← How I Built This with Guy Raz
How I Built This with Guy Raz
Backroads: Tom Hale. How a desk worker became a trailblazer in active travel
00:50:50
Loading summary
Transcript179 lines
- [00:00]
A
Wondery subscribers can listen to How I Built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. I've stayed in awesome homes on Airbnb in places like Athens and Berlin and Rome, and each time these places have given our family a chance to feel like locals. It's the best way to travel. You're spending a cozy evening out of town in a home you booked on Airbnb. The space is thoughtfully designed and you think, I bet I could host my own home on Airbnb. Airbnb. Your home might be worth more than you think. Find out how much@airbnb.com host listening to Audible can open you up to so much. Whether you listen to memoirs, thrillers or expert advice, you can be inspired to imagine new worlds and new ways of thinking. Listening can lead to positive change in your mood, your habits, and ultimately your overall well being. I know I always feel better after listening to a book on Audible. Audible has an incredible selection which with over 1 million audiobooks, podcasts and Audible originals all in one app, enjoy Audible anytime while doing other things chores, exercising, commuting, you name it. Audible makes it easy to be inspired and entertained as part of your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Sign up for a free 30 day Audible trial and your first audiobook is free. Visit audible.com built if you've shopped online, chances are you've bought from a business powered by Shopify. You know that purple shop pay button you see at checkout? The one that makes buying so incredibly easy? That's Shopify. And there's a reason so many businesses sell with it. Because Shopify doesn't just make amazing buying experiences for customers, they're also the experts in helping small businesses grow big. Stop seeing carts going abandoned and turn those sales into Sign up for your $1 per month trial and start selling today at shopify.com bilt go to shopify.com bilt shopify.com built.
- [02:33]
B
So we were driving, crossing the Nevada desert and the driver went off the embankment and we rolled the van a couple times. I felt like we were in a rock tumbler and it was all steel tool chests, propane containers. Just imagine all that was going around as we're spider manning through the air. And anyway we came to a rest, went and made it over to the edge of the freeway, were laying there side by side and Bill, one of the leaders, said, well, I guess that's it for the summer.
- [03:13]
A
Welcome To How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz. And on the show today, how a midnight epiphany led Tom Hale to quit his job and launch Backroads, a bike touring company that grew into one of the largest active travel companies in the world. Have you ever taken a trip that left you feeling different when you came home? Not because of what you saw, but because of how you moved through it? Well, that's what Tom Hale has built his entire life around. Back in 1979, Tom quit his job with no plan, no investors, and almost no experience. Just this idea that people might actually want to ride bikes and camp their way through places like Death Valley. His first trip, just four guests, and Tom led it himself to stay afloat. He washed dishes at night. He lived in a house with a bunch of roommates and chased down stolen bikes from the Backroads officer. But over time, his bet paid off. Backroads grew from a one man operation into one of the world's largest active travel companies, offering hundreds of biking and hiking adventures in more than 60 countries. And Tom did it all without taking a dime of outside capital. He grew up in California, and he ran track at the University of Oregon alongside the legendary Steve Prefontaine. After injuries put an end to his running career, he earned a master's degree in environmental planning and his first job after grad school. It took him somewhere unexpected. To Las Vegas, a place that was very different from what he was used to.
- [05:12]
B
Yeah, no, it was a very weird place. I remember I started biking, commuting by bike to the Valley bank building and would go past the clubs that had lines out the door at 6 in the morning. It was just like such a juxtaposition. Everything about my life, it was just odd.
- [05:30]
A
You worked for, like, the city of Las Vegas.
- [05:33]
B
The city of Las Vegas, yes. I worked on air quality, water quality, solid waste plans, et cetera. And, you know, I remember driving up the coast and my mom was saying, tom, you are somebody that needs to be passionate about what you're doing. But the implication was, Tom, you don't love what you're doing. And she could not have been more right on that count. And I think I recognized that when I was in Las Vegas and I didn't like Las Vegas. So the whole do something you love to do, I made the wrong decision. I see so many kids doing exactly what I did, which is I love the environment, okay? I always have. I've been Running out in the woods all my life. I love the environment. Well, I love the environment, so why don't I do environmental planning? There was nothing about that job that resonated with me.
- [06:22]
A
You were in an office. You were sitting in a cubicle, and.
- [06:25]
B
I'm in an office now, actually, a lot of the time, but it's a very different environment. But, yeah, so that was in the back of my head or the front of my head.
- [06:33]
A
You mentioned bike commuting. I read that you, because of all the injuries, as a runner, you kind of switched to cycling like that, because that wasn't as. Obviously, it's not as impactful as running is. Is that right?
- [06:49]
B
I think that's pretty accurate. I never really gave up on running, but biking did. I commuted by bike and. And it was six months into the job that I woke up in the middle of the night with this idea that I wanted to take people on bike trips.
- [07:04]
A
Had you. Were you at this point doing, like, bike trips or cycling, or had you been on one before?
- [07:11]
B
No, I rode my bike up the California coastline.
- [07:15]
A
Oh, wow.
- [07:16]
B
Against the wind. That was it. I think I did that maybe in between quarters or something when I was at ucla.
- [07:24]
A
All right, so you had already done a pretty intense bike, and you went up Highway 1.
- [07:27]
B
That's right. Yeah.
- [07:28]
A
So you had done that, and you get up in the middle of the night thinking, I want to lead bike tours.
- [07:34]
B
That's right. Woke up about 2 in the morning, got out of bed, and took eight pages of notes on what it would take to do this.
- [07:42]
A
Where does it come from? I mean, clearly you liked being around people, or you liked the idea of leading people or not, or it was just completely random.
- [07:53]
B
It's about as random. I have asked myself that question hundreds of times, and I cannot remember anything that led up to me waking up. I literally think it was a reaction against Las Vegas. I believe I had got a hold of a book, what color is your parachute? Which I could summarize by saying, find something you love doing that you're really good at. But what I saw as I read it is like, oh, my God, this is a perfect thing for who I am in my personality. Whether as far as wanting to have control of my life, wanting to do something exciting. I might have seen something in a bicycling magazine, maybe a classified ad. I'm not sure. There weren't too many companies doing this sort of thing. I don't even know if I had seen a bicycling magazine at that point, but it must have been something like that, Some trivial thing that, you know, said, well, that's interesting, maybe. Yeah, this shouldn't have worked. I didn't have a nickel to my name practically, and, you know, just jumped in.
- [08:59]
A
I'm just curious if you can take me back to that time in 1979. Did you have a vision of, like, a large, huge company, or did you think, I just. Was it as simple as I want to just lead people on bike tours in different places?
- [09:13]
B
Well, I didn't do it like a lot of people do it, which is they keep their day job and then they start this sort of hobby thing. I quit my job, you know that I had gone to school, college for seven years, and I. So I quit my job, had no income coming in. So I was going to make something out of this. A company that would lead bike trips. But I couldn't see beyond my hand as far as where it was going to go.
- [09:37]
A
Right. You didn't know what it was going to be, but you knew, and you were young. I mean, you were 26, 27. So it was a risk, but it wasn't a catastrophic risk. Like, you could go back to a drudgery of a desk job if you had to.
- [09:50]
B
Yes, but that was never going to happen.
- [09:52]
A
Right.
- [09:53]
B
I made my mistake once. I wasn't going to make it again.
- [09:56]
A
All right, so this is the late 70s. You decide you want to lead a bike trip, and you're obviously a pretty good bike cyclist. You cycled up the California coast, but, you know, you had to presumably do some kind of, I don't know, reconnaissance or planning or studying. What did you. What was the first thing you did to figure out whether this was feasible?
- [10:18]
B
Well, I came up with a name for the company, Backroads. And that was the first name I came up with. And I was going to go on.
- [10:27]
A
A bike trip in Las Vegas. You were gonna take a bike trip on your own?
- [10:31]
B
Yeah, on my own across the country.
- [10:34]
A
Across the United States. The whole country.
- [10:36]
B
That's what I was going to do. But then I realized there's a whole lot of cornfields to get through. I thought going around the loop in the western United States, I did about a 5000 mile loop. I started in San Francis, took BART to the end of the line and got out of BART and rode down the coast and went counterclockwise. Around the country or around the West?
- [10:57]
A
Around the West. And you just had a backpack and a sleeping bag. I mean, a tent.
- [11:01]
B
I had a panniers on the bike.
- [11:03]
A
Okay, so. Right. Panniers or whatever they're called. Yeah. I don't know how they pronounce it. Is it panniers or is it panniers?
- [11:08]
B
Pannier, I think. Okay.
- [11:09]
A
All right, thank you. That's very helpful. I always said panniers.
- [11:13]
B
Yeah, you might be right. I have to go check that. I had to know.
- [11:16]
A
So you have those bags on the side. Okay. And there was a tent in there. Camping stuff.
- [11:21]
B
Camping stuff, yeah. Which it turned out I didn't. I was by myself. So going through the Mojave Desert, I remember stopping at night and listening to all the critters out in the sagebrush. Lizards, snakes, etc. And they're really loud at night, so the thought of putting a sleeping bag down amongst those critters is not very pleasant. So, anyway, that was my trip.
- [11:46]
A
Tom, I'm curious. In 1979, I mean, today it's so common to see packs of cyclists everywhere, like just all over the country. And it's. But in 1979, was it kind of an oddball thing to do to get on a bike and just ride around the country? Like, there wasn't the infrastructure. There weren't bike lanes. There weren't.
- [12:05]
B
No, no. But. But there still aren't necessarily bike lanes where a lot of people do long bike rides. And so you're. You're sharing the road with cars. And so riding a bike by yourself is a very solitary experience. You almost never. And back then there, like you say, there weren't that many bikes out. So I. I was by myself the whole time. A lot of room for introspection and thinking about, well, this is a good idea. And. And I was initially going to start a company in a geographic area like the Northern California where I'm from, but I got back and realized that, my God, there's all these national parks that would be great to do. So that was. That 5,000 mile ride became a formative aspect of the company.
- [12:45]
A
Yeah. And tell me about the first trip that you organized. How did you do that?
- [12:51]
B
We had four people on it, and it was a camping trip and camping trip.
- [12:56]
A
Where?
- [12:57]
B
Death Valley.
- [12:58]
A
Death Valley. Okay.
- [12:59]
B
And we still go to Death Valley. We don't do camping there anymore, but we do go there. And it was such a fun experience, but, you know, we couldn't have done more things wrong because of the camping venue, the weather conditions, the. The winds are crazy. But, you know, we had a good time and we ran a trip and this was just.
- [13:19]
A
And how many miles a day were you cycling?
- [13:22]
B
We biked more back then. Than we probably do now. It was probably more like over 50 miles a day.
- [13:28]
A
Wow. So you had to be pretty good shape to do that.
- [13:30]
B
Yeah, I'd say so, yeah.
- [13:32]
A
Got it. Okay. And would every. Everybody on the trip pitch their own tent or would you do that for everybody?
- [13:38]
B
In the very beginning, I believe we felt like it was a good thing to have people participate. I think that could not have been more ill founded, personally. But so they did actually pitch their tent. And anyway, it didn't take us very long to realize that they don't really want to, so.
- [13:55]
A
And what about food? I mean, you know, obviously in the late 70s, there already was, like, meals ready to eat and food you could take for camping. It wasn't as good as it is now. It was like a lot of powdered.
- [14:06]
B
Yeah, we didn't eat any of that kind of food. It was real food.
- [14:09]
A
You had food on your bike for everybody?
- [14:12]
B
No, no, we had a van.
- [14:15]
A
The van would come.
- [14:16]
B
Yeah, yeah, yeah.
- [14:17]
A
And the van carried like the bags and the food, basically.
- [14:20]
B
Yes, exactly. Yeah. You know, we were cooking with Dutch ovens. Made some great, great food. Learned the hard way. Like Dutch ovens, for instance, you don't want to put the briquettes right in the middle of the Dutch oven. When they're stacked up, it gets too hot and they crack. Which they did.
- [14:35]
A
Yep.
- [14:35]
B
You know, and when you're out camping, food tastes better. But we did a really good job. Made lasagna, all kinds of good things.
- [14:40]
A
So the people on those early trips were essentially, they were paying to pitch their own tents, cook their own food, and cycle 50 miles a day.
- [14:50]
B
There you go. Right.
- [14:52]
A
Sounds like a great deal. No, but I'm sure it was amazing. And how did you know what to charge people?
- [14:58]
B
We would charge what we felt was fair and what people could afford to pay. And we look at how much we spent and that, we got to make a margin. And so we charged way too little probably back then, but, you know, we learned pretty quickly.
- [15:13]
A
And when you got back. Right. I mean, you were in that first year, I imagine, leading the trips. But also you have to organize them. You've got to advertise. Where were you advertising these trips? Like, were you putting bulletin boards?
- [15:25]
B
Bicycling magazine, Outside magazine? I think Outside was in existence at that point. And we probably rented some mailing lists, bike club mailing lists. I don't know. You know, I. To this day, I have no idea if much of that paid off. You know, it's so different now. You do digital advertising, and today and tomorrow, you know, if it worked or not back then, you'd, like, find out a year later.
- [15:49]
A
How did you have the money to. To buy those ads, Tom?
- [15:52]
B
Well, they didn't cost very much, and I worked on the side at night at Fondue Fred on Telegraph Avenue in Berkeley. I chipped the cheese out of fondue pots.
- [16:05]
A
You were like basically a dishwasher there.
- [16:07]
B
It was worse than a dishwasher because it was chipping cheese out of a fondue pot.
- [16:12]
A
Yeah, but I don't understand why you have to do that. Fondue is soft and melty. Wouldn't they just take the pot and.
- [16:18]
B
Put hot water in it after everybody shared tips? So it didn't matter to me. I didn't want to talk to anybody. And so shipping as fast as I could. And we listened to music.
- [16:27]
A
So this is. Make some side money to finance this business. Okay, so you. Basically, the idea was very straightforward. You were gonna do biking trips where people would camp. But I guess pretty early on, maybe even in the first year, you realize that maybe camping wasn't the way to go. Tell me about that.
- [16:46]
B
So we continued to do camping for 38 years, I think, but it had flatlined towards the end of that period, and everything else was growing rapidly. So in our. I think it was our second year pivoted to hotel trips, and quickly that became the majority of what we did.
- [17:07]
A
So you basically cycle for a fixed, you know, amount of time during the day, and then you overnight at a hotel or motel.
- [17:15]
B
Really, really nice. Even back then, they were nice hotels. Yes.
- [17:18]
A
Yeah. Okay. So you're doing these bike trips in different places around the Southwest in the US And I guess the first several years are these are just bike trips. Right?
- [17:28]
B
Right.
- [17:29]
A
Like, later on, it would become hiking and other things. But at this point, they're bike trips. And I guess from the beginning, you were providing the bikes. You were, like, holding them and then storing those bikes somewhere to be used on these trips.
- [17:44]
B
We were. I shared a house with six roommates. Most of them spoke Norwegian, and it was in a nice neighborhood up in foothills of Oakland.
- [17:56]
A
Five Norwegians in one house.
- [17:58]
B
Yeah, they all spoke Norwegian in Berkeley. My high school friend, they had a weird.
- [18:03]
A
How does that happen? There's 4 million people. There are five of them in Berkeley.
- [18:07]
B
Yeah. I'd come into the kitchen in the morning, and Norwegian is a very sing songy language. And it's tusendak. And I didn't know if she had a word. I loved them all. But anyway, I'm still in touch with several of them anyway. But Backroads was one of the roommates. I was a roommate. And the rent for Backroads was $135. That included the office that I was in in the garage. And I lived on nothing, pretty much, you know, peanut butter sandwich, et cetera. And that's just the way it went for the first few years.
- [18:36]
A
And you stored the bicycles there in that garage?
- [18:38]
B
Yeah, in what we called the. Well, it was a very dark basement. But yeah, we stored them there. It was a nice neighborhood. And we probably overstayed our visit there. And then we moved down to San Leandro to the world's most decrepit strip mall.
- [18:57]
A
San Leandro, also in the Bay Area, sort of south of Oakland. And so in terms of like just when you would have a trip in those first few years, all the bicycles were kept in a warehouse in the Bay Area. And then what you would like load a van and then drive that van to Yellowstone and meet people there?
- [19:20]
B
We would do the loop. So we would drive to. First we do New Mexico, then we do Colorado, then we do Wyoming. And so, yeah, so it was linear.
- [19:30]
A
Yeah, you'd organize like five or six different trips, but it would be on this loop path. And so you would, you would take the bikes, you'd meet people in the first trip, which, let's say New Mexico, then they would say goodbye when they were done. Then you'd pack the bikes up and drive to the next place, which was only a couple hours away, maybe in Utah or Arizona, do the same thing and then. And then keep going until you get back to Berkeley.
- [19:53]
B
Yeah, and it actually was probably a two month loop. That was the. Almost the extent of our offer. We also did run a higher percentage of trips in the northern California area.
- [20:06]
A
And these were point to point trips. Right. You would start in like one part of Zion national park, let's say, and you'd end up in another part at the end.
- [20:14]
B
That's right, we would. I mean, the canyons, I always went there on my birthday. I remember because I was leading the trip on September 20th and it was a beautiful time to be there. The aspen are changing, but we went from Cedar Breaks to Bryce Canyon to the North Rim and to Zion. We did all of that. It was a seven night trip. We ran longer trips back then.
- [20:36]
A
Who were you finding to work with you? Because you were saying we. So I'm assuming it was you and maybe one other person who would lead these trips.
- [20:42]
B
So I, I met somebody on my 5,000 mile bike ride in Fairplay. Colorado, who was working in a diner.
- [20:51]
A
There as a woman or a man?
- [20:54]
B
A woman.
- [20:55]
A
What was her name, by the way?
- [20:56]
B
Linda. Linda Petty.
- [20:58]
A
She.
- [21:00]
B
I struck up a conversation with her or her with me. I don't remember. And we had a really nice chat about what I was embarking on as far as this business. And she was just, like, really interested in it. So we said, well, let's keep in touch. But she had expressed enough interest to where she was pretty pumped on it. So she became a 50. 50 partner for about two and a. I want to say two and a half years. I'm not sure how long it was. And then she kind of woke up and said, wow, this is really a lot of work and we're not making any money, and decided to get out of it. And so then we dissolved the partnership.
- [21:37]
A
So basically, yeah. I mean, two and a half years in, it's a grind. You're not making money. And so you probably bought her out. The business wasn't worth anything at that time.
- [21:46]
B
No, it was. Yeah. It was kind of a long story on how we came to an agreement on that, but, yeah, it was, you know, she was smarter than I was as far as seeing the writing on the wall, that this is always going to be a lot of work. So, you know, 247 forever.
- [22:05]
A
When we come back in just a moment, how a rollover van accident in the Nevada desert almost puts an end to the story of backroads. Stick around. I'm Guy Raz, and you're listening to how I built this. One of the coolest things I did last summer was take my family to Athens, where we saw the Parthenon and the Agora and all those amazing neighborhoods and ancient historical sites. And one of the things that made it so awesome was the home we booked on Airbnb. We literally had a view of the Parthenon from our bedroom window. There was a hot tub on the top floor. We could sit in it all overlooking the entire city. And we had a kitchen and access to markets, and we were in walking distance from all of the things you would want to see. It made the trip so, so amazing. And when you take your own vacation, that's actually a great time to host your home on airbnb. Your place with your cool art collection and your handy kitchen gadgets. It might just be what someone else needs to feel right at home on their next trip. Plus, your earnings from hosting provide you with another income stream and could even help offset the cost of your next trip. Your home might be worth more than you think? Find out how much@airbnb.com host you know as someone who's built an entire career around curiosity, I find myself asking questions even in the quietest moments of my day. Whether I'm walking my dog in the morning or just reading a good book, my mind is always wondering about the why behind things. Which is exactly how Claude has become such an incredible collaborator in my daily life. Claude is the AI for minds that don't stop at good enough, the thinking partner that works with you to explore the things that fascinate you. Take last night while making dinner, I found myself wondering about the science behind making the perfect crispy roast chicken. And this all led to an enlightening conversation with Claude that went far beyond basic cooking science. We explored the Maillard reaction, moisture management, salting and brining, and even the history of how humans discovered the cooking process. It was really cool stuff, and I love how Claude matches my natural curiosity rather than trying to shut it down with quick answers. Like when I recently noticed all the different layers in a cliff face during a hike, Claude transported me back in time. It helped me explore how these rocks formed under ancient seas and all the forces that transformed them over millions of years. Whether you're researching outdoor curiosity spirals or working through complex creative challenges, Claude extends your thinking to tackle the problems together. And it helps me see connections I never would have made on my own, turning casual observations into moments of genuine discovery. Ready to explore what's possible? Try Claude for free at Claude AI hibt. That's Claude AI hibt to start thinking deeper today. Ever had one of those afternoons where your brain just quits on you? You're sluggish, hangry, maybe even a little foggy. What if it's your glucose? See, glucose is an energy currency for your mind and body. When it's stable, you're on point. When it crashes, so can you. That's why Lingo is so interesting. Lingo is a glucose wearable designed to help you connect the dots between your glucose and you eat, how you move and how you feel. It shows your glucose data in real time. Instead of guessing, you see the impact of your choices. Maybe that healthy snack is actually sending your glucose on a roller coaster. Or that afternoon walk is the perfect stabilizer. It's about unlocking your consistent best all day long by truly understanding your body's unique responses. Get to know your glucose and learn about how to build healthy habits that work for you with Lingo, Designed for you by Abbott through November 30th. Use code GUY10 on hello Lingo.com to get 10% off a lingo plan, purchase one use per customer. This offer cannot be combined with other offers, US Puerto Rico and UK only. The Lingo Glucose system is for users 18 years and older, not on insulin. It is not intended for diagnosis of diseases, including diabetes. Individual responses may vary. Hey, welcome back to How I Built this. I'm Guy Raz. So it's the early 1980s, and Tom Hale is busy leading bike trips around the Southwestern US Backroads is growing at a steady pace, but it's still a pretty small company, and Tom is about to face a setback he cannot afford.
- [27:05]
B
The bikes were in our warehouse in San Leandro. We got burglarized and they stole half of our bikes. That was a problem. I reported to police and we put out a reward for information. And this young fella came by and said, hey, I know who stole your bikes. And I said, well, okay. And it was in the neighborhood. And I said, well, let's walk over. And it was at night time at that point, walked over to the corner. He said, that's the house like two, three houses away. So I was like, oh, my God, I hope that this is right, and I hope they don't come to the door with a gun. But I went to the door and this young fella answered the door. And so I just took it upon myself, say, well, by the way, I think you've got about 12 of my bikes. And I think I. Oh, and I also added. And what was his name? The police guy? Detective Ritter says this is still a prosecutable offense. So if you don't want that to happen, get your bikes right now. I want to know where the bikes are. So he went up into the attic and started dropping bikes down. And anyway, I got my bikes back.
- [28:12]
A
All right, so you. I mean, I'm just thinking of the logistics of doing this. And again, this is like early 80s, pre Internet. It's like mailing letters, phone calls. Hopefully people will pick up. How did you figure out how to plan all the logistics for each of these trips? I mean, you had an office in San Leandro. You had to figure out enough food for each trip. You had to figure out the right bikes to bring because there were different sizes for people. You had to bring water. How did you start to figure that out, you know?
- [28:47]
B
Well, first of all, it's not rocket science, and secondly, I love logistics and I'm good at that sort of thing. And thirdly, I never was without a notepad in my pocket. And a pen. And so I was constantly improving and thinking. And it's actually a very complicated business now. We're spending tens of million dollars on technology to harness everything we have and how we communicate, blah, blah, blah. But back then, it was just figuring it out as we went.
- [29:18]
A
And who were the people initially going on those trips? I mean, there was a culture of cyclists, but those kinds of cyclists, I don't think would have gone on organized trips like this necessarily. Right. Those are hardcore. Like, were those the kinds of people going on your trip or was it more casual cyclists, younger people?
- [29:38]
B
It was. No. I would say that the demographic was probably a lot of folks in their 40s and 50s and certainly younger and older. We've had some amazingly fit people in their 80s on our trips that probably rode the younger folks out of them like crazy. But we weren't really targeting gung ho cyclists. We were really interested in this as being a much more holistic experience. And I would say that we've always been experts at accommodating mixed abilities.
- [30:11]
A
Okay. I mean, given how intense the cadence was, right. You are leading trips or you're back at the office trying to prepare for the next one. And it seems like at times it was a house of cards because you're on a trip and somebody in the back, like somebody manning the store, I don't know, quits, or there's a problem, like you don't have cell phones. It's. It's like it could all just kind of collapse, maybe temporarily, but. But did that happen? Were there situations or times where you're out on a trip and you got to go back because there's like a fire that you have to put out at the office.
- [30:47]
B
Well, you know, the best example I can think of is when I. This is very early on when we only had one office person, and she quit in the middle of me leading a trip. And so I had to come back and man the office. And, you know, that was just kind of stupid to only have one person. Maybe. Certainly didn't do that again. And we. I built up a very strong structure around supporting everything we have to do.
- [31:18]
A
I'm curious about expenses, like, at what point. Because you didn't have any investors, right? I mean, this was all.
- [31:26]
B
Didn't have any investors. Never. It's remained a 100% closely held family business for 46 years. And my dad and my uncle and my best friend from graduate school, they all. For some reason, I had this $30,000amount in my head that that's what they Provided as a loan. And it was always a loan to get a very short term loan to get through the winter. We are a very strong cash flow company. I read this little book when I was thinking about starting this company up. It was really small book called Buy Low, Sell High, Collect early and Pay Late. And you didn't even have to read the book, you just read the heading. And if that's the kind of business you have, it's a really good thing. Our guests first of all are paying their deposit maybe 90 days in advance or more on average. We are paying the hotel. Sometimes the balance due is paid after we have already finished the trip. So I didn't know that that would become so important, but it made us able to do this right.
- [32:36]
A
So you got. It was like a pre order almost for a product. You basically get the deposit so you've got some cash to work with. Then you get the full amount, you know, within a few days of the trip starting. Then you do the trip and then the hotels don't have to be paid until after the trip is over.
- [32:50]
B
Right, exactly.
- [32:52]
A
I read a story about an early trip you took and I wanted to kind of talk a little bit about this because there was a serious accident. Like you were in a van and it like flipped over and tell me what happened.
- [33:05]
B
So we were driving, crossing the Nevada desert just east of Elko, Nevada and the driver reached down to swat a bug off her leg or something. Anyway, she went off the embankment and we rolled the van a couple times. I felt like we were in a. A rock tumbler and it was all steel tool chests, propane containers. Just imagine all that was going around as we're spider manning through the, through the air. And anyway, we came to a rest, went and made it over to the edge of the freeway and we're laying there side by side and Bill, one of the leaders, said, well, I guess that's it for the summer. And didn't miss a blink. It's like my response that, well, I don't think so. We'll figure it out. So we took the ammo to the hospital and we actually walked out of the hospital was amazing. I had broken ribs and they had neck braces on and we were really beat up. We made it to the, I think the Salvation army to get some clothes. We didn't have a thing on our person and we walked out of there with these puffy slippers. And Kathy could, one of the leaders, she could only walk about, I don't know, 50 yards with that before she had to like, kind of sit down. But they, Bill and Kathy went on to lead the next two trips. I went back to get another van to meet them, and we finished. It was pretty rigorous because we had to keep moving the, the seats in the van in and out, and they were heavy, and we had to move big, heavy picnic tables around. So I, my, my ribs never got. Well, we were sleeping on the ground and got back to Oakland, pulled into the driveway, and I kid you not, one of the tires went flat right then and there, and we pulled open the, the sliding door of the van and it fell off the hinges. It was like a, it was a omen from somewhere, but it was a hell of a summer, I'll say that.
- [35:15]
A
Tom, at what point? I mean, so for the first few years, you're leading trips mainly in the western only, I think, in the western United States. The loop, right, this loop through national parks in the western United States. At what point did you or somebody who you worked with say, hey, maybe we should go to somewhere else, like maybe outside the U.S. yeah.
- [35:41]
B
So this is a seasonal business. It's a seasonal business now. I mean, we run, you know, probably.
- [35:45]
A
It'S mainly spring to fall.
- [35:48]
B
Spring to fall, yes. And so it was totally spring to fall then. And so we didn't take much to think that we should branch out. So we started with, let's see, we did Baja, Hawaii and New Zealand in pretty short order, as well as Bali, I think it was.
- [36:08]
A
So, so you, because I read you started Hawaii in 1984, so at this point, you're like five years in to the company, so you have some experience, but really all the logistics are being done. I mean, you've got your warehouse, you've got your bikes, you've got your van. How are you going to do that in Hawaii or two years later in New Zealand? Let's start with either of those. I mean, you had to basically replicate that without the van, without the bikes, right?
- [36:39]
B
You're right. So we figured out how to ship bikes. I don't know if they had rules back then in all of these places that we should have been adhering to. My guess is they probably did have rules and we probably weren't adhering to them. So we, we basically did things as close to how we do them in the States as we possibly could. We used our national leaders, which were U.S. and Canadian at that point, for the most part, and then we also used some local guides in places like Bali. But we really wanted our own leaders to be leading our trips because they Were really heavily trained and we could trust them and, and they knew what they were doing, et cetera, and we'd do the trip.
- [37:26]
A
I want to ask you about training people. How did you train people? I'm assuming you train them by just bringing them on trips.
- [37:35]
B
No, we have always had a training program. Recruiting, hiring, training and performance management.
- [37:43]
A
Always from the beginning?
- [37:45]
B
No. Excuse me. Almost always, yeah.
- [37:47]
A
How did you develop that?
- [37:49]
B
Trial and error. For instance, our. We used to have a combined hiring and training event and it was a three day event and at the end of that we would choose our leaders out of that. But we real. It took us way too long to realize, well, that's a stupid way to do it. You're spending all of this time and money training people and you're only going to hire half of them or whatever it might be. So anyway, we now have all of our leaders go through 10 days of training. That is really pretty intense. And then we have performance management happening for everybody all the time. And we are a heavily metric driven company. We survey to the nth degree. We started out by surveying our guests, for instance, and what we came to see is, well, that would say something about the overall experience. Great. But we then started asking people, well, how are the restaurants, how are the hotels, how are the local guides and a handful of other things. And we track all that and try to improve the trips.
- [38:55]
A
All right, so basically you continue to expand these trips in New Zealand and then Peru and really for the first time, 10 years. I think it was bike trips primarily.
- [39:12]
B
Right.
- [39:12]
A
It didn't expand to hiking and walking trips until later on.
- [39:17]
B
That's right. It was. Our name was Backroads Bicycle Touring for the first 15 years or so. We didn't officially change it until after that. So great name decision because we could split off backwards if we wanted to, but we held onto that longer than we probably should have. We were known as the biking company long after we were much more than that. And now, now we're 1/3 biking, 1/3 hiking and 1/3 multi adventure.
- [39:44]
A
And really a lot of the business was coming from repeat customers. Right. People, people would go on a trip and then they'd come back the next year.
- [39:52]
B
Yeah, we have a very high repeat and referral rate. That's also about 1/3, 1/3, 1 third repeat, referral and new business. But word of mouth is everything in this business. You can't do it without word of mouth.
- [40:06]
A
When we come back in just a moment, how surviving two massive downturns teaches Tom some vital lessons which help him get through the biggest challenge of all. A global pandemic. Stay with us. I'm Guy Raz and you're listening to How I Built this. This show is presented to you by American Express. Building a business is never a straight line. It's full of unexpected turns. And the right tools can make all the difference along the way. That's why when I talk to entrepreneurs about how they keep growing, American Express often comes up. The new enhancements to the Amex Business Platinum card are designed for how business owners actually work today, offering them more value, flexibility and rewards than ever before. With two times membership Rewards points on select business purchases, those everyday choices can fuel even more growth. And when it's time to hit the road or the skies, Business Platinum Card members have access to the largest global airport lounge network of any credit card. It's a way to stay productive even while traveling. Plus, the flexible spending limit changes as your business does, adapting to where you are and where you're headed next. Because when it comes to growing your business, there's truly nothing like Business Platinum. Not all purchases will be approved. Terms and points cap apply. Learn more at Go Amex Bplat startups move fast. And with AI, they're shipping even faster and attracting enterprise buyers sooner. But big deals bring even bigger security and compliance requirements. A SOC 2 isn't always enough. The right kind of security can make a deal or break it. But what founder or engineer can afford to take time away from building their company? Vanta's AI and automation make it easy to get big deal ready in days. And Vanta continuously monitors your compliance so future deals are never blocked. Plus, Vanta scales with you backed by support that's there when you need it. Every step of the way. My listeners can get $1,000 off@vanta.combilt that's V A N T A dot com bilt for $1,000 off. Hey, welcome back to How I Built this. I'm Guy raz. So by 2001, Backroads has grown from a one man show into a new brand. Pretty solid business. Tom has stopped leading trips himself and is now focused on running the company. And up to this point, most of the setbacks have been pretty minor. But in September of that year, all of that changes.
- [43:08]
B
911 was just so shocking. And one thing I've learned in this rather seasonal business is that if you have something happen bad happen in the world, please have it happen late in the fall. Okay, so this wasn't late enough in the fall on September 11, but it was still Late enough to where we'd run most of our trips, but September is our biggest, most busy month. And so that was crazy. We basically said, if you're on your way to the trip, feel free to go to the designated meeting place. We said the same to our leaders. And we had some amazingly great trips run that week. Even that week. And then, of course, we had to kind of figure out the next few weeks. And so we lost a lot of business there.
- [43:57]
A
So things slowed down.
- [43:58]
B
Yeah, slowed down.
- [43:59]
A
And that lasted for quite some time, but obviously recovered. And then you have the financial crisis, of course, in 2008, 2009. And what did that mean? I mean, did it have a significant impact on people booking trips?
- [44:13]
B
Yeah, so that had a much bigger impact. We had a 40, 43% drop in business that year. So that. You're kidding. A 43% drop in business? That's going to kill us. We laid a lot of people off. It was really hard. But we were able to look at our business very differently. And so I asked the question of what are we doing that's better than what the competition is doing? What are we doing that we're really doing a great job? If the answer was, this is something that we're doing a really great job on, then the next question was, are we doing enough of it to be able to talk about it? Because one thing we noticed was that all the companies kind of look alike. They all put out a nice catalog, blah, blah. But we were better, and I knew we were, but we weren't doing enough of these things to talk about it. So we retooled the company, and instead of having two liters, we had three liters. Instead of having one van, we had two vans and went on and on, on and on. And we went from really low profit margins to much higher profit margins because we were talking about what we do and how well we do it. And more than anything else we do, we have the best leaders out there and we treat them well. They're not independent contractors. We house them between trips and just have a lot of. We just don't subcontract.
- [45:42]
A
How many total employees do you have?
- [45:45]
B
We have about 1300 employees, I'd say, right now.
- [45:49]
A
And some of them are tour leaders. Some of them are in headquarters. So are all the employees full time? I mean, are some of them seasonal?
- [45:56]
B
No. All of the folks that are working more or less outside of the leader ranks are full time. Many of the leaders are full time, as full time as they want to be. It's A lifestyle job, and it can be really demanding. So there's plenty of leaders that are happy to take the winter off, but others want to work all the time. So. Yeah.
- [46:16]
A
Tom, I'm curious about COVID because Covid really was. I mean, it was disastrous for anyone in the service industry. But all of a sudden, people not only weren't traveling, they were scared to travel, they're scared to be around other people. I mean, airline business almost collapsed right when it became a reality in March of 2020. You know, this is when you're just about to launch your spring trips. What happened?
- [46:40]
B
Yeah, it was just disastrous. And the only reason we had any signups that year is because we had signups before, before February and March. But yeah, we basically stopped all revenue, more or less stopped for about a year. And we laid off people. We did temporary layoffs, full time layout. We. We even reduced pay and then. And we made a lot of that up after we came out of COVID But we did everything we could think of. And the one thing that I've gotten pretty good at is, you know, we're going to come out of this stronger than when we went into it. And I attribute my belief in our ability to do that to the experience we had with 911 and Great Recession because we, as tough as Covid was, it was just hellacious. I mean, all of the rules we had to follow and, you know, everybody was in the same boat. But we came out of COVID faster than anybody. Purposefully, there was some, I think our guests were incredibly generous with us. You know, we always survey our guests. How'd it go? And they, they were, you know, quite honestly. Well, I think they were overly generous because, you know, the national park restaurants aren't exactly known for their fine cuisine to begin with, but, but it went from that to boxed lunches because of COVID And so really, I think our guests were just so darn happy to be outside and doing something with people that we shot up in business in 2022 like you can't even believe.
- [48:15]
A
So now I think. How many trips on average do you offer a year?
- [48:19]
B
We'll do about a little over 5,000 trips this year.
- [48:22]
A
5,000 trips, yeah. So, Tom, I mean, when you look at, I think about COVID for example, and how people talked about COVID is going to change everything. And in fact, it didn't really change everything. You know, people went to remote work for some time, but more or less are back in the office. People said you wouldn't shake hands anymore, that masks would be the norm on airplanes. I don't see masks on planes very often. Do you think that travel or the way we travel or how we choose to travel or why to go to those places will change? I mean, I. Let me just give you my take for a sec. I think it has changed already because of social media. Right. When I was a backpacker in Europe in the 90s, you'd go to places and it was a frontier. There's no one there. And now you go to places that nothing is hidden anymore. There's no secrets. There's no. Oh, only the insiders know this because it's all on Instagram. There's somebody who has set up a tripod and is posing for photos for seven hours in one spot because they want to get the right social media photo. I'm astonished that people would travel around the world to wait three hours for gelato and skip seeing a masterpiece in the museum that nobody is going to. I experienced that in many cities in Europe. The museums are empty in many of these cities, unless it's the Prado or the Louvre or the David statue. But the other ones are empty. But people are waiting for two hours for gelato, waiting to get the perfect selfie to put on Instagram.
- [49:54]
B
Well, I'll back up just a little bit, which is to say that I will avoid those kinds of places that you just referenced to the nth degree. I hope that most of our guests will avoid those kinds of places. I don't care.
- [50:03]
A
They don't. Of course they can't. They can't. You want to go to.
- [50:06]
B
Well, actually to Florence.
- [50:07]
A
You got to go to Florence. Well, Venice.
- [50:10]
B
That's not the part of travel we do, though, the way we travel. We're biking, by the way. We're not. There's not 25 of us going down the road as a pack. You are 100% riding at your own pace. And so you can never see another guest on the trip, but you're out there interacting with. In. On little, little towns we go through in these beautiful European villages. There's a little sidewalk cafe. It's not an Instagram heavy environment. I'm not saying that there aren't those places that we have, but. And even on our hiking trips, we're out hiking. And so I agree, it's an unfortunate thing, but we do our best to avoid those kinds of places. Sometimes we're able to go in the morning and miss something, that negative aspect of a place, and sometimes we just don't go there anymore.
- [51:04]
A
Yeah, you know, it's an interesting point because I think that as social media has kind of become a reality, sort of just a reality of life. If you go to Venice, the only time to see Venice, and by the way, if anybody listening is going to Venice, get up at 5 in the morning and walk around Venice between 5 and 7 in the morning, that is the time to see Venice because that's when the delivery people are out and the people working in Venice are opening. The shops and there's streets are amazing, it's beautiful, quiet, you can really get a sense of that city. But really after 10:00am and that's the.
- [51:44]
B
That'S true with every city. That's what I do. I take a run in the city at five in the morning, maybe six. And it's. You're so right, it's. And you can do it, you can take a walk. But yeah, you want to get out there before the crowds arise. And it's an entirely different place.
- [52:03]
A
So where, I mean, how do you think that technology is going to change, if at all how people are going to interact with what you're offering? Right. I mean now like I'm going to, we're going to go on a trip, a family trip in December to Asia and I've already done this. A lot of my trip and travel. I now start with AI to help me kind of and then I'll do deeper dives, I'll buy books and other things. But it's made it really, really interesting actually to work with AI Yeah, I.
- [52:34]
B
Think there's a lot of opportunity that we will, I know there's opportunity and we will take advantage of much of it. And I know at the same time that we are going to be hyper vigilant about where it hits a boundary that we don't want to mess with. We want to have our voice be our voice. But I think there's a lot of ways to make life more efficient. Also having to do travel copy from scratch all the time may not be the best way to do it.
- [53:02]
A
Tom, when you think about this business that you started when you were 26 and where it is now, I think you're one of the biggest adventure travel businesses in the U.S. right? If not the biggest one?
- [53:13]
B
I think so, yeah.
- [53:14]
A
And so when you think about where you are now, thousands of trip options, I was looking through the catalog, it's unbelievable, the options. And I wonder when you think about all of the. This journey you took. Right. And where you are now, how much of the success of this business do you attribute to the work you put in the grind and how much do you think happened because the timing was right and you got lucky making the.
- [53:42]
B
Decision to do this initially in Las Vegas, waking up in the middle of the night. I attribute that to luck and just a fortuitous moment. But I gotta say that in general the grind has been consistent, non stop embraced and has meant everything and I don't resent it, I embrace it. And my original short term partner who said this is just a lot of work, she really hit it on the nail. It's a lot of work and I don't think, you know, and people that start this as a hobby and keep their day job, I can't even imagine. Good luck.
- [54:27]
A
That's Tom Hale, the founder and CEO of Backroads, by the way. A while back the company started offering E bike options on their trips and it quickly became a really popular choice. So much so that last year in response to guests feedback, they started offering bike trips only for people who want to do it the old fashioned way with no electricity and just legs. Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at Guy Raz or on Substack. This episode was produced by Casey Herman with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Sam Paulson. Our engineers were Patrick Murray and Jimmy Keeley. Our production staff also includes Alex chung, Chris Masini, J.C. howard, Kerry Thompson, Katherine Cipher, Andrea Bruce, Rommel Wood, and Elaine Coates. I'm Guy Raz and you've been listening to How I Became Built this. And don't stop the podcast just yet because right now you're about to hear an amazing small business story that you don't want to miss. This segment is presented by American Express with a Business Platinum membership. The best just got even better. And this week's story comes to us from Steven Davis. Back in 2021, a friend of his had had just moved to Arizona. To help out, Stephen decided to hop a plane from Detroit to Phoenix.
- [56:05]
C
I have found a flight for like $40 round trip on one of the budget airlines. It's a great deal but you add your your carry on fee. It was about $50 each away. So I was like wait for me to carry my own bag onto the plane and put it in overhead. I got to Pay twice as much as the actual, actual flight itself. That just bothered me.
- [56:27]
A
That's how budget airlines get you, right? The ticket is cheap, but they'll charge extra for things like bottled water or printing your ticket at the airport, or carrying on a roller suitcase. But one of the things that are still free, a small personal item like a backpack or a purse. And that's when Stephen noticed something at the airport.
- [56:47]
C
I just looked at the size of her personal item and the carry on size, and I just was like, well, it's not too much smaller. I wonder if my suitcase could fit. I put it under sizer and I looked like, well, if it didn't have these wheels, it probably would fit inside this sizer.
- [57:04]
A
Steven got to thinking, what if there was a carry on roller suitcase big enough to hold all you need for a trip, but could also shrink down just a little? To be the size of a free personal item, all you'd have to do is press a button and pop. You could take off. The wheels take off. And he thought that would make a pretty cool name for a luggage company too. So despite no background in product design and while working a full time sales job, Steven gathered up some seed money and found a manufacturer on Alibaba to build out a prototype. After five months of back and forth, the first run of suitcases was ready to be sent to his house. All 500 of them.
- [57:48]
C
The day the shipment came, I came home. There were suitcases stacked to the ceiling in our living room, in our garage.
- [57:58]
A
It was slow going at first. Stephen estimates he sold about 50 during the first few months, Mostly to friends and family. But his big break came after he posted a video of himself at the airport showing the takeoff suitcase in action. That got 700,000 views on TikTok and his first real sale.
- [58:18]
C
Her name was Courtney. She's like, I've been waiting on something like this. I travel, you know, budget airlines all the time. And he said, I'm gonna make a video of it. And that YouTube video is actually what started driving ourselves.
- [58:30]
A
Shortly after that video went viral, that first run of 500 suitcases sold out. And Stephen realized that building out a community of fans online was critical to his success.
- [58:42]
C
Having a tight knit group of customers who champion our brand has helped our growth. I actually ran into a girl at an airport. She made me feel famous. She's like, oh my God, you're takeoff.
- [58:53]
A
Takeoff has grown so much since 2021 that it's now Steven's full time gig. He's also launched new products like vacuum sealed bags and a neck pillow that can be stuffed with clothes.
- [59:06]
C
We try to let people pack more without having to pay more. I'm sure that Budget Airlines doesn't like us, but you know, we here for the people we like. The Robin Hood of the airlines.
- [59:15]
A
That's Stephen Davis, founder of Takeoff Luggage. His small business story is presented by American Express. To build a business like no other, you need a card like no other. There's nothing like Business Platinum. If you like how I built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey.