How Did I Get Here (9 page)

The Six Flags graphic-design team knew their stuff, but to their credit they also knew what they
didn't
know, and so came to us for help. We spent many hours crafting signage and high-octane video loops, along with a mini-documentary about me. In typical theme-park fashion, they wanted to install larger-than-life cutouts of me spinning somersaults above the ride. They submitted lots of oddly cropped mock-ups for our approval. Jaimie tweaked things and sent back high-res artwork that they used as is. We were lucky that the marketing team was led by Mike Antinoro, a former ESPN guy who'd worked on the X Games for years. Collaborating with experienced and open-minded folks made things far less painless.

We had similar luck with a company called Case Logic, which wanted to put out a line of Tony Hawk CD cases. (This was in 2002, before iPods killed CDs.) Jaimie fashioned monotone versions of some of my Birdhouse graphics, combining that with our style guide. The end result looked great, I thought—and nothing like the stuff Case Logic was doing at the time.

The more success we had in standardizing graphics across different markets, the more confident we became in our ability to control other aspects of our licensing partnerships. When I signed up to do a weekly satellite radio program for Sirius Radio in 2004, they were happy to have us create the show's identity. Jaimie came up with the name
Demolition Radio.
And when we cut deals for cell phones, he coordinated graphics for both the phone and the packaging on my signature Sidekick cell phone with T-Mobile.

A final word on Jaimie: Shortly before we hired him as THI's brand manager, he interviewed for a design job with a big Southern California ad agency. They rejected him on the grounds that he'd spent too much time in the action-sports world and thus wouldn't be able to relate to their mainstream clients. He, of course, felt otherwise. Since working for me, Jaimie has helped design successful campaigns for T-Mobile, McDonald's, Apple, Frito-Lay, Jeep, Powerade, Mattel, and Intel, among many others.

With such a diverse range of partners, we decided in 2006 to begin staging an annual “Tony Hawk Brand Summit” at our headquarters. Representatives from all of my sponsors and licensees spend the day together, allowing us to create a more cohesive strategy across the various markets. It gives my large international partners, like Jeep, a chance to see how the action-sports world works, and my smaller street-level sponsors a chance to see how the big boys play. We open with a video that recaps the prior year, and Pat gives a summary of Tony Hawk Inc.'s latest projects and partnerships. Then reps from the various companies give an overview of their relationships with THI. We finish off with a lunch and demo on my big indoor halfpipe.

That summit made us realize that no matter how closely we work with each partner, it's up to us to make sure that each of them knows what the others are doing—no matter how seemingly disparate their markets. The idea has paid off in a hundred subtle, immeasurable ways, and in a few big, tangible ways. For instance, not long after we started holding the summits, the folks at Jeep partnered with Sirius Radio to put together a successful ad campaign with me as the link. It included TV ads and a five-page “advertorial” for
Rolling Stone
magazine that rolled in some of my endemic partners like Quiksilver and Nixon watches.

The Wise Old Adolescent

I've been making a living through skateboarding for more than 25 years now, and throughout my career there's been one essential constant: I skate. I've lost teeth, endured concussions, fractured my pelvis, and flayed the skin off my shins so many times that doctors think I'm a burn victim. But I still try to skate every day, even though I'm over 40 now. It's not like a religion or anything—I simply follow the advice that I give other people all the time:
do what you love.
I now make a very good living doing something that I would gladly do for free (and for many years, I did just that). I've been extraordinarily lucky that way.

I've also been lucky that my sport of choice, along with other action sports, continues to grow in popularity. Skaters have gone from a fringe culture to a mainstream success story. Shaun White's been on the cover of
Rolling Stone,
and I've been profiled in
Forbes.
Today, more kids ride skateboards in North America than play Little League Baseball.

And of course Madison Avenue has noticed. In 1986,
Sports Illustrated
reported that the skate industry had combined annual sales of about $300 million. By 2010, that same figure had grown to more than $4 billion. My video game series alone has done more than $1 billion in sales since inception.

I've been fortunate in that most of the large endorsement deals I've signed over the years have been with sponsors who understand how much I like to ride my skateboard—and who see that it's good for everyone's business (and my soul) if I'm out there riding my board instead of attending meetings or doing press tours. It's no coincidence that their sponsorship dollars have helped to underwrite events and products that often require me to get my friends together and skate: the Boom Boom HuckJam shows, the Birdhouse team tours, the
Gigantic Skatepark Tour
and
Secret Skatepark Tour
TV shows, and the annual fundraising events for my charitable foundation, which features a private halfpipe demo in the backyard of a Beverly Hills billionaire.

To me, that's the best possible kind of brand management. Because no matter how much our sponsors trust us to strike the right balance between mainstream and core, battles inevitably arise over the way a logo should be tweaked or a photo should be cropped or a model should be posed. Even when such exchanges are entirely civil, we're bound to have conflicting opinions, bound to struggle in the search for compromise.

But when I'm up on the ramp, those issues don't get access. Somewhere deep in my subconscious there resides a wise old adolescent who understands that such concerns are ultimately meaningless. Or let me put it like this: Up there on the ramp, I don't have to worry that someone in a suit's going to wander over and tell me how to skate. That part they leave up to me.

7

THE DENIM DEBACLE

Some business ideas that didn’t quite fly

Skate companies are typically started by pro skaters who want to leave their own creative stamp on the culture, make some money, and—perhaps most important—maintain their street cred. “Keeping it core” remains the unwritten theme of nearly every skate (and surf and snowboard) start-up business plan. Of course, that often leads to liquidation. Mock their naïveté or praise their principles—either way, most action-sports companies come and go quickly.

But every now and then a young exec will get it right: retain his authenticity, turn a profit, and plant seeds for a new style that spreads vinelike through the culture. Among skaters, Steve Rocco did it with World Industries (although he was more interested in shock than style), Tod Swank did it with Tum Yeto, and Jamie Thomas did it with Zero. In the surf world, Richard Woolcott did it with Volcom, and Conan Hayes did it with RVCA.

I jumped into a venture once with that kind of potential. It was a denim company started by Jade Howe, a surfer and former Quiksilver designer who’d launched his own line of über-fresh pants and shirts—a look that would ultimately be copied by dozens of established denim companies.

But this story is not about success. It’s a cautionary tale about a venture that cost me a lot of money and ultimately caused me to sever ties with my original business partner, Per Welinder. But I still look back on it as a worthwhile effort with great potential—and as a valuable lesson.

Per and I had started Birdhouse skateboards back in 1992, then added Blitz Distribution. Through Blitz, we helped to finance and market start-up skate companies and nurtured a few skate teams.

The Birdhouse team and brand was my primary business interest for more than 15 years. Obviously, I know from experience what it’s like to live the life of a sponsored pro, living from one royalty check to the next. So I always tried hard to treat our teams with respect, and to make sure the riders got paid what they deserved. For several years, I put my own royalty checks (from the sales of the various products with my name on it) back into the company so we could keep the business afloat and pay the team.

How to Build a Buzz

In 2002, after a run of profitable years, Per pitched the idea of getting into the denim-apparel business. Howe was a great designer, and we had room in our warehouse and office for his inventory and small staff. We decided to invest and become his partners as a way of expanding and diversifying the business.

Both Per and I believed deeply in Jade’s talent as a designer; he was way ahead of his time. I used to wear his stuff all the time, especially to high-profile events and during television appearances. Per initially limited distribution to trendsetting boutique retailers with reputations for carrying the hippest city-chic streetwear—places like Fred Segal and Maxfield in Los Angeles. Other buyers nationwide monitor such stores, and Hollywood stylists scour them to outfit their actors.

Howe began to build a buzz right away. (I truly believe Jade should get credit for the last decade’s widespread trend to stitch off-center gothic graphics on shirts, as well as the vertical-stripe look that came to dominate clubs around the same time.) His stuff was progressive, and it was expensive. Maybe a little too much of both.

Within a year Howe’s sales rocketed to $1 million and continued to climb. But the brand’s overhead and manufacturing costs were so high we could never pull a profit. In fact, in the 15 years that we ran Blitz, no other company sucked cash the way Howe did. Blitz was doing more than $20 million in annual sales at the time, and Per had always done a good job of controlling overhead for skateboards and accessories. And even though the skate brands were doing well, Blitz was showing net losses—all because of a single apparel line.

It was becoming apparent that we knew skateboards, but we didn’t know apparel. Most of Blitz’s experience in that realm had been with T-shirts and hoodies, and that was easy: You buy blank, ready-made shirts from somebody else and simply silk-screen your own graphics on them.

Now, we were suddenly in the high-end clothing business—
terra incognita.
You need designers, pattern makers, garment workers, custom fabrics, buttons, zippers—the list goes on and on. I knew from the early days at Hawk Clothing that this was going to be a difficult business, but I had no idea how difficult. Making skateboards and skate accessories is like baking cookies: a few ingredients and a simple recipe. High-end apparel, in comparison, is a six-course gourmet meal.

Jade started to get discouraged because he wanted a bigger marketing budget and a wider array of products, which meant increasing our line of credit. Per, who ran Blitz, resisted. He and Jade started to butt heads. The co-owners of Blitz’s other brands began to complain that too much energy was being placed on this one new business. Something had to give.

Jade said he was interested in merging with a more established clothing company for better cash flow. We agreed that that was a good idea. In late 2005, he began shopping Howe to larger manufacturers, finally cutting a deal in May 2006 with Seattle Pacific, the same company that owns Union Bay. At the same time, our bank was calling in its loan. We talked the bank into a 90-day extension while the deal got finalized.

The Howe–Seattle Pacific deal closed in September 2006. Jade was happy. Seattle Pacific was happy. Per and I, however, were not happy, because Blitz’s share of the sell price didn’t come close to covering our losses by the time expenses were paid out. Also, with our credit lines now stretched to the breaking point, Blitz’s once-solid financial reports were a mess.

Ultimately, the entire debacle was the beginning of the end of my ownership of Blitz Distribution, and the closing of my business relationship with Per. Although it was a difficult time, some good came out of it. I learned a hard but indelible lesson about the importance of sticking to my core business. And I got to wear a lot of cool shit.

Bye-Bye Blitz

If Howe weakened Blitz’s immune system, the tanking economy gave it a serious infection.

Like most companies, Blitz suffered serious cash-flow problems once the worldwide economy began to slide into deep recession in 2007. As banks started collapsing, loans became virtually nonexistent. On the other side of the ledger, retailers wanted longer and better terms, sometimes even seeking for the first time to return products they’d already bought. Some large sporting goods chains refused to take delivery of goods that had already been manufactured and were on their way to our warehouse. We were overstocked and underfinanced.

Things got really scary when the banks decided they’d no longer let us use the corporation as collateral for business loans. They wanted Per and me to personally guarantee Blitz’s loans, meaning I’d have to put up things like my house as collateral—in a faltering economy. We hadn’t taken that kind of risk since the birth of Birdhouse, when we’d been willing to gamble because we’d had no other choice. It felt like we were going backward in our business.

Before the apparel business took us for a ride, Per had been known to run a tight ship. He was quick to lower overhead and lay off employees if times were tight. It was often hard but necessary. But now he was talking about cutbacks I couldn’t live with: trimming the Birdhouse marketing budget and maybe even its team. I’d already agreed to defer my own royalties (hoping to get paid at a later date) to keep Birdhouse afloat. Now the whole team was at risk of losing salaries, ads, and travel budgets. That was the last thing I wanted to happen.

By this time I’d already had some success building up my own, separate business, Tony Hawk Inc. (THI), based on a completely different business model from Blitz’s. THI has two simple rules:

I’ve had the same financial advisors for many years. My closest advisors are my sister Pat and Sandy Dusablon, who’s the company’s CFO and my personal CPA. Sandy has taught me well over the years, showing me how to interpret balance sheets and profit-and-loss statements. I know what my assets are, what A/P and A/R mean, and I have final say at every corporate meeting. It’s not as much fun as pulling backside smith grinds, but it’s important stuff, and pretty interesting once you understand it.

Buying Back Birdhouse

Anyway, as Birdhouse started to teeter because of the Blitz-Howe disaster, Pat, Sandy, and my tax accountant all agreed that it was time for me buy out Per and take over Birdhouse. So in 2008, I wrote a check and became the sole owner of Birdhouse Skateboards, making it part of THI. That allowed us to take control of the design of all Birdhouse products, as well as marketing, packaging, and point-of-purchase materials.

The next step was to find the right partners to manufacture the goods, someone who already knew skateboard products and had deep roots in that world. THI had recently struck a licensing deal with Bravo Sports, who’d had success selling skateboards at all levels of distribution, from core skate shops to sporting goods stores to mass retailers. Bravo had taken World Industries’s complete skateboards (meaning fully assembled—with deck, wheels, and trucks) to sporting goods stores and had moved the Kryptonics brand into the mass market. We were already using them to make and distribute low-cost completes and accessories for our Boom Boom HuckJam brand at mass retailers like Wal-Mart and Toys “R” Us. Those sales were going well.

I decided to use some of the royalties from these lower-priced skateboards to help keep Birdhouse and its team alive, and Bravo agreed to distribute Birdhouse at sporting goods stores. I reached out to an old friend, Reggie Barnes at Eastern Skateboard Supply, to distribute Birdhouse to skate shops and specialty retailers.

It took about six months to fully migrate Birdhouse to THI—a smooth transition, thanks in large part to Derek Richardson, the former Blitz sales manager who came over to run Birdhouse for THI. Derek was pivotal, because he knew all the parties involved. None of the skaters on the Birdhouse team was fired. We even added three guys, and in 2009 I joined everyone on a four-week world tour.

Because I had only distant ties to Blitz at this point, I told Per I wanted to relinquish my share of the distribution company. Per would own and run Blitz Distribution; I would own and run Birdhouse Skateboards. Per had always been good at nurturing small brands, and he looked forward to getting back to that business.

So Per and I struck a deal and, after 15 years as partners, we went our separate ways. It’s unusual in the business world, but we managed to pull it off with mutual respect, and we remain friends.