But First!

This will shock you … shock you! But today’s newsletter is presented by Seed Golf. Check them out, support their company. They have been a champion of this newsletter and I want to return the favor for the work they are doing as well.

Also, the golf ball absolutely rocks.

OK, onto the Q&A.

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Q&A: Dean Klatt

KP: What did you want to be when you were 14 years old?

Dean: That's a very easy question. I was very happy to be a golf pro. My dad was a golf professional back at Virginia Golf Club in a place called Brisbane in Australia. I worked in a pro shop, essentially, at a golf club. So spent a lot of time in the back of a pro shop and also spent a lot of time caddying for him.

I'm talking probably in the 1980s, in Queensland, in Australia … There was a lot of interesting players coming through golf at that level. You know, Greg Norman, Wayne Grady, all those guys who dad was obviously older than, but I suppose one of their peers.

I grew up in that environment with all that stuff going on. They were just really entertaining guys, funny guys, good guys to be around. It just looked like a great lifestyle to me at 14 years old. Yeah, a golf professional was what I wanted to be at 14.

On Lessons Learned

KP: What did you learn from that experience with your dad and with everybody that was in that world that you have applied to your business now?

Dean: Someone asked me this the other day of how did you come to be making golf balls, going against Titleist, Callaway and TaylorMade, which to a lot of people seems like a very unusual thing to be doing.

When I was looking back, I was thinking those guys that I mentioned just seemed like my dad's mates. They were just normal people. Greg was a little different. He's quite a character. But the other guys are just normal guys, and you would see them do amazing things like win the British Open, or win the PGA or whatever.

The idea of an Australian going out into the world and doing something on a grand scale, I suppose, just didn't seem like that big a deal to me. It just was stuff I'd seen or experienced as a kid through my dad's network of friends. It just seemed like a pretty natural thing to do. There was no fear there of doing that or taking in the world.

On Entrepreneurship

KP: Did you have an entrepreneurial bent from a young age, or did that develop later on?

Dean: I didn't know what it was or what the problem would be, but I always wanted to own my own business. I have a bit of a problem with authority and with people telling me what to do. I think I just always wanted to be in control of that and be dictating the shots.

And it just took a few years to really get into a position where you could start your own business. So you have to do a little bit of the groundwork in the early days to create some reputation or career path for yourself to be able to get in a position to be able to run your own business.

For as long as I can remember, I've always wanted to work for myself and had no desire at all to go and work for other companies or a big company or anything like that.

On Masters of the Universe

KP: Did that lack of desire to be controlled by authority ever play out badly for you?

Dean: No, not really. I didn't come from a particularly strict parental background or anything like that. We were pretty free-rangey We could do whatever we wanted, more or less, within reason.

When you start working for international golf brands and you sit in on the management meetings and the product meetings and the sales meetings and all that type of stuff, and you look at the people that are running those companies.I used to think, oh, these guys must be like masters of the universe doing all that stuff. Then you meet them and you go, Actually, they’re just normal people as well.

And it doesn't seem that far-fetched or that difficult to do. I suppose there's a level of that line between confidence and arrogance is pretty easily crossed sometimes, I think. But I think there's a level of self-confidence there that perhaps I was just always there, and I just always thought that I could do it, and I was capable of doing it.

KP: I think that was a moment the coin dropped for me as an adult was, Oh, you guys have no idea what you're doing.

Dean: I can do stuff, too.

Golf is for Everyone

KP: Yeah. So we talked about this previously. But give me the story between being in Australia, working for [some international golf] companies, and then making the leap to Ireland, and basically starting Seed at a university. Give me the Cliff’s notes of how that happened.

Dean: As I mentioned, I was working with OGIO, who I believe is [one of your] partners.

Ed. note: Shout out to our friends at OGIO.

My role with them was to set up distribution for Ireland and UK, but also I did their web business for all of Europe as part of that deal. And we were actually selling more equipment on the web than we were through traditional B2B channels, which I thought was really interesting.

And it was really with golf, five years behind the rest of the world, basically. We can be a bit slow while the rest of the world was going pretty heavily into e-commerce, business and sales. This is all 10 years ago, so it's all common knowledge now. But at the time, it was perhaps not quite fully known. There was more juniors, more women, more millennials coming into the game.

Those demographics are probably more likely to buy products online. That's probably more likely where they're likely to shop. I thought that was really interesting.

I think the other thing we see, like I was saying before, growing up in the back of a pro shop, golf was really an interesting game in Australia in the sense that, or it certainly was back when I was a kid, that it was very egalitarian. It was open to everybody.

It wasn't like the country club kids or any that type of stuff. It was something that was available to everybody on any budget, whether you were from a taxi driver all the way through to someone that might run multinational companies. I always really like that about the game.

The Hardest Part of Making a Ball

KP: It goes back to the idea that you look around and you're like, I can just make stuff. I can just make a golf ball, right?

Dean: I can totally do this.

KP: What's the hardest thing about making a golf ball?

Dean: The hardest part of the golf ball was actually designing the product. There's a market opportunity here. The market's going more towards e-commerce, and there's a younger market emerging. That's all great.

Then you stop and think about it and think, Oh, okay you just have to design a golf ball that plays as well as the market leading product. That's not easy to do. In fact, that's actually quite difficult to do.

It took us about two years to develop and we were very fortunate that the government trade body called Enterprise Ireland got involved [at a local university].

These guys have had all the facilities like wind tunnels and CAD design, and safety design, and all that type of stuff, and scientists that you have to use all that equipment to help us put it together. We designed very much in reverse.

From a golfer's perspective, I would scope out what I wanted the golfer to do. How fast I wanted it to come off the club face, what type of spin I wanted, how far it would to accelerate through the air, what the peak height would be, what the direction was, how far it would fly, how far it would run out, all that type of stuff.

Then we take it to the lab, basically, the guys that actually knew what they're doing, and say, How do we engineer something that will have this level of performance? It had to perform equally or as close as possible to the market leading products. Otherwise the brand wouldn't have taken off nor survived if it did take off.

On the Most Regulated Equipment

KP: The most compelling thing you've ever said about the Seed golf ball is just this idea that the ball is the most regulated piece of equipment in golf. There's almost a way to reverse engineer the best ball. Then from there, it's just a marketing game. Is that how you guys view it?

Dean: [What Titleist is] promoting at the moment is 25 years since the Pro V1 was first release. Patents only last for 20 years. So I knew when we were starting to see that initial technology that they developed or initial IP was soon to enter public domain. So it's not that we copy their product at all, but it gives those guys I mentioned in the university a blueprint or a starting point to go, Okay, well, this is how it's done.

Dean: How do we tweak these components and the material in this performance to hit what they was looking for inside of their lines of performance? So, yeah, that regulation certainly helped with what we're doing because it does provide a roadmap to get you to where we need to be.

We weren't the only company that noticed that at the time. It was a lot of D2C brands started up around that time, just five to seven years ago, I suppose. But that's essentially what if you want to go behind the scenes, that's what makes brands like us happen. What's interesting for us is that's where we started, but now we're getting to a point where we're getting so far down that path of developing our own products that it's long since forgotten.

You just keep refining, tweaking, improving. So one of them all was like, it's third generation design at the moment. So, yeah, it's been an interesting process of how you start to where you get to as you move along.

Normal Business

KP: Can you remember a moment in that process where you're looking around? I don't know, maybe on your hands and knees, slicing up golf balls, just like, How did I end up here? How is this the work that I'm doing?

Dean: That happens still on a daily basis. It's just really what you want to do. It's been great. We were talking about kids before we started. The great thing about having an e-commerce or a digital business is a pure flexibility of time.

To be able to spend time with those kids and be there when they needed me for whatever. One of the disadvantages of being the son of a golf pro is Saturday and Sunday at a golf club is the busiest period for them.

My sports, when I was a teenager or whatever, my old man didn't see any of that because he had to work. The advantage of doing what I do was you could be there for the kids and spend the time with them when you wanted to be with them.

Dollar Shave Club … for Golf

KP: Is there another company or brand in a different industry, not in golf, that you look to from a branding or a D2C perspective, and you think, Man, they're doing what I want to do within the golf world?

Dean: When we got started, The Dollar Shave Club thing was a big deal at the time. That was all new and revolutionary, and it was definitely something we looked at as an example of what could be done.

The interesting thing about the men's grooming or shaving industry is if you look at the market conditions, it's very similar to gold. There's two main brands that control 75 percent of the market, which you would think would mean that they wouldn't be susceptible to competition at all. They'd have the whole thing sewn up, and there's just no way you can break in.

Golf is very similar. A very large chunk of the market and would have appeared to be almost impenetrable. But I think sometimes those larger companies, they get so focused on the core of the business. Perhaps they don't see where those changes are coming from, where those changes in demographics, changing in buying patterns, all that stuff I mentioned before are happening. If you're small, quick, nimble, you can perhaps take an advantage of that.

180 Degrees Opposite

Dean: Warby Parker would have been another one. Casper is a great example with mattresses, but that was probably another one as well at the time that we would have looked at.

Disrupt [is] the word that gets thrown around a lot, but it's definitely possible to do things differently to the way it's always been done. It doesn't have to be done that way.

If you look at golf equipment companies, they tend to all operate more or less the same way. So I'd go and develop a great product, go and get Tiger or Jordan Spieth for someone to play the product on tour.

If you go and advertise it, tell everybody that you're doing that, and then that's the recipe for success. We were just looking for a different business model. Anything a normal golf company would do, we do 180 degrees the opposite.

On the Future

KP: What excites you when you think about where seed could be five or 10 years from now?

Dean: It's growing pretty quickly at the moment. The U.S. market is a bit daunting, to be honest with you. It's like a big, big market. I've had experience in Australia, I've had experience in Asia, done a bit over here in Europe and in Ireland. That's not as daunting because I'm familiar with that.

But the U.S., it's very noticeable when we go over there, that you're really taking on all these major brands — Titleist, Callaway, TaylorMade, Ping, all of them — in their backyard. They're very keen to maintain their markets there, and they're very keen to not give any of that up.

It's exciting to think that we may be able to make some inroads over there and have a little bit of influence on how people buy their golf equipment. It doesn't necessarily have to be done the same way it's always been done, but perhaps there's a different way and a better way to get a really good performing product at a fair value for money price. That's all we're really trying to offer. I find that exciting.

Dean: I'm not going to tell you we're trying to grow the game, but if … I can jump in the game in some small way to perhaps a section of the market that might have used a slightly different product, cheaper, less performing product because that was where their budget was [and we can improve that part of the market] then I think that's a good thing overall.

KP: Thank you for not saying grow the game.

Dean: I try to bite my tongue every time I say that.

Postscript

KP: That's all I got. I think people are drawn to stories like this. It's been so fun working with you guys and getting to know your story and getting to know each other. I'm grateful for you sharing it.

Dean: I appreciate the interest. I don't often do it very often, but you'll find that founders are generally quite happy to talk about themselves.

KP: I have found myself on the podcast circuit, and you do get better over time at telling your companies or your own story. Because at first, you're like … This is weird. Then you get used to it, and you're like, Sure, I'll talk for three hours about myself.

Dean: The more you do it … I suppose it's a bit like comedy. Where you're trying to have different lines of what people respond to, and they really took to that particular line or this particular line. So eventually, you just tighten it up to the tight 10 minutes set, and away you go.