Value Creation, Exit Strategy, and Bass Guitars

Published: 12 July 2023
on channel: Strategic Glue Small Business Marketing, Branding

What do bass guitars have to do with value creation and exit strategies?
#marketing #strategy #business #smallbusiness #smallbusinessowner

Transcript:

Many business owners want to build their business and capitalize on the value they created by selling their business. Let’s talk about value creation and exit strategy by talking about bass guitars.

Here are two bass guitars—the venerable fender jazz bass on the left and a pedulla fretless buzz bass on the right.

Both of these brands fostered significant value creation but both chose different exit strategies and capitalized on that value creation in different ways.

Leo fender founded his company in 1938 repairing radios and ultimately introduced the first mass-produced solid body electric guitar in 1950. Several models introduced in the 50s and 60s are still some of the most famous and best selling instruments in the world today. Fender built his instruments with utility in mind where necks were bolted onto bodies using modern manufacturing methods. The fender jazz bass like what you see here was introduced in 1960. Fender became so successful that it was purchased in 1965 by cbs for $13 million dollars, which is equivalent to $125 million today.

Michael pedulla began hand making instruments in 1975 and soon focused on bass guitars only, eventually producing as many as 750 basses per year. Pedulla basses became coveted because of their unique build quality, sound, and playability. This buzz bass’s construction offers different tonal characteristics and feel than the fender. Eventually, michael pedulla scaled down his company because he loved making the basses—not managing how they were made. In his own words, his basses became better because he became better at hand building them and his passion grew because he was doing what he loved. Michael pedulla’s value creation was building timeless basses…by himself. Pedulla retired in 2019 after 45 years in business. Curiously, with a brand like pedulla, certainly he could have sold it to another company, which is quite common in this industry. Instead, he announced his retirement, sold the remaining inventory, and rode off into the sunset.

So, what’s the point? Isn’t the goal of value creation to produce something of value and to capitalize on that value. Like leo fender’s successful exit in selling to cbs? Maybe. But maybe not. Michael pedulla created immense value to players the world over, and his legacy will live on as one of the best bass builders ever. I suspect he wanted to leave the integrity of his brand and name intact and not risk it becoming something watered-down under a different owner.

As small business owners, we want to create value regardless of size and scope. But it’s also about passion, purpose, and doing what you love. But value creation is also about providing “options” to capitalize on what you’ve built when you’re ready. Leo fender and michael pedulla both had options - they just chose different exits.

Please check back next week for another marketing tip on creating a more valuable small business.

Watch video Value Creation, Exit Strategy, and Bass Guitars online, duration hours minute second in high quality that is uploaded to the channel Strategic Glue Small Business Marketing, Branding 12 July 2023. Share the link to the video on social media so that your subscribers and friends will also watch this video. This video clip has been viewed 13 times and liked it 0 visitors.

397