GoDaddy founder Bob Parsons
The company claims it’s averaging over 60% month-over-month growth.
Bob Parsons is aiming for the green with his passion play in golf. Just 18 months after the GoDaddy founder launched Parsons Xtreme Golf (PXG), the high-end clubs are being played on the pro golf tours, swung by celebrities including Bill Murray, Tom Brady, and Adam Levine, and appearing at exclusive clubhouses.
Parsons says making golf clubs is a labor of love: “I absolutely adore being in this business and so do the guys we work with. We don’t cut corners, we use the best materials and once we get it made we do what Ferrari does, we put a price on it.”
The price tag: $5,000 for a set.
Like many golfers, the gregarious entrepreneur had decided clubs were definitely the problem and not operator error. But unlike most duffers, Parsons used his considerable cash pile to do something about it.
In an interview, he laughed while claiming that he’s spent more than $350,000 on golf clubs—and those were just the receipts he could find—so sinking $12 million (so far) into a club manufacturer is par for the course.
Plus Parsons already owned a place to play: Scottsdale National Golf Club.
He hired Chief Product Officer Brad Schweigert and senior engineer (and PGA TOUR winner) Mike Nicolette away from golf manufacturer PING to build the best, and most expensive, golf clubs on the planet.
“We had no constraints on costs, we had a metals expert that advised us, and we also had free rein on everything; and we got lucky—I mean jackpot lucky,” Parsons says to Fortune. “We decided we would insert into the (club head’s) cavity some type of elastomer to absorb vibrations to make it feel good and it also kept the face from collapsing (at impact with the ball).”
Parsons explains that creates a bigger sweet spot and launches the ball higher and faster into the air than other clubs.
The empty club head filled with elastomer makes a “trampoline effect,” according to Matt Knitter, master fitter and master builder in Club Champion’s Santa Monica, Calif. location. He also notes the distinctive holes on the iron heads are perimeter weights that help keep the face steady on impact.
“I’ve never seen an iron with that much ball speed generated, that’s that forgiving,” Knitter adds. “They’re long and fast and easy to hit.”
The PXG Clubs are the most expensive in the store but Knitter says he gets requests for them, which is unusual for such expensive custom clubs. “Everyone I’ve sold them to, (custom) built them to, has ridiculously high reviews of it,” he adds. “The performances are through the roof.”
Parsons says there were no issues getting the clubs approved by the game’s gatekeepers at the U.S. Golf Association, which opened the doors to the pro tours. PXG has signed a dozen players including 2015 British Open Champion Zach Johnson and two-time LPGA Major winner Christie Kerr who won the CME Group Tour Championship in November playing PXGs.
James Hahn, who won his first PGA TOUR event last year, was looking for an edge when he jumped to PXG in January: “I didn’t feel the need to switch (from TaylorMade) but a small part of me was thinking, ‘I can’t compete with a guy who hits 30 yards longer than me and one or two clubs longer than me.’ I’d have to pitch and putt ridiculously well to win each week.’”
“I’ve gained distance,” Hahn asserts, ” these clubs are making my game better.”
Other pros are using PXG clubs as well. The Darrell Survey reports PXG has about a 4% share of irons on the PGA TOUR while the hybrids are in 4.4% of bags.
Parsons is a straight talker, whether it’s about his handicap (now 9.1 with PXG clubs from a “12 to 14”) or flunking fifth grade in his working-class Baltimore neighborhood. In one of many calculated risks that have paid off, Parsons says the next year he lined up with the sixth graders anyway and a sympathetic nun didn’t send him back.
The 65-year-old entrepreneur says he learned about risks from his parents who “liked to gamble, leaving me to fend for myself…I learned the difference between gambling, which I do little of, and risk-taking, which I do all the time.”
Parsons says flat out there are too many restrictions on foreign companies in China to sell the clubs there, even though they’re made in that country.
And while PXG clubs are sold by certified custom fitters and course clubhouses in just 29 states, Parsons says the U.S. market is “larger than anybody would dream, a few million people.” He brazenly adds, “People ask me if prices will come down. If anything, I think our prices will go up. One of our ads has a warning that says ‘our clubs are amazing but expensive.’”
The company reports $1.85 million in sales for February and claims it’s averaging over 60% month-over-month growth.
When he’s not teeing it up, Parsons enjoys riding—and selling—motorcycles. He opened the world’s largest Harley-Davidson dealership in Scottsdale but doesn’t own the stock. “I have a bigger investment than most shareholders. I have this huge dealership and another one in Southaven, Mississippi,” he says. “I’m the guy trying to increase the value for shareholders.”
Parsons has a bike customizing company called Spooky Fast, which he claims will “really trick them out.”
The various Parsons projects are under the YAM Worldwide umbrella (an acronym for “You’re A Mess”), with $750 million invested in these ventures and employing 520 people. Parsons also remains the biggest holder of GoDaddy stock.
A Philanthropic Approach
Parsons and his wife, Renee, have donated more than $103 million to charitable causes through their foundation over the past four years and signed the giving pledge in 2013.
He says they support causes “most people don’t want to be involved with, but make a difference,” including building a medical clinic in Haiti, providing medical treatment for children of undocumented workers in Arizona, offering free art classes for abused children, and helping poverty-stricken AIDS patients.
The billionaire couple contributes to the U.S. Marine Corps.’ Semper Fi Fund for wounded, critically ill, and injured service members. In 2015, the Parsons pledged to match gifts up to $10 million after matching $6 million in donations the prior year.
The PXG CEO says the U.S. Marines “straightened me out,” instilling discipline and resilience in him. PXG’s club numbering system is derived from the Marines as a tribute.
And while those traits are important, Parsons has a simple message for entrepreneurs: “If you love what you’re doing, you won’t have to work at it harder and learn those small nuances. It makes a huge difference.”
Source URL: http://fortune.com/2016/03/20/godaddy-founder-golf-clubs/
By Robert Gray at fortune.com