Backroads: Tom Hale. How a desk worker became a trailblazer in active travel
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode features Tom Hale, founder and CEO of Backroads, sharing his remarkable journey from quitting a dreaded office job in Las Vegas to building one of the world's largest active travel companies. In 1979, Tom woke up in the middle of the night with a wild idea: take people on bike trips. (07:24) With no investors, no playbook, and just eight pages of hastily scribbled notes, he launched what would become a 5,000+ trips per year business operating in 60+ countries.
- The episode chronicles how Backroads scaled from a one-man camping operation in Death Valley to a sophisticated travel company with 1,300 employees, surviving major setbacks including bike burglaries, van rollovers, 9/11, the Great Recession, and COVID-19.
Speakers
Tom Hale
Tom Hale is the founder and CEO of Backroads, one of the world's largest active travel companies. He's a former University of Oregon track runner who competed alongside legendary Steve Prefontaine before injuries ended his running career. After earning a master's degree in environmental planning, Tom worked for the city of Las Vegas before his midnight epiphany in 1979 led him to quit and launch Backroads, which has grown from a solo bike touring operation to a company running over 5,000 trips annually in 60+ countries without ever taking outside investment.
Guy Raz
Guy Raz is the host of How I Built This, NPR's popular podcast featuring entrepreneurs and innovators sharing their business-building stories. He's an award-winning journalist and podcast host who has worked extensively in public media, creating shows that explore the stories behind successful companies and movements.
Key Takeaways
Embrace the Midnight Epiphany But Back It With Action
Tom's story began with a random 2 AM wake-up call that changed everything. (07:24) He immediately wrote eight pages of notes about starting a bike touring company, despite having no experience in the industry. The key wasn't just having the idea—it was his willingness to quit his stable job and fully commit without keeping a safety net. This teaches us that breakthrough moments often come unexpectedly, but they require immediate, decisive action to transform from dreams into reality.
Bootstrap Through Smart Cash Flow Management
Tom discovered the power of "collect early, pay late" business models early on. (29:21) Customers paid deposits 90+ days in advance and full payment before trips started, while hotels were paid after the trips concluded. This cash flow structure allowed Backroads to grow without external investors for 46 years. For any service business, structuring payment terms to maintain positive cash flow can eliminate the need for outside capital and maintain full control over your company's direction.
Turn Crisis Into Competitive Advantage
When the 2008 financial crisis hit Backroads with a 43% revenue drop, Tom used it as an opportunity to fundamentally examine what made them better than competitors. (40:06) Instead of just cutting costs, he asked what they did exceptionally well and whether they were doing enough of it to talk about it. This led to upgrading from two leaders to three per trip and one van to two, ultimately increasing profit margins by clearly differentiating their premium service. Crises reveal what truly matters in your business model.
Obsess Over the Details That Customers Can't Articulate
Tom carried a notepad and pen everywhere, constantly improving logistics and operations. (29:01) He understood that customer satisfaction in experiential businesses comes from seamless execution of countless small details. From Dutch oven placement to bike storage, every operational element was systematically optimized through direct experience and feedback. Excellence in service businesses isn't about grand gestures—it's about perfecting the thousand tiny things customers feel but can't name.
Build Anti-Fragile Systems Through Redundancy
After a van rollover accident in Nevada left Tom with broken ribs, he and his injured team still completed the remaining summer trips. (30:55) Rather than viewing this as just toughness, it revealed the importance of building systems that can function even when key people are compromised. Tom learned to never rely on single points of failure—whether it was having only one office person or one van. Creating redundancy in critical business functions isn't expensive insurance; it's survival strategy.
Statistics & Facts
- Backroads runs over 5,000 trips per year in 60+ countries with approximately 1,300 employees, all while remaining 100% family-owned without outside investment for 46 years. (47:46)
- During the 2008 financial crisis, Backroads experienced a 43% drop in business, forcing significant layoffs but ultimately leading to a complete company restructuring that improved profit margins. (43:38)
- The company's customer base splits evenly into thirds: one-third repeat customers, one-third referrals, and one-third new business, demonstrating the power of word-of-mouth in the travel industry. (39:56)
