire, which would lead to the famed Fender Stratocaster in 1954, the preferred ax of Eric Clapton, Jimi Hendrix, Stevie Ray Vaughn, and host of other guitar virtuosos. Seeing the success of the Fender guitar, Gibson executives belatedly reconnected with Les Paul to create their competitive product, the legendary Gibson Les Paul guitar in 1952.
Fender, the humble inventor, was the catalyst for everything to come. According to Les Paul, “I took ‘the Log’ to Gibson and I spent 10 years trying to convince them that this was the way to go,” recollects Les. “But it wasn’t easy. If it wasn’t for Leo Fender, I don’t think that ever would have come off. Leo saw more in it than Gibson did.”[2]
Veteran behemoth Gibson Guitar which dominated the guitar market since the beginning of the century, ended up chasing Fender for the next 80 years for market dominance. According to the National Association of Music Merchants (NAMM) in 2023, Gibson barely ekes out market dominance from Fender; 34% to 30%. Oh, and solid-body electric guitars compose 60% of the guitar market in 2023[3].
How did Gibson miss out on this opportunity and allow unknown electronics tinkerer Fender to leapfrog them? Well, there’s a bunch of reasons.
Voice of the Customer Probably Wouldn’t Have Helped
If you talked to contemporary musicians during the 30s and 40s, most would have thought an electric solid-body guitar was a dumb idea. They played hollow-body guitars in swing and big bands, which were in vogue at the time.
Mainstream guitarists played a supporting role for the horns that dominated solos and melody in mainstream music. Guitar amplification was being developed, but not yet widespread. If you asked most guitarists at the time, they probably would have talked about resonance, portability, reliability, and price. They were still trapped in the now and unable to see the future. Changing the guitar from a hollow body to a solid body would have seemed heretical to most.
But… There were Signals of Change
The first innovation that drove the transition to solid-body electric guitars can be found, interestingly enough, in sheep guts. Sheep intestine and silk were the exclusive methods of constructing guitar strings in the 19th century.
“Old world” guitars and their organic strings proved to be too fragile for the harsh American frontier, so Martin guitar created an X bracing system that strengthened the guitar and incorporated new, more durable, mass-produced steel wound strings, first appearing in the late 1900s[4].
As a bonus, these guitar strings could be mass-produced making it affordable to not just professionals, but to a wide cross-section of Americans. These steel strings would become integral to the widespread adoption of the electric guitar 50 years later. While no one thought about it at the time, sheep gut strings don’t work well with electromagnetic pickups… steel strings do.
Another signal present in the 1930s was the technological advances in amplification. While the steel string guitar was louder than its European predecessors, it still could not compete with the horns of big bands. Discovering this new technology, pioneers in the field such as amplification pioneer Eddie Lang and, later, Les Paul himself, started experimenting with using amplification for guitars. The first dedicated guitar amplifier was invented in 1932 by Beauchamp and Rickenback[5]. They were pushing the envelope by using amplification to take the guitar out of the rhythm section and into the limelight.
With amplification traditional hollow body guitars encountered an annoying problem; they were highly susceptible to acoustic feedback, the annoying screeching kind, not the cool Jimi Hendrix kind. The beautiful resonance of the guitar’s sound chamber was inhibiting the amount that the guitar could be amplified in the first place. There was a need for a solution for this problem.
Meanwhile other influences would amplify (excuse the pun) this movement. Americans were growing weary of the polite and inoffensive status quo. Big Band and Swing were waning in popularity to new, unorthodox forms such as honkey-tonk, boogie-woogie, jazz, and, at the core and probably the most influential, blues.
This new style of music had roots in Black slaves who adopted their African musical heritage to the new world. The blues and the electric guitar worked exceedingly well with one another. With an electric guitar, you could strum in a rhythm form, use a more percussive finger picking adopted from banjo playing (originally an African instrument), or even use steel slides that gave the steel string a varied repertoire of sounds. Muddy Waters was the first to electrify the blues[6] and others followed his lead. This new electrified blues continued to grow in popularity in the 1930s and 1940s but was supercharged by another technology, the radio.
In 1923, less than 1 percent of the US population owned a radio; by 1940, this was 83% of American Households[7]. This new media format was content-hungry, as most are in their infancy, and continued to propel not just the electrified blues, but other forms of music featuring the electric guitar as the centerpiece. To this day, the electric solid-body guitar still endures as the lead instrument in many modern music forms.
A Common Story
This story is repeated again and again, from Kodak to RIM Technologies to Nokia. Even today we see Tesla seeing the future differently than traditional automakers and designing accordingly. Unfortunately, most companies don’t react to these changes until it is too late.
I must confess, I have also been a victim of this myopia. When I was with Maritz Research twenty years ago, we regarded Medallia as an upstart that was ‘cheap and cheerful,’ who couldn’t possibly challenge our dominance in what was then the “customer satisfaction” measurement space. They were safely quarantined in the hospitality sector, which is where we thought they were regulated to stay. Qualtrics was a survey software company and was not even on our radar. Adding to our confidence, our clients all seemed very happy with their current bespoke system. After all, our QBRs and surveys all said so. No worries, mate!
Today, Maritz Research doesn’t exist and Qualtrics and Medallia dominate the CX measurement landscape.
At Maritz Research, we failed to notice and act on the signals right in front of us. If we asked our clients at the time what they wanted, they would have pointed out some incremental improvement in data delivery time or perhaps price reduction.
The bigger solution we were blinded to; clients were willing to get 80% of the functionality of their bespoke programs for 50% of the price for a SaaS model. The industry was transforming, and we just dug our heels in and did what we always did. Slowly we lost clients one by one. As I remember one client telling me when we lost a major account “Dave, we worked with a research company that uses software, now we want to work with a software company that does research.” Nonetheless, while revenue decreased, profitability remained as we hung on. We continued to be highly profitability… until we weren’t, and then it was too late.
Foresight, the Insurance Policy for the Future
Market research and voice of the customer (CX) are both good at diagnosing today’s problems, however. Despite our best attempts, it is dreadful at predicting the future. Happily, I recently discovered a discipline that attempts to address this challenge. The field of Foresight is not about predicting the future, but about anticipating possible futures so you can plan the future of the company.
In her excellent book The Signals are Talking, Amy Webb highlights a process by which you can mitigate risk in the future by playing out different scenarios and the associated knockdown effects on your industry. Likewise, institutions such as Institute for the Future (IFTF) also provide training, certification, and guidance on the discipline of Foresight. While I am not an expert, I have spent the last few months researching the various approaches and they tend to follow a common formula.
Early Signals
Common across practitioners and experts in the field is the focus on signal detection. Signals are those things that are happening in the world that are at the fringes. According to IFTF:
“Without any concrete facts about the future to draw from, signals form the evidence basis for identifying possible, plausible, and preferable futures. Signals help us contextualize how macro drivers may show up in the form of new assumptions, behaviors, and experiences.”[8]
In the 1900s, steel strings were signals, little glimmers of what may come in the future. Later in the 1930s technological development in sound amplification were signals, changes in consumer music preference were signals, as were advances in manufacturing that allowed mass production. Some of the advances during that time were likely duds going nowhere. However, by cataloging and monitoring these signals, Gibson may have seen the log for what it was; the next innovation and Fender guitars may never have existed.
How do you find these signals? We can find guidance from the ancient Chinese text I Ching:
“Before the beginning of great brilliance, there must be chaos. Before a brilliant person begins something great, they must look foolish in the crowd.”
Step 1: Find What is Normal and then Find the Weirdos
The first step is to understand what is ‘normal’ and then look high and far for what is ‘not normal’. Find the weirdos. Who is doing really odd or risky things in a field or adjacent to it?
Strapping on sound pickups to a 4×4 piece of wood and then plugging it into an amplifier was truly weird in the 1930s. Look for guys and gals doing this kind of stuff. These may give you a clue as to what may happen in the future.
We can leverage traditional qualitative research techniques to go look and see…but picking the right people is important. We need to look to startups, think tanks, and people who are off doing their own thing because they can, or they want to. Many of these people will be whack jobs. Some will be whack jobs with some good ideas. Find them and listen to them.
Secondary research or ‘desk research’ looking at patent applications, reading about R&D releases, and glimpses of what are the cutting edge at fringe trade shows, can all help provide insight as to what a nascent idea that could balloon into a full-fledged trend. But how do you tell if a signal is a trend or just a fad?
Step 2: Separating Fads from Trends by Determining Drivers
Fads come and go. They have no stamina and rarely have a lasting impact on consumer behavior or industry. Remember fidget spinners and pet rocks. Those were fads. However, more enduring trends have drivers that make them endure. By understanding the underlying reasons why something is becoming popular, you can ride the innovation wave in its nascent stages.
The solid-body electric guitar had no chance before 1950 for several reasons. First, the technology was not advanced enough yet. Amplification was still in development, and not ready for broadcasting the sounds of the electric guitar. Secondly, musical tastes did not change until after World War II when the Big Band Orchestra started to be supplanted by 3 to 5-piece bands playing faster, louder, and shorter sets.
However, the underlying drivers of these trends had taken firm root in the 1900s and 1930s. Steel strings and widespread distribution of American forms of guitars had begun because they were more durable and cheaper to make. Amplification had developed beyond primitive PA systems to help give a voice that only the horn section could have achieved previously.
The War had exposed Americans to an entire world and made them hungry and open to new experiences. From an amalgam of cross-cultural stew emerged a new form of music that was fronted by a smaller number of performers playing shorter songs in larger and larger venues. These bands were cheaper to hire and even cheaper still to form.
The development of amplification which supported this new format which, coincidentally, was ideal for the emerging new media channel of radio. The zeitgeist of hope and enthusiasm post-war turbocharged the format. The aggregate of all these signals and their drivers put the hollow-body guitar on its trajectory to be a solid-body solo instrument that could turn into a rhythm instrument with the flick of a switch.
Step 3: Designing Probable, Possible, and Plausible Futures
Now, let’s go visit the boardroom of Gibson Guitars in 1938. We would have first worked with board members to rationally examine the facts present and what was developing into a trend. We start with a central premise of all foresight work.
“Change is the law of life. And those who look only to the past or present are certain to miss the future”
– John F Kennedy
Gibson board members needed to understand that everything, and I mean everything, has a beginning, middle, and end. This includes the popularity of hollow-body guitars, people, and the universe.
Second, we would work with them to collect the facts. We might dispatch people to ancillary or supporting technology. What were the string manufacturers doing differently? Amplification was used for singing – what were PA companies working on?
Next, we might hire someone to do a bit of desk research. This would admittedly be much more difficult in 1930 than now, but you could still take a ticket from Kalamazoo Michigan to Washington DC on the B&O railroad for about $37[9] (about $650 in 2023). In about 16 hours, and with undoubtedly some world-class cocktails, you could visit the patent office to review patents in adjacent categories. If Gibson did, they might have found this; patent No. 435,679 filed by George Breed in 1890.
You will note this is for an “apparatus” which would not necessarily preclude Gibson from working on a solution for the guitar since Breed’s design “was based on a vibrating string in an electromagnetic field” and he died in 1939[10].
Finally, we could have dispatched people for a few hundred dollars across the continent. We would then start asking questions; What was the new form of music being played by African Americans in the Mississippi Delta? Who were Son House and Robert Johnson? What the heck was this music evolving on the beaches of Southern California? What was that slide guitar thing in the Territory of Hawaii all about? What was annoying hollow body guitar players using amplification? Finally, maybe we should pay more attention to Mr. Paul and his log guitar.
With data in hand, we might then construct three future worlds for Gibson Guitars. Here’s how it might have panned out.
Probable Future – While today it is obvious that big band was out, and rock-n-roll and the solid body guitar were at an inflection point, at the time that was not at all clear. The probable future was probably the one they were expecting; that is the status quo. In this scenario, we would predict that the hollow body guitar would continue to grow, and we should pursue the associated refinements and updates associated with that instrument. Perhaps we should also pursue forms of electrification in a hollow body format (such as mandolin or banjo).
Possible – Based on the data available, it would seem there is something more than a virtuoso lunatic with a log guitar afoot here. We should probably start investing in the development of Les’s idea and move forward with a more refined MVP of Les’s design. Perhaps we should showcase it at tradeshows, gather some feedback from more progressive musicians, and plan a limited production run if we have some bites. We should definitely move forward with a solid body design regardless.
Plausible – traditional non-electrification is going to go the way of the buggy whip. We should plan to move our entire portfolio to electrification immediately and also start looking for adjacencies to hedge, as it is not at all clear that ‘guitars’ in general will play a prominent role in the future of popular music. Advances in radio technology may eliminate or at least diminish the demand for the desire for anyone to attend live musical performances, so volumes will likely diminish to match that diminished interest.
A smart company would have made some investment in all three categories, probably a 60/30/10 or an 80/15/5 allocation would have been prudent depending on how unclear the headwaters were ahead. Unfortunately, Gibson went all in (100%) on “Probable” and the rest is history.
CODA
While the role of Customer Insight (CX) is still of great value, you can see how Foresight techniques can help hedge against future changes. It isn’t an exact science but offers a blueprint that challenges us to break loose from the shackles of our own experience and engage in ‘what might be,’ no matter how fantastic or improbable.
So where is Gibson today? In 2018, it filed for bankruptcy as a result of, ironically, straying from its roots into ‘lifestyle branding’ and electronics. Not wanting to see an American icon disappear, creditors gave them some leeway and Gibson refocused their energy (and money) on electric guitars, fairly quickly achieving financial stability, even acquiring Mesa Boogie amplifiers in 2021[11]. It now has new leadership under Cesar Guekian who assumed the role of CEO in May of 2023[12].
Gibson, once again, faces an uncertain future. The music scene has fragmented alongside social media. The golden days of a monolithic “Top 40” driven by a three-piece band of drummer, bassist, and guitars are being supplanted by tech and digital music. Some are even saying the electric guitar is dead[13]. Who knows. Maybe someone with an unusual idea will show up to Gibson again.
I find that unlikely. Best they go out and find them.
Notes
[1] Interesting O.W Appleton approached Gibson in 1943 with a similar but more refined design and was similarly dismissed by the Gibson board, so Gibson turned the idea away not once but twice according to https://www.gearnews.com/did-gibson-steal-the-les-paul-design/
[2] https://gear-vault.com/les-paul-log-guitar-1939-birth-les-paul/
[3] https://www.pianodreamers.com/guitar-sales-statistics/#:~:text=When%20it%20comes%20to%20market,the%20rest%20of%20the%20market.
[4] https://www.christchurch-guitar-lessons.com/steel-string-guitar.html#:~:text=Steel%20strings%20for%20the%20guitar,the%20new%20steel%20string%20guitars.&text=salon%20guitars%20was%20also%20used%20for%20steel%20string%20guitars.
[5] https://www.fuelrocks.com/the-first-guitar-amplifiers/#:~:text=Musicians%20began%20to%20realize%20they,and%20widely%20used%20until%201912.
[6] https://open.lib.umn.edu/mediaandculture/chapter/6-2-the-evolution-of-popular-music/
[7] https://www.researchgate.net/figure/tbl4_233149747
[8] https://www.iftf.org/insights/what-is-the-future-factors-platform/#:~:text=Without%20any%20concrete%20facts%20about,assumptions%2C%20behaviors%2C%20and%20experiences.
[9] https://picclick.com.au/May-1943-Baltimore-Ohio-Detroit-Washington-374851902170.html
[10] https://bibliolore.org/2011/12/11/george-breeds-electrified-guitar/#:~:text=On%202%20September%201890%20U.S.,to%20a%20fretted%20string%20instrument.
[11] https://www.guitarworld.com/news/gibson-acquires-mesaboogie-amps
[12] https://www.gibson.com/en-US/News/gibson-brands-announces-ceo-transition
[13] https://www.kissyourears.com/pages/rock-n-roll-is-dead-why-electric-guitar-music-is-redundant
Dave, as a guitar player I love the history lesson on how we arrived at the Les Paul, Fender Stratocaster, and steel strings. And a fantastic tie back to CX and the voice of the customer.
Enjoyed this article Dave, well done. I tend to reference the traditional Blockbuster or Kodak tales when looking to point out the necessity of being future focused. You’ve provided another strong example. Thank you
Thank you both Jeremy and Kristin. I am always on the look out for other “missed opportunity” stories…beyond Blockbuster, Kodak, and the usual suspects so let me know you hear of any. Thanks for reading!