In this episode we hear from Darcy Kieran of Scubanomics and question if the diving industry business model needs to change for 2020 and beyond.

The Dive Locker, episode 17. Happy New Year!

Welcome to The Dive Locker podcast, the podcast for dive professionals where we bring you the latest and diving industry resources that make you excellent at teaching techniques, risk management and dive business.

I’m your host, Tec Clark, and Happy New Year everyone. Can you believe it is 2020? On the one hand I feel old. I mean, you know, I grew up in the 70s and eighties I remember the Jetsons. So I’m thinking like 2020 we should be all jetsoned out here, you know, but on the other hand, I feel absolutely empowered. Why? Because we have never had technology, economy, access to people and places. All of that like we do right now in 2020. I absolutely feel blessed and I think this is going to be an awesome and absolutely empowering year. I hope you feel the same. In fact, my wish for you is absolute prosperity and success in all that you do.

So the beginning of every year is a grand indicator of change, right? We change our calendars. We make new year’s resolutions where we change things about ourselves. We’re in, you know, new fiscal years and different things like that.

Well, in today’s episode, we look at whether the diving industry needs to change. Now I have to admit for Christmas presents this year, I did, a bunch of Amazon and everything like that, but I actually did the Amazon same day delivery. I was shocked. Literally, I got a package the same day I ordered it from Amazon. Now think about this. Who would have thought that was even possible five years ago? You know, that is crazy. Change is happening so quickly that it begs the question, do current business models in our diving industry need to change?

Well my guest today is Darcy Kieran. Darcy owned and managed dive shops, dive resorts and charter boats in both Canada and the USA. He’s been a course director and instructor trainer with numerous training agencies as well as being on the board of DEMA. Now Darcy’s background was in retail sales, so when he took the plunge to open his dive center 20 years ago, he realized that many dive professionals lacked formal retail training, so he went on to create the Business of Diving Institute and more recently he curates scubanomics.com a website dedicated to the business of diving.

I met up with Darcy poolside in Orlando and we discussed issues that might make you think about changes in our industry and in your dive business as we are now in 2020. He also shares his concept of that a dive center is six businesses in one. I think you’ll find this interview really compelling and very thought provoking.

Now, before we get to my interview with Darcy, I have something really cool to share with you. You all have heard of my ScubaGuru brand. Well, ScubaGuru Academy is an online school of tutorials for divers and pros. It was launched last year and has a couple of pilot courses on there already, but I’m here to tell you about my newest and most ambitious tutorial yet, and it’s coming out this month. It’s called Mastering Dive Tables and Decompression Theory. I designed this course for numerous divers and aspiring dive pros and even dive pros who are challenged by dive table teaching or decompression theory teaching.

This is especially beneficial for those becoming divemasters or instructors. Now, back in the day it was mostly the open water diver student who struggled through dive tables, but today what we see a lot of our divemaster candidates who have only learned dive computers their whole time diving and the first time they’re learning how to use dive tables is in their Divemaster course. This can be a major challenge and then when it comes to instructor candidates, not only do they have to pass their exams on dive table usage and so forth, they also need to be able to teach dive tables and decompression theory.

My Mastering Dive Tables and Decompression Theory course will help anyone at any level master the area of decompression theory and how to use dive tables. The course is broken down into several chapters, including the history of decompression theory, understanding gases, decompression sickness, decompression models, and the dive table usage. There’s over 50 sample questions as well as a thorough study guide. I know this is going to be something great for so many. I’m just giving you a teaser now that this course is coming out this month, January of 2020. I think you’ll be really impressed with it. More details in upcoming episodes. All right, pros. Now let’s get to my interview with Darcy. Kieran of Scubanomics.

TEC CLARK:           Darcy welcome to The Dive Locker. So I referenced you in earlier podcast episode where I talked about,  at your website scubanomics.com how you refer to a dive center as six businesses in one. Tell us about that.

DARCY KIERAN:  Yeah, we always think of the dive store as a business and it happens to be a small business compared to any other business in the dive industry. Whether you look on the travel site equipment or training agencies, they’re all bigger than the dive shop and were referred to dive shop as a business, which is at the forefront of contact with the customers. But then the reality, it’s a lot more than one business. I mean, I, I’ve managed many different businesses in my life and I’ve never seen a business more difficult to manage than the dive center. It’s to me is because it’s not a dive center. It’s six different businesses. For instance. I mean if you’re a PADI, you know, the three E’s of diving, you know, education, equipment, experience, which is what you sell to customers. So, for instance, you’re selling equipment well that requires the skills of a retail manager, right?

DARCY KIERAN:  You have to manage inventory and you have to have the proper level of inventory to satisfy the customers, but also a bunch of different financial ratios, education, Oh, that’s like managing a school. Now managing a school requires a totally different set of financial measures. Keep, key, you know, key performance indicators, critical success factors. They’re all different. The school and the retail store are two very different types of business. And then you have the experience, which can be a little bit different. You can either be a travel agency or a tour operator. I mean, depending where you are experienced part will be a little bit different. But regardless, it’s a totally different business, right? If you’re a tour operator or a travel agency, that’s extremely different than operating a retail store.

TEC CLARK:           Right. So in the tour operator, are you talking about if you have a charter dive boat at your dive center and you’re doing daily trips as opposed to if you’re in the Midwest and you don’t do daily trips, but you do big travel and you’re going to the islands and you’re going different places internationally?

DARCY KIERAN:  Yeah, yeah. Well I usually see the, you know, separate dive stores in two categories, the origin or the destination. So for your example of the Midwest is to me, an origin dive center. Sure. You do a little bit of diving locally, but it’s mostly flying down South. Right? So you’re an origin and if, and when you go to Roatan, then you’re mainly it destination. Most of your customers come from somewhere else. They’re not locals. So in Roatan, you’re, you’re a tour operator but or a resort, right. You’ll receive customers and the experience scuba diving with you. While if you’re in Chicago, you’re most likely the biggest part of experiences, most likely organizing trips down South. But either way it requires a totally different set of tools and expertise and way of managing a business. Travel agencies for it for a start. They’re all having issues nowadays with online booking and all that. And there’s laws and regulations in many States and countries that you have to follow. So it’s totally different than the school. So, and that’s just only three then is there the other four which are support services, right?

DARCY KIERAN:  You provide rental gear. Oh, that’s like operating an Avis. Rent a car. You have to have a way to make reservations and make sure when people come they have the right sizes and etc. You have to maintain that equipment properly, just like you have to clean the car. All right, a refills. Well that’s like operating a gas station, right? You have peaks and you have plenty of time where the fill station is sitting doing nothing and then everybody comes at the same time to fill their tanks. And then you have repair and maintenance, which is like operating a garage. Now you have to have a parts. Some of those parts are provided free to the customer under warranty, but you have to have some sort of tracking system to collect them from the suppliers. So that gives you all your six businesses and, and it’s, in theory, you could have six different softwares to do this in each one of those industries.

DARCY KIERAN:  There’s is software dedicated to doing this very well and there are good examples of businesses who do very well in each one of these six industries. You could use it as role model, but you’re a small business. You’re a dive store, so maybe you’re selling 500,000 a year in revenues, but you have six businesses with 500,000 in revenues. To me it’s, it’s humanly and physically impossible for such a tiny small business to be the best at each one of these six businesses. I just don’t know why you can do it now. I think it was easier to do in the seventies and eighties when customers’ expectations were not as high as the are today. I mean today, customers expect everything to be top quality. They want it now. And, and how can you really do that right now with a small business. I don’t see it. I mean, to me that’s where I often talk about the structure of the dive industry and when we discussed with her it’s drop out rate or lack of growth or grow that is small.

DARCY KIERAN:  To me it’s all about the structure, right? You have to restructure it in a way that we can provide the customers what they expect nowadays. Right. So something has to happen.

TEC CLARK:           Interesting. What would you say that something has to be? It to me seems like a different way of thinking.  

DARCY KIERAN:  Well, you know, I mean we’ve started saying that years ago, but the only, the only constant is change. And I think this is accelerating.  I mean look at the Blockbusters, right? They all, they all had, they all had small stores, renting. Mom and pops, renting  videos. But they barely had anything in stock. Then Blockbuster showed up took the market and everything and stuff all the time. And now they don’t even exist. I mean Netflix and the rest. So things evolve fast. And so we’re looking at the business model in the dive industry, it’s the same one that we had in the 70s so right there there’s some thing that has to be wrong and I don’t, how many industries have a business model that’s the same today that they had in the 70s you know right there you should ask yourself some questions.

So to answer your question, what we need is we need to restructure and it has to be restructure not on what we’ve done for the last 40 years or, or how we like to operate. It has to be structured, restructured based on what the customer want. even, if we don’t like it, that’s irrelevant. I mean we cannot expect to grow an industry by forcing customers to do what we like. It’s the other way around. So, for instance, when you look at buying gear nowadays with Amazon and the rest customers expect to have everything that you are going to have everything in stock and they’re going to get at the latest tomorrow and it’s seven getting to the point where tomorrow is late because Amazon is doing same day delivery. And so that’s where, that’s where the retailing industry is going. So if you’re selling dive gear, you need to have all the brands, all the callers, all the sizes in stock, and you have to be to be able to deliver it at the latest tomorrow.

DARCY KIERAN:  So again, a small business selling 500,000 a year, so maybe they have, you know, 250,000 in gears sales. I mean how can you do that. It’s impossible to have that kind of inventory and you’re probably also not set up to do next day delivery on everything. So that that retail part of operations as to be restructured so that we offer what customers want. So really what you need is, is is, is a brand that sells all of that equipment with a central warehouse where you have all of that in stock next to a ups facility. So delivery is fast and efficient and inexpensive. And, and with that you need to have instructors teaching, right? And locations. Now teaching is usually done there near where you are, whether it’s in their resort or it’s at home. Usually don’t go that far. For taking classes. I mean you might go to Cozumel, right?

DARCY KIERAN:  But I mean you’re going to do your classes near you, we’ll tell you or so that can not be a long distance thing. But dive gear can be, as long as you have a little showroom locally and you see a lot of retailers also moving towards showrooms and then you’ll get everything sent to wherever you want by tomorrow. And so right there, and we’ve only talked about these two industries and then there’s the other four. So to me it’s just so logical because you look at the owners of local dive shops and in most cases they started in the industry because they love scuba diving and then they became a dive instructor and then they were told by the training agency or their dive gear manufacturer, well, if you want, if you want to sell, you have to have all these six businesses, right? Are you?

DARCY KIERAN:  You’re, you’re not. And so they, they end up with a dive store because they’re forced really by the training agency or the dive gear manufacturer. But that’s not their forte. I mean it’s not, in most cases, that’s not what they like. They don’t even like managing a retail store. They want to teach and they want to go diving. But we’re forcing them to be a retailer. Without really any support because I don’t see anywhere in the diving industry where you can actually learn to be a real professional retailer in 2020 nowhere. Nobody has that. You’ll have a little bit of sales training here and there. Product knowledge, right. But you don’t really have training for being a retailer, but we’re forcing them to be. So changing that structure to me satisfies everything. It satisfies the customers, what the customers want in 2019 and 2020 and it satisfies what the dive instructors wanted.

DARCY KIERAN:  They want to teach, they want to go diving. They don’t need to be managing retail in a way that doesn’t even satisfy to these customers. So the first thing has to change the training agency and the dive equipment manufacturer where they have to stop forcing everybody to be dive shop for instance. And those websites, you’re not even going to be listed, right? If you’re, unless you own a dive store. So and on the PADI website now you haven’t have to be a five star in order to be on the first page. That’s the other way around. Because if I want, if I have a customers that I want to learn to dive and I go on those website that the training agencies, then I am being given a list of dive stores, which might not even be where to dive store teach the course.

DARCY KIERAN:  Doesn’t make any sense to me. Right? If I, if I go and Google that, then I ask for a Starbuck location that you’re going to send me to a Starbucks location. But I go and find, I want to learn to scuba dive. And I searched for dive centers, I’m being dive stores, right? And a lot of dive stores teach sometimes miles away from the dive shop. That doesn’t make sense as a customer is I would say, what, what the heck is that? Interesting. So this center structure is to be changed where people should be doing what they’re good at. For instance, instructors, they like to teach it, like to go diving professional retailers should take care of their retailing part.

TEC CLARK:           Interesting. Interesting. Darcy, you’ve touched on this on your website, scubanomics.com tell everyone about your website. And what is your mission? Because you have a passion and I love it, and it comes out in your, in your website. Scubanomics.

DARCY KIERAN:  Well, my whole time in the dive industry, I fell that the structure was wrong and I mean, I’ve managed dive stores,  small ones and big ones. And, but in all cases, it’s six was extremely difficult to, and I’m not saying I’m the role model on being good at all those six because I think it’s, it’s kind of physically impossible and financially impossible to actually be good at all of those six sectors of operations within that one roof. So I’ve been working on it for a long time with many different partners in the industry, but changing the structure, I mean, where do you start? I don’t fully blame the training agencies and the dive gear manufacturer because right now they’re selling through that prehistoric network.

DARCY KIERAN:  How, do you pull the plug on that and go with the front route? I mean, it’s gotta be rock and roll for two or three years before you, you know, so it’s, it’s a very tricky question.  you can actually implement a new structure. Usually in most industries what you see, it’s a new player coming in to change industry. Cause old players have a hard time adapting simply because they currently satisfy a bunch of customers in this set way. Now, who, that new player would be, I don’t, but the reason that the website was we need, we need the first step is we need to talk about it. We need to talk about it and realize that there’s things to do. on the website I listed a bunch of different strategies, right? And maybe some of them are bad and some of them are good.

DARCY KIERAN:  But to me it’s a, let’s talk about it. Let’s recognize their are some issues,  whether it’s dropout rate, not enough growth or customer satisfactions or satisfaction of the dive store owners or satisfaction of the dive structures and the fact that retailing is totally changing. So we need to adapt. So let’s start by talking about it. And then somebody somewhere will figure out how to do it. Im, be glad to be part of that process. But to me it’s, we have to start talking about it because whatever of either issues I see the dive industry is the lack of a real trade publication. We have a lot of magazines that are prepared for scuba divers. You thought about scuba diving to the general public and then training agencies usually have their own magazine, but they talk about, you know, their own, their own Koolaid and, and I mean they, Dive Center Business who I think is a very good magazine.

DARCY KIERAN:  That’s the, that’s the closest to a trade magazine and the content is very good. Every dive store owners should get and read that magazine, but it’s, it’s more geared toward providing them with information and skills to currently to run their current dive shop. To me, a trade magazine is one that would cover trends in the industry,  sales or sales or down and which segment of the industry sales are down and they should try it. That’s usually taboo in our industry. If sales are down in the Midwest and up in the Southeast, I mean, we don’t want to talk about that. Right. So where do you go to find information. I don’t see a trade publication, right. That covers any of that. Or if there’s sales, if there’s merger and acquisitions. We all know that there’s been a lot in the last few years in the dive industry. Again, it’s kind of, we don’t really talk about it, but why not? Because you really need to know where the industry is going, what are the trends, what’s working, what’s not working so that we could then all work with that knowledge to get better. So now I don’t have all of that on the website, but it’s part of it. Where is it? Let’s start putting the real cards on the table, discuss and see how we can turn around the dive industry.

TEC CLARK:           Right. You know, you mentioned that there are lots of other industries bigger and smaller than ours that do have trade publications. Um, that is an interesting concept. You know, you mentioned, um, You mentioned change before and um, change agents. You and I are both major fans of blue water strategy and I think that, you know, the listeners of this podcast are usually a little bit of a different breed. They want to learn, they want to better themselves. That’s why they’re listening to a podcast for dive professionals. I have a feeling you, you know, you put the tenants of blue water strategy and blue water strategy created such a change that then the blue water strategy shift come out. Because people were then reporting back by saying, here’s what I did in my industry, here’s what I did in my profession.

TEC CLARK:           I changed the way we did things because things were broken and these people then got brought in and celebrated for their excellence in what they did. And then they were used as case examples for the next book. So I think what you’re speaking to in the audience you’re speaking to right now, if, if this is resonating with them, it resonates with me six different businesses in a dive center and are we good? Are we excellent at all of them? Probably not.

And so what does that mean? What has to change? Do we become super men and women that are excellent at all these areas or is there a different way? I think you make an excellent point on that. So I would recommend, yeah, go to the scubanomics see more of what Darcy’s talking about and also check out that blue water, Blue Water Strategy, Blue Water Shift. Those books are excellent at making you think differently about how to change problems.

DARCY KIERAN:  Yes, and there’s a whole section on scubanomics.com about the Blue Ocean Strategy.

TEC CLARK:           Exactly, exactly. Well great. Thanks Darcy. This was awesome talking with you. We’re going to have you on a again in the future. This is wonderful. It’s always great talking with you. Yeah, enjoy the rest of the DEMA show too.

So there you go. I like how Darcy isn’t afraid to be radical in his thought. I like how he looks forward to change. This interview should really be a call to action for you to give thought not only into your dive business being six businesses in one, but to also challenge yourself to think about change. What changes need to happen in our industry for our businesses to thrive in 2020 and beyond. You know, let’s start this dialogue. Go to scubaguru.com and find this episode of the dive locker podcast, episode 17 and click on the microphone. That way you can record and share your thoughts about change, change of business models, change in your business practice. What do we need to change as an industry? Share those thoughts.

Well, that’s it for today, everyone. Thank you so much for listening. Remember to subscribe to this podcast on iTunes, Google Play or Stitcher. That way you’ll be notified of new episodes as soon as they go live. And please leave a rating. Items talked about in this episode can be found on the show notes page at scubaguru.com and that’s where you can also click that microphone and leave us a comment about today’s episode and your thoughts of change. So thanks again everyone. We’ll see you in the next episode. Happy new year! Safe diving and take good care of my friends.

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