“How to make a small fortune in the surfboard industry? Start with a large one!” – Mark Price interviewed in The Business of Surfing


Mark at Malibu, shot by Steve LIppmann.

When you say you want to surf for a living you are expressing the most common and un-original thought a surfer can have.

What is not common is pulling it off, for example going pro, building surfboards, marketing boardshorts, or lifeguarding at Tavarua.

The folks who land these types of careers are the interesting ones because they have taken an un-original thought and used original approaches to arrive at uncommon outcomes.

Mark Price is not common. He is original.

M.P., as we call him here at Firewire, did surf for a living as a professional in the 80’s. And he has since done it in one way or another for over 30 years, working as a surf industry executive at many companies you’ve heard of before becoming the founding CEO of Firewire in 2006.

For anyone interested in paving their own way towards a career that aligns with their surfing passions, Mark is a good case study, and The Business of Surf is a worthy read.

Founded by Brad Bricknell, it’s one of our favorite ways to keep our fingers on the pulse of this industry we love.

Mark appeared this week in its pages and what follows is the interview in its entirety with an original introduction by Brad.


The Introduction and interview that follows are by Brad Bricknell; writer at The Business of Surf.

I’d always heard of the name, Mark Price, a fellow South African, who was maybe a decade or so ahead of me in era. His name was always spoken about with the utmost respect, both as an accomplished surfer and as a businessman in the industry.

I first came across his name in South Africa’s first surf mag, ZigZag which was started by another respected surfer and businessman in Paul Naude. In fact the two shared similar paths, both grew up in Durban, South Africa and both have made California their home.

Price grew up in a era where conscription was compulsory in South Africa, and the prospect of going to fight in a war (in Angola) that he didn’t believe in, along with the fact it would take him away from the ocean make his decision to leave the country relatively easy.

His pathway to CEO of the global Firewire business included executive positions at Gotcha and the industry leading (at the time) MCD brand, he also started his own brand, Tavarua and started his fascination with sustainable manufacturing and environment back in the early 90’s. Incidentally Mark wasn’t allowed back into South Africa until Mandela was released from prison in ’94, and pretty much hasn’t missed an annual trip back to J-Bay ever since.

Mark stands with Firewire surfboards designed by Kelly Slater, Jon Pyzel, Rob Machado and Daniel Thomson.

In the last 12 years though, Mark Price has led a surfboard revolution. He, along with a group of forward thinking, innovative and progressive businessman, shapers and surfers have pioneered the space and indelibly changed the landscape… and not just in business, but for the good of the environment too.

And they have also proved you can make money, while taking a sustainable approach to manufacturing.

Meeting Mark in person, probably some 30 years after first hearing his name was an incredibly surreal moment. We had communicated on e-mail prior to his recent trip to Australia and I was immediately struck by the size of his passion. It oozed, then gushed and spilled out even more as the conversation went on. Not only intelligent and inspirational, you can see Mark is a man who has found his place in the world. Working with that passion, taking risks and loving every moment of his job. In fact he went as far as saying it’s the best job he’s ever had, and while he might not always be the CEO of Firewire, he’d like to think that he would always be involved in the business in some way – testament to the strong links he (and as we hear, the entire founding group) have forged with this company.

We cover so much in this interview that I won’t even try and preface the conversation here. Suffice to say, if you’re anything like me, you’ll walk away inspired and educated, if not a little intrigued and attracted to this unique model of business… heck, you might even consider buying a surfboard from them, to test the theories for yourself.

But all that is up to you, right now all you need to do is find a comfortable spot, set aside 20 minutes and enjoy finding out a little more about Mark Price and The Business of Firewire Surfboards.

Here we go…

Mark spends three weeks each year surfing J-Bay. Photo: Dave Aherns.

BRAD: I love how Firewire has been described as a technology company; you don’t see yourselves as a surfboard manufacturer per se. Can you elaborate on that point of view?

MARK: We like to define ourselves as a technology company that makes surfboards. And the reason we phrase it that way is that we have a tremendous discipline around our product development. We have a strong Brand, and successful Brands have what you’d call ‘market permission’ – people often want more products from that Brand, but we feel that when looking out over the very long term, we operate with tremendous discipline as to what we bring to market to avoid diluting our brand equity.

I’ve always felt that over the very long-term, the business that you say ‘no’ to, is ultimately more important that what you say ‘yes’ to”.

Therefore, unless we can make something that is technically superior to what’s already out there, or more sustainably produced – preferably both, we won’t do it. And that’s why you’ve seen so few products from us, outside of surfboards, and more recently the algae traction pads, after being in business for almost 12 years.

BRAD: Does the business have an innovation pipeline that you are continuously funneling ideas through or do you leave it with the shapers to come up with what’s next?

MARK: The answer is yes to both. For example, when it comes to shape, we give tremendous freedom to Tomo, Machado, Dan Mann and Kelly to come up with innovative designs. And we’re not scared to bring something to market like the Cornice for example, which was a commercial failure… but if you ever rode one… it was sick!

That said, we are equally interested in new materials and the factory processes that could improve performance, and/or reduce toxicity.

One of the big advantages we have is that we’re completely vertical; we own and operate our own factory. So, the R&D process from a new materials and factory process standpoint is 24/7, because we’re basically talking to ourselves!

In addition, we’re also open source. If someone comes to us with an innovative material or a particular build process – we’ll give it a go. In fact, more recently we set up a R&D facility on the Gold Coast in an undisclosed location, and that’s where we will be testing new materials and factory processes before implementing them on a broader scale. We also believe that exponential improvements in performance now have to come from the marriage of shape AND new materials. As it stands today, shape alone can only give you incremental improvements because shape has become so refined…. the next leaps forward will come from new materials and factory processes.

BRAD: It feels like everyone involved in the business has sustainability and environmental awareness as part of their own belief system. When did your journey start around caring for the environment and sustainable manufacturing?

MARK: I read a book in the early 90’s called The Ecology of Commerce written by Paul Hawkins, who is still alive today and a committed environmentalist. My sister brought it to my attention when she was working for Interface Flooring, one of the original companies seriously focused on sustainability. I think that today they have zero virgin raw material inputs, or very close to it. The company Paul founded back then with his wife was called Smith and Hawkins. It was a gardening and outdoor furniture company with a really strong sustainability ethos, and his basic premise was that building sustainable products while running an ethical company, and making money were not mutually exclusive objectives.

With obvious exceptions, the traditional capitalist view often revolves around constant growth without limits, making the least expensive products possible and selling the most of them. And creating so-called ‘shareholder value’ is all that matters, and normally that ‘value’ has a relatively short time horizon in mind.

And the boom and bust cycle mentality inherent in that business strategy is accepted, including the human cost of the layoffs that inevitably coincide with the busts – never mind all the excessive waste generated during each upswing

However, if you have a long-term view of your business and a concern for the environment AND the people involved in your business, then slower growth and sustainability does makes sense…and ironically it is fast becoming both profitable and a competitive advantage because there is a growing segment of the market today that appreciates that point of difference.

They care about how a company makes the products they buy, not just the utility they get from using them.

On that point, I remembered reading an interview in the mid-80’s with the first green party member in Germany who secured a seat in their congress. The first guy! A reporter said to him, when is this whole eco thing going to come of age? There’s one of you and hundreds of these other guys – what’s the point?

He replied: When people figure out they can make money from being green, it will come of age. And I think we’re at that inflection point now…it’s taken a while, but we are there”.

I’d also like to point that that our commitment to sustainability goes beyond just striving to build the least toxic, performance surfboards possible, and includes significant support for a host of environmental and humanitarian organizations that candidly, are doing far more than we are to improve the well-being of people around the world and mitigating the destruction of our environment.

We are one of the largest, endemic supporters of SurfAidSurfrider, Share the Stoke Foundation, Surfers against Sewage, Save the Waves and Parley for the Oceans to name the most visible. 

LFT, Timbertek and Helium shapes.

BRAD: We’ve often heard the debate between epoxy verses PU boards. Can you give me your personal pitch for epoxy boards vs. PU both from a performance and a sustainability point of view?

MARK: Yeah sure. From a sustainability point of view, when we launched our company 12 years ago, the original technology – Future Shapes Technology (FST) – I believe it was the University of Brisbane that did a VOC (volatile organic compound) study on that construction verses the traditional PU/PE surfboard and they found that epoxy/EPS boards, emitted 50 times less VOC’s during the manufacturing process and over its lifetime. And that’s before we started using bio-resins and 20% recycled content EPS blanks in TimberTEK for example.

So from Day 1 we felt like we were building a significantly less toxic surfboard.

From a performance standpoint, if built correctly, we believe that you can make a lighter, stronger surfboard with EPS and epoxy than you can with traditional materials. And I would argue that all things being equal, weight is a huge determinant of performance, if not the most important. Obviously, there is a point below which you lose projection and a board can be too light, but the difference between a 2.80 kg and a 2.50kg performance shortboard is dramatic.

BRAD: I’ve heard you debunk the theory before that epoxy/eps boards don’t work in solid, or bumpy/choppy conditions…. can we hear this one from the horse’s mouth?

(Laughs) Well, I would just urge people to go back in time and watch the WSL event that Michele Bourez won in 2-3m Margaret River with a howling cross wind/cross chop, riding a Firewire board and just dominating. He also won the Van’s Triple Crown event in 2.5 -3.5m surf at Sunset with the same construction. And he’s had some insane heats in really big, windy Cloudbreak. Nuff said?

People, often with a vested interest in PU/PE, tend to make these sweeping generalizations about materials, but it’s how the materials are used – what are they combined with, how they are built, that determines how they perform – in my humble opinion, these generalizations are just bullsh*t.

That said, to be fair there have been some EPS/epoxy builds that did not perform as well as PU/PE so those generalizations did not come about in a vacuum.

It’s just that the brush often used to paint the category is too broad.

Rob Machado with eyes on two of his Go Fish models with resin tints.

BRAD: Does that frustrate you? Continually hearing those generalizations?

MARK: Yeah, sometimes. But at the same time, we are playing the long game and the company is doing well…

BRAD: A lot of it is an educational process isn’t it?

MARK: Absolutely! I had to get educated. When I first joined what was to become Firewire, I thought 2 things. a) I had an insane quiver of surfboards and b) I knew a lot about surfboard design. I soon realized that knew sh*t about the latter and my boards were average at best. (Laughs) So I’m a perfect example of someone who needed education in the process!

BRAD: It’s commonly known that manufacturing and selling surfboards is a low margin game. Do you ever see that changing at any point in the future? There are really only 2 levers to pull – either cost or RRP?

MARK: In the time we have been in business, we’ve seen the RRP go up. However, I think this is part of a much larger conversation around the overall surfboard marketplace and business model, which is pretty broken.

I think that there are 2 main factors that are driving down retail margins for surfboards (and wholesale margins), basically margins across the entire supply chain. One is probably the fact that it’s the only product category in the world where a very high percentage of surfboards (perhaps as high as 25%?) are sold outside of retail – factory direct, at prices that are below our wholesale prices. So that’s one challenge.

The other one is that it’s probably the only sporting good product in the world where there are 500-plus manufacturers of varying scale all competing for a piece of the pie. Therefore, you don’t get the economies of scale you usually get in other industries where the market leaders have a fairly large share of the total market.

On a related note, Firewire has copped a lot of flak over the years for building boards in Asia and this whole Asian sweatshop stereotype that’s out there. Two things on that:

Our factory is ISO9000 Certified, which is a quality control certification around factory processes and consistent outcomes, and within the next 12 months, we will be Fair Trade certified as well, which is a labor standard that no other surfboard factory, and not many other factories period, could meet.

Nor would they be willing to make the investments in qualitative labor practices in order to qualify for FT certification. Fortunately for us we already had the bulk of those benchmarks in place, so we were already almost there.

With that in mind, we are running the furthest thing from a sweatshop. But the bigger question is why did we go offshore? Some on Social Media like to claim that it’s because we’re greedy assholes who just want to get rich. (laughs). I’m sure you’ve heard the old joke, ‘How do you make a small fortune in the surfboard industry? Start with a large one!’

If you recall when we started in 2006, we set up factories in Burleigh Heads and San Diego and spent a small fortune to get those up and running.

But because of the complicated nature of our boards and the materials cost, we had to put them out there at a significantly higher price point than our competitors, and they didn’t sell.

But because of the complicated nature of our boards and the materials cost, we had to put them out there at a significantly higher price point than our competitors, and they didn’t sell.

And the reason for that is for decades, the domestic board builders have built disposable product. They have trained the consumer that your board is going to ride great, but after a year it’s probably worth next to nothing! Garage sale maybe, for a couple of hundred bucks. It’s yellow, time to get a new one and the deck looks like a golf ball. So, we were forced to drop our prices to the same level as the other premium PU board builders until consumers could appreciate what we were building which took time, and when we did that, the company took off like a rocket ship. However, our domestic manufacturing margins became so low that we could not support the business.

So rather than pillory us for going offshore I think they should look themselves in the mirror and acknowledge that they created a price to value equation in the consumer’s mind that was too low!

Over decades, they trained the consumer that that’s all a surfboard was worth. Because if you talk to board builders they will always tell you that surfboards are too cheap based on what it takes to build them. Which is true, but the consumer only cares about the value to them, they don’t care what it costs to make.

BRAD: And once you have precedence in the market, it’s difficult to change it….

MARK: Exactly. And what’s so ironic is now that we have entered the market and succeeded around technology, and we were forced to go offshore (and lost a small fortune) our competitors who are now trying to compete against us with technology are going offshore to manufacture as well, because they’ve hit the same wall that we did! And some of them are doing it in a bit of disingenuous manner – without fully disclosing the country of origin or acknowledging it in the subtlest way possible. Whereas we have laminated a decal on the rail since day one with that information.

I don’t mind getting sh*t for building our boards offshore because that is factually accurate, but I won’t accept the premise that we went there just to make a buck. We went offshore to stay in business!

We run a high-quality operation and we were forced offshore by the (broader) business model. And we’ve been instrumental in helping raise the price of surfboards at retail over the last 10 years as consumers realized that we offered increased durability without sacrificing performance (a higher price to value equation to come back to an earlier point), and that has benefitted all board builders.

BRAD: Part of your business model is also to hold a lot of stock – are there pros and cons to that strategy?

MARK: Yeah there are, but surfing is such a highly individualized activity, as you know. If you are a snowboard brand you could probably offer less than 20 SKU’s and cover a pretty high percentage of potential customers, whereas with surfing you wouldn’t even get out the gate! Remember when it comes to surfboards, the term SKU drills down to the individual model, length/dims and fin system. So, it’s a business necessity if you want to cater to a variety of surfing abilities, physical conditioning, and wave conditions.

On the plus side, unlike the apparel industry that is highly seasonal; a surfboard that didn’t sell in March, is still viable in July! I’ll take the trade-off of a lot of SKU’s relative to our revenue, but a fairly simple business model from a seasonal standpoint. That said, we have fairly sophisticated tools in place to rationalize every SKU so our inventory mix is kept tight.

BRAD: What is your view of the Australia/Pacific market specifically in terms of the surfboard space? How do you view the retail and the health of the category?

MARK: The Australian surf shops that we sell to, are in my opinion what the future of surf shops will be. And by that, I mean that they have a high percentage of their floor space dedicated to hard goods. This also holds true in Europe, and in some cases in the US. They are effectively technical stores and if you look at the way the market is right now – where apparel, eyewear, footwear and other related accessories are available across every channel under the sun, plus vertical company stores – surf hardgoods are one of the few product categories that surf shops can use to really differentiate their floor space to a meaningful degree.

I think the Australian market, at least from Firewire’s standpoint is strong. And I think those retailers are well positioned to continue to do well in the future.

BRAD: Where do you think the future of the space goes? Is it retail, is it more experiential? We’ve just seen the launch of Awayco, essentially another technology surf company that you’ve been supporting from the start.

MARK: Fu*cked if I know (laughs) Jokes aside, we are always willing to support something new like Awayco and from a philosophical standpoint the business model makes sense, whether the surfers will support it to a meaningful degree, remains to be seen.

That said, I think the future will always be centered around innovation in both product itself, and ways to bring those products to market. The market is already polarized to the point where it’s either cheap and deep or premium, innovative and relatively exclusive.

The middle ground is gone, and I think that’s why a lot of board builders are hurting because they operate in that middle ground where they are building largely me-too product at comparable mid-tier price points.

BRAD: With some of the technology deals and collaborations you have going on with shapers outside the stable (thinking Pyzel etc.) – it almost feels like you have an open source kind of vibe with the technology. Is that how you view it?

MARK: We actually parted ways with Jon Pyzel recently under very good terms, but your overall point is valid, however we’re not licensing our technologies.

We are open source in the sense that the company is not built around a personality or individual shaper. And I think a tip of the hat to Nev (Hyman) is due. When we first started we sat down and discussed this issue, because Nev had his own label and the name was trademarked around the world, so it would have been very easy to just introduce the original FST technology under the Nev brand. But we felt that wasn’t the smartest way to go long-term and that’s proven to be the right decision, so we have a multi-brand strategy and we work with a number of different shapers – and again coming back to that highly individualized aspect of the market, it’s proven to be a good way to go.

That said, we’re still in the premium-priced Branded surfboard business so we’re not going to work with a ton of people – we want to build these 3 maybe 4 brands into viable entities in their own right and then have them sit alongside each other. So, it’s a bit of a hybrid model in that sense.

BRAD: What does someone like the greatest surfer of all time bring to the business?

MARK: (Laughs) Nothing! (More laughs) Kelly’s involvement in the company was substantial for a number of reasons. Obviously, we were able to launch Slater Designs, his namesake brand, and if ever there was a product category that was perfectly aligned with an athlete, it would be surfboards and Kelly! So, it was a great entrée into the market for that brand and its had an impact already.

But I think of equal importance – when Kelly left a PU company and joined a company like Firewire that was exclusively EPS and epoxy, it caused a large segment of the surfing population to re-look at those materials.

When we first started we probably had the attention and interest of 20% of the market, maybe. With Kelly’s involvement, not only did we launch his brand, but now 75% plus percent of potential customers are now looking at the whole range of products we made.

The proof was that we initially thought that Slater Design’s would cannibalize some of the Tomo and Firewire business, but it didn’t. They all grew for that reason.

So, Kelly’s involvement was substantial on a number of fronts, and I’d like to make one other point. To his credit, Kelly has surrounded himself with some really smart business people over the years and obviously, they came along with Kelly.

Therefore, not only did we benefit from Kelly’s endorsement, we also gained some new Board members who were very experienced businessmen, understood our market, and also shared our long-term view of what it was going to take to get the company to the next level. And Dougall Walker, an original, invaluable Board member is also still with us. So, it’s been significant on a number of fronts.

Kelly Slater holds the Helium Gamma.

BRAD: The Algae foam product is quite refreshing as well. Has the traction gone OK commercially?

MARK: Incredibly well! It’s one of the best-selling tractions in our stores and it proves that if you can give surfers something similar or better performance-wise, and with an increased sustainability component added to it, they are ready for it.

BRAD: Will there be any other categories you think you might move into?

MARK: Yeah, we are launching an Eco-leash that will hit the market in a couple of months. Coming back to that open source point you made earlier, this leash was developed by a Jan Persson of Revolwe, Swedish surfer, and it’s turn-key. We just re-branded it and collaborated with him on the go-to-market strategy.

It was the easiest product development on the planet – for us at least. (Laughs). He on the other hand, spent a couple of years developing it and checking as many sustainability boxes as he could. Those wins don’t come along very often, but again, I think we have developed a reputation for bringing those types of products to market, so people find us now.

BRAD: The business from the outside looks like it’s hit a point of scale and profitability – it’s come of age, it’s not a start-up anymore – it looks like a very successful business. For someone like yourself who has been a part of the journey from the start, it must be very rewarding?

MARK: Absolutely, we went through all the trials and tribulations of a startup company and then some! The surfboard industry was a tough category to enter into, so it’s been very gratifying to get to the point where we are cash flow positive and profitable… you know, we might have good years, great years or not-so-good years, but we’re now in business to stay, assuming that we continue to build product that surfers want of course.

And it’s been a great ride so far. One of the things I’m most proud of, and I think it speaks volumes to what we have accomplished, is that not a single in-house person has ever left our company.

BRAD: The whole founding group is still together…

MARK: They’re all here! We’ve had to make some changes in personnel for various reasons or someone’s wife got a job somewhere else and they moved away, but no one has left us to go to another company for a better opportunity. It’s created deep institutional knowledge within the company and great chemistry across all functions. I think we’re probably one of the only companies where our CFO can hold his own in a marketing or product discussion without resorting to a calculator to make his point (laughs).

BRAD: From a personal point of view, what’s helped you stay the course through this whole journey?

MARK: Without getting too pessimistic, I really think the world is in crisis and if we continue on the path that we’re on, the future is quite dark. The way we are polluting the planet, we’ve gone completely away from ‘needs’ and all we care about now are ‘wants’. And ‘wants’, by definition, cannot ever be satisfied so we just consume more and more. And now we’re trying to convince the rest of the world to live like all of us in the first world, as if it isn’t bad enough that we’re living the way we are… so what motivates me, excites and keeps me passionate is the influence I feel we are having on our market.

I’m not under any illusion that we are changing the world – but I think we are changing our world. And that sense of purpose is powerful.

BRAD: One of the great initiatives we’ve seen was turning the Helium Gamma waste into pavers. That looked like an amazing project.

MARK: It is, and by the way, we just used the Gamma for the video, we compress all of our EPS dust into pavers. Along those lines, we’ve taken our waste and reduced it by 95% over the last 18 months. From 0.4 cubic meters to 0.02 and we are striving to get to zero landfill in the next 12 to 18 months. Our supply chain crew deserve tremendous credit for their various initiatives in this regard, as does Sustainable Surf, who have brought ideas to the table during their annual Ecoboard audits at our factory.

BRAD: By more initiatives like this?

MARK: Through various up-cycled products and reducing the total amount of ‘waste’ that needs to be recycled or upcycled, period. And we’ll get there, it’s another benefit of being vertical – we have a lot of control within our supply chain to affect change.

BRAD: What is the best surfboard model commercially? Does it vary by region?

MARK: The top ten models from around the world are pretty consistent, their individual ranking within the top 10 may vary slightly, but certainly over the last 2 years the Sci-Fi has been the number one selling board in every market, and deservedly so. It’s a really great design and Tomo deserves a ton of credit for developing it, and Stu Kennedy blowing up at the Snapper event did not hurt either.

We’ll see what comes next – the Go Fish is doing incredibly well. It’s been really gratifying to see Rob Machado’s evolution into a credible designer because he’s been quietly shaping and designing his own boards for a long time and he’s now coming into his own. Plus, Kelly is becoming even more involved in surfboard design as his focus shifts to broader interests at this stage in his career.

I would also note that Dan Mann has been a Firewire stalwart for many years, and if you add up all the boards he’s designed, and surfers are riding, he’s probably one of the most prolific designers in the world, probably only eclipsed by a handful for very well-known names.

BRAD: Do you think the business loses anything by not having a custom programme?

MARK: There’s certainly a customer out there that we’re not addressing by not having custom boards, no question about it. The question is, how big of a market is that? And what would it take for us to address it? We’ll have that answer soon because within the next 12 months we will be offering custom boards, so we’ll see what the uptake is.

We are currently working on new factory processes that will enable us to streamline the CAD and the build time to make a custom board in our various technologies. Right now, that option has been restricted to our team riders.

But candidly, I would argue that for the vast majority of surfers, knowing your volume range and putting a board under your arm is probably more valuable than worrying about a minor dimensional tweak, unless of course you want something radically difference and there are any number of credible brands out there creating amazing boards for that niche.

And the interesting thing with volume is that I don’t even look at dimensions anymore. I look for a board that’s 28.5 to max 30 liters. That’s it, and whatever the corresponding length is – that’s what I grab.

BRAD: What’s the favorite board in Mark Price’s quiver?

I’m a boring old fart. I’ve been riding the Vader for 4 years now!

There are 2 types of people at Firewire; the guys that ride everything under the sun, because they can. And then there are the guys like me who have found a board that they just love and are so tuned into it. I have it in various constructions, stashed around the world, and I fiddle around with the fins depending on wave conditions.

That said, I did ride the Cymatic recently which is a new Tomo shape in the Slater Designs range – pretty much blew my mind so I might have to expand my quiver… by 100% (laughs)

BRAD: Finally, there’s a lot of talk about participation in surfing being at an all-time high and with the inclusion of surfing in the 2020 Olympics and with wave pool development… the future looks good for the hard goods category.

MARK: Definitely, that is going to create new markets; and potentially increase existing markets. I think what most of us in the industry don’t realize is that the average surfer has a crappy surf before work, catches a few waves, while also juggling family commitments on the weekend.

To the extent that they could now have a qualitative surfing experience at a designated time… they are probably going to catch more waves! And they might even have more equipment demands because they’re going to realize there are so many different ways to ride a wave. So, I think it will have a significant impact on new markets as well as existing markets.