Markus Boesch stands at the helm of one of the world’s most historic boat brands
When Markus Boesch was growing up, he always assumed that he would join the speedboat business founded 91 years ago by his great-grandfather Jakob. As a young boy, he had played in its boatyard on the shores of Lake Zurich, and later worked there during his summer holidays. But after failing to complete a degree in mechanical engineering, he decided on a change of career and left the family business – forever, he thought. Twenty years ago, however, he returned to Boesch Motorboats and today he sits at the helm as chief executive.
“My first reaction to the disappointment in my studies was to decide to do something totally different – which is typical of people in their mid-20s who see things in black and white!” Markus recalls. He went to business school and, having been a keen swimmer at school, trained as a swimming coach at Switzerland’s sports university; he went on to coach the junior national team. After his business degree, he went into IT, working for a small chain of shops that specialised in mobile computing.
“I found the IT industry fascinating, but it was moving so fast that the company’s strategy changed every few months,” he says. “I realised I’d be happier in a smaller, more familiar environment where I could be involved in building a business over the longer term.” He spoke to his father and his uncle about returning to the family company and, in 2000, rejoined Boesch with the initial remit of overseeing the modernisation of its IT system.
He represents the fourth generation of Boesch family leadership, but the first generation where not all the family members are working for the company, Markus explains. His younger brother is pursuing a career in psychology, while his cousin moved on after working for Boesch for a time. “In previous generations, the children were expected to follow their parents,” he says. “My father and uncle had no choice, because my grandparents sent them to Germany for their technical education so they could join the business.”
There has been a boatyard on the site of the Boesch headquarters in Kilchberg, a lakeside village which is now effectively a suburb of Zurich, for more than 150 years. Jakob Boesch, a carpenter who retrained as a boat-builder after realising that he had no head for heights, came to work there around 1900. When it went bankrupt after the First World War, he bought it in 1920 with financial backing from some directors from Lindt & Sprüngli, the famous chocolate-maker whose headquarters is across the road.
The business then was building, servicing and repairing sailing boats, motorboats and rowing boats. But Jakob’s son Walter, who started his apprenticeship with the company in 1925, was fascinated by the first half-glider speedboats whose design allowed them to achieve faster speeds more efficiently. Under his leadership from 1938, the company developed the ‘horizon gliding’ designs, which mean that Boesch boats climb up on their bow waves and overtake them nearly horizontally. The resulting stable stern waves, speed and agility quickly made them a favourite for water skiers, used in European Championships between 1960 and 1976, and in World Championships from 1960 to 1991.
When petrol rationing halted motorboat production during the Second World War, Walter switched to making sailing boats. But once the war was over, the demand for motorboats soared – and with it sales of Boesch boats, which were relatively cheap because of the low exchange rate of the Swiss franc against the dollar. Walter visited the US to study mass production methods in Detroit, and in 1953 Boesch became the first company to apply such techniques to boat-building.
The company continued to be innovative, switching from plank construction to the use of laminates after yet another trip by Walter to the US in 1964. Today, the boats are built with up to eleven layers of mahogany from West Africa, which is stained and coated with several layers of epoxy resin and varnished with further layers of polyurethane which cumulatively bring out the natural beauty of the wood. The result is a skin that is solid, rigid and stronger than the fibreglass, which is now the most common material for speedboats. A larger production plant capable of making up to 150 boats a year was opened at Sihlbrugg in the neighbouring canton of Zug.
In the 1970s, the family’s third generation came on board, when Marcus’s father Klaus, a newly graduated naval architect, and his uncle Urs, a mechanical engineer, joined the company. But the business quickly faced tough new challenges with the oil shock and the devaluation of the dollar against the franc. Boesch moved from volume production to a niche business model, designing bigger boats with more features to order and using new products and technologies. Today the company makes between 15 and 20 motorboats per year, which take up to six months to complete and sell for anywhere between SFr200,000 and SFr800,000.
Just like on the roads, electric motors have been a successful innovation in the boat-building industry as well, partly because many lakes such as those in southern Germany and Austria have restrictions on the number of petrol-driven motorboats allowed on the water each summer. Around a third of Boesch sales are now of electrically powered boats, using the latest batteries that are no heavier than a standard V8 internal combustion engine.
“If you compare today’s boats with those of the 1970s, they look the same, but a lot has changed,” says Markus. “Just like a Porsche 911, you’ll always recognise a Boesch boat – even though they are constantly developing technically.”
Being successful as a niche producer raises a lot of challenges, he adds. The boating industry has changed a lot in the past 25 years, with small manufacturers facing increasing competition from large, vertically integrated companies using mass production methods.
“We have a very good reputation and a strong brand, because we still make our boats out of mahogany,” says Markus. “But we need to find new markets for our products – most of our boats are sold to customers in central Europe where the markets are flat or even shrinking. And we have only the marketing resources of a small business.”
The family tried selling more boats in the US during the 1990s, but American dealers wanted to have dozens in stock, because buyers there preferred to choose a boat and take it home immediately. “With our output,” says Markus, “we just can’t maintain such stocks.” The other market that has, unsurprisingly, been on his mind is China. “We’ve considered the options, we’ve done market research, I’ve been there myself and had a look,” he says. But the level of investment required to break into this incredibly competitive and complex market is simply beyond Boesch’s resources, he says. “You have one chance to get in the market there. And you don’t want to mess it up.”
At the same time, Markus believes in steady growth and the importance of long-term relationships with customers rather than quick, short-term sales. Indeed, still to this day, the boatyard works on restoring boats sold in the 1950s and ‘60s back to their original condition. “We know most of the families that own a Boesch boat,” he says. “They remain in contact, and we care for their boats over the generations.”
Since rejoining the family business, Markus has stamped his own mark on a few things that he wanted to change. One priority is maintaining a proper work-life balance: “I don’t want to live on the yard,” he says. “When my grandparents came to dinner in the 1970s and 1980s, the subject was always business – they had no life outside the company. And my father worked seven days a week for most of the year. I had the big advantage of working in a different environment before coming here. When I’m in the yard, it’s business and when I’m home, it’s home and family.”
In addition, he has introduced more formal arrangements for managing the company. For a time, he ran the business alongside his father and uncle, which necessitated the introduction of more organised meetings. “My father and uncle got on very well together and had a method and rhythm of working together,” Markus says. “But moving from two to three people meant we had to formalise our discussions and not just talk about them at the coffee machine. This was important to me, because it’s business and it’s family, and there are emotional issues.”
His father and uncle have both since retired, leaving Markus as the sole Boesch family member still in the operations. However, he still interacts regularly with the previous generation. “They’re still on several boards we have, whether it’s a family board, an advisory board or our board of shareholders, so we see each other quite often,” he says. “My father comes around two or three times a week. And anyway we live in the same village.” Yet his father and uncle are careful not to intrude or interfere. “If there’s something to discuss, if we need advice, we go and ask,” says Markus. “But they don’t just pop in and say, ‘Hey, have you thought about x or y?’”
Although Boesch remains family-owned and controlled, executives from outside the family are offered minority shareholdings in the subsidiary companies. And the family has no interest in selling up, despite some very attractive approaches. Markus cites the fate of Riva, the Italian company which was Boesch’s biggest competitor in the 1960s and 1970s. The family owners sold the boat-building operation at the end of the 1970s, since which time it has passed through a variety of hands – private equity, trade buyers, a public listing and hedge funds.
“If we sold the company, we could cash in heavily,” he says. ‘But what will I do for the rest of my life?’ Would he like one or more of his four daughters – who are all still under 20 – to become the fifth generation to run the family company? “They’re showing interest, but we’re not forcing anything there,” says Markus. “Besides, we have already redefined our structures so that we can separate operation and ownership. So it might be the case that in the fifth generation, we only have ownership in the company – but it’s definitely something we want to keep in the family.”
Markus Boesch's tips for entrepreneurs
- Find a way of developing a dialogue between the generations. There are lots of issues in family businesses, and it is vital to talk about them openly.
- Experience outside of the family business and/or branch is very important.
- Try to set up a network of connections locally, in your country and on your continent or further abroad.