Meet the Founders: Hisatake Shibuya, ESP Board Chairman

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Markets Are there In the World

Hisatake Shibuya
Born in 1937 in Sado Island, Niigata-ken. Graduated from Doshisha University in l961. He is now U.S.-based. The interview was arranged during his recent 2-week home coming trip to Japan.

Founder-Hisatake_Shibuya.jpg

Be Innovative-Never Be Follower
I started working for the music products industry at the age of 24 as a freshman of Electric Guitar Dept. of Kawai. It was 50 years ago. Teisco and Guyatone electric guitars were coveted instruments of young players at that time. I loved my work, but 4 years later I clashed with my boss and left Kawai. I know I was too bold and stubborn, but they are my nature anyway.

Jobless for one year, I joined Nippon Gakki (present Yamaha). I left the company to launch my own business with 4 years of experience in product distribution. I worked with Shigeki Saito who had been a colleague at Kawai, and then ran Fernandes, guitar maker. He was one of my mentors in this business, and supported me in many ways during the year out of work.

I have learned business through 4 years work each at Kawai, Yamaha and Fernandes which have different corporate culture and product marketing.

The Japanese guitar industry has grown with help of the great guitar boom. But we also saw countless numbers of rise and fall in the history. While many entered in the market there were always many went out of business. Years later, world manufacturing base transferred to Korea, and appreciation of the yen against U.S. dollars hurt the Japanese makers.

I launched ESP, guitar store, in 1975 in Shibuya, Tokyo. It had a partitioned area where I brought in machinery to operate as a guitar retail store/workshop. I had 3 staff and we started building Navigator high-quality hand-made electric guitars and repair services.

Why did I go high-end line from the outset? It had been my policy since I started working for Yamaha. I thought that having ordinary guitars on our store walls wouldn't much impress the shoppers. To quickly respond to requirements of musicians, our store should have been located in Tokyo. We stayed in Metropolitan area until we established an efficient manufacturing base. It greatly helped us to enhance communication with musicians and meet their demands. 

Years later, we moved our production facilities outside of Tokyo, but we kept our policy that we concentrate on high-ticket guitars. Once we tried to triple our sales of one high-end model which sold 200 units a month to 600 units. The result was extra cost generated in advertisement and marketing, and our gross profit remained flat. In terms of operating risk, our ambitious plan was far greater than selling 200 units. I took a lesson from this experience. Thus, we build expensive models with additional value under ESP brand, and sell mid-range and competitive models under second and third brands.

Thirty six years in this business have not been easy. More than once, I put our competitors on trials. Every time I had to protect our business I told myself that I wouldn't get defeated. Some people in U.S. called me 'cobra' because I bite as I am prodded on my head. In one way, such my attitude has helped me to survive in the industry (laugh).

Opening Guitar Builders' School
A big turning point came when I launched guitar building school. The plans got started when we opened new job opportunities at ESP. More young people than we expected called us for interview, I thought that they saw guitar building so attractive. An idea for opening guitar craftsmen school came into my mind. I examined every detail of the new project. It took me 10 months to design blue print for the new business because there were no schools of that kind in Japan.

Launched Japan Guitar Builders' School much strengthened the ESP corporate structure and finance. Not a few of the early time graduates of the school now take most of the ESP's managerial positions. The school brought growth to the company. It's safe to say we wouldn't have today's rich asset of human resource if we didn't have the school. I expanded school business opening Japan Musicians' Academy and Japan Piano Technicians' Academy years later.

Settled in U.S. to Explore the Market
In course of time, ESP came to know Musicians Institute (U.S) had financial problem. The school was once an approved place for young musicians seeking professional opportunities, but it lost its glamour as advanced sound equipment replaced studio musicians. I thought it was logical to purchase the school because entering diversified entertainment business has been my years of dream.

Acquired the MI, the faculty members presented us 10 requests including pay raise.                 Perhaps, they were skeptical about Japanese management. Moved in U.S., I made up my mind to keep my policy not easily compromise in business. I didn't accept their requests but promised they would be better paid once MI was restructured successfully. I had my hair shaved and wore sunglasses to make me appear tough negotiator. People spoke of me something mysterious. In reality, too much stress in business caused me several physical disorders. After all, it took us 16 years to get MI back to right track. I fell that I'm ready now to pursue my dream plans.

The reason I put my feet in U.S. was, firstly, to set MI, ESP and Shecter on right course, and secondly, I felt I should dilute my influence as founder of ESP on senior managers in Japan. Frankly speaking, I was very anxious about their management skill, and I continued calling Japan office every day from U.S. In a year or so, they could control everything themselves saying that there was nothing I could support. Well, good for them, but I felt a kind of self-contradiction that they could go on without me. (laugh)

In the following years I purchased United Television Broadcasting (broadcast station in Japanese language), Theatre of Arts and Elegance International (school for special stage make up), etc in further pursuit of my dream plans.

Design Your Dream- World Markets Are There
Young people often say they have no specific dream. It's not given. I say dream is what individuals conceive in mind themselves. Japanese guitar market has been dwarfed in the last years because our society is getting older, but market has expanded throughout the globe. Korea has less than half population of Japan , but people there eminently focus on world markets.

I expect that young industry people develop products with originality and additional value to be differentiated from competitors. I understand my key role at ESP is to present a corporate succession plan. I always tell my managers to find seeds for future businesses, never be content with the present conditions and have challenging spirit.

About ESP
1975- Founded as a manufacturer of high-end electric guitar, and to train guitar repair servicemen.
1979- Started accepting orders for 100% custom-made electric guitars.
1981- Established ESP-USA.
1983- Established ESP Europe in Germany. Opened Japan Guitar Builders' School.
1986- Opened a 6,600 sq. meter factory in Sado Island, Niigata-ken.
1990- Purchased Schecter USA.
1982- Launched ESP-China.
1995- Purchased U.S. Musicians Institute.
1997-2010 Acquired and opened more than 10 educational institutions and retail shops.
ESP Co., Ltd. has 18 member companies, 1,300 workers and 13 billion yen annual sales as a group. The business expands from musical instrument manufacturing, distribution, sales, import/export, music and movie production, publishing, development and distribution of music software to multiple educational institutions.

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This page contains a single entry by jmtrades published on April 5, 2011 10:41 PM.

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