(Fortune Magazine) -- We had a vacation house in Newport Beach, Calif., so I was always in and around the water and loved to surf. My dad was an importer, and on a trip to Japan he brought me home a movie camera. I started filming surfers at the local beach and then editing and splicing my own little surf movies. When I went to the University of Southern California's school of business, I helped pay my way by showing surf movies up and down the coast for $1 a ticket. "

Look for a product that's proven.

I thought I'd just bum around for a year or two and then get serious about life. I started traveling to go surfing and ended up in Bali in 1974. I met Jeff Hakman, who's a very famous surfer. We became good friends, and he invited me to spend time on the North Shore. He knew about these shorts coming out of Australia called Quiksilver (ZQK). He also knew Alan Green, the guy who designed them, and Alan sold us the rights to Quiksilver in America in 1976. "

Do it yourself.

Jeff and I started buying the fabric and getting the shorts sewn one at a time. I put the snaps in every pair, Jeff would iron every pair, and then we'd put them in the back of my Volkswagen van and drive up and down the coast to sell them. By doing that we built relationships with surfers who owned local shops that are now larger accounts.

Find a niche.

Most people didn't sell [surf] clothing back in those days, only boards and wax, so we were really different. The marketing was easy: Give free pairs of shorts to hot kids who surfed. That's the grass-roots methodology that we continue to use.

Don't listen to the naysayers.

Early on when I told my father about Quiksilver, he said, "I spent all this money on education, and you're going to go and make surf shorts?" Thankfully, I proved him wrong.