Stephan Drake No Longer With DPS Skis

[Cameron]

Its kind of sad to see this news and I wonder where the company is headed. I have been a fan of their products for a while now and I hope this doesn't lead to a decline in the company.

https://blisterreview.com/industry-news/dps-skis-co-founder-stephan-drake-no-longer-with-dps

 

[fatbob]

Hmm. I've always assumed that DPS's fairly aggressive expansion was driven by PE money. No idea if that's right but not surprised if ultimately the demands of investors don't mesh with the visions of the founder. Lots of former owner managed businesses go through this.

 

[Cameron]

There's an update to the article that has a statement from Drake. It sounds like a bitter divorce and its a shame. Hopefully it works out for the brand though loosing its namesake founder can't be good.

 

[AmyPJ]

Wow.

 

[ScotsSkier]

When you take PE money ypu need to remember their objective is to grow the Company ( preferably quickly!) then exit with a sale. For a founder you need to remember that you are going to be reporting ( and answering!) very frequently to your investors. It is not just free money!

 

[Wasatchman]

Sad to hear the news. The ski equipment business is brutal. While good for the consumer, there is arguably way too many brands of skis out there already. And if you miss a product cycle you go from high flyer to dud in no time at all.

 

[Brian Finch]

Saw this coming- every time we liked a ski in testing “Ok, we’ll make it 10% softer!”

*I’m 145 pounds - who are you building for?!

 

[Alexzn]

Blister reports that Stefan Drake, the founder and likely the main creative force behind DPS skis has been ousted from the company. He is apparently starting some new venture, and DPS is continuing without him. Reading between the lines he is going/planning to peel off some DPS people with him for whatever new thing he is going to do. Didn’t seem to be an amicable parting.

 

[Philpug]

Yes, I talked to some sources that the departure was not amicable. It is a shame. Hopeully it will get resolved but right now it doesn't look that way.

 

[BS Slarver]

Sad news.
Once your baby leaves your hands and investors get involved it’s not your baby.

The Spoon, the lotus and powder works are what I will remember Stefan and DPS for. Hand made in the USA and tested by Stefan himself. Kinda saw this coming with the foundation line and the move of production overseas, not that that’s a bad thing if you want to grow your brand and gain market share.
Will be interesting to see what direction they go moving forward and how long the old guard hang around.

 

[Alexzn]

This is pretty sad, DPS was a significant innovator both in shapes and construction techniques. The Foundation series was writing on the wall for them when they took out construction out of the equation and added a pretty topsheet. The rise of skis like Head Kore that undercut DPS on price while offering similar performance to weigh advantages was not helpful either. Drake is well known enough and innovative enough to get backing to start something new. We will see. Expect DPS in big box stores and catering to the lowest common denominator. I'm really worried that this is happening with Kastle as well, but that's another story...

 

[AngryAnalyst]

When you take PE money ypu need to remember their objective is to grow the Company ( preferably quickly!) then exit with a sale. For a founder you need to remember that you are going to be reporting ( and answering!) very frequently to your investors. It is not just free money!

Without knowing anything about DPS the company, I find the outcome surprising. I have trouble imagining why the investor would think the company will run better without Stephen, the only things I can think of are that they want to sell the company, there was a personality clash or something weird happened.

I realize their is a perception PE is full of short sighted blood sucking assholes and this does have some truth. However, much more typically what is good for a PE fund is good for the businesses they own. I don’t know enough about ski brands like DPS to tell you whether the nature of the business is likely to create conflicts.

 

[ScotsSkier]

Without knowing anything about DPS the company, I find the outcome surprising. I have trouble imagining why the investor would think the company will run better without Stephen, the only things I can think of are that they want to sell the company, there was a personality clash or something weird happened.

I realize their is a perception PE is full of short sighted blood sucking assholes and this does have some truth. However, much more typically what is good for a PE fund is good for the businesses they own. I don’t know enough about ski brands like DPS to tell you whether the nature of the business is likely to create conflicts.

Yes, in more "conventional" PE businesses where the founders are as interested as the PE in making money, this holds true. However if the founder still wants to be independent and do his own thing, , as it sounds like here, there comes an inevitable clash. There ares also some cases where the PE company does not really understand what they have bought. I was involved with a consulting firm where the PE investors thought they had bought a software company.!!....we ended up spending 2 weeks every month preparing reports for the Board....and they still didn't understand why the growth rate wasn't what they had expected ... (I hasten to advise that I didn't make the sale...I was just trying to find ways to get anywhere near growth rates that were impossible for that line of business! )

 

[Philpug]

Without knowing anything about DPS the company, I find the outcome surprising. I have trouble imagining why the investor would think the company will run better without Stephen, the only things I can think of are that they want to sell the company, there was a personality clash or something weird happened.

You would think of they were to sell the company, it would be more valuable with the face of the brand still involved so that leads to your latter two points, a personality clash or something weird.

 

[fatbob]

Doesn't have to be weird. The investor might want to exploit the brand halo further by producing mass market piste skis while Drake wanted investment in exotica etc. Or they want to milk Phantom some more or less because it's not paying back on investment cost.

Probably a personality/ego clash involved at some point because otherwise objective adults can work stuff out pragmatically.

 

[AngryAnalyst]

Doesn't have to be weird. The investor might want to exploit the brand halo further by producing mass market piste skis while Drake wanted investment in exotica etc. Or they want to milk Phantom some more or less because it's not paying back on investment cost.

Probably a personality/ego clash involved at some point because otherwise objective adults can work stuff out pragmatically.

The brand exploitation point you raise I'm honestly not sure about. Notwithstanding the complaining about wide skis on this forum, I very much doubt Atomic makes much money on the 120 Bentchetler despite the fact many of their free ride athletes seem to love the thing (I also intuitively doubt they sell tons of WC skis). Sponsored athletes broadly are clearly marketing budget dollars. While I doubt DPS makes much on all of the Lotus skis together, I also think it gives them a halo so I sort of doubt "new" DPS is going to kill them (I certainly hope they don't because I want one).

The only thing I can think of really is that either investor wanted to sell to Anta or he got into a pissing match with Stephen for a dumb reason.

 

[crgildart]

Knee Bindings Version 2.0

 

[mdf]

or he got into a pissing match with Stephen for a dumb reason

Could be. People who start companies and private equity investors are not usually known for their passive personalities.

I suspect that the other thing that happens sometimes is that investors buy into the founders' dream intiallly, but later decide it isn't going to work out after all, and want to kill the dream to salvage some monetary value.

 

[AngryAnalyst]

Could be. People who start companies and private equity investors are not usually known for their passive personalities.

True but they both typically like money which tends to keep them from doing dumb things. I would guess about half the PE type people I have met might be irritable enough to fire a founder they presumably liked (or they wouldn't have made the investment) over a personality conflict. That's far more than zero but far less than 100%.

I suspect that the other thing that happens sometimes is that investors buy into the founders' dream intiallly, but later decide it isn't going to work out after all, and want to kill the dream to salvage some monetary value.

This is the version I find most perplexing - of course I don't know what this PE firm wanted, but if you're investing in a boutique ski brand you have to know the growth isn't going to be amazing. A great many of the big brands in Europe seem like closely held success stories and I doubt they grow top line or bottom line as fast as Amer did standalone. Maybe the PE firm was investing assuming DPS would roll out Phantom to displace Swix or something?

Still the most likely hypothesis by far is the personality conflict one. I'm thinking out loud here in case you can't tell, sorry.

 

[Teppaz]

I'm not an insider at all, but could this turn into a similarish story to what happened to Line Skis founder Jason Levinthal, who left and started J Skis? It's possible Drake could set off on his own, no? J Skis seems to be doing okay with its different business model.