Hartley Peavey became one of the key drivers in the musical instrument industry by adhering to a very simple philosophy – innovate in order to sell products at a price that people could afford. You can't talk to Hartley without that phrase coming up a couple of times and that's the kind of focus that leads clever people to success.
He has all the personal qualities you would expect from of an innovator. He's a creative, out-of-the box thinker with an appreciation of history coupled with an excited eye to the future. He has a thorough knowledge of how MI manufacturing companies got to where they are today and he is completely unafraid of taking risks.
Peavey is located in Meridian, Mississippi, which was flattened during the American Civil War and then rebuilt to become the leading manufacturing center in the south in the late 19th and early 20th centuries. Hartley Peavey is one of its most prominent native sons. He's a firm believer in his own business instincts, having "tried out a bunch of guys with MBAs and run them off when I decided that my education from Mississippi wasn't so bad after all.".
His company has been responsible for many innovations within the musical instruments industry. Many of these innovations have been in manufacturing techniques that are beneath the radar of most musicians, but others have been more notable. For those of us that remember, in 1989 Peavey launched the DPM series, which were the first major electronic keyboard products to use off the shelf DSPs in lieu of a custom ASIC, which was the strategy of the other major players at the time. They even marketed an early MIDI fader controller called the PC-1600x, a useful product and ahead of its time in 1992.
In 1993 Peavey marketed MediaMatrix, the first digitally networked audio solution, which is deployed in such diverse locations as the Beijing International Airport in China, the US Capitol, the Opryland Convention Center in Tennessee, and over a quarter of the NFL stadiums in North America. More recently they have entered the software plug-in market with ReValver and the MuseBox.
My personal experiences with the company began in the 70s. I went into my local music store thinking I wanted to buy a Marshall amp and discovered what they cost. I walked out with a Peavey, which sounded great and I didn't have to rob a bank to pay for it. As I later learned this was a critical part of their sales strategy and part of Hartley's aforementioned reason d'etre; Deliver great value at an affordable price and (probably because his father owned a music store), form close relationships with the dealer network.
Peavey recently celebrated his 47th year of business.
Well, there's no substitute for 47 years of experience....
My little education from Mississippi State wasn't so bad after all. I gave the commencement address there last year. I told them the truth. A diploma is little more than a learner's permit. When I graduated from college I thought I knew something. I soon figured out that I had plenty to learn.
How did you get involved in musical instruments in the first place?
I never wanted to be in the manufacturing business. I love music and I love musicians. At that time in my life everybody I knew who was a musician always told me some version of the same thing. They all said, "I wish somebody would make good gear at a fair price." And this was circa 1964. In the mid-60s a Vox Super Beetle sold for $1500.
I remember. It had a sort of mini-scaffold around it.
Yes, it had a chrome stand and a cheesy 100-watt transistor amplifier made by the Thomas Organ Company. It had four 12-inch speakers and sold for $1500. At the time gasoline was $0.32 a gallon and you could buy a six-pack of beer for a buck. I know that's true because I bought many of them. If you want to know what that is in today's dollars just multiply it by ten. Can you imaging spending $15,000 for a Vox Super Beatle?
Well, Vox did. And back then if you wanted a PA system or sound system, you had two choices. You could buy a Shure Vocal Master, which was $1,000, or you could buy a Kustom K200, which was essentially a 100-watt, four-channel guitar amplifier and you could buy that for $900. And that was a lot of money back then. And that's how I got in the business.
I was an engineer and I'd look inside of a Marshall amplifier that sold for $1,000, and there were probably about $60 worth of parts. I thought, "Hell, I could do better than that.".
You must've done something innovative to allow you to sell products for less money or was it just that you didn't feel that you needed to make as much?
Well, that's an interesting question. My father was a music retailer so I was raised in that environment. When he graduated from high school, it was the middle of the depression and there were no jobs, and the only thing he could make money doing was playing music. He was a saxophone player so he played in this swing band all over the south-east for about six years, and then came back to Meridian and opened a music store in 1938.
He always said, "Son, you add thirty points onto your cost and make a fair and reasonable profit and you'll always have business." So I figured out what my costs were, my parts, my labor, my overhead...all of that, and I would add on thirty points and the price just fell where it was. And it just so happened that it was about 30–40% cheaper than the competition, generally.
When did you decide you wanted to participate?
In 1957 I went to a Bo Diddley concert in Laurel, Mississippi. I went nuts and told my dad that I wanted to be a guitar player. And he said, "No, you don't want to be a guitar player. This rock 'n' roll, it'll never last and guitar players don't pay their bills." I insisted so he said, "Okay, well I'll get you some lessons and if you learn how to play then I'll think about getting you a guitar." And of course that wasn't good enough for me. I got an old crappy guitar and made my own pickup. Then I asked him for an amp, and I got the same answer. "No, when you learn how to play I'll think about getting you an amp." So I built my own amplifier with 4x12 speakers and 35 watts, which at that time was a big amplifier.
How did you acquire the skills to build those things?
All through high school I took courses like sheet metal and machine shop, and mechanical drawing. I took basic and advanced electricity. By the time I had graduated from high school, I had taken just about every shop class they offered. I could run a lathe or a milling machine, a wood shaper, a metal shaper, a surface grinder. I could make anything, and did. I would make guitar bridges, bass bridges, zip guns, cannons, and just about anything you could think of. I loved to work with my hands.
You see, I believe that we're all given gifts when we come here. They're not necessarily what we want. You don't have a choice because we're not born with a set of instructions tattooed on our asses. And life's test is to see what you do with the gifts that you're given. I wanted to be a musician. My dad was a great musician, but hanging a picture on the wall was a test of his mechanical ability. On the other hand I was probably the world's worst guitar player, but I used to win all of my school's science fairs.
The truth is that my talent is building things. That was the gift that I was given, but it took me a long time to figure it out. In the meantime every band that I ever got in needed equipment. So I would build it. If the bass player needed a bass, I'd go build him one. And every time I would build the gear they needed, they would kick me out. The first time that happened I said, "Well, you know, shit happens.", but then it happened again.
So I looked in the mirror and I said "Okay big boy, it looks like you're not going to be a rock star. What are you going to do with the rest of your life?" And like I told you earlier, it came back to me and I said I'm going to build what every musician said they wanted - good gear at a fair price.
How did you get started?
Well, my goal was, and still is, not to be the biggest, not to be the most profitable, but to be the best. But you can't be the best, by definition, unless you're different.
But this is where it gets interesting. 6L6's (vacuum tubes used in all the early Fender guitar amps) were very expensive and very rare in the UK. Part of the reason for that is when RCA invented the 6L6, in 1936; they patented what they called a "beam power tetrode". It had beam-forming plates and was designed by RCA basically for cinema amplifiers. It was not a full pentode because it did not have a suppressor grid. And a year later they came out with a tube that was specially designed for car radios called the 6V6, which was a little brother to the 6L6. They both were beam power tetrodes that were developed by RCA. Well, that became the standard output tube for audio amplifiers in the United States, and that's what Fender used in all of his amplifiers and everyone else did over on this side of the pond.
But in Europe, Philips was the big dog in the tube business, so after WWII they told their engineers to develop a tube that was at least the equivalent or better than the RCA 6L6 and 6V6. And to get around the RCA patents that were still valid in the late '40s, instead of using a beam power tetrode as RCA did, they made the tubes a full pentode. One of the things about a pentode is it has slightly more gain than a tetrode. And the EL34 requires about 32 volts to drive it wide open or to drive it into saturation. And because of the 6L6s particular characteristics, it requires about 52 volts to turn the tube fully on.
All right. So when he couldn't get 6L6's, Jim Marshall told Ken Bran to re-bias the amplifier they had (which was a direct copy of the 1959 Fender Bassman), to accept EL34s, which he did. However, what he didn't do was change the gain structure, because when Leo designed that amplifier, he designed enough voltage gain in it to swing 52 volts. And they had to have that to turn the tube on to get maximum power out of it. Well, if you put an EL34 in the same place you put a 6L6, the EL34 only required about 32 volts to drive it fully on, whereas the 6L6 required the 52 volts to turn it fully on.
So it'd get overdriven sooner....
So, automatically, completely unknowingly, Jim Marshall invented the so-called "Marshall Sound" by using a different tube. The amplifier was set up for 6L6s but he put a higher gain tube in there, the EL34, and then the "Marshall Sound" was born. That's how that happened.
When Marshalls first started coming into the States, the kit alone was $1000, and in those days you could buy output tubes, 6L6s and EL34s, for about a buck, buck and a half. Marshall had three 12X7s and about seven or eight dollars worth of output tubes and maybe $30 worth of transformers, a few resistors and a chassis and he was selling it for $1000 and I looked at that and thought, I can do it for a hell of a lot less than that. So I set up a little woodshop in my parent's basement and started the business selling a guitar amp and a bass amp. I would go into musical instrument shops and say, "I have a new line of amplifiers I'd like to show you." "Yeah, well what's it called?" "It's a Peavey." "What?" "You know, Peavey. P-E-A-V-E-Y." "Son, get out.".
So one time in Montgomery, Alabama, a dealer said, "Son, I'm not interested in your guitar amps because I've got plenty of those, but if you had a good sound system, I'd be very interested in that." So I designed a PA system.
So how were you different with your PA products?
I figured out a better way to do it. When you built a PA, you had to have a box for the head and two columns. So I built about ten or fifteen sets and thought, this is a stupid way to do it, because at that time you had to build the outside of the cabinet, then line the front and back with the little strips, about one inch by ¾ of an inch, and you'd drill holes and put about thirty-something screws in the front to hold it on there. And then to put the back on you'd do the same thing and drill about thirty-something holes. That was sixty screws I had to put in the cabinet. So I got to thinking and decided to put a groove around the front and back and glue the speaker board in it and then glue the back in. Then I figured out a way to cover the cabinet with one piece of cloth and built a cabinet with no screws, nothing to vibrate, and it was wonderful.
But then I had to mount the speakers to the front of the baffle board from the back. So the only way I could get a grill cloth in there was to build a frame for it, which I did, but when you build a four-foot column speaker, you stretch the grille cloth and the frame would just bow inside. I had to figure out some way to keep the thing from bowing and that's when I came up with those aluminum extrusions. I eliminated the screws. Instead of having five pieces of cloth I had one piece. I could build that cabinet for about 40% less than the other people, so I came out with a sound system in 1968 that was four channels, 100-watts with two columns for $600.
And those aluminum extrusions became a signature design thing for Peavey...
Yeah, that was trademarked.
What kept other, more-established companies from doing something similar?
They didn't consider me serious competition. They thought I was just some little redneck kid from Mississippi, which was a wonderful thing for me. When rock 'n' roll exploded the first time, it was in the mid '50s, and that was at a time when Bill Ludwig owned Ludwig, the Steinway family owned Steinway, and Leo Fender owned Fender, and music manufacturing was a family business. By the early '60s music had kind of gotten stale. The Brits had been so impressed with American rock 'n roll music that they repackaged it and sold it back to us and that became the British Invasion. And that's when the Beatles and the Rolling Stones came along. So in the early '60s through most of the '70s, the conglomerates came in. This is when CBS bought Fender. Norlin bought Gibson. LTVJ, bought Altec Lansing. This is when Beatrice Foods, you know, "Nobody doesn't like Sara Lee", they bought JBL.
I didn't know about Beatrice Foods and JBL. That's pretty funny in retrospect....
Well, they did. All of these people jumped in the business. Prices skyrocketed and quality went to hell. When CBS bought Fender in 1965, a Stratocaster wholesale in a case was $162.50. I know that price very well because I was saving money to buy one.
All of this was heaven for me because I had a different strategy -building "good product" at an affordable price. It could be frustrating sometimes. I'd see catalogs from Fender and they had four-color catalogs and I was doing my catalog in black and white on newsprint.
And, I never wanted to get into the guitar business, but I did because my major competitors at that time, were going into the dealers and saying, "Well if you don't stock our amplifiers one to one, or our PAs one to one, we're not going to sell you our guitars." So I said: OK, I'll fight fire with fire and get in the guitar business.
So in order to compete with them we pioneered the use of computer-controlled machines to make guitars. Everybody was saying you can't make guitars with computers. Well, to some degree that is correct. But you can make very precise guitar parts with computers. Of course they have to essentially be assembled by hand, but that's what I did. I produced precision guitar parts and eliminated the slop. And any guitar made today, in any quantity, is made that way. Martin is making them that way. Taylor is making them that way. I did it in 1976. So that's my MO. That's the way I tend to do things.
Part 2 can be found here.