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However, the changes in Quiksilver as it has grown (5,000 employees and 410 stores around the world) are hard to ignore. A visit to the company just five years ago meant showing up at a nondescript industrial park and asking the receptionist if Bob was around; now a public relations consultant sits in on most meetings with journalists, emblematic of the fact that far more attention is being paid these days to the image. The result, as you walk around and admire the surfboards mounted on the walls, is a disquieting sense that Quiksilver is becoming self-conscious about what it wants to be, that it is striving to be what Wall Street thinks a surfwear company should look like, rather than being a core--as in hard-core--company that doesn't care what people think. (Keep in mind that the Zen essence of being core is not seeming to try too hard to be core.) If Quiksilver is now selling a culture (like Nike, or for that matter Disney or Starbucks) then there is a message in everything the company does--from how it decorates its office to its advertising to whom it hires to endorse its clothes. But if 15-year-old surfers in Malibu or Sunset Beach catch a whiff of Quik trying too hard, then Quik can kiss its core market goodbye, and with that, any chance of hitting the sports-business exacta: cashing in while staying cool.
McKnight says his primary responsibility is refining Quik's message. To make sure that Quiksilver is associated with all things core, the company hosts major surf contests and sponsors first-rate surf, skate and snowboard teams. He has also created Quiksilver Entertainment, a marketing and film production division that produces and distributes movie, television and literary properties, most recently the new Stacey Peralta surfing documentary, Riding Giants. But when he needs a refresher course on staying core, there is one surfer whom he wants to please. He thinks about Mr. Sunset.
In the summer of 1976 McKnight and Hakman moved to Orange County to form Quiksilver USA. They had little more than a licensing agreement and the $10,000 in operating capital that McKnight had raised from a few relatives. Green, after exchanging his license for 7.5% of any future revenue and 5% of the new company, promised to send them a package with everything they'd need to get started. "We thought it was going to be easy," says McKnight. "Import the shorts. Sell the shorts. Make money."
When Green's package arrived, it was a slim manila envelope containing one aluminum snap, one Velcro fly, a one-square-inch fabric swatch and a pattern drawn on crinkled foolscap. "We had to find everything," McKnight says. "We had to interview cutters, figure out how to get patterns made, where to get them sewn. Contractors weren't interested in two surfers who wanted just a dozen pairs of shorts made."
The two surfers rented a Quonset hut in Costa Mesa furnished with little more than a long table. McKnight fastened the snaps onto the shorts and Hakman, world-champion surfer, ironed every new pair. At first they were making a few dozen at a time, delivering them to only four surf shops in Southern California. "We were like drug dealers," says McKnight, "only instead of dope we had shorts. We would show up, and the owners would be like, Please, please--how many do you have for us? And we'd be like, We only have four pairs."
Having Hakman as a business partner lent the venture instant credibility. Surf-shop owners were stoked to be meeting Mr. Sunset, and very quickly the brand was developing the kind of following that Hakman had predicted. Kids up and down the coast were jonesing for Quiks, and within a year every surf shop in the U.S. was looking to stock the shorts. "You could feel the momentum," Hakman recalls.
While McKnight was in heaven--putting his USC business degree to work, surfing every day, hanging out with Mr. Sunset--his partner was starting to miss the North Shore. As Quiksilver lurched from start-up to going concern, Hakman found that he missed the thrill of the takeoff more than he enjoyed riding this particular wave. He had dabbled in heroin on and off since that fall in Bali but had stayed clean for the first 18 months he was in Southern California launching Quiksilver. "And then I ran into some old friends from the North Shore in Corona Del Mar, and they had some H," Hakman says. "Why did I do it again? I don't know. The thrills of business weren't nearly as high and deep as those in surfing."
As the company grew ($5 million in sales in 1980), Hakman, who originally owned 28.5% of Quik, was looking to get out. "I was thinking about two things," he says, "escape and getting loaded. Bob had his office and his chair and he loved his little domain. And I couldn't care less. I wanted to look for some new surf--or get some smack.
"I was selling off stock like a maniac. Now it looks like I was an idiot, but when you are under an addiction, you think a geographical change will make things better. So I'd sell 10 percent of the company for $100,000 to raise money and go to Australia."
As the business grew, McKnight brought in additional partners, a few of whom didn't appreciate having a junkie as a high-ranking executive at the company. Eventually, president Larry Crowe called Hakman in for a meeting. "They read me the riot act," Hakman says. "They were like, You're f-----' up! You're a disgrace! [Crowe] was screaming at me, and Bob was sitting there, sort of staring at his hands."