Upstarts: Luke Egan and Bruce Beach On Depactus
Bruce Beach and Luke Egan are the impetus behind Depactus, a new boardshort and apparel brand. That alone speaks volumes for what’s in store for the start-up, especially when looking at the well-versed backgrounds both hail from. Egan, a former professional WCT surfer who was sponsored by Billabong for the past twenty years, and Beach, a successful entrepreneur who had a hand in founding eyewear brand Electric, are both in tune with identifying a need in the market and building the creativity and resources necessary to create a solid brand.
The two started brainstorming back in April 2013, when Beach—who had just stepped away from his role at Electric —received a call from Egan, eager to create “something different” within the market. Beach jumped on a plane right away to pay Egan a visit in his native Australia, which spawned a trip across several continents over the next several months to get back in touch with everything from retail to consumer trends.
“We started surfing down the coast and looking at all the potential opportunities, where the industry was headed and what was going on within the industry,” says Beach. “As we got further down in the year we thought there was a huge opportunity for a surf brand that was run by surfers, privately held, and was really based on making great product, starting off with board shorts, that would be something for the specialty core retailers—something that wouldn’t be sold everywhere, and that would be really special and unique.”
The team slowly came together as an impressive roster from some of the industry’s top brands. Nixon veteran Myfanwy Bradbury, former Oakley design guru Lawrance “Squig” Quigley, and Volcom’s former EVP of Global Sales Tom Ruiz joined Depactus, bringing a level of skill and expertise needed to execute the ideas Beach and Egan had for the brand. In January, they also brought several key athletes on board as their Men of Extraordinary Pursuits—a tactic the founders say help tell the brand story at a global level through the voice of surfers and waterman who embody the brand.
We caught up with Egan and Beach to learn more.
How long did it take from beginning concept to moving into product development, and what was that process like?
Luke: I was still working as a contest director and ambassador for Billabong. I knew I wanted a new challenge in 2014. I realized that in 2013. You feel it within yourself from time to time. That was the way I approached Bruce with some ideas. We really didn’t put anything into place until January , until we had a look and knew what we were going to do. That’s when we employed our first guy, Lawrance [Quigley].
Lawrance has a great background in technical product and he was feeling similar to us – he was ready for a different start. From there, the rest is built from our relationships with Tom Ruiz to Myf [Bradbury] from Nixon- she was loving what we were doing through that January period. Bruce and I had all these ideas, but she was really instrumental in extracting all of those ideas from our brains. We started doing story boards, and she was so instrumental. Bruce and I —he has been my boss for many years, from when I was an athlete to being business partners in Electric—so we both knew where the other was coming from, but to actually start the process of refining the look and feel, what we stand for, to product, Myf was a huge part of that.
Bruce: That’s where her experience and expertise from Nixon, working there for years as the product manager for men’s and women’s watches, really came in. Just taking a concept to a design brief, to actually laying out the story board, and the whole architecture of what different categories would look and feel like. Not just from the technical product side, but also from the emotional feeling you get. That’s where we started putting the brand vision together. She came up with Men of Extraordinary Pursuits, and we all came up with “Where Land Meets Sea.” And that’s what the brand is based on.
Luke: We knew the product was going to have to be technical for the guys we were working with. Mark Healey was signed in January before we had anything signed off on and ready to go. A lot of the product was built around what Mark does. It was great to have him so early even before the name and logo was established. Purely to study what Mark does and what he would need on the surf side, and even on the diving side—we don’t do technical diving gear but there is stuff that needs to crossover, with the amount of time spent in the water, traveling to these locations, in boats, surfing and diving, going to exotic locations and different terrains.
Bruce: Products like technical shells and wet/dry bags to store your gear in. All of those things that Mark does is a perfect example of what the brand is about. So he was a perfect MEP to start the brand.
“Mark Healey, Matt Meola, Ry Craike, and Chris Christenson are all really diverse, but they all have skills at the highest level in each of their particular crafts. Whether it’s shaping boards, or doing the biggest most technical airs, or surfing some of the biggest waves around the world.”—Bruce Beach, Depactus Co-Founder
How did you come up with the name Depactus, and what is its significance?
Bruce: It means “Deep Set,” and that’s a strong feature, or it can be a deep set out the back in surfing, or it can just be something strong, fixed into the ground. We wanted the name to be strong and not be super literal, where we could have a blank canvas and really create what the brand was about based on the products we made and the people who represent the brand, our MEP’s. That’s a big focus for us today. Mark Healey, Matt Meola, Ry Craike, and Chris Christenson are all really diverse, but they all have skills at the highest level in each of their particular crafts. Whether it’s shaping boards, or doing the biggest most technical airs, or surfing some of the biggest waves around the world.
How did you land on “Depactus” – were you doing some research around it, or did you just land on it one day?
Luke: This is Bruce’s third or fourth time around starting a brand, and from his experience it was always if you like the word. Eventually we want to be a global brand. The first reason to check it is to make sure the word isn’t insulting in another language. You go to Italy or Germany or another key region to sell it for the first season, and they are like “Oh no, what do you mean you are going to call your brand that?” So coming up, our LLC is Deep Set, and that translated in Latin to Depactus. We wanted something that’s different than what’s out there.
Bruce: Just from our history at Electric, everyone after 14 years said “Electric is such a great, powerful name – how are you guys going to come up with a name as great as Electric?” I remember we spent six months coming up with the Electric name, and people were like “what does Electric have to do with sunglasses? Are you going to make electric sunglasses?” That was the cool thing about it – Electric is an adjective, it’s a strong name, but we really defined what the brand was about. And I think with Depactus, it’s the same thing. As soon as people hear it, it’s unlike anything they have ever heard before, and they will say it a couple times and think about it. We didn’t want to give the name out to anyone until we had the story behind the name. As soon as people were able to see our icon, and as soon as they were able to see our MEP’s, and our product, they were like “Oh, we get it—Depactus.”
On the retail side, what has been the reaction there?
About a month before the tradeshow, we had the name, the logo, and product categories we were going to do. We went and met with about ten of the best retailers out there and spent about an hour with each showing them the word mark, and the icon, and the story behind it, to really get their input. All of them were really excited about it and thought it was something really fresh, and different than anything else out there. With our name and logo, we didn’t want to do anything like all the existing brands were doing. We wanted something to stand out. We posted up everything that was going on out there and said to our designers, we want to be something totally different. That was a good left turn from everything else that was going on. As trends happen, everyone starts doing the same thing and starts looking similar, and we wanted to make sure we didn’t look similar, but relative as well. As much as our brand is built on surf, we wanted to have a modern and youthful appeal. We make technical stuff that people are going to go and drop $110 on a pair of board shorts, but we wanted to make sure that a 15-year-old kid out there would see our brand as youthful and exciting, down to everything from the prints and colors. Although we have some really technical products, we made sure they have a cool styling element to them. That’s something that Luke and I leaned on our design crew and product people for, to let them come up with what they thought would be different than what’s out there.
What type of feedback did you get after showing the entire collection for the first time?
We were really stoked on the response we got at Agenda. Since then, Tom Ruiz has been on the road; he’s already been back East. Our reps have been on the road. The response has been great. The feedback has been really strong. The retailers we decided to work with from a distribution standpoint are the core specialty shops. [We want to] keep it limited to that and try to be deeper in those shops rather than having a ton of shops everywhere. We just really wanted to focus on the best shops out there.
“There is nothing better than having someone come in fresh from the outside and get what you are about, and put together something that you weren’t even thinking about and you dig it.”—Luke Egan, Co-Founder of Depactus
Is your whole design crew in house?
Bruce: We have a number of people who work with us freelance, which we thought was really cool to do. Because instead of having everyone sitting there staring at the same stuff, it’s great to have some people come in with fresh perspectives. We are working with some different people for our cut n’sew and bags, trying to get a really fresh, global perspective. That’s something we decided to do early on, that wherever we could we would try to be flexible and outsource.
Luke: It really came from us taking a look from the outside back in and seeing what was going on. Bruce taking some time off and just trying to disconnect a little bit and then have a look. I think doing that made us realize if this is giving us a good perspective on what’s going on, then we should look at doing it in some other areas of the business. If you can get the right formula and get it working, that’s great. There is nothing better than having someone come in fresh from the outside and get what you are about, and put together something that you weren’t even thinking about and you dig it.
How did you go about selecting your in-house team?
Luke: To try to eliminate mistakes, we said let’s start the initial team with a lot of experience. Bruce and I felt that experience is the one thing that will get us over the line. Also, the second key thing is, can I hang out with this person on a boat trip? [Laughs] I think we’ve all done that a lot being passionate surfers, and you know once you are in a small space with someone for a few weeks, you know if you can do business with them and you know what kind of person they are.
As far as your manufacturing goes, where do you do most of that?
Bruce: We do the majority overseas in Asia, but with a lot of the cut and sew and printables, we do a lot of that in the US. We are doing all of our organic cottons here, and that allows us to do better turns, and be quicker to market with our products. It’s really just a blend, but wherever we can we try to do as much as we can in the US. We are relying heavily on Lawrance’s relationships, and people we are working with outside the brand. As a start-up right out of the gates, we have strong relationships with our factories. It’s super important to us, same as when I was at Electric. We always had the best relationships with suppliers, to make sure that even as we started and were a small guy, and our orders weren’t that big, that it was going to be a long term partnership and we were in it for the long haul. It’s more about the quality of the product and the dependability – making sure you can deliver on time and you are able to execute. Even though we are a start-up, we don’t want the retailer to look at us as a start-up. At the same time, it’s been very challenging because we don’t have history or track record with Depactus.
What about online sales?
Bruce: Online sales are also really important to us. When we met with our first ten important retailers, that’s something we discussed with them. Things have changed a lot over the last five or ten years. I think there was some friction about whether e-commerce was good or bad. I think now as a brand you have to have a strong e-commerce platform and your entire website, the stronger it is, I think that gives retailers confidence of what your brand should look and feel like all the way down to the consumer level—even setting the guidelines of what consumers should expect to pay at retail for your brand. That was one of the reasons we partnered up with Instrument out of Portland. That’s one of their specialties with brands like Nike and Levis. They do such a good job with not just the backend, but the front end in making sure the brand story is told through the site. It’s a good experience. That’s something we’ve invested in heavily. We are in stores Feb. 1, 2015, and the online platform will be going live that same day.
Luke: We made a conscious decision not to launch the brand at the same time globally. Hopefully, the regions really want to get a part of Depactus early on, and we want our e-comm to be able to service those regions ,as well.
When do you think you will expand the brand into other countries?
Luke: We wanted to make sure the brand is where we want it and really tell our story, and make sure the stories are great, and most of all make sure the product is on point. Bruce and I decided if we get those three things really nailed here in the US, the phone is going to start ringing for different regions. I was a partner of Bruce’s and a distributor of Electric in Australia, and knowing how it was for him running the business dealing with us, us dealing with him, and the effort that it would take—we would be around the world right now trying to work out where it’s going to be, who is going to do it. Right now we are just focused on those three things.
Bruce: I think that is one of the lessons Luke and I learned in our time with Electric, and how things have evolved since 2000. Back then we tried to set up separate companies at the same time, one in Australia, the US, Europe, and New Zealand. With that you have four offices, four warehouses, four sets of employees. It actually put a lot of strain on the headquarters globally because it was really hard to give those regions the type of support needed. For us, we said let’s just focus all of our energies on the US, Canada, Central America for the first 12 or 18 months. We’ll do our research and figure out how we are going to enter those markets. We want to make sure the timing is right, and we build up demand for it. Also, finding the right partners in those regions.
What are some of the other lessons you learned along the way?
Bruce: I think 15 years ago it was all about having a big roster and a big team. You had regional and international teams, you had all these guys and girls – all these different areas you were trying to cover. With this brand we set it up differently so we would have four guys who really have global impact. More than anything, we are just going to tell their stories in our product and their adventures and pursuits around the world with our product. A big part of that is creating content and using social media. The old marketing way was how many guys can you get to rock a sticker on your board.
Luke: There was so much growth in the industry in those days, and everyone was just trying to go wide. You were touching so many new people so quickly, it kind of was the way to go. But the climate has changed. With social media these days, instantly your team is global, all they have to do is post. That’s another part of business that’s so much different.
Across the board in marketing, what is your game plan?
Bruce: By having a small group of MEPs, it's an advantage for us because you don't have to have this huge team that goes through layers of team managers, marketing managers, VP of Marketing, global marketing. When you have all these layers and layers of team riders, a lot of times there is a real disconnect between the people who are running the company and the people who are out there representing the company. It goes back to what Luke was saying: ten or fifteen years ago it was how wide and spread out can you get with all these team riders. For us, it's about going with less shops, less people, and going deeper in everything we do. I think that for a start up brand it's a competitive advantage you have, and the feedback you get is quick and honest.
Where do you see the state of the market right now?
Bruce: It was great to take 6-9 months to really look at the market and see what it was doing. In a lot of cases, the surf market was dictated by the distribution or the brands, and I think now it's changing in that the consumers actually have a voice and the kids want new and different stuff. I think that is really cool for the core specialty shops. If young kids want new stuff it puts a responsibility on the retailers to cary new stuff so that they do look like a specialty shop. There are some great exciting new brands out there like Vissla, Roark, and Stance socks are still pretty new, and Captain Fin. Kids want to get their hands on these brands, so that's where retailers will need to make sure to stock these brands and get behind them. That's what is going to continue to make their shops special. For the market, it is an exciting time. Especially at Agenda, there was a lot of buzz amongst the retailers about what the new brands were creating.
What inspired you both to start your own company?
Luke: It's always been a dream, because as a kid and wanting to be a professional surfer, I came from the same beach that Mark Richards is from and I used to look at him like one day I want to be like him, that's what I want to do. And then once I started surfing with Billabong, I think I was 15 or 16, I was lucky enough to start spending a lot of time with Gordon Merchant. He was really hands on with the team at the time, and he used to take all of us to Hawaii. Back then you had to go to Hawaii to experience it and see if you could really make it. Just watching him run and grow his business, I was always thinking one day I would love to have my own board short company. So, it was watching Gordon grow into what he managed to do with Billabong. My aspirations have always been there from watching Gordon and the respect I had for the way he handled himself through the Billabong business. I was there through my whole career. So it kind of evolved from MR to Gordon.
Bruce: For me, the great thing about Electric was working really close with the Volcom guys, and working alongside Tom Ruiz, who is working with us now, and getting to work with Richard Woolcott. Volcom is just one of those brands that's amazing. Seeing how passionate those guys were about their brand, and being able to start our own brand you draw from certain things you appreciate or you go 'Hey, Billabong what a great company, or Volcom, or Hurley.' I personally draw inspiration from guys like Richard Woolcott and Bob Hurley. More than anything we want to make sure we are getting in the water everyday and surfing, and going on boat trips and doing all those fun things that we were doing 20 years ago. To me that's the beauty of it. Yeah, it's business, finance, and there's all this other stuff, but you have to keep it fun, and you have to keep it exciting.
“We are just staying focussed on specific categories and not trying to do everything. The more focused we are, the better.” —Bruce Beach, Co-founder of Depactus
I think it's cool that you got time to disconnect and do your own thing.
Bruce: For me it was the best thing to do, because I literally went to work on the same street for 22 years. I think we were both really proud of our accomplishments and what we did there, but it was good to not to just jump into something else the next day. There was still a time frame where we were working hard on it 24/7, but it was something new and different.
Everyone started seeing Luke out here at Lowers on an almost weekly basis, going "What are you doing in California again, you were just here last week." We went to Agenda for a day and then we went to Surf Expo, and people were like, okay what are you guys doing? I think a lot of people actually thought we were going to do eyewear [or watches]. That's the last two categories we wanted to get into. And a lot of people were just going "Yeah right." I think people were surprised – we had investors read our plan who were like 'there's nothing in here about watches or eyewear,' and we were like 'that's because it's not in our business plan.' That's another big part of it—we are just staying focussed on specific categories and not trying to do everything. The more focused we are, the better.