How Did I Get Here (4 page)

In early 1994, Birdhouse was on life support, and Per and I discussed pulling the plug. Vert skating (on big halfpipes—my specialty) was dying, so I had stopped competing and was putting more time into the business. I still had a ramp at home, and I was actually skating better than ever (learning new tricks, like heelflip varial liens), but no one was watching. I often skated alone.

As a parting shot to my pro skating career, I asked the Birdhouse art department to use an image of the
Titanic
on my last signature-model board. It seemed like a good metaphor: the supposedly unsinkable ship, sinking.

Fortunately, my “retirement” didn’t last long. For one thing, I never really took to the 9-to-5 desk-job thing. Per and I quickly realized that it was better for the company if I spent more time in the public eye, doing demos and competing, so the company could profit from my high profile. We licensed my old hawk skull graphic from Powell, and began making more products bearing my name.

We got lucky, because 1995 was the year that ESPN debuted something called the Extreme Games (now the X Games) in Rhode Island. I wasn’t sure what to expect when the network invited me to compete, since ESPN was all about big-ticket sports like baseball and basketball, but I figured it was worth the risk. The producers went to great lengths to tell the stories of a few select athletes in hopes of giving viewers an emotional attachment to the competitors. That was crucial to the games’ success, because mainstream America at that point knew very little about skating or BMX riding. And since I was the best-known skater at the time, ESPN devoted an inordinate amount of airtime to me.

I was stoked to win the vert contest and place second in the street event, but felt embarrassed when I saw the final show. A lot of world-class skaters—friends of mine—never even made it on the air, while I became the face of skateboarding for millions of viewers. Suddenly, people who’d never touched a skateboard were stopping me in airports and restaurants. Sales of my decks skyrocketed in the following years, and the skate industry itself started to benefit from an upswing.

Bootleg Braggadocio

Per and I also owned a distribution company called Blitz, which we used to incubate a variety of small skate brands, such as Baker, Flip, Hook-Ups, SK8MAFIA, The Firm, and Fury. Most of them were the brainchildren of former pros who came in as co-owners.

Those were interesting times. While we helped those brands broaden their distribution and range of products, the owners loved to stir shit up. That was part of the charm, actually: watching misanthropic businessmen compete to see who had the biggest balls when it came to breaking the rules of business. It could also be pretty scary, especially when we lampooned mainstream corporations by repurposing their logos and putting them on skate decks and T-shirts.

Needless to say, we received a lot of terse cease-and-desist letters, but most of those arrived after we’d already ceased and desisted; skateboard graphics rarely last more than one selling season. More often than not, we’d produce and distribute so few of the offending products that the company whose logo got violated would never notice. We did get sued a few times—and usually ended up signing settlement agreements that prohibited me from even talking about those cases. Sorry.

I learned one important lesson through all of this: If you think you or one of your business partners has done something that might get you sued, spend what it takes to hire the best lawyers you can find.

The attorneys didn’t always give great advice. A
very big
candy manufacturer once sued us because it didn’t like the way one of our companies had appropriated its logo. Our in-house legal rep suggested the candy maker might drop the suit if we agreed to include coupons for the candy in our own packaging. That one we didn’t even try.

Legal potshots also came sometimes from the artists themselves. To keep their designs from getting stale, most small skate companies get their artwork from freelancers. We’d pay the artist a one-time fee for the rights to use a piece of art on everything we manufactured or licensed. The contracts were usually just quick one-sheets—a stupid oversight. When my video game started to do well, an artist came after us because his version of my oft-manipulated hawk skull graphic appeared in the game as one of about 300 different boards that players could choose to ride. We had a contract that said we owned the artwork, we had his canceled check, and we had a copy of his invoice marked “paid.” But the guy’s lawyer saw deep pockets, and the whole thing turned into a headache.

That was another lesson: These days, we always use an ironclad release for artists’ works, and we’re diligent about making sure contractors are willing to sign it. If they won’t sign, we use someone else.

Videos also triggered their share of lawsuits, especially when it came to using unlicensed music. Very few skate companies could afford to pay for the rights to their favorite songs, but a lot of them just used them anyway—again under the assumption that they were so far under the radar, with such a small audience, that no one would notice. Of course, today, in the age of the Internet, skating bootleggers are way more likely to get busted—especially if their video sections are good enough to go viral.

With the growth of niche television networks, we get approached a lot from TV producers hoping to air clips from old skate videos. But a lot of our best stuff contains poached songs. We end up back in the editing bay, sometimes replacing a great but unaffordable soundtrack with cheesy free music that sounds like it got lifted from a porn movie.

Unlicensed music isn’t the only problem. After Birdhouse released its groundbreaking video
The End
in 1998, one of the producers thought it would be cool to add a bonus “egg” clip to the DVD version. Remember those? You had to scroll around the menu for an egg that would lead you to some hidden video—in this case it was footage of an appearance by me on a national network game show, one of the most popular game shows in the world, a game show that had not given us permission to use its footage. I didn’t find out about it until after the DVD shipped to stores.

We had to recall every copy.

3

HEY KID, WANT TO BUY A HOODIE?

Risking our homes to make t-shirts and hats

By the late 1990s, my sisters, brother, and I all had children of our own, ranging in age from 2 to 15. Anytime we got together, and we got together a lot, there was a gaggle of young cousins underfoot. Of course, being neck-deep in the surf-skate culture, we liked to dress our kids up to look like mini-rippers. But it wasn’t easy. Most of the stuff for the under-12 set was of the goofy OshKosh-Gymboree variety, designed to make them look like dress-up dolls instead of little humans.

A few surf companies, like Quiksilver, Rusty, and Billabong, had obligatory youth lines, but none of the core skate companies did. They worried they’d risk alienating their hypercool teenage customers by catering to munchkins whose favorite thing to do with a skateboard was turn it upside-down and spin the wheels. The coolest kids’ clothes we found were made by a little-known start-up company called Modern Amusement, but they were pricey.

When we launched Hawk Clothing we featured our target market in the advertising—our own kids. Here I am with my son Riley along with Pat’s twins, Emily and Hagen.

In 1997, California got hammered by storms thanks to the ocean-warming phenomenon known as El Niño, which means “the child” in Spanish. My brother Steve was editor of
Surfer
magazine at the time, and El Niño was a big deal in the surf world because it created a nonstop stream of big swells. One day that summer, at a family barbecue, Steve suggested that we pool our money and start a company to make surf and skate clothes for kids. Call it El Niño, he said. Everybody agreed it might work, but we had only the vaguest idea about how to get it started.

My sister Pat had been helping my skateboard company, Birdhouse, a little at this point, setting up team demos and coordinating a few marketing opportunities, and she was looking to head up a brand. Unfortunately (or perhaps fortunately, as it turned out) there was already a company named El Niño making kids’ clothes. So we decided to call it Hawk Clothing instead, to take advantage of some of the buzz (and products) that were starting to build around my name. We could also see that my fan base was getting younger and younger, with a lot of mail coming in from youngsters who could barely spell.

Going It Alone

Pat and I approached my partner at Birdhouse, Per Welinder, to see if he was interested in getting our distribution company, Blitz Distribution, involved. Like other skate company execs, Per was concerned that Blitz and its related brands would chase away some of its core customer base if the company moved into the 12-and-under market.

We disagreed. We figured older kids wouldn’t care what younger kids were wearing, and we also knew from our own experience as parents that children as young as five or six were, for better or worse, already judging brands based on their cool factor. We were determined to create a cutting-edge skate apparel brand for kids. As long as it stayed authentic to the culture, we believed it could succeed.

Without Blitz’s help, we had to start from scratch in regard to design, infrastructure, production, distribution, and marketing. I agreed to use my name to help build the Hawk brand, but wanted to eliminate the “Tony” part in the hope of retaining its longevity.

For start-up money, Steve, Pat, and I dipped into our savings accounts, which we quickly burned through creating samples, attending trade shows, and going into production on a small line of T-shirts and hats. Turns out, apparel is a risky, money-sucking industry, with a long and bumpy road from conception to market. And even if you get that far, profit margins are thin.

But I knew from experience that there was a void in the market. I could see it every day as I traveled around the country. Kids as young as five were starting to skate, and taking it seriously.

Short on cash, we put up our houses as collateral to get a small-business loan—no small task. Pat came up with the prospectus and financial plan, Steve wrote the mission statement, and I was the pitchman. The bank bit.

The year Hawk Clothing was born, 1998, Americans spent $5 billion on surf, skateboard, and snowboard gear and apparel. By 2008, that figure had more than doubled to $11 billion. We were at the right place at the right time but had no idea how long it would take to make any money at it.

Pat and our first employee, Jared Prindle, worked out of Pat’s house for about a year until the boxes of T-shirts in her garage began to spill into her driveway. Jared, who’s still with me, is a renaissance man. His father was the founder of Prindle Catamarans, so Jared had learned to sew sails at a young age. Pat’s college degree included a minor in fashion design, so she could design and sew, too.

Our line initially was limited to T-shirts bearing cartoon graphics: robots, airplanes, and such. We’d buy pre-constructed T-shirts, silk-screen graphics on the front, and replace the labels with our own. Shirts and shorts were limited in styles and made locally in Santa Ana. Not exactly couture.

To help with marketing, we hired a publicist, a former colleague of Pat’s from the music business named Sarah Hall, who’s also still with me. I was already known in the skate world, obviously, but the general public had little idea who I was. As I’ve mentioned, two big things happened in 1999 that drew a lot of attention. I landed a 900 at the X Games, and Activision released my new video game,
Tony Hawk’s Pro Skater.
Almost overnight, I was doing interviews with magazines and newspapers and television shows that had heretofore dismissed skateboarding as a fad.

All that press obviously helped jump-start Hawk Clothing, but it wasn’t the only thing. The video game, aiming at authenticity, embedded several skate brands throughout its virtual world, including the Hawk Clothing logo. That added up to millions of impressions.

As my name began to creep into the mainstream, we decided to try to push Hawk Clothing beyond skate shops. Pat flew to New York for a children’s apparel trade show, where they sandwiched our little one-person booth between one company that sold Tweety Bird products and another that featured Snoopy. She spent most of that show explaining to bemused buyers who this “Tony Hawk” guy was. But we got some orders.

We also showed at the Surf Expo in Florida that same year. My other sister, Lenore, had invested in the company by then, so she, Pat, and I squeezed into a hotel room in Orlando for three days. At least now we were showing the line to the right crowd. At the Action Sports Retailer show in San Diego the following year, the buyer from Nordstrom decided to test the line. That was our first major account.

Breaking Rules

We didn’t always play by the rules. The day before one of our first big trade shows, the samples for our cut-and-sew shirts (meaning they had buttons and collars) still hadn’t arrived from our supplier. Pat went to a local surf shop, bought a few Quiksilver shirts, changed the buttons, replaced the labels and tags with our own, and silk-screened a small Hawk logo onto it. She told customers that the samples showed only the style of the shirt, and that the actual product would come in different colors. This was, of course, illegal. Years later, Pat told this story to some folks at Quiksilver, which has its own pirate origins. They laughed.

When we finally got big enough to rent a warehouse, we looked to San Clemente, which was no more than a 30-minute drive for any of us. Also, the surf-skate industry is centered in Southern California, so we had ready access to good vendors and influential retailers. We spent those first few years printing and embroidering T-shirts, fleece, and hats using local manufacturers. It was a ton of work, and for the most part a family affair. Pat ran the business, and her husband, Alan, a professional bass player, ran the day-to-day office operations and even shipped boxes when he wasn’t on the road. Steve put together the catalogs and helped hire a sales team. Lenore and her husband, Dick, erected and dressed up the trade show booths. When we needed models, we used our kids.

Before long we hired a designer, Skot Werner-Longo, and a production manager, Carol Ianelli, both of whom taught us much and were crucial to the company’s early growth. We eventually began to notice that our “Accounts Receivable” drawer had almost as many files in it as our “Bills Payable” drawer. But we were still a long way from pulling out any kind of profit. The problem was cash flow. Any growing company needs more cash to produce more goods, so profits go right back into the machine. As sales increase, the cycle accelerates. Also, most of our vendors were demanding payment upon delivery, while our customers (often small skate and surf shops), sometimes needed up to 90 days to pay.

It’s a common business dilemma, and we considered our options. Should we ask our bank for a larger credit line? Bring in more investors? License the brand to a larger company with adequate cash flow?

We knew we had to do something, because the car was gaining speed and we were still learning how to drive. In addition to Nordstrom, the brand had been picked up by such chains as Pacific Sunwear, Tilly’s, and Bob’s Stores. We also cut a deal to sell outdated inventory at discounts to Marshalls and T.J.Maxx.

By now, we had five full-time employees, and our little warehouse was bustling. We were designing for future seasons, creating catalogs, web sites, and marketing plans, producing goods on- and offshore, taking orders, packing and shipping boxes, and building a sales team.

Looking for a Suitor

In 1999, Pat consulted with an attorney, Ladd Lonnquist, who specialized in the apparel business. After reviewing our books, Ladd said the brand appeared to be a solid idea with a good start and much potential for long-term success. But it would take us 10 or 15 years to see any kind of real profits, so he suggested we start looking into licensing the brand to a larger, existing apparel company.

It didn’t take us long to find some people who were interested, but none of them seemed to really understand our mission, which was to build a mainstream audience outside of skateboarding while staying true to the culture on which the business was built. Because of his years at
Surfer
magazine, Steve knew some top executives at Quiksilver, the big dog of the surf industry, which had grown into a $500 million company using essentially the same mission as we were. Quik was (and still is) a respected brand among serious surfers, while also managing to sell its hoodies and T-shirts and boardshorts to kids in Kansas who’ve never dipped a toe in the ocean.

In late 1999, Steve and Pat drove to Quik’s headquarters in Huntington Beach to meet with Danny Kwock, the company’s head of special projects. (We’d all met with Bob McKnight, the company’s CEO, a year or two earlier, but that was mostly to get advice on trademark protection and other start-up issues.) As soon as they sat down, Danny made it clear that he was meeting us only out of courtesy and that Quik had no intention of pursuing a merger. He’d already met with McKnight, and they’d agreed that he should say thanks but no thanks. But as Pat and Steve told the story of Hawk Clothing’s swift rise, and of the success the brand was having in Middle America, it was like a switch flicked on in Danny’s head.

Here’s how Danny told the story 10 years later: “The only reason I even met with them was because Steve was a bro and I had to do the polite thing. So I walked into the room thinking, ‘How am I going to tell these guys thanks but no thanks without hurting their feelings?’ But as they gave their pitch, it brought me back to the early days at Quik, when we also had a little warehouse with the single roll-up door. And I was pleasantly surprised by Hawk Clothing’s designs—they had the sizing down, the graphics, the colors. They were honed in to the under-12 market.

“Quik had struggled with that age group. To get into that market, we’d have had to start a new brand, and that’s a huge struggle. And here was one already dialed in, attached to a person with deep roots in skateboarding. It stayed true to the sport’s core values but also had potential to scale. And I realized this was one of those rare feel-good business opportunities, where you can partner with people you respect and who have the same passion and vision.

“So I went back to Bob and said, ‘My intuition tells me we should do this deal. I think this could blow up.’ Bob thought I was spun, and the marketing guys were all, ‘What are you tripping on?’ But, you know, the easy answer is always no. So we did it, and it worked. It ended up being a big feather in my cap personally at Quik.”

Within six months, we were signing papers, and Quiksilver became the owner of Hawk Clothing. We initially hoped to license the brand, not sell it. But Quik was only interested in buying the whole company, so we cut a deal that included a purchase price and future royalties. Although the deal has worked out well in the long run, and Quiksilver has been fair, if we had it to do over again, we wouldn’t have allowed a larger company to take ownership of the brand, which in this case included the “Tony Hawk” trademark for apparel. And that’s one piece of advice I give all the time: Never sell full ownership of your name to anyone for any reason, no matter what the price.