Darren Handley and the wisdom of the crowd
A decade working in surf journalism has allowed me to report on great stories, work with words, and it’s also given me plenty of time to surf. What it hasn’t done is provide me with a sharp wardrobe, so I felt somewhat conspicuous walking around Sydney’s financial precinct yesterday afternoon. It was 5pm and I looked like a lost dog as young men with sharp suits and hard-parted hair walked with intent between buildings and bars.
The reason I was in Sydney was to “meet the management” at the launch of the Darren Handley Designs crowdfunding offer. Employing a mix of old-style shares and modern crowd-sourcing, DHD are using a crowdfunding platform called Equitise to raise capital. Anyone who pitches in ‘owns’ a share in the company.
The meeting was in a building directly opposite the Australian Stock Exchange. Walking towards the building I reflected on Darren Handley, and it hit me like a stray golf ball that the last time he featured on Swellnet was when he crashed the PWC on the Gold Coast. Ho ho ho...we gave him a bit of air time following that incident!
I ducked into a laneway bar and fortified myself with a drink.
Not that it was ultimately needed. When the presentation began, DHD’s CEO Tony Emerton explained that Handley’s plane didn’t make it to Sydney due to the dust storm enveloping the city. Emerton apologised, brushed off the setback and launched into his spiel.
It was an odd audience that Emerton spoke to. Here was Australia’s most visible surfboard company making their pitch, yet if there were other surfers in the room it wasn’t obvious. Foremost, this was a financial crowd. I know I cling to the vestiges of surfing being a hermetically sealed subculture, it’s wilful thinking more than anything else, but it’s still a shock when surfing is presented as a dispassionate business screed - numbers and KPIs and ROIs - to an audience of suits.
As the PowerPoint preso rolled I flashed on Phil Jarratt’s Salts and Suits, a book that chronicled corporate tension following the incursion of non-surfing ‘suits’ into the expanding surf industry. Thinking there was a similarity would prove to be an incomplete read of the situation. But the reason why didn’t hit me till the end of the presentation.
Emerton explained how DHD had recently bought 80% of Modom to expand the company’s push into hardware, apparel, and in time, surf fashion. “When we bought Modom,” said Emerton, “We bought all the mistakes they’d made, so we wouldn’t make the same.”
Modom would also be used to create market segmentation. “We often get asked to create a DHD SUP, or a DHD softboard,” recalled Emerton before explaining that the DHD brand would retain its premium, performance-oriented focus, so therefore all softboards, learner boards, or even SUPs if they were to go down that path would be branded as Modom.
From market segmentation, Emerton moved to “integrated products”, which are essentially co-ordinated products such as fins, grip, and even legropes, all of them upsold with each board purchase. With this explanation, DHD’s bigger picture assumed some shape. Everything they’re currently doing finds root in just one product.
I went into the meeting with the decline of Billabong and Quiksilver in my mind. Great companies that expanded then went bust. There’s a common thread those doomed brands followed, but it appears DHD aren’t emulating it. Gordon Merchant once made boards before he made his fortune in surf fashion. Rip Curl also made boards before they focused on wetsuits. Even Quiksilver tried their hand with Quikstix, before deeming it all too hard and retreating to the rag trade.
But the take home message from the meeting is that, while DHD will branch out into hardware and fashion, they’ll primarily remain a surfboard company. Hand-shaping purists may disagree with their mass-produced methods, but there’s a belief that should be admired. And that is? The surfboard should be the central pillar of a surf company.
I’ve got no idea what non-surfers will make of that belief, or even if it’s a good commercial strategy, but coming from the acclaimed Sandon Point School of Business I think it makes perfect sense.
Other points from the meeting:
- If something were to happen to “key personnel” - i.e the bloke who the company is named after - Emerton said Mick Fanning would stand in as the shaper and designer of DHD.
- DHD are moving into epoxy boards. Most will be made in the Cobra factory, Thailand. They’ve just taken delivery of 1,000 of them.
- The minimum investment is $250.