Conversation with Fran Maier, CEO & Founder, BabyQuip
Bringing Baby Gear to the Sharing Economy
October 24, 2018
1. What is your business?
BabyQuip is a baby gear rental service and marketplace. We make sure that traveling families have everything they need for their vacation, whether they are staying at a hotel, a vacation rental or with the grandparents. Quality Providers, the people who own and deliver the gear, are mostly women, many are stay-at-home moms, who own the gear which can be anything from car seats to cribs to toys. In addition to delivery, set-up and pick-up, our providers thoroughly clean all of their gear that is rented to families. BabyQuip operates in well over 250 markets in the U.S. and Canada, we have over 300 providers on our platform, and we’re starting to develop partnerships with hospitality companies.
Because we are seeing demand for baby gear everywhere, it is starting to become clear that we tapped into a dramatically underserved market. We’ve quickly become the national brand.
In terms of pricing, the customer pays for the equipment rental by the day, the week or month, and there is a delivery fee and a service fee. The Quality Providers keep over 80% of the rental and delivery fee and keep any tips. We charge a service fee to the end customer which supports the platform and advertising. The average rental period is three days, and the most in-demand items are strollers, cribs and car seats. But, we also lots of other gear. For example, we can provide baby monitors, toys, and white noise machines. Almost 50% of our customers are grandparents, and they love working with our Providers to give their grandkids get just what they need. And of course parents use us for stays at hotels and resorts and at vacation rentals too.
Quality Providers are building a business on our platform, and they become known in their local market. Some of our providers rent out an extra crib or stroller and others own and rent out seven or more cribs, especially during high demand times like the summer or holidays. Because it would be prohibitively expensive for individuals to get insurance coverage, we offer insurance to all of our Quality Providers.
The one thing we don’t do is install car seats. Because of insurance regulations, renters have to install car seats on their own. And because we are trying to take the lead on baby safety, we look to leading SIDS organizations like First Candle to inform our policies on what we do and don’t rent.
2. What made you decide to start your business and/or switch careers?
I started renting rooms in my house on Airbnb in 2012, and it became immediately clear to me that the rental income could pay for my mortgage. It changed my relationship to work. In fact, I bought some more properties in New Mexico, where I grew up, to rent them out on Airbnb.
I started to become intrigued by businesses in collaborative and sharing economies and also this whole new way that people were traveling. With my Airbnb rentals, I knew that my listings could have much more demand if I had a crib or a high chair at the house, but I didn’t want to invest in them or have to store them. So when I happened to meet this gal in Santa Fe who had recently started a baby gear rental business, I immediately saw the potential combining all of these areas that had been percolating in my head. In our first meeting, I told her, “You should hire me as your CEO.”
We launched the business in May of 2016 as Babierge, our former name. That first summer I wanted to understand three business fundamental issues: 1) How strong is demand – are there enough parents wanting to use this service? 2) How hard is it to recruit Providers, is this a side gig that is attractive? And 3) Could we get liability insurance? Not just for the company, but also for our providers.
It seemed to me that all the best platforms offer insurance, and I wanted to be sure that we were protected. In addition, I knew that this would be differentiating from the competition. At the end of the summer, I was super excited: demand was high, people, especially moms, wanted to do this work, and we secured the needed insurance.
3. Was there ever a particularly tough time that in retrospect was a priceless learning moment?
I think every start-up goes through a demoralizing period that I call, “the trough of despair.” Last summer, we were running low on our initial capital and were having trouble raising money. Even as hard as that time was, with cash dwindling, I kept telling everyone that we’re not going to run out of money, we’re going to be fine. We needed to take a step back to see that fundraising success or failure was not a comment on the fundamentals of the business. The business was growing! Sometimes it is hard to have the faith. Because I had been through this with several other start-ups, and I was able to see the 30,000 foot view. I was able to be optimistic.
Sure enough, we grew a lot over that next holiday season, one of our busiest times. We ended up generating over six figures of gross revenue. After that, the capital raising discussions were easier.
4. Were there any partnerships or advice that were particularly helpful?
Yes, last year, we started a partnership with Destination Hotels, a collection of luxury resorts and hotels. As part of our partnership, we agreed to find providers in all of the markets where the hotels are based. Destination Hotels wanted to reinforce its positioning as a family resort group, and it gave us a great way to launch in new markets and connect with new providers. It would have been hard for Destination Hotels to supply as much baby gear as we offer, so we saved them the cost of purchasing and storage, and it opened up a new marketing channel for us.
5. Was outside funding/cost a challenge to getting your business off the ground?
I don’t want to say that venture capital fundraising is impossible, but it is a challenge. There’s less interest among investors for parenting and baby-focused businesses. I think women always have a harder time raising capital from these institutional groups, so I advise female founders their first slide should be about themselves. It feels to me like I have to establish my credibility before I can even discuss the business or the market.
I don’t think there are enough women venture capitalists who invest at the earliest stages where the money is really needed. I mean, we usually need the money early, at the time that it would make the most difference. Once you’ve gone through the “trough of despair” venture capital funding is less difficult to get. I see it as a bunch of obstacles that each entrepreneur has to get through.
6. What are some successes you have had with your business that make you proud?
I’m really happy that we changed our name. The name of the company used to be Babierge which was the combination of “baby” plus “concierge,” but while it was cute and clever, the name was difficult to spell and pronounce. Ultimately, we decided to make it easier for people, but it took a lot of work, focus, time, and money. Unfortunately, when you change your website and company name, there is a hit to traffic and search engine discovery, but it was worth it. I feel like BabyQuip now is really set up in the best possible way. We just served our 14,000th order!
We add new providers to the BabyQuip platform every day now. Helping these highly motivated mostly woman entrepreneurs launch and grow their businesses feels like a big success to all of us.
7. What are some of your current challenges?
This past summer was an important time for the company, given our name change. Now our focus has turned to the 2018 holiday season. For the upcoming Thanksgiving and December holidays, our goals are getting more providers onboard with significant inventory available to customers, and launching more partnerships, as well as thinking through where we grow next and how we continue to meet the demand.
We’re moving so fast that sometimes it’s challenging to keep up with the work at hand. We just upgraded the site to add better back-office functionality so Quality Providers can more easily manage changes to rental orders, and we introduced a feature so customers can leave tips for providers along with reviews. That kept us busy.
We’re looking at adding additional sales, social media and marketing training for Quality Providers—something many have asked about. We add new people to the platform every day, so we’re working on a playbook to streamline both the recruiting and onboarding process and we’re already rolling out marketing to address the fall season holidays.
8. What are some of the biggest positive or negative surprises in your business?
I always get excited and surprised by how demand is pretty much everywhere. So, for instance, we aren’t just doing well in big cities or in vacation destinations. Those places are great, but Santa Fe, population 85,000, with no obvious kid-focused tourist attractions, is still one of our top markets.
I think the second thing that surprises me is the awesomeness of our community of providers. They are highly educated and highly motivated stay-at-home moms. Most of the people who are helping us live in the communities they serve, and one gal on her own created a YouTube video about how to put a crib into a minivan without taking out your back. It’s hilarious, and she had a friend of hers who is a physical therapist give pointers. Now she’s our video spokesperson because she’s just so talented, and we have other providers who help us with recruiting and training. I mean, this group is intense, hardworking and talented.
9. What would be your biggest piece of advice you would give to yourself ten years ago?
I often tell people that if you’re onto something, you’ll know soon enough and things will come together. There will always be bumps in the road, you can’t avoid those, but don’t get freaked out about the problem you’re going to have to solve a year from now. Just focus on the problems you have to solve today. Because a year from now, you can solve those problems once they become a priority. The thing is if there’s a business to be had, start-ups will create a momentum all on their own.
10. What are your hopes for your business for the next five years?
I want BabyQuip to help families travel everywhere and continue to grow and build more great partnerships, in US and abroad. As we build BabyQuip int a great brand, I’ve got a long list of additional services that we can provide to parents.
Date on conversation: August 9, 2018
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