September 6, 2018

Pithy Conversations with CEOs
Liz Harvey, Island Windjammers 

(c) Trusted Counsel (Ashley) LLC. All Rights Reserved.


Speaker 1:           It's time for In Process, Conversations about Business in the 21st Century with Evelyn Ashley and John Monahon, presented by Trusted Counsel, a corporate and intellectual property law firm. For more information, visited trusted-counsel.com. And now with In Process, here are Evelyn Ashley and John Monahon.

John:                  Welcome to In Process. I'm John Monahon.

Evelyn:               And I'm Evelyn Ashley.

John:                 And today we are having our continued series of pithy conversations with CEOs.

Evelyn:               Exactly. We're pretty excited about our guest today, because she's got a very fun business that she has founded and operates, and even though she disagrees, we think she's pretty pithy.

John:                  Yes. Let me introduce Liz Harvey, the CEO of Island Windjammers, which is a cruise line for smaller ship vacations cruises. I'm not going to steal her thunder though. I can't explain it as well as she can, so Liz, do you want to give us the 60 second elevator pitch about your company?

Liz:                     Sure. Island Windjammers operates three small ships in the Caribbean, windjammer tall ship sailing cruises. They are six and 12 nights. The ships take 10 guests to 24 guests in air conditioned double cabins, and operate out of different ports in the Eastern Caribbean.

Evelyn:                Sounds much better than we could say it, Liz.

John:                   Yes-

Liz:                     Okay. So far, so good.

John:                  And so, I didn't want to go into your whole background at the beginning of this by myself. I'd prefer that you tell it. You have a really interesting background. Can you tell us a little bit about how you got this company started and what you were doing at the time?

Liz:                     Sure. Well, basically, a similar company went out of business in 2007, and I had just vacationed with them around the time, or shortly before they went out of business, and became part of an outline dialogue with a big group of super fans who wanted to start a new company. I was really enthusiastic and thought they should. I was right there cheering for them, but I didn't know anything about sailing or about business, so I just thought I'd be a supporter and part of the ra-ra squad. Gradually, people sort of lost interest and decided they couldn't do it, and the group dwindled and dwindled and dwindled, and then all of a sudden, I was the only one left.

Evelyn:                 And you couldn't just leave it alone, could you?

Liz:                      I couldn't just leave it alone. I was really fired up. This is going to be a great thing to do, and I just thought after we all put all this passion and energy into it for many months, I couldn't just let it go.

John:                   Yes.

Liz:                      So I didn't.

Evelyn:                 So tell us though, Liz, what did you do at the point you decided, “I'm going to do this.”? What happened?

Liz:                       It was those kinds of things that follow on, one after another. The first thing that happened was, I kept a group of people in this online conversation, and we actually, very naively, started a bank account and put money into it, and everybody knew they were probably going to lose their money. But we kept that money. I never used any of it while we were talking to people and making connections and scouting around for ships.

                           Then the time came along when Diamant, our first vessel, the 10 passenger yacht, became available. Actually the owner called us up and asked if we wanted to purchase it. I said, “Well, I have this little amount of money for a down payment.” He said, “Okay.” And that was that. We started sailing six weeks after we got the ship.

John:                   At the time, what was your full time job? This isn't something that you necessarily any experience in.

Liz:                     My full time job was as an operating room nurse. I was full time then and I'm still an operating room nurse now, because I have a hard time saying no when people are short staffed. So you can find me at Roswell Surgery Center too.

John:                  You know what I think is the most fascinating thing about this, which is ... What year are you talking about that this happened?

Liz:                     It was in 2007, that it started.

John:                 Yes. And that is so ahead of its time, quite frankly. It's not as if you were raising money on this platform, or that it was crowd funded, but very similar to the extent of the enthusiasm came out of it, and then you guys got a real business and got it going. But if you think about it, it really was ahead of its time in that aspect, that you were able to get this enthusiasm, and this business, and eventually a boat out of that group of people.

Evelyn:               Yes. Because that was a terrible time to raise money, Liz. It was, you know-

Liz:                    Yes, when I think back on the internet chat boards that we were using, they were just absolutely archaic compared to the kind of online communications that's available now. I kept all of those chats and records and whatnot. I actually can't read them, they make me cringe.

John:                 What happened after you bought your first boat? Was there a moment of, “This is awesome.”, or was it like, “Oh my gosh, I got a boat now.”?

Liz:                    Oh no, it was awesome. The best part about it was, I had a little group of people working with me, and we were all so excited about it that we didn't know how stupid we were. We just forged ahead, and started with definitely the right boat for us, because it was small. We had set our sights on something much grander, but Diamant came along, and in retrospect, it all unfolded as it should have. So, no, we charged in there as excited as could be.

John:                 How long after you bought the boat were you guys running cruises?

Liz:                   We bought the boat at the end of September of 2009, and the first cruise ... We had two practice cruises in November, and then real cruises started at the beginning of December. So two months. But we had been planning so long that we knew how we were going to do it. There had been a lot of pre-planning, so that it wasn't that hard to get the cruises actually going once we had the ship. That was the only missing piece at the time, a ship.

John:                What about the staff and everybody else that you needed on board? It's not very easy to do it from here in the States, and you got everybody staffed up. How did you get all that started? How did you get the work force in place?

Liz:                   We had a big network of former crew from the company that went out of business. When that company folded, there was a lot of communication back and forth. I got to know captains, shipping agents, maritime attorneys, crew members. That part actually was not a big problem.

Evelyn:              There is now three ships in the Island Windjammers group.

Liz:                   Correct.

Evelyn:              How long before you made your next purchase?

Liz:                   We bought Sagitta in 2012, so it would have been three years after we got Diamant, and then Vela was three more years after that.

Evelyn:              So it's about time for another ship, is that right?

Liz:                   It might have been that we were headed in that direction, but last year we had it real slow when Hurricane Irma and Maria decimated a lot of islands in the Eastern Caribbean where we sail. There's still lots and of lots of islands left, but Caribbean tourism overall is decreased by 60, 70, 80 percent-

Evelyn:              Oh, wow.

Liz:                   All through the region because of the disasters last year.

John:                There's a lot of competition for recreational dollars. Particularly, there's a lot of large cruises that want people's money. How do you differentiate yourself from the other sort of cruises in your space?

Liz:                   We like to say that our cruises are for travelers, not tourists. We go to really small islands in the Caribbean. There are not tours and attractions and contrived kind of activities, like ... I don't know what they do on board big cruise ships. Mountain climb or ...

John:                 A lot of limbo, like ...

Liz:                    Ice skate ... Yes, hello, limboing. We have a very casual product. You only need to pack a tiny little bag. Just your bathing suits, and a couple shorts and T-shirts, and you're going to see the real Caribbean on board the ships. Islands that many of them, you can't even fly to on commuter islands. The only to get to them is by boat.

Evelyn:              How do you focus on getting the word out about Island Windjammers? Now you've had to go beyond your small group. What kind of marketing methods does the company follow?

Liz:                   We use mainly social media. We've dabbled in a lot of different things, and it seems that, the less expensive the advertising is, the more effective it is. We do a lot of Facebook and Instagram, Google AdWords, but not much print advertising. We are listed in a couple of charter catalogs, but mostly social media. Word of mouth is big for our company. Repeat guests are ... We have about a 28 percent return rate among our current guests.

John:                Yes. Your cruisers are fanatical. That's definitely something I've noticed is that they're very passionate about the cruise. How do you address the seasonality of the business? That's something I'm curious about. That must pose a lot of challenges for you.

Liz:                   We do maintenance on the ships during peak hurricane season, so we take them out of service on a rotating basis for most of hurricane season. Then September, which is peak hurricane season, all of the ships are out of service. There's always lots of work to fill up that time, and we also drop the prices on the months surrounding hurricane season, so it's more affordable for people during that time.

John:                So Liz, going back to the fundraising a little bit. It's been really interesting. One, I just got to say that it's been very neat for me to see where you've gone from 2009 until now, and just seeing the ships, one by one, getting added. I think another interesting thing about your company is that really, we talked about where it started, but even now, you did once the 506C sort of crowdfunding rules came out ... You guys actually took advantage of that. You actually have a lot of your fan base that's invested in the company under the new crowdfunding rules. That's pretty interesting. How's that experience been?

Liz:                   It's actually been great, because the investment is an unusual one. We do have all accredited investors. They all have sailed at least once, and many of them have sailed lots of times. But because they are fans of the company, they were really enthused to invest, and part of the benefits that they get include some cruising benefits. That makes it more attractive to the people that sail with us. We do keep an investment perspective on board all the ships. We have gotten several investors just by people glancing at the materials that are kept on board.

John:                Yes. It's been-

Evelyn:              Really innovative. Plus, it's another way is ... You have these very dedicated investors inside the business that probably want their friends to invest too, and help push it a little bit.

Liz:                   Yes. We have had investors from other investors. People say a lot, “Well, it's really an innovative way of raising money.” But, I always say, “Well, I never raised money before, so I didn't know how it was done.” I just did it one way.

John:                It's been interesting for me. We've added a lot of people, and that's been good. It's good to see the result of it, absolutely, in the way the business has grown.

Evelyn:             So, Liz-

Liz:                  Yes, it's been exciting.

Evelyn:             So, Liz, you essentially manage the company, your people virtually. How do you do that? We're a group that basically, we all sit in the same office and see each other most days. We have our own communication challenges. Maybe that's a problem with just being lawyers, I don't know. We're always fascinated by a company that's structured where, essentially, you really don't see your people face to face on a very regular basis. Isn't that right?

Liz:                  That's true. We get together ... Our management team in the US is just very small, and it's all women, get together usually once a year. After we spend three or four days together, we all agree that it's a good thing we don't work in the same office. We'd kill each other. I actually think that's a huge advantage. It's very easy to run the business virtually, because of the technology that's available now. We have group texts. We email, text ... Talking is our least likely method of communication. It's easy, and we all are in frequent contact with each other throughout the day. When I say all, I mean all three of us.

John:               What's the corporate culture? I know you're going to laugh at that, but what is ... Every company has a culture. How would you describe Island Windjammers culture?

Liz:                  Well, it's very informal. One of my huge values is not to micromanage people and to have people working for me that I don't have to micromanage, that I really, really trust and rely on their opinion and expertise. I have the most amazing team of people. Never feel I have to micromanage. I trust them to the extent that sometimes, if their opinion is totally different than mine, I'll just let them run with it. Sometimes I can say, “I told you so” later, and other times it's like, “Wow, that really worked out great!”

Evelyn:             I'm really happy to hear this, Liz, because I had this visual of basically Captain Bligh.

Liz:                  No. I'm too busy to micromanage people. My other corporate culture is to have as few meetings as possible. I'd say we have maybe one phone meeting a month.

Evelyn:             Wow. That's great.

Liz:                  Yes. We do better with just the dynamic communications day to day.

John:               I imagine you to be a direct manager though. I imagine that you're pretty direct in feedback if something is not going the way that it goes. Is that accurate?

Liz:                  I'm actually kind of a pansy. So, yes and no. When I get ... I'll be timid about something for a while until it's really become a problem, and then I can be direct.

John:               Yes. What about-

Liz:                  That's actually something that I'm working on, because I am a pansy.

John:               I would have never guessed.

Liz:                  It's a nurse thing. You're used to getting pushed around.

John:               What about the corporate culture down on the boat level? Customer satisfaction has to be key. How do you make sure you enforce a consistent passenger experience?

Liz:                  Well, the majority of my crew members ... I'm not going to say 100 percent, but it's a really high percentage, are really proud of their jobs and proud of what they do. Proud of the ships. It shows in our customer comments. I've been told that in the travel industry, or basically any industry, if you can make 80 percent of the people happy, then you're doing well. We're way above that, probably in the high 90 percent. I have to say that the crew is a large reason why. If you read our comment cards, it's always, always, always, “Amazing crew, amazing crew, amazing crew.”

John:                Now is that a trial and error process or did you kind of get lucky from the outset?

Liz:                  We have staff turnover. Every employee doesn't work out fabulously all the time. But, overall, even if the crew maybe aren't working so well together behind the scenes, they can always put on a good smoke mirror show.

John:               Which is bound to happen if you're stuck on a boat together, I would imagine.

Liz:                  That's absolutely true.

John:               Do you get down there to cruise yours ... How often do you go down there to ride the ships and see what the experience is like?

Liz:                  I go every couple of months. I don't always cruise. I actually prefer to get opinions from other people on the cruises, because I feel like when I'm there, obviously everybody maybe is doing things a little bit differently than they would if I weren't there.

John:               Right.

Evelyn:            Perfectly, yes.

Liz:                 Yes. To be honest, I don't know how to say this without sounding bad, but I'm so detail oriented that when I sail I ... If I see a soda can, I have to get up and get it myself, put it away. It's not all that relaxing for me.

John:               Yes. That's what I was going to ask, whether you still enjoy it? Whether you can enjoy it when you're there?

Liz:                  I do enjoy it, but it's also aggravating.

John:               You see all the details, I'm sure, that nobody else sees.

Evelyn:            Right.

Liz:                 Exactly.

Evelyn:            What's your view on transparency, Liz? You've got a small group, but you do have crew, and-

Liz:                 I don't know what that question means, Evelyn.

Evelyn:            Basically, how open are the books of the company? Does everyone know how the business is doing on a weekly, monthly, quarterly, annual basis? Or do you pretty much keep that to yourself and your key managers that are working with you?

Liz:                 It's really easy for my employees to see how the business is going, because ... I said we have only three key employees here in the US. Every single one of us sees when a reservation comes in. All of us know what the good reservation, what the not so great reservation, if we had a good reservations day, or if we didn't have a good reservations day. We've had some really challenging times in the last year because of the hurricanes. The crew is aware of that as well, and they've seen that reflected in lower occupancy rates on board. In fact, very low for us. The lowest they've ever been in 10 years.

Evelyn:            Oh, wow.

Liz:                 So they can see that. But I have never, ever, ever, once thought that ultimately we're not going to make it. I try not to be Debbie-Downer when we're doing badly, and just ... We've been through lots of hard times with-

Evelyn:            Focus on the future. Yes.

Liz:                 Yes. We always moved through it, and come out better on the other side.

Evelyn:            Are there repairs that are happening on the islands that at least, you're hoping that this next season-

Liz:                 The majority of the islands are perfectly fine. The islands that were damaged, I would say the worst of the ones that I've seen is St. Martin, but they're rebuilding. The things that we do at any of the islands is pull up to beaches and do beach barbecues, and go hiking. You can do that regardless.

Evelyn:            Right.

Liz:                 Little Dominica was one of the hardest hit islands last year. They have very limited resources, and they don't have big countries backing them. We started sailing again in Dominica in March of this year, which was about six months after the hurricanes, and they're so incredibly grateful to have the tourism returning.

Evelyn:            Right.

Liz:                 There's still plenty to see and do, and we were a little concerned that some of our guests would say, “Oh gosh, why did you take us there? There were tumbled down houses.” But we haven't had a single comment like that.

Evelyn:            I recall that when the hurricanes had hit that you and your crew and your people, you were all raising clothing and food and money for the islands. Isn't that right? Tell us a little bit about that.

Liz:                 We actually ... We used Diamant, our little 10 guest yacht, because she was out of service for several weeks anyway for maintenance, but instead the maintenance was sort of stuff that it would be nice if we did, but not mandatory. I had a GoFundMe page, and we collected a lot of money here, and sent out a lot of supplies. We also collected supplies in the islands, and then we used Diamant to take a cargo of supplies to Dominica.

                      Then they sailed back and forth between Martinique and Dominica about half a dozen times bringing more relief supplies that had been donated in Martinique over to Dominica. Then they stayed on the island for three weeks and helped put up school tents, and install water purification equipment. It was great to be able to do that.

Evelyn:            Nice. Well, I'm sure the islands that people had to be really appreciative and ... That's just a great way to make it so solidifying for your business, quite frankly.

Liz:                 Those are our friends there too. Friends of our crew member's families. It really hit pretty close to home.

Evelyn:            Liz, are you working in the business?  Are you working on the business? Are you-

Liz:                 I guess I would say I'm working in the business, on the business, and at Roswell Surgery.

Evelyn:            Got a lot going on, Liz.

Liz:                 Yes, got a lot going on. But I do work in the business and on the business. Sometimes I'll take reservations calls, or whatever basically needs to be done, order toilet paper from Amazon. Also, I obviously work on the business as well.

Evelyn:            So what does success look like for Island Windjammers, and for Liz Harvey?

Liz:                 Success for Island Windjammers looks like ships that are averaging 80 percent or better occupancy over the year.

John:              Now are there a number of ships, or is it these three ships? Or do you have more in mind?

Liz:                 I don't have any more in mind right now, because we ... Well, I have a couple of goals of ... Number one, we need to get back to where we were before the hurricane, as far as volume of guests sailing with us. Number two, we still have some debt to pay off, and I'm really focused on getting our debt load whittled down before we get any larger.

John:              What have been some of the biggest challenges that you've had in the business so far?

Liz:                 I would say the hurricanes would have been the biggest challenge, because it literally just killed our business suddenly and out of the blue, and completely for many, many months. It was difficult to get through that.

John:              That one's not something you can really prepare for. Or is it? Do you guys count every year ... Like, there's going to be a hurricane or some sort of natural disaster? I guess you count on hurricane season, but nothing of this magnitude.

Liz:                 We count on hurricane season, but to have three of our sailing areas taken out literally within days of each other ... Even that wouldn't have been so bad. We can go to other islands, but it's the overall ... The public perception of the disaster in the Caribbean that really just put a stop to tourism, and ...

Evelyn:            Yes.

John:              Yes.

Evelyn:           Not writing the checks.

Liz:                Exactly.

John:             Is there anything that you're most proud of?

Liz:                Yes. I'm a nurse. I got three ships, and ...

John:             It is awesome.

Liz:                Yes, I can tell you what under filter goes on any of our engines and generators off the top of my head. I've learned all kinds of new things, and every time there's something in front of me that I think, “Oh, God, I just can't do this. I can't. I don't know how to do it.” Then I make a couple phone calls, or call somebody who knows somebody. We haven't run into a problem yet that we couldn't surmount, knock on wood.

Evelyn:           That's awesome. Tell the truth, Liz, want to hear. Okay, patients are in recovery from the operating room. Are you passing out PPMs? Are you saying, “Hey, we're looking for investment, and we need you to get on our ships?”

Liz:                No, I'm not. I'm not allowed to do that. However, when I take the garbage out to the dumpster, I do check my email for the company, and send replies when I'm standing out at the dumpster. I have a very glamorous job.

Evelyn:           Good for you. Good for you.

Liz:                 Yes.

Evelyn:           We really enjoyed this Liz. Terrific. We only wish the best for Island Windjammers, and we hope that our listeners will actually go to islandwindjammers.com and take a look at what a great company you have built, and these fabulous ships, and your cruises. Is there anything else that we should say, so they can get in touch with you, Liz? Anyone who is listening?

Liz:                 Anyone's welcome if they have questions, to contact me by email. It's very easy. It's liz@islandwindjammers.com.

Evelyn:           Perfect.

Liz:                 I think there was a question in the possible script that said that I have 50 words of wisdom or a pithy CEO words or something-

Evelyn:           Oh yes, let's have it. What are those-

Liz:                Mine are, “Be careful what you wish for.”

Evelyn:           You might just get it.

Liz:                You might just get it. You're right.

Evelyn:          Those are words we all should remember.

Liz:                Yes, exactly.

Evelyn:          Well, thank you Liz. We really appreciate your time, and-

John:            Thank you, Liz.

Evelyn:          This has been great.

Liz:                Alright, it was great talking to you guys, and you're the best.

Evelyn:          You're the best. Bye, Liz.

Liz:                Thank you. Bye.

Speaker 1:      This has been In Process, conversations about business in the 21st century, with Evelyn Ashley and John Monahon, presented by Trusted Counsel, a corporate and intellectual property law firm. Are you interested in being a guest on our show? Email our show producers at inprocess@trusted-counsel.com. For more information on Trusted Counsel, please visit trusted-counsel.com.