By Erin Chambers After 10 years managing his family's pest-control business, Troy Sears was antsy. An avid sailor and San Diego native, he had always dreamed of ditching the family trade, buying a few boats, and putting them out to charter. But Hydricks Pest Control provided a steady life, and Sears, the father of three, feared the risks that would come with branching out on his own. "I was making a good living for my family, and that was a lot to give up," says Sears. "But I just didn't enjoy what I was doing day in and day out."
A member of San Diego Yacht Club, Sears knew the two prized 80-foot America's Cup boats docked there would be perfect for the kind of venture he had in mind, but he also knew getting his hands on them would be tough. "It's like a golfer who dreams of playing Augusta," Sears says of Abracadabra, a former America's Cup competitor, and Stars and Stripes, which won the Cup in 1988. "No one could get on these boats."
"CRAZY, FORTUITOUS THINGS." The boats are tailor-made for specific waters, and until they are retired, remain in the hands of America's Cup teams. Design and construction reportedly runs upwards of $10 million.
But when the Swiss won the Cup in 2003, the race would shift back to Europe, and Sears knew the boats would finally be put on the market. Once the race moves to new waters, their value drops, and the vessels are usually sold off to the highest bidder. Recognizing the opportunity, Sears sold his pest-control company, bought both boats, and founded Next Level Sailing.
Sears says "a lot of crazy, fortuitous things" in his life contributed to his success with the new business. Thanks to a three-year stint on Wall Street after college, he has maintained relationships with a few New York investors, one of whom signed on as a silent partner when Sears needed help financing the purchase of the boats. Though Sears won't disclose the sticker price, estimates run from $300,000 to $500,000 each.
FASCINATING PROCESS. Initially, he was only able to take out groups of six or less until he got the boats approved for passenger excursions by the U.S. Coast Guard -- something that had never been done on a modern carbon-fiber vessel. But the head usher at Sears' church happened to be a retired Coast Guard captain who used to train inspectors, and he helped get the ball rolling on the inspection process.
"It was expensive and a lot of trips to Washington," Sears says. But as a sailing enthusiast, he admits testing and examining the boats so intricately was an education in the technical aspects of the craft that he had never considered before. "Pursuing this was fascinating," Sears says. "I enjoyed putting all the time and energy into it."
After nearly a year of refinements, the boats were approved to take on more than six passengers at a time, and Next Level was finally poised to make some real money. Sears now takes up to 20 passengers per sail -- and, yes, everyone gets a chance to steer the boat out on the water.
PUBLICITY BOON. At $99 per person for a two-hour sail (or $1,980 to rent the whole boat for four hours, for up to 20 passengers), it's not exactly a bargain. But Sears says his upscale recreational outfit works because it's unique and makes use of San Diego's recently revamped waterfront, including a string of new hotels, a floating museum, and the San Diego Padres new baseball stadium, Petco Park. His clientele is split between tourists and executives, who often book a sail as a team-building exercise for groups of employees. "It's cheaper than a round of golf," Sears says.
But even in the early days, when he could only take out a handful of passengers, Next Level found itself in the national spotlight, garnering months of free publicity that proved to be a boon. Producers of MTV's long-running reality show, The Real World, approached him about having its San Diego cast work for Next Level during the taping of the show last year.
Friends warned Sears about the show's reputation for housing unmotivated party-animal types, but with his company still in a fledgling stage, he figured the publicity benefits outweighed the risks. "It's a numbers game," says Sears, who was banking on the producers' promise of millions of viewers each week.
WELCOMING THE FLEET. The viewers turned out: The Real World: San Diego landed in the Nielsen Top 10 for cable programming each week it was on air, and despite a near-mutiny among the cast, which debated quitting at one point, Next Level was flooded with inquiries. After the first few episodes aired in January, 2004, Sears had requests for reservations from 43 U.S. states and eight foreign countries.
With two 11-story masts, the multimillion-dollar yachts are attention-getters in and of themselves. When the aircraft carrier SS Reagan docked in San Diego this summer, Sears wanted to personally welcome the Navy fleet, so he made a 35x63-foot American flag and hung it between the masts. CNN featured the flag and an interview with Sears in their coverage of the event. "Sometimes just doing a good thing generates publicity," he says.
CBS uses blimp shots of the boats on the way to commercial breaks during broadcasts of San Diego Chargers football games, and the Travel Channel shot an entire segment on the boats as part of the special series, Maria Shriver's California. "She thought the boats would be a great way to show San Diego," says Sears, who says he did nothing to solicit the network's business.
POSITIVE WORD-OF-MOUTH. Aside from passenger fees, the boats also generate about $25,000 a month from ads on their massive sails. Sears is working to obtain a liquor license for the boats and has plans to acquire Abracadabra's sister ship.
With little traditional marketing, Next Level's growth has come largely through word-of-mouth, which Sears attributes to the one thing he demands of his 25-member crew -- "make sure every passenger has a good time." For Sears, it has been a high-seas adventure. Chambers is a reporter for BusinessWeek Online in New York