After 58 Years, a Shot at Olympic Gold
World-class sailing requires a lot more skill and brainpower than the lazy summer margarita-soaked afternoon rides sprung from Jimmy Buffet's imagination. "It's a thinking man's sport," says John Dane III. And, as the oldest member of the 2008 Olympic team (and the oldest in the last 50 years), the 58-year-old Dane knows which way the wind blows. He grew up in New Orleans learning to sail on Lake Pontchartrain and as a member of the famed Southern Yacht Club. It's also where he founded Trinity Yachts, the nation's largest mega-yacht builder, with projected revenue of $175 million in 2008 and $230 million in 2009. The average yacht on order runs about 180-feet and costs $35 million, but Trinity is also constructing one that will be 242-feet and come in at just under $100 million.
The company's uber-wealthy clientele typically have a net worth of over $100 million, so riding out the current economic storm isn't a problem. But Hurricane Katrina was. Sure, two employees hunkered down to keep an eye on the Industrial Canal shipyard with lobster and barbecued ribs aboard the 160-foot Zoom Zoom Zoom yacht, but Trinity's facility ended up sunk under 14-feet of water and they were forced to move the operation to a Gulfport, Miss., shipyard at a cost of $20 million. Dane's home in Pass Christian was wiped out as well, so he moved his family onto a houseboat and got back to work. In the immediate aftermath of Katrina, Trinity gave every employee $1,500 and spent $4 million building 3-4 bedroom mobile homes in a community near the new site. Katrina cost Trinity some $30 million, but as of today, the company has 1,000 employees (including subcontractors), a record backlog of 25 boats, and has even moved some operations back to its original New Orleans shipyard, which was the former home of Higgins Industries where the famous World War II D-Day transport boats were built.
It hasn't always been smooth sailing for Dane, but he's primed to fulfill his longtime Olympic journey come Aug. 15. A warm, friendly man, Dane was kind enough to speak with Inc.com just before-and-after an emergency root canal. Another storm to weather perhaps, but no sailor wants to be distracted by a toothache while trying to bring home the gold out on the Yellow Sea.
Thanks for talking to us today.
Dane: I just returned from two weeks of training in Qingdao, which is the home to the Olympic Sailing Center and where the sailing events will take place. I'm glad I was back home and didn't have to get emergency dental work in China.
How did you get into the yacht-building business?
Dane: I've been on the water my whole life and my love of sailing introduced me to the yachting scene. After college, I worked for a company called Halter Marine before starting my own shipyard, Moss Point Marine, in 1980. Later, Halter bought my company and I went to work for them, starting Trinity Yachts as a division in 1988. In 1999, Halter merged with Friede Goldman International. It was now a big public company and I decided to retire. A few months later in 2000, Halter was going to spin off Trinity Yachts, so myself and two partners used personal money to buy the company and take it private.
Why did you think Trinity presented a solid opportunity?
Dane: We'd started the yacht division in 1988 as a diversification because we were building oil support vessels for the Gulf Coast and were subject to the ups-and-downs of the oil business. I saw our technology and engineering skills as an underused asset. Research showed most buyers were Americans, but they were going to Europe. Our plan was simple, if we could get the American buyers, we'd have a very good business. It worked out and the market hadn't changed all that much by the time we bought it in 2000.
How long does it take to build one of these mega-yachts?
Dane: Construction is typically two to three years, but with our backlog the contracts are generally set up for delivery at around 36 to 42 months. We deliver six to eight boats a year depending on the size and complexity.
Who typically buys Trinity Yachts?
Dane: Up until the last 18 months, 75 percent of our sales were to self-made Americans like Rick Hendrick, who you might know from his NASCAR team. Recently, our boats have sold to Russians, Middle-Easterners, and a Mexican. A lot of that is due to the exchange rate, especially with the Euro. It appears as if our boats are on sale.
Can you give us a taste of what one might find on board a Trinity Yacht?
Dane: They are floating castles. Typically, owners have 12 to 15 people on-board with a crew of 10 to 24. The yachts have huge bedrooms, full spas that produce their own electricity, marble tubs, satellite communications, car garages, televisions hidden in the walls, helicopter pads, hot tubs…. They're palaces that can go anywhere in the world.
Do you own one yourself?
Dane: I used to have a 115-foot Trinity Yacht up until two years ago, when I started extensive training for the Olympics again. I knew I wasn't going to have any time to use it, so I sold it. Here's the incredible thing about Trinity Yachts: every owner has sold their boat for more than we got paid. We've had some clients wait three years and as soon as their boat is ready for delivery, someone offers them so much money for it that they sell it and go to the back of the line. It becomes a profitable venture for them.
Before we get into the Olympics, can you give a sense of how things are in the Gulf Coast region?
Dane: Well, we kind of glide under the radar, which is fine by us. It took us six months to get electricity and year to get phones in New Orleans, but we have a small portion of our operations up and running again. We basically moved our company lock, stock, and barrel to Gulfport. My sailing partner is also my son-in-law, Austin Perry. After Katrina, he headed up acquiring and installing the 100 mobile homes we needed to keep the company going. It's been three years since the storm now and there is still a problem with affordable housing for blue-collar workers near both facilities, but we came through it and things have fallen into place.
Tell us about your Olympic event.
Dane: We are sailing in the two-person Star class races in a 20-foot keelboat. It's 10 races over five days. The top 10 teams have one more race that count double. Nine out of a possible 11 rounds count in the end. You sail a bunch of rounds, and like in golf, lowest point total wins.
This is probably going to sound like a stupid question, but how much is wind a factor?
Dane: Wind is a huge factor, but it's not the only factor. Conditions at that time in Qingdao usually call for light winds and strong current, so it's a challenging venue. On top of that, there's all that algae, but it looks like they may have got that problem licked. They way I explain it is that it's the same wind, current, and algae for everyone, so we just have to do a better job.
What are your strengths?
Dane: Well, sailing is one sport where experience counts. There's a lot physics involved in a sail catching wind to propel a boat forward, so having a Ph.D. in engineering helps. Experience is also key in understanding the conditions, looking at the clouds and knowing where the winds are going to come from, and in the tactics. How do you want to position yourself in comparison to your competitors. Austin is 30, so he's young and athletic. Together, we make a formidable team.
If Austin screws up, does he still get to come to Thanksgiving?
Dane: [Laughs] Of course, because it's a team effort. We've know what we're doing thanks to a ton of practice, but someone can always accidentally fumble at the goal line. The beauty of sailing is that we've got 11 races and we don't have to win 'em all. At this level of competition, nobody will. I'd say we have a good chance to medal.
Do you know how much you've spent in pursuit of your Olympic dream?
Dane: I know exactly how much down to the penny. We've got training boats in Florida, Europe and China. I've funded 90 percent of our campaign in the last three years out of pocket. It's embarrassing…. Let's just say it's a considerable amount.
Does training for the Olympics get in the way of being president and CEO of a successful company?
Dane: I'm involved in the conceptual phase of the yachts, but mostly it's overseeing contracts and the sales side of things so I can work from anywhere. I'm a workaholic, so when I was in China training, I was up at 4 a.m. answering e-mails, but the Olympics has been an unfulfilled dream of mine for 40 years. I came in second in the 1968 trials, but in sailing, only the number one gets to go. My wife Leslie was fully supportive when I decided to give it a go one more time. Last October was my seventh try, and at my age, it would've been my last one. My wife and all seven of my children will be in Beijing.
It's an amazing time in your life right now, has it even begun to sink in?
Dane: I felt it for the first time last week when we got our equipment, outfits, and credentials. Wow, I'm really on the Olympic team.