DC Shoes was built on debt: Ken Block borrowed $10K from parents, and now it’s a $1 bn business

Shipping containers, like beached whales, were once a rare sight in landlocked Utah. Park City, situated at the foothills of the Rockies, is today, pockmarked by the steel excrescences that constitute the offices of(HRD).

Its premises sit on a large parcel of land dotted by 40-odd shipping containers that use recycled materials like wood sourced from old skateboards. “If we have to relocate, these entire offices can easily be moved somewhere else on a shipping truck,” said, HRD’s founder, in a podcast.

Block, who arrived at rally racing via sports entrepreneurship, started his career as a draughtsman. “I loved architecture as an art, but I hated the actual business of it. It takes either a tonne of money or 30-40 years’ experience to climb to the top,” he said.

After a brief stint in the drafting room, he moved to Colorado to try snowboarding. A self-professed adrenaline junkie, Block soon found out that his enthusiasm for the sport outweighed his natural ability.

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After spending a couple of years in ski resorts on the outskirts of Denver, Block returned to California with a new resolve: To meld his natural affinity for art with his passion for adventure sports. And that’s when he began designing equipment for niche stores in Colorado that were patronised by professional athletes.

Finding the right fit
In the meantime, Block met, the older brother of legendary skateboarder. They instituted a couple of businesses, including Eightball and Droors, but it was a rocky road to profitability. “Eventually, we started,” he said. “We were lucky to have gained experience floundering around with these other clothing companies.”

DC Shoes was founded in 1994-95. With Danny Way’s help, the brand gained credence among top athletes on the professional circuit. Like other startups in capitalheavy industries, DC was also built on debt.

After much persuasion, Block’s parents lent him $10,000. Way chipped in with a commensurate sum. In 1995, the business clocked $7 million in sales. Block reckons that targeted marketing campaigns helped DC Shoes become synonymous with skateboarding. Danny Way, who was then in his prime, attempted hitherto unseen skateboard tricks in video advertisements for DC. Mike Shinoda from the band Linkin Park also came on board. And that’s how a loyal customer base was established.

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On the fast track
By the turn of the millennium, the company’s sales soared to $60 million. It would go on to touch the $100-million mark in three years. But the founders were sceptical. “We had our names on very large lines of credit. It was one of the reasons why we eventually sold,” Block said, highlighting the fact that a bad year could have wiped out the company.

Block and Way concurred on taking the exit route. In 2004, DC Shoes was acquired by Australian sportswear brand Quicksilver for $87 million, helping its new parent reach $1 billion in revenue.

But Block was not done yet. A year after receiving a generous payout, he signed up with Subaru for a racing career as a rally driver.

Ken Block went from snowboarding to apparel designing to racing to finally forging his own motorsport brand.

In his rookie season, Block ended runner-up in the Rally America National Championship. But he soon outgrew the field at the national level. Thebeckoned twice, but Block found himself out of his depth yet again.

Undeterred by failure, he was intent on forging a motorsport brand in his own likeness. The Monster World Rally Team he had formed in 2010 for participating in the championship was rechristened Hoonigan Racing Division in 2013.

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Block didn’t enjoy much success behind the wheel, but he was steering HRD to commercial success. Hoonigan Media Machine was spun off to create video content, opening a new window to the inner workings of race teams. It is the creator of the Gymkhana Files, a series on stunt driving.

“The experiment with videos gives us a platform to tell the whole story about how to do serious, but fun stuff with cars. We have been able to grow because we have done some creative and fun projects,” he said.

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