My biggest mistake: Justin Hales, founder of Camplify
While Camplify founder Justin Hales has welcomed the startup’s speedy growth, he admits the team neglected one very important business activity: tracking its hard data.
When Justin Hales launched Camplify — an Airbnb-style business for campers — in 2015, the new business took off like a rocket.
But while the speedy growth was welcome, the Newcastle startup was neglecting one very important business activity: tracking its hard data.
“We were just growing and growing and we weren’t looking at anything below the surface,” said Hales.
With his ASX-listed company now operating in Australia, the UK, New Zealand and Spain, the entrepreneur reveals how his biggest mistake came to pass — and how Camplify got back on the road.
The mistake
“I would say that early on we didn’t focus enough on really understanding the data and the metrics and the trends,” said Hales.
The campervan, motorhome and caravan sharing platform was gaining pace so fast that the focus was on its gross transaction number.
“As long as that was going up and to the right then we were like, that’s all we need to worry about.”
And the platform was adding new listings as quickly as possible to try and keep up with customer demand.
But while business was booming, Camplify was not across the nitty-gritty.
It was failing to track data in many areas, including the period between customers booking and travelling, how many customers were returning to hire another vehicle down the track, and the variances between van hire prices throughout Australia.
The context
Hales says the business was growing so fast that there was no time to consider the detailed numbers. It became a case of “just keep doing what we’re doing”.
“Also, when you’re in an environment where your growth is really strong and quite frankly, you’re getting funded from VC capital, you don’t often worry too much about those other things,” he said.
“You’re just a growth business and that’s what VCs want to see. But when all you’re doing is focusing on growth, you’re not actually running a real business.”
So what prompted Camplify to realise the error of its ways?
“It was when we were thinking about what we were going to do with the business next. We were going to raise some more capital — we were getting out of that kind of growth at all costs business, and trying to get into a bit more scale,” said Hale.
“The board started to ask some questions.”
Unfortunately, Camplify didn’t yet have the answers.
The impact
For the first four years of the business, Hales says he was largely running on gut instinct. And while this worked to a point, he admits Camplify would have been even more successful had it tracked its metrics properly.
“We would have had a much more scalable business and we would have been able to make more effective decisions about our products, about what markets we went to, and why.”
He gives the example of Camplify’s first expansion into an overseas market, the UK, in 2017.
“Our entire decision making was me going over there, seeing that there was a big demand for, and a big subculture of caravans, that they spoke English and they were in the opposite season to us here in Australia.”
However when Camplify expanded into Spain in early 2020, the business gathered plenty of data first, such as the growth rates of caravan or RV ownerships, the demographics of these vehicle owners and online search volumes for vehicle hire. The result was much quicker engagement and growth than in the UK.
Camplify had also been missing opportunities to improve its customer retention rate, and give vehicle owners the information to best calculate their hire price — and improve profits for everyone.
“We found for example, that to rent a rental car in Tasmania was $120 a day and our customers were renting their campervans for $80 a day.”
The fix
Hales worked with his chief technology officer to decide what technology they were going to use, and how.
Camplify hired a marketing and data analyst to ensure money spent acquiring new customers was being spent on the right channels.
A finance analyst also joined the team.
“We’re a seasonal business, and we’re a two-sided marketplace, so we’ve got to be able to build stock,” said Hales.
“He looks at how that process is working and how pricing models are working and a whole heap of other things around finance.”
The focus on metrics proved to be fortuitous timing, given the events to follow in 2020.
“When COVID-19 hit, that’s when we actually started to really extract data and really use that data to make really fast decisions because there was no trend, and nothing was normal,” said Hales.
For example, pre-pandemic, the average customer booking window was about 45 days. It plummeted to six.
“A lockdown would lift, and then they’d go right I’m going on holiday — bang, book, go,” said Hales. “If we didn’t have that data, we would literally be flying blind.”
The new systems also helped Camplify manage the mass cancellations hitting tourism businesses.
“95% of our customers decided to just take a credit and then re-book, and so we were able to use a lot of that data to be able to help navigate that whole process.”
The lesson
If he had his time over, would Hales start measuring the data from the beginning?
“Absolutely — and then have the ability to scale it as it got bigger and bigger.”
He says having the numbers to back up his gut feel inspires confident decision-making.
And given Camplify listed on the share market in June 2021, having solid data is more important than ever.
“Being able to show actual data and show exactly how your business is performing and provide that information, that helps financial analysts in the share market be able to understand where you’re at it, and where they think that you’re going,” said Hale.
“We’ve doubled the business in the last 12 months for example. And I don’t think there’s any way we would have been able to achieve that with the team that we had without knowing that information and knowing that data.”
