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Lex Pedersen – A passion for internal combustion

Lex Pedersen (BA 1999) is one of those people in business who others are just drawn to, and not just because of his depth of experience. There’s something about his approach (and no doubt success) that people clearly admire. But it goes beyond that. It’s his passion.

Maybe it’s knowing that someone has scaled the heights of their own well-known business, surviving the flames in the process, and has come out the other side to impart their wisdom that makes listening to them so intriguing. There’s also something about a person who can graciously and generously share this experience, quietly inspiring as they turn their energy toward a new business and, indeed, a life they love.

Lex Pedersen is one such man and, listening to his story, it’s hard not to bring to mind Joseph Campbell’s, the hero’s journey. Not least because Lex’s story starts around a campfire, as all good stories do.

It was the year 2000, and Sydney was alive with the Olympics. Lex had just finished a Bachelor of Arts from Macquarie University in environmental science and says, ‘My goal was to spend six to 12 months travelling around Australia.

‘I was either going to invent something or come up with a business plan; that was my next endeavour,’ he says, and you can hear in his voice the long-held conviction, the entrepreneurial spirit burning bright.

He definitely started early. As an 11-year-old Aussie living in New Zealand, motivated to save up for batteries for his ghetto-blaster, he sold pine cones for firewood. It was the late eighties, after all, and as Lex explains, ‘Those D-size batteries were pretty expensive. I soon realised that if you want something in this world, you need to go out and get it,’ he says with the slightest of Kiwi accents.

Lex goes on to explain his family moved a lot as a result of his father’s work: ‘I went to almost ten different schools: first in New Zealand, then Perth, where I developed a love for surfing, and finally Sydney.’

Of this time, he reflects, ‘Watching my father was a great motivator. He went through a lot of stress in his career working for others, which contributed to my early decision to work for myself.’

It didn’t take long after the pine cone venture to set the wheels in motion. Lex went on to start a small landscaping and maintenance business while at uni and also had a job in a surf shop to fund the post-uni holiday. And so it was that he found himself in the Northern Territory by a campfire, with a fellow traveller, his wife and their enormous motor home.

The conversation turned to the purpose of Lex’s trip before the man recounted the story of his career, which involved buying and selling several businesses. ‘The last one had sold for $20 million or so, a flyscreen business, and his advice was clear: you don’t have to reinvent the wheel, you just have to find something that others are doing and do it better. ‘

You can almost imagine Lex sitting there in the firelight, taking in the wisdom being offered, when he says, ‘That idea really stuck with me. When I got home, I continued to work in the surf shop and at night, sold product through an eBay store called SurfStitch.’

And so the dream was born, and the hard work began. ‘I was up until two o’clock every night, taking photos and sending stuff out. Then, with two friends, we took that philosophy of doing what others were doing but doing it better and launched an online surf shop called SurfStitch.’

Timing is everything, as Lex explains: ‘It had been done in Europe and North America, but no-one had done it in Australia. The internet was in its infancy. It was a wild ride that took us on a huge learning curve, lots of staff, lots of pressure and triple-digit growth year on year.

‘We had our own brands, our own media outlets, magazines. Digital surf shops online across the globe. It was a whole ecosystem. The growth was phenomenal. And then we fell into the trap – as so many do in the public markets – of chasing and promising growth that sometimes just isn’t there.

‘That created a bit of a nosedive,’ he says without rancour. ‘The rest is history, but it was an amazing experience. It exposed me to the volatility of that market and how share prices and values aren’t always in sync with the health or trajectory of the business.’

And so, in 2017, Lex left SurfStitch. Together with two of the sharpest minds in SurfStitch, he started PeriscoPe, an e-commerce business that helps emerging and growing ecommerce brands avoid the traps they’d experienced at SurfStitch.

They say giving back is the true mark of a lesson learned, but PeriscoPe also put a line between Lex’s passion for surfing, something he says is now somewhat on the backburner after a shoulder injury, and his true passion: investing in cars.

‘I’d always collected cars. In fact, I’d sold all my cars to start SurfStitch – it was a very capital-intensive business – but had managed to build up a small collection again and was doing quite well out of them financially.

‘It was interesting because my more traditional investments were a huge rollercoaster ride of values, yet this car collection was rock steady,’ he says, before going on to explain that passion assets are currently the most non-volatile, emerging investment class.

‘Cars are the best. Whisky. Wine. Even designer luggage. They’re being taken very seriously – banks like Credit Suisse are advising their clients to set aside a portion of their net wealth to invest in passion assets.’

It would seem Lex has found his sweet spot between business and pleasure. ‘They’re not just collections led by the heart; the wallet gets a benefit as well.’

And it’s inspired a whole new company for Lex and his business partner. Named CHROME TEMPLE, it’s an ecosystem like SurfStitch, but rather than being focused on surf, it’s focused on the automotive community.

It’s a huge and untapped community, and there’s no-one bringing enthusiasts together in the same way CHROME TEMPLE is in terms of investments, storage, and the operational side of owning these cars, as well as buying and selling them. The investment funds, which launched a couple of months ago, are the first of their kind in Australia and arguably the world.

 

‘Knowing that the next automotive revolution is occurring – hybridised vehicles, electric vehicles and, in time, autonomous vehicles – we’re focusing on tomorrow’s classics; vehicles that spark an emotional connection to the past like V8s, V10s, V12s, manual gearboxes. They’re loud and obnoxious. They’re everything the future is not.

‘And they’re going to become very desirable, the artworks of tomorrow, because the adoption rate of this automotive revolution is going to be exponential. What people think is a long way down the track is going to come at us very fast, so we’re bringing a professional approach to what is traditionally a hobby investment class.

‘We’re professionalising it, taking a data-led, science-led approach and marrying it with art. Car culture and building community is a huge focus for us too, both physically with track and other events as well as digitally with an online auction site.’

As Lex talks, you can hear the passion coming through thick and strong. And while the business has enormous potential given the changing market intersecting with diminishing stock, there’s another side to it too. ‘There’s almost an obligation to make sure that the next generation can still experience this type of car,’ says Lex. ‘They shouldn’t be tucked away; they should be enjoyed and marvelled at.’

The company has had a strong response, with a lot of investors. Car enthusiasts, yes, but also people who have no interest in vehicles but have invested entirely on the merit of the financial case. ‘We’ve been very humbled by that,’ says Lex, who notes the influence of the high-calibre board, individuals who are doing it out of their own passion and interest, and are actually invested in the fund, as is he.

‘We have some large ambitions for CHROME TEMPLE. We’re working through the sequence of building trust and credibility in this space. Just gently, but on track. I started out surfing and did as much as I could in that space, but this is my new passion. It definitely has me springing out of bed.’

Maybe that’s Lex Pedersen’s secret.

 Words: Megan English

Lex Pedersen embodies everything the Macquarie University Incubator is all about. Entrepreneurship. Collaborating with others. And learning as much from the challenges as the wins. It’s no wonder he enthralled a group of students and alumni at a recent Leaders, Innovators and Disruptors Conversation.

With a Bachelor of Arts (1999) from Macquarie University, he is the Director and Portfolio Manager at CHROME TEMPLE, which recently launched Australia’s first investment fund targeted exclusively at automobiles of distinction.

Lex draws on deep business experience. In 2006, he created SurfStitch from his home garage. The company went on to become the world’s largest and first global surf eCommerce powerhouse, reaching a market capitalisation of over $500 million.

Since leaving SurfStitch in 2017, he has co-founded PeriscoPe Digital Group, a full suite eCommerce service and strategy powerhouse, and 1 Day Wraps Australia, an on-vehicle guerilla marketing agency that focuses on vinyl wrapping vehicles to promote businesses.

Lex’s true passion lies in collecting cars, and several other automotive culture-inspired initiatives await CHROME TEMPLE.