Whoever said you couldn’t mix business with pleasure would do well to have a conversation with Sanuk Founder Jeff Kelley.

A former dishwasher at a coffee shop, Kelley counts himself among the lucky few (“I still pinch myself every single day,” he says) who get to build business empires around the things they love the most.

Blending his innate curiosity to invent and innovate with his passion for surfing has enabled Kelley to blaze new trails in the footwear industry by creating sandals—“not shoes”—from just about every material, texture and pattern imaginable. “I’ve always been into really weird footwear as a kid,” shares Kelley. “I used to make sandals out of bicycle tires for my friends when I was in high school,” he says, “I was always the kind of guy who was tinkering with stuff.”

When Kelley found himself in the action-sports world in the ’80s designing “deck pads” used to keep surfers on their boards without having to use surf wax, he realized the benefits of being barefoot after an afternoon running around with his surfboard.

“We were already talking about the benefits of being barefoot and walking on a barefoot motion long before the barefoot running phenomenon became mainstream,” Kelley explains. “Sanuk’s story,” he says, “has always been about how they help strengthen the feet because they’re made on sandal foot beds and they’re very flexible.”

‘Trailer trash’

Sanuk has grown quite extensively since its inception in 1997—thanks, interestingly enough, to a flagship product that Kelley originally branded as a “trailer trash sandal” made out of real indoor-outdoor carpet.

“In the States, if you’re poor and you live in a trailer park, you use indoor-outdoor carpet as your lawn,” he explains. “People were telling me, ‘What the heck were you thinking?’” he relates, “but the funny thing was those green sandals I designed, the people who embraced it the most weren’t the surf shops. It was the upscale boutiques. I was promoting it as trailer trash and folks like Fred Segal and Louis Boston picked it up.”

Sanuk’s DNA has since expanded to accommodate raw materials that range from bamboo, rain ponchos, furniture upholsteries, wire mesh and yoga mats. “The one thing that’s unique about Sanuk,” Kelley says, “is that when we’re designing a collection, I’ll take my design crew to places where most people won’t go to look for materials. One time we went to a furniture area in China and we found furniture upholsteries we could work with. We try to keep it unique.”

Creative and out of control

Innovating in a lot of new categories has always been what Sanuk is about. The Voodoo, its first big commercial success, was a brightly colored sandal that looked like spaghetti. “Nobody had anything like it because I was able to patent that design,” says Kelley.

Similarly their best-selling Sanuk Sidewalk Surfers, shoes constructed on a sandal foot bed, are also patented such that competitors cannot make knock-offs that feel exactly the same. Their yoga mat sandals also currently rank number one in the women’s sandals category in the United States.

“All these things didn’t exist in footwear prior,” he says. “If we made products that are just like everybody else’s, then it just comes down to a price war—and you can never be successful when you’re competing on price,” he says, “so we constantly innovate.”

Kelley’s out-of-the-box perspective translates to how he runs his company as well. “We’re really out of control,” he says. “It is so fun and I’m so blessed I work with so many talented people. The way I’ve set the office up is we have one big room, no walls, and on one end is the guys that do most of the graphics, in the middle is my viral marketing and media guys, and on the left is my design and development people. We’re all in the same room and they can all see and interact with each other. There are no walls and there’s just a lot of exchange of ideas going around,” he shares.

Such work environment has given way to not only innovation in product design, but also in the way the company retails, promotes and markets its products. “We recently came up with an ad campaign called ‘Cut and Paste,’” shares Kelley. “I sponsor a lot of professional climbers and surfers and they’re constantly traveling and they’re hard to pin down for a photo shoot. Out of necessity, what I’ve done is taken pictures of their faces in pretty much every expression or angle you can imagine and we catalog those. When we wanna do an ad, we just draw the ad and paste the right face for that moment, and it’s been really good for us because we don’t even have to call these guys in for a photo shoot. It also allows us to be beyond creative,” he says, “because anything we dream up, we just draw, and we inject humor into everything we do.”

‘Crazy growth’

Surfing remains a vital part of Kelley—and Sanuk’s—DNA. To kick off the surf break season, Kelley brought professional surfer and musician Donavon Frankenreiter to the Philippines to promote the brand through a series of mini concerts and outdoor events.

“I’ve always been big on supporting the surfing culture,” he says, “and here in the Philippines you have all these perfect waves all over the place and it’s just a matter of getting some guys to find those places. When that happens, there’s going to be a huge population of surfers that’s going to travel here. I give it five years and you’re gonna see a giant boom in the whole culture.”

One of the things that draw people to surfing is the healthy lifestyle, and it’s also that “green” aspect that works well for Sanuk. “We’re one of the few companies that were not affected by the recession in the States,” shares Kelley. “I think it’s because we’re reasonably priced and we’re selling a healthy lifestyle,” he says, “and people are really starting to understand and talk about that, which has been great for us.”

Currently available in over 60 countries and expected to generate $70 million in sales this year, Sanuk has become pretty successful and with so much potential still. With its recent acquisition by the Deckers Outdoor Corporation, the coming years spell “crazy growth for Sanuk,” says Kelley. “The brand has the potential to be $500 million, but it’s going to require a larger infrastructure than the one we have now. Deckers already has that infrastructure in place and they’ll allow us to beef up our marketing budget so we can get the Sanuk message out to a broader audience and then have the back end to be able to make it happen,” he says.

Despite the sale of the company, Kelley still remains with Sanuk heading product development and overall creatives for the brand. Asked if selling Sanuk has always been part of his plan, Kelley shares, “I really didn’t think about selling it until I got to this point. It was always so much fun, it still is so much fun, and things are really going good. But,” he ends in typical Kelley humor and levity, “it’s hard to say no when someone offers you 120 million dollars.”

Published in the Business Agenda section of Manila Bulletin, November 7, 2011