THE BUSINESS: Golf-club manufacturer
CLOSED: July 1998
CAUSE OF DEATH: Failure to obtain early product approval from the sport's governing association
The idea behind Black Rock Golf Corp.'s Killer Bee driver was ludicrously simple. Its main selling point wasn't sophisticated aerodynamics or new composite materials; it was merely that the club was longer.
Although most drivers are 43 to 45 inches long, the clubs introduced in 1995 by start-up Black Rock, based in Englewood, Colo., measured either 46 or 48 inches. That extra length translated into extra distance off the tee, claimed the company's cofounders, Hugh "Rocky" Thompson and Jack Rule, both professional golfers who have played on the Senior PGA Tour. "They thought they had found the Holy Grail," recalls Christopher Cooper, Black Rock's former chief operating officer.
Mindful that rivals might easily copy the Killer Bee--after all, no patent protected the extra length--Thompson and Rule rushed their product to market. They didn't do what golf-equipment manufacturers typically do before mass-producing a new club: they didn't ask the sport's governing authority, the U.S. Golf Association (USGA), to certify that their design conformed to its standards. Bypassing the USGA would turn out to be a fatal mistake.
It was Thompson, known as a "short hitter" on the PGA Tour, who had discovered that a longer club could extend his drives and who had recognized its commercial potential. He and Rule raised $1.2 million in seed capital from private investors and revved up production of the Killer Bee. Rather than competing in stores against established rivals like Callaway and Cobra, Black Rock appealed directly to customers in cable-TV infomercials on the Golf Channel. Wearing an outlandish yellow-and-black-striped outfit, Thompson brandished the Killer Bee and urged viewers to order it for $200 by telephoning an 800 number.
Many did. In 1995 sales swelled to almost $5 million. Flush with overnight success, Thompson and Rule took Black Rock public in July 1996, raising $5 million. By 1997 the company was producing a full line of clubs, including a $350 titanium-headed version of the Killer Bee, and, Cooper says, was "looking forward to a big year."
But that was not to be. In February 1997 the USGA notified Black Rock that the face markings on the Killer Bee and two of the company's other metal woods violated the measurement requirements of the association's rule 4-1e. By not seeking the USGA imprimatur early on, Black Rock ran a big risk, according to industry experts. "When you are spending so much time and money to develop a club, you want to have a letter of conformance on file from the USGA," says Don Anderson, president and CEO of GolfGear International, a golf-club manufacturer based in Huntington Beach, Calif.
Because many golfers will buy only clubs sanctioned by the USGA, the ruling stalled sales. Although the USGA reversed its decision two months later, by then Black Rock had returned 10,000 clubs to its manufacturer in Taiwan for refurbishing, at a total cost of $500,000. Hobbled during the prime selling months of March and April, the company never regained its balance. In 1997 its revenues plummeted 22% from the previous year's, and it lost $2.7 million.
On July 17, 1998, Black Rock filed for Chapter 7 bankruptcy. One of golf's leading retailers, Golfsmith International LP, purchased Black Rock's assets out of bankruptcy for $483,000 and resurrected the Killer Bee. "It's really a very good club," says a company spokesman, "if you can get the hang of it." --Joshua Macht