Sailing the High Seas

Twitter

Ron Patston stumbled into the sailing industry; in 2006, looking for a new hobby, he took a 2-week “Zero to Hero” sailing course with Gulf Charters Thailand at Ocean Marina Yacht Club. Finding that the sailing business intrigued him a year later he purchased 50 percent of the company and became its CEO.

But let’s start at the beginning: Ron was born in San Luis Obispo to young parents. At the age of 3, the family moved to San Jose and that’s where Ron grew up (he says the area was all orchards before it became Silicon Valley and at a young age worked cutting Apricots).

At 17, in a rebellious stage, Ron dropped out of high school to join the US Army and became a paramedic for three years. What he learned in the Army was that he didn’t want to work for people just because they had been in their job longer than he had.

Ron then decided he wanted to go to college; he had gotten his GED while in the army, but since his high school transcripts weren’t great, he had to get recommendations from some of his Army officers to ensure college entrance. Ron jokes that he was only admitted to college through a program that was designed favouring disadvantaged Latinos.

In college, Ron took classes in the morning and worked in the afternoon. He was one of the first 100 employers at Apple Computer, and yes he met Steve Jobs. Due to scheduling conflicts with his academic timetable, he had to switch jobs though and he went to work for Planar Microwave, a company that manufactured microwave components for the aerospace and defense industries. He started as a technician and worked his way up to electrical engineer. He was then headhunted by Avantek, a fast-growing microwave component company, as an Applications Engineer – the technical interface between the factory and the customers.

He was then recruited to be a manufacturer’s representative, or third party sales force, for a product line of Electronic Designed Automation (EDA) software called Touchstone, which was used to predict the performance of RF and microwave circuits before they are actually built. He quickly became the company’s number one outside salesman resulting in EEsof Inc., who made the software, offering him him to work directly for them as an Applications Engineer located in Westlake Village, California. This position later led to Ron being promoted to Applications Engineering manager. Two years later at a trade show in Philadelphia, he was offered to become the company’s European Operations Manager and was quickly dispatched to Munich, where with a year he opened offices there and in Stockholm, Milan, London and Paris boosting sales by 400% in the first year. He stayed in Europe from 1989-93, growing the staff to 25.

He then returned to California, running the company’s Asia-Pacific division for a couple of years and he became the company’s Director of Marketing. Six months after taking over the Marketing Group the firm was acquired by Hewlett Packard, who had a similar product to what EEsof was selling and after the merger and acquisition process was over he became the Marketing Manager of HP’s EEssof EDA Division, responsible for Marketing, Sales, Documentation and Customer Support. For this position, Ron relocated to Santa Rosa, California.

But working for big companies was not Ron’s thing and he quickly found himself being recruited by another start-up called Verticom, which based in Santa Rosa, California, manufacturing microwave synthesizers used in the rapidly growing market for connecting cellular phone towers. He was VP of Sales and Marketing, and over three years, secured US$24,000,000 in orders. During this time Ron worked with the Board of Directors to secure a second-round venture funding of $13,000,000. Unfortunately, even though the company had a strong backlog, the technical challenges in manufacturing and delivering the product were monumental and the company was unable to deliver on delivery commitments.

So Ron found himself back at Hewlett Packard to start a new Consulting Group in the EEsof EDA division, working for a spin-off subsidiary of Hewlett Packard called Agilent Technologies and secured $8,000,000 in new consulting projects. Shortly thereafter, a friend recruited him to a firm called Applied Wave Research (AWR), where he became the company’s VP of Marketing, then the company’s VP of Sales taking the company past the $10,000,000 per year sales level.
Ron then focused on the rapidly developing market in Asia as the VP of the Asia-Pacific region. Traveling to and from Asia a lot, he calculated he spent 53 weekend days in hotels or airports overseas in one year. He convinced his boss that this was silly and that he should be based in Asia; he ended up in Pattaya. He would travel almost every week heading to Suvarnabhumi at about 5am on Monday and get back late Friday night. Ron says that Bangkok is a great place to cover Asia from; it’s centrally located, you can get flights to anywhere and the cost of living is much lower compared to a city like Singapore.

Ron’s hobby back home was extreme 4-wheeling: slow, strategic rock crawling he calls it. He had been doing it for 20 years; he had a shop and a collection of 4-wheelers and classic cars. But these are not easy hobbies to have in Thailand, so after a couple of years here Ron found that all he was doing was working. In 2005, he went sailing on a 55-ft catamaran in the Caribbean and found it enjoyable causing him to enroll in the Gulf Charters sailing school the next year, with Tim McMahon teaching him the “Crew” and “Watchkeeper” courses and Paul Reeves teaching him the “Captain’s” course.

After taking the course, Ron decided he wanted to buy a catamaran, but he couldn’t afford a big Fontaine Pajot, Lagoon or something similar. He did some research and discovered the McGregor 36, which he could buy and ship to Thailand in a container, so he went back to America and bought two of them. Then one day while he was in Ocean Marina, Paul Reaves came over and suggested that Gulf Charters might need some help on the business side. So Ron e-mailed Phil Harper, who was running the company solo at the time, describing his background and letting him know he was tired with what he was doing. Negotiations ensued, and six months later Ron officially bought half the company and became its CEO.

So in 2007, just before the economic meltdown Ron went back to his company and told them he wanted to resign, that he had bought half of a Marine Business company and was tired of traveling 250,000+ miles a year. But his company offered more salary and more stock to stick around for a couple years until they could get sorted and find a suitable replacement. Watching the market fall several hundred points a day, he thought that might not be a bad idea.

So Ron went back to Phil telling him about his company’s request and asked him if he would be ok with that, Phil was and Ron became the company’s CFO remotely and started getting involved in strategic decisions (what did they want to do, where did they want to go, what did they want to be, how did we they want to get there, etc.) and Phil continued to run the day-to-day operations of Gulf Charters.

When Ron first started with Gulf Charters it was doing electronic systems sales, it was trying to be a chandlery, it was doing boat repairs, it was basically doing anything that walked in the door.

So Phil and Ron decided to focus on three things: yacht charter, sailing school, and yacht brokerage, and they divested the company of all its other businesses, going to people like Gary Baguley in Ocean Marina, asking him if he wanted to take over the products they were selling.

In April 2010, Ron finally left AWR and started in the Gulf Charters office full time, though he was held on for five years as a technical consultant, because not only was he in charge of the company’s Asia-Pacific operations, he also ran their software anti-piracy unit.

One of the first things he did at Gulf Charters was move all of the company’s systems to the Cloud. He explained to Phil he wanted to install an online booking system that they all could have access to. Similarly, he wanted to install a cloud-based accounting system, so that staff in the office could enter all the transactions and Ron could see what was happening. And he wanted to put in a cloud-based CRM system, or customer management system. Phil’s response to all this was, “If you can do that, you’re a God.” For a small company that is geographically separated Ron knew that you needed to put systems in place to make it productive.

The company then decided to add yacht delivery to its portfolio and has delivered yachts from Brisbane to Koh Chang, from Hong Kong to South Korea, from Pattaya and Phuket to Hong Kong and back again. They do that with their own skippers and sailing school alumni, which gives the ex-students a good chance to get sea miles.

But about that time, the political demonstrations in Bangkok started and the charter business dropped off significantly but the company still did well because the sailing school and brokerage were still going strong. They had signed on Catalina Yachts in 2008 and Nautitech in 2011for new yacht brokerage and that helped.

But then as the charter business started to recover, Phil and Ron realized they needed more than one catamaran in their fleet, so they went searching and found the cost of the new catamarans made in France was not the main barrier, but the cost of shipping them to the Gulf of Thailand added significant cost that did not make them a viable charter boat choice for the area. In addition at that time piracy was alive and well in the Gulf of Aden, so on the water delivery was not an option, you couldn’t get any insurance if you wanted to sail through the area.

So they tried to recruit cats from other fleets and were successful in acquiring Tropic Dancer from Australia and Rangiroa from Croatia via Singapore. Then, Paul Reeves, the Gulf Charters Senior Yacht Broker was approached by the builder of the Island Spirit Catamarans, which had been building catamarans in South Africa since the late 90s and had delivered close to 50 boats. The owner wanted Gulf Charters to sell his boats, in particular, a new design, the Island Spirit 380, which had a very attractive sticker price of under $300,000. There was a huge amount of interest from Gulf Charter’s clients but everyone wanted to see the boat.

Gulf Charters ordered the first boat (hull #1) to expedite the process. About a year later, in July of 2013, they received it, but it wasn’t everything they expected, so they sat down with the owner and said they would like to make some improvements. There were no structural issues with the boat, it was very strong, you could hit a reef with a hit no problem, but it was too heavy.

Ron brought in longtime business associate and close friend Jack Matz to determine if there was a viable financing model to get 5 more boats on order and closer supervision of the manufacturing process. They reached an agreement to order five more boats with the builder, but in exchange, agreed to start a new joint venture, Island Spirit Catamarans, Co. Ltd. to build the boats with joint ownership. Also as part of this agreement, Ron and Jack would have worldwide distribution responsibility.

Ron then went to the Annapolis Boat Show in October of 2013, but while he was there the builder died. Ron came back to Thailand and Jack Matz flew in from Texas. The goals were simple: where were they on the build process of the boats on order, and did they have the staff and facilities to build the boats within cost and on time?

They decided to press on and launched hull #2 a power cat in Jan 2014; in July of last year they launched hull #4 and in October they launched hull #5. They then started production on hulls 6-8, and all of these were snapped up at the Ocean Marina Pattaya Boat Show (hull 6 will be launched in April, hull seven – a hybrid – in early June, and hull eight in August). The boat show, by the way, was great for Gulf Charters as it received numerous good sales leads.

The company’s plan is to launch three boats every six months. Ron says it’s a chicken-and-egg type thing, people will not really take notice until you put out a couple quality boats.

Ron also tries to get the new owners to keep the boats in the Gulf Charter fleet if they are not using them all the time. Owning a boat is a challenge unless you use it all the time, so putting in charter keeps it being used, covers the operating costs, and keeps it up to speed maintenance-wise.

Today, Phil Harper manages the Gulf Charters charter business; Paul Reeves manages the Yacht brokerage, Russell Hough has joined the company for New Business Development for the Sailing School, expanding the program beyond basic sailing courses and Ron has responsibility for charter sales and financial management and overall management of the Island Spirit Catamarans business.

Gulf Charters is seeing continued growth in the charter market and adding new Catamarans now every year, the sailing school, which was primarily all expats attending, is now seeing many more Thai nationals learning how to sail.

Today, Island Spirit Catamarans is building these new Catamarans in Ban Chang, Rayong for private customers, for use in the Gulf Charters Fleet and also will be delivering a number of boats to the Sail in Thailand Charter Fleet over the next year.

It’s been a long journey for Ron – very few people have covered as many air miles as he has – the irony is, he may finally have found his home – on the sea.