Business of Flyboard
Flyboard and the Future
By Shawn Galiotto: Lake Erie Flyboard
Flyboard® is a registered trademark of Zapata Racing
Well folks here we are another month in the books and our season has finally come to an end due to quickly decreasing temperatures. We are preparing to end our season next week with some r-n-r in Arkansas for the Flyboard Family event being held just outside Rogers, Arkansas. It’s official as of print time that we will all be heading there to be part of setting a Guinness Book of World Record for most Flyboard’s in flight at one time, could be over 100 from what I have gathered. This should be a great weekend for Flyboard and Hoverboard enthusiasts, as well as the owners, dealers, distributors, and even possibly the manufacturer to talk some shop. This event being the second one, I am sure we will see an increase in participants which I would say is good for the overall dialogue and growth of the sport, and most importantly the business.
I am going to stray from my normal format of Q and A style to talk a bit about what some have asked me about as far as issues with the long term model for expansion and growth within the Flyboard community, especially within the smaller rental business community. I am by no means the expert but have asked a few along the way about the issues that concern them. Those I speak with seem to express a bit of concern for the future of the business, as far as the rental side goes. There are several issues ranging from rules and regulations being imposed from the coast guard, as well as local municipalities fighting the companies on operating in certain areas. There is also the concern of a lot of competition popping up in already saturated areas. I have even recently had a discussion with someone in regards to marketing money and the effects on a business model when money is spent from your business vs. the marketing being provided by the distributors and manufacturers. Through conversations, there seems to be a bit of confusion as to how and where you can market your product and brand. As well as integrate other company’s products into your current model, but still conform to the wishes of the distributors and manufacturers.
The long term vision is a bit cloudy and I think that this is a concern to some. Let’s take a deeper look at these issues and present some questions that might need to be answered.
There has recently been some news from the Flyboard community that the coast guard has stopped them from flying in certain areas and in other cases some companies were even attending town meetings to open dialogue on what needs to be done to make sure it’s safe and respectful of the laws and etiquette of the water ways they are using. I have also read in a recent coast guard bulletin that a decision on whether or not some type of license will be needed is going to be made. This looks as if it will be based on specific locations so far but nonetheless we need to make sure that in the areas where there is no issue we exceed the expectations of safety and etiquette. This will allow for the coast guards and municipalities to see as a whole that when our business is run properly we are actually providing an amazing experience for our customers.
Personally speaking we have had many experiences and encounters with the coast guard and many local sheriffs on our water ways and have had nothing but support from them, as well as giving them a lot of pictures. We feel like they have observed us teach our clients with safety as the number one priority, with etiquette being a close second. One thing we have tried to do is to approach the local authorities and ask them if it’s ok to fly where we are thinking of setting up and making sure we are not disrupting any boating channels and residents of the various marinas. It’s important to know your routes for needing to possibly come to shore to switch to your next client, and be as unobtrusive as possible. I have been fortunate to fly in a few different locations and states and always take note of the difficulties of wanting to show off for the people on shore and the safety of where you need to be in order to have a safe flight. I think that we need to be aware that what one person or company does could ultimately affect the livelihood of so many.
One point I want to make is that most of these issues are related to North America and the United States, but if someone were to get hurt in a different country, you better bet that the authorities here would be quick to act on imposing some type of regulation. I personally am conflicted in my opinion of these rules. We all know that rules can be a great thing if they are used to regulate an out of control industry and on the flip side of that, can be bad due to many restrictions that would hinder your business model. It’s a serious issue that might not be affecting you yet but is something we all need to be aware of.
One of the major concerns I am asked most about are the rules that govern the dealer and distributor territories and what is considered an available dealer area. As well as what distinguishes a dealer from a distributor. This seems to be a slippery slope and there are a few who are not excited by the thought of a competitor coming to the area they have worked hard to market. This seems more prominent in the warm weather climates, but is also happening in the short season climates as well. I have spoken to several owners throughout North America, as well as abroad, who have expressed that they are puzzled by the way the dealer and distribution channels are heading. With the addition of products now coming from other manufactures this becomes ever increasingly more difficult.
As of the writing of this article there are different companies popping up that are producing similar types of products based on the water jet propulsion technology, there are aftermarket products for the Flyboard and several other types of water propelled products. Even amateur competitions not associated with just the Flyboard starting to take place. There is a definite buzz in the community as to where these products could end up as far as being part of the overall growing rental business. Will this be well received by the diehard Flyboard and Hoverboard enthusiast? We shall see, but I do believe that there is a time and place for these discussions and will sooner than later most likely need to be addressed.
Just like any industry there is the magical time that exists when a product is new and mesmerizes its early adopters. I am and will always be partial to the Flyboard and its community due to the good things it has brought me and my community. But I can see that some who might have put a lot of time and effort into promoting Flyboarding as a sport and business will eventually see that there is a much larger industry to grow here. What, to me, is a better question is how can we integrate these different by name but similar in technology products into one unified sport? By having the sport somewhat universal the businesses could grow organically from there. The sport and business landscape seems to be evolving out of necessity and as we know necessity is the mother of invention.
This brings me to a more in depth topic that will surely create endless debate, but that involves the overall model for growth and expansion based on the contribution of marketing materials and quality products from the manufacturers. This is a topic I am interested in getting more input from the community about. In many industries there is always a certain level of unspoken commitment that the manufacturer, the distributors and the dealers have to have with each other to allow for an ebb and flow of business to take place. This would mean a clear and uniform model for making someone a dealer or distributor. As well as creating a marketing platform that allows for the manufacturer to provide the distributors with collateral material that would then be given to dealers and these would be uniform to the overall presentation of the product. At this time the consensus that I get is that this is nonexistent with some of product manufactures and is provided with some of the others. Some will say they do receive the proper service and commitment but there are some that say they are clearly not. I have heard many sides to the story and could only gather that this is an issue that needs further exploration.
In the many interviews I have done one question I continually ask is if there should be some uniformity to the business model for rental operations. Most of the time that answer is either a flat out no or is answered with rental prices always being the main reason that they would not want it to be uniform, but feel that some type of uniformity is needed. There was at one time discussion of creating an association and I was an avid supporter of it, and still am. I was surprised that there was as much backlash to creating something that is well needed in our industry. I now see that there could even be several of them popping up. This will be a good thing once the industry leader shows that they can benefit the rental companies. But like any industry there are ways to do things and then there are ways to do it better. I guess we will see who will take the lead.
I think if we want Flyboarding and water jet propulsion of some kind to be a sport, we have to accept that this might consist of different companies creating products that allow the sport to grow and create some competition on the distribution and manufacturing level. Until now that competition was being felt on the rental and dealer level only. Just like in sports such as skateboarding and snowboarding there are many manufactures, but there are levels of quality that exist in each company’s product. They are consistently attempting to create a better skateboard and snowboard. We can always have loyalty, which I do, to the company that created the magic moment that you discovered it, but there must be a reason to continue that loyalty. There will be much debate on this topic I’m sure, but hopefully it will allow for some type of discussions to take place to allow for a more uniform model and sport. There is a lot of room for all of us to grow and there are surely enough people for us to share this amazing sport with.
In closing this month I want to say that it was an amazing season and to be able to introduce Flyboarding to so many people was an amazing way to spend my summer. I hope we can continue to watch it grow locally and organically. Hope we can all work together to develop this into a growing industry. We need to respect the efforts that many have put forth already and help promote the sport and business in a way that creates benefits for all of us. We can conquer the rules and regulations and can create a uniform model for growth and expansion. We can create a better network of distribution and dealer channels that open the doors for others to come in and not feel threatened by the presence of competition. Just like any business there will be winners and losers. These are all issues that can be dealt with and solved by the power of discussion.
I hope to report back to you some of the answers to these questions and maybe get some clarification from those that have the answers. I hope to see a few of you at the Flyboard Family event and I am looking forward to being part of a world record. The day will be special for sure and I am glad to share it with so many like-minded people. As always I invite you to contact me via email at any time if you feel like you would like to weigh in on any of these issues. So, until next time folks…go get high…World Record High!!
Response to this article by Luke Kanowski of Flyboard Cairns (unedited)
Business of Flyboard – Great Article Blaine!
I’m very happy that you’ve chosen to bring up these topics from a incredibly neutral stand-point. You and your magazine are undoubted the voice of reason in our little Hydro-Jet world. A little rhetorical feedback from Downunder, based on what I see everyday on Family, whispers from afar of the tyrants, and the angels.
I believe uniformity can be achieved through working against the world, and not among ourselves. Dealers/ Distributors for the majority are incredibly good at growing Flyboarding into a sport. The minority sometimes need a leash, and sometimes a very select few need a moral compass. This select few seem to be the driving force behind our internal squabble, blasted out of logical proportion sometimes because, for nearly all of us, Flyboarding has become our bread and butter, and defending that is our primitive instinct- the drive to providing for our families.
Supersaturation of popular small areas is a sure way to doom all small rental businesses as they fight to bottom for the best price, and yet policing those small areas can have other repercussions as allowing one small business over another to take territory goes against most Fair Trading Laws. What happens if that small business fails anyway?
Distributor/ Agent commission – a form of franchising or pyramid scheming? Some have begun adopting these ‘Agent of Distributor’ systems. But how is this money used? Is any of it quantified? I know here it isn’t and that’s a big cause for the conflict. Is it for personal gain or for the good of the sport, policing who operates as an agent in your territory – tackling the above mentioned issues? If the latter is the case, then why does money need to be transferred?
What Distributors and Operators alike need to realize is that the business of a Rental Operator is vastly different to the business of Distribution. I feel like most people don’t actually realize this, and keep trying to intertwine the two, or piggyback on the other. A Distributors marketing efforts may aline with that of a Rental Operator but at the end of the day they are selling two separate products. A Rental Operator sells an experience and memory, not a toy. A Distributor sells a toy, not a business tool or a business. It is in the Distributors best interest to ensure that the Rental Operator does well, but not be the hand of God. The more people who Fly, the more likely boards are going to sell, the more popular the sport will become leading to recognized training, eliminating rouges etc. The key is to recognize, respect and support each others business direction and goals. Establishing these relationships is key to the clear economical benefits for all ahead.
Another misconception I believe, is that everyone thinks we are all making huge amounts of money. And everyone thinks they deserve a piece. For most of us, we are small businesses. This means that – of the small amount of small businesses that can actually turn a profit – invest that profit straight back into marketing experimentation, and what’s left of that goes straight back into jet-ski maintenance, permit renewals, licensing renewals, accounting fees, phone bills and endless other operational expenses. Most people add a Flyboard to their existing business because it simply doesn’t make enough money… yet… (I stress yet!)
To demand agent fees, commissions, annual training commitments or whatever, of small operators and businesses is simply “stupid” when bread and butter needs to put on the table at the end of the day. And I’m sorry but if a distributor’s/ dealer’s major source of income is by collecting money from its rental operators in any way possible, than they shouldn’t be a distributor/ dealer in the first place – not when that rental operator is basically a free living advisement.
Mutual respect, understanding and support of each others business, direction and goals, I find, is the key to good business. I guess that’s why I was a finalist in the Young Entrepreneur awards for Queensland.
As an example, the other day Jetovator came knocking on our door, interested to set-up. Will they actually move here? I don’t think so. But our response was; how can we help? Whatever negativity there is, needed to be abolished for whatever positive opportunities there are available. I think this really surprised them. But I saw opportunity through cross-promotion, weekly show-offs Jetovator vs. Flyboard, night shows… take your pick, its another avenue to grow the sport in our region. Instead of one voice against the red-tape it’s two, or three, or more. But can you imagine the uproar some other Flyboard entities may have?
As I said, I believe uniformity can be achieved through working against the world, and not among ourselves, by painting a clear understanding, respect and support of each other and our goals.