Hobie Alter: Founding father of the surfing industry

  @FortuneMagazine January 16, 2014: 7:00 AM ET
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Hobie Alter, photographed at Laguna Beach

(Fortune)

Foam and fiberglass. If you're not a surfer, that combination means little to you. But if you like to ride the waves, you can thank Hobie Alter, the man who combined those two materials. That breakthrough made boards 20 pounds lighter and easier to use, as well as simpler to manufacture. It helped transform board-making from expensive balsa and fiberglass projects that you shaped and sanded in your garage into an economical, mass-production process in the 1950s.

His Hobie Surfboards became top sellers and helped launch a multibillion-dollar industry. In later years Alter also designed a radio-controlled glider, the Hobie Hawk, and helped make multi-hull sailing affordable and easier with the popular Hobie Cat. He passed the company to his sons two decades ago. (The company declined to discuss its revenues.) Today, at 80, he still gets out on the Pacific -- but these days it's on a motorized catamaran rather than a surfboard. His story:

My grandparents and my dad were orange growers in Ontario, Calif. My mother's father liked the beach, so he bought some property in Laguna. As soon as school got out, we would go straight to Laguna Beach, which was a perfect location for surfing. So I grew up bodysurfing and belly-board surfing.

Back in the 1940s surfing existed in Hawaii, but people didn't know much about it in California. When I was 14, my father couldn't find a surfboard, so he bought me a paddleboard that I'd use at low tide. A year later I met a guy named Walter Hoffman, who was one of the best riders on the Pacific Coast at the time. He told me where to buy the balsa wood and fiberglass, and my dad thought that was pretty neat. So my dad paid $45 for the materials, and I started building surfboards.

All the boards back then were homemade. The first surfboard I made came out really good, and pretty soon people started wanting me to build boards for them. I'd take orders, and could build three to four a week in my folks' garage. I'd make about $20 profit on each board, and I built boards every summer through college.

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Eventually it was too messy to be building all those boards in the garage, so my dad said, "You need a shop. Try to go into the surfboard business." I had built 80 boards in four years, and he was impressed that I'd done that with no advertising. He thought if I got a place out on the highway and people saw the shop, I'd do even better. So when I finished junior college, I knew I'd go into the surfboard business.

There wasn't a surfboard industry when I started. In 1953 my dad and I went to Dana Point, where property was cheap, and found a lot off the Pacific Coast Highway. Dad got a guy to build the shop with a showroom, and I paid $1,500 for the lot and $15,000 for the building and tooling with my savings.

In January 1954, I started building boards in the shop with the help of a high school kid and a friend, and could build 10 a week that way. Being on the highway worked. I was working day and night, particularly in the summers. I started hiring guys who were surfers, and took in used boards in trade for a new board.

I got married the summer of 1954, and my first child was on the way. Because I grew up on the beach, the ocean was always our playground. There weren't many surfing contests back then, but I enjoyed competing. The first contest I went into was the Laguna Beach Surfing Championship in 1954. I placed second, and the next year came in first. I placed fourth two years in a row in the Hawaii International Surfing Championship.

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Surfers just want to go to the beach and have fun. Riding a wave is a thrill, and you're doing something independently, rather than being part of a team. For me, competing was just going out and seeing what you can do with your fellow surfers. But when it came to the business, my biggest challenge was keeping up with production and demand. Making surfboards ended up being a manufacturing situation.

One day in 1957, my resin salesman at Reichold Chemicals came by and handed me a piece of polyurethane foam. I poured some styrene and resin on it, and it didn't melt. So I started building a fiberglass mold for a surfboard with it, which I knew was the future. I rented a building in Laguna Canyon that became a secret shop, and after two years of experimenting, we built the molds and got it done. We replaced the balsa wood with the foam, and the boards were strong and light. We started selling the foam-core boards, kicking up production to 20 boards a week.

I was making enough to cover everything. We lived in a cheap house on Dana Point. We cleared more than $10 a board, which sold for $100 each, and we made 200 boards a week at the peak.

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By then, I wasn't the only surfboard manufacturer anymore. The business was growing fast, and there were five or six competitors. I never planned how to expand. I just kept hustling to grow the business.

In 1959 a Hollywood film company called and wanted me to be a surfing adviser for the movie Gidget [starring Sandra Dee]. They didn't hire me, but the movie came out, and all of a sudden a flood of surfers and wannabe surfers came out, wanting to buy boards. The popularity of the sport grew and created a whirlwind of business. As more competition came in, we'd give boards away to young, hot surfers. We created the Hobie Surf Team and sponsored them in surfing contests so we could promote our Hobie boards.

Skateboarding came along, and I thought I could make them and sell them to my surfboard dealers. But in 1964, I got a call from the Vita-Pakt Co., which wanted to go into the skateboard business and license my name. Vita-Pakt was owned by Barron Hilton [owner of the Hilton Hotel chain], and his sons were devoted skateboarders.

So we made a deal. They licensed my name, and I did the design work on the skateboards, and helped them promote their skateboard team. It took off, and probably saved my fanny because it was so lucrative. I was getting 25ยข a skateboard, with no production expenses. I was getting all the publicity from the Hobie Skateboard team, and continued building my surfboard business.

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Skateboarding was hot for only a year or two back then, so I went back to building my surfboards. At the time, I had bought a P-Cat, an 18-foot, $3,000 catamaran. It was a heavy boat, and you needed friends to help you haul it onto the beach.

I thought, If I wanted to spread out more, I'd build a 14-foot catamaran, weighing under 200 pounds, that could be sold for less than $1,000. A Newport Beach businessman named Art Hendrickson suggested that we form a separate company to do that. He would help with financing and sales, and I'd work only on the design. I said okay. We started Coast Catamaran Corp., and I began building a boat out of surfboard foam.

We launched our first four production boats, called the Hobie 14, on July 4, 1968. Both of us put in about $20,000, and neither of us took a salary. We built about 100 boats the first year. In 1970, Art wanted to erect a building to build the boats in. We needed some serious money, so we took the company public, and raised $200,000 or so.

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In the meantime, I designed the Hobie 16, and we were growing fast. The Hobie 14 sold for $999 for about a year, then we bumped it up to $1,100. We had a ton of dealers and made a lot of boats. The surfboard business continued to run on its own while I started the catamarans. Art left to start his own company, and in 1976, I sold the catamaran business to Coleman Co. for $3 million. I could stay on and build boats while keeping the surfboard company and retaining the name for everything except the boating products.

Along the way I licensed my name out for swimwear to McGregor Sportswear and Ocean Pacific. Eventually I got onto the board of OP, and am now licensed to Hurley for surfwear apparel.

I retired in 1992, and just completed building a 60-foot power catamaran for myself. My sons, Hobie Jr. and Jeff, now run Hobie Surfboards/SUP and Hobie Design, which manages licenses for the Hobie brand.

I started selling surfboards 64 years ago, and I'm proud that we've been a leading surfboard manufacturer and catamaran manufacturer. We've survived and are still out there. Hobie has become a national name, and I got to build things I like.

My advice

Find a hole to fill. There was a need for a lighter-weight boat, so I built the Hobie 14. There has to be a need for your product to compete.

Have passion for what you're selling. I was an active user of surfboards and sailboats, and got our products out in the public eye. My sons sailed and surfed from the beginning and have the same attitude.

Your customers' praise means everything. It's important to have good word-of-mouth, and let the customers sell for you. We put on regattas to promote our sailboats, which are still going on today. We started a class of sailboat racing for the Hobie 14, and there are fleets around the world now.

This story is from the February 3, 2014 issue of Fortune. To top of page



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