March 13, 2009

ResidenSea…stead: Ships Revisited

There has been a long and active debate about the relative merits of different structures for seasteading, such as [spar platforms](, [breakwaters](, SFS (ranging from SWATH to spars to Water Walkers), sailing ships, or retrofitted cruise ships. Seasteading is by its nature a diverse movement – of business models, governmental forms, and structure designs, as in [Wayne’s Venice Concept](

Our initial research focused on the spar platform as the most promising structure. Now that development of our patented [ClubStead][] design is wrapping up, we are going to evaluate some of the other contenders. Breakwaters were extensively discussed in [this Weekly Research topic](, and we are considering how best to explore single-family seasteads. We are also going to investigate retrofitted cruise ships – starting with this blog post.

My previous opinion on ships is best summarized by the FAQ for [“Why not just buy a boat?”](, which concluded: _”Weighing these factors, we think a platform is a better approach if your goal is to create permanent ocean settlements. However, boatsteading is a pretty reasonable strategy as well. It may even be better in the short-term, but we think it is much less likely to transform the world.”_

It is part of our strategy to research and attempt to nourish both the residential and commercial sectors. Discussions with investors and entrepreneurs have indicated that seasteading-related businesses such as medical tourism need to be proven at a smaller scale than ClubStead (which costs ~$100M) in order for a spar platform business to have a chance to be funded. So ships seem a natural stepping stone along the path to larger commercial seasteads. And in the same way, ships seem a natural stepping stone along the path to larger residential seasteads. And in terms of business models, just as near-shore medical tourism is a small extension of medical tourism to distant countries, given that short-term travel on the ocean is a proven industry (cruise ships), it seems natural to extend it to long-term residency.

Additionally, some new information has come in since Wayne & I wrote our recommendations for spar platforms in the book alpha version 5+ years ago:

* Cost – Ships now appear relatively more cost-effective than we’d thought, for several reasons:
* Used ship prices have plunged with the global recession and shipping slowdown – the [Baltic Dry Index]( reached a 22-year low in December of 2008.
* The industry is in a slowdown, and consolidating its fleets to larger vessels, so many smaller used cruise ships (~700 pax) are for sale right now.
* The cost of ClubStead seems to be a bit higher than we had expected ($400+/ft^2), based on preliminary estimates.
* Legal Status: Our legal research recently determined that while a ship is under the flag jurisdiction beyond 12nm, artificial platforms are regulated by the coastal state throughout the EEZ (200nm or more). Initial ventures will probably want to be near-shore, testing and proving seasteading at 12nm before we are ready to go to 200nm.

Cost and legal status are two of the most important criteria for a structure, so this argues in favor of ships as the first incremental step for the residential sector. I’ve been mulling over how retrofitted cruise ships could be made to work as a near-term business for the last month or so, and am ready to present an analysis for feedback.

#### Business Model

The obvious business model is a cruise ship condo, like [ResidenSea][] but priced for the middle-class. Size would depend on the level of interest, but I’m thinking something like a 700-pax ship, leaving small rooms for 200 (guests/staff/frugal) and converting 500 pax of rooms to condos for 100. The combination of permanent residents and timesharers/vacationers would travel the world on a retrofitted cruise ship, with an itinerary timed to catch major world events like the Cannes Film Festival, Carnival in Rio, Burning Man, and Olympics. The vacationers would be funded by dirtside jobs, while the residents would be a combination of retirees and telecommuters.

Initially, signups would be taken as a contingent contract, where people would sign: _”If a residential seastead can be built for < $200/ft^2, and 200 people (permanent residents and prorated timesharers) sign up, I will purchase at least AAA ft^2 for BB weeks/year"_ filling in their values for AAA and BB (52 for full-time). #### Pros and Cons by Area ##### Structural (Ship-shape) * (+) Proven over centuries. Minimum engineering novelty. * (-) Doesn't seem/feel new/different. This means it less PR, less feeling of pioneering, perhaps less attractiveness to customers. * (-) Poor stability when stopped in deep ocean (turns beam and then rolls). Must spend time either traveling or in port. * (-) Optimized for movement. Space and solar footprint are limited. ##### Location (Mobile) * (+) Mobility is nice to grow a social movement - ship can give talks / host socials all over the world as it travels. * (+) Shopping / resupply is easy due to frequent port visits. * (+) Less likely to have political problems if only in/near each country for a little while. Can skip countries that are problematic. * (+) Thanks to cruise industry, there are great dock facilities in many ports for cruise ships, often with good access to shopping and dining areas. * (+/-) Mixed in attracting people. People like cruises to visit many places for vacation. But they also tend to like to stay in one place and build a network of friends for permanent living. * (-) World travel limits onboard businesses / occupations - medical tourism is tough w/ no fixed location, for example. Phone/internet-based businesses may be all that works. * (-) Being in domestic waters so frequently may pose significant legal challenges (varying laws for things like drugs & guns). Perhaps the ship can lock them up when in port? Might even have to leave a "pod" (ocean cache) outside territorial waters. Messy logistics there. ##### Legal (Ship flying a flag) * (+) Ships have one of the best legal statuses. Outside 12nm, the flagging state has jurisdiction, and [flags of convenience][] for ships are standard. Whereas platforms are regulated by coastal state within 200nm EEZ. Also, we get to use the "legal shadow" of the cruise line industry (precedents set by their political power). Ship is less likely to have a path to sovereignty, but we should be building breakwater cities long before sovereignty is an issue. (Note that this venture would be a separate legal entity from TSI) ##### Financial (Residents: condos / timeshares) * (+) Ships are particularly cheap now due to recession and shipping volume decline (Baltic Dry Index). * (+) As a proven, mass-produced technology, ships are relatively inexpensive. Purchase and retrofit may even be able to be financed by loans. * (+) Condos / timeshares gives a clear funding model for both residents and guests. * (-) Somewhat competing with the existing cruise industry, which has much more experience and economies of scale. Vacationers onboard are directly competing w/ cruise lines. And more may enter the market if we prove the model. * (-) [ResidenSea][] was a failure financially. ##### Timescale * (+) Can be done now with no new engineering. Once the venture has customers and funds, it should be able to buy and retrofit a ship in 1-2 years. ##### Modularity/Scaling * (-) Not very modular - can't expand incrementally. There is the possibility to expand by trading up to a larger vessel, or by adding ships, but this is not seastead-style expansion building a city one block at a time. #### Unknowns Some of the information that seems important to me in evaluating this strategy: * Does this approach (business model and structure) appeal to our community? It will only work if there are customers, so this is important. * How much does it cost? (price ships & retrofitting). What about relative to [ClubStead][]? What are the prospects for additional cost savings from improving the ClubStead design? * How many people are needed for a [breakwater][] city to be cost-effective? The smaller the number, the less we should worry about non-seastead aspects of short-term strategies like ships. The larger the number, the more we want modularity in our pre-breakwater structures. #### Conclusion The cruise ship condo approach is a promising near-term strategy which bears further investigation. The tradeoffs are complicated, but at the core it comes down to a question of novelty and how big our first steps should be toward the long-term goal of seastead cities. The ship route is cheaper, easier, has a clearer place in the existing business and legal landscapes, and can be done sooner. But its lack of novelty means it is less interesting and exciting to potential seasteaders and the media, and more poorly suited to our long-term goals. We must weigh the advantages of an easier start against the dangers of losing our unique vision. You are part of "We", so your feedback here is welcomed. [ResidenSea]: [ClubStead]: [breakwater]: [breakwaters]: [spar platforms]: