Backroads: Tom Hale. How a desk worker became a trailblazer in active travel

Transcript from https://podmenti.com/t/5a2283b495e5011c

So we were driving
Crossing the Nevada Desert.
And the driver uh went off the
embankment and we roll the van s couple of times. I felt like we were in a rock tumbler and it was all uh steel tool chests.
propane containers. Just imagine all that was going on as we're spidermanning through the air and
Anyway, we came to our rest, went and made it over to the edge of the um
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.
Built.
Guy Roz 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.
Mm.
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 back road's 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 was started b 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 um
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 um
More right.
on that count. And I think I 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 a I'm in an office now, actually a lot of the time. But it's a very different environment. But but yeah, so that was in the back of my head or the front of my head.
By commuting.
I read that you because of all the injuries as a runner
Um, you kinda switch to cycling like that because that wasn't as obviously
It's not as impactful then as running is. Is that
Is it right?
I I think that's pretty accurate. I was I never really gave up on
Running.
But biking did. I you know, I I commuted by bike and uh
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.
Had you were you at this point doing like bike trips or 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. Um
Maybe in between quarters or something when I was at UCLA.
All right, so you had already done a pretty intense bite and you went up highway one?
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.
Wh where does it come from? I mean
Clearly you liked being around people or you liked the idea of

Or not, or did it was just completely random.
I it's about as random I I have asked myself that question hundreds of times and I cannot remember anything that led up to me waking up. I I w literally uh
Think it was a reaction against Las Vegas.
I
Levi had got a hold of a
Book, uh 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.
Uh 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 um 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 nineteen seventy nine.
Did you have a vision of like a large, huge company, or did you think I just was it as simple as
I wanna just lead people on bike tours in different places.
Well, I 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 gonna make something out of this, a company that would lead bike trips. But I I couldn't see

But you didn't know what it was gonna be, but you knew and you were young. I mean you were twenty six, twenty seven, 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 gonna happen.
I I I made my m mistake once, I wasn't gonna make it again.
All right. So y this is the late seventies. 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 um you know you had to
Presumably to do some kind of I don't reconnaissance or
planning or 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, Back Roads, and you know, I that was the first name I came up with.
And
I
was going to go on a bike trip.
In Las Vegas. You were gonna take a bike trip on your own.
Yeah, uh on my own, across the country.
Across the United States, the whole country?
That's what I was going to do, but then I I realized there's a whole lot of cornfields uh to get through. I thought the you know, going around the uh loop in the Western United States, uh I did about a five thousand mile loop
I started in um 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. Around the west. And you just had a backpack and and a sleeping bag? I mean a tent? Uh I had a panier on the bike and p Okay so right, paniers or whatever they're called, yeah.
I know they're pronounced. Is it Piniers or is it Panyers?
Pinier, I think. Okay. Yeah, you might be right. I have to go check that out. So you have those bags on the side of okay, and and there was a tent in there?
Camping stuff.
Um camping stuff, yeah, which it turned out I I didn't w I was by myself, so going through the Mojave Desert. I I remember stopping at night.
And
listening to all the critters out in in the Sage Brush.
Yeah.
And they're really loud at night. So the thought of putting a sleeping bag down amongst those critters is not very pleasant. So uh anyway, that was my uh my trip.
Tom I'm curious, in nineteen seventy nine
I mean today it's so common to see
packs of cyclists everywhere, like just all over the country, and it's
But in s nineteen seventy nine w was it kind of an oddball thing to do to get on a 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 but there still aren't necessarily bike lanes where a lot of people do long bike rides. 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 what was a good idea and and I 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 again there's all these national parks that would be great to do. So that was
That five thousand 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 chemistry 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 um
It was such a fun experience and but we know we couldn't have done more things wrong.
Because of the camping venue, the
weather conditions, the


Crazy, uh, but you know, we had a good time and we ran a trip. And this was just uh and and how many how many miles a day were you cycling?
We bite more back then than we probably do now. It was probably more like
Or fifty miles a day.

Yeah.
Got it. Okay.
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's a good thing.
could not have been more ill founded personally, but so they did actually

And anyway, it didn't take us very long to realize that they don't really want to, so
And what about food? I mean
you know, obviously in the late seventies there al 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.
You had food in your on your bike for everybody? No, no in c we had a we had a van. Uh the van would come up. 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. Uh 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. Yep. 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.
So the people on those early trips were but essentially
They were paying to

Cook their own food.
And cycle fifty miles a day.
There you go.
Sounds like a great deal. No, but I mean 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 look at how much we spent and that we gotta make a a margin. And so
We charge way too little.
Probably back then.
But you know, we learn pretty quickly.
And when you
When you got back, right? I mean you were
In that first year, imagine.
leading the trips but also
We have to organize them, you've got to advertise. Where were you advertising these trips? Like were you putting bulletin boards?
Bicycling magazine, outside magazine. I think outside was
in existence at that point. Um
And we probably rented some mailing lists, uh 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.
How did you have the money to
To buy those ads, Tom.
Well they didn't cost very much and um 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. Um it was worse than a dishwasher, because it was chipping cheese out of it. A fondue pot. Yeah, but why I don't understand why you'd have to do that. Fondue is soft and melty. Wouldn't they just take the pot and like put hot water in it after?
I li uh everybody sharps so it didn't matter to me. I didn't want to talk to anybody so chipping as fast as I could. And um we listened to music. So you this is a make some side money to 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.
So we continued to do camping for uh thirty-eight years, I think, but
It had flatlined towards the end of that period and everything else was growing rapidly. So uh in our I think it was our second year pivoted to
Hotel trips.
And quickly, uh, that became
The majority of what we did.
So you basically cycle for a fixed um you know amount of time during the day and then you you overnight at a hotel or motel. Yeah.
Okay, so you're doing these bike trips in uh different places around the southwest in the US. Um and I guess the first several years are these are just bike trips, right? Right. Like later on it would become hiking and and other things, but but at this point
And 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?
We were I
Shared a
house with six roommates, most of them spoke Norwegian.
And um it was in a nice neighborhood up in
Foels of
Oakland.
Five Norwegians in one house? Yeah, they all spoke. In Berkeley. How does that happen? Yeah, I'd come into the
Kitchen in the morning and and Norwegian language and it's I didn't understand a word. I loved them all, but um anyway, I'm still in touch with several of them. Anyway, but back rose was one of the roommates. I was a roommate
And the rent for backroad was a hundred and thirty five dollars. That included the

in the garage and I lived on nothing. Yeah. 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?
Well it was a a very dark
Basement, but yeah, we sort of nearly.
It was a nice neighborhood and um we
probably over stayed our visit there and then we moved down to San Leandro to the world's most decrepit um
Strip mall. San Leander also in the Bay Area, sort of um south of of of Oakland.
Yeah.
And and so in terms of like
Just
w when you 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 ha drive that van to Yellowstone and and meet people there?
Uh we would do the loop. So we would drive to
First we do New Mexico, then we do Colorado, then we do
I see. Wyoming and so yeah, so it was it was linear, yeah. You'd organize like five or six different trips, but it would be
And so you would
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
Maybe in Utah or Arizona.
Do the same thing and then and then keep going until you get back to Berkeley. Yeah, and it it actually uh was probably a two month loop.
Th that was the almost the extent of our offer. We also did run a a higher percent of trips in the Northern California area.
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.
Uh, that's right. We would uh in the canyons, I always went there on my birthday, I remember,'cause I was leading the trip on September twentieth, and uh
It's a beautiful time to be there. The aspect are changing, but we went from
Cedar breaks.
Two
Rice 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 are you finding to work with you?'Cause you were you you're saying we, so I'm assuming it was you and maybe one other person who would lead these trips. So I
Uh I met somebody on my five thousand mile bike ride.
In Fair Play, Colorado.
Who was working in a diner there.
But what was her name, by the way?
Uh Linda.
Linda Petty.
She
Uh 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 and she was just like really interested in it.
So we said, Well just keep in touch. Uh but sh but she had expressed enough interest to where she she was
Pretty pumped on it.
So she became
A fifty fifty partner.
For about two and a I'm gonna say two and a half years, I'm not sure how long it was.
And then she um
kinda 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 dissolve 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. Business wasn't worth anything at that time.
No, it was um yeah, it was a kind of a long story on how we
came to a agreement on that. But yeah, it was uh
You know, she was smarter than I was as far as seeing the the writing on the wall that this is always gonna be a lot of work. So, um, you know, twenty four seven for
Error.
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.
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.
The bikes um were in our warehouse in San Leandro.
We got burglarized and they stole half of our bikes.
That was a problem. Um
I report it to police and um
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. Uh and it was in the neighborhood. I said, Well can let's walk over and you it was at night time that
At that point.
walked over to the corner and he said, That's the house like
two, three houses away. So um
Tyler's 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 I s 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 twelve of my bikes. And um I think I oh and I also added in um what's what was his name? The police guy, um
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 in up into the attic and started dropping bikes down and
Um anyway.
You know, I got my bikes back, so
Alright, so you
I mean, I'm just thinking of the logistics of doing this and and again, this is like
early eighties, pre internet, you know, 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 and I 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 uh 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 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 um I would say that the demographic was probably a lot of folks in their you know forties and fifties and certainly younger and older.
We've had some amazingly fit people in their eighties on our trips that probably rode the younger folks out of them like crazy. But
We weren't really targeting
gung ho cyclists. Um we were really interested in this as being a much more holistic
experience and I would say that
Um 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 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 kinda collapse.
maybe temporarily, but y but did that happen? Were there situations or times where you're out on a trip and
You gotta go back'cause there's like a fire that you have to put out at at the office?
Well
You know, the best example I can think of is when I I um this is very early on when we only had an o 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 um you know, uh that was just kinda 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
'Cause I you didn't have any investors, right? I mean this is all didn't have any investors, never it's um remained a hundred percent closely held family business for forty six years and um
My f dad.
And my uncle?
And my best friend from graduate school.
They all uh uh for some reason I had this thirty thousand dollar um amount in my head that that's what they provided as a loan. And it was always a loan to get um a very short term loan to get through the winter.
We are a very strong cash flow company.
I r read this little book uh when I was thinking about
Yeah.
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 if that's the kind of business you have, it's a really good thing. Um
You know
Or our guests first of all are paying their deposit.
maybe ninety days in advance or more on average.
we are paying the hotel sometimes, the balance due is paid after we have already uh finished the trip.
So I didn't know that that would become so important.
But
It made us able to do this. Right. 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.
Right, exactly.
I read a story about
An early trip you took and I want to
kind of talk a a little bit about this because
There was a serious accident, like w you were in a van.
And it like flipped over. And tell me w what happened.
Uh so we were driving
Crossing the Nevada Desert just um east of Elko, Nevada.
And the driver uh reached down to uh swat a bug off her leg or something. Anyway, she went off the embankment and we rolled the van s a couple of times. I felt like we were in a rock tumbler and it was all uh steel tool.
chests, propane containers. Just imagine all that was going on as we're spidermanning 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 uh I was um
We're laying 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 to that, well, I don't think so. Um we'll figure it out. So we uh we we took the ammo to the hospital and and we actually walked out of the hospital. It was amazing. I I had broken ribs and they had neck braces on and um we were really beat up. We uh
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 leadership.
I don't know, fifty yards with that before she had to like kinda sit down.
But they um Bill and Kathy went on to lead the next two trips. I went back to get another van, um, to meet them.
And
We finished uh it was uh pretty rigorous cause we ha had to keep moving the
seats in the van in and out and they were heavy and we had to move ch big heavy picnic tables around. So I my my ribs never got well. We were sleeping on the ground and um 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 uh it was a it was a hell of a summer.
Uh I'll say that.
Tom, what ат вот пои
I mean you so for the first few years you're leading trips
mainly in the Western Un only, I think in the Western United States, the loop, right? Uh the this loop through national parks in the western United States.
At what point
Did you
Or somebody who 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 It's mainly spring to fall.
Spring to fall, yes. And so it was it was totally
spring to fall then. And so we you know it didn't take much to think that well we should branch out. So we started with uh let's see I
We did Bah?
Hawaii
And
New Zealand in pretty short order as well as
Bali, I think it was. So and'cause I read you started Hawaii in nineteen eighty four. So you've y at this point you're like five years in.
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 got your
Van
How are you gonna do that in
Hawaii or
Two years later in New l New Zealand. Let's start with
W
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. Um I'm
I don't know if they had rules back then in all of these places that we should have been ad 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 um US and Canadian at that point for the most part. And then we also used some local guides in places like um Bali, um
But we really wanted our own leaders to be leading our trips'cause they were, you know, really heavily trained and

We can trust them and
They knew what they were doing, et cetera.
And we
Do the trip.
I wanna ask you about training people. How did you
Train people.
You train them by just
Bring them on trips.
No we um have always had a training program uh uh recruiting, hiring, training and performance management. Always from the beginning.
Uh uh no, excuse me. Um almost always, yeah. We um how did you develop that?
Trial and error, uh 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 um 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 gonna hire half of'em or whatever it might be. So anyway, we we now have
All of our leaders go through ten days of training.
that is really pretty intense and
then we have performance management happening for everybody.
All the time and we are uh
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 were 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.
Alright, so
Basically you continue to expand these trips.
In
you know, New Zealand and then Peru and
And really
For the first like
Ten years, I think.
It was bike trips primarily, right? It didn't it didn't expand to hiking and walking trips.
Until later on.
That's right. It was our name was Back Roads Bicycle Touring for the first
fifteen years or so. We didn't officially change it until after that. So
Great name.
Decision.
'Cause we could split off backwards if we wanted to, but it 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 would go on a trip and then they'd come back the next year. Yeah, we have a 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 downtures 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.
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 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.
Nine eleven was just so shocking.
And uh one thing I've learned uh in this rather seasonal business is that if you have something happen
uh bad happen in the world. Please have it happen uh late in the fall. Okay. So this wasn't late enough in the fall on September eleventh.
But it was still late enough to where we'd run most of our trips. But September's our biggest, um 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.
that week, even that week. And then of course we had to kind of figure out the next few weeks and so we, you know, lost a lot of business there.
So things slowed down. Yeah, slowed down. And that and that lasted
And then
You have the uh the financial crisis, of course, in two thousand eight, two thousand nine. Right. And what did that mean? I mean, uh did it have a significant impact on people booking trips? Um we had a forty three
three percent drop in business that year. So that you're kidding, a 43% drop in business, that's gonna kill us. Uh
We laid a lot of people off. We um it was really hard. But um
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, you know, all the companies kinda look alike. They all put out a nice catalog, blah, blah.
But
We were better.
And I knew we were.
But we didn't 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.
Um and went on and on and on.
And we went from really low profit margins to much higher profit margins.
because we were 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.
Um and we treat them well. They're not independent contractors. We um we house them between trips and just have a lot of um
We we just don't subcontract.
How many total employees do you have?
Uh we have about thirteen hundred uh employees, I'd say, right now.
And
Some of them are
tour leaders, some of them are in in the headquarters. So are all the employees full time? I mean are some of them. No. Um all of the folks that are working more or less in the um
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's 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.
Um
Tom, I'm curious about covet because covet 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. Air I mean airline business almost collapsed.
Right.
When it became a reality in March of twenty twenty.
You know, this is when you're just about to launch your spring trips.
What happened?
Yeah, is it
just disastrous and um the only reason we had any sign ups that year is because we had signs before uh before
February March.
But um yeah, we basically
stopped all of 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 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 um I've gotten
Pretty good at.
Is you know
We're gonna come out of this stronger.
Then when we went into it.
And
I attribute.
my belief in our ability to do that to the experience we had with nine eleven 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.
Yeah.
There was some uh I think our guests were incredibly generous with us. You know, we always survey our guests how to go and they they w 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 um it went from that
to boxed lunches because of Covid. And so um really I think our guests were just so darn happy to be outside and doing something with people that uh
We shot up in business in two thousand twenty two like you can't even believe.
So now I I think you ha how many trips on average do you offer a year?
We'll do about a little over five thousand trips this year. Five thousand trips. Yeah.
So Tom, I mean when you when you look at
I think about covet, for example, and
How people talked about covet is gonna change everything.
And in fact it didn't really change everything.
You know, people went to remote work for some time, but m more or less are back in the office. People said he wouldn't shake hands anymore, that masks would be the norm on airplanes. I don't see masks on planes very often.
Um 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
L 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 nineties,
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 n nothing is hidden anymore. There's no secrets. There's no oh only the insiders know this. Cause it's all on Instagram. There's somebody 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 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
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.
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. Well, actually to Florence. You gotta go to Florence.
Well Venice that's not the part of travel we do though. Um the way we travel
We're biking. Uh by the way, we're not
There's not twenty five of us going down the road as a pack. You are one hundred percent riding at your own pace.
And so you can never see another guest on the trip, but you're out there interacting.
Oh
With in on 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
Um, and even on our hiking trips, we're out hiking. And so Yeah, 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 real
a reality of life. If you go to uh 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 there's it the streets are amazing. It's beautiful, quiet.
You can
really get a sense of that city. But really after ten AM that's true with every city. That's what I do. I I take a run
In the city.
At five in the morning, maybe six. And it's you're so right. It's uh and you can do it. You can take a walk.
But yeah, you 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 gonna change, if if at all
How people are gonna interact with with what you're offering.
Right. I mean
You know, now like I'm going to we're gonna go on a trip a family trip in um
December Asia.
And I've already done this. A lot of my trip
and travel, I I now start
With AI.

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, th I think there's a lot of opportunity that we will I I know there's opportunity and we will take advantage of much of it.
And I know at the same time that we are gonna 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.
Um having to do travel copy from scratch all the time may not be the best way to do it.
Tom, when you think about, you know, this business that you started, right, when you were twenty six and where it is now, I think you're one of the biggest
uh 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 of trip options. Every I mean I've I was looking through the catalog.
It's um 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 of the success of this business do you attribute to the work you put in the grind and how much do you think happened'cause it just the timing was right and 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

Um just a fortuitous moment.
But
I gotta say that
In general
The grind.
Has been consistent.
Non stop.
embraced and has meant everything.
And it it's
I don't resent it.
I embrace it and you know, my
original short term.
partner who said this is just a lot of work. You know, she really hit it on the nail. It's a lot of work.
And I and I I don't that you know, and people that start this as a hobby and keep their day job, I I can't even imagine.
Oh 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 електри.
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 guyroz.com or on Substack.
This episode was produced by Casey Herman with music composed by Ramteen Erogli. 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 Massini, JC 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!
Біказ 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 just moved to Arizona.
To help out, Steven decided to hop a plane from Detroit to Phoenix.
I have found a flight.
Like forty dollars round trip.
or one of the budget airlines is a great deal, but
Yag agile. Yeah, carry on fee.
It was about fifth doll each way, so I was like, Wait.
For me to carry my own bag onto the plane and put it in overhead, I gotta pay twice as much as the actual fight 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 the size of the personal item and the carry on size of and I just was like, Well, it's not too much smaller. I wonder if my suitcase could fit.
I put it on the size there.
And I look like
Well, if it didn't have these wheels.
It probably will fit inside this size there.
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 in 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, uh in our in our living room. In our uh garage.
It was slow going at first. Steven 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 its first real sale.
I think it was Courtney.
'Cause I I've been waiting on something like this. I travel, you know, budget lines all the time.
And he said, I'ma 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 a tight knit group.
of customers who who champion our brand is what's helped our growth. I actually ran to a girl in an airport, she made me feel famous. She's like, oh my God, you're uh the take off
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 the budget Airlines doesn't like us, but you know, we here for the people. We like the rival hood of the airlines.
That's Steven Davis, founder of Take Off Luggage.
His small business story is presented by American Express.
To build a business like no other, you need a car like no other.
There's nothing like business platinum.