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Knut Frostad, CEO of the Volvo Ocean Race, talks to VSail.info (part I)

Posted on 27 September 2012 by Valencia Sailing

We catch up with the CEO of the premiere round-the-world race and talk about the current situation and, most importantly, the major change in adopting a one-design boat for the entire fleet. Even if we didn’t entirely agree with Frostad’s point of view, it was interesting to have such an in-depth and exhaustive discussion. Time will tell whether the decision was successful or not. This is the first installment of the interview, the second one will be published next week:

VSail.info: Before talking about the present and future of the Volvo Ocean Race let’s briefly turn to the very recent past. How would you assess the edition of the race that just finished? Did it live up to the expectations you had?
Knut Frostad: Yes, it did. The final conclusion for us is that we are happy with the race especially considering the situation we started from. To start with the negative points, I would say we weren’t happy to have such a big percentage of the fleet suffering from technical problems at the beginning. Obviously, that was not an ideal situation for us. At the same time, we started in a different economic environment and we managed to have six very good teams, five of which were definitely competing to win the race. We had a fantastic race with these five teams, until the very end, so considering that situation, we are very happy. Of course, there are always a hundred things we would like to improve and for that reason we are currently working on the next edition, trying to learn from the past races and improve the way we do things. To cut a long story short, we feel we definitely had a good event event and our global media numbers, corporate guests and impact in the stopovers increased substantially from 2008-09.

VSail.info: I remember that in April 2010, in a previous interview, you had stated you were expecting ten entries. Would you say you were overly optimistic back then?
Knut Frostad: Well, in hindsight probably yes but it is always very difficult to make a prediction. At that stage we had a lot of interest but at the same time the economy kept deteriorating as we were getting closer to the race. In any case, you always make your predictions based on the current situation and forecasts and at that stage I can say we had good reasons to be optimistic.

VSail.info: Without any doubt, the most important news since the end of the 2011-12 race was the announcement you made concerning the future boat. This has been covered, discussed and analyzed at length throughout the summer. My own unscientific poll, based on the information gathered by talking to various people, suggests opinions are split. What was the main reason, the drive behind taking that decision?
Knut Frostad: The main objective for the Volvo Ocean Race is to increase the fleet of the race in a difficult environment. This is the starting point and our main objective. One-design doesn’t only affect costs, it affects many other aspects of the race and under the current situation we believe it’s the right decision and the right thing to do.

We understand a lot of the criticism and the fact people are in favor of open classes or the arguments they are more interesting to race or develop but our primary, our only objective, is to consider the situation the race is in, the situation the sponsorship market is currently in and try to make it as attractive to potential teams and sponsors as possible. This is the main objective for us. It’s not about singling out one element. It’s not just about saying the one-design lowers costs. One-design does a lot more than simply reduce costs…

Start of the Alicante in-port race in the 2011-12 Volvo Ocean Race. Alicante, 29 October 2011. Photo copyright Pierre Orphanidis / VSail.info

VSail.info: Such as?
Knut Frostad: First of all, it completely changes the timing for potential teams, when they actually have to find the money because we managed to finance the construction of the boats. This is probably the most essential aspect of the one-design idea, the fact we are now able to produce the boats, to finance their construction. That means the teams now have more time to find the necessary funding. In a difficult economic environment such as the one today, this is ABSOLUTELY essential.

Take for example the America’s Cup World Series. Why did the ACWS happen? The only reason it happened so quickly was because Larry Ellison built enough boats on time. It wasn’t only because people liked the idea of catamaran racing. Somebody had to build the boats and make this possible. The reason it was possible was because someone had the necessary financing to design and build the boats and suddenly 8-10 boats were available. Even if a team entered very, very late they had a boat.

A lot of people don’t realize how important that element is. In every single Volvo Ocean Race I have been part of, even when I was racing myself, you were heading to a deadline which was when you had time to design, book a slot and build your boat. This deadline comes, normally, at least a year and a half before the start. If you miss that deadline, your only option left to do the race is to buy an old boat. Obviously, nobody’s strategy was to do that. When you reach that point it’s your only option but not your preferred one.

This is very important for us because what we looked at was how to reach the size of fleet we want in a very difficult environment. We analyzed the problems and bottlenecks teams encounter when they want to join. Cost is one but not just the boat, it’s the cost of the entire campaign. Another extremely important element is the time you have available to find the funding.

There is another aspect as well. Some teams look at the Volvo Ocean Race and consider it too difficult to be competitive because they lack the experience with the race. The one-design will not entirely eliminate this because an experienced team will, and should, always have an advantage but at least it guarantees that all teams start on the same platform. They will be more competitive in the sense they will not start from behind, they will not have to learn how to design a boat, find the right designer, build it and end up with a boat that is potentially slower than the rest of the fleet.

VSail.info: So, it seems that for you it is very important to try to level the playing field and lower the barriers of entry, make the entry easier.
Knut Frostad: Yes, in particular for teams with less Volvo Ocean Race experience or new teams. We looked at the three-four last editions and for us to grow the race, we need new teams to come in. Teams that come from outside, that might be competitive in other events or classes or even completely new to our offshore sailing. For them it’s important to see how they can enter the race and how it can be attractive to them and their sponsors and what time it will take them to get up to speed.

We also see that the cost side of the one-design is, obviously, extremely important. A one-design boat will always be cheaper than a one-off boat when you look at the total package over time. Time will tell how much cheaper but there are some elements of the one-design boat that you simply cannot compete with. For example, in regards to the spare parts and all the maintenance of the boat it’s not comparable with an open environment where everybody has different masts, booms, daggerboards, rudders and systems. In addition, since we will do two races with these boats, the second-hand value will always be higher. If you compare apples with apples, there is no doubt the one-design boat is more economically efficient.

Another element, equally important to us, is the reliability of the boats.  It’s an incredibly important part for us because you can always argue that the VO70 boat was a development class but it was also a  locked class inside the box. If you really want free development, then you shouldn’t have any rules. Without any doubt, if you take the money the teams spent on developing their VO70′s and you spend it on boats with no rules then you would certainly have faster boats. You could probably even have better boats because the rule doesn’t always drive you in a good way, it drives you to work inside the box and you spend a lot of money pushing the walls of the box even if it’s not efficient.  You spend a lot of money chasing small gains. You end up spending money in places that don’t make sense.

The same challenge we have with reliability is that in order to really change it, substantially, you would need to rewrite the rules completely. Of course there are a lot of things we learned from the VO70 which were positive developments we would like to carry forward but there are also many things we will like not to repeat or do things we didn’t do with the VO70. We now have a completely new book with the new class and the new boat that will be launched in 2013 will be much more developed in some key areas for the race than the VO70′s.

Abu Dhabi’s Azzam was designed by Farr Yacht Design and built by Persico, both heavily involved in the design and construction of the new one-design VO65. Alicante, 29 October 2011. Photo copyright Pierre Orphanidis / VSail.info

VSail.info: I see your arguments even if I don’t share entirely your point of view. You own the race so you set the rules, that’s obvious, but since you took the decision to opt for a new one-design boat why didn’t you go with Juan Kouyoumdjian, the designer of the winning boats in the last three editions, instead of Farr Yacht Design?
Knut Frostad: This question has been asked a lot. I don’t like to go into the details of why we didn’t go with one designer or another. We had a short time frame to make a viable project working and for us it was critical to select partners, not only in the design, but also in the yards and the systems, that firstly really wanted to do this project, because we only wanted partners who shared our vision and were determined to make it work. It’s a complex and challenging projects and we needed to work with designers, boatyards and suppliers that wanted to do it and had a good experience in one-design classes. We also wanted them to meet all the objectives we had. In some cases we ran tender processes while in other cases we started very early the selection of our partners that we felt we would be happy with. We are very happy working with Farr Yacht Design in this project and we have a very good collaboration from the beginning. They are currently working with quite a few sailors and key people from the previous race that are involved in the design of the boat and this is very positive.

For us, it’s not an issue of why we selected someone instead of somebody else. We had to define what the key elements were for us and needed to find partners in all the areas that worked very well with those elements.

VSail.info: Yes, but two of your main partners, Farr Yacht Design and Persico, were involved in the design and constructions of Abu Dhabi’s Azzam, the only boat to have suffered from delamination.
Knut Frostad: We know quite a lot about what went wrong with the boats. We have a long log with all the damages and a lot of them are not reported to the media. We know them because we manage our race control with all the information from the boats. We know exactly what damage each boat has suffered from. We believe we know why Abu Dhabi suffered delamination on leg 5 but I don’t want to go into the details of what exactly happened. The rig problem they had was completely unrelated to the designer and the boatyard. It was very important when we went through the damage in the last Volvo Ocean Race to separate rig from boat problems because these two are not necessarily related at all, they are two different problems. I would like to add that delamination was experienced with more boats than Abu Dhabi.

VSail.info: Once the decision was taken to go for a one-design boat by Farr what was the general philosophy of the design? What were the main elements and your priorities?
Knut Frostad: There are many elements and priorities in the design brief but the key for us is to have an exciting boat that is a high performance boat and at the same time substantially increasing its reliability. We looked at the reliability side and at the performance side that can, at times, be conflicting. We set a level of the strength of the boat we want and then tried to push performance as much as we could within the constraints.

We also wanted an attractive boat and the reason we went for a smaller one was driven by cost reduction but also because we wanted it to be slightly less physically demanding so it could be operated by smaller crews physically. However, it’s not a substantially different boat from the VO70. It’s still powerful and it will be interesting to see how fast it will be. Still, we don’t think it will be much slower than the VO70′s.

To design a boat around content production and television rather than retro-fitting TV equipment is also an important part of our brief which opens up a whole new world for us and the teams.

Telefonica was one of the three Juan Kouyoumdjian designs in the 2011-12 Volvo Ocean Race. Alicante, 29 October 2011. Photo copyright Pierre Orphanidis / VSail.info

VSail.info: I do understand that you want to make it easier for the new or potential teams to enter but don’t you think that by going to a one-design boat you take out from the Volvo Ocean Race the technology, development and design aspects, reducing its attractiveness?
Knut Frostad: It’s obvious that when you have an open class you have more development between the teams, there is no question about that. You can always discuss this in complete isolation from reality and say “OK, let’s forget the fact it was challenging to get six boats on the starting line, let’s forget Spain’s deep financial problems, let’s forget Europe’s problems, let’s forget the financial crisis and see what the nicest design we can have is.” We can always have this discussion and I will agree with you that developing your own boat is interesting.

We have also made an interesting observation of the past when you have reached the end of a life cycle of an open box rule class, the boats become very close, in fact almost one design. This was the case with the Whitbread 60’s and the Volvo Open 70’s, and that is when everyone think the event works better. However you still struggle with the challenge of timing your funding, etc. which only a one-design class can change.

However, we can never forget the reality we live in and neither do all the potential teams that want to race. In addition, right now in the sailing world there are a lot of very successful one-design projects, such as the AC45, the RC44, the Soto 40 and many more. There is a reason why these classes are working well at this moment, mainly because you don’t have to build a boat all the time, you don’t have to spend money on design and that saves you from a lot of money, very early in your project. We believe that right now this is the most important thing we have to consider.

Let me give you an example. I asked the skippers of the 2008-9 edition, before the start, what boat they would like to have. Pretty much everyone was very happy with his own boat. However, when I asked them the same question after the end of the race in Saint Petersburg, everybody said they wanted to have Ericsson 4. This is something very frequent in a development class. Yes, it’s fantastic to have development and everybody wants to spend his sponsor’s money on R&D and design until realize someone else has the fastest boat.

Although the technology story is interesting, it’s a paradox that until now we have never really been able to tell the outside world the story of how these boats are designed and built, and now with the new one design boat we can and will do that. We never ever got access to film inside the new boats before the start before and certainly not anything worth showing from design and construction. So in fact it is for us now easier to show the technology behind the boats than before.

VSail.info: Do you think you could alienate the sponsors that want to associate their image to the technology aspect in the sense that their message could have been “we won because our technology was the best”?
Knut Frostad: No. I have worked with many sponsors in this race for many, many years and since we launched this project not a single sponsor has come to us telling us we committed an error and that they would prefer a development class. Not a single one! This might be because the sponsors we have are not particularly focused on boat technology but the reality is that we have had very positive feedback from all the sponsors from the last race and all the new, potential sponsors we are in discussion with for this race.

This shouldn’t seem strange at all because they also live in the same world where you have to be cost-efficient and achieve your goals with less money. For them it makes sense to know that we eliminated the risk of having a boat that is either slow or with problems or that they have to start early with their financing in design and R&D. This makes sense for any company.

9 Comments For This Post

  1. Patrick Shaughnessy Says:

    “the only boat to have suffered from delamination”???? Really Pierre? That is just about the most blatantly wrong thing I have ever seen you put in print. You’re better than that.

  2. Teabag Says:

    …Abu Dhabi’s Azzam, the only boat to have suffered from delamination?!?!?!?! What race were you watching, Pierre???

  3. Euan Says:

    OK, Farr have struggled recently in the VO70; but the story was Juan K wasn’t enthusiastic about the one-design option and offered the VO70 Telefonica design on a take-it-or-leave-it basis. I guess it’ll never be clear since Juan K has an axe to grind and Volvo are censored by their essential corporate discretion. In any event Farr are more or less unchallenged when we look at their record of delivering big offshore-capable one designs over many years, and their Open 60s, etc have been conspicuously better than Juan Ks – so its not like this is a crazy decision. And of course, I’d guess they are maybe easier to work with?

  4. ELVSTROM Says:

    I fail to see why certain people have such a big love for Juan K. His AC 72 mast failed and Artemis is set back 4 months minimum. I bet Paul Cayard is rethinking his design choices. I think one of the main reasons that Juan K has been so successful in the V70 is that most of the teams go with him and the best sailors always win. He seems to get all the credit – why not the sailors and the sailmakers? I think J K would have been a terrible choice for the Volvo one design. Big deal if his designs won. Not that I like Farr and Co any better, they are all arrogant.
    Knut should have gone with a V70 multihull one design. Why not?

  5. Cristián A. Palau C. Says:

    To ELVSTROM,
    I have just a couple of points I would like to argue with you about your comment.

    1. “I think J K would have been a terrible choice for the Volvo one design”: In case you miss it, Juan K. did offered the VO70 Telefonica design on a take-it-or-leave-it basis, so, if Volvo Ocean Race had accepted this offer, all boats would been exactly identical to the VO70 Telefónica, which would have made the VOR fleet One Design. Therefore, to have 8 VO70 with the same design as VO70 Telefónica, would have drop the costs dramatically, just like the VO65 OD will do.
    2. “Knut should have gone with a V70 multihull one design. Why not?”: On this issue, some people have suggested that the new MOD70 class would have been a great choice for the Volvo race. But as Knut Frostad states himself “In addition, since we will do two races with these boats………”, so, after these 2 races with the VO65 OD, why VOR cannot move to the MOD70 trimaran, if they have been succesfull on their own circuit? Besides, each MOD70 uses 6 or 7 crew members (instead of the 8 to 10, that will have each boat on the next race), which reduces costs even further.

    Best regards,
    Cristián Palau

  6. ELVSTROM Says:

    Christian,
    You are right, Juan K did offer Telefonica as a take it or leave it offer. What kind of attitude is that? It just shows what a stubborn ass he is. That is probably one of the main reasons he lost the bid. That and the fact that Farr has the background in designing and managing the one-design classes Farr 30 and Farr 40 sucessfully.

    You can’t compare the V70 Telefonica to the new V OD65. They are two different concepts:
    Telefnica is a one-off custom design that was designed to the limit (how many times did it break down?). Wait, they all broke! That is not what Volvo wanted. I mean, really, they are trying to get away from the V70, you fool!

    The V OD 65 will be more solid, designed for series production, more conservatie scantlings, more ergonomic, fast, built for 2 editions of the race…. I mean the list goes on and on. How does Telefonica fit that profile? Juan is just not a good choice. You need someone that is on board and able to compromise for the sake of the event. He just doesn’t get it.

    Juan is too self centered. He always complaining, bad mouthing someone or something. A sour grapes tye of guy. Typical Argentinian prima donna. And he lies as well. Cayard is an idiot for choosing him. But then, how many AC’s has Cayard lost?

    I don’t understand your point #2 regarding multihulls.
    I think that they avoided the multi is beacause they are not a good boat for newbies. The OD 65 will allow a few rich guys and his buddies to enter. (think Russians and Chinese and Arabs). They’ll get 8 teams for sure. Just show up with sails.

  7. Potter Says:

    To Cristián A. Palau
    The MOD 70 are not designed to go into the Southern Ocean or around Cape Horn. Can you imagine the outcry if the VOR did not go around the Horn?
    Also the One Design was designed to reduce costs on more than one area, so the VO70 would have to be redesigned to reduce the number of sails in use, increase the protection to the crew, improve reliability. So a ‘take it or leave it’ boat from Juan K would not have helped.
    As for Elvstroms idea to go with a OD multihull, I like the idea, but in order to increase participation AND improve reliability in the space of 2 1/2 years, it would have been a huge step change. Now is not the right time to do that. The AC is operated by multi nillionaires, the VOR is commercial (by comparison) and it would have significantly increased costs.

  8. Cristián A. Palau C. Says:

    To ELVSTROM,
    Just to explain my point #2, of my first post on this forum, regarding the use of multihulls on the Volvo race, I just proposed that, as the VO65 OD will only be use on the VOR 2014-2015, and later on the VOR 2017-2018, there`s nothing to loose by, at least, studying the possibility of using a trimaran, whether is the MOD70 or another trimaran, suitable for the southern ocean, for the VOR 2020-2021.

    But as Potter correctly states “The MOD 70 are not designed to go into the Southern Ocean or around Cape Horn”, so, if it would to be a reinforced MOD70, capable of withstand the wind speeds, wave heights, etc. of sailing on the Southern Ocean or around Cape Horn.

    Still, the VOR 2020-2021, is a long way ahead, and we still need to see if the new VO65 OD is a great success or a complete disaster. Only after the VOR 2014-2015 is done, we`ll be able to say if the change to a One Design boat was the right or wrong move, and what lies ahead for the future of the VOR.

    Gentlemen (ELVSTROM and Potter), have a great week, and it was a pleassure chatting with you.

    Best regards,
    Cristián Palau

  9. ELVSTROM Says:

    In the end, I don’t think it matters if it is one design. Look at all the success in the Melges 20, 24, 30 and Farr 30 and 40. I don’t think its a big deal. The days of expensive custom one-offs is over. In the end the sailors will probably break these too.

    The biggest factor is that these boats are now experiencing offshore powerboat loading and are using very rigid materials with sailboat laminates.

    At least we know we’ll get 8-10 teams.

    Juan need to rethink his business model.

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