As an independent crowdfunding adviser I had my eyes open among the hundreds of exhibitors at the 2017 London Boat Show (January 6-15) to find ones operating on a crowd economy/sharing economy business model. This article features three of them, the oldest being twelve years old and the youngest is a brand new company that launched at the show.
Beds on Board is a simple concept to grasp. It’s like Airbnb except all the accommodation is on boats that don’t leave their mooring. Since 2015 it has operated as an online as a peer to peer platform connecting boat owners and accommodation seekers. The average amount of time an owner uses their boat is the equivalent of just six weeks a year, so they are very often vacant though still with on-going costs of a mooring place (usually in a marina) and maintenance. Yachts and motor cruisers not only depreciate, but also cost approximately 10% of their capital value per year to keep and maintain. Beds on Board enables owners to have an income from renting their boats at minimal risk to overnight guests who aren’t going to do any sailing or cruising.
Boat owners with safe, comfortable boats with shore-side access that comply with all local laws and regulations can list their boats for accommodation-only rentals by guests. Guests looking for alternative accommodation and who respect boats and marinas can search for boats to stay aboard and enjoy a novel way to relax at their chosen destination in over 40 countries. Once accommodation seekers sign up on the website, they are able to make bookings after identifying their required date, number of people and a verified payment option. The owner then has 48 hours in which they can veto a booking if they have any reason to.
There are some ground rules to follow (e.g. no parties and anyone not on the booking form not allowed on board), and all guests have to be able to swim. At the end of the booking the owner and guests rate each other to encourage mutual best behaviour.
A company that does rent out privately owned boats for sailing is the brand new Borrow a Boat. At the same time as most boats remain unused for the majority of time, the cost of boat ownership remains prohibitively expensive for the majority of people. Borrow a Boat connects people wanting to enjoy boating with boat owners who welcome a contribution to the cost of ownership. Through working with partners they have standardised requirements for qualifications, experience, insurance, boat safety, and charter contracting. This has made the whole process simpler and more accessible for people wishing to enjoy recreational boating.
The three founding partners all share a passion for boating and have spent much of their lives on the water. They definitely know their bowsprit from a bow thruster and can talk with comforting authority to owners and renters alike.
I’ll talk in greater length about the third exhibitor using a crowd economy business model. Twelve years ago, before any of us had heard of or even imagined going online to share car rides, parking spaces or spare bedrooms with people we don’t know, FlexiSail launched itself as a closed-user group boat sharing business based on the English south coast. I caught up with their Business Development Manager, Susannah Hart, to hear more.
As with all boat charter companies, FlexiSail’s aim is to make recreational boating more affordable and is designed to give a greater number of people an opportunity to get out on the water regularly without actually buying a yacht or motor cruiser. Their key difference is achieved through a boat share membership scheme. As opposed to a traditional boat charter business that offers access to an interchangeable pool of vessels, each boat user commits themselves to just one particular boat from FlexiSail’s fleet. They pay a fixed monthly membership fee determined by the size and how often they wish to use the boat of their choice, and when they have that boat booked out it is exclusively theirs.
Through this method of exclusive access the boat users share some of the ‘pride of ownership’, though without the long-term costs, commitment or worry as FlexiSail completely look after, maintain and manage every boat in the scheme. It is this sense of ‘ownership’ which really sets the FlexiSail model apart from other boat charter initiatives as it helps boat owners trust the boat users to keep them in immaculate condition. What also reassures the boat owners is that FlexiSail ensures all members have appropriate sailing experience and qualifications for the boat they wish to use. On signing up, members gain access to an exclusive RYA (Royal Yachting Association) Training Centre – FlexiSail Training.
It is also possible to join FlexiSail as a crew member and be available to help on the boats under the command of fully qualified sailing members, the temporary boat ‘skippers’. This is not only for less experienced sailors but for anyone who is unable to make the full commitment of a FlexiSail boat share – even some sailing instructors are signed up to FlexiCrew.
Consequently, the main advantages for boat owners when they place their boat in the FlexiSail Ownership Programme are:
- a guaranteed income
- their boat will be professionally managed and maintained
- the hassle, worry and costs of ownership are offset
- there are adequate safeguards and controls in place to protect their asset
In keeping with the growth of the rest of the global crowd economy, the key to the development and success of FlexiSail’s membership sailing model is the advancement of technology. Their online systems are designed for members to autonomously manage their own bookings, further engendering that sense of ownership.
FlexiSail’s iCalendar booking system gives people the greatest amount of flexibility. Bookings can be made up to 12 months in advance and amended or cancelled at the touch of a button. All members are entitled to a certain amount of time throughout the year, dependent on the level of membership they buy into, and this time is guaranteed, the system knows this and over-booking cannot occur.
Standard charter companies rely on labour intensive check on and check off procedures. This increases costs and also means a third party has to be present. This not only restricts flexibility of embarking and disembarking times, but also takes away the feeling that it is ‘your’ yacht. FlexiSail has a comprehensive online system called the iBosun, which allows each member to take care of all of this without any restrictions. A simple form, the iBosun is completed on arrival and departure, and any issues reported are emailed directly to the FlexiSail management and maintenance teams to be dealt with in a timely and competent fashion.
FlexiSail currently provides access to 18 boats for 175 boat ‘skipper’ members plus 25 crew members. Their annual turnover is in the region of £700,000 and they are considering crowdfunding as a means to purchase their own boats.
From one perspective these three examples are about people being able to create an income from an under-used asset within an online framework that vets the users of that asset to protect the owner. Crowdfunding is similar: people with under-used wealth are able to potentially gain a higher income from it through investing in companies pre-vetted by the equity crowdfunding and peer-to-peer lending platforms. However, equity investments cannot be guaranteed to provide a return, or even to hand back the original investment, so do so with due diligence and the standard advice is always to invest in a range of companies to offset risk.
From another perspective it’s about people having access to something that was previously our of their reach, whether it’s the use of a fantastic yacht or motor cruiser, or access to funds to launch a startup company or expand an existing business. If that’s what you want to do then as an independent crowdfunding adviser I can help you with your first steps of understanding how crowdfunding can work best for you, and work with you to create an effective pitch to investors. Contact me at [email protected].