Your company profile mentions that you’re “in love with National Parks.” Are there any notable memories or experiences that sparked this love?
If I were to draw a venn diagram of all the things I’m passionate about, National Parks would be one of the hundred things in there, but I do love the outdoors. I grew up about 45 minutes from Zion and we went there a lot as a kid. I remember going tubing in the river, I remember hiking with my mom; all sorts of stuff. It was in my backyard so we there all the time. My dad loved Lake Powell so I have fond memories of going to Lake Powell with him. When you’re in the west it’s easy to take [National Parks] for granted; it’s just all around you.
I’m kind of a romantic, and I think the concept of National Parks fits that idea. If you’ve never been to Glacier, I can’t describe how incredible it is. But it also rains, it’s hot, it’s wilderness, it’s wild, people die, etc. It’s not perfect, but in our minds we view it as this perfect thing.
Overall it’s less about individual instances, more about gained exposure and learned appreciation overtime. I had largely positive experiences at National Parks, but a lot of the parks I hadn’t visited until I was an adult. I grew up 60 minutes from the north rim of the Grand Canyon but never visited until a few years ago. Now I take my kids and have a chance to combine several different things that I love – which is pretty cool.
When did you make the decision to merge your formal business education with the personal passions of athletics and physical challenges? Was it while you were pursuing your higher education, or shortly after you graduated?
Actually, it was none of that. After college I worked for an investment bank, software companies, and eventually went back to school for my MBA. I fully thought I’d go work for a larger company. My resume is full of very small companies with a collective 100 employees, so my intention was to get a recognizable name onto my work history.
I kept looking for jobs and internships, but I kept getting called back to the idea of starting my own company. I was called to entrepreneurship. At the time, I already had a family – a wife and 4 kids. So I didn’t think I could pursue a startup, it was too risky. But I kept coming back, I kept getting called back to it.
I took an MBA course called “Entrepreneurship through Acquisition,” which is basically where you buy a struggling company for cheap, and you turn it around to create value. This seemed like a far less risky way to pursue entrepreneurship.
A friend of mine buys underperforming assisted living homes around the country. He said, “I can look at a P&L and tell you what is going wrong. I know the industry so well I could identify issues and solutions just by looking at the financials.” I needed to pick an industry I knew so well I could identify a good deal. I had helped my brother grow a triathlon event 10 years prior, and that was an industry I really knew well. So I started looking for an event I could buy. As I began my research, I quickly found an opportunity to start a half marathon series at the National Parks rather than buy something existing, so I took it.
Today, there are a wide variety of fun and challenging races appealing to runners of all ages and levels of experience. How developed was this industry when you first started Vacation Races?
It’s only been 5 years, but there have been a lot of changes since we started. This was in 2012, and “Run Disney” was really just getting started. Disney had the Disneyworld Marathon and a five year old Disneyland Half, and maybe one other that year. Really, a person traveling to many races each year isn’t very old, maybe a decade or less for casual runners.
The Color Run also started in 2012 and had planned for 5 events that year. By the end of the year, they had put on 60 events which obviously far exceeded their own expectations. So themed events were all the rage then.
Mud runs were at their peak around that time too – many people suggested I put on mud runs or other themed events. I saw that color runs were faddish and the mud runs were “once you’ve done one, you’ve done them all” so I decided to try and start something I thought would last.
What, if any, are the biggest adjustments you’ve made to your business model? Were the driving factors of these adjustments internal or external?
We only exist as a company because of our customers. There is no other reason. As I was developing the idea of Vacation Races I kept looking at beaches as a location. When I personally thought of vacation I thought of water fun, but ultimately as I talked to my potential customers it became clear the opportunity was in events at the National Parks.
From the beginning to took customer feedback extremely serious. Even before our first event, I came across a way to produce the race without using cups on course. But rather than just unilaterally deciding on implementing it I asked what our customers thought. Once I saw they approved we moved forward with it.
In terms of marketing, we have tried lots of marketing channels, but nothing even holds a candle to Facebook. We’ve shifted to 100% Facebook. In fact, I just hired a CMO to focus on diversifying our online marketing. We currently pay something close to $10 in marketing for each registration. We get calls from magazines selling ad space, but we ask ourselves “how many registrations would I get from buying a $2,000 ad”? Rarely do we think we can get the same return that we see from Facebook. We are probably going to spend close to half a million dollars on Facebook this year.
Finally, we’ve been trying to bring all our P&L line items in-house. The medals and shirts we get straight from the manufacturer and even our portable toilets are handled internally. We started a composting toilet company which we will be using to offer even more value to our participants.
How would you describe the standard Vacation Races participant? Both as a runner and as a customer?
For a half marathon it’s a 35-45 year old woman. For the ultras we have more men. Between 40-60% of participants have never been to the event’s location before, so their whole trip is an adventure and we are the catalyst. Typically we hear people saying, “I’m not gonna drop $2k to go to the grand canyon. But if I sign up for this and I train, I’ve EARNED my trip to the grand canyon.”
While there’s a wide range of skill and fitness levels, pretty much everyone loves the outdoors. Over 90% of participants go on hikes after the race, so these people are active and motivated.
It’s all about the parks; whether you want a 5k at the Yellowstone or 100 miles at Zion, you’re still coming for the same reason. You want an experience at the park, and you want to challenge yourself physically.
From high tech running watches to muscle oxygen monitors, athletes have a surplus of data to measure and improve their performance. From a business standpoint, are you using data to measure and improve the Vacation Races experience?
The entire Vacation Races concept was built on data. Before I even started the company, I would stand at the finish line of marathon events interviewing participants to find out what they like and what they want to see from an event experience standpoint.
There’s a book I read, “Nail It Then Scale It”, the first half of which describes the new way to start a company in the internet age. Rather than starting a company in secret, and after all the investment put it out there and then hoping people will like it, you start with potential customer feedback even before you begin. Listening to customers is step #1 rather than step #7.
By starting dialogue with potential customers first, you figure out what their problems are and then you find solutions. A closed-loop customer feedback system provides incoming ideas. It drives decisions like our cup-free events to eliminate the waste and litter. It also drove my decision to look at National Parks as a possible event location.
Customer feedback data helps us stay in tune with participants to hear what they want, to keep in touch with how we’re doing, and provides an opportunity to respond to those things.
What are some of the key trends you’d say are poised to make a significant impact within the organized race industry moving into 2018?
I think people are getting bored with road, so I see a shift to trail events over the next few years.
We have a lot of user interaction on our Facebook page and I saw a comment recently that said, “I think half marathons are passé” and it makes me wonder if the party is over. The growth of half marathon events has slowed a bit, but it’s still growing. But is still puts me on edge.
The biggest trend I’m seeing is with Virtual Races. I had mentioned that part of concept development for Vacation Races came from finish line surveys at other marathon events. I noted two commonalities among everyone I spoke to. The first was that marathon events are appealing because they offer training motivation. People sign up for an event, they put money down and this helps drive them to train. The second was the sense of accomplishment associated with completing both the training and the event itself.
As I reviewed and considered these findings, I noticed that neither of them requires everyone to be in the same place at the same time. I was one of the first in 2013 to do a virtual turkey trot. People run on their own schedule, but still get a race shirt and medal if they want. Our Virtual Running Club puts on 40+ virtual races each year. I think this is the bleeding edge of some really interesting ways for people to challenge themselves physically.
The feedback we receive from the virtual races show the various ways in which people completed the run. Some people ran as a group, some people ran in the mountains, some on a treadmill and some even do their normal, every-day run.
Surprisingly some participants would register for the event, pay the event registration fee, and then decline our offer of a shirt or medal. The entire event concept is based on the honor system. There’s no incentive to cheat because we don’t anoint a winner. For some people it is about the shirt and the medals, for others it’s about committing to doing something. The value we’re really providing is motivation to train and a sense of accomplishment.
Virtual Races make up 20% of our revenue today.
Whether direct or indirect, who would you say are your brand’s toughest competitors?
I’d say our two main competitors are the Ragnar Relay Series, bot road and trail and the Run Disney events. The latter of which has limited properties to play host, so in that regard I think Vacation Races has an advantage.
Things like Spartan races are great events and really popular, but I think the value proposition of the event itself is much different than Vacation Races. People don’t sign up for a Spartan race because of the scenery or location. Whether the event is held in Las Vegas or Glacier, the event itself is mostly the same.
To a lesser extent we are competing with regular vacations, but at the same time we offer more bang for the buck. Not only the excitement and training building up to the trip, there’s also the sense of accomplishment associated with the trip itself; which is something that usually wouldn’t be felt on a normal vacation.
If you were granted one wish to add any National Park that isn’t on your current list of events, which would it be? Why?
Hawaii – for purely selfish reasons. I’d love to have an event around Hawaiian volcanos so I could have a trip to Hawaii every year on the company dime.
I’m not sure if moving forward we’re going to add any locations, or if we’ll focus our time and money on virtual races.
What is your favorite quote?
“Success is making those who believed in you look brilliant.”
Dharmesh Shah, HubSpot CTO & Founder