Randy French Story
http://www.surftech.com/
In a recent issue of Transworld Surf, a trade magazine, Randy French was listed as the third-most-powerful person in the $4.5 billion industry. But if there were a list of the most controversial players in the field, French would probably come in No. 1.
Through his Santa Cruz, Calif., company, Surftech, French is dragging surfboard manufacturing into the age of mass customization. For decades boards have been built by hand, shaped by craftsmen who cut and sanded blocks of polyurethane foam into the desired forms (longer for more stability, shorter for more maneuverability), then coated them with fiberglass and resin. Unfortunately, even the best shapers often couldn't predict how their boards would perform in the water. French, 53, who shaped boards in this way for nearly 35 years, had a rule: "I always got to ride the board first," he says. "One time I rode a board that I liked so much, I gave the friend who'd ordered it his money back. I think he's still mad at me."
French kept the board because he knew how hard it would be to replicate what he had done: create what surfers call a "magic" board. But in surfing, as in so much else, technology is changing everything. Last year French's company produced 50,000 "magic" boards. By using computer-aided-design programs, injection-molded technology, and a factory in Thailand, Surftech takes proven boards from the best shapers in the world and mass-produces them in a stronger, lighter material. Some 47 legendary shapers now sell their best designs through Surftech in exchange for licensing fees of about $35 to $50 for each board. With sales of more than $17 million in 2004, Surftech ranks as the largest manufacturer of surfboards in the world.
The company's modern approach has put it in the cross hairs of opponents. Critics say that by designing a board on a computer and producing it from plastic in an overseas factory, Surftech is destroying the soul of the sport. Purists also say that in the water, Surftech products lack the feel of traditional polyurethane boards; the new ones are stiffer and more buoyant (though they also don't break as often).
Two recent developments should help Surftech's image. Earlier this year six-time world champion Kelly Slater lent his name to a series of Surftech boards. Slater, one of the most famous surfers in the world, has publicly expressed frustration with the fragility of polyurethane boards (he once broke three in a session in Indonesia), though he still rides them in contests. Perhaps more important, a top professional surfer recently used a Surftech board in competition. At the 2004 Quiksilver Pro contest in Australia, former world champion Sunny Garcia became the first pro to win a heat on a Surftech. He didn't win the event, but the surf press and online chat groups took note of his equipment.
French got the idea of mass-producing surfboards in 1985, when he crafted a sailboard for a top-ranked windsurfer. Applying his knowledge of surfboard design, French built a smaller, lighter sailboard. The model performed well on the World Cup Tour and brought French an avalanche of orders. He knew he couldn't fulfill them if he had to produce the boards by hand. Another local business, Santa Cruz Yachts, was using composite plastics to mass-produce fast, ultralight boats (one of which set the speed record for sailing between Los Angeles and Honolulu). French realized he could employ a similar process for sailboards. Within a few years, he had two factories operating at full capacity to produce his sailboard designs. (Windsurfers, less tradition-bound than surfers, didn't gripe about mass-produced boards.)
Despite that success, French yearned to return to making surfboards. He also believed that the technology he had pioneered with sailboards could cross over to surfboard manufacturing. In 1989 he approached Cobra International, a manufacturer of plastic products in Thailand. In 1990, Surftech's first year in business, the company manufactured just 50 surfboards. For 2005 it is on track to make 75,000.
Surftech works with independent shapers, each of whom provides a master board--usually based on a popular existing model. (For more on how the manufacturing process works, see the box above.) The Surftech versions are called Tuflite--the brand name of the plastic from which they're made--but are sold under the name of the designer on whose model they are based. They cost substantially more--a six-foot Town & Country Tuflite model will cost about $600, compared with $500 for the foam version. But surfers are willing to pay a premium for what many consider a more consistent and durable product.
Not everyone agrees. "Board manufacturing has always been a hand-shaped industry," says Matt Biolas, head of surfboard manufacturer Lost and one of French's most vocal critics. "Surftech just softens the aura of what we have as a surfing culture, a sport based on individualism." Another critic is Gordon "Grubby" Clark, owner of Clark Foam, which makes the polyurethane blanks used by most U.S. surfboard shapers. Clark has written about the damage that mass-production can have on domestic surfboard sales, but he declined to comment for this article.
Criticism of Surftech's Thailand factory and allegations in the surfing community that the company was using sweatshop labor reached a peak in 2003. "The surfboard business is like junior high," says French in his Santa Cruz office, where an artist's model is posed behind his desk, making an "up yours" gesture familiar to Italians. "A lot of people don't function using sophisticated, refined business tactics. It's more like 'If you try to get in our business, we're going to kick your ass.'"
In response, French invited surf writers to visit the Cobra facility in Chonburi province, Thailand. A reporter from Surfing magazine wrote that he found a modern factory in an immaculate industrial complex located near companies such as Mitsubishi, Sony, and Toyota. In addition, French boasted that Cobra employees are unionized, earn above-average wages for the region, and receive health care, transportation, and subsidized meals.
At the outset, the shapers working with Surftech--almost all sole proprietors or small businesses--were concerned that their Tuflite models might cannibalize their higher-margin custom business. Their experience has been just the opposite, says Channel Islands Surfboards founder Al Merrick. "I think it has markedly helped sales in our core product," he says. "Tuflite is just 5% of sales, but it puts more product in the water, and more people see the logo. You get a customer that tries the Tuflite, and it's restricted in size by molds, so they may want to move to a custom board."
Another gripe is the difference in feel between the two types of boards. Yet, says French, "naysayers in the 1960s said the same thing when boards changed from balsa to foam." He points to sports such as auto racing and tennis, both of which saw enhanced performance after adopting composite materials.
At a recent trade show in San Diego, the Surftech booth was a hive of activity. The company introduced four new Kelly Slater signature models (different sizes for taller or shorter surfers, and for varying wave conditions) based on masters produced by Al Merrick, Surfing magazine's shaper of the year. There was also Robert August, star of the 1960s movie Endless Summer, who has models in the Surftech line. In the middle of it all, French moved easily among the celebrities of the surf world and the potential customers who asked him about the boards.
When asked what he's proudest of, French doesn't hesitate. "Last year we paid out a million dollars in royalties," he says. "Before Surftech, the pioneers of surfboard shaping had to be chained to their sheds to make any money. And shaping boards is hard work. Now these guys have something of a golden parachute, and surfers get to enjoy the legacy of their perfected shapes." If that makes French the most controversial person in the sport, he can deal with it.
Saturday, February 21, 2009
Friday, February 20, 2009
Device From 1980s Makes Phishing Attacks Impossible
Kendal Halt Story
http://www.vasco.com/
A recent survey estimated that almost two million Internet users in the U.S. inadvertently gave personal information to cyberscammers last year. Increasingly the weapon of choice is a "phishing" expedition, in which a con artist poses as your bank and asks you to go online and confirm details such as your account number or password. Such attacks cost credit card companies and banks some $1.2 billion in 2004. But a small technology firm came up with a security solution to stop phishing attacks years ago. Only recently, says Kendall Hunt, the founder and CEO of Vasco Security, based in Oakbrook, Ill., has the market come around to the login security pass that Vasco has been selling for nearly a decade.
Launched out of Hunt's basement in 1984, Vasco is now among the hottest firms in the data-security industry offering computer security solutions. Its projected revenues for 2005 will climb 74%, to $52 million, while profits are on track to rise 20%, to $33 million. Vasco's stock, which trades on Nasdaq, has surged nearly 400% over the previous 12 months, to nearly $11.
The anti-phishing technology Vasco developed is called two-way authentication. It uses a small token, called Digipass, that shows a six-digit number that changes every 30 seconds. To log on to a bank's website, a user must enter the number from the token. A server at the bank or credit card company keeps track of which numbers are currently valid for which users. In other words, no Digipass, no access.
To be sure, Digipass hardly boasts cutting-edge technology. Similar security products are sold by larger firms, such as RSA in Bedford, Mass., which has 65% of the market. And as Internet security rivals contend, two-way authentication is "only a small piece of the security pie," says Brad Miller, CEO of Milford, Conn.-based Perimeter, which provides data-security services ranging from firewalls to spam to phishing prevention and content filtering. What sets Digipass apart is its price, about $7 a user on average, compared with $10 or more for rival models. It's a no-frills version, safer than passwords alone and good for tasks such as online banking and e-mail. Whether this technology will finally end phishing attacks is yet to be seen.
During the past decade most of Vasco's clients were overseas. (It does business in about 80 countries.) "A lot of U.S. companies simply weren't that interested in data security," says Hunt, 60. "I guess the market wasn't quite ready." But with phishing and other online fraud on the rise, the market here is more than ready now.
http://www.vasco.com/
A recent survey estimated that almost two million Internet users in the U.S. inadvertently gave personal information to cyberscammers last year. Increasingly the weapon of choice is a "phishing" expedition, in which a con artist poses as your bank and asks you to go online and confirm details such as your account number or password. Such attacks cost credit card companies and banks some $1.2 billion in 2004. But a small technology firm came up with a security solution to stop phishing attacks years ago. Only recently, says Kendall Hunt, the founder and CEO of Vasco Security, based in Oakbrook, Ill., has the market come around to the login security pass that Vasco has been selling for nearly a decade.
Launched out of Hunt's basement in 1984, Vasco is now among the hottest firms in the data-security industry offering computer security solutions. Its projected revenues for 2005 will climb 74%, to $52 million, while profits are on track to rise 20%, to $33 million. Vasco's stock, which trades on Nasdaq, has surged nearly 400% over the previous 12 months, to nearly $11.
The anti-phishing technology Vasco developed is called two-way authentication. It uses a small token, called Digipass, that shows a six-digit number that changes every 30 seconds. To log on to a bank's website, a user must enter the number from the token. A server at the bank or credit card company keeps track of which numbers are currently valid for which users. In other words, no Digipass, no access.
To be sure, Digipass hardly boasts cutting-edge technology. Similar security products are sold by larger firms, such as RSA in Bedford, Mass., which has 65% of the market. And as Internet security rivals contend, two-way authentication is "only a small piece of the security pie," says Brad Miller, CEO of Milford, Conn.-based Perimeter, which provides data-security services ranging from firewalls to spam to phishing prevention and content filtering. What sets Digipass apart is its price, about $7 a user on average, compared with $10 or more for rival models. It's a no-frills version, safer than passwords alone and good for tasks such as online banking and e-mail. Whether this technology will finally end phishing attacks is yet to be seen.
During the past decade most of Vasco's clients were overseas. (It does business in about 80 countries.) "A lot of U.S. companies simply weren't that interested in data security," says Hunt, 60. "I guess the market wasn't quite ready." But with phishing and other online fraud on the rise, the market here is more than ready now.
Thursday, February 19, 2009
Bad Fishing Trip Makes A Florida Man Rich
George Goodwin Story
http://www.heartpine.com
Great business ideas often come from strange places, but no one expects to find one at the bottom of a river. Yet that's what happened to George Goodwin. When he went fishing in shallow Florida riverbeds during the early 1970s, Goodwin often caught more logs than bass. "I used to snag my lures on them," he remembers. Most fishermen would have cursed their luck; Goodwin, now 59, reeled in a multi-million-dollar business instead.
What Goodwin found are known as deadhead logs. In the 1800s loggers felled centuries-old cypress and pine throughout the South for use in construction. They would float the logs downstream to the nearest mill, but often the heaviest logs--those filled with the most resin--sank to the muddy riverbed. At a time when the South was blanketed by tens of millions of acres of untouched forest, it wasn't much of a loss. But today overharvesting has reduced that old-growth forest to just 5,000 to 10,000 acres, most of it protected, and the logs once lost to the rivers have newfound value.
As Goodwin got interested in logs, he discovered that, although the outside decomposes after being underwater for nearly a century, resin keeps the inside perfectly preserved. Prized for flooring and paneling, this interior wood is known as "heart pine" and "heart cypress."
Goodwin spent $105,500--his entire savings--to purchase 20 acres of land in Micanopy, Fla., ten miles south of Gainesville, and move an old sawmill to the property, where he and his wife, Carol, the company's 59-year-old vice president, live and work. They pay divers $2 to $3 per board foot of wood in the logs recovered from Florida riverbeds. Then they clean up the logs and mill them into flooring that sells for $5 to $20 a foot. Carol estimates that the demand for antique wood has risen tenfold in the past decade, thanks to the housing boom and changing tastes. That has sent the company's annual revenue on a steady climb, from $5,000 in 1977 to $3 million in 2004.
By last year their company had 25 employees and enough cash flow to take out a $140,000 loan to build a 15,000-square-foot warehouse for the nearly two million board feet of wood it has in inventory. That saved a lot of aggravation when several hurricanes tore through the area just months after the building had been completed. (The Goodwins were unaffected by Katrina and Wilma.) Had the logs been soaked, the company would have had to spend months drying them out.
Goodwin Heart Pine has supplied flooring for the homes of celebrities such as Paul McCartney, Morgan Freeman, and Ted Turner. The wood is also popular for historical sites, including the Ernest Hemingway Home and Museum in Key West, Fla. Six years ago the termite-infested flooring in the 150-year-old structure needed replacing. "Goodwin flooring was the closest to what Hemingway had originally," says Hemingway Home event director Linda Mendez.
The growing popularity of antique wood, however, has more would-be entrepreneurs flocking to the business, not all with the best intentions. "There's a joke in the South that anyone with a pickup sells a little bit of heart pine," says Carol Goodwin. "But you never know what you're getting." Because there are no up-to-date guidelines on what constitutes heart pine--the most recent standards were published in 1924--unwitting customers may purchase heart pine from younger trees, which is not nearly as dense and durable as what the Goodwins sell.
When a hurricane knocks down any of the remaining old-growth forest--as happened last year--the Goodwins often buy that wood. They also buy and resell antique heart pine salvaged from old barns and buildings. Branching out from flooring, George and a local cabinet-maker have teamed up to craft and sell a line of wood furniture. In July the Goodwins opened a showroom in Palm Coast, Fla., for both their furniture and flooring.
While George Goodwin jokes that "cashing the checks" is one of his favorite parts of the business, he loves the other parts more than he lets on. "If George had $1 million in the bank, he'd just go and buy more wood," says Carol, laughing.
http://www.heartpine.com
Great business ideas often come from strange places, but no one expects to find one at the bottom of a river. Yet that's what happened to George Goodwin. When he went fishing in shallow Florida riverbeds during the early 1970s, Goodwin often caught more logs than bass. "I used to snag my lures on them," he remembers. Most fishermen would have cursed their luck; Goodwin, now 59, reeled in a multi-million-dollar business instead.
What Goodwin found are known as deadhead logs. In the 1800s loggers felled centuries-old cypress and pine throughout the South for use in construction. They would float the logs downstream to the nearest mill, but often the heaviest logs--those filled with the most resin--sank to the muddy riverbed. At a time when the South was blanketed by tens of millions of acres of untouched forest, it wasn't much of a loss. But today overharvesting has reduced that old-growth forest to just 5,000 to 10,000 acres, most of it protected, and the logs once lost to the rivers have newfound value.
As Goodwin got interested in logs, he discovered that, although the outside decomposes after being underwater for nearly a century, resin keeps the inside perfectly preserved. Prized for flooring and paneling, this interior wood is known as "heart pine" and "heart cypress."
Goodwin spent $105,500--his entire savings--to purchase 20 acres of land in Micanopy, Fla., ten miles south of Gainesville, and move an old sawmill to the property, where he and his wife, Carol, the company's 59-year-old vice president, live and work. They pay divers $2 to $3 per board foot of wood in the logs recovered from Florida riverbeds. Then they clean up the logs and mill them into flooring that sells for $5 to $20 a foot. Carol estimates that the demand for antique wood has risen tenfold in the past decade, thanks to the housing boom and changing tastes. That has sent the company's annual revenue on a steady climb, from $5,000 in 1977 to $3 million in 2004.
By last year their company had 25 employees and enough cash flow to take out a $140,000 loan to build a 15,000-square-foot warehouse for the nearly two million board feet of wood it has in inventory. That saved a lot of aggravation when several hurricanes tore through the area just months after the building had been completed. (The Goodwins were unaffected by Katrina and Wilma.) Had the logs been soaked, the company would have had to spend months drying them out.
Goodwin Heart Pine has supplied flooring for the homes of celebrities such as Paul McCartney, Morgan Freeman, and Ted Turner. The wood is also popular for historical sites, including the Ernest Hemingway Home and Museum in Key West, Fla. Six years ago the termite-infested flooring in the 150-year-old structure needed replacing. "Goodwin flooring was the closest to what Hemingway had originally," says Hemingway Home event director Linda Mendez.
The growing popularity of antique wood, however, has more would-be entrepreneurs flocking to the business, not all with the best intentions. "There's a joke in the South that anyone with a pickup sells a little bit of heart pine," says Carol Goodwin. "But you never know what you're getting." Because there are no up-to-date guidelines on what constitutes heart pine--the most recent standards were published in 1924--unwitting customers may purchase heart pine from younger trees, which is not nearly as dense and durable as what the Goodwins sell.
When a hurricane knocks down any of the remaining old-growth forest--as happened last year--the Goodwins often buy that wood. They also buy and resell antique heart pine salvaged from old barns and buildings. Branching out from flooring, George and a local cabinet-maker have teamed up to craft and sell a line of wood furniture. In July the Goodwins opened a showroom in Palm Coast, Fla., for both their furniture and flooring.
While George Goodwin jokes that "cashing the checks" is one of his favorite parts of the business, he loves the other parts more than he lets on. "If George had $1 million in the bank, he'd just go and buy more wood," says Carol, laughing.
Wednesday, February 18, 2009
Cistercian Monks' Jesus Ink Business
Father Bernard McCoy Story
http://lasermonks.com/
Like many entrepreneurs, Father Bernard McCoy loves to talk about his industry. But as a Cistercian monk, he has a time frame longer than most.
"Nine hundred years ago my brothers were making ink, making their own paper, and copying manuscripts," says McCoy. "We were the original social entrepreneurs. We were the first multinationals."
McCoy is CEO of LaserMonks.com, an Internet retailer that sells discounted printer cartridges and other office supplies. Customers include individuals and churches, along with giants such as Morgan Stanley (Research) and the U.S. Forest Service. It's a lucrative business. Sales have risen from $2,000 in 2002, the company's first full year of operation, to around $2.5 million in 2005.
LaserMonks.com is a for-profit subsidiary of the Cistercian Abbey of Our Lady of Spring Bank, an eight-monk monastery in the hills of Monroe County, 90 miles northwest of Madison. The Spring Bank brethren wear robes, sing Gregorian chants, and eat their meals in silence.
"We're monks," McCoy says cheerfully. "We do monk things."
Like all Roman Catholic monasteries, the abbey is responsible for its own upkeep, receiving no financial support from the Vatican. Hence LaserMonks.com. Father McCoy estimates that it costs around $150,000 to maintain the abbey and its 500 acres of grounds. The rest of the company's profits help support charities that range from a camp for kids with HIV to a Buddhist orphanage in Tibet.
The idea for LaserMonks.com came to Father McCoy one day when his printer ran out of ink. He shopped around for a new ink cartridge but couldn't find one that was reasonably priced. That's because printer manufacturers make most of their money by imposing stratospheric markups on printing supplies. As a result thousands of small companies were cropping up all over the Internet, selling reconditioned ink and toner cartridges. Despite legal challenges from the established printer manufacturers, the industry is now firmly established.
In the beginning LaserMonks.com consisted of a few monks sitting around with black powder and empty plastic cartridges, filling a few orders a day. Today the monks say they have served more than 50,000 customers, and process 200 to 300 daily orders for a broad range of school and office supplies.
The website also accepts online prayer requests.
And in a fiercely competitive commodity industry, McCoy and his brethren have thrived on the sheer novelty of their story. The company spends relatively little money on advertising, benefiting instead from media coverage and McCoy's frequent speaking engagements around the country.
Father McCoy recently started selling printers, cables, and surge protectors, and plans to offer a full line of office electronics later this year. He expects LaserMonks.com's 2006 sales to exceed $5 million.
http://lasermonks.com/
Like many entrepreneurs, Father Bernard McCoy loves to talk about his industry. But as a Cistercian monk, he has a time frame longer than most.
"Nine hundred years ago my brothers were making ink, making their own paper, and copying manuscripts," says McCoy. "We were the original social entrepreneurs. We were the first multinationals."
McCoy is CEO of LaserMonks.com, an Internet retailer that sells discounted printer cartridges and other office supplies. Customers include individuals and churches, along with giants such as Morgan Stanley (Research) and the U.S. Forest Service. It's a lucrative business. Sales have risen from $2,000 in 2002, the company's first full year of operation, to around $2.5 million in 2005.
LaserMonks.com is a for-profit subsidiary of the Cistercian Abbey of Our Lady of Spring Bank, an eight-monk monastery in the hills of Monroe County, 90 miles northwest of Madison. The Spring Bank brethren wear robes, sing Gregorian chants, and eat their meals in silence.
"We're monks," McCoy says cheerfully. "We do monk things."
Like all Roman Catholic monasteries, the abbey is responsible for its own upkeep, receiving no financial support from the Vatican. Hence LaserMonks.com. Father McCoy estimates that it costs around $150,000 to maintain the abbey and its 500 acres of grounds. The rest of the company's profits help support charities that range from a camp for kids with HIV to a Buddhist orphanage in Tibet.
The idea for LaserMonks.com came to Father McCoy one day when his printer ran out of ink. He shopped around for a new ink cartridge but couldn't find one that was reasonably priced. That's because printer manufacturers make most of their money by imposing stratospheric markups on printing supplies. As a result thousands of small companies were cropping up all over the Internet, selling reconditioned ink and toner cartridges. Despite legal challenges from the established printer manufacturers, the industry is now firmly established.
In the beginning LaserMonks.com consisted of a few monks sitting around with black powder and empty plastic cartridges, filling a few orders a day. Today the monks say they have served more than 50,000 customers, and process 200 to 300 daily orders for a broad range of school and office supplies.
The website also accepts online prayer requests.
And in a fiercely competitive commodity industry, McCoy and his brethren have thrived on the sheer novelty of their story. The company spends relatively little money on advertising, benefiting instead from media coverage and McCoy's frequent speaking engagements around the country.
Father McCoy recently started selling printers, cables, and surge protectors, and plans to offer a full line of office electronics later this year. He expects LaserMonks.com's 2006 sales to exceed $5 million.
Tuesday, February 17, 2009
How To Make $25000 A Month Using Sail As Billboard
Troy Sears Story
http://www.nextlevelsailing.com/
After 10 years managing his family's pest-control business, Troy Sears was antsy. An avid sailor and San Diego native, he had always dreamed of ditching the family trade, buying a few boats, and putting them out to charter. But Hydricks Pest Control provided a steady life, and Sears, the father of three, feared the risks that would come with branching out on his own. "I was making a good living for my family, and that was a lot to give up," says Sears. "But I just didn't enjoy what I was doing day in and day out."
A member of San Diego Yacht Club, Sears knew the two prized 80-foot America's Cup boats docked there would be perfect for the kind of venture he had in mind, but he also knew getting his hands on them would be tough. "It's like a golfer who dreams of playing Augusta," Sears says of Abracadabra, a former America's Cup competitor, and Stars and Stripes, which won the Cup in 1988. "No one could get on these boats."
The boats are tailor-made for specific waters, and until they are retired, remain in the hands of America's Cup teams. Design and construction reportedly runs upwards of $10 million.
But when the Swiss won the Cup in 2003, the race would shift back to Europe, and Sears knew the boats would finally be put on the market. Once the race moves to new waters, their value drops, and the vessels are usually sold off to the highest bidder. Recognizing the opportunity, Sears sold his pest-control company, bought both boats, and founded Next Level Sailing.
Sears says "a lot of crazy, fortuitous things" in his life contributed to his success with the new business. Thanks to a three-year stint on Wall Street after college, he has maintained relationships with a few New York investors, one of whom signed on as a silent partner when Sears needed help financing the purchase of the boats. Though Sears won't disclose the sticker price, estimates run from $300,000 to $500,000 each.
Initially, he was only able to take out groups of six or less until he got the boats approved for passenger excursions by the U.S. Coast Guard -- something that had never been done on a modern carbon-fiber vessel. But the head usher at Sears' church happened to be a retired Coast Guard captain who used to train inspectors, and he helped get the ball rolling on the inspection process.
"It was expensive and a lot of trips to Washington," Sears says. But as a sailing enthusiast, he admits testing and examining the boats so intricately was an education in the technical aspects of the craft that he had never considered before. "Pursuing this was fascinating," Sears says. "I enjoyed putting all the time and energy into it."
After nearly a year of refinements, the boats were approved to take on more than six passengers at a time, and Next Level was finally poised to make some real money. Sears now takes up to 20 passengers per sail -- and, yes, everyone gets a chance to steer the boat out on the water.
At $99 per person for a two-hour sail (or $1,980 to rent the whole boat for four hours, for up to 20 passengers), it's not exactly a bargain. But Sears says his upscale recreational outfit works because it's unique and makes use of San Diego's recently revamped waterfront, including a string of new hotels, a floating museum, and the San Diego Padres new baseball stadium, Petco Park. His clientele is split between tourists and executives, who often book a sail as a team-building exercise for groups of employees. "It's cheaper than a round of golf," Sears says.
But even in the early days, when he could only take out a handful of passengers, Next Level found itself in the national spotlight, garnering months of free publicity that proved to be a boon. Producers of MTV's long-running reality show, The Real World, approached him about having its San Diego cast work for Next Level during the taping of the show last year.
Friends warned Sears about the show's reputation for housing unmotivated party-animal types, but with his company still in a fledgling stage, he figured the publicity benefits outweighed the risks. "It's a numbers game," says Sears, who was banking on the producers' promise of millions of viewers each week.
The viewers turned out: The Real World: San Diego landed in the Nielsen Top 10 for cable programming each week it was on air, and despite a near-mutiny among the cast, which debated quitting at one point, Next Level was flooded with inquiries. After the first few episodes aired in January, 2004, Sears had requests for reservations from 43 U.S. states and eight foreign countries.
With two 11-story masts, the multimillion-dollar yachts are attention-getters in and of themselves. When the aircraft carrier SS Reagan docked in San Diego this summer, Sears wanted to personally welcome the Navy fleet, so he made a 35x63-foot American flag and hung it between the masts. CNN featured the flag and an interview with Sears in their coverage of the event. "Sometimes just doing a good thing generates publicity," he says.
CBS uses blimp shots of the boats on the way to commercial breaks during broadcasts of San Diego Chargers football games, and the Travel Channel shot an entire segment on the boats as part of the special series, Maria Shriver's California. "She thought the boats would be a great way to show San Diego," says Sears, who says he did nothing to solicit the network's business.
Aside from passenger fees, the boats also generate about $25,000 a month from ads on their massive sails. Sears is working to obtain a liquor license for the boats and has plans to acquire Abracadabra's sister ship.
With little traditional marketing, Next Level's growth has come largely through word-of-mouth, which Sears attributes to the one thing he demands of his 25-member crew -- "make sure every passenger has a good time." For Sears, it has been a high-seas adventure.
http://www.nextlevelsailing.com/
After 10 years managing his family's pest-control business, Troy Sears was antsy. An avid sailor and San Diego native, he had always dreamed of ditching the family trade, buying a few boats, and putting them out to charter. But Hydricks Pest Control provided a steady life, and Sears, the father of three, feared the risks that would come with branching out on his own. "I was making a good living for my family, and that was a lot to give up," says Sears. "But I just didn't enjoy what I was doing day in and day out."
A member of San Diego Yacht Club, Sears knew the two prized 80-foot America's Cup boats docked there would be perfect for the kind of venture he had in mind, but he also knew getting his hands on them would be tough. "It's like a golfer who dreams of playing Augusta," Sears says of Abracadabra, a former America's Cup competitor, and Stars and Stripes, which won the Cup in 1988. "No one could get on these boats."
The boats are tailor-made for specific waters, and until they are retired, remain in the hands of America's Cup teams. Design and construction reportedly runs upwards of $10 million.
But when the Swiss won the Cup in 2003, the race would shift back to Europe, and Sears knew the boats would finally be put on the market. Once the race moves to new waters, their value drops, and the vessels are usually sold off to the highest bidder. Recognizing the opportunity, Sears sold his pest-control company, bought both boats, and founded Next Level Sailing.
Sears says "a lot of crazy, fortuitous things" in his life contributed to his success with the new business. Thanks to a three-year stint on Wall Street after college, he has maintained relationships with a few New York investors, one of whom signed on as a silent partner when Sears needed help financing the purchase of the boats. Though Sears won't disclose the sticker price, estimates run from $300,000 to $500,000 each.
Initially, he was only able to take out groups of six or less until he got the boats approved for passenger excursions by the U.S. Coast Guard -- something that had never been done on a modern carbon-fiber vessel. But the head usher at Sears' church happened to be a retired Coast Guard captain who used to train inspectors, and he helped get the ball rolling on the inspection process.
"It was expensive and a lot of trips to Washington," Sears says. But as a sailing enthusiast, he admits testing and examining the boats so intricately was an education in the technical aspects of the craft that he had never considered before. "Pursuing this was fascinating," Sears says. "I enjoyed putting all the time and energy into it."
After nearly a year of refinements, the boats were approved to take on more than six passengers at a time, and Next Level was finally poised to make some real money. Sears now takes up to 20 passengers per sail -- and, yes, everyone gets a chance to steer the boat out on the water.
At $99 per person for a two-hour sail (or $1,980 to rent the whole boat for four hours, for up to 20 passengers), it's not exactly a bargain. But Sears says his upscale recreational outfit works because it's unique and makes use of San Diego's recently revamped waterfront, including a string of new hotels, a floating museum, and the San Diego Padres new baseball stadium, Petco Park. His clientele is split between tourists and executives, who often book a sail as a team-building exercise for groups of employees. "It's cheaper than a round of golf," Sears says.
But even in the early days, when he could only take out a handful of passengers, Next Level found itself in the national spotlight, garnering months of free publicity that proved to be a boon. Producers of MTV's long-running reality show, The Real World, approached him about having its San Diego cast work for Next Level during the taping of the show last year.
Friends warned Sears about the show's reputation for housing unmotivated party-animal types, but with his company still in a fledgling stage, he figured the publicity benefits outweighed the risks. "It's a numbers game," says Sears, who was banking on the producers' promise of millions of viewers each week.
The viewers turned out: The Real World: San Diego landed in the Nielsen Top 10 for cable programming each week it was on air, and despite a near-mutiny among the cast, which debated quitting at one point, Next Level was flooded with inquiries. After the first few episodes aired in January, 2004, Sears had requests for reservations from 43 U.S. states and eight foreign countries.
With two 11-story masts, the multimillion-dollar yachts are attention-getters in and of themselves. When the aircraft carrier SS Reagan docked in San Diego this summer, Sears wanted to personally welcome the Navy fleet, so he made a 35x63-foot American flag and hung it between the masts. CNN featured the flag and an interview with Sears in their coverage of the event. "Sometimes just doing a good thing generates publicity," he says.
CBS uses blimp shots of the boats on the way to commercial breaks during broadcasts of San Diego Chargers football games, and the Travel Channel shot an entire segment on the boats as part of the special series, Maria Shriver's California. "She thought the boats would be a great way to show San Diego," says Sears, who says he did nothing to solicit the network's business.
Aside from passenger fees, the boats also generate about $25,000 a month from ads on their massive sails. Sears is working to obtain a liquor license for the boats and has plans to acquire Abracadabra's sister ship.
With little traditional marketing, Next Level's growth has come largely through word-of-mouth, which Sears attributes to the one thing he demands of his 25-member crew -- "make sure every passenger has a good time." For Sears, it has been a high-seas adventure.
Monday, February 16, 2009
Making Millions Cleaning Other People Garages
Marc Shuman Story
http://www.garagetek.com/
GarageTek was a no-brainer when Shuman founded it in 2000. He got the idea when he and his father, with whom he outfitted department store interiors, designed and built a set of slotted wall panels with moveable shelves for a retail client. When several of his employees began using the panel systems to organize their own garages and basements, Shuman realized he had a potential hit on his hands. And the timing seemed perfect: The housing market was heating up, garages were getting bigger, and closet organizers were all the rage. Shuman decided to sell the display business and open GarageTek.
Rather than simply selling the panels at home-improvement stores, Shuman decided to build a garage-makeover business. GarageTek would perform in-home consultations, then design and install the systems--complete with shelves, cabinets, bike racks, and work benches. Homeowners, Shuman figured, were likely to pay a premium for the service. The biggest risk was competition. After all, anyone could have the same idea. But if Shuman could establish a foothold in markets around the country, GarageTek had a better chance of survival. Franchising seemed like the best way to pull off such an ambitious expansion.
In early 2001, Shuman placed an ad soliciting franchisees in The Wall Street Journal, and phone calls poured in. His attorney advised him to choose carefully. But Shuman, eager to get started, approved anyone with a business background, a $25,000 franchise fee, and $200,000--which, according to Shuman's calculations, was enough to purchase supplies, buy newspaper ads, and turn a profit within 18 months. Each franchise would pay GarageTek 8 percent of annual sales, a portion of which would help fund national advertising campaigns. In exchange, they received three days of basic training and a manual written by Shuman. "If they had the money and they had a strong sales and marketing background, we felt they were qualified," Shuman says.
At first, everything seemed to go according to plan. In the first half of 2001, GarageTek franchises opened in Connecticut, New Jersey, and New York. By 2003, 57 franchises had sprung up in 33 states, and annual revenue at the corporate office was on track to top $12 million. That summer, however, Shuman began to realize that while many franchises were thriving, 15 were struggling.
He and his team moved quickly to correct their mistakes. The first step was to create more stringent criteria for new franchisees. To pass the initial screening, candidates now need a net worth of $1 million, with at least $250,000 in liquid assets; their proposed territories must boast at least 250,000 single-family homes, occupied by owners. They're also required to run the franchises themselves. GarageTek also decided to administer a 350-question personality test, looking for candidates with traits similar to GarageTek's top performers, who tend to be enterprising and not overly accommodating--a sign of independence. Finally, all candidates fly to New York to meet with Shuman and his corporate team. To identify problems early on, he installed software that enables him to track each franchise's financial performance.
So far, the strategy seems to be working. In 2005, GarageTek's sales jumped 33 percent, to $20 million, even though the company had 21 fewer franchises than in 2004. Now that he has a streamlined system in place, Shuman plans to add 55 new franchises during the next few years, for a total of 100. But he admits that he has more to learn. "We're not, by any stretch, done," he says.
http://www.garagetek.com/
GarageTek was a no-brainer when Shuman founded it in 2000. He got the idea when he and his father, with whom he outfitted department store interiors, designed and built a set of slotted wall panels with moveable shelves for a retail client. When several of his employees began using the panel systems to organize their own garages and basements, Shuman realized he had a potential hit on his hands. And the timing seemed perfect: The housing market was heating up, garages were getting bigger, and closet organizers were all the rage. Shuman decided to sell the display business and open GarageTek.
Rather than simply selling the panels at home-improvement stores, Shuman decided to build a garage-makeover business. GarageTek would perform in-home consultations, then design and install the systems--complete with shelves, cabinets, bike racks, and work benches. Homeowners, Shuman figured, were likely to pay a premium for the service. The biggest risk was competition. After all, anyone could have the same idea. But if Shuman could establish a foothold in markets around the country, GarageTek had a better chance of survival. Franchising seemed like the best way to pull off such an ambitious expansion.
In early 2001, Shuman placed an ad soliciting franchisees in The Wall Street Journal, and phone calls poured in. His attorney advised him to choose carefully. But Shuman, eager to get started, approved anyone with a business background, a $25,000 franchise fee, and $200,000--which, according to Shuman's calculations, was enough to purchase supplies, buy newspaper ads, and turn a profit within 18 months. Each franchise would pay GarageTek 8 percent of annual sales, a portion of which would help fund national advertising campaigns. In exchange, they received three days of basic training and a manual written by Shuman. "If they had the money and they had a strong sales and marketing background, we felt they were qualified," Shuman says.
At first, everything seemed to go according to plan. In the first half of 2001, GarageTek franchises opened in Connecticut, New Jersey, and New York. By 2003, 57 franchises had sprung up in 33 states, and annual revenue at the corporate office was on track to top $12 million. That summer, however, Shuman began to realize that while many franchises were thriving, 15 were struggling.
He and his team moved quickly to correct their mistakes. The first step was to create more stringent criteria for new franchisees. To pass the initial screening, candidates now need a net worth of $1 million, with at least $250,000 in liquid assets; their proposed territories must boast at least 250,000 single-family homes, occupied by owners. They're also required to run the franchises themselves. GarageTek also decided to administer a 350-question personality test, looking for candidates with traits similar to GarageTek's top performers, who tend to be enterprising and not overly accommodating--a sign of independence. Finally, all candidates fly to New York to meet with Shuman and his corporate team. To identify problems early on, he installed software that enables him to track each franchise's financial performance.
So far, the strategy seems to be working. In 2005, GarageTek's sales jumped 33 percent, to $20 million, even though the company had 21 fewer franchises than in 2004. Now that he has a streamlined system in place, Shuman plans to add 55 new franchises during the next few years, for a total of 100. But he admits that he has more to learn. "We're not, by any stretch, done," he says.
Sunday, February 15, 2009
Lost Election Makes Man A Multimillionaire
John Zogby Story
http://www.zogby.com/
In 1981, John Zogby, a 33-year-old history professor and founder of the Utica Citizen's Lobby, decided to add another credential to his resume: mayor of Utica, N.Y. Then a curious thing happened: He lost, but he knew beforehand how much he would lose by. He and his students had conducted a preelection poll that showed him getting 14% to 15% of the vote. And that, says Zogby, is exactly what he got.
As a smart guy who knows how to capitalize on success, Zogby gave up office-seeking and turned to polling. In the years following, Zogby International grew to an organization with 52 full-time employees, $5 million in annual sales, political and corporate clients of all stripes, offices in Washington, D.C., and Utica, and an international reputation fostered by the founder's knack for spotting opportunities, taking risks, and calling the cards right.
Zogby International is currently polling the 2004 presidential race for NBC News and Reuters and conducting statewide and national polls for the Miami Herald, the Toledo Blade, and the Atlanta Journal-Constitution.
Here is his story:
I truly backed into this business. I was a history professor and a liberal political activist. All that merged when I ran for mayor in the Democratic primary in Utica, where I was born and raised. After my loss there, I went to work for a national Arab American organization with my brother Jim. A number of us had some philosophical differences with the chairman of the board and were fired on September 10, 1984. Two days later, on September 12, I became an independent political and fundraising consultant with one client, a Forbes 400-type character from Boston named Sam Phillips. Ten weeks later, Sam Phillips dropped dead at the age of 54.
These setbacks reinforced what I had learned at home from my father, a Lebanese immigrant who worked with his brothers in their grocery store 7 a.m. to 7 p.m., six days of the week. He taught me that a man can do anything he wants to do. He also taught me that if the customer wants it, find a way to do it.
To survive I had to branch out into retail advertising, public relations, and nonprofit agencies. Then, in 1987, I made a momentous decision, though it may not sound like it. I decided to poll the households of Watertown, N.Y. The Army had decided to expand Fort Drum, moving in the 10th Mountain Division, which meant bringing 10,000 personnel and 20,000 civilians into a declining region. It was the most dramatic story in upstate New York in the 1980s.
The Fort Drum steering council, a public-private consortium, underwrote quarterly household surveys. We wanted to know whether the newcomers were voters, had ever marched in a demonstration. When they shopped, did they look for certain brands of cereal, soft drinks, detergent -- or did they buy on sale? I began doing studies for housing developers, shopping malls. There were plans to build townhouses, but that was a complete bomb. Our surveys showed that when people move to a place where there is a lot of land, they want a house with a yard.
I couldn't compete in Washington in the '80s, so I took the blue highways approach, going into local communities that had never done polling and capturing the imagination of the local media.
The next benchmark came in 1991 when we decided to launch -- out of pocket -- a statewide Zogby poll. Well, I say I funded the poll out of pocket, but I didn't have anything in my pocket. There was only one other statewide poll in the Empire State. The timing was perfect. Our poll in early December showed that President Bush would defeat Mario Cuomo, then governor, even in New York State. The poll came out the day before Cuomo's plane would fly him from Albany to New Hampshire to file. Cuomo decided not to go.
In 1996, after we got all the political primaries right, I got a call from Reuters. We went on to produce the Reuters-Zogby Poll. Now the whole world is watching, and we get the Clinton-Dole race right, with the least margin of error. We said Clinton would win by 8.1%. The actual margin ended up at 8.4.
In polling, you need to ask the kinds of questions that will determine what is important to people. In 2000, we were polling 10 states and the nation as a whole for Reuters and NBC. Whenever Gore would go up in the national, he'd go down in the battleground states. Same with Bush. Tim Russert asked me, "How can this be?" I had headquarters add a new question to the poll: You live in the Land of Oz. There is an election for mayor between the Tin Man, who has all brains and no heart, and the Scarecrow, who is all heart and no brains. The next day, Gore and Bush were almost tied. But, more importantly, the Tin Man and Scarecrow were tied, 46.2 to 46.2. That told me everything.
Most polling is still done by phone, but it's now taking a lot more phone calls to get a sample. The Do Not Call Registry doesn't affect us, but it's indirectly killing us. It emboldens people to hang up. For the presidential race we're going to do all 50 states interactively. By getting e-mail addresses of a representative sample of the electorate, we can invite 50,000 to 100,000 people to participate at once. In seconds, we can have 1,000 responses.
I want to be the Gallup of my generation, the household word, the generic. I have plans to make this a $40 million corporation, partly by pursuing licensing agreements with partners around the world. We're getting ready to poll Swaziland. We've completed Botswana and Malawi. Most of these polls are corporate-sponsored. We want to know the investment climate, the path to reform.
Once I was a very liberal professor activist, and I saw a political career for myself. But I managed to be cured of that disease.
http://www.zogby.com/
In 1981, John Zogby, a 33-year-old history professor and founder of the Utica Citizen's Lobby, decided to add another credential to his resume: mayor of Utica, N.Y. Then a curious thing happened: He lost, but he knew beforehand how much he would lose by. He and his students had conducted a preelection poll that showed him getting 14% to 15% of the vote. And that, says Zogby, is exactly what he got.
As a smart guy who knows how to capitalize on success, Zogby gave up office-seeking and turned to polling. In the years following, Zogby International grew to an organization with 52 full-time employees, $5 million in annual sales, political and corporate clients of all stripes, offices in Washington, D.C., and Utica, and an international reputation fostered by the founder's knack for spotting opportunities, taking risks, and calling the cards right.
Zogby International is currently polling the 2004 presidential race for NBC News and Reuters and conducting statewide and national polls for the Miami Herald, the Toledo Blade, and the Atlanta Journal-Constitution.
Here is his story:
I truly backed into this business. I was a history professor and a liberal political activist. All that merged when I ran for mayor in the Democratic primary in Utica, where I was born and raised. After my loss there, I went to work for a national Arab American organization with my brother Jim. A number of us had some philosophical differences with the chairman of the board and were fired on September 10, 1984. Two days later, on September 12, I became an independent political and fundraising consultant with one client, a Forbes 400-type character from Boston named Sam Phillips. Ten weeks later, Sam Phillips dropped dead at the age of 54.
These setbacks reinforced what I had learned at home from my father, a Lebanese immigrant who worked with his brothers in their grocery store 7 a.m. to 7 p.m., six days of the week. He taught me that a man can do anything he wants to do. He also taught me that if the customer wants it, find a way to do it.
To survive I had to branch out into retail advertising, public relations, and nonprofit agencies. Then, in 1987, I made a momentous decision, though it may not sound like it. I decided to poll the households of Watertown, N.Y. The Army had decided to expand Fort Drum, moving in the 10th Mountain Division, which meant bringing 10,000 personnel and 20,000 civilians into a declining region. It was the most dramatic story in upstate New York in the 1980s.
The Fort Drum steering council, a public-private consortium, underwrote quarterly household surveys. We wanted to know whether the newcomers were voters, had ever marched in a demonstration. When they shopped, did they look for certain brands of cereal, soft drinks, detergent -- or did they buy on sale? I began doing studies for housing developers, shopping malls. There were plans to build townhouses, but that was a complete bomb. Our surveys showed that when people move to a place where there is a lot of land, they want a house with a yard.
I couldn't compete in Washington in the '80s, so I took the blue highways approach, going into local communities that had never done polling and capturing the imagination of the local media.
The next benchmark came in 1991 when we decided to launch -- out of pocket -- a statewide Zogby poll. Well, I say I funded the poll out of pocket, but I didn't have anything in my pocket. There was only one other statewide poll in the Empire State. The timing was perfect. Our poll in early December showed that President Bush would defeat Mario Cuomo, then governor, even in New York State. The poll came out the day before Cuomo's plane would fly him from Albany to New Hampshire to file. Cuomo decided not to go.
In 1996, after we got all the political primaries right, I got a call from Reuters. We went on to produce the Reuters-Zogby Poll. Now the whole world is watching, and we get the Clinton-Dole race right, with the least margin of error. We said Clinton would win by 8.1%. The actual margin ended up at 8.4.
In polling, you need to ask the kinds of questions that will determine what is important to people. In 2000, we were polling 10 states and the nation as a whole for Reuters and NBC. Whenever Gore would go up in the national, he'd go down in the battleground states. Same with Bush. Tim Russert asked me, "How can this be?" I had headquarters add a new question to the poll: You live in the Land of Oz. There is an election for mayor between the Tin Man, who has all brains and no heart, and the Scarecrow, who is all heart and no brains. The next day, Gore and Bush were almost tied. But, more importantly, the Tin Man and Scarecrow were tied, 46.2 to 46.2. That told me everything.
Most polling is still done by phone, but it's now taking a lot more phone calls to get a sample. The Do Not Call Registry doesn't affect us, but it's indirectly killing us. It emboldens people to hang up. For the presidential race we're going to do all 50 states interactively. By getting e-mail addresses of a representative sample of the electorate, we can invite 50,000 to 100,000 people to participate at once. In seconds, we can have 1,000 responses.
I want to be the Gallup of my generation, the household word, the generic. I have plans to make this a $40 million corporation, partly by pursuing licensing agreements with partners around the world. We're getting ready to poll Swaziland. We've completed Botswana and Malawi. Most of these polls are corporate-sponsored. We want to know the investment climate, the path to reform.
Once I was a very liberal professor activist, and I saw a political career for myself. But I managed to be cured of that disease.
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