It’s a classic Kiwi ‘garage to world-stage’ business success. And now thanks to an equity crowdfunding initiative, worldwide sales of Red Witch guitar effects pedals are expected to skyrocket.
Diehard fans of rock band The Police will remember the 2007–2008 World Reunion Tour. It was a tour that would provide a defining moment for Ben Fulton, an accomplished guitar player and teacher who had been designing and hand-building premium guitar effects pedals in a Kapiti Coast garage.
Andy Summers, lead guitarist for The Police, gave one of Ben’s pedals a rave review, and along with many other A-list musicians and music commentators, became an advocate for his Red Witch brand.
Queenstown-based serial entrepreneur Geoff Matthews read about the Kiwi Red Witch connection in a magazine article and ‘banked’ it in the back of his mind – only to have it revived some months later by his nephew, who had played in a band with Ben and contacted Geoff to see if he could help by investing in the business.
When the two met up, Ben had progressed from hand-making pedals in his garage to producing them in a Taiwan factory. The problem with this, says Geoff, is that when you upscale a business, your capital requirements increase. “Ben had orders from the US, but didn’t have the money required for his next production run.”
Geoff describes the Red Witch founder as a “creative genius”, but had yet to develop the business skills required to grow his business beyond his garage. Ben did, however, show his new business partner-to-be a dossier of all the rave reviews for the pedals in all of the world’s major guitar magazines.
“I took them home and read them, and that’s what captured me,” recalls Geoff.
He could clearly see the potential of the brand. “I figured that with its brand name and positioning it should be turning over US$5 million.”
Ben, too, was pretty pleased with his new business partner. “Geoff brought a lot of much needed business experience into the business,” he says. “With him came the infrastructure Red Witch needed – a board of directors, solid accounting systems, and perhaps most important of all, someone else to share the dream with. “His enthusiasm and belief in the company is unshakeable.”
Geoff says the market is bigger than you would think. “In 2014 there were an estimated 1.2 million units sold worldwide, worth around US$195 million. It is the fastest-growing segment in the music world.”
Growth, ironically, has been driven off the back of the humble old analog pedal.
“Guitarists are seeking the tone and authenticity of analog, rather than through a digital board that can do everything [in the way of effects],” explains Geoff.
Just as with most digital technology, the pricing has come down, however the analog pedals do not date so quickly. “We’ve just received a brand new five-star review in Germany for a Red Witch pedal that was made, and used by Andy Summers, back in 2006 – which pre-dates the iPhone and YouTube!”
It seems that premium guitar effects pedals appreciate like fine wine. Geoff knows of an original Medusa made by Ben nearly ten years ago selling years later on eBay for almost twice its new price. “Sometimes there can be a mystique that’s built up around original or vintage equipment.”
His decision to join forces with Ben in 2009 was an easy one. He didn’t see Red Witch as a niche product. What he saw was “a great brand led by an exceptional product. That’s a commonality with everything that I’ve ever got involved with. I never do ‘me-too’.”
The brand’s claim to be a world-class product is borne-out by the fact that no Red Witch pedal has ever received a bad review, he says.
“Trend analyst Eric Garland summed up the music business recently by saying that in the end its quite simple. Make products people want to buy, sold by competent people who care about the business; and financed in a sensible way. That’s exactly where we are with Red Witch.”
Putting the pedal down
Since Geoff came on board the product line has ballooned from four to an impressive 19. The focus has now switched from product development, which was perfectly fine while the world navigated the GFC, to full-on marketing.
The pedal is finally being put to the metal.
Marketing funding is coming via crowdfunding, which was successfully underway at the time of writing. A major focus is to enthuse and empower retail sales people with professional development courses, “so they care about the brand too”.
“A good brand will know how it adds value to peoples’ lives,” says Geoff. But he’s not just talking about adding value to consumers’ lives, but to the people who sell the products. Giving them a ‘badge of honour’ in recognition of their Red Witch product knowledge.
Just as Ben’s in-store demos produced an immediate bump in sales, they hope to achieve the same outcome with online professional development courses that leverage Ben’s respected expertise and focus on both product knowledge and general knowledge.
“These people will become our brand ambassadors on the shop floor.”
But don’t discount online sales, Geoff adds, because their biggest US dealer also puts customers directly in touch, via ‘live chat’, with well-schooled sales ‘engineers’.
Geoff firmly believes that the all-out assault on marketing will play to Ben’s strengths as a teacher too – “that ability to help an everyday person extract a beautiful sound through a Red Witch pedal”.
Thankfully, says Geoff, Ben has never has never worn that ‘mad inventor’ label, and has always had a bigger vision for the company.
Looking ahead, Geoff predicts Red Witch will gain the attention of larger offshore music ‘corporates’ seeking to acquire additional premium branded products, which could quickly solve any issues relating to sales and distribution.
“Things can move quickly in the music business, but three to five years is a good estimate in terms of an exit space.”
Ben, meantime, has a more practical outlook. “It’s time to focus on ensuring that Red Witch is one of the first brands anyone thinks of when considering guitar effects pedals.”
For him Red Witch is more of an emotional journey. Nothing inspires and excites him more than to hear about an A-list guitar player using his product.
“The perfect example is the Empress Chorus pedal. I designed that thinking of the chorus sound Andy Summers pioneered. Six months after its release The Police reformed for their world tour, using the Empress for all chorus needs and my Deluxe Moon Phaser. When someone like that, chooses to use the pedal I designed – that’s a highlight.
“Being able to offer something back to players who have influenced my life in a deeply positive way is a great feeling.”