Wondery Plus subscribers can listen to How I Built This early and ad-free right now.
Join Wondery Plus 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.
And now a quick vital break.
A little more from our sponsor AirBnB, vital proteins.
You might have heard about vital proteins.
They're all about collagen peptides.
By taking collagen peptides daily, you can help support your hair skin nail, bone and joint health.
Now vital proteins has a brand new way to get your collagen a new collagen and protein shake.
It has 30 grams of protein and zero sugar or artificial sweeteners, and it tastes like chocolate.
It's honestly delicious.
I drink it when i work out.
Go to wwwvitalproteinscom to learn more and where to buy.
Get 20% off your next order by entering promo code BUILT at checkout.
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.
We'll see you next 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 slash built.
So we were driving crossing the Nevada desert and the driver went off the embankment and we rolled the vans a couple of 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 and made it over to the edge of the freeway.
We're laying there side by side.
And Bill, one of the leaders said, well, I guess that's it for the summer.
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 office.
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.
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 six in the morning.
It was just like such a juxtaposition of everything about my life.
It was just odd, really.
You worked for like the city of Las Vegas?
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.
You were in an office.
You were sitting in a cubicle.
And 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.
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?
I think that's pretty accurate.
I never really gave up on running, but biking did.
I commuted by bike, 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.
Were you at this point doing like bike trips or cycling or had you been on one before?
No.
I rode my bike up the California coastline.
Oh, wow.
Against the wind.
That was it.
I think I did that maybe in between quarters or something when I was at UCLA.
All right.
So you had already done a pretty intense bike and you went up Highway 1?
That's right.
Yeah.
So you had done that and you get up in the middle of the night thinking, I want to lead bike tours.
That's right.
Woke up about two in the morning, got out of bed and took eight pages of notes on what it would take to do this.
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.
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...
I 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 and 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 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.
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?
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 that I had gone to school – college for seven years.
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.
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.
Yes, but that was never going to happen.
Right.
I made my mistake once.
I wasn't going to make it again.
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?
Well, I came up with a name for the company, Backroads.
And, you know, that was the first name I came up with.
And I was going to go on a bike trip.
In Las Vegas, you were going to take a bike trip on your own.
Yeah.
On my own, across the country.
Across the United States, the whole country?
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 5,000 mile loop.
I started in San Francisco, took BART to the end of the line and got out of BART and rode down the coast and went uh counterclockwise around the country or around the west around the west and you just had a backpack and a sleeping bag i mean a tent i had a panniers on the bike okay so right panniers or whatever they're called yeah i don't know how to pronounce it is it panniers or is it panniers pannier i think okay all right let's thank you that's very helpful i always said panniers um yeah you might be right i have to go check that i had to know so you had those bags in the side okay and yeah and there was a tent in there camping stuff 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.
Yeah.
Lizards, snakes, et cetera.
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.
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.
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.
No, no.
But there still aren't necessarily bike lanes where a lot of people do long bike rides.
So you're sharing the road with cars.
And so riding a bike by yourself is a very solitary activity. 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 what was a good idea.
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 I got there's all these national parks that would be great to do.
And so that was that 5,000 mile ride became a formative aspect of the company.
Yeah.
And tell me about the first trip that you organized.
How did you do that?
We had four people on it.
Okay.
And it was a camping trip.
And camping trip where?
Death Valley.
Death Valley, okay.
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 wind's Crazy.
But, you know, we had a good time and we ran a trip.
And this was just and how many how many miles a day were you cycling?
We bike more back then than we probably do now.
It was probably more like over 50 miles a day.
Wow.
So you had to be pretty good shape to do that.
Yeah, I'd say so.
Yeah.
Got it.
OK.
And would every everybody on the trip pitch their own tent or would you do that for everybody?
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.
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.
Yeah, we didn't eat any of that kind of food.
It was real food.
You had food on your bike for everybody?
No, no.
We had a van.
The van would come.
Yeah, yeah, yeah.
And the van carried like the bags and the food, basically.
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, gets too hot and they crack, which they did.
And when you're out camping, food tastes better.
But we did a really good job, made lasagna, all kinds of good things.
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.
There you go.
Sounds like a great deal.
No, but I'm sure it was amazing.
And how did you know what to charge people?
We would charge what we felt was fair and what people could afford to pay.
And we'd 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.
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 online?
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, 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.
How did you have the money to buy those ads, Tom?
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.
You were like basically a dishwasher there.
It was worse than a dishwasher because it was chipping cheese out of a fondue pot.
I don't understand why you have to do that.
Fondue is soft and melty.
Wouldn't they just take the pot and like 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.
So this is to make some side money to finance this business.
Okay, so you—basically, the idea was very straightforward.
You were going to do biking trips where people would camp.
But I guess pretty early on, maybe even in the first year, you realized that maybe camping wasn't the way to go.
Tell me about that.
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.
So you basically cycle for a fixed amount of time during the day and then you overnight at a hotel or motel.
Really, really nice.
Even back then they were nice hotels.
Yes.
Yeah.
Okay, so you're doing these bike trips in different places around the Southwest in the U.S.
And I guess the first several years, these are just bike trips, right?
Right.
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 storing those bikes somewhere to be used on these trips?
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.
Five Norwegians in one house?
Yeah, they all spoke Norwegian.
In Berkeley?
My high school friend.
It's weird.
How does that happen?
It's a country of four million people.
There are five of them in Berkeley?
Yeah, I'd come into the... kitchen in the morning.
And Norwegian is a very sing-songy language.
I didn't understand 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.
And you stored the bicycles there in that garage?
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.
San Leandro, also in the Bay Area, sort of south of Oakland.
Right.
Yeah.
And so, in terms of like, just when you would have a trip in the.
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.
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 it was linear.
Yeah.
You'd organize like five or six different trips, but it would be on this loop path.
And so you would take the bikes.
You'd meet people in the first trip, which was, 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 keep going until you get back to Berkeley.
Yeah, and it actually was probably a two-month loop.
That was almost the extent of our offer.
We also did run a higher percent of trips in the Northern California area.
And these were point-to-point trips, right?
You would start in one part of Zion National Park, let's say, and you'd end up in another part at the end.
That's right.
In the canyons, I always went there on my birthday.
I remember because I was leading the trip on September 20th.
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.
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.
So I met somebody on my 5000-mile bike ride in Fairplay, Colorado who was working in a diner there.
Is it a woman or a man?
A woman.
What was her name, by the way?
Linda...
Linda Petty.
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 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.
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.
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, 24-7 forever.
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 back roads.
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 forever. 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 at Airbnb.com slash 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 what 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.
I'll see you next time.
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 U.S.
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.
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 it 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.
I said, well, let's walk over.
And it was at nighttime 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 to say, well, by the way, I think you've got about 12 of my bikes.
And, um, Oh, and I also added – 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.
Wow.
Anyway, I got my bikes back.
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 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.
And I mean, how did you start to figure that out?
You know, 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.
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?
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 cyclists.
We've had some amazingly fit people in their 80s on our trips that probably rode the younger folks out.
Rode 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.
Okay.
I mean, given how intensely... 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 like you could all just kind of collapse maybe temporarily.
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?
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, and we, we, we, I built up a very strong structure around supporting everything we have to do.
I'm curious about expenses.
Like at what point, because you didn't have any investors, right?
I mean, this was all.
Didn't have any investors, never.
It's remained a hundred percent 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 30000 amount 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 a 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 made us able to do this.
Right.
So you got, it was like a preorder 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.
Right, exactly.
I read a story about an early trip you took.
And I want 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.
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 of times.
I felt like we were in a rock tumbler and it was all steel tool chests and propane containers.
Just imagine all that was going around as we're spider manning through the uh, through the air.
And anyway, we came to a rest, went and made it over to the edge of the um freeway and i was um, 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 figure it out.
So we took the ambulance to the hospital and we actually walked out of the hospital.
It was amazing.
I had broken ribs and they had neck braces on and we were really beat up.
We made it to 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, one of the leaders.
She could only walk about I don't know 50 yards before she had to kind of sit down.
But 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 seats in the van in and out.
And they were heavy.
And we had to move big, heavy picnic tables around.
So 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 sliding door of the van and it fell off the hinges.
It was like it was an omen from somewhere.
But it was a hell of a summer.
I'll say that.
Tom, what at what point?
I mean so for the first few years you're leading trips to 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 US?
Yeah, so this is a seasonal business.
It's a seasonal business now.
I mean, we run, you know, probably-
Spring to fall, yes.
And so it was totally spring to fall then.
And so it 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.
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?
You're right.
So, you know, we figured out how to ship bikes.
I'm.
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 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 use some local guides in places like um Bali um, But we really wanted our own leaders to be leading our trips because they were, you know, really heavily trained and we could trust them and they knew what they were doing, etc.
And we'd do the trip.
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.
No, we have always had a training program program.
Recruiting, hiring, training, and performance management.
Always from the beginning?
No, excuse me.
Almost always, yeah.
How did you develop that?
Trial and error.
For instance, 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 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're 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.
All right.
So...
And basically, you continue to expand these trips in New Zealand and then Peru.
And really, for the first like 10 years, I think, it was bike trips primarily, right?
It didn't expand to hiking and walking trips until later on.
That's right.
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 on to 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 one-third biking, one-third hiking and one-third multi-adventure, and really a lot of the business was coming from repeat customers, right people?
People go on a trip and then they come back the next year.
Yeah, we have a very high repeat and referral rate.
Um, That's also about one third, one third, one third repeat referral and new business.
But word of mouth is everything in this business.
You can't do it without word of mouth.
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.com.
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 Shopifycom.
Slash built.
Go to Shopify.com slash built.
Shopify.com slash built.
Welcome back to How I Built This.
I'm Guy Raz.
So by 2001, Backroads has grown from a one-man show into a 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.
9-11 was just so shocking to me.
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.
So this wasn't late enough in the fall on September 11th, 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.
So things slowed down.
Yeah, slowed down.
And that lasted for quite some time, but obviously recovered.
And then you have that The financial crisis, of course, in 2008, 2009.
Right.
And what did that mean?
I mean, did it have a significant impact on people booking trips?
Yeah, so that had a much bigger impact.
We had a 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, right?
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, you know, 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 leaders, we had three leaders.
Instead of having one van, we had two vans.
And went on and 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.
How many total employees do you have?
We have about 1,300 employees, I'd say, right now.
And some of them are tour leaders.
Some of them are in the headquarters.
So are all the employees full-time?
I mean, are some of them CEO?
No.
All of the folks that are working more or less in the – 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.
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?
Yeah, it was just disastrous.
And the only reason we had any signups that year is because we had signups before February and March.
But yeah, we basically... stopped all his revenue, more or less stopped for about a year.
And we laid off people.
We did temporary layoffs, full-time layout.
We even reduced pay.
And then 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 nine, 11 and great recession, because we um 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 to go.
And 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 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.
So now I think how many trips on average do you offer a year?
We'll do about a little over 5,000 trips this year.
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.
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 when I was a backpacker in Europe in the 90s, you'd go to places and it was a frontier.
Right.
There's no one there.
And now you go to places that there's 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 somewhat 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.
People are waiting for two hours for gelato, waiting to get the perfect selfie to put on Instagram.
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.
They don't.
Of course they can't.
They can't.
You want to go to Florence.
You got to go to Florence.
Well, 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 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.
And even on our hiking trips... we're out hiking.
And so, um, I agree.
It's a real, it's a 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, we just don't go there anymore.
Yeah.
You know, it's an interesting point because I think that as social media, you know, has kind of become a reality, sort of just the 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 five in the morning and walk around Venice between five and seven 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, you know, opening the shops and the streets are amazing.
It's beautiful, quiet.
You can really get a sense of that city. but really after 10 a.m.
And 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 you're so right.
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.
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 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 hypervigilant 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.
Tom, when you think about this business that you started right when you were 26 and where it is now, I think you're one of the biggest – adventure travel businesses in the US, right?
If not the biggest one.
I think so.
Yeah.
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, you know, 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 it just The timing was right and you got lucky.
Making the 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 got to say that in general, the grind has been consistent, nonstop 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 people that start this as a hobby and keep their day job, I can't even imagine.
Good luck.
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 guest 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 GuyRozcom or on Substack.
This episode was produced by Casey Herman with music composed by Ramtin Ereblui.
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 Messini, J.C.
Howard, Carrie Thompson, Catherine Seifer, Andrea Bruce, Ramel Wood, and Elaine Coates.
I'm Guy Raz, and you've been listening to How I 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 Stephen Davis.
Back in 2021, a friend of his had just moved to Arizona.
To help out, Stephen decided to hop a plane from Detroit to Phoenix.
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 carry-on fee.
It was about $50 each way.
So I was like wait for me to carry my own bag onto the plane and put it over here.
I got to pay twice as much as the actual flight itself.
That just bothered me.
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 Steven noticed something at the airport.
I just looked at the size of the 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 on the sizer and I looked like, well, if it didn't have these wheels, it probably would fit inside this sizer.
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, Stephen 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.
The day the shipment came, I can't, I came home.
It was suitcases stacked to the ceiling in our living room, in our garage.
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.
Her name was Courtney.
She was like, I've been waiting on something like this.
I travel, you know, budget lines all the time.
And she said, I'm going to make a video of it.
And that YouTube video is actually what started driving ourselves.
Shortly after that video went viral, that first run of 500 Suitcases sold out.
And Steven realized that building out a community of fans online was critical to his success.
Having a tight-knit group customers who champion our brand, which 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.
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.
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're here for the people.
We like the Robin Hood of the airlines.
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 at wondery.com.
