- And we are back Between Two Yetis. This is Timothy Hamilton. How are you doing, sir?

- Very good, glad to be here.

- I've just met you for the first time.

- Yeah.

- And I don't know why.

- I don't either. I've been pretty involved in this for awhile.

- So you've been in the industry awhile.

- Yeah, I have, yeah.

- All right. From what I know, you've worked with the two, it's hard to say the best, but it is, isn't it?

- Two very well known big yacht motor yacht builders.

- The ones everybody aspires to be with, of, like.

- Yeah, for building big yachts, you know. But there's fantastic builders that are building, you know, 35 footers or 50 footers that Feadship and Lurssen couldn't touch if they wanted to. But in the big custom yacht building section, they're two of the best known names.

- Yeah, so you've worked for Feadship, and you worked for Lurssen.

- That's right. I'm the only guy that's ever worked for both companies.

-So how's it going?

- It's good. I mean, both of them are great companies. They have different cultures. Feadship is an interesting company, because it actually is two separate companies that share a brand. So, Feadship has this sort of interesting dynamic within its own team that there's this always tension there that causes them to always strive towards doing things better and better. Lurssen is a German company; Feadship is a Dutch company. Lurssen is still family-owned and has been in business for 140 years or something and has a very different corporate culture than Feadship does.

- So in your opinion, what's the difference-- What does a Dutchman stand for and a German stand for?

- That's pretty hard to put that into one phrase.

- I know I can.

- Yeah? What would you say?

- The Dutch solve problems. The Germans love problems.

- Interesting. I would have said the French love problems.

- The French cause problems.

- Obviously we know the Germans are...

- They're a no-nonsense culture.

- I was interviewing a guy who sells luxury cars, Ferraris, Lamborghinis, stuff like that, and he was German himself. He was saying how Germans obviously have the greatest engineering, one of the greatest engineering cultures on the planet.

- Yep, yep.

- But they also have the greatest style and the most fun. And I was like, how on earth, Germans aren't known for that. And he was like, "No, no, no. "Because we have order, we're allowed to have the fun, "because we know that the order's always there." The engineering's always there, the fun's always there. So when you have Porsches, the other German car manufacturers, they have so much fun and flair, because they know the grounding's good.

- Yeah.

- And I never would have thought of the Germans in that way.

- Well, to support that argument is I have never laughed so hard and had so much fun that I have just hanging out with Lurssen at boat shows. It is hilarious, because you would think that it's all serious business, but actually, even the guys that have been with Lurssen for 20, 30 years, the guys that are senior guys. You know, we go to dinner, and we're often at dinner until 12 or 1 in the morning laughing our heads off. So they know how to have a good time. You're absolutely right.

- It's amazing, the perception of cultures from an American standpoint is very different from the actual reality.

- Yeah, I think that's right.

- Where are you from?

- I was born in Texas, but I grew up in Florida.

- Ah! All right!

- Somebody said I'm a Floridian with Texas blood.

- That's actually the best way to be.

- That's how it is, exactly.

- Right, so you grew up in Texas.

- On the water?

- Actually I grew up in Florida in the panhandle in Destin, Florida.

- Oh wow, okay.

- Beautiful, beautiful spot, Destin. Anybody that hasn't been there, they call it the Redneck Riviera, and it's--

- Would you classify yourself as a redneck?

- Yeah, I've got a little redneck underneath, underneath the surface.

- Now, why are your customers American-based? Why do Americans go to Germany, Holland, the European yachts, to have a boat built, instead of having it done in America?

- That's a good question, because you know, I'm also a very patriotic guy, and I would love to see American shipyards build really high quality yachts. And there is one, there's one or two that do build good boats. But unfortunately, America as a whole, we've lost our edge on making really good things. I mean, think about it. There's no really high end car manufacturers in the U.S., are there? I mean, there's a couple of boutique car makers here and there, but you know. All the Ferraris and the Lamborghinis and the Rolls Royces and the Bentleys and the things like this are all European made. And the same when it comes to boats. We have some boat manufacturers in the US that are building very reliable, very predictable, usable things that people want. But when it comes to really high end, custom made things, somehow America has lost her way on that. And I'm not quite sure why that is.

- The ability's there, and the skill is there.

- And certainly the market is there. You would think that, between North and South America, for large yachts, 130, 150 foot plus. Something around 30 percent of all the world's yachts are owned by Americans. But somehow we don't manufacture, and I just don't know why. I would love to see it happen.

- Because America has the ability to... I mean, make America great again, the whole thing that's been part of the culture for the last two or three years. Back in the '50s and 60's this was...

- We're putting men on the moon, and even today, we're building rockets and leading the world when it comes to rockets and space again, fortunately. We're building technology, leading the world in those ways. So we definitely have the ability to innovate and create great things, but when it comes to manufacturing, somehow...

- So this goes back to maybe the Feadship and the Lurssen. Lurssen, it's family owned, three or four generations...

- That's right, Lurssen is in the fourth generation right now, and the fifth generation is in the company.

- And so there's that legacy--

- That's right.

- Whereas, America doesn't really have that, does it, to sell it?

- I know some American families that are in their second, third, or fourth generation in their businesses. Certainly, that also translates across to our culture, but you're right, there's also a lot of people that will build a company and sell it to somebody else. But that happens in Europe. I mean, that happens everywhere.

- But that's never going to happen to Feadship or Lurssen.

- Well, Feadship actually is. Feadship is two companies, but one of them is Van Lent. And Van Lent is no longer owned by the family. The family is not in the company anymore.

- What is Van Lent?

- Van Lent sold to LVMH, which is a French conglomerate, over ten years ago.

- Nice, okay.

- The De Vries family still owns the De Vries shipyard, and they're still very involved, and the next generation is in place, so De Vries is still involved. But half of Feadship is sort of moved on.

- In French.

- In French, exactly, exactly.

- I never made that connection, my god. But yeah, that's exactly what happened.

- The guys that are now running that side, running Van Lent, are very competent individuals, so I think they're in good hands, and they're building some fantastic yachts.

- Dick Van Lent, we know quite well from over the years.

- Yeah, okay, good.

- I always remember his tour around his factory. You could eat off the floor.

- Yeah.

- He has a cleaner per floor, full time, even on the boats.

- That's right.

- Just going around, vacuuming, sweeping, polishing. And it is like Google, almost in the terms of cleanliness, like a computer factory.

- Yeah.

- But you're building--

- Building yachts.

- Steel...

- Dick really left a strong legacy, and you know, Dick is still around, actually, still around the company. But Dick left a strong legacy on Van Lent, in that he focused heavily on the experience of the client of building the yacht. And he used to say this, whenever I first started with Feadship, he used to say, "People don't just build a yacht because they want "the end result. "They also build a yacht because they want "to enjoy the experience of building a yacht." And I used to say, "Ah, there's no way." A guy's not going to decide hey, we're going to go to this shipyard because they have a better experience...

- It can take five years.

- I learned over time that he was absolutely right. So having a clean shipyard that is able to deliver for the client a great experience while building the yacht is as important as the product itself. And that's part of the reason for Feadship's success.

- Counterculture to what Heesen said the other day, so they're making boats to spec.

- That's right.

- Because they believe their owners don't want the experience. They want six months, twelve months, buy in, and have the product.

- You know, it's very interesting, because if you look at most of the major shipyards left in the world right now, Oceanco, Amels, Hessen, Westport, all these companies have gone to a model that primarily builds boats on spec, right? And actually, those companies have all been very successful at that business model. They build a boat, that way somebody doesn't have to wait three or four years to get a boat, but instead, hey, it's available right away. And Feadship and Lurssen are two of the last remaining holdouts of the old school method of we're going to wait for a customer to come along, and then we're going to start over and build them a complete, custom project from the ground up to their exact wishes. It's a lot harder to do that for a multitude of reasons. One if finding somebody who's willing to wait three years to four years. Second of all, there's a lot more risk inherant with the shipyard of building a fully custom project from the beginning. But I think that makes Feadship and Lurssen kind of special.

- That's what makes them special.

- Yeah.

- Yeah.

- And that's kind of why they have this reputation, you alluded in the beginning. Amels and Hessen, there's many good builders out there. But this reputation of Feadship and Lurssen somehow being the best or most respected is because every project is special, every project is a one-off. It kind of builds this prestige a little bit, doesn't it? And if you're an owner that owns one, you know you own something unique that nobody else has.

- And that's why you charge more?

- Why we charge more is it takes a lot more effort and a lot more work to build everything one-off. When you're able to build the same thing ten or twenty times over, you're able to significantly reduce the cost. Yeah, exactly. I mean, if you went to a car manufacturer and said, "I would like you to build something completely "from the ground up new," it would probably cost you ten times as much than the normal cost of buying a car. And in boats, of course, it doesn't cost us ten times as much, but it does cost a little bit more to build everything as a one-off.

- All right, so we never, we always hear that shipyards never make money, that it's a four percent margin, where everybody's working, and if there's changed orders, you try to absorb those, and then technology moves on and stuff like that. These yards are not necessarily hanging on, but define their model by doing the spec. You two, your old company and then the current one, you are the back skins of what actually true ship building on that scale is about. If we lose you guys...

- I don't think that there's any risk right now of Lurssen or Feadship going anywhere. I mean, both of the companies have healthy order books. You're right, they don't make very much money, these companies, you would be surprised at the margins. But both the companies have been around for a long time and have ample reserves, and both of them are being managed by very competent people, so...

- Yeah, the best in the industry.

- Yeah, so I think that risk of one of those two shipyards--

- Well, I wouldn't say risky, I mean, if they change their model, and try and become more commercial-- I know Feadship tried to do the series.

- That's right, yeah, Feadship has done a couple of series. And Feadship still will occasionally build a boat on spec and deliver it, but it's always a one-off spec. So they kind of keep that customization there a little bit. Lurssen to this day has never built a boat on spec, and so far, the family has decided that's not a model they want to pursue. But I wouldn't put it past it to be done one day.

- The Lurssen yard is truly inspirational. It is Lemwerder, isn't it, the town? I know you've got Abeking right next door, but it's really you guys. And the scale of it-- I remember seeing the steel plates and the hunks of the cofferdams. It is almost an industrial scale that you just can't really comprehend until you've gone there.

- That's right, and the thing that's interesting about Lurssen is, is that I didn't know Lurssen that well before I started working for them. Lurssen is on a whole other level than any other yacht boat on the planet when it comes to their organization efficiency. Because it's one thing to be able to build a boat of 1,000 gross tons, maybe even 2,000 gross tons in three, three and a half years, but to build a boat of 16,000 gross tons or 12,000 gross tons in three years and then the next year deliver, again, another boat of that size... The organizational structure can't just be a little bit better, it has to be multitude better, and it really is. They think and are organized in a way that makes other yacht builders look like, you know, guys with Lincoln Logs, you know, working with, you know, arts and crafts. Lurssen is structured and organized in a way, like a Mercedes Benz factory. I mean, it is incredible how well set up they are and how sharp they are and how many generations they are ahead of everybody else in the way they approach projects and building boats.

- Yeah, now can you clear one thing up for me? How do you spell Lurssen?

-L-U-R-S-S-E-N is the brand name, but the family name has an E in there, but that is in German-- I've asked this many times, because I'm just starting to learn German a little bit. And actually when it comes to German, having the E in there and not having the E, it seems that it doesn't matter so much, and I'm not quite sure why.

-Okay, so you can do it either way.

- You can do it either way, but they're both correct, exactly.

- Because I keep seeing, Lurssen's Lurssen, but when you get the E it's like "Lyurssen"?

- Exactly right.

- So either way.

- All right, cool, all right. So when you left Feadship.

- Yep.

- You tried to get out of the industry.

- That's right.

- And you were saying, how is it different?

- Well, I wouldn't say that I was particularly running away from the industry. I was trying to build my own company. I did a tech startup in real estate. And having a startup is a very hard, stressful thing. You guys have your own business, so you understand that. There's good times, and there's bad times.

- Especially in the tech world, because you've got a very short window of...

- Of opportunity, exactly. So, I started my business, and very quickly ended up with a lot of competition. And a lot of my competitors raised massive amounts of venture capital very quickly. And I realized very quickly that I was basically getting left behind. So many, many nights for months and months of stress and lacking sleep, because I have people to support, I'm investing heavily, and realized that I'm getting left behind. I'm in the process of exiting that business, and I got offered to come back into this business, and I feel very, very fortunate.

- You applied to the job, or they went, "Hey, we hear you're..."

- It's a bit of a story, actually. We sat back and we said, my wife and I sat back, and said, "Hey, what do we want to do next? You know, I could go on with tech. I could go work for one of my competitors in this space or somewhere else, I could go work somewhere else in real estate, or I could go back to the yachting industry.

- What's your speciality? Are you good with tech, numbers...

- I mean, I don't write code, so that's certainly not it. I don't know what my speciality is. That's a great question.

- You're a good rounded individual.

- I guess so, yeah. I'm just a guy that's a dreamer, I guess.

- The Lurssen and the Feadship thing, they are... I don't know, we've grown up, I've grown up in this industry since I was like eight years old.

- Oh, really? Was your father in the business or something?

- Nigel Savage. He did a lighting company.

- Okay, I didn't know that.

- Customary lighting.

- So you kind of followed in his footsteps with the lighting thing.

- Yeah, so we were, in the early days, his business partner was Don Starkey.

- Really? I didn't know this, man.

- Yeah, so Don--

- Has anybody interviewed, have y'all Between Two Yeti'd each other?

- No, no.

- And totally found the business Are you guys crazy? Y'all definitely need to do that. You need to interview each other and kind of interview about your father.

- Well, what was strange about our father, when I was a young teenager, I got to hang out with Don Starkey, Terence Tisdale, Ken Freivokh--

- The legends.

- The legends, the legends.

- All those old school guys.

- You know, my experience with this industry is the Feadships, the Lurssens, the Hessens, the Abeking builds.

- Right, right.

- So, when I came to America, it was... The perception of those yards did mirror what I'd seen, but I also have this admiration for America, that this is the greatest country in the world.

- Yeah, it really is.

- Why on earth is it not--

- Building better yachts.

- Producing the best, and I don't think it's a case necessarily, well I don't know if it is quite or not, because I've never owned one, but the ability's there, I just think that the way the Germans and the Dutch have marketed themselves in position against the Americans, makes the Americans seem like they just throw it together as quick as they can, and they pop them out.

- In a way, though-- We're sitting right now across from Westport, right? In a way, those guys are a lot smarter than us, because they are building a very reliable, simple, economical to build, very economical to run and own, known entity. It's like a Chevy Corvette. Amazing performance, right? It's a very good price for what it is. It looks great.

- It does look good.

- And you know what, it gets you out driving. And this Westport right there, for boating, that gets you out boating, and that's fantastic, you know. It has five cabins or whatever, and it works. It goes to the Bahamas, it goes fast, it's reliable.

- But it's a stepping stone...

- It is, it's not near as sophisticated as a Bugatti Veyron, right? You know, it's a... It just works. So in a way, actually, they're building something that the market really wants, and the reason why that's right is they're selling five or ten of those for every Lurssen that's sold, right? So obviously, there's more people that want that than that want a Lurssen. Or are willing to pay for that than are willing to pay for a Lurrsen. So I wouldn't say necessarily that the custom builders that are really good at building these high end boats are necessarily doing something better. We're just doing a better job with building the big, very sophisticated, very complex boats.

- All right, so what are you doing for Lurssen, then?

- I'm going to be setting up an office for Lurssen here in Florida.

- They don't have an office?

- They haven't had an office since early 2000s. They had a guy named Buddy Hack in the late '90s. But we're focusing ourselves back on the 60-meter, 200 foot, 250 footers.

- Have they got too big now, then?

- Yeah, for a while there they did. They really built so many yachts in the 300 foot plus range.

- Is that serving people's egos? I've got to have something 10 foot, 50 foot bigger than the last one?

- Look, I mean, to each their own, right? I mean, if I was building any boat for myself, I'd still probably build an 80 foot, you know, sloop. To each their own. A 300 footer, you can helicoptor and big tenters and all that, you know, whereas a 200 footer, you're a little bit restricted on those. But still, you could still have ample space in a 200 footer. You know, it's just all subjective on what works for who.

- Yeah, because you are serving egos of the-- Not even the one percent, it's... So your customer base, are they... Did they have boats before, or are the coming in brand new, first time, I want something...

- You would think somebody ends up with a 300 footer or even a 200 footer because they've gone through all the steps, and some people do go through all those steps. They first have a Westport 112 or a 130, and then they buy a used 50 meter boat, and they go with a 60 meter new or something like that. That's more often than not the case, but I would say a good quarter to a third of people are just going off... They come in, they've chartered, so they've got a little bit of experience. And the first boat, they just straight up build a Lurssen. They build a Feadship for their first boat. They'll build a 250 footer, a 200 footer, whatever it is.

- It must be daunting, or is it just the case--

- I think with anything, you get the right team around you, and you get the right people around you that you know are looking after your best interests and can advise you correctly, you educate yourself, like anything else, and you build a boat, you build your dream. You know the funny thing is about people who build yachts is most of the time they're entrepreneurs and so they like building things. You know, like you guys are building a new company or a new service here. Between Two Yetis is pretty cool, you know. You're building something, and so people that like building businesses or building anything else would like to build a yacht and build something unique to themselves.

- It's the challenge in itself.

- Putting their own stamp on it.

- Good god, so you're-- So this is a part of the industry I never even considered, but it is, it's giving the best minds in the world...

- An outlet.

- An outlet.

- To create something.

- To create something and provide not just the local community but the entire world a revenue stream.

- You're absolutely right about that, because I used to struggle a little bit with, okay, what am I really doing to help, you know, the world, with this career, right? But actually, I'm very grateful for our clients that build yachts, because they employ so many thousands-- I mean, you guys are indirectly employed by people building yachts. I'm directly employed. We have almost 3,000 employees in Germany that are employed.

- The guy who made that cap--

- He has now benefited, exactly. And so the amount of fallout help, you know, this is the sort of trickle down economics from a guy building a yacht. It's enormous, because normally, when somebody builds a yacht, they have ample resources, and otherwise, they're just sitting in an investment account somewhere. And they're putting it to real work. So, I'm very grateful that they do. Well, continue doing the good work you're doing for humanity. Exactly right, I'll continue to contribute to humanity.

- I hope this Palm Beach show's given you what you would hope. I know I spoke to Theo a couple of days ago, and he said that you guys are trying to establish which American show you want to kind of like...

- Every American that really understands this market in the large yacht scene at least loves this boat show. And for companies that are in the industry, we can't do-- It doesn't make sense for us to do two or three boat shows in America. We need to really longterm choose one show and invest into it.

- Because in Europe, you basically do Monaco, then it's just satellite works.

- That's right, so Monaco and Fort Lauderdale have historically been the two main boat shows. But because they're so close to each other, they're within a month of each other, it's-- And then you go ten months without a major boat show.

- Yeah.

- And additionally, Fort Lauderdale, even though they've moved it back a week, it's still sort of on the tale end of bad weather, so there's that risk. Also, Fort Lauderdale, logistically, from a client experience, is not as nice as Palm Beach. Palm Beach, a client can stay in the Breakers or somewhere else on Palm Beach Island, right? They can valet their car here, no headaches, no traffic. You know, they can easily have a nice lunch somewhere like Komadix.

- Yeah.

- So, the client experience, I find in Palm Beach much nicer, and the weather is always nicer, you know.

- This is almost perfect weather.

- So Miami isn't really on the cards, or is it?

- Miami is an important boat show for the South American markets for production yachts, but it's kind of in the middle of the season. So for getting bigger yachts-- You know, without yachts, we don't have a yacht show, do we? And when you start talking about the bigger yachts, it's very challenging to find an owner who is willing to let us put their boat in a boat show. Miami happens to be in February, which is in the middle of the season, so it would be unlikely that an owner or less likely that an owner has the boat in town, and is willing to say, "Yeah sure, you can use it." Whereas, this is sort of the perfect time for the client who is sort of towards the tail end of the season. The boats are back from the Caribbean, from the Bahamas. They're preparing the next few weeks to make the crossing over to the Med to get ready for the Cannes Film Festival, Monaco Grand Prix. They haven't quite left yet, but the boats are here in town, so you'd have a higher chance of being able to get the boats in the boat show, so we can not just have a bunch of guys sitting around a booth, but actually have boats to show to our clients.

- It is amazing, the thought process for all that and where that's going to end up.

- Yeah, so we'll see how it goes, but I personally would like to see Palm Beach rise over the next five or so years and slowly draw it out from Fort Lauderdale. But in the end we can only do what we see our clients doing. We follow what the clients do, so we'll only be able to really know over time if the clients start, more of them showing up here than in Fort Lauderdale.

- Okay, I've got one final question. So, a shipyard over there was saying that their strength with their shipyard is they bring a lot of outside resources in. They don't have an internal team. You guys do. So they were saying the advantage of that is they get constantly refreshed with new ideas, new innovations, new techniques because they're not keeping it in house and not recycling the same ideas.

- I find that interesting. What I find very entertaining about our industry is, in journalism, in the press, often times, as a shipyard, you release a press release, and you put out a message that you want to be put in the market. And the different news media whatever things just print that. And if you read a press release, normally someone knows what their weaknesses are, and they talk about it with a spin to try to make it as a strength, and that's a precise example. It is much more safer as a shipyard--

- To not have employees.

- To not have employees. As a matter of fact, one of the best known, big yacht Dutch builders, not Feadship but one of the best known, probably one of the most expensive big Dutch builder, which is not Feadship, by the way, had, up until just five years ago, only 25 employees. And they were building these 90 meter boats. And they only had 25 employees. So basically, their entire shipyard, everything they were doing was subcontracted. They were really just a general contractor. They said, "Hey, we have a shed. "You, guy in Portland, build the hull. "You over here paint, you do the engineering." And so there's no controlling what's being produced.

- Wow.

- The quality is just-- I don't know, it could be good, it could be bad. It's probably one boat's good, one boat's bad. One boat has this good, one boat has that good. But the risk is very low, because if the market all of a sudden gets very quiet, and they don't get an order no problem, they only have the same 25 employees. Feadship has 2,000 employees. Lurssen has almost 3,000 employees. And so there's a lot of risk with that, right? If the market is slow, there's all those mouths that we have to continue to feed, right? But what we have is, we have all these employees that are within our control to maintain quality and continue to improve as we improve our organization structure. Most of those guys have been working for us for 20 years plus. They get better with each one. And when it comes to R&D is what they're discussing there, we actually have dedicated teams that do R&D, both on the engineering front, on supplies, on new materials, that are constantly feeding the machine. But there's longevity of the same guy doing the job every time. He's able to go and speak to the crew, and on the last one, say, "Hey, did that work? Oh, that worked good? "Oh but, we can make it better by doing it this way? "Okay, fine." And so that knowledge continues to build over time. And that's why Feadship and Lurssen is building the best yachts, because they have those in house workers.

- And as a supplier, it's evident when you work with the boat company that, doesn't matter what nationality, and they're only producing one boat every three years. The purchase order comes in, you know... You guys, it's a process.

- Yeah.

- NDAs, purchase agreements, it's 10-TNCs.

- That's just experience.

- Confidentiality agreements.

- Yeah.

- You're talking 50 pages worth of just documentation before you even get the request for quotation.

- Yeah, that might also be the German overdoing things as well.

- This lot, maybe. But you know, that level of professionalism sets you as a supplier as, I've really got to perform.

- Yeah.

- And if I don't, consequences are, term number 25, 26, 27, 28. You guys bring your suppliers up to a level which perhaps, the rest of the industry doesn't necessarily require.

- And also what happens, that ends up benefitting others, right? So Feadship and Lurssen, we are constantly pushing interior manufacturers, engine manufacturers. You know, for instance, we developed together with HUG, which is an exhaust particle cleaner to manage exhaust, to be tier three to consolidate some of the machinery needed for exhaust, right? We worked together with them to develop that, but all of our competitors are now going to benefit from that new engineering development.

- Wow. Giving back, see? It's all about the...

- Well, we didn't want to, but it's just the nature of the business.

- Oh and last thing, Lurssen party at Fort Lauderdale.

- Yeah, it's pretty awesome.

- You don't do it to get a customer.

- No.

- You do it just to show that the Lurssen boys can have fun.

- I think it's in the DNA of Lurssen that we talked about in the very beginning, that I'm only now discovering is that Lurssen to me, always seemed, from the outside, as these very serious, German guys. And they are very serious, don't get me wrong. But they really like to have a good time. And that is part of the experience that we were talking about with Dick Van Lent is the experience of building a yacht should be fun for the owner, and it should be fun for everybody. If we're not all having fun, if we're taking ourselves too seriously, then I think we're doing this wrong.

- Well, thanks for meeting me.

- Hey, I'm just part of it.

- [Lee] You're the American face here now.