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Xtreme Entrepreneurs

Learn from the pros: Discover what it takes to turn your passion for Xtreme sports into a successful business.
April 5, 2006
URL: http://www.entrepreneur.com/article/189088

In the sports world, Xtreme sports have long been thought of as the unconventional rebel, the edgy alternative to mainstream pursuits. If baseball is as American as apple pie, then skateboarding, snowboarding, surfing and BMX racing are now as American as the Apple iPod.

The essence of Xtreme sports is that it's less about competing with opponents and more about competing with yourself. Moving with the earth. Defying gravity and your fears. There's a certain fervent passion within Xtreme athletes that you won't find in other sports--the kind of passion that springs from being alone with the environment, whether that's respecting the awesome power of the ocean or feeling your way through the rhythms of a city sidewalk.

And it's this same passion that drives many Xtreme athletes to successfully launch and run businesses of their own. The ability to face fear head on and push themselves to succeed at feats others have never tried are also qualities found in every successful entrepreneur.

"[Skateboarding] is about getting on the board and feeling that exhilaration, the speed and control of it," says pro-rider Tony Alva. "And, not to be too metaphorical, but the business relates to that same thing with me."

A Revolution is Born
Alva is the granddaddy of Xtreme entrepreneurs. One of the pioneering founders of skateboarding, he's witnessed the sport from its grassroots beginning in the 1970s, through it's lull in the '90s, and to the multibillion dollar business it is today.

"I was really lucky," says Alva, 48, whose story was recently documented in the hit film Lords of Dogtown. "I think a lot of it had to do with the timing and the fact that I was born and raised in the '70s at a time when there was a huge revolution for surfing and skateboarding. So going from being the punk kid sneaking into people's backyards [and skating their empty pools] to being an entrepreneur was kind of a natural progression for me."

Alva started skateboarding at 16, and at 19, he paired up with a friend who was experimenting with a new lamination process that made the skateboard decks lighter and more flexible, while retaining their durability and rigidity. Alva knew this new process would revolutionize the skateboarding world. Together he and his friend put together $50,000 from savings, family loans and competition winnings, and started manufacturing skateboards with other pro riders in mind. In 1977, Alva opened Alva Skateboards in Oceanside, California, where he sold skateboards, clothing and other skate apparel. Alva opened a new store in Los Angeles in December, 2005, and projects combined sales of over $1.5 million in 2006. He's also looking at opening retail outlets in key cites such as New York, Tokyo and London, where skateboarding has a huge following.

Per Welinder, 43, a professional skateboarder from Sweden who made a name for himself in the early '80s, also had pro skaters in mind when he launched Birdhouse Projects with Tony Hawk, 38, in 1992. "We love skaters," says Welinder. "We were living and breathing skateboarding. We started Birdhouse because we felt that we wanted to have a brand that really reflected what the pro riders wanted to have out there in the marketplace."

So Welinder and Hawk began creating skateboard components, such as decks and wheels, designed for competitive skating. It wasn't long before they began building their brand recognition through Birdhouse's competitive skate team and started selling their boards, T-shirts and hats in specialty sports shops throughout Southern California.

Welinder, Hawk and Alva were able to capitalize on their fame and start businesses of their own, but what about the hundreds of other aspiring entrepreneurs who want to start a business based on their passion for Xtreme sports? Surprisingly, you don't have to be a professional to make it in this business, and many of the obstacles you'll face are the same the pros do.

Taking Flight

Izzy and Coco Tihanyi are twin sisters who started Surf Diva, a surf school and surf apparel company for women and girls, despite the odds. "When we first started it, we were told, 'You're crazy. You're not going to start a surf school just for girls since girls don't surf,' " says Izzy. "There was quite a bit of resistance [to it]--mostly from guys."

Izzy, a former competitive surfer, knew there was lack of good instruction for women in surfing and also knew there would be a huge market for it. She and her sister worked hard during their off-hours from their full-time jobs to launch their La Jolla, California-based business in 1996.

"Neither of us quit our jobs for almost three years," says Izzy, who was selling advertising for an action sports show when they began. Every day, after getting home from her day job, Izzy would start returning phone calls and booking surf classes for the weekends. Then, during the weekend, she'd teach the classes while Coco, who was working full time for a marketing firm, would market the business by distributing fliers to local surf shops and doing tradeouts with local radio stations by donating surf lessons and doing the surf report in exchange for air time.

Now, 10 years later, the sisters, who in true diva style declined to give their ages, have expanded their California surf school to schools in Australia and Costa Rica, and have just landed a top Brazilian designer to manufacture a new line of swimwear. In the past year, the number of retail stores selling the Surf Diva brand has doubled, and their clothing line can be found in surf and specialty shops, sporting goods stores and even airport gift shops throughout the country. Sales from their surf schools, which they're looking into franchising, have increased nearly 13% a year, and product sales are expected to double each year, but it took nearly three years of tight budgeting to get their business off and growing. "I found an ATM receipt of how much money I had in the bank [when we started], and it was about $324," says Coco. "My rent at the time was $425. I don't know how we did it."

But even being well known in the industry doesn't guarantee an easy startup. Welinder and Hawk found the first two years of business equally as rough.

"If we would have read a How to Start a Business in California manual, I think we never would have started it," Welinder says. "It's like, Whoa! You gotta have a trademark, you gotta have a lawyer drawing up papers; it seemed way too complicated. The first two years we did good business, but based on the overhead, the first two [years] were definitely rough."

Even securing a loan from the bank was tough for the pair. By the time they launched their business, Welinder and Hawk were both very well known in the skateboarding world, but they couldn't find anyone willing to finance their company. So they pooled together $80,000 of their own money from competition winnings to start Birdhouse.

"The banks certainly didn't take us seriously," Welinder says, laughing about it now. "We went to the bank day one in October of '92 when we first had the thoughts [for the business], and they were just kind of like, 'Oh, that's nice,' and then, 'Here's the door.'"

Jim Bell, 32, didn't even bother knocking on the doors of any banks when he started Jim Bell Skateboard Ramps in 2004. "I started on a couch with $50 in my pocket. I know a lot of companies try to go out and chase down big loans and stuff, but I took the money I got [from the first ramp I built] and bought tools to get me going. And then after my second, third and fourth jobs, when it all started kicking in, I used that money to buy my truck."

Bell, an Illinois native, began building skateboards in his dad's garden when he was 14, eventually moving to San Diego in 1996 to pursue his dream of working in the skateboarding industry. After a string of sales jobs with different skate companies, he finally returned to his passion for building ramps and started his company at the beginning of 2004. But instead of working in skate parks, Bell builds custom ramps at his customers' homes, creating anything from custom-built quarter pipes that are 4' x 8' wide to 40-foot half pipes and wooden bowls. Business has been so successful for Bell that just one year after launching his company, his initial $50 outlay turned into 2005 sales of $250,000. And it doesn't stop there.

His latest product, the U-Build-It Skateboard Ramp, is expected to nearly double his sales for 2006. The boxed ramp-building kit is sold in skate shops and allows people to build their own ramps at home. Bell marketed the U-Build-It Skateboard Ramps by featuring the product at trade shows. He backed up his product by featuring pictures of the hundreds of ramps he's built, so that when interested store owners inquired about the marketability of his product, he was able to prove the demand existed, as well as the quality and customer satisfaction his work boasts.

Generating Hype
If you're a professional athlete, having a recognized name is often enough brand recognition to guarantee your new business' success. "The best kind of marketing I have is simply using my own bikes," says Mat Hoffman, arguably one of the best freestyle BMX riders in the world.

Hoffman entered the BMX scene at 13, and at 16, he became the youngest pro rider the sport had ever seen. When Hoffman began completing such stunts as base-jumping his bike off 3,500-foot cliffs, it became clear that he'd need bikes that were much more durable than the ones he was using.

"I started building bikes because I had to," says Hoffman, 34, who was going through dozens of bikes landing his record-setting jumps. "I needed a bike that would be able to handle the type of stunts I was doing, and I knew other [riders] would want them, too."

The interest other pro riders showed in Hoffman's bikes only made them more appealing to the public, creating a demand that Hoffman fulfilled by launching Hoffman Bikes in 1991 with a $40,000 startup loan from the SBA. It's the kind of marketing that smaller Xtreme-sport businesses bank on: people talking.

"Word of mouth has definitely been beneficial," says Coco Tihanyi of Surf Diva's success. Coco was able to market Surf Diva on a shoestring budget because she knew that having their customers tell other women about their school was worth much more than buying an ad.

Word of mouth was also a huge factor in the beginning for Bell. To get the word flowing, Bell hung inexpensive posters up in skate shops around San Diego advertising his custom-built skateboard ramps. When one of Bell's customers would tell him a certain skate shop referred them, Bell would return to the shop and reward them with a check for $50 or $100. He found it was the perfect way to keep his name on the tips of the skate-shop's employees' tongues. "The skate shops all of a sudden were like, 'Hey, we don't have to stock anything in our store, this guy hangs up posters, kids get excited, we tell them about it, and we get a check!'" It was a no-brainer for the shop employees to talk up Bell's company.

Honing Their Skills
Even the biggest companies started from the ground up, struggling to grow as they learned their way. Welinder says he got a little better at running the business day by day, learning as he went. "The big day was when we got our first vending machine," he says. "That was the best day of my life because I felt we'd finally become a real company." Which sounds funny coming from a man who's now CEO of one of the largest, best-known skateboard companies in the world. His company's products are found in more than 2,000 stores worldwide, and he predicts sales of well over $10 million in 2006.

For Bell, whose company is barely over a year old, his growing pains are just beginning. The demand for his custom ramps and his new U-Build-It Skateboard Ramp are stretching him thin as a one-man company. "You know, it's like you ask for [a lot of business] and you get it, and you're like, OK, Jim, you wanted to build skateboard ramps, you wanted a bunch of kids to have them. Now they all want them."

Bell says he knows the problems he has now are ones that others only wish they had, so he can't complain too much. So he's taking it one step at a time and preparing to add additional salespeople and back-end help to help him run his business.

Pleasing the Crowd
Of all the lessons learned and experiences shared between these Xtreme entrepreneurs, the biggest one has been realizing the importance of creating a brand their customers can connect with. When someone forms a connection with your brand and begins to identify themselves through the products they buy from your company, you truly create customers for life.

"[When we began,] the average skater was probably about 16 or 17 years old. He's seeking his identity, trying to be cool, grown up, and he wants to make sure he's different than the next guy," Welinder says. He began creating many more brands under the Birdhouse label and created Blitz Distribution in 1997 as an umbrella company for them all. By offering different brands to choose from, it allowed their diverse younger audience the chance to pick a brand they could identify themselves with the best.

Alva agrees that the image his company maintains is something they work hard to have their customers connect with. "The image needs to be hardcore and grassroots, and not too commercial or trendy," he says. "Just keeping it real, to us, is kind of like sticking to where skateboarding came from."

To Alva, that means creating quality boards that kids can afford. "We were kind of like rag-tag, poor kids on the west side of L.A.," Alva says of the initial skateboarding movement of the '70s. "It's never really been that expensive, you know? You can get a pair of Vans tennis shoes and a skateboard, even today, for like $200." Other sports, he points out, cost a lot more money to participate in. With snowboarding, for example, once you pay for a board, shoes, bindings, outerwear and a ski lift ticket, you can be out nearly $400.

"Snowboarding is almost exclusively for kids that are either upper middle class or have money. Skateboarding is accessible even to third-world kids. There are a lot of Latin countries and poorer countries where kids can still skate. They have access to free skateboard parks, and they can get a board and get something thrown together so that they can progress and eventually become a professional skateboarder.

"If we can sell them a product that really works, but also something that the kid's going to come back for, you're going to have a regular rapport with them," says Alva. "You establish yourself with a fan base and clientele--all that is really important in skateboarding."

Bell couldn't agree more. Not only is he getting parents to connect more with their kids' interests, he's also connecting to the kids themselves once he finishes building their ramps.

"A major thing about our company is that on the day the ramp's finished, I skate with the kids for one day and show them how to do tricks on the ramp. That's really the muscle that drives everything," Bell says about helping the kids develop their skills. "You almost want to shed a tear because it's something that you did: [You helped take] a kid to the next level. And I'll tell you what's going to be really surprising: when I turn on the TV one day and there's one of the kids I built a ramp for going up against someone like Tony Hawk."

Want to learn more about these Xtreme entrepreneurs? See them in action in our slideshow.