“We better pay attention to our future because that is where we are going to spend the rest of our lives.” — Anonymous
I received great feedback from my previous blog post on the future of boating (if you haven’t read it yet, do so before reading this!).
In this new post (Part II), we’ll start by reviewing the different technologies that will change the way we do business. This is totally fascinating so please take a few minutes to read it, as it will totally change our industry forever.
What follows are three game-changing technologies that will disrupt the boating industry:
#1) 3D Printing
3D printing is about to completely transform the way things are manufactured but as well distributed. Traditional manufacturing takes material away and creates a desired object. 3D printing (also called additive manufacturing) is computer generated and makes an object layer by layer.
This fabrication process saves massive amounts of material but as well removes error and reduces time and production cost. Because it is processed digitally, it is influenced by Moores Law so we can naturally anticipate a phenomenal growth in the coming months and years. I researched online and found houses, cars, and even small boats that have already been 3D printed.
Look at this 3D printed boat.
Yes, the boat looks small and you might think that there is nothing to worry about. But because it is a digitized manufacturing process, production will double every year while production cost will keep reducing exponentially.
A company called Carbon 3D recently discovered a way to print 25 to 100 times faster compared to traditional 3D printing.
The technology is called Continuous Liquid Interface Production. It uses a photosensitive resin that reacts to UV light and oxygen. It creates smooth objects in seconds while they emerge from a container of liquid. Sounds like science fiction and Terminator 2 right? We now live in a world where science fiction is becoming reality.
#2) artificial Intelligence
Artificial intelligence (AI) is the intelligence exhibited by machines or software.
Before starting to understand artificial Intelligence, you have to understand the power of the human brain. A human brain is capable of processing 10 quadrillion cps (calculation per second). To give you a better idea of what it represents, it is 10 million of billions of calculations per second. To make AI popular, we would need to build computers capable of this type of computation for a reasonable cost (USD $1000).
First question: Are we currently capable of building a computer with that much power?
Yes, the current world’s fastest computer Tianhe-2 can operate at a staggering 34 quadrillion cps. The only problem is that it costs over $390 million to build, takes 720 square meters of space and uses 24 megawatts of power when our brain only uses 20 watts.
Tianhe 2 super computer
Second question: How far are we from building them?
Today with $1,000 you can purchase a computer capable of cps equivalent to the brain of a mouse or at a thousandth of human level. It might not sound much to you but if you consider that we were at a trillionth of human level in 1985, a billionth in 1995 and a millionth in 2005, you can appreciate the progress made so far.
We can expect to reach that level of performance in the next 10 to 15 years which means that AI will growth exponentially in the next 10 years to become part of our everyday life. At the same time, intelligent computer systems are progressively starting to take more and more place in our society.
Siri is now accessible on millions of phones worldwide.
Tesla Motors is moving closer to having self-driving vehicles via sensors, cameras and promises 90% of autonomous driving capability in their new cars in 2015.
Every new year, billions of dollars are spent on AI research and massive progress is made daily.
Companies like Google’s DeepMind, Vicarious, and IBM Watson are bringing the AI revolution one step closer by even opening their cloud AI to businesses.
AI will affect every aspect of our life and our businesses. Do not underestimate it. Every single part of your business from sales, marketing, production, management, administration will depend on it.
Just like phone booths were replaced by mobile phones, like road maps were replaced by GPS, many new jobs and applications are progressively being replaced by AI.
#3) Virtual Reality
We started playing with virtual reality headsets in 2008. I remember the first time I tried Oculus Rift years ago. I was virtually immersed in the cockpit of a boat. I reached with my hands to touch the hull. It was a bit pixelated but it still felt so real. I knew we were onto something that could change the Industry forever.
In 2013, we decided to finally sell the technology to our clients. We partnered with Oculus Rift who sent us a few development kits and we did a few projects for Boeing, Lurssen and Sea Ray. A few months after, Facebook acquired Oculus for 2 billion which started a race to the commercialization of many new virtual reality devices. Just about one year later, dozens of tech companies are commercializing virtual reality headsets. LG is even giving away a headset for free with the purchase of one of their new smartphone.
Companies like Facebook/Oculus VR, Microsoft’s Hololens, Google/Magic Leap, High Fidelity, OTOY, Leap Motion – are investing billions to develop highly disruptive virtual reality applications.
Right now I can take my VR One headset. Put my iPhone 6 in it. Press one button and visit an entire boat virtually. I can also take a virtual sea trial using a 360 video and my headset from the comfort of my home! See sample we made here.
In a couple of years from now, imagine being able to go boating with your friend, sitting on an accelerometer chair with wind, sound and maybe even smell (Digital scent technology that already exist).
2 months ago at the Dubai show I tried the Dominator VR experience. I could literally walk through the boat on a tread mill.
Ray Kurzweil says that in the next 16 years, humans will not be able to tell the difference between virtual and real experiences.
So here is my question to you.
Would you still buy a boat if you could get the exact same sensation virtually from the comfort of your home with no cost of ownership?
3D Printing, VR or Ai are just a few of the new technologies that will change our lives and businesses.
Many other new technologies such as Robotics, Big Data, Nanotechnologies, Augmented Reality will be part of those massive changes as well.
An Industry Due For Change
I know I have been depicting quite a dark picture of the future of boating so far. No need to be depressed.
People have been on the water for thousands of years and will still remain on it (both for commercial and pleasure purposes). It is just that the current pleasure boat business model has been around since the 50s and is clearly due for change.
The business model is still the same and the actors of this market are getting older.
In the following graph from NMMA, we can see that the median age of the average boater went from pretty much 40 to over 55 in the last 15 years.
In a market that is stagnating and aging, what can we do to change it?
I have heard many times that the best way to predict the future is to create it. So we decided to launch a completely new and innovative platform for boat sales.Today’s consumers are better informed, less loyal but as well more exigent. Multiple studies have confirmed that 70% of the buying decisions are now made before talking to a salesperson.
The selling process has moved from self-promotion to education.
Buying patterns have changed and selling the information (education) is becoming AS IMPORTANT as selling the product.The companies who will win will be the ones that are able to teach and earn their trust before prospects even talk to their sales persons. The sale is now made before and not after meeting the sales person.
For those reasons, we developed a platform called Boat Show Avenue to purchase boats based on this new reality. So many actions needed to be changed to satisfy the consumer’s new needs:
• Removing the buying pressure
• Making the boat shopping experience easy and fun
• Facilitating the boat buying experience by offering virtual reality visits
• Visiting any boats from the comfort of their home 24/7
• Reducing companies overhead (boat show, sales staff, moorage, etc)
• Offering the possibility to the consumer to buy direct
• Showcasing boats to an audience of buyers worldwide
• Comparing hundreds of boats under the same platform
In our second phase of development, we plan to even go further with:
• Implementing algorithms to track your movements and detect likes and dislikes of any boats and recommending feedback to the builder
• Accessing fleets of boats via virtual reality headsets
• Offering virtual sea trial with 360 video connected to virtual reality headsets
• Connecting consumers with AI virtual brokers that can help you contact manufacturing, write offers, or set up financing
What Can You Do To Change
There is a big difference between what science knows and what businesses do. The business that will survive are the ones who are willing to change.
The problem is the majority of people and businesses never want to change.
There are 3 main reasons businesses are not willing to change.
1) Our natural tendency to stay in our comfort zone
Successful people or companies understand that by doing 10% of the things that 90% of the people are not comfortable doing, they get the best results.
2) The sunk cost bias
Sunk Cost bias can be explained by our inability to make a rational decision due to influence created by strong emotional, financial or material investment.
One of the best examples of the Sunk Cost Bias is the Concorde investment by Air France & British Airways. It has been proven to be economically non-viable but because they sank over 1 billion into the program they decided to keep running it and of course it ended up with a crash and became an even worse economic disaster.
3) The decision fatigue
We live in a society where the preponderance of choices is becoming overwhelming. How can we identify what must be changed when we are advertised 2000 to 5000 times a day?We have lost our ability to filter what is important and what isn’t. Psychologists call this “Decision Fatigue”.
The more choices we are forced to make and the more the quality of our decisions deteriorate. Those difficulties in taking decisions are not solely due to the abundance of choices but as well at how we are constantly influenced into making those decisions (information and opinion overload as well as a hyper connection).
Here’s a list of 5 recommendations to start following now:
Everyday life items are being digitized one after the other, from books to ebooks, CDs to iTunes, DVDs to Netflix, direct mail to email, outside stores to online stores, etc…
Material items are not the only things that are being digitized. Services, experiences, and processes are too. Financial transactions, currency, communication, education, entertainment, advertising and sales are step by step being digitized.
The boating industry is quite slow to adapt but will have no other choice than to do it.
You need to understand the reasons and consequences of this digitalization so you can adapt and strive in today’s digital world. Look at the Tesla website. I noticed 3 main things on the Tesla home page:
• A red Tesla logo on the top left of the page
• A beautiful photo of the Tesla Model S in the background
• A red ORDER button near the center of the homepage
While the company logo and background picture might sound normal to you, you might be surprised to see an order button to purchase a 120k luxury product on the homepage of a car manufacturing website!
Well, not so surprising anymore, as we live in a world where everything is being done online. So how digitized is your business? Are you advertising online or still mainly in magazines and boat shows. Will you start selling boats online like Tesla or keep doing it the old way?
#2 Be Creative & Combine Ideas
If you want advantages in life and business, develop the ability to come up with great ideas. You don’t need to be a genius to come up with a great idea. Sometimes the best ideas aren’t born from a genuine idea, they are born from a combination of 2 existing ideas.
Let me show you a couple of examples:
Meat has being consumed by man for thousands of years. Bread has been made for over 2000 years but sandwiches were invented in 1762.
Ice cream was first made over 3000 years ago. Waffles over a thousand years ago but coned ice cream was invented early 1900.
A client, Aspen Power Catamaran, brilliantly combined the idea of an Indonesian proa with a power boat catamaran. They were able to build a motor catamaran powered by a single engine.
They grew their company successfully for the last few years and got several awards including an NMMA innovation award.
#3 reduce Expenses
They are 2 ways you can grow a business:
1) Make more sales.
2) Reduce expenses.
They are tons of business books and resources on how to increase sales but usually very little on how to reduce expenses. The businesses of the future understand that the best way to grow a business is to reduce expenses. New successful companies are demonetizing entire industries.
Airbnb sold more nights than the biggest hotel group in the world (Accor Group) who already own a staggering 3700 hotels, 480.000 rooms in 92 countries worldwide.
Contrary to Accor Group, Airbnb doesn’t pay any property tax, maintenance or cleaning fees. They just get a percentage on every night booked by clients on their website.
Some people might say “But in the boating industry, you need lots of money and overhead to operate”. Let me prove to you that you are wrong.
A friend and client of mine, Trevor Brice from North Pacific Yachts started his own yacht building company. He has sold over 100 yachts. He has always worked from home. He has no employees, commercial offices, inventories, service centre etc… and probably the lowest overhead of any other yacht companies out there.
I have been onboard many of his yachts and spoken with a few of his clients that love the product and the brand. This example demonstrates how you can brilliantly succeed in today’s’ economy by lowering your expenses.
#4 Remove The Middle Man
Have you ever heard of the term ‘dis-intermediation’? I know, it sounds a bit fancy. It’s defined as the process of removing intermediaries in a supply chain. In a much simpler way, it is called “cutting out the middlemen”
Instead of using traditional distribution channels, (with intermediates such as a distributor, wholesaler, broker, or agent), more and more companies are trying to deal directly with consumers.
If you look at a platform like Alibaba which is one of the largest retailers worldwide, it just simplifies the supply chain by connecting manufacturers directly to buyers.
It removes several entities from the supply chain!
The typical dealership structure is becoming more challenging to maintain and develop. Some boat brands have done very well in the last few years by selling direct.
In the case of 3D printing, we can even see a system between the supplier and the buyer directly that even removes the manufacturer from the supply chain!
Many new startups don’t really make anything. Instead of cutting out the middlemen, they’ve virtually become them, connecting people with specific genres of services or merchants.
Successful examples in our industry include startup Boatyard.co who connect marine service providers to boat owners or BoatSetter who is a rental intermediary platform between boaters and boat owners.
#5 Invest In Yourself
Let me share with you one of my favorite quotes.
“Your level of success will rarely exceed your level of personal development because success is not something you attract but the person you become.” — Jim Rohn
There is a huge correlation between personal development and success. If you want to succeed in today’s environment you need to focus on 3 essential things:
Your mindset. Your knowledge. And your Actions.
In this case, I am going to only discuss knowledge.
The current school system is based on principles established hundreds of years ago when getting a degree allowed you to use your knowledge learned at school during your entire career. Today, the average worker changes career several times and rarely starts working in a field they graduated in. All this social phenomenon should push us to learn more.
Relying on your school education, university degree or current knowledge to be able to work and progress in today’s’ society is not applicable anymore. Consequently, you must self-educate yourself and develop the habits of learning new skills and knowledge through your entire life.
Just like human progress, human knowledge is exponentially growing. A futurist called Buckminster Fuller came up with the theory of the “Knowledge Doubling Curve”; he noticed that until 1900 human knowledge doubled approximately every century. By 1950, knowledge was doubling every 25 years. Today, human knowledge is doubling every 13 months.
And according to IBM, the build out of the “internet of things” and development of nano-technologies will lead to the doubling of knowledge every 12 hours. So by the time you go back home and the time you come back to work in the morning, the sum of human knowledge ever discovered will have doubled!!
So, develop the habit of learning and become an avid student. Just like there are no shortcuts to experience, there are no shortcuts to knowledge.
Learning is one of my priorities in life. I consider having a productive day based on the amount of things that I learn rather than the amount of things that I do.
I hope that these 2 articles will give you a better idea of what the future of boating will look like.
And I would like to finish by sharing with you 2 very important points. Either you do or don’t believe my predictions, there are two things that you absolutely need to take into consideration:
Firstly, technological innovation can give you significant advantages in life and business but will never replace our need for emotional connection and physical contacts.
Today more than ever, people feel the need for emotional connections and physical contacts.
Cultivate those skills and you will always have an advantage in business. Make the effort to send a thank you card rather than an email. Take the time to meet somebody physically rather than making a phone call. Show and share your appreciation verbally. Practice the magic touch to bond with coworkers or clients (gentle touch between elbow to shoulder).
The more we evolve into a digital era, the more we will feel the need for real connections.
Secondly, remember that the best way to predict the future is by focusing on the things that are not changing, instead of trying to guess the things that will change.
I learned this by reading a story of Jeff Bezoz, the CEO of Amazon which is today one of the biggest company in the world. Jeff Bezos recommends that instead of focusing on the things that might change, focus on the things that will not change.
For instance, Bezos who is the head of Amazon bet on the fact that customers would always be attracted by the best customer experience, the lowest price and a convenient shopping experience. This method of thinking helped him grow Amazon from a living room operation to a billion dollar business.
I hope that you liked these 2 blog posts about the future of boating. Please share below your thoughts on how you think our industry will evolve in the next coming years.
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To your success!
— Vincent Finetti
Founder & Instructor
Yacht Sales Academy