Re: [PSUBS-MAILIST] Sub building business

[Phil Nuytten <pnuytten@compuserve.com>]

Hi, Guys!
        I've been following Hugo's thread on ' the business of building
submersibles for fun and profit' with  considerable interest. I think it
was Greg who mentioned 'Sea Urchin' - our 100+ meter single person unit
that I originally hoped to be able to flog for about 50K. Although I'm ever
- optimistic, even I knew it was going to be difficult to build 'Sea
Urchin' to sell at that price.
The rationale was to set a price that made the sub affordable and desirable
- and then figure out how many units you'd have to make to recover all your
engineering, certification set-up, tooling, dies, testing, prototype build,
and on and on - and then show a profit conmensurate with the risk - and
then have a sustainable market that you could continue to build for
(without saturating ) and FINALLY once you had established that number of
units that you had to sell to make that price viable - commence a market
survey to see if a market for that number actually  existed. Pretty
straightforward, one might say . . ..
        So, how do you do such a market survey. You sure as hell don't hire
a marketing consultant group who will charge you up the ying (Yes, Vance -
hundreds of  thousands of nads!) to give you largely useless data replete
with  ' our researchers' and 'current demographics' and ' as in the case
with dune-buggies', etc. Fortunately ( or, rather, unfortunately) I'd
already played that game whilst running Hard Suits Inc. ( and to a lesser
extent, in Oceaneering International Inc.) and knew how very little you
would get in return  for a very big wad of cash. So, we advertised the
little Sea Urchin with a 50K price tag in dozens of SCUBA and
Boating/marine mags worldwide - We built a working prototype and made a
deal with some guys to cart it around the country giving demos, we showed
it at diving and boating shows,  and so on. All of this over a period of
about 3 years. We sunk about 300 -350K into this 'market study' . . .and
what, you may ask, was the result? Well, send me a hundred grand and I'll
ship you a filing cabinet of data - send 200K and I'll include the Sea
Urchin prototype!!.(G) All of this was over the period 1992 to 1995 - but I
doubt that the market has changed drastically since then.
        Suffice it to say that t he market was way too small for the number
of units that we'd have to produce to make any money at  50K  -  and that
50K number was only if we could get away without Lloyds or ABS
certification. Why certify? You can't get product liability insurance
without cert. With no PL  insurance, the first lawsuit will take every
single thing you own or have ever thought about owning! So . . .how did
George K do it? Sell incomplete kits and/or only sell one finished sub at a
time ( your 'personal' sub ) and make sure it's 'used' and carries no
warranty - and, toss around a liitle bit at at night knowing that anyone
who can demonstrate that you make a practise of selling used subs can
pierce that defensive veil in an instant!  Another reason to at least have
a certification alternate is if you intend to sell to yacht-owners who
could put their entire vessel at risk because of potential liability
jeopardy. The Sea Urchin prototype was built and inspected as a classed ABS
vehicle. So was its successor, an advanced version called Newtsub 'Flyer'
which series ultimately evolved into the first 'DeepWorker' prototype'.
        Sub-building biz?? Definitely not for the faint of heart! Could you
do a Geoge K. - style operation today? I don't know - but I suspect you
could if you could get the buyer to purchase ( not from you!)and install
some critical parts - and you commisioned  a 'Philadelphia Lawyer' to
construct some two-inch thick boiler-plate waivers! Ambient pressure sub?
No problem, ( IMHO) One-at sub? A horse of a different persuasion, I
believe.  I've often toyed with the kit thing. We designed and built ( hull
only) an 'Aquarium' version of DeepWorker. Identical to the 2000 footer
except laid up out of  fibeglass, It was/is to be a 30 meter one-at unit
but could easily be thickened for  a 100 meters. We had discussed selling
only the hull/dome/battery pods and providing plans for the aluminum or
fibreglass frame, life support, control system etc., We are going to build
some Aquarium subs anyhow, so I thought we'd just 'dangle the package' and
see how many fish bit,( as it were). 
        Advice? If Sub-building commercially is something you really,
really, want to do - then give it a try! There's sure no magic to it! Just
don't get so seduced by the technology that you fail to apply some good
old-fashioned horse-sense to the equation . .( Man! have I been there!)
Regards
Phil Nuytten
          

( BTW.  If you want to see a 'centerfold' pic of 'Sea Urchin', check out
the January 1993 issue of National Geographic Magazine - article " Money
from the Sea".) I loaned Sea Urchin to Scott Carpenter for his 'Man-in-Sea'
facility in Key Largo, Fla. It dove regularly there for 7 years.It came
home a few years ago and now lives with our other dozen or so 'museum'
subs,
        .




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