Hype, Technology And Trade Shows; Not Enough of Some, too Much of the Other.

Slowing growth, or a decline in year over year sales if that’s what your company is experiencing, was inevitable in skateboarding. Sure, we would rather it didn’t happen. But since we all knew it was going to happen, it might as well be sooner rather than later so it’s less painful.

What I didn’t see in San Diego, happily, was what I saw at the Vegas snowboard industry show in 1995. Or was it 1996? Whatever. Vegas that year was the biggest snowboard party I’ve ever seen with lots of hype and lots of new brands. And then the snowboard consolidation wiped out most of those brands.

Skateboarding doesn’t seem to be doing that to itself. The number of brands isn’t expanding dramatically. We’re resisting, so far, “net never” dating, and there isn’t a Japan around that’s going to yank the financing many companies need to survive as there was in snowboarding.
 
Still, this setback has wonderfully focused the mind on some significant business issues. Here are some of the ones mine is focused on.
 
Hype
We need less hype. Between network television, Investor’s Business Daily, The Wall Street Journal, The New York Times, and more bad ads featuring skateboarding than I can even begin to count, it’s just too much. Maybe what I mean is we need the right kind of hype. At least part of skateboarding’s success has been its ability to be underground, a little dark and urban, and maybe somewhat unintelligible in its humor and attitude toward non-participants. That kind of hype—the kind that makes people curious about skateboarding is a good thing.
 
I’ll go a step further. The kind of hype we want encourages people to skate or learn to skate better—not just to buy a T-shirt. I recognize that we can’t do much about the people who just want to create an association between their brand and skating for the sake of selling a product and don’t really give a damn about skateboarding. I hope the skate-industry companies will look at all their advertisements and promotions through that filter—does it encourage people to skate? I think that for the most part they do.
 
Two people I respect have pointed out that the slowing of skateboard growth may be related to demographics. As they put it, we’ve got a lot of sixteen-year-old boys who are discovering girls and cars to the detriment of skating. We’ve also got a lot of seven, eight, and nine year olds who are discovering skating, but their disposable income is limited and their purchases largely controlled by their parents, who tend to favor spending less rather than more and buying pricepoint decks. The suggestion is that our slowdown/decline may be caused by the loss of older kids before the younger ones, although they are coming up, are ready to replace them. In this scenario, everything will be fine in a couple of years.
 
I haven’t checked out the census data recently, but if the numbers bear it out, I can see some validity to this scenario. The caveat, and this is where we get back to hype, is that it won’t matter how many kids there are if too many of them think skateboarding is lame because of how ubiquitous it’s become.
 
Technology
Meanwhile, cheap decks from China are happening. I’ve written enough about that and the potential (probable?) impact in previous articles. What’s the typical strategic response in any industry to lower-cost foreign competition? Technology and product improvement that can’t be matched, at least not immediately.
 
Of course, the skateboard industry has spent some years now explaining that a seven-ply Canadian maple deck is what a skateboard is, and nothing else is a skateboard. Nevertheless, if you’re a factory making skateboards and you want to compete with Chinese labor costs, you’d better figure out a better skateboard technology that gives you a competitive advantage.
 
Over at PS Stix, to nobody’s surprise, Paul Schmidt has taken a shot at that. His Featherlight technology results in a skateboard he describes as lighter and stronger. It contains a layer of new material that results in a stronger, more consistent pop back when you flex it. The new material doesn’t go all the way to the tips, and the deck will still wear out.
 
The good news is it looks just like a traditional skateboard. The bad news is that it looks just like a traditional skateboard. How do you sell something nobody can see when they inspect the product?
 
PS Stix’s answer is to have a display for the retailer that shows the cross sections of the deck. An awful lot of people tried this in snowboarding to differentiate their constructions, and it never seemed to work. Maybe the differences weren’t significant enough and maybe there were too many of them. Probably both. PS Stix seems to have first-mover advantage on this, and there won’t, at least at first, be 100 guys using cross sections to explain why their construction is better and their decks perform better.
 
PS Stix’s Featherlight deck will sell for about ten percent more than a traditional deck. That’s what you expect from a product with a competitive advantage. If it catches on and the volume justifies the effort, eventually the low-cost producers will figure out how to make it for less. Then PS Stix and the other manufacturers will have to move on to another new technology. Sounds to me like it could be good for the consumer. Oh yeah, I guess that’s what competitive pressure is supposed to accomplish.
 
How do we get notoriously conservative skateboarders to accept these new technologies as they come along? We’ve created the form of rock star known as the teamrider. We’re more or less convinced that what they ride influences what other kids buy. It’s pretty clear, then, that we have to get our teamriders to ride decks with the new technologies.
 
That shouldn’t be so hard. The company says, “Hey, you need to ride this new technology from now on and love it.” The rider says, “I don’t want to!” The company says, “Do you want to get a check every month?” The rider says, “Yes!” The company says, “Given the number of blanks being sold and the margin pressure we’ll be under if this new technology doesn’t work out, you won’t get that check unless you ride and love this new technology.” The rider suddenly feels love for the new deck welling up in his heart. People with agents should be able to see the business necessity.
 
Trade Show
Over at the International Coup D’Etat Skateboarding Exposition, sponsored by Alien Workshop and Foundation Skateboards and supported by others who showed some product and paid for some of the festivities, companies had a good time and got some business done. Tum Yeto’s Tod Swank says he spent less cash than he would have spent exhibiting at ASR and was able to make, because of the involvement of his and other companies, a contribution of at least 10,000 dollars to the Children’s Museum where the event was held. Nice.
 
Powell, Nixon, and Gravis were upstairs in rooms at the convention center. Bet they saved a few bucks with no loss of business. I thought the atmosphere up there was more conducive to doing business than it was on the floor of the show.
 
Meanwhile, various companies were spending well over 100,000 dollars to attend ASR, not counting lost business and management time. Under current business conditions, I think they have to look themselves in the mirror and ask, “If I didn’t come to the show or cut my presence way back, would I actually lose much business?” They might consider spending some or all of the money they spend at ASR on other ways of meeting their customers’ needs. If you haven’t seen it, you might check out my article (“Trade Shows Again”) in the July 2002 issue of TransWorld SNOWboarding Business. It suggests an alternative trade-show strategy used by some snowboard companies that might be appropriate for some skate companies. (If you e-mail me, I can send you a copy.)
 
Then there was the “secret” meeting called by ASR to address issues that the skate companies have with ASR. I’m told about 25 skate-company heads were invited. I didn’t go. Couldn’t find the secret room. Don’t even know the secret handshake.
 
The skate companies are unhappy because of the cost of ASR and the pressure from ASR to participate in other kinds of advertising and promotion as part of the perceived price for getting the booth you want in the location you want regardless of how long you’ve been coming to the show. They also don’t feel it’s right that ASR pays SIMA a bunch of money to support the show but don’t pay a dollar to skateboarding now that skate is arguably more important to the show than surf.
 
I guess there was also some frustration expressed with the fact that there’s no beer allowed in the booth. You know, that one bothers me, too—especially after waiting in a long line to pay four dollars for a small beer when I could have gotten a big one for free somewhere.
 
I think these concerns are justified, although I’m not so worried about the beer as the other issues. It’s getting harder and harder to justify the expense of the shows. I imagine ASR recognizes these issues as being legitimate. But they can justifiably ask, “Who, exactly, should we negotiate with?” There’s no skateboarding equivalent of SIMA, and unless IASC gets more industry support and Jim Fitzpatrick is ready to quit his day job, we can’t really point there.
 
There’s an old Chinese curse that says, “May you live in interesting times.” For a lot of reasons, including those discussed above, this would be a good time for the skateboard industry to cooperate in ways it never has before. The industry’s history is such that I won’t hold my breath. Still, imagine if we could.