This chapter has nothing to do with yacht design or gear, but getting this aspect right will determine whether or not the Adventure 4o is a success or failure.
I have been thinking about this issue for the past year, since Steve Dashew and Jean-François Eeman, both experienced boat builders, told me that the Adventure 40 is doomed to failure if we don’t solve this problem. The problem is bundling.
When thinking about bundling, the first thing to understand is that there is really no such thing as free. There is only included and not included. Let me give you an example:
When you go shopping for a car and spend say half a day with a salesperson looking at his or her offerings, it is logical to conclude that browsing experience is free. It isn’t. It’s included in the price you will eventually pay for the car.
But wait. What if you then buy a car from another dealership? Surely the time at the first dealership was free? No, it’s not free, it’s just that you didn’t pay. The people who buy cars from the first dealership paid for the salesperson’s time spent with you. And you, in turn, paid for the time spent with customers that never closed at the dealership you finally bought from. That’s bundling.
Wait, the problem gets worse. Different buyers require dramatically different amounts of information and sales effort. So if you are the kind of buyer that is well informed about cars and walk onto the lot knowing exactly what you want and close on the car in half an hour, you are paying for the guy who visited five times over a month using 20 hours of salesperson time.
The car industry gets around this problem, at least partially, by wheeling and dealing on the price, but that’s an opaque and often unfair process—certainly not something we want to get into with the Adventure 40.
That, in a nutshell, is what Steve and Jean-François warned me about: The boatbuilding industry, at least for real offshore boats, is totally bundled.
Not only do many (perhaps most) buyers expect to spend days looking at boats, taking test sails, touring the yard, interviewing the designer, and even being wined and dined, they also expect that the same level of personal attention will continue after the sale, and for years afterward.
But the bundled business model just will not work for the Adventure 40, since success requires selling an order of magnitude more boats than Steve and Jean-François do, and selling those boats for a much lower price and gross margin.
But here’s the lucky thing. I have already been exposed to and successfully dealt with this business challenge in a past career. There is a solution. It’s called unbundling.
Now, understand that I and AAC are not going to build the Adventure 40. A totally independent company that I will not be part of (other than continuing to write about the process) will do that. So I can’t tell that company what to do. But I can make recommendations. Here they are:
Buyers who wish to inspect and test sail the boat will pay, say $800, (may be more, won’t be less) for a defined two day experience including:
- Plenty of time on the demo boat.
- Tour of the factory—not sure about this one.
- Test sail.
- Sleepover on the demo boat.
- Copy of the detailed construction specification.
- Copy of the owner’s manual.
- Up to four hours of follow up via phone or email—time after that will be billed at an hourly rate.
This is a very fair price for the time and expertise involved since for those two days they will have full access to, and the attention of, a person who fully understands the boat—be a nice job for a beached cruiser. However, there will be no access to the production staff of the builder or designer—they need to focus on building a great boat.
And this system means that the buyer who just checks out a friend’s Adventure 40, reads this online book, and then orders without ever going near the builder, won’t be paying for sales time and test sails for other buyers or, worse still, for all the tire-kickers who never buy.
And this is not trivial. My guess is that satisfying all the more needy Adventure 40 buyers (both before and after sale) and tire kickers for “free” could add $20,000 to $40,000 to the $200,000 price tag.
Sounds a lot, I know. But think about it. That’s the work dealers do in the mass production boat market (with varying degrees of competence) and they get at least 10% off the top.
The Adventure 40 will be delivered to the buyer at the yard entrance on a shipping cradle complete with a detailed owner’s manual, certificate from the independent surveyor who supervised the build, and a copy of the detailed specification the boat was built from.
Warranty claims will be adjudicated by the surveyor and will be paid if the boat does not meet the specification.
This will be fine for the experienced DIY buyer, or the buyer that hires someone with the required skills to help them commission the boat—it won’t be long before one or more commissioning companies specializing in the Adventure 40 spring up.
But what about the buyer who wants personal hand holding throughout commissioning and the early years of ownership? Well, remember I said I had already been through this in a previous life? That was in the computer industry. And when computers dropped in price and we no longer had the margin to include after sales services, we came up with a solution: the support contract.
Buyers of the Adventure 40 will be able to buy an optional support contract that will give them access to a pool of Adventure 40 experts (by telephone or email) who are independent from the builder and financed by the contract revenue.
And, by the way, being one of those experts will be a nice way for experienced voyagers to make a bit of income. Everyone wins, and the builder can get on with producing a great boat, rather than answering the telephone every five minutes and answering a hundred emails a day.
I know it’s radical, but it’s also the only answer that I can think of to a problem that, if left unsolved, will doom the Adventure 40 builder to bankruptcy.
One More Thing
As I wrote this article, it came to me. As a staunch believer in the essential fairness of unbundling, I was being a hypocrite because most of the Adventure 40 effort here at AAC is financed by our members, but most of those signed-up as interested in an Adventure 40 are not members (just 27%).
So, we will be moving all Adventure 40 posts to the members’ area with the exception of the Adventure 40 introductory chapter and this chapter that explains the policy. Once again, it’s radical. But it’s also right.
Not only is the present situation unfair to the members, changing it will be good since it will quickly stress test the entire unbundling concept. Heck, it will stress test the entire Adventure 40 project.
After all, if people are not willing to pay $1.66 a month to be part of the process, are they really going to pay $200,000 for a boat? If the answer is no, we might as well find out now, rather than after Erik and I put in even more time, and money is spent on the prototype.
If you have a better idea(s) to solve this problem, I’m all ears. But please make sure your idea recognizes the builder’s right to make a fair profit and our right at AAC to be at least partially compensated for our time, effort and expenses.