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Inexperience as Edge

Francisco Morales, cofounder of the specialty clothing and gear manufacturer 5.11 Tactical in Irvine, credits his success as an innovator to two seemingly disparate attributes—technical capability and inexperience.

“I would approach things with an open mind because I’m not a cop, and I was not in the military, so I didn’t have a point of view on how the gear should work,” said Morales, who was one of the six entrepreneurs recognized at the Business Journal’s inaugural Innovator of the Year Awards luncheon on Sept. 24 at Hotel Irvine (see related stories, pages 1, 4, 6, 7, 8 and 10).

The relative lack of experience “forced all of us…to be very good at listening to what the customers have to say.”

5.11 Tactical’s prime customers are soldiers, firefighters and police officers and it offers an array of accessories and apparel that is “battle-tested,” such as its stretchy Flex-Tac pants. Its popularity with first responders is spilling over into the consumer market—including industrial workers and weekend outdoors enthusiasts, prompting the company’s recent expansion into retail.

Tailor

Morales, son of a Spanish tailor, learned the ropes at his family’s pants factory in Caracas, Venezuela, to which his father immigrated as a teen.

“My younger brother and I were literally trained in the craft,” he said. “From cleaning the bathrooms in the factory to helping run it.”

Morales moved to the U.S. to study English and earned his bachelor’s degree in fashion apparel management, business and textiles from Philadelphia University in 1998. His early career included stints as product development and design manager at Dick’s Sporting Goods and raw materials manager at L.L.Bean.

Morales met his business partner, Dan Costa, in 2002 when Morales joined Modesto-based outdoor apparel manufacturer Royal Robbins as a minority partner and vice president of product. The company was already making 5.11 Tactical pants when Costa acquired it in 1999. The duo spun off the 5.11 division in 2003, as an independent company that specialized in clothing and gear for first responders.

“There were a lot of unsatisfied customers that didn’t like [other manufacturers’ offerings], and we really just had to listen to them and make good products,” Morales said. “We thought, ‘We can get this company to $100 million,’ and that looked really big at that point. This year we’ll probably do around $300 million.”

Sourcing

Morales also ran Invigour8 Trading Co. Ltd., a sourcing company he and Costa founded in 2002.

“We decided that in order to get the best quality and best pricing, we had to get better at sourcing,” Morales said. “So our solution was to [do the] sourcing for us, as well as other companies.”

Menlo Park-based private equity firm TA Associates Management LP bought 80% of 5.11 Tactical and Invigour8 in 2007 for $240 million and kept the management team in place.

5.11 Tactical now has 109 workers at its product development division in Irvine. But innovations also come from a Seattle-based subsidiary, Beyond Clothing, which counts on the U.S. Military Special Operations Command as a main customer and source of feedback.

“One of the things that gets people excited around here is innovation with a purpose,” Morales said. “After being here for six months they realize, ‘Wow, with my skill, with my craft, which normally would be used to work in high fashion or something else, I’m actually making a difference. I’m helping those people that protect us. I’m making a difference in the lives of law enforcement, military, EMTs and firefighters.’

“We also get a lot of letters that say, ‘Hey, this product saved my life, and I want to thank you guys for a great job.’ Personally, it’s a humbling experience because if there was an issue in my house, these people would risk their life to save us and protect us, and they are writing me a letter to thank me.”

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