I want to say something clearly about the financial question in the early days of Naora, because it is the question that the outside world tends to ask in one form and that we were asking in a different form. The outside world asks: is this commercially viable? This is the reasonable question of the person who is assessing an opportunity. It is not the question we were asking.
The question we were asking is: can this sustain itself? Can the Naora programme operate, with the boat maintained at the standard the offshore sailing life requires, the crew paid at the level the offshore professional deserves, the programme delivered at the quality that makes the doing of it genuine rather than the approximate version that the financial pressure to reduce costs tends to produce, at a cost that the membership can carry?
Not profitably in the conventional sense of the surplus that accumulates above the cost of the operation. At the sufficiency of the programme that covers its costs and delivers its promise and remains there for the people who come for it year after year across the five years of the circumnavigation.
What the Model Said
The model said yes, at the membership size and pricing structure that the concept required. This was the relief rather than the triumph: not the discovery of the large opportunity but the confirmation that the thing we wanted to build could exist in the form we wanted to build it in, without the compromise that the financial pressure to reduce costs below the standard would have required. The non-negotiable costs — the boat, the crew, the programme quality, were covered. The membership could carry them. The programme could sustain itself.
I have been asked since whether we should have priced higher, whether the programme could have generated a surplus that was invested back into additional legs or additional boats or the commercial growth that the investment logic normally pursues.
The answer is that we did not build Naora to pursue commercial growth. We built it to make the offshore sailing circumnavigation available in the form that does what Sven has been watching it do for twenty-five years, for the people who need it to do that.
The financial model that enables this is the correct financial model. The surplus is the experience we are creating, not the number at the bottom of the spreadsheet.
