Innovation Insights: Mavericks—A study of consistency and dedication

If you are local to Silicon Valley, you likely have heard of Jeff Clark. He is a renowned big-wave surfer. He is also one of our sports heroes, and his story is one of our favorites.

Jeff grew up in Half Moon Bay, California, a sleepy coastal town which is about 15 miles west of Silicon Valley and our corporate headquarters. Those 15 miles might as well have been a thousand. Half Moon Bay used to be best known for Christmas trees, huge pumpkins, eternal fog, and seasonal hayrides. That started to change a bit in 1975 when Jeff Clark was a freshman in high school. While on a break from class, he went with his friend, Brian, to the shore and saw what looked like huge surfing waves half a mile off the coast. 

He told Brian, “We’ve got to go check this out.”

Brian replied, “There is no way I am paddling a half mile offshore to a place I have never been…. I will call the coast guard and tell them where I last saw you.” 

So, Jeff went out alone and surfed one of the greatest big wave spots in the world, now world-famous as “Mavericks.” Jeff told his friends what he discovered, but no one wanted to join him. Jeff surfed Mavericks, alone, for 15 years.

Greg Nolan, another big wave surfer, described Jeff like this: “He was sitting out there, with no one in the bleachers, no helicopters overhead, no cheering crowds, doing his [stuff] out there by himself.”¹

While Jeff paddled out alone, surfing continued to grow elsewhere in the world—not just as a hobby, but as a lifestyle and competitive sport. Competitions were split into different styles of tricks, categories and movement sequences that many spectators couldn’t understand or follow.

Finally, in 1990, Jeff convinced a few surf buddies from Santa Cruz to try Mavericks. Because surfing is dependent on the weather, he had to wait for a big winter storm to bring in the perfect swell. The next time the conditions at Mavericks were right, everything changed. Mavericks had been officially “discovered.” 

From there, its popularity exploded. Over the next 25 years, multiple documentaries,² a Hollywood-scripted movie,³ and world-class competitions drew television crews, international surfers and thousands of spectators to Mavericks. 

As more time passed, the surfing world moved on. The hype around Mavericks diminished, and the spotlight shifted to new global surf spots like Teahupo’o, Peahi or Nazaré. There has not been an international competition at Mavericks since 2016,⁴ and, as far as we know, there is none on the schedule. And yet, whenever the conditions are right, you can find Jeff Clark a half mile off the coast of Half Moon Bay, finding his line or helping others to find theirs to surf one of the biggest and most rewarding waves in the world, with no one in the stands, no crowd, and no cameras, just the love of the surfing.

Over the years, there were so many temptations for Jeff to reclassify himself within the surfing world. Yet, throughout, Jeff remained unwavering in his passion for this singular, extreme place. You can’t fake passion; if you do, you will fade.

We find comfort in Jeff’s story. We like it because his story, in part, mirrors our own.

Our innovation investment strategy launched in 1968, only a handful of years before Jeff first surfed Mavericks.

The strategy’s first principles are simple and have been the same since its founding. Invest in dynamic technologies to outperform the market over the long term. Today, we use the S&P 500 Index⁵ as a proxy for the market and the long term as 10 years.

When the strategy was founded in the late 1960s, the concept of investing in innovation in the public markets was not just out-of-step, it was unknown. Silicon Valley had yet to be called Silicon Valley. The venture capital industry as we know it today didn’t yet exist. We were completely out of the limelight, and this would not change for a long time. During this period, we simply developed, practiced and improved our process.

Also during this time, the investment industry was evolving. In 1992, a year before the strategy’s 25^th anniversary, Morningstar⁶ introduced the Style Box, a nine-square grid that classifies funds and securities by characteristics like market capitalization.⁷ Then, in 1999, Morgan Stanley Capital International (MSCI) and Standard and Poor’s (S&P) started to categorize securities into sectors, such as health care, utilities and technology.⁸ Naturally, sector funds followed. It did not stop there. While the industry was sorting itself into style boxes, sectors of the economy, factors, BRICS, alternatives and ESG,⁹ we were tracking PCs, semiconductors, biotechnology, renewable energy, genomics and robots. Today, MSCI¹⁰ has over 280,000 indices, benchmarking various styles, sectors and flavors—yet only around 3,000 non-penny stocks trade on the New York Stock Exchange and the Nasdaq. None of these trends has aligned with our worldview.

Recently, it is innovation that has captured the moment. We are delighted because we want investors to be successful. We believe in our mission. 

In pursuing this singular goal so unremittingly, we find commonality with many founders of innovation-driven companies we have met over the years.

These founders had to fight through what was considered the unassailable common sense of the entrenched professional. Without exception, these founders found success not by avoiding being misunderstood, but rather understanding that rejection, criticism, and, even later, appropriation all contribute to an important feedback loop that culminates in success. In almost all cases, these “overnight successes” took place after years, often decades, of perseverance and hard work.

This is a lesson we take to heart.

We democratize investing in innovation through the public markets. We have done so both when it has been popular and when it has not. We can’t try to fit in or match consensus views because then we would lose what makes us successful. There will always be something new in the industry that will be seductive, interesting and distracting: a Teahupo’o, Peahi or Nazaré. As the spotlight moves and shifts to new stories, we will stand still. We believe our chances of success increase when we focus and simplify. This focus allows us to operate exactly as we see fit to serve our clients as best we can. Our hope is that we continue to attract a client base whose views align with ours. 

The first thing any investor must decide is if they are willing to strive for above-average returns. To be above average, you must risk being below average. These two are inseparable. However, if you do decide to be above average, we would argue it is important to have a unique creed. Ours has remained the same for well over half a century, and we believe it will continue: invest in innovation to outperform the market over the long term. At base, we see the world differently. We don’t think in sectors or style boxes but in S-curves, innovations, science and dynamic technologies.