Tuesday, May 26, 2009

Valencia Sailing talks to Francesco de Leo, CEO of Green Comm

Valencia Sailing talked on Tuesday afternoon to Francesco de Leo, CEO of Green Comm, the Italian team that filed a challenge for the 33rd America's Cup, representing the Cirvolo Vela Gargnano. Our talk took place in the base of the 32nd America's Cup challenger +39 and covered a wide spectrum of questions such as Green Comm's agenda, its aim, its relation to Alinghi, its finances, its ability to design, build and race a 90ft trimaran in such a short time, or even its legitimacy.

Valencia Sailing: I have a lot of questions and I will start with the most direct one, asked by several of our readers. Are you a pawn of Alinghi, used in their quest to buy time in order to better prepare for the inevitable one-on-one race with BMW Oracle?

Francesco de Leo: No, we are absolutely not their pawns. This is a challenge that started with completely different objectives and has its own global agenda. It isn't a coincidence that we are called Green Comm and this has to do with my personal background. Probably your readers don't know it but I won the third mobile phone license in Spain when I was managing director of Telecom Italia, the youngest managing director of a listed company in Italy because at the age of 35 I was the managing director of M&A, of international operations, of business development as well as manager of our affiliates abroad. I was in charge of 12,000 employees and 9 billion euros of business.

Valencia Sailing: Let me rephrase the question. Is Green Comm's challenge a delaying tactic used by Alinghi?

Francesco de Leo: No. Look, I have no connection whatsoever with Ernesto Bertarelli...

Valencia Sailing: That was my following question. Are Ernesto Bertarelli or Alinghi, directly or indirectly, financing Green Comm?

Francesco de Leo: The answer is again no. I have to admit I'm also very surprised with these questions that your readers posted on your website. Let me clarify it once and for all. The reason I am talking to you today is to clarify that this is an independent, unrelated challenge and I am myself, Francesco de Leo, organizing it. Everything that is written regarding our association with any other person or entity has to be proven in court or otherwise it is false. I can assure you that tonight, I can call my lawyers in Madrid. In fact, yesterday I had a meeting with Niccoló Bastianini, head of our legal advisory team and one of the best lawyers in Italy. Bastianini is in constant contact with my lawyers in Lausanne and one has to be aware that if one decides to make affirmations not substantiated by evidence, they will have to be accountable.

Valencia Sailing: Still, is it a coincidence that the world headquarters of Simtone, the first sponsor you publicly announced, are in Vevey, Switzerland, close to Serono's facilities and the Décision boatyard?

Francesco de Leo: I will tell you everything about Simtone. If you go to the company's website, www.simtone.net, you'll see that I form part of its advisory board. Simtone is the creation of Mario Dal Canto, one of the initial managers of Sun Microsystems, together with founders Scott McNealy and Bill Joy. One of my dearest friends and mentor, Sol Trujillo, CEO of US West, then Orange and now Telstra, was one of Dal Canto's financial backers. I know Mario since a very long time. He's an Italian with a very strong presence in the US and creator of what is probably the world's most powerful cloud computing platform. This technology will also be of use to me for our challenge.

Valencia Sailing: Yes, but let's consider the following fact. You are the only team or yacht club to have officially challenged, after BMW Oracle, for an America's Cup that will definitely be sailed in huge multihulls. I haven't seen, at least publicly, a challenge from any of the French multihull legends, that, undoubtedly, have the expertise and knowhow to be competitive in such a race. You have to admit this creates serious doubts about your ability to be competitive in such a short time.

Francesco de Leo: I understand your question because I was the first one to ask it myself but we have to take things into perspective. When I was managing different businesses, I was handling investments worth 2-3 billion euros and making acquisitions worth 7-8 billion euros. When now you ask me how difficult it is to have a 28-million euro budget I realize it is a big number in sailing but it's only a day's revenue for a telecom operator like Wind. As a result, you have to take into consideration one's background. Secondly, in order to make this a successful challenge it's not only necessary to have a design team or winning design ideas. It's even more important to come from a country that has a high-level aeronautical industry...

Valencia Sailing: I will interrupt you again, but there is no multihull experience in Italy, unlike France where you have legends such as Franck Cammas, Loïck Peyron or Pascal Bidégorry, just to name a few.

Francesco de Leo: You are absolutely right, but if you go to Google and type "multihulls" you will have much more information than what I had myself 20 years ago when I was doing my PhD in California. The world has changed and people still don't understand it. They think we are in the 1980's. If you have the right contacts and the right people, you can build any challenge you want. Let me give you an example. Sol Trujillo, with whom I'll dine on Friday in Venice, covered the entire Australian territory, 98% of its population with a broadband wireless network in 10 months. You are obviously aware that Australia is as big as Continental Europe.

How did he achieve it? Certainly not by doing the things the usual way in the telecom sector. He reviewed all processes, the roles of each person, saw where time savings could be made and carried out his plan. People now ask me, "How can you build a catamaran before February?", my answer is simple. Trujillo covered the entire Australian territory in 10 months and we will not able to build a multihull in 3 months? It depends a lot on your starting point. I come with a different background and a managerial experience. I'm sorry to see people are very surprised but they shouldn't be surprised at all.

Lorenzo Rizzardi (left), president of Circolo Vela Gargnano, and Francesco de Leo, CEO of Green Comm Challenge. Valencia, 26 May 2009. Photo copyright Pierre Orphanidis / Valencia Sailing

Valencia Sailing: But even Alinghi and BMW Oracle, two high-level professional sailing teams, had to use the expertise of French multihull specialists and you can't deny there are dozens of years of racing yacht design experience in both of them. In addition, Green Comm being, let's say, the continuation of +39...

Francesco de Leo: Wait, stop here. Lets make things clear. There is no relation between +39 Challenge and Green Comm Challenge. I understand that +39 has been a complicated and difficult situation but in 2007 I was NOT in Valencia, I was in another part of the world doing something completely different. If anyone still claims we are a continuation of +39 makes a big mistake. The only contact point is the fact we are representing the Circolo Vela Gargnano.

Valencia Sailing: Why did you choose to represent that yacht club?

Francesco de Leo: I come from Bergamo and the Circolo Vela Gargnano is just an hour away from home. As a result, I have the ability to be there as long as necessary. Secondly, we are building a WiMax network in that area that will enable us to connect the sensors we have installed on some yachts, monitoring their speed and performance. That was an important factor. In order to be able to carry out these innovative tests with telecom technology we needed a basin of that nature.

In addition the Circolo Vela Gargnano is one of Italy's most prestigious yacht clubs and this year, next September, will hold the World Tornado Championship. This will be a great experience for us and we'll be able to see all these young multihull sailors. That's yet another reason for me to be there.

Last but not least, the people I have met in that yacht club have understood that this has to be a challenge completely different from the past.

Valencia Sailing: Nevertheless, right now we are in what is, or at least was, the base of +39 Challenge, right here in Valencia. There must be some relation.

Francesco de Leo: We are talking with the president of the Consorcio Valencia in order to enter in this base and use it in full right. We have chosen this particular base because we consider it to be the most appropriate for our activities.

Valencia Sailing: What about the alleged debts +39 Challenge has or had with its employees or the Spanish state?

Francesco de Leo: [Laughs] Lorenzo Rizzardi, a very serious person, has to close the chapter of the 32nd America's Cup but Francesco de Leo of Green Comm has nothing to do with that. Honestly, I don't understand why we keep talking about these things.

Valencia Sailing: Let's then move back to the yacht and her designer. You haven't announced any name.

Francesco de Leo: Look, our approach this time is very different from the past. There has always been a lead designer that from the start gave the guidelines regarding what the boat would look like. I have a different experience. I come from a business environment and what counts is the team. We have Professor Nani Lombardi from the University of Pisa, the biggest calculation center in Italy, who is in charge of CFD. We also have the Polytechnic of Turin, one of Europe's most important centers for ICT studies. Microsoft has 400 researchers there in charge of developing broadband mobile access technologies. We also have UCLA, where I am a visiting scholar of the Computer Science Department. As you see we have a very powerful team. This is a different challenge that requires knowhow and components very different from the past because nobody before has designed catamarans such as Oracle's or Alinghi's.

As a result, the innovation margin is very high to do things that apparently look very difficult but are performing very well on the water.

Valencia Sailing: So, you claim there is no need to have a lead designer with long and solid experience in multihulls.

Francesco de Leo: Some people might choose to have a lead designer in charge of the entire process while in this case we have chosen a different path with a team of highly-experienced people that come from aerospace or Formula 1, put together to design a boat that is different from what we have known so far.

Valencia Sailing: But that's exactly my point, you are designing a sailing yacht, not an airplane or an F1 car. You never mention an expert in yacht design.

Francesco de Leo: We do have that expert. It seems you don't know who Nani Lombardi is. He's one of the biggest experts in naval design. He's never been the lead designer of a team because he'd rather be doing research.

I'll make it clear that I'm in a position to call anyone I want who can give me an insight on how to design such a yacht. In addition, don't forget that this is not a reality show, as some people think, and some of our choices remain unrevealed. We aren't here to come every day and talk about something.

Valencia Sailing: Let's assume you design a 90ft multihull. This yacht must be built in Italy as per the Deed of Gift. Is there such a knowhow? Where would you build it?

Francesco de Leo: Of course there is the knowhow in Italy. In Italy there are companies like Finnmecanica, Finncantieri or Alenia Spazzio that not only are leaders in aerospace or defense but have also made acquisitions throughout the world. Let's not forget there are boatyards that, starting with the Moro di Venezia, have built a number of America's Cup yachts. We have extraordinary knowhow in carbon fiber and it's only 50km away from my home.

Valencia Sailing: Let's again, hypothetically, assume that BMW Oracle agrees and accepts you challenge. That would mean you would have to race a Challenger Selection Series some time in January. Your time window is even smaller. Would you still have the time to develop realistically something competitive?

Francesco de Leo: It's clear that we are not doing something that is absolutely normal. In fact, the management's mentality is to manage a "mission impossible". We know we have until the end of July before we definitely freeze the boat design. We also know we can accelerate the construction process, within certain limits. We will certainly not have the time we would have wished for to test her in order to optimize her. We will substitute this with the wireless electronic sensors and the sensor networks that will allow us to process data that today we are not even able to collect.

We just have to wait and see what are the decisions taken by others.

Valencia Sailing: On May 11th you sent a press release announcing exactly the starts of these sensoring tests...

Francesco de Leo: No, the tests started much earlier than that. In fact they continue as we speak and one of my tasks this summer will be to put in place the WiMax network I told you about. This network will allow us to have a real wind tunnel not a virtual one. You can always do as much simulation as you want but at the end of the day the boat will have to go on the water and sail. Water is very noisy as far as the information is concerned and for that reason yo have to be very selective.

Valencia Sailing: You are carrying out these tests on a small and antiquated C-Class catamaran built in the 1970's. This is also a source of doubts about your seriousness.

Francesco de Leo: Look, I'll explain. Do you know what I consider the important for me as head of the team? To challenge the rest of it to go beyond conventional wisdom. The reason we chose that yacht was to prove that in the 1970's someone was able to design a yacht ahead of its time. As a result, I told the people working for me that if such a yacht was built in the 1970's, what we'll see in February has to be far more sophisticated.

There is also another important factor. BMW Oracle has shown a trimaran. It might not be the one they race with but at least we are clearly able to see what they have been working on, what evolutions they have made. Similarly, regardless of what they are building now, we will also see Alignhi's yacht in July. We will study both yachts and some times it's better to be a late comer, you have an advantage over your adversaries.

Valencia Sailing: These yachts are also very expensive. Tom Ehman, last December here in Valencia, publicly stated that the cost of building BOR90 was "more than 10 million euros". This is very vague and it could be 20 or 50 million and doesn't include the current modifications. Let's hypothetically say it's 20 million. They have a well-oiled machine that has been working for years while you start from scratch and will probably need more than that. Do you have these 20-30 million euros available?

Francesco de Leo: Absolutely. I'm amazed each time somebody asks me whether it's difficult for us to find a budget of 30 million.

Valencia Sailing: It might be peanuts for a multinational telecom group, but in sailing, especially under the current tough environment, it's difficult to find such an amount. Don't forget that in the best-case scenario you might be only racing for 10-15 days.

Francesco de Leo: Your question is legitimate but I think that the major error you commit is that you can't manage the America's Cup thinking it's just a sailing event. The America's Cup is a business. The choice we have made since the beginning is to have a green agenda, our statement that this will become the cornerstone of the new economy whose aim is to save the environment. It's true we are going through a crisis but we don't come to Valencia saying we are going to a regatta. It has to become a public agenda, a global media platform where we say, "Yes we are in Valencia because we want to sponsor a multihull team" but a the same time we talk about our company, about what we do, our technologies, how we satisfy the needs of our clients. The America's Cup is by far the most appropriate event but if I run the event without such a global agenda, it then becomes more difficult.

Valencia Sailing: So, if I understand well, for you the actual race or the sport of sailing is secondary, a side dish. The America's Cup for you is a show rather than a sport event.

Francesco de Leo: No, maybe I din't express myself correctly. The things we are doing will help a sector face a problem whose solution will require a lot of time. Sailing is undoubtedly the sport that best embraces the same ideals. Our mission is much more complicated and the people that work with us are aware that we have an additional task; to work in a green low carbon-emission manner.

Valencia Sailing: All these ideas are indeed appealing but you still depend on whether BMW Oracle accepts you. Have you officially received a reply?

Francesco de Leo: No, we still haven't received a reply [Note: The interview was conducted before the letter from GGYC was sent].

Valencia Sailing: Have you set a deadline? You certainly can't wait too long.

Francesco de Leo: This is an issue we are taking into consideration with great attention, both in the design process as well as legally. It isn't, let's say, nice to send letters and then wait for a reply for days. Having said that, this is a problem of BMW Oracle. When they decide what their position is we will accordingly set ours. We, unlike others, respect entirely the rules of the game.

Valencia Sailing: Russell Coutts stated last Thursday during his press conference that holding a Challenger Selection Series in multihulls early next year wasn't "practical". If the final official answer from GGYC is negative how will you react?

Francesco de Leo: Green Comm will hold its steering committee and talk to its legal advisors in Los Angeles, Madrid and Milan in order to take a decision. That decision will then be made public through our official communication channels. I can't tell you right now what our position will be. We will certainly take into consideration the results of such a delay.

Valencia Sailing: If I'm not mistaken they have no obligation whatsoever to accept a second challenger. It's a privilege they have under the rules.

Francesco de Leo: I'm not an expert on that issue and I will rely on what my lawyers tell me.

Valencia Sailing: In your latest letter to GGYC, dated May 22nd, you indicate that the statements made by Coutts and Ehman are "under scrutiny" by your legal team. Do you consider bringing them to justice?

Francesco de Leo: No later than tomorrow [Wednesday] morning I will have a meeting with our legal team in Madrid. Niccoló Bastianini, our chief legal advisor, is preparing a report and as always I will follow their advice because I show esteem for all the work they have done. I will only repeat one thing: When one makes affirmations and is not able to substantiate them with evidence, they have to imagine that at some point they might be held accountable.

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