For our annual guitar issue, we placed a call to one of the most iconic and personable people in our industry: Paul Reed Smith, founder of Stevensville, Md.-based PRS Guitars. Among other things, we asked about the company’s current 35th anniversary and if Smith ever expected to have the success he and his company have enjoyed over the years.
The honesty Smith provides in his answers is difficult to rival, and he is an entertaining conversationalist to boot. Enjoy!
The Music & Sound Retailer: Let’s start with the 35th anniversary, but take it from this angle: Are you proud of all of your success? Were you expecting it?
Paul Reed Smith: I am proud of the people here. Nobody ever gave up. A couple of times for us, it was Chicken Little, “the sky is falling.” But those moments are why I am in the position I am in. I actually went into our national sales manager’s office [at one of those times] and said, “If everybody got drunk for two and a half months, we will still have a business.” There was another time we were at our worst in 2009. We had squirreled away 10 years of wood for a rainy day. Well, it rained. We built this wood library and invited the whole world to show up, and they gave us orders. There were moments when people didn’t know what to do in certain situations. I called our chairman of the board and asked him what we should do. He said, “I don’t know, but you will muddle through it.”
What I like is when everyone puts their heads down and stays at it, regardless of the situation. We had Gibson lawsuits. The first one we lost, and I said, “It is not our day, but it will be our day again.” And then one day, two and a-half years later, the phone rang and they said the [lawsuit] was over. It was our day. Everybody stood strong. I went to the factory floor and somebody got in my face and said, “Don’t you dare back down.”
I like the people here. I am proud of that. There is a [movie] out about Carroll Shelby now (“Ford vs. Ferrari”). He never gave up. It is probably the most remarkable thing about him. I could make a really good living in a single shop making guitars. But I don’t for a variety of reasons. One of the main ones is I like working with the people in this building. I am proud of the group effort.
Did I know this was going to happen? No. Was not making it an option? No. I remember someone walked into our NAMM booth in 1990 and said, “They’re still here?” I was standing right behind him. It was a guy running another company. We are still here. I remember someone in 2011 saying, “The lights are still on. Good job.” Did we know how we would get here? No. But had we not got here, it would have been spiritually wrong somehow. I always felt we would make it. I always thought, spiritually, we would survive. I just never saw it quite the way it is. We have been through some layoffs. We have been through some tough times. But I keep telling everyone at The NAMM Show, “This is our time.” I say it over and over again. This is our time. It is like having a football team that had a lot of interesting seasons, but this year, we are headed to the playoffs.
I think of the  movie “Major League,” when the [Cleveland] Indians keep losing until Charlie Sheen [playing fictional Indians pitcher Rick Vaughn] got new glasses, and then they started winning. That was like us.
I always thought we would be alive, like we are. I did not know it would be like it is. I really appreciate the people I have worked with. That includes the media, dealers and everyone else I have come across. We buy the wood, we make the guitars, we hire the people and we ship it out. But at that point, the job is still not done. You still have to do other things like market products. Wow. It is like a merry-go-round. Every horse [on the merry-go-round] represents a different part of the process.
The Retailer: You had a significant presence at The NAMM Show. In fact, you even hosted a press conference. Tell us about some of the product launches you had at the show.
Smith: The Dragon guitar, which I think is really beautiful, could be the best one we have ever made. I [also] really like all of the John Mayer Nebula guitars and maple fretboard guitars. And I am particularly partial to the revamp of the McCarty line. They didn’t receive a lot of press because they are not new models. Instead, we redid them. But I like the sound of those guitars. We have this new tuned capacitive conductive pickup item that is going well for us. We are getting a better reputation about pickups every day. We also had new S2 and SE guitars. Last year, the Tremonti amp was the hit of the show. This time, it was a little bit of everything.
The Retailer: Looking at the guitar market, are you pleased with what you have seen recently for the industry and on a companywide basis?
Smith: We are growing at 15 percent a year. How can I not be happy with that? We have a half-year to yearlong backorder in almost every category. Our problem is delivering, not trying to sell. We are sticking to our knitting. We are trying to make better guitars.
The Retailer: Some recent factors may have changed the industry, with tarif fs last year and now the coronavirus. Do you think they are having an adverse effect on our industry at all?
Smith: We got hit with the 25-percent tariff on amps on some of our products. It was sobering. We didn’t complain. We just dealt with it. Coronavirus is a different animal. Some factories have been shut down that make parts. My morning meeting [the day you called] was about coronavirus. I don’t know enough about it yet to say anything definitive other than it is a real issue. The people at Johns Hopkins are telling me the coronavirus has been around a long time. The last time there was a flu, a half million people died. They are just trying to shut this down. The problem is, it is going to be hard to stop. Usually, things run their course. I can say if it still has an effect a few months from now, it will be devastating. Let’s say you are a grocery store. If you run out of cantaloupes, you are still a grocery store because you can buy other things. But when you are a guitar company and you run out of “cantaloupes,” you can’t finish the guitar because you are missing a part.
The Retailer: To wrap it up, despite these issues, are you still optimistic about the future of your company and the industry as a whole?
Smith: Highly. To go back to what I said before, we have a half-year to a year’s worth of items on backorder in almost every category in our entire product line. How can I not be happy about that? This is our time. Some people are never happy no matter what.
Some people are always happy, even if things are bad. I am kind of in the middle. When things are really good, I say, “It’s good.” I got up on a chair at our holiday party and said, “It’s good.” Everyone said, “Yay, it is good.” I then gave out $300,000 in holiday bonuses that day to thank our employees, and we had a party. The reason we have parties is because we know things are not good all the time. When they are good, we celebrate. After I got up on the chair, the whole place celebrated, we had a drink and everyone went home. It actually happened.
To read more interviews with leaders in the MI industry, click here.