Gotcha Founders Michael Tomson and Joel Cooper have one of the great partnership stories in their industry.
Their relationship survived the big ups and the big downs of the Gotcha years, and they remained best friends until Michael’s death from cancer in October last year.
We asked Joel about his relationship with Michael, including how the partnership started, what the big growth years of Gotcha were like, and his advice for creating a lasting partnership.
THE STORY OF JOEL AND MICHAEL
The Early Years
Joel Cooper: We first met playing soccer on the beach but were not close friends at that time. I definitely knew who he was – he and his cousin, Shaun, were famous in South Africa.
We became really good friends at University of Natal, Durban. I was a dedicated student and would take copious notes, which I would then turn into a book to study from. Michael, who was surfing on the world tour, would return home and I would provide him with my notes, and we would study together. He soon introduced me to his girlfriend’s sister, and from that point we became inseparable.
You know how Michael was. He just had a way about him, that natural sparkle. He had great vision. He always saw the big picture and was able to articulate it and motivate people with his exceptional talking skills.
Quiksilver sponsored Michael in the very early days of the brand. Soon after Bob McKnight offered him the license for Quiksilver in South Africa. By this time, I had graduated with a CPA degree and was working for my father who owned a clothing factory.
Michael presented me with the offer he had received. After establishing we had the production capabilities to produce the clothing, it became clear that it was not financially viable to pay Michael in addition to paying Quiksilver a royalty. I said, “We can’t afford to pay two people. Why don’t we do this ourselves? You are the star in South Africa, nobody knows who Quiksilver is.” We were 25 years old. The rest is history.
It was interesting how we came up with the name Gotcha. Michael always kept a notebook where he would wrote things that made an impact on him. While in America, he heard a Gillette ad on TV where a guy shaving cuts himself and says, “Gotcha!” That name went into his book.
When it came time for us to pick a name for our new brand, out came the book. We identified 10 potential names, and independently we circled our first choice. We both circled Gotcha.
Off to America
It was an instant success in South Africa. We gave distribution rights for the U.S. to a South African guy who I had known growing and who had moved to California. We were two kids just starting out, but there was no question America was where we were headed.
We ran these little ads in the U.S. saying “Gotcha, the right stuff.” Nothing else. As a result the retailers knew of the brand, and our distributor was able to get it placed in all the best stores. Somehow we got wind that our distributor was getting samples made without our knowledge and was looking to rip us off. Within a month we both came over to investigate. We ended up firing our distributor, and I immediately told Michael, “I’m coming to live here.” We attended Magic in September, I flew back to South Africa to pack up, and moved to the U.S. in November. I made the first shipments out of my house in Laguna by December. That was 1979.
This was only possible because my father had a factory, and we had a full-blown infrastructure behind us.
We were in our third year in South Africa when we decided to move to the states. Gotcha had become a real business. We needed someone in charge. We chose Paul Naude for the job, a position he held in South Africa for over 10 years.
The Big Growth Years
In our first year in Laguna, we did $1 million out of that house. In our third year, we hit $5 million and moved to a warehouse and started to build an infrastructure. We started hiring many of our associates and friends to work at the company, including Mark Price who went from being a professional surfer to managing customer service and the warehouse. We also hired Bryan Friedman, our South African attorney, to run collections.
We went from $5 million to $10 million the next year. At this point we needed to bring in professionals and our first big hire was Bruce Friedman. He was the CFO at SDS Graphics, which was the T-shirt licensee for Ocean Pacific. It was a big company, they were doing more than $250 million in annual sales. He was the financial pro we really needed at this stage of our growth. He had a lot of respect in the financial community and knew all the banks and the factors who helped in our growth.
What’s amazing is that with his help, we were able to grow rapidly in those early years without any outside capital. We started with $30,000, and my father had given us an open credit line. That was really the key. We continued to import all our product from South Africa until we had to stop because of Apartheid.
From that point it was all uphill. We went from $10 million to $17 million to $42 million to $120 million. And that’s just domestic, and just men’s and boys’. And it all happened within five years.
Why the Relationship Worked
I think Michael and I worked well together because we had complimentary skills. I was happy to live in his shadow. He was the figurehead, the star. He knew he couldn’t do it without me, and I knew I couldn’t do it without him.
Don’t think we didn’t have major fights, because we did. Of course, we had differences. But it’s like fighting with your brother, you kiss and make up.
Ever since we became partners, we never, ever fought about money. We had a deep trust and respect for each other.
Even during those big growth years, the company never felt out of control. We were lucky, we brought in so many great people, so many talented people. The company was well run. I took care of all sales, finance, and production, and Michael took care of product, marketing and merchandising. We never stepped on each other’s toes, and we had a great team.
If you speak to people who worked for us then, they will probably tell you the same thing. Those were the best days of our lives. We treated our employees well and we paid people well. We had the best sales meetings. We were extravagant. Everybody wanted to work there. People loved working for Michael. He inspired them.
What Went Wrong
What went wrong? The biggest thing was we grew our business based on demand rather than thinking about longevity. So, when surf slowed down, the impact was substantial.
We grew too fast. It was easy to go up, but it was hard to come down. We never accepted it being a smaller business and adjusted to that size. If we had done that, who knows? It’s still a great name.
Before we sold the company, we were very close to selling to JC Penney. Their orders started coming in and the opening orders were over $30 million. By this time Paul Naude had moved to the states to become president of the company. Together, we flew to JC Penney’s head office to deliver the message we would not be opening them. We were trying to protect the core and were so terrified we just couldn’t do it.
I think we made right decision but turning down a $30 million dollar order is not easy.
After that, the ownership started changing. Merrill Lynch ended up owning a piece of it, then some outside investors ended up owning 50%, and they brought in Marvin Winkler to represent their interests.
The atmosphere at Gotcha changed dramatically. Michael and I sold our full stake in the company, and I left. Michael chose to stay. I knew it was a mistake, but he wanted to protect our money because we were getting paid out over time.
Before I left, that was probably the most difficult time between me and Michael. But like always, we overcame our differences. If he wouldn’t have stayed at Gotcha, he would have been a partner in Lost with me for sure. He gave me a lot of advice in those days.
We stayed close and continued to invest together. Unfortunately, I didn’t always listen to him. Remember when Surfline was just a fax service? Sean Collins wanted us to buy out his partner for $500,000. I looked at it and said, “Why would we give you a valuation of $1 million when you aren’t even doing $1 million in sales?” Michael said, “Joel, trust me on this one.” He had the vision, but we didn’t do it and we should have. It would have been a great investment.
What’s my advice for a good partnership? Respect, honesty, compassion, consideration. Really, it’s like a marriage. There are going to be good times and bad, but at the end of the day you want someone to have your back no matter what.
One of things we used to say at the beginning was “Never talk about ‘I,’ always talk about ‘we.’”
Michael’s Demons
Why do I think Michael couldn’t overcome his demons? You know Michael, he had the gift of gab and could talk his way out of everything. He thought he was invincible, and that was to his detriment. He was so talented at everything – I think he thought that he could overcome anything.
He did what he wanted to do as he always did, and I say that with the utmost affection. That was who he was.
Missing Michael Everyday
I still can’t believe he’s gone. There are so many things in everyday life that makes me think of him. I feel lucky to have had him as my best friend for most of my life.
I will never forget him – you can be sure of that.
