BCG - The Boston Consulting Group

Stéphan Constance & Xavier Desmarest Partner & President and General Manager (respectively) Allures Yachting BCG Office: Paris, 1999-2003

When Stéphan Constance began shopping for a yacht in 2001, he had his sights set on adventure. He was in the market for a sea-kindly vessel that would take his young family to exotic locales. But when his research uncovered a lack of affordable options, he and Paris officemate Xavier Desmarest wound up with a lot more adventure than either had bargained for—they set sail on an entirely new career.

"The whole thing began as a bit of a joke," recalls Stéphan, who shares the CEO mantle of Allures Yachting with Xavier. The experienced sailors emphasize that they were simply dreaming of the sea—not of becoming entrepreneurs—when they uncovered a niche market opportunity for an innovative, semicustom, and affordable yacht.

"After my initial shopping experience, Xavier and I just wanted to understand why demand in this industry outpaced supply so significantly," explains Stéphan. "We thought it would make for a fun and classic BCG-type market exercise, so we presented the information at BCG training, where we gathered some impressive ideas. From there, we shared our ideas with other BCGers, and everyone we talked to confirmed and further brought into focus the raw opportunity we saw."

The consultants soon realized that consumers had only a Hobson's choice. To secure an ocean-faring vessel with comfortable living space, European yachters basically had to turn to customized high-end yachts—and pay a 200 percent premium over bulk-market yachts. That left all but the wealthiest with essentially one option: a hard-chine aluminum centerboarder designed in the 1980s that delivered virtually the same features as costlier yachts but at an affordable price. However, the lower price tag on that lone option also meant that the performance and design were noticeably inferior to those of the high-end yachts. And given the number of yachters clamoring for the boat, there was a two-year wait for the less expensive craft.

The BCG consultants noticed that the European yachting industry was reminiscent of the early days of the auto industry, when Henry Ford assured his customers that they could purchase a car in any color—as long as it was black. They also instinctively understood that if they could find ways to break compromises in standardization and customization and in quality and price, they could make their mark in the industry.

"We knew that we needed a vessel that was to boating what the Land Rover is to driving," explains Xavier. "Yachters would be sailing not only in the ocean but right up to and between small islands that often lack harbors, so our vessel would have to go everywhere—and well off the beaten path. Constructing the hull and bridge of aluminum was the obvious choice, since, compared with the composite materials currently being used, aluminum is 18 times more resistant to shocks in terms of tensile strength and 40 times more resistant to piercing."

Using a case-team approach, the pair orchestrated a small meeting of cross-functional world-class experts—the first of their innovations. "Teaming was a radical approach for the yachting industry, so everyone—including us—knew immediately that our ideas were either very good or totally crazy," admits Stéphan.

Fortunately, it was the former that proved true, and shortly thereafter, in 2003, Xavier and Stéphan launched Allures Yachting. They gathered a yacht architect, an interior designer, a boat builder, a furniture manufacturer, and a famous sailor to share expertise in designing and delivering an affordable and innovative yacht.

The pair fostered collaboration and relied on strong involvement from their team members, engaging the architect and designer not just in the shipyard but also in the earliest phases of spec writing.

"We were also one of the few companies in the yachting industry to conduct a focus group, a practice common at BCG, to determine which features yachters actually desired. And we used that information to decide on the interior design options and technical features," Xavier says.

"Our relationships with experts and our access to their technical expertise were key," Stéphan adds.

Conducting their business that way resulted in several innovations. The main improvement was the use of both aluminum and composite materials in the construction of the yacht—aluminum for the hull and structure and composites for the superstructure. The result is less weight, improved performance, better insulation, and more freedom of shape in the design. The company received support from ANVAR (the French national agency that sponsors research) in the development of this technique, and the innovation has been patented.

The innovations quickly paid off. It took the team just nine months to produce an early design and to create a prototype, drawing on not only the technical expertise of the engineers but also the business expertise of the former consultants.

Since then, business has been booming for Allures. The order backlog now stretches to February 2007, and the shipyard will deliver 13 yachts in 2006. The founders also anticipate strong future growth, particularly as baby boomers reach retirement age and increasing numbers of them seek to sail around the world. "We are hardly the first two guys to set out to transform a passion for boating into a career," Stéphan admits. "But we've been told by many that we are among the few who've combined a passion for boating with a passion for business, and that has made all the difference in how favorably people have reacted."

To continue on course, Stéphan and Xavier know that they'll need to continue to spread the word about Allures. For that, they'll require what they call "Allures ambassadors"—viral marketers whom they hope to recruit from among the ranks of BCG. "We welcome all sailors and would-be sailors from BCG worldwide to visit our site in Cherbourg, Normandy; we're just a three-hour train ride from Paris. We are always up for a chat; the spirit and insight of BCG are always welcome."

Across the Atlantic, BCGers in the Americas can catch a glimpse of Allures's yachts at the Miami International Boat Show on February 15-19, 2007. Xavier says that they are eager to see familiar and friendly faces while at the show, and he encourages all those interested to visit them there.

But if you don't catch Xavier or Stéphan in Cherbourg or Miami, you'll want to scan the horizon in 2009 for an Allures yacht bearing one of the company's CEOs on the first of many planned sailing sabbaticals. "People always ask us, 'Why two CEOs?' That's easy. So one can sail away while the other minds the business," Stéphan says. And so the adventure continues for these sailors who love business—or are they businessmen who love the sea?