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.
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.
Separating “product” vs. “service” business models (“unbundling”) lowers indirect costs (overhead) related to the manufacturing process. Outsourcing of services often improves them, as services delivery is the core competency and focus of the service suppliers. Good plan.
RE stress testing the sign-ups, I’d like to see something more than $1.99 per month. I’m not sure that stresses the sign-ups much. Perhaps we can consider a more significant financial commitment plan (in steps?) so that we have a real indication of what kind of production volumes we are talking about. Maybe something like the way crowdfunding works.
I think you are right about a stepped financial commitment. More in 10 days or so.
The business model for the A40 has always attracted me – and worried me.
A target price with no margin for all the fluff that the industry has had to include? This cuts out the tyre (tire) kickers, but what about the support?
I have to confess to being in the Tech industry so know where John is
coming from. We charge a fortune for our services, which new customer struggle with, but when the proverbial hits the fan, we are there through thick and thin. The cost is soon forgotten.
I would never pretend to have the combined knowledge you and Erik and the team have, gained from hard won experience, and would not question paying for the hand holding I would need to untie the lines. Having someone like Colin (or Colin!) look after the process will be a good investment.
Good to see some more deep thinking here.
When can I have one?
A dealer support network that offers value is worth the £ ($) everytime.
Now wouldn’t it be great if we could talk Colin into heading up the support outfit! Not sure if he would be interested, but there is no one better qualified.
I think you’re on to something. And I can tell you from my own business experience as president of Island Planet Sails that consumers are ready for unbundling. We work with clients around the world so by necessity, the client measures the rig (or engages a rigger for an hour), a chore that in the past was usually undertaken by the sailmaker. It’s a simple enough process and our videos and phone/email support gets them through it. They also bend on their new sails themselves.
We don’t sail with clients very often, even local ones. We supply a variety of educational material and advice, but we don’t have the time suck of going out for a sail. It’s not that we don’t enjoy sailing but every moment away from production, sales, or admin tasks is time that somehow has to be compensated for. Our clients have figured out that if they’re saving hundreds or thousands of dollars by passing up the hand-holding, there’s budget left over for hiring a private sailing instructor or attending an ASA or USSA certified sailing school for a class.
Having worked in a a traditional sail loft, where we’d go out and race constantly, I can tell you that a lot of time was spent on activities that didn’t contribute directly to the bottom line. And of course there was time lost traveling to and from client boats. For self -sufficient cruisers , measuring a rig, bending on a sail, and throwing on some spreader patches is quite manageable.
Great to have the real world confirmation that the market is ready for this, thank you.
Your comment really resonated with me as an ex-sailmaker. One of the main reasons that I left the trade was that I got sick of customers that bought one or two sails and then expected me to, in effect, become responsible for their boat’s entire rig and as well as race with them, for no additional compensation. Too many weekends working my heart out all day trimming only to have the owner blame my sails when we didn’t do well. Never mind that he had muffed the start and been out of phase with the shifts all day.
Totally agree with unbundling. I spent many years in the computer industry (want service, pay for it with a service contract) and recently selling high-end kayaks. This year, for example, I charge $80 to test-sail a Hobie Tandem Island priced at $6199. That is a 1.2% price of the boat.
We have enough margin to apply the demo fee against purchase. But, to the point, the demo fee eliminates tire kickers or provides a modicum of income.
I think your suggested $800 sea-trial fee is too low. What is the objective of a sea-trial? Does the naval architect know how to design a boat? Will the boat sail? Will my drinks spill underway?
2 cents as always,
Great to hear that that you have this idea actually working in boat sales. And yes, I think you might be right that $800 is too low. Maybe we should package it as a charter of the demo boat of two or more days (customer option) and charge accordingly, with menu of extras, like the factory tour, at a price.
That way demoing the boat could be a separate (from the builder) profit making business.
I think the concept is fine. The last boat I purchased had a 1 year warranty which covered everthing, and then the hull warranty was for 5 years. It would be interesting to see options for an extended warranty, commissioning and any other “services” that would be required to get the boat in the water and ready for a voyage. Absolutely necessary to find out who is really interested in a purchase or the economies of scale may evaporate on the build. I’m in, let’s make it happen!
Good points on extended warranty etc. One of the big benefits of unbundling is that separate companies spring up organically to add services like those you list to the core product.
This does not happen with a bundled product as much because one never knows when the manufacturer with change its policies and ruin the support companies business model.
The secret to this working will be for the A40 builder to be crystal clear in it’s unbundled stance and then stick to it.
Very nicely thought through.
Not only do I think this a good solution for the A40, but once again, I would wish, you could be nudging the maritime industry to reassess it’s habits.
Well done, Dick Stevenson
Thanks for the support. I agree, if the Adventure 40 can be the pioneer for change in what is, at least in my opinion, a totally broken system, I’m all for it.
Well, that’s a relief! I have been agonizing over this for over a year and feared that the reception I would get to such a radical idea would be anything but positive…shows how wrong I can be. Thanks to all for the support.
Very well thought out analysis, and completely appropriate for the A40 concept. If the A40 is to become a financial success your plan will be a key factor. A marketing system that forgoes the opportunity to baby-sit and bait & switch fence sitting customers will lose some potential sales, hopefully more than making up for it with increased efficiency.
I’m sure you and Steve Dashew have discussed his experience with an arrangement similar to yours used when TPI built the fiberglass Sundeer series. One of the (inevitable) results of removing post-sale support from the manufacturer’s control is that problems due to independent subcontractor errors tend to get blamed on the manufacturer or designer. But there ain’t no perfect world!
Good to hear that it works for someone of your industry experience.
Good point on the blame game. My hope is that having A40 experts readily available, including an owners forum, will go a long way to mitigate that, but, as you say, there is no perfect world.
Hi John, I think the principle of unbundling is the way to go. I am not a sailing technical person so would expect that upon delivery of my boat at the yard, that I could appoint an expert third party to prepare the boat for full commissioning with my input.
Just out of interest and sorry if it’s already mentioned elsewhere or not yet confirmed, but where will the boat be built? Is it in the UK or USA?
Yes, I definitely think we need a company(s) to commission the boats but the key is that it should be a separate entity from the builder for a separate price. That way each buyer can pick the level of help and expense that they want.
More on builders in a post coming in 10 days or so.
Agree with the unbundling concept. I had never thought of this before, as it relates to car buying, but dealer time and effort has to be paid for somewhere.
Also agree with stress testing the commits. Seems like a key challenge now is to determine how many boats you have. Your 293 might really be 20, who knows at this point? Myself as an example: I love the concept, plan to upgrade within 5 years but still am probably only 60/40 in terms of ultimately going through with the A40. Having said that, I’m sure the serious sign ups will ballon with the actual prototype.
Continued good luck, love the process and look forward to seeing your baby materialize.
A members only A40 user group could offer some degree of support.
At the end of the article, having learnt a bit more about the sales industry, I was left with a sense of guilt, knowing or realising for the first time that I am a new kind of villain, a tire-kicker. Like all guilty parties you immediately feel driven to justify your actions. Although I will dot down a few reasons why I felt the need to even reply, I do not wish this to sound like justification because I don’t want you to change your mind in any manner whatsoever. I am replying to tell you why this tire-kicker behaves as such.
Here it goes. I am a beginner from the land locked city, Johannesburg, South Africa. Our exchange rate is poor so any dollar spent can buy you a loaf of bread and a half.
My family and I WILL be sailing in the near future there is little doubt in my mind about that. By the way, over here you need a SAS sailing ticket to sail locally and RYA is run in conjunction to allow international sailing accreditation while the latter is not sufficient on its own. The reason probably being the hazardous waters along our coast. As a result, we (family) have completed our Competent Crew in Dec 2014 and I will complete my Day Skippers in Dec 2015. From there we will charter and crew where there is an opportunity.
Yes, so that is what we do down south, to get back to the topic. We browse the internet for as much “free” information as possible. Yachtworld, blogs and websites like yours. A little perspective though, when you live where we live, you have to cross an ocean either when leaving home or getting back. OK you could leave you boat in the Caribbean and fly in and out but again there is the matter of the exchange rate. To give you an idea when I read the fist article about Adventure 40 our R/$ exchange was R10 = $1 it is now R13 = $1. See, how the price of the Adventure 40 has increased without it actually increasing?
I am glad I stumbled upon your site, glad that I got to learn about the Adventure 40 for “free”. It is a boat that makes a lot of sense. When we buy a boat we really have only one stab at it, one flight, one survey is about what the budget should allow and that is where the option for a new boat makes so much sense. A decent, ready to sail, pre-owned local boat is scarce while a new Pacer or expensive Leopard is a hard buy.
Who knows, maybe closer to the time I will invest in paid membership, put my name up, pay the deposit etc. The desire is there for sure, and again, who knows, even becoming one of “those experts” (dependant on whether the is a Green Card restriction).
We will be shoe-string sailors, but if we do get to purchase an Adventure 40 we will at least, no longer be “tire-kickers”!! Pity about the lack of refrigeration on the Adventure 40.
PS. To leave this message, I had to become a member. Hope it is as valuable as the sales-pitch makes you believe.
Thanks for joining. You are no longer a tire kicker!
Lot’s of good points in your comment. I really took on board your point about having one chance to get the right boat with little or no margin for error. And I guess that’s exactly what the A40 is about: providing a strong simple boat that will work offshore.
For someone with your money challenges due to exchange a key take away point is that an unbundled approach is generally cheeper than a bundled one and that you get to manage how your money is spent instead of handing over a higher price to the builder and dealer and then hoping that they will spend it on things that will make your experience better, rather than just pocketing it as profit.
On the fridge: No she does not come with one installed, but adding one will be easy since she will have a well insulated box, spare breakers, and spare inlets on the sea chest. This is a core A40 principle: simple to build, easy to customize.
Thank you for all the responses, please don’t feel you need to reply every time I leave a comment, you may find it a bit tiresome as I can be a bit long winded at times. Suppose there is a pun in there somewhere. We won’t labour the fridge matter, a cold beer and well stocked meet supply while cruising may not be a priority for most sailors, but for this one it is even more important than a hot shower. I’d rather you answer the next question but before I put it to you, consider the following. It is easy to put the phrase adventure cruising out there. While I have no doubt you know exactly what it means I would like to perhaps see it defined. Over here sailors don’t go out when the wind is below 20 knots, that would be a waste of time, in these conditions they will rather motor to a destination. My introduction to sailing occurred in 30 knot wind with gusts of over 40 in substantial seas. Your boat could, for its lifespan be subjected to this kind of weather on good days but mostly a bit more severe. Here is the question. While I will be searching your website for actual weather conditions the Adventure 40 is designed for, it will be our primary consideration and this will include sail selection (which I know you have mentioned, thanks for that), rigging etc. For information and btw, our course boat is a Muira 29 (too small) and a Holiday 34 (soon to be experienced).
The A40 will be a great boat for regular high wind sailing. If it were me, for that kind of sailing, I would set her up as a cutter and probably add roller furling to the staysail. Put two reefs in the main, set up the runners, and unroll the staysail and you have a bomb proof “go-to-hell-rig”.
Also the hull, being better built than most production boats, will stand up to that kind of beating for years.
I believe, if you really want education on offshore passage making and the boats/gear/techniques to do it in/with, you are in the best place on the internet.
As to refrigeration, I suspect it will be easy to come by in the after-market entities that John alluded to.
Dick Stevenson, s/v Alchemy
Good idea with the unbundling, as long as there is a viable option to pay for handholding/test. However, I am not so sure about moving the entire A40 book behind pay Wall.
This site/A40 book is the most persuasive sales pitch ever made which reaches out to a global community (I am from sweden and before I found this page I had nerver dreamd of owning anything but a older Orust build Sailboat). After reading the a40 book it was quite obvious how much great information there is here and the decesion to sign up was a no brainer. Would I have Done the same if it requrired me paying before I got hooked? Maybee maybee not. But it is certanly worth thinking about (maybee atleast leave a few chapters free as a hook for new potential buyers).
Since I have very little experience when it comes to offshore sailing i never comment so I also just want to take this opportunity to thank you and all the experienced commentators for sharing so much wisdom on this site!
Thanks for being a member.
You are right, getting the mix between free and premium content right to maximize membership sign-up is really hard. We do a lot of traffic measurement to try and get a handle on this, but in the end it comes down to try it and see. Right now the A40 intro chapter is free to view. We will need to monitor how this works and fine tune how many chapters are free.
The bottom line is that right now we are only just making it financially, and need to double our membership from current levels to remain viable in the long run. And our testing has confirmed with certainty that the only way to get new readers to sign up is to put something they want behind the paywall.
Appeals and other methods just don’t work. For example, about six months ago we sent an appeal to all those signed up for the A40 to join. Only one out of over 200 did!
Perhaps you could “trial” putting subsequent A40 chapters in the free portion as, for lack of a better term, bait for the rest. In other words, make Chapter 1, perhaps expanded on to reiterate the rationale for the project as it has developed after reader input, always free. Make Chapter 2 free after a couple of months, and then Chapter 3 and so on. Draw the line where you like, and perhaps salt the mix with “teaser” updates that are very brief, but which show the whole project approaching physical reality.
An example of this is Robert Perry’s recent months of Facebook posts showing the rather slow, but meticulous, build of four identical ocean cruisers in carbon fibre based on one of his designs for an evidently wealthy client. As a designer, he is unsurpassed in many minds, but he freely admits that hanging out in a boat factory watching his drawing turn into beautiful hulls has been a revelation to him…he’s had to have most of it explained to him and, subsequently, to his FB audience. Imagine how the punters feel seeing many photos of CF layout from a male mold! I have no doubt that there are similarities between Perry’s enthusiastic “journey of discovery” and the A40 process detailed here….and I bet that process is compelling enough to garner more memberships if managed carefully.
One of the things I really appreciate about the A40 is a designer who has actually been to sea and built a boat. I’ve been on some Perry designs that I suspect he would have drawn differently if he sailed some distance in it. Theory and practice are two different things.
Successful designers give their clients what they think they want (whether it works or not!) Bob Perry is a great artist— one of the best in the business, but like most yacht designers his background is an apprenticeship at the drafting table, not several years as a delivery skipper crossing oceans (as should be required by anybody calling themselves a yacht designer. )
The custom Perry 59 I once sailed up from Panama is a good example of satisfying the customer while ignoring the needs of the ocean and the crew. The owner is 6’6, and he told Bob he wanted a “man-sized boat.” So Bob drew a 40′ boat interior with every dimension simply expanded in size. When pounding to weather it was almost impossible to remain seated on the toilet long enough to complete your business because the compartment was nearly 6′ x 6′, the head was mounted the conventional (wrong) direction facing inward, and there was absolutely nothing to hang on to or brace yourself with. Not a pretty picture—. LOL
“Tack, tack! I need to use the head”
Wander around in the basketball-court sized salon of one of the currently fashionable deck salon designs and imagine yourself grabbing for a handhold (what handhold?) as the boat falls sideways off a Gulf Stream wave and you will agree that Perry is not the only designer guilty of giving the public what it wants!
Hi Richard and Dave,
I agree completely. In fact I wrote about that here (see #3). Bottom line, one of the most important talents required to be a truly great offshore boat designer is being able to say no to the client and still stay in business: think Steve Dashew and Jim McCurdy.
That’s pretty much what we do: experiment constantly with the mix of free and paid to see what works best to get more members. Having said that, the more we test the more we prove that the more we lock down the more members we get.
The other issue in all of this is all of this messing around with what is and is not free and all the other tuning of our marketing and positioning is hugely time consuming, to he point that at the moment I am spending more time on that stuff than on creating content, not a good situation.
Consider my comments more in the spirit of “allegedly helpful suggestions”, then, as I trust you know your business and your results to date better than I could. Still, it has to be a fine line. It reminds me of a common complaint of my musician friends, who are expected to pay for either nothing or peanuts because so many will, as they start out, happily play for free.
Yup, good point on the damage that “playing for free” does. Professional photographers have been absolutely slaughtered by this.
Having said that, I think that the market, after its initial fascination with free, is beginning to understand that free is often work exactly what you paid for it.
Would you consider giving the owners manual away for free?
You make a great argument for unbundling services as a way of controlling costs, pointing to technology sales (especially enterprise tech sales) as a comparison.
Another trend in providing support, which goes hand in hand with the unbundling, is community driven support (stackoverflow.com being the prime example, but others include magento and SugarCRM).
Since so much work has already gone into creating a community around the A40, it seems like a natural step once they are available. Making the owner’s manual freely available will increase the number of people who can help provide support beyond just those who have seriously considered making the purchase.
Yes, I think that making the owner’s manual freely available might be a very good idea.
This is the right way to go for sure. I’m not sure that you want to totally discourage tire kickers, as they may convert to customers, but you will certainly need to limit what exposure they get to the A40 for free simply to keep the costs sensible. It may be possible to construct a 3D ‘fly through’ model from the drawings that could be posted in the intro section on AAC (i.e. free) that would help folks over the line or at least get a real sense of the principles in action. I would also think about a tiered ‘paid for’ approach so there is, for example, a simple 1/2 day viewing compared to a more extensive trial, such as the 2 days that you suggest. Someone else commented that this could be viewed as a short charter; not a bad idea. I am still very engaged in the whole A40 project and would certainly be prepared to pay for an opportunity to ‘feel’ the A40 underway both sail and motor. As an engineer and offshore sailor i really respect the core design principles and i am still committed to eventually acquiring one.
I think your tiered suggestion is a very good one. In fact that highlights a big advantage in the bundled model: the buyer and seller’s interests are aligned because the more services the seller provides, the more revenue they make, and this in turn allows the buyer to pick from a menu and get their specific needs met.
Contrast this with the bundled approach in which there is a built in conflict of interest: the seller trying to do the least amount, to maximize profit on a fixed revenue, and the buyer trying to get the most for what they paid.
I think the price of membership is exceedingly reasonable; however, some may feel otherwise. Would it be practical and possible to use a system similar to that used by Google books? Random sections from chapters available for preview but full access only by membership. Indeed, I subscribed after reading some of your preview material and posts and was very pleasantly surprised and thought membership only made more sense!
We already do that, in effect, in that we have implemented Google first click free. Also, over 60% or our archive content is outside the paywall as well as over 50% of our new content.
You win! I don’t want to miss that next Adventure 40 post.
Just subscribed…now over to put my name on that A40 list. 😉
Thanks, John, we appreciate it.
I think the entire A 40 concept is remarkably good and unbundling makes complete business sense for both the customer and builder. I also will be totally willing to pay fairly for the hand holding required if I ever get as far as purchasing an A 40. As a longtime construction contractor, I am often mind boggled by the spoiled idea of expecting services for free, especially by people well heeled enough to buy the product without even flinching. I don’t accept-or expect-that from anyone. The price of membership is so low that I do not understand how anyone who is interested enough to read it would not subscribe, if only to support your very excellent site. I would pay double, even though I am so (happily) tied up in my Alaska gold exploration business that I may not get to go long distance cruising again-except vicariously-for a long time. I really appreciate all of the great thought and experience reflected in this site, it is by far the best on any subject that I have found.
Thanks so much for a very kind and encouraging comment.
Back to the conversation about getting some meaningful data on the numbers who might actually buy an Adventure 40…
I’m told that back before 2007 there was a high-end sport fishing manufacturer in North Carolina that had a waiting list a mile long. Apparently an informal “secondary market” emerged where down payments associated with the building schedule were bought and sold.
I’m just wondering if putting this type of thing in place might not help produce some early indicators about the true market potential of the Adventure 40, capture some initial working capital, and create a dynamic source of information about the boat and the project.
So let’s say you establish a down payment scheme that is associated to the delivery sequence of the boats. The down payment itself is a low percentage of the ultimate cost of the boat ($200,000) and is ultimately applicable as a credit against the cost of the boat (like any down payment).
Each of these “down payment credit notes” has a place in the build sequence… A40 #1, A40 #2, A40 #3, etc. All credit notes are initially sold at the same face value and in the sequence at which they are paid. So a sale goes on, and if you are one of the first in, you get a lower sequence number, but everyone pays the same amount.
(As the credits are applicable to the ultimate cost of the boat, they could be well justified to be applied project management operations, most of which will occur prior to the first boat being delivered. Thus setting the down payment rate might be based on what the project team thinks project SG&A will be.)
But then the fun starts. The project team puts up a platform (web site) where credit note holders can trade on the value of their place in the build sequence.
Simply requiring a downpayment will obviously give you good read on interest in the project. But then allowing and/or facilitating the trading of downpayment credits will give you a reading on the intensity of interest in relation to other factors – like how well the design is being received, if folks like the prototype, etc.
One of the core principles of the A40 project is that the boat is being delivered to the buyer for $200,000. If a buyer is willing to pay another a buyer a premium to get higher into the build schedule, the A40 project still meets its commitment to a static price, but the more anxious buyer gets his boat sooner. Plus, the information provided by the market price of these credit notes will be a dynamic indicator of how the project is proceeding.
Maybe there’s a lawyer out there who can let us know if this runs afoul of any SEC type rules. But I don’t see how it would. This is not unlike how crowdfunding sites work.
Anyway, just a thought on a Sunday morning.
Please, let’s not get the lawyers involved. They’ll figure a way that requires filing a prospectus, FOI request, waivers and releases and all manner of nonsensical paperwork that supposedly protects someone but doesn’t really.
I think that sounds like a great idea! Certainly something for the building company to look at.
One reason a buyer may wish to sell an early position is simply their own timing requirements. For instance- ideally, I’d like to buy one in five years, but I want to support the project and help create a viable production backlog. So as the production run grows, I may be very willing to trade/sell my early slot for a later one, especially if I can leverage some value for it.
…with an unbundled product, what commits the builder to quality in materials and workmanship?
I guess I don’t really see a connection between un-bundling and quality control. The boat will still have warranty and it will in the builder’s interest to make sure that there are as few warranty claims as possible.
More on QC for the A40 in this post.
When I first read this post about unbundling I was not a member so I couldn’t add a comment. I just joined now (oddly enough the propeller article pushed me over the edge) and going back to comment I see that others have expressed some similar thoughts – concern that too many potential buyers wouldn’t get drawn into the concept and never “buy in”.
It’s a tricky game – one that has no clear right answer — How much to give away for free, how to draw in more subscribers without working for nothing.
I have a casual interest in the A40 – the ideas behind it and the process are educational, but I doubt I’ll buy/build one. My personal goals for cruising are 15+yrs in the future, and I’ve always been partial to catamarans (maybe a sacrilegious statement here?). I confident that this site will help me learn more as I muck around Mahone Bay in my little CS 30 and help me with my future goals.
You are right, the decision to put the A40 Online Book behind the Paywall was anything but black and white. At he moment it seems to be working out OK, bit if it turns out to be wrong, we can always change back.
Nothing against multihulls here at AAC, in fact I think they can make very cool offshore cruising boats—lots of good ways to go to sea.
I look forward to working my way through the copious information on this site. Should make for good winter reading.
On the topic of subscriptions I had another thought. It seems that Apple has found a very lucrative market selling songs and apps for $1-2. Access to the ACC site is by yearly subscription – which seems like a longer term commitment even when it’s far cheaper in the long run.
I wonder if you may attract more income by offering a 1-2 week access for $5, or by offering up individual books at $2 each? – Something small and immediate that gets people a step closer into the fold and also provides a bit of short term $.
In the end I think you’ll find many people just won’t pay because they don’t understand the value of the information is greater than it’s cost, and they don’t understand that the free info they find everywhere is mostly poor quality.
Interesting idea, but the admin and support would eat us alive in comparison to the revenue. It’s bad enough at $20.00. In fact we may need to put the price up to cover these costs.
I think that establishing a secondary market for the A40 could backfire as it might encourage speculators. Morgan Cars in the UK have had real problems in the past with this. I cannot come up with a motivation for someone who has an earlier position in the production schedule to sell their position, other than to make a profit. This would seem to be against the concept of the A40, getting people out cruising on a good boat for a reasonable/affordable price. A secondary market might actually work against this.
That’s a good point. Still, I think the secondary market idea is an interesting one, perhaps coupled with a Kickstarter campaign. But, as you say, we would want to make sure that we did not inadvertently set up something that could be abused.
How about the ultimate unbundle? I just watched Pam Wall’s walk through tour of her Freya 39 with Andy Schell. Pam and her husband bought their boat as a hull only kit. They built the interior and the cabin top. West sail and many others offered similar owner finished kits. Some companies sold just the hull, some sold hull and cabin top, and some sold a sailing boat, but with basically no interior.
I can see why production boat builders don’t do this anymore. Every bare hull sold at $100k is a lost potential sail of $300k. Also, every sold hull is a potential second hand buyer calling the factory to complain, not knowing the boats was owner finished. There are quite a few designers selling designs for fiberglass, aluminum, and steel hulls, but I can’t find anyone that makes a completed bare hull for sale.
I can also guess John’s criticism about they practice for a buyer, do you want to build or sail?
I am still curious that no one has bought an old set of molds and started cranking out solid hulls for the home builder. Could there be so little profit in basic hulls for a home builder?
Would be interesting to hear why owner completed hulls wouldn’t be viable for the Adventure 40, and if not, why. I guess I am thinking I missed out on the 70’s when these things were still possible. Who would have thought, we have iphones and the internet now, but in many ways, the 1970’s was a peak of sorts.
While I agree that unfinished hulls are an interesting idea, we won’t be offering the A40 in that configuration for just the reasons you state. Also the whole idea of the A40 is a sail away boat, not a multi year building project. Offering the boat as a bare hull would muddy the waters in way that would be bad for the brand. Also, I would bet that a person who bought an A40 as a bare hull would spend as much or even more money finishing it than buying a sail away would cost—the efficiencies generated by mass production of identical boats are that large.