Boatsetter: An Exclusive Interview with Co-Founder & CEO Jackie Baumgarten
Our team had the opportunity to interview Jackie Baumgarten, Co-Founder and CEO of lead boat sharing startup, Boatsetter. Read below to see what Jackie has to say about the sharing economy, fundraising, and the the importance of having tenacity as an entrepreneur.
BST: Boatsetter has been described as “Airbnb for boats”. Is this an accurate description? Was Airbnb the inspiration for the company?
JB: Yes, that’s a great description - perhaps even better would be “Airbnb for boating experiences”. Boatsetter is all about making getting out on the water as easy as Airbnb makes getting travel accommodations. And it is certainly fair to say that Airbnb has been a huge inspiration to us. We’ve enjoyed working with Airbnb over the past couple of years on their Experiences offering, and we’ve benefited tremendously from our partnership with their luxury-focused department, Luxury Retreats.
BST: What is your background? What are the critical stepping stones that led you to becoming a CEO?
JB: I’m definitely not your TV stereotype of a twenty-something entrepreneur that started straight out of school. For me, making sure that I had a very solid and strong foundation in business, building teams and leading organizations was core. I started as a strategy consultant for Fortune 500 companies in New York, then I went to Stanford for my MBA. I love architecture and real estate, so after Stanford, I got a job at Westfield Corporation, one of the largest shopping center developers in the country. At Westfield, I ran the largest development project in the city of LA. It was a two-million square foot mixed-use project. I oversaw entitlements, feasibility, design, pre-construction, you name it. That was an exceptional opportunity for growth, because as a thirty year-old, I was one of a small handful of Westfield developers at the time under the age of forty-five and probably one of the only females running a development of that magnitude in the entire city of LA.
In 2009, when the market tanked, I went to work with the gentleman who ran all of marketing and operations for the US centers, and he turned to me and said, "Jackie, find a way to make more money out of our existing centers." This was a great opportunity for me to be entrepreneurial under the aegis of a larger corporation. I wrote the business plan and I launched a subsidiary called Westfield Media Group in the United States. By year three they were generating sixty million in incremental revenue for the company.
Those projects really allowed me to learn a tremendous amount about launching and running nascent operations. They gave me confidence and allowed me to build the expertise, the skill set, the emotional intelligence to be able to lead teams, and to really know what it means to be an operator. After that, I was confident that I had the skills I was going to need to bring something new to market and build it on my own.
BST: You are a female CEO and co-founder who has successfully raised millions of dollars in VC funding. According to Pitchbook, in each of the past two years, just 2.2% of venture capital investments went to companies with female founders. What has the fundraising experience been like for you?
JB: Fundraising is almost always hard, especially for first-time start-up founders. It was no different for me at the beginning. I’m sure that there were some challenges I faced because I am female, but on the flip side, there were also significant advantages over others that I enjoyed because the network and reputation I built up from going to Stanford business school and from launching new ventures and lines of business within the corporations that I worked for in the first 15 years of my career. New start-up founders seem to often make the mistake of trying to go straight to VC’s, when frankly, there are other funding sources that are much more appropriate at a company’s beginning stages. I believe strongly that the first money in should be your own - why should anyone else put in their money if you’ve not put in yours? In my case, I sold my condo in LA I’d saved up for 15 years to buy, moved into a rental in Florida and used that money as my initial seed capital. After that, creative arrangements with strategic partners were a way I brought in lots of resources - marketing, tech, legal, etc. - that I’d have otherwise had to spend my capital raises on. Those strategic partners can also be great sources of good-value capital, since their larger goals are, by definition, aligned with yours and are generally broader than just making money on your exit. Lastly, I’ve found family offices to be a very good source of capital. They often have investment strategies that are not subject to the kinds of timetables and other pressures that VC funds generally constrain themselves with.
BST: Uber. Airbnb. WeWork. These companies have disrupted enormous industries that have remained stagnant for so long. Do you think this “sharing economy” is here to stay?
JB: I believe these sharing economy marketplaces are the natural and somewhat inevitable outcomes of the much larger dynamic of the networking of human beings and the reduction of the barriers to communication and cooperation that technology has brought at an exponentially accelerating pace in recent history. The basic human behavior of trade, at its base, is one human exchanging his or her efforts for another’s. A middleman who does not add value only adds friction and cost to that exchange. The sharing economy and online peer-to-peer marketplaces are the embodiment of what current technology allows us to do in order to trade most easily with one another, minimizing the cost and friction of unnecessary middlemen while adding benefits that make the trade easier.
In the case of Boatsetter, we’ve made it possible for the first time in history for a private boat owner, a renter, and a professional captain who’ve never met before to quickly and easily verify and have trust in one another. Boatsetter enables this trust-filled person-to-person exchange to happen and makes it safe by providing insurance, ensured payment to all, and a professional captain at the helm.
Human civilization as a whole has been following a relatively continual trend of trying to evolve our systems to reduce that friction with technologies like money, record-keeping, transportation and communication innovations, etc. Since society as a whole seems to benefit from and desire trade, I assume this millennial-old trend will continue and what we are now calling the sharing economy will continue to be around until it evolves into something that is even more effective at enabling humans to trade with one another.
BST: Just how big is this boat-sharing market? Is it big enough for Boatsetter to reach unicorn status, and is that a goal?
JB: Boat-sharing’s total addressable market globally is currently $50B and we are absolutely intending to grow ourselves into a unicorn!
BST: What has been your most exciting moment so far in terms of your company’s growth?
JB: Every time we make a huge jump forward in our growth, it is an incredibly exciting moment. I remember the thrill of our very first customer finding us on the internet and booking our first rental back in 2013, then the excitement when we emerged from where we launched in south Florida and were suddenly a national company with boats all over the US. Then a few years ago, we expanded internationally into the Caribbean, the Med and beyond and bought the top charter company in Ibiza, establishing us as the leader in that part of the world. Now, in this last year, our domestic and international expansion has accelerated and pushed us into exponential gains territory with our company growing 4.5X in the last 12 months. I’m guessing that the most exciting moment for Boatsetter’s growth is yet to come!
BST: What are the top three most important skills for a modern day entrepreneur to have to be successful?
JB: Tenacity, negotiation and fundraising.
Tenacity is probably the most important of these three. The essence of being an entrepreneur is that you are creating something brand new. You are coming up with new systems, new tools, new structures, new contractual arrangements - and each of these must be tested against reality to see if they survive. Over years, you are continually going to be doing an endless number of little mini-experiments, most ending in failure on one hand, but learnings on the other. With those learnings you adapt your approaches and you test again, adapt, test, adapt, endlessly. Tenacity is, to a large extent, fundamentally changing your relationship to the concept of “failure”. You must stop seeing not succeeding in an effort as a “failure”, and instead, see it simply as one of the many steps necessary to get to success. You only fail when you stop trying new solutions. Tenacity is the will to keep on trying until you get to success, and you need that to be an entrepreneur.
Negotiation - The company you build will be the tools you build plus the collaborations you create with others. What undergirds all that are the agreements you will negotiate. While it is essentially a given that no agreement you negotiate will be completely perfect, you have to have the negotiating skills to ensure that most of the agreements you go into are not bad. If you are concerned about whether or not you are a good negotiator, train up in it with reading and courses, and maybe consider honing your negotiating skills while working for someone else in a position where negotiation is a core activity, ideally under the aegis of a skilled negotiator who can guide and teach you.
Fundraising - Your number one job as CEO is to make sure your company does not run out of money. If you are not launching the type of business that can be break-even from the get-go and aren’t going to fund the company yourself, you’re going to have to fundraise. A core skill you will need when fundraising is storytelling, but the way you will tell your story will change radically as you move through different stages of your business. At the very beginning, when you’re just starting out and haven’t really built much yet, you are selling a vision and you are selling belief in your team. During this early phase, when you are pitching friends & family and angels, narrative and emotionally compelling storytelling will be core. Once you’ve got something built and have an actual product and customers, then your storytelling will become mostly about the numbers. This is an entirely different skill set, centered around knowing your business - your metrics, your finances, your cap table, your projections - inside and out.
BST: What does success mean to you?
JB: Ever since I was a small child, it’s been my dream to build my own company. It’s the vision I’ve always had for my life. Building Boatsetter is a realization of that lifelong dream.
My artistic love is sculpting. I have a muse that drives me to take difficult materials like stone and metal and wood and shape them into the vision that arises in my mind’s eye. It gives me a tremendous sense of fulfillment when I’ve succeeded in taking formless raw materials and crafted them into what I’ve envisioned. And hopefully, those pieces I sculpt impact those who see them in some way.
I suppose my entrepreneurial drive springs from the same place. Building a company is kind of a long-form, abstract version of sculpting - it just takes years instead of days, and creates something enormous, that spreads over continents. With Boatsetter, I’ve been able to begin with a mere idea, build up a powerful and creative team of incredible people who, in turn, are creating a product that is revolutionizing how people around the world get out on the water and bringing new generations and demographics to the pleasure of boating.
I guess for me, success is bringing together material and people and ideas and energy and creating from those thing strong and effective teams who create amazing products that, hopefully, impact the lives of millions of people for the better.