A Passion for Boating Turned Into a Business : After buying a bankrupt firm’s sport-fishing boat division, entrepreneur set about learning the boat-building business.
An entrepreneur needn’t know every aspect of a business before starting a company, says Keiji Tanada, but it helps if you have a passion for what you are doing.
Tanada’s passion has long been boating. Now it’s his business, too.
Tanada, 42, ran his own trading company in Tokyo and was the Japanese distributor for Ericson Young, a sailboat builder that went bankrupt in the spring of 1990. Tanada was one of the company’s unsecured creditors. When Ericson’s assets were sold in a bankruptcy auction in July, 1990, he bought its sportfishing boat division.
The acquisition was timely. The Japanese government had started a campaign that year to encourage its citizens to take more time off from work. Sportfishing and sailing were growing in popularity among Japanese, and demand for U.S.-made boats was on the rise. Tanada decided to customize his boats for the Japanese market.
But there was a big problem: He knew nothing about boat building. The assets of Innovator Boats--engineering drawings and various other plans--didn’t include any engineers or designers.
“The only things going for me were: I liked sailing and I knew what the Japanese market wants,” Tanada says. He adds that he is eager to learn the art of boat building.
Now a resident of Irvine, Tanada had wanted to own a boat ever since taking sailing lessons during his college days at Keio University in Tokyo. After graduating in 1973, he went to work for a small Japanese trading company in Tokyo. The job didn’t pay much, so he couldn’t save enough money to buy his own boat.
He left to work for a General Electric subsidiary in Japan, marketing semiconductors and other computer components. He also worked for TRW Overseas Inc. in Tokyo, a unit of Cleveland-based TRW Inc., as marketing director for automobile seat belt and safety air bag products.
At 30, Tanada finally bought his first boat--a Japanese-made, 21-foot sailboat. By the time he left Tokyo to move to Irvine in October, 1990, Tanada had owned four sailboats and was on his way to becoming a boat builder.
“While I like sailing, my business intuition tells me to invest in sportfishing boats because the market for these boats is growing very fast in Japan,” Tanada says.
He hired an experienced boat-building engineer, a sales manager and a secretary for the company. At the same time, he began studying Japanese regulations for sportfishing boats and researched the market to find out what features Japanese consumers would want.
Tanada hires subcontractors to actually build the boats. That reduces his company’s labor costs and allows his employees to concentrate solely on design and engineering. He makes sure that he and his engineers work closely with the subcontractors. To minimize production errors, he slashed the number of components used in the boats and standardized all the parts.
Innovator Boats makes the fiberglass molds, tooling and cabinets locally. The boat engines are supplied by a Michigan company and other parts come from Washington state.
“Everything is made in America,” says Tanada.
There have been some unpleasant surprises. California’s strict environmental regulations soon woke him to the realities of U.S. production. He didn’t expect to spend so much money for required pollution equipment that reduces emissions from chemical solvents used in boat production.
In February 1991 Tanada unveiled a 30-foot sportfishing boat, the Innovator 30, that sells between $99,500 and $146,000. Despite the recession, he sold 10 boats last year in the United States, Europe and Japan.
One pleasant surprise this year: four orders from Panama and Costa Rica. So far, Tanada has only sold four boats to Japan--his target market. He expects that it will take a lot of time and patience before sales to Japan take off. Japanese consumers are quite brand-conscious, he says, and little Innovator Boats has a long way to go before it’s name is well recognized.
