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Exploring the Deep

Trim and energetic, with prematurely silver-gray hair and beard and a perpetual twinkle in his eye, Greg Stemm seems right out of central casting as the CEO of a company that does what many people dream about. Stemm is a deep-ocean shipwreck explorer. His company, Odyssey Marine Exploration, specializes in finding historic shipwrecks and recovering gold, silver and other artifacts.

Odyssey (NASDAQ: OMEX) is best known for two finds. The first, in 2003, was the S.S. Republic, a Civil War-era paddle-wheel steamer en route from New York to New Orleans that sank in a hurricane in 1865 about 100 miles off the Georgia coast. It took a dozen years for Odyssey to find and reach the wreck, which yielded about $75 million in historic artifacts including more than 51,000 gold and silver coins. Because of the depth—1,700 feet below the ocean surface—Odyssey crew members used a large remotely operated vehicle to individually retrieve each coin and artifact, place them carefully into containers and raise these to the deck of the 251-foot Odyssey Explorer.

The second major find and excavation has the code name Black Swan. Found in 2007 in international waters south of Spain, this wreck has yielded more than a half-million silver and gold coins. Though Odyssey declines to speculate on the value, coin experts suggest the find could be the largest in history, with a retail value as high as $500 million. As you might imagine, such discoveries are not without controversy. Though the site has not been positively identified, the government of Spain has made a claim in court. Meanwhile, Odyssey has brought the treasure to Florida where it is being conserved and studied as negotiations with Spain move forward.

While these are the two most famous wrecks Odyssey has discovered, there are many others of even greater historical significance. The company has found and photographed hundreds of historic wrecks in the Atlantic and Mediterranean, ranging from ancient Roman vessels and Phoenician wrecks to German U-boats and colonial warships. These remain to be recovered. Sitting in Stemm’s Tampa lake house, the former ad agency owner talks about his life strategies, setbacks, values and victories.

SUCCESS: There is an ancient Chinese aphorism that says, “May you live in interesting times.” Some refer to it as a blessing and some think of it as a curse. Since you are clearly living an amazing adventure, how do you relate to the interesting times wish?

Stemm: Oh, I absolutely consider it a blessing…. Well, most of the time. One of our Odyssey board members defines adventure as disaster narrowly averted— the closer the disaster, the better the adventure—so I am cautious about yearning for adventure. It just seems to follow us.

SUCCESS: So what have been some of the narrowly averted disasters that stick out in your mind?

Stemm: Where to start? From a business standpoint, when John Morris and I first formed Odyssey, it felt like we were always on the brink of breaking rule No. 1 in this business: Don’t go broke. We were always cobbling together financial arrangements to keep pushing forward. It went on that way for years. Those interesting times were certainly less fun than these, though no less valuable.

SUCCESS: So you’re saying that finding a fortune in lost sunken treasure is not a quick way to wealth?

Stemm: Absolutely not. In 2000, the situation looked pretty dire, and it was easy to question our ability to keep our business plan financially afloat. John and I had long since stopped taking salaries and were selling off previously acquired assets to keep moving forward. Then, just before Christmas a dear friend and mentor, Jack Painter, introduced us to an investor who put up $3 million in exchange for a large percentage of our company.

SUCCESS:  How long had you been going by then?

Stemm: We first got started in this business in 1987, and there were many times when we were on the ragged edge of keeping the dream afloat.

SUCCESS: You said it was less fun, though not less valuable. How so?

Stemm: I buy into the idea that what doesn’t kill us makes us stronger. It’s the tough times that make us all the more grateful for the good times. When things are going really well, it is easy to fall into the smug belief that you have figured it out. When things are falling apart around you, you tend to pay very close attention! Those lessons include what does work and what doesn’t.

SUCCESS: So you are feeling pretty grateful these days?

Stemm: Yes, but mostly for the things that aren’t really related to my success in business. What I am really grateful for are friends. Success at Odyssey is the icing on the cake.

SUCCESS: So what have you learned about what doesn’t work?

Stemm: First, money cannot be the major motivator and acquiring lots of early funding may not be best for your business.

SUCCESS: How so?

Stemm: I believe that a passion for your dream has to be the driving force in any successful endeavor. Pursue a worthy dream with energy, faith and intelligent action and the money will likely show up as a byproduct. Secondly, I have found that too much financing too soon can hide potentially destructive problems with your business plan. Remember the dot-com bust of the ’90s—too much money too soon led to crazy excesses that masked f laws in management, strategy and leadership.

SUCCESS: What else doesn’t contribute to entrepreneurial success?

Stemm: I used to believe that great ideas were the key to success. Actually, having great ideas is the easy part. The real challenge is always in the implementation— taking a good, workable idea to market, and shepherding the company forward until the idea takes hold and can be leveraged. I’ve also found that being too smart can actually be a hindrance to coming to good decisions.

SUCCESS: How so?

Stemm: It’s natural to think your idea is the best when working with others. If you have high control needs, you can use your intelligence to out-argue anyone. But it doesn’t mean you’re right. This behavior leads to insulated thinking that can miss important strategic issues. No one is smart enough to see all good possibilities by themselves. Teamwork requires that we all hear and support one another as being valuable, even when we are disagreeing.

SUCCESS: So you prefer to work with people who will speak their minds, even when you are convinced that you are right?

Stemm: Yes, as hard as it may be sometimes. In fact, I feel strongly that as an entrepreneur you should be the generalist who understands enough about every aspect of your business to be conversant and make informed decisions. In doing so you need to find individuals who are better than you in every area of the business. Once you have determined that they are the best people for the slots, give them authority that matches their responsibilities and let them do what they do best.

SUCCESS: What else do you feel contributes to entrepreneurial success?

Stemm: I think a company needs to be built around a simple idea. It seems to me that the best concepts for great entrepreneurial successes are very simple to explain in one sentence. When you describe your concept you should find people asking, “I really never thought of it that way—why isn’t anyone else doing it?”

SUCCESS: And what is Odyssey’s simple concept?

Stemm: There are billions of dollars’ worth of interesting things lying on the ocean bottom—and the technology exists to find and recover them. Simple as that. The longer answer is that our mission is to be the world leader in the business of shipwreck exploration, deep-ocean archaeological excavation, education and marketing. That means that we not only explore for shipwrecks, but we approach each one in an archaeologically sound manner. That includes creating X, Y and Z (three-dimensional) co-ordinates as we pick up and film each artifact, as well as doing the best conservation possible on each recovered piece. The education part starts with our own team of archaeologists, historical researchers and consulting experts and continues with sharing our archaeological and historical data with academics and the public at large. Finally, while holding back samples of each type of artifact we recover for future research, we market coins, other duplicate artifacts, replicas and educational pieces to support the ongoing success of the company. Along the way we have had the privilege of working with such great partners as Disney, Volvo, Mercedes Benz and National Geographic. We have also worked closely with many great schoolteachers at every level and a number of museums around the country. Right now we have a major exhibit in Detroit.

SUCCESS: Was all of this in your initial business plan?

Stemm: The direction was there, but not the details. I feel that a business plan always needs to be a work in progress. I also believe entrepreneurs need to revisit their business plans and core assumptions frequently to see what is working as planned and what is not. Constant small course corrections will keep you on the road. Think about it. No matter how good a driver you are, you can’t just set the wheel in one place and hold it there, even on a straight road. The more often you correct your course, the less dramatic the corrections need to be.

SUCCESS: Is there anything else you’d like to share about what has contributed to your success so far?

Stemm: Never give up. Never give up. Never give up. If you are passionate about your concept and truly believe in what you are doing, you must be willing to stick with it no matter how tough things get. Most of the great entrepreneurial successes we see in books and magazines show how the founders held on through almost impossible odds, and multiple setbacks. That’s no coincidence.

SUCCESS: Do you have any regrets as you look back on your path so far?

Stemm: No. I really don’t rehash or dwell on disappointments. There are many setbacks, delays, poor calls and lessons along the way. But they all are experiences that contribute to what I have to work with today.

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