For example, in this month’s SuperYachtWorld (the global magazine for superyacht owners) there is an article about boatbuilders Feadship.
In 1978 they built the yacht Al Riyadh for the Saudi royal family. At 65m it remained for decades the world’s largest motoryacht. And when Steve Jobs wanted a superyacht, he selected Feadship to build it for him.
Does The Escher Cycle help to account for their success?
The brand comprises two shipyards, ‘Koninklijke de Vries Scheepsbouw’ and ‘Royal van Lent’, plus naval architects ‘de Voogt’ who create the designs.
On page 20 of this month’s Superyacht World director Henk de Vries tells us clearly what in his opinion makes the difference: “Each yard builds three to four boats a year, and the learning curve we go through is much quicker than our competitors. For the past decade we’ve been sharing ideas, innovations and experiences.”
A quick google search brings us one more key piece of information: “Like a number of other builders who have traditionally built only custom yachts to a particular client’s order, Feadship has branched out with semi-custom offerings.”
Here is how The Escher Cycle helps us make sense of this.
First, Feadship operates in the ‘top half’ of the yacht building industry: custom and semi-custom yachts.
De Voogt design the boats and Koninklijke de Vries and Royal van Lent build/refit/maintain them (with “a healthy rivalry between the two yards”).
We can map this like so:
Second, the fact that “Each yard builds three to four boats a year, and the learning curve we go through is much quicker than our competitors” means two things:
- the high number of builds per year means they have more experience of how to build a luxury yacht better, faster and at lower unit cost.
- the additional experience also feeds into the design process. It ensures the company has more opportunities to create the future designs for the most demanding customers. (It also means that those designs are less likely to experience surprises during the build process, which means on-time delivery for customers, and reliable profit margins for Feadship.)
As de Vries explicitly points out, Feadship actively works to make this learning happen: “For the past decade we’ve been sharing ideas, innovations and experiences.”
We can add these learning conversations as arrows on the diagram:
The third piece of the jigsaw puzzle is that Feadship also offers semi-custom yachts.
This means that [some of] the learnings from building superyachts can be transferred into more affordable designs. These semi-custom yachts not only have the cachet of the luxury brand but also the potential to have better features than their rivals. (In The Escher Cycle this is called this the ‘Teflon Effect’.)
For the business, these semi-custom yachts provide a second income stream (which brings greater financial stability). They also bring greater volume, which brings deeper brand presence, economies of scale (in the overhead costs of management, HR, and finance, for example), and more opportunities for learning. This helps the build/refit/maintain part of the business run more efficiently.
If we add arrows for these two improvements/learnings, the final picture of Fead’s success looks like this:
Feadship has two shipyards, which work in “healthy rivalry”. They actively share learnings between the yards and with the naval architects. They leverage their design and build expertise into semi-custom yachts, which in turn benefit the custom builds.
They have built themselves an Escher Cycle (see chapter 8).
The result is:
- lower unit costs
- greater brand presence
- better designs, and
- the rate of learning they need to stay ahead of their competitors
And all of this ensures that when the next Saudi royal family, Steve Jobs, or whoever else wants to build the world’s greatest superyacht, Feadship is the company they will turn to.