Jen Young and Jeff Cavins were sitting in a beige conference room at a downtown Vancouver hotel, wasting away under fluorescent lights, an endless PowerPoint and a pair of sad Styrofoam cups of coffee between them. Young was there on a marketing contract. Cavins was a board member. They shared one of those looks that only couples can understand. It said: There’s got to be something better than this.
With 40 years of running technology companies under Cavins’ belt and a successful ad agency career under Young’s, the two decided to craft a business around their shared passion of being out in nature. When they realized there are more than 20 million recreational vehicles all across the U.S., most of which are used only a handful of days, they saw an opportunity. They asked themselves: How do we create memorable outdoor experiences and make them available to everybody?
For seven months, the couple traveled across the U.S. to do market research on travelers and RV owners to form the basis of their company.
The sharing economy of Uber, Lyft and Airbnb had already laid the groundwork. Why not open it up to RVs?
In 2014, Young and Cavins invested their life savings into Outdoorsy, sold their homes and jumped into an Airstream Eddie Bauer trailer. For seven months, the couple traveled across the U.S. to do market research on travelers and RV owners to form the basis of their company.
In June, Outdoorsy raised $90 million in a Series D led by ADAR1 Partners, as well as an additional $30 million in debt financing from Pacific Western Bank. The money will be used in large part to accelerate the growth of Outdoorsy’s insurtech business, Roamly. In the same month, the company announced a partnership with glamping company Collective Retreats to expand its outdoor offerings.
The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.
You’ve taken a personal approach to your business, spending months in the research phase actually living in an RV and interviewing RV owners and their families around the country. How do you think that’s shaped your business?
Jen Young: When we lived on the road, we had to experience that customer experience every day for hundreds of days. So this is where we were able to pick up and identify what the biggest pain points were on the renter and the owner side and start tackling those first.
For example, we understood what was most important from an insurance perspective because we could hear the voices of renters and owners — they consider these things their babies in many cases.
The owners that are more entrepreneurial-minded, they consider them more of a business asset, but both of them want to know, “What am I going to get for liability insurance? Comp and collision? Interior damage?” The detailed list of those things became the beginning of the product roadmap, as well as itemizing what things have to occur for a good guest experience.
In what ways have you had to pivot your model based on how people have used your platform?
Cavins: One of the things we learned is most renters don’t want to drive these things, so owners started to do delivery, which became very popular on our platform. Sixty percent of all owners now will just deliver and set up for you so you can arrive at your campsite and everything’s just done. Your chairs are out, your barbecue is out, your awning is out and maybe a bottle of champagne in your fridge for you.
When Jen and I were traveling last year, we saw that most of the American landscape of campgrounds and campsites were overbooked. People couldn’t get their reservations closed the way that you would expect in a world of technologically evolved industries, and we thought there had to be something better in terms of the customer experience for camping, which really catalyzed our investment in glamping company Collective Retreats.
It’s very bespoke, and we learned that there’s a group of people that love camping, but they don’t want to give up the luxuries of a Four Seasons hotel. They want both combined, and so we made that investment, and we would have never made that investment had we not lived on the road.
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Renting camper vans isn’t new. How does Outdoorsy add value to an existing market?
Young: So many of these small, midsized rental camper van companies just don’t have any software to manage a fleet. And that was one of the biggest eye-opening opportunities for us, and it’s a point of differentiation between Outdoorsy and every other would-be rental company. There’s a lot of competition, of course, around the outdoor space, but we created software called Wheelbase, which is our RV fleet management software.
Building that software for business owners originated from being on the road and actually meeting with businesses. We realized that this was not a peer-to-peer marketplace, but this truly needed to be a marketplace for entrepreneurs and business owners.
We offer free software to our RV owners, and it is connected directly into the Outdoorsy marketplace, so all the inventory for business owners is displayed on one single calendar view where you can see who’s checking in or out, what kits they need, what insurance is covered, does it require maintenance. There are just hundreds of variables. So all of those features are in Wheelbase, and we charge standard service fees for business owners that have had bookings through our site.
What percentage of your business would you say the software covers?
Cavins: It’s going to be in the 30% to 35% range. Wheelbase basically enables you to professionalize and grow a real business. When people get on Outdoorsy they start with a camper van, and now we have people that will make $50,000 a year with one so they’ll get a second and a third. People are starting fleets because we have the software that enables them to grow and become professionals, like the power sellers on eBay.
You raised quite a lot of money in June, and earlier you mentioned partnering with Collective Retreats. Did you use some of this money to fund that investment?
Cavins: We raised $120 million recently. We made the investment in Collective Retreat before the raise. The raise was fundamentally designed to help us continue to scale our operations and to expand Roamly, our insurance business. The reason you never saw a marketplace happen with recreational vehicles is because the commercialization of a privately owned recreational vehicle is prohibited by insurance law.
So if you’ve got a camper van and want to rent it to Jen in California, that would have been an illicit transaction. So it’s not illegal, but if your insurance company found out, they could drop you from your policy, and then your bank would get notified that you no longer have insurance and they would, in most cases, foreclose on the loan. It was a huge problem that we had to solve. So part of the $120 million round is to build out the operations of the Roamly organization.
About $30 million of that round was debt financing, can you walk me through the terms of that and why you chose to take that route?
Cavins: We like to look at macro trends as a business and I think U.S. monetary policy is going to get us all in a little bit of trouble. So we wanted to lock in a credit facility for the company at advantageous terms.
The debt is made in today’s markets, where interest rates are very low, and we’re able to borrow at basically prime plus 25 basis points. But I see that world changing, so we wanted to lock in some extra capacity for our balance sheet. I think we’re gonna see rising interest rates, which will create downward pressure on the dollar, so I wanted to capture the market now. It’s good for our existing investors so we don’t dilute them further, and we already had a substantial amount of cash before we raised the $120 million.
Van life is a massive trend among young people right now, and with pandemic lockdowns easing, everyone wants to get outdoors. The entire market could blow up next year once people can travel abroad again. How are you planning for that?
Cavins: Before COVID, what Jen and I were inspired by is this global cross-cultural phenomenon that was happening already, so we’re just kind of picking back up where we left off.
We’ve opened up a channel for travel consumers never knew they could have before. So while the mass-market hotels will come back and mass-market airlines and cities will come back, this is an alternative form of travel that consumers have learned and they’re not going to unlearn it, and we’re seeing that in our numbers this year. We’re up 145% this year over last, and last year was explosive growth for the company.
How have your past business decisions informed your current strategy?
Young: I’ve always been focused on one-to-one communications with customers, and that became the beginning thesis of the marketplace. Part of the reason why we are a community-based marketplace and organization is that most of our marketing and efforts are focused on the ground, working with business owners or individual parks. Interestingly, it’s less about advertising and more about one-to-one communications because in the marketplace you don’t own any inventory and you don’t own your customers, so providing new products and services to work together is the approach that I’ve been able to take from my marketing background.
Cavins: Running a fiscally responsible company, knowing how to raise money, knowing how to deal with investors. We find that most companies that do what we do are very small, and they’re typically run by romantic hobbyists, which I love, but I had to bring some professional experience along with it so that we didn’t end up in trouble. I think it’s very difficult for those companies to scale, to add layers of management. Things that we care about here are things that maybe some of those companies don’t understand yet, like security. We’re dealing with millions of people’s transactions and international payments, so we have an entire security organization inside of our company that works on just making sure we’re not a victim of cyberterrorism.
Also, I’ve never run a company that didn’t face a horrific tragedy, from the dot-com crash of 2000 to 9/11 watching the World Trade Center come down to the 2008 recession. So for me, the experience of being an entrepreneur for so many years is knowing how to make swift and decisive action.
What has surprised you about working together as a couple on a startup?
Young: We contrast each other in our demeanors as well as our outlooks for how we would operate a business, and those are a little bit like a yin and a yang, so that is very helpful. And I guess I could say this is surprising and that, you know, seven years in, I am still surprised that the greater the challenges, the more capable we become working as a couple.
So let’s just even take COVID. I mean, it’s hard enough to start a marketplace. I will tell you it’s one of those things, particularly with COVID, it either makes you or breaks you. I am surprised that, actually, we have become I think each other’s best assets, knowing each other well, not quitting, doubling down on the endurance and trust that it takes.
Cavins: Jen is probably the most unbreakable human being I’ve ever met. She can go through anything; she’s as tough as a Navy SEAL. I think as a couple we are quite a fortress, like nothing can break us. I guess, for me, I don’t think there are any surprises really, I guess I’m surprised how well we work together.
Where do you expect Outdoorsy to be in a year from now?
Young: My feeling is you are going to see Outdoorsy as a brand continue to be the most popular marketplace for outdoor travel and experiences. You’re going to start to see Outdoorsy in more physical manifestations, you’re going to see us grow our footprint, expanding the guest experience from just being the rental of the vehicle to the actual experience on land. I think we nodded a little bit toward that when we talked about the Collective Retreats investment.
Cavins: I’m glad you asked that question because a lot of executives will always answer with some sort of a revenue answer, and we just think in terms of customer love, customer trust, customer experience on our platform. If we do that well, the revenue will come. The goal of our company is to be trusted and to be really good at what we do and to win the customer’s heart.