Northern Michigan:The year was 2007, and Ed Reynolds, just 12 months into his new gig as president of Quantum Sails, an international sailmaking company based in Traverse City, was looking ahead to the coming 2008 sail racing season obsessed with one audacious goal. Wait, clarification: ONE AUDACIOUS GOAL!
He knew his company was making state-of-the-technology sails that could stand shoulder to shoulder with sails from global behemoth North Sails, but he also knew that the top sail-racers in the world did not share the Ed Reynolds viewpoint. In the eyes of international sail racers, Quantum was decent enough, but no better than many other sailmakers around the planet, an also-ran vying for the crumbs left on the table by North. Reynolds’s goal was to figure a way to break out of the pack and become a full-on contender for that elite and lucrative pinnacle sail-racing business. Do that, and Quantum could become what marketers call an aspirational brand—people in the broader market, the everyday sailors of the world, would want to be cool like Quantum.
Reynolds looked hard at the MedCup Circuit, an annual race series in the Mediterranean Sea in which 52-foot boats compete in five regattas—each a multi-day event—over the course of five months, with a series champion announced at the final race. The race attracts the best sailors in the world to sail on the best boats in the world. No surprise, competing is not cheap. Sponsors must pay a crew of the world’s top sailors and support members—about 20 people—for five months in addition to paying $2.5 million to build a boat and another $1.8 million or so in campaign costs. Reynolds was keenly aware that since the MedCup began in 2005, nearly every boat in the 15-to-20-boat fleet had flown North sails.
Reynolds’s Plan A was obvious enough. He would approach a team that was rigged with North sails and offer to outfit the entire boat with Quantum sails for free, basically a half-million-dollar sponsorship. Who could say no? “But I could not give a set of sails away,” he says. “I mean that literally, nobody would take them.” Reynolds, a bold optimist, but also a strategic realist, thought about the problem and realized the flaw. “They call it permission marketing, I was asking guys making six figure incomes as race team managers to risk their jobs by taking a risk with my product,” he says.
He had no choice but to hatch Plan B. He approached one of Quantum’s main investors and explained that the company needed to fund a race team—people, boat, sails—and compete straight up with North in the MedCup. They needed to be big about it. They needed to be brazen about it. They needed to be brilliant about it. The investors agreed.
Since the move was ultimately about branding, Reynolds hired a renowned European designer to create a look for the sail and boat that radiated attitude. The designer came back with an electrifying saturated aqua and a sail that would announce Quantum to the world by flying a rebellious and colossal Q.
Reynolds looked at the designs. He started to have second thoughts. He called the designer. “I don’t know, maybe it’s a little over the top,” Reynolds said. Plus, that price tag—$60,000 for design alone?
The designer nearly shouted into the phone, his northern European accent thick. “If you do not do this you are stupid! This will be the most photographed boat in the world! And yes, you will pay the fee because I am the best. If you don’t do this you are stupid! And I don’t like stupid people.”
Reynolds concedes he’s a fan of big egos, but still, the conversation set him back. Three stupids? He thought about it for a long pause. “Dude,” he said, “I’m in.”
To captain the boat, Reynolds brought in Terry Hutchinson, whom some consider the top racing sailor in the world today, a brilliant tactician and also one of Reynolds’s best friends. Hutchinson recalls the start line on day one of the 2008 race. “There were 19 boats; 18 of them had North sails, we had Quantum sails.”
And those in-your-face graphics that Reynolds okayed made the boat’s intent unmistakable: renegade Quantum had arrived to challenge the knight.
“The worldwide sailing media said, You guys are crazy. You actually think you can come here and beat North,” Reynolds recalls. “That’s a big risk, they said. But I said, I have zero risk. You are talking to a guy with nothing to lose. What’s your image of the company? You don’t have the technology. You can’t compete at the top levels. Maybe you will be proven right, but I have nothing to lose.”
Nothing to lose, and, as the saying goes, everything to gain. And Quantum gained big. The team dominated the series and won the overall championship. And the Euro designer had called it: the Quantum boat flying the defiant colors of a bold and victorious challenger showed up everywhere—magazines, newspapers, TV, on the web. “The next year, 30 percent of the fleet came in with Quantum sails,” Hutchinson says. The pressure that year, 2009, was to prove Quantum’s win wasn’t a one-off. They succeeded in that too, coming in second. In 2010 they came in second again. They won again in 2011.
Ed Reynolds was a 20-year-old student at Northwestern Michigan College in 1975 looking for some direction in his life when a friend suggested he apply for a job at a sailmaking shop—termed “sail loft” in sailor vernacular. Born and raised in Fenton, just south of Flint, Reynolds had never stepped foot on a sailboat, let alone ever considered who was making the sails or how they did it. “My goal was to figure a way to live in Traverse City,” he says.
The shop, Babel and Buchbinder, was on Cherry Bend Road. “I walked in. It was a big, wide open floor and white fabric was all around. There was a kind of buzz going on around it.” The scene cast a spell on him. “I can’t put my finger on it, but if there’s such a concept as love at first sight … I couldn’t get it out of my mind.”
The hiring partner assessed Reynolds complete lack of experience and said no thanks. But Reynolds, displaying that competitive resiliency, called back. Again and again. “I told him I’ll work for free for a week, no obligation. If he didn’t want to hire me by then, no harm no foul.” The partner finally agreed to the trial period. “Three-quarters of the way through the first day he said, Yep, I’ll hire you,” Reynolds says.
Once immersed in the day to day of sailmaking, Reynolds’s obsession only increased. “I read everything I could about it, this idea that a sail is really like an airplane wing, and the boat is sucked across the water ... it just seemed like a really clean bright light to follow,” he says.
Back then, the sailmaking industry was still comprised mostly of tiny shops like Babel and Buchbinder, seasoned craftsmen with a handful of employees who catered to the local sailing community. Thousands of such shops were tucked away in marina shanties around the world, and were not so unlike sail lofts going back centuries.
The small loft gave Reynolds the chance to check out many aspects of the business. He did some design. He did some production. He managed projects. But about 1982 the loft ran into some hard times, and Reynolds thought he could make a go of it. But Reynolds had no money, he had a young family, and he wanted to buy a business that had never really made much profit. A couple of customers who knew Reynolds, Dave Harris and Dr. Wes Schulz, loaned him the funds. “In hindsight, I owe those two men everything in my life,” he says.
Reynolds and his investors aligned the loft with Shore Sails, one of the first companies to attempt to offer sailmaking through a dealer network. The primary advantage of a network alliance is it allows small lofts to sell higher-technology sails because small independent shops could not possibly afford to develop and manufacture that technology on their own—essentially the benefit Quantum offers through its dealer network today. He stayed allied with Shore Sails for 17 years.
A turning point came in 1990, when one of Reynolds’s customers built a 46-foot racing boat christened Collaboration, and Reynolds’s loft made the sails. “It was a major breakthrough boat and it won everything. It won the Key West Race Week, won in Bermuda, won the Mackinac races. By the end of that season, everybody had heard of Collaboration,” he says. And by extension, people heard of Ed Reynolds and his loft. The sailing world suddenly viewed Reynolds and his crew as experts, and the Collaboration success attracted one sail race-boat owner after another. He didn’t fully realize it at the time, but Reynolds’s journey had just shifted to a course that would eventually lead him to the presidency of the $40 million-a-year business that is Quantum today.
A note here about sailmakers in the broader sense. Sailmakers make sails, obviously, but they often fill a wider role for boat owners. They are kind of the fixers of the sailing world. You need someone to crew the Wednesday night race? Call the sail loft. You need a source for new rigging? Call the loft. Need some tactical advice? Call the loft. And as the stakes increase, the caller might say, “I need a naval architect to design a race boat,” or, “I need a whole crew and captain who can win the Chicago to Mackinac.” Reynolds, ever the dealmaker, relished the role. “Much of my career has been acting as a facilitator between money ego and talent ego,” Reynolds says.
John Gluek, a former Olympic sailor and longtime sail industry insider, has known Reynolds for most of his career. “Ed was good with the owners, very honest with them about the cost of a racing program, and he developed a following. And he had the leadership ability to blend personalities in these racing programs. It’s like building a sports team; you can put superstars together, but they may not blend. He made winning teams. As a sailor, Ed is average to above average, but as a team manager, he would fit into one of the top five elite of the world.”
The year following the Collaboration wins, Reynolds made another move that revealed his eye for talent: he hired Terry Hutchinson. A two-time collegiate Sailor of the Year, Hutchinson was just graduating when Reynolds, in his mid-30s at the time, had a chance to see him sail. “I felt he was an unbelievable sailor, a prodigy, and I felt I had an obligation to help him achieve what he needed to do with his career.”
Hutchinson, looking back on it, says, “He took a chance on me and I took a chance on him.” Hutchinson had never heard of Ed Reynolds or Traverse City, yet based on the pitch from Reynolds he moved from his boyhood home on the East Coast to work on Cherry Bend Road in 1991. “Ed said, ‘I can’t race sailboats, I don’t have that talent, but I can progress your sailing career. If you can win races, I can do that for you.’ ” That give and take was so vividly and richly on display when, 17 years later, Hutchinson—who was a direct employee of Reynolds only for a couple of years—gripped the ship’s tiller as he neared the start line of the 2008 MedCup, the Quantum colors flying overhead.
“Ed brought me into his family, and he has always looked after me and made sure I wouldn’t do anything silly,” Hutchinson says. “Same today, before I do anything with my career, I pass it through him. We still talk on the phone a couple times a week, no matter where we are in the world, across time zones. It’s a good thing we are both insomniacs.”
When Reynolds ended his alliance with Shore Sails, he bumped around a bit. He tried another affiliation program for six months but wasn’t pleased with it. He went independent, becoming Reynolds Sail Company. He considered an offer by North Sails to join their affiliate program. “North is a great company. Very smart,” he says. But he declined because he knew North would shut down the loft in Traverse City. “When my sons were babies they slept in cloth boxes in the loft. And I didn’t want that to go away.”
In 1999, Reynolds accepted an offer by Quantum Sails, headquartered in Annapolis, Maryland, at the time. The company was just six months old and was a collaboration of three partners who, like Reynolds, saw a market possibility for a new high-tech sailmaking company. The scheme envisioned a strong core design and manufacturing company with a global distribution network mostly of independent lofts.
But the challenges were huge. “We were each trying to make this change from local sailmaker good at servicing a particular genre of client and now doing this international brand. The supply chain economics. The distribution channels. The nuances of international business. Frankly we weren’t very good at it,” he says.
Still, the company, though Lilliputian by international business standards, had grown to something sizable. It owned a high-tech sail manufacturing plant in Malaysia, had a plant and designers and engineers in Spain, farmed out work to other corners of the globe. Quantum had dealers in dozens of major ports around the world and was putting through $15 million a year in sails. The company made sails for virtually any type of sailboat on the water, selling hundreds of Optimist sails—a small starter boat that is perhaps the most ubiquitous sailboat on the planet—to $180,000 mainsails for world class sailing vessels.
But profits remained elusive, and in 2007 the investor group asked Reynolds to become president of Quantum, which he accepted contingent on one thing: the headquarters must move to Traverse City.
Why? “I have been almost everywhere, and this is the best. I moved here to raise little Midwestern hicks and I’m not going to live anywhere else,” he says. “I’ve brought people here from all over the world, and when they first arrive, they might wonder why I’m here, but by the time they leave, they all get it.“ The most dramatic example of the phenomenon: One year, he was sailing the Chicago to Mackinac and two of his crew had just won the Whitbread Round the World Race. They were surfing through the Manitou Passage, the wind blowing out of the south at about 25 knots, air at 85 degrees. Reynolds was looking at one of the guys. “I said, ‘You have a funny look on your face.’ And he goes, ‘Three months ago I just finished sailing around the world, and this spot right here is the most beautiful place I have ever seen. I just had no idea something like this existed.’”
Reynolds concedes that these days his job can seem a long way from the days of making sails in a quiet shop on the bay. He worries over a 300-person team, international exchange rates, labor costs in Malaysia, delivery times, the adhesive for high-tech mylar sails and the best way to reinforce them with carbon-fiber strands, and marketing … is Quantum the aspirational brand it needs to be?
People tell him Quantum should leverage the brand, start a water-sports clothing line, like, say, O’Neill. Top fashion companies—Prada, Hugo Boss, Hilfiger, others—are spending hundreds of millions of dollars a year to tie their brands to yachting. Quantum already has the brash, risk-taking sail-racing image that the market seeks, what is he waiting for? “I don’t know,” he says. “I can barely run a sailmaking company, I am pretty certain I don’t know how to run a clothing company.” But you can tell he’s thinking about it all the time. Considering the possibilities. Considering the team it would take. Considering the strategy.
Forget the notion of billowing white sheets. Today’s top racers hoist sails made of two sheets of Mylar that sandwich an elaborate web of carbon fiber strands for reinforcement. Quantum assembles Mylar sails in Malaysia using a high-tech machine crewed by 60 people on a 10-by-50-meter floor. The company’s standard goal for all custom-made sails is four weeks from first sales meeting to delivery.
Sail racing has forever been a romantic contest of one captain’s will and judgment against another's. But Quantum CEO Ed Reynolds wanted to, well, quantify that process more. These days, Quantum Racing is a leader in using video and computer analysis to assess sails and sailing performance. As the boat is sailing, video cameras communicate sail images to an onboard computer, which analyses sail shape, compares it to a perfect ideal shape, and then indicates the departure from ideal. The computer then sends a text line, like a mini-news feed, to a crewman’s wrist-mounted PDA so he can adjust sails nearly instantaneously.