20th Anniversary Interview: Kyle Gross, President and Founder of APS
Let’s go way back—When did you first start sailing? Was it a family tradition?
I’ve always been drawn to the water, and my dad bought a power boat to live on – a big old Matthews 45 Sportfish. He had to move it, and that was the first time I ever went out on a power boat. I found an old copy of Chapman’s and read half of it (if not all of it) the night before.
So that was my education before my first time on the water. Sailing wise, I don’t know that I’d been on a sailboat until I got to St. Mary’s College. A friend of mine worked on the board of Admissions, and I very much wanted to sail, live by the water, do anything with boats – and she kind of fibbed a bit and told the head of admissions (who was a big supporter of the sailing team) that I’d be a great addition to the team.
It was a bit unorganized back then. Those were the days before we had a coach. A week after I got to school, my roommate took me out and taught me how to sail on Laser 2s. The next week, I went out for the team and progressed from there.
Say it’s 1990, the year before you started your company. What was your plan? Did you have a plan?
I had no plan. In terms of life, I was working in Eastport for Black Dog Boat Works for Bob Stein and going to school part time. I was traveling twice a week and just trying to get through college. That summer, I announced to a friend that I was going to open a business that catered to dinghy sailors. I didn’t know how I was going to do it, I didn’t have any money, hadn’t graduated college, was making minimum hourly funds – but I latched on to the idea and decided I was going to do it.
Did you recognize a lot of potential as a sailor entrepreneur at that time? Was there a need for that?
I grew up knowing I was going to own my own business. In high school and college, I had little enterprises I started – just trying to make a buck, trying to get something going. My father was an entrepreneur so I always had an eye open for an opportunity. And while I was sailing at St. Mary’s and working at the boat house, I saw how difficult It was to source parts. Especially dinghy parts that came from the UK. There just weren’t any good retailers. That’s where the seed was sewn, and it just kind of rattled around in my head. As I saw graduation coming, I thought, “Hey, I’m going to open the best dinghy shop and have all this hard to find stuff.”
Do you remember shopping for your first sailing gear?
It was just difficult to get anything working in St. Mary’s, which was pretty isolated back in my day. Usually, somebody from the team would try to put a team order together. In Annapolis, there were only two places. Fawcett’s, which certainly wasn’t a racing shop, and ISP International Sailing Products. That’s where we got out gear from. That was a model that I drew upon when I was trying to put APS together. Even then, they had a very small shop, and it was mostly clothing. It was still hard to find nuts and bolts and specialty parts. Even going to their store, you could see there was a need for a different model.
Will you tell me about that first location? (The sailing environment in Annapolis? Eastport in particular?)
A fair number of people from the sailing team at St. Mary’s were from Annapolis or moved to Annapolis after graduating. We would go to Annapolis. It was kind of the mecca for sailing. Friends became sail makers and worked in the industry, lived and breathed it. I was already up here and commuting to St. Mary’s to finish my degree, and I was able to finagle a very small loan – a very small loan – from a local bank. Enough to take a lease on Fourth Street in Eastport in the bottom of a house. Bob Stein of Black Dog Boat Works was so nice to me and would let me use the power tools after work—and use anything, his truck . So I ended up with a little tiny office/store with no fixtures because I couldn’t afford them. So I built all the fixtures, shelving, gondolas, everything. And put the store together, put the sign up, and went to a wholesaler and bought some stuff.
There’s a rumor going around APS that you started the store in a Van?
No. I didn’t buy the van until I was about a year into it. I went to a few regattas and sold out of the van. It wasn’t very effective, but it was a great way to cushion the cost of going to Laser midwinters. I tried it half a dozen times and gave up on the model.
What about the Storefront? You must have been the only employee.
For many years.
Do you remember hiring your first employee?
I do. I worked 7 days a week for a little less than two years and was to go down and do Key West Race Week. I had a good time, let off a lot of steam, came back – and that Spring, I hired some young high school kid, nice guy—and I think by about week two, he had mis-cut some high tech rope two or three times, and I ended up letting him go. I didn’t have another employee until later that summer maybe.
There’s a picture of the old storefront with people hanging out on the porch. Did you have a lot of friends around for support? I mean more so the sense of moral support—
Yeah. If it weren’t for my friends dragging their customers in, the business wouldn’t have been grand – friends who were sail makers encouraging their customers to come to me.
And I don’t want to exaggerate, I was sailing every evening that I could. By about year 2.5/3, I had somebody part-time so I could do the occasional weekend race. The front was Friday night beers. I’d have a laser on display, you’d fill the cockpit with a bunch of ice, you’d throw the beers in. Everybody got off work at 5:00, and a lot of people would stop by.
At what point did you feel momentum gaining in the first stages of APS?
Was it year 3 that I put out a little tiny publication? Before I had a computer, it was all cut and paste. I’d take pictures to a photo lab and have them turned into half tones and cut and glue them to the pages. I mailed to the laser class and finally started to get some response.
That’s how I started the mail order business, would take my packages – what few there were – across the street. That was the first time I had a taste of the need for mail order because then I realized Annapolis is the sailing capital, but there’s not enough dinghy sailing to really support a dedicated well-stocked store. I think, by the end of that year, I had pretty much every laser part memorized--part number and price, and there weren’t that many back then.
What year was that?
1993 or 4—
Oh, I saw that and didn’t realize it was laser specific.
I did an Opti one, then a Laser one. Then, I did one that was just clothing, which was my first glossy. Trying to hack that thing together without a computer. I got my friends to be my models. I did that two years in a row – got them to help me out. I think on the second one, the catalogs were mislabeled, and I had thousands and thousands of catalogs that needed different zip codes or something odd. So I bribed a bunch of friends with beer and pizza one night to come over and help me get that done. I kept poking at this catalog idea, and that’s where I started to see some potential.
What were the classes you focused on?
In the beginning, I didn’t focus on any classes, just general dinghy needs. I wasn’t a Laser dealer for the first two, two and a half years. There was another dealer around, and I couldn’t get access to boats and parts – that was a big hindrance to me growing. Once I got the dealership, you talk about perspective change. That’s when I started to see even more potential.
I forgot that, that was a major detail. I was only able to do that because I had to come up with a bunch of cash to buy boats and parts because without that you can’t become a dealer. A good friend of mine LG Railey from St. Mary’s, he lent me the money.
This is APS 20th anniversary. What are your thoughts on how performance sailing has changed in the last 20 years? Are there any pivotal industry moments that stand out in your mind?
I think people’s awareness of sailboat racing was more regional. And, you know, I started pre-internet, pre-information age, everything was still done by print or a phone call. Nobody had a cell phone. So you’re awareness of the diversity and the breadth of sailboat racing was rather limited, other than what you read in periodicals.
So I think the biggest impact has been the information age. What had been isolated pockets for one designs (because they can be very strong in one region and non-existent other places) have grown, come on the radar. Now, many places on the Internet report on sailing, forums and news outlets. This stuff is being fed out, and you can subscribe to information in a number of different ways.
The other thing has been the threat to sailing. Perceived (and in many cases, real) barriers: water access, cost, historically, an elitism had to be overcome. It seems that every sport has become a little more intense, whether it’s lacrosse or soccer or whatever you happen to do , there’s more equipment, the bar has been raised, it’s a bigger commitment. Therefore, the person that participated in 4 to 8 activities from organized sports to recreational whatever it is—scuba diving, I think the economic pressures and the commitment levels have required that people pick their top 1, 2, or 3 and there’s no room for others. There are so many barriers to sailing that it’s an easy one to just drop off of people’s radar, and it’s hard to overcome that. The sport has grown, and trust me, I’ve been happy for that change.
It seems like you wanted to say something about APS making the transition from a sole focus on dinghy sailing in to keelboat racing.
When I started the company, the first year, I shut down for a week. I had identified in England, which is the mecca of dinghy sailing, all of the major manufacturers and stores. I jumped on a plane, rented a car, and I drove to every dinghy shop I could find. I stopped at Marlow, RWO, Holt Allen, Seasure completely unannounced to see what that scene was all about. I think that was the point at which I realized in the United States, we are geographically challenged. To reach critical mass, each one design or body of sailors—needs to have a certain concentration. In the UK, and most of Europe, everything is a day or half a day’s drive away. Generally, it’s less than half a day if you’re in England. Therefore, the barriers were fewer, and people could participate more freely.
Here, we’re back to these pockets in a huge country, and we only have so much coast line and sailable water compared to how much acreage there is in this country. I started to realize we’re not going to reach critical mass with dinghy sailing, and there will always be concentrated pockets. So I came back to the US, saw how many dinghies were sailing in this country, and realized there just wasn’t enough business. That’s when I started to entertain the idea of working with bigger boats.
What year did you hop that plane to England?
1992. Tail end of that first 12 months.
Sounds like that would have been quite the trip.
I got so lost because I figured I needed to head NW until I hit a highway or an M. I’d hit these round abouts, the sun never came out, and I started to lose my sense of direction. Couldn’t figure it out, and these burgs, the little tiny towns aren’t on the big maps – I ended up in Bath when I was supposed to be in South Hampton. Yeah, it was an adventure.
Were you alone or did you bring a friend.
It was just me.
It sounds like that was your first introduction to manufacturers - which is surprisingly early on. When did you start to form relationships with them?
I identified very early on that I needed to have strong relationships with the manufacturers, not distributors and all this kind of stuff because APS was going to be so specialized and really dominate a certain part of the market. Some were open armed, others looked at me and said I’d be a flash in the pan and I won’t be here next year. Some opened their door just a little bit and would just give me part of their line because they had other dealers. There were some relationships that took many, many years to develop.
Where do those relationships stand now after being 20-years established?
They’re very, very strong. I know people trust us. They know I’ve stayed with the vision and done what I said I was going to do. I think there’s some credibility that comes along with that. Where it stands, I feel like I could pretty much pick up the phone, and nicely call any of my vendors and say hey, I’ve got this idea. There’s not a CEO or President of any company I wouldn’t pick up the phone and call.
Are any of the folks you talked to in ’92 still around? Do you every laugh about that first visit?
There are some people still around. This is an industry for life for the most part. You see people come into it and leave it for the short term, but I think most of those guys are pretty early to spot. It is a lifestyle industry. There are a lot of the same players.
What about the storefront and your commitment to customers? I think one thing that sets APS apart from other sail gear outfitters is the fact there’s a physical store location where racers and cruisers can stop by if they’re in town. Check out who we are, buy some parts - What are your thoughts on this?
Customer service is king, customer for life policies are an absolute. Consistency is the only way to grow. These are my mantras. It’s been very, very tempting to run at some opportunities or to see what somebody else is doing and have a knee jerk reaction. Now, I think we’ve reached a point where it would be the rare occasion that APS would do anything without really thinking everything through. We’ve established where we’re going and how we want to take care of the customer, what we want that experience to be like. I want a business where the more somebody interacts with us, the more drive they have to interact with us again.
With the storefront in particular, in terms of building, it was a very expensive piece of property to buy and building to build. We did it specifically so that aps would stay true to its roots and be right in the heart of Annapolis, right in between the major clubs and therefore convenient. Eastport is representative of the roots of APS so to be out in some business park just didn’t seem—I just don’t think I could have slept with that.
I think it’s a nice nod to APS’s past that the current location should be 2 blocks from that original store.
Even the design of the building. It would have been so much cheaper to put up a metal building with a fake façade. We built something real that was very much something APS, and functional, and very much Eastport in style.
It just shows you have plans for the future.
Sounds like the business has come a long way. If you had to start all over, is there anything you’d do differently?
Ask for help. Underline. Assume nothing. Realize that a BS from a college is not an education –it just builds aptitude or an appetite for knowledge. Back then, I figured I could do it all on my own. I was working harder not smarter.
As president of APS, what is your current state of mind?
I don’t think I’ve ever known my state of mind.
Calm. We have reached a certain point. We have a certain foundation. We have a wonderful staff of people, smart people, creative people working at APS. We have a good system in place. I feel I’m empowering people, I’m giving them clear definitions of what their roles are, I’m giving them tools and training, and I’m just watching people doing their jobs. That’s just starting to gain momentum, and I love that feeling.
After 20 years in business, what are you most proud of?
I think I’m most proud of building a successful company, and I have the lifestyle I’ve always wanted. To be able to merge the lifestyle and the business is just a win-win. I don’t need a big house, my truck is 10 years old. I’m happy.