This Week in Startups - E1116: Cabana CEO Scott Kubly is building a fleet of hotels-on-wheels, shares insights on scaling an asset-heavy business, providing unique & flexible experiences to customers & more

Episode Date: September 29, 2020

Check out Cabana: https://cabana.life FOLLOW Scott: https://twitter.com/skubly FOLLOW Jason: https://linktr.ee/calacanis

This week in startups is brought to you by Silicon Valley Bank. For over 35 years, Silicon Valley Bank has helped thousands of tech and life science companies planned for the future. Learn more at SVB.com slash next. Silicon Valley Bank, Bill for what's next. Main Street, founders, you're owed over $50,000 by the IRS. Main Street gets it back for you in 20 minutes. Get back your cash at Mainstreet.us slash twist and Masterworks. The first company allowing investors exposure into the blue chip artwork asset class.

Skip the 5,000 person wait list by going to I.masterworks.com. Hey, everybody. Welcome to another this week in startups. I'm your host Jason Calacanis, and this is a podcast where we talk to founders. and investors and thinkers, journalists, everybody in the entrepreneurial and tech space who was looking to drive the human species forward with cool product, services, companies, startups, if you will. And today will be no different. If you look at what's happened during this pandemic, there is perhaps no category that I can think of that's been hit harder than

travel and hospitality. Airlines, hotels are crushed because who in their right mind, would want to get on a silver tube with a hundred other people breathing some amount of recycled air. Who knows exactly how dangerous it is to be on an airline on a flight? Maybe people are making a bigger deal out of it than it is. But it's clearly something that I'm not interested in doing until we get through this pandemic, to be totally honest. And another trend had occurred even prior to the pandemic, which is people like to get outside. They like to do that forest bathing. They like to get out there in camp.

And we had hip camp on the podcast, among other people, following this trend with products and services. Again, that delight customers and empower them to do interesting things with their free time and travel. And when I saw this next company, Cabana, I was enamored. And my friend David Sachs had invested in the company and introduced me to the founder. And I just thought, wow, I have been watching the van life hashtag on Instagram and other places. and been enamored with candidly people driving up and down the coast and across the country and going to the amazing parks, national parks we have here in America.

And I thought, wow, that's a great idea for a company. Of course, then cabana.Life, you can go check it out, came out with a fleet of vehicles that allow you for about 200 bucks a night to rent a van, a conversion van that has a bed and a bathroom and cooking equipment and all that great stuff. So you too can go live that great outdoor lifestyle, full disclosure. We have invested in this company. Not only have I, but our syndicate at the syndicate.com has invested in this company. And we're very pleased to have made that investment because we think this idea has legs.

Welcome to the program, Scott Kubli. Thanks, Jason. Thanks for having me. Well, thanks for having me on the cap table as well. I appreciate that. Tell everybody what was. your inspiration for starting Cabana. And then how is it going?

Because I know that there's been some great news about the initial fleet being sold out. So take that in whichever order you like. Yeah, absolutely. So, I mean, the genesis of the idea was really, I was working for Lyme before Cabana. And I was on the road, basically. The scooter company. The scooter company. Micromobility company.

Yep. And I was working there. I was on the road, probably 80% of the time. And I was actually down in Sydney, Australia for work. And I was sitting at a friend who I hadn't seen him in about 10 years. I was sitting at his dinner table. And we were just, you know, I had a really early morning flight. And so I was looking at maybe getting three to four hours of sleep and a pretty long Uber

ride back to my hotel. And I remember just saying, oh, my God, I wish my hotel were right outside your house or there was some way to bring all of my stuff. So I could stay at your house. Yeah. And so then we opened another bottle of wine. And we started riffing about what that would look like. I got even less sleep.

We started talking about like, could you do it before you had autonomous vehicles? How would it change after you had autonomous vehicles? And, you know, what would the form factor look like? And, you know, so then went back, forgot about it for a few months. And then I was at, as I was leaving Lyme, trying to figure out what I wanted to do next. You know, the idea kind of came back to me. I actually forgot the origin until my friend reminded me, the origin of it. And kind of worked on it in secret.

My wife was not really excited about me doing another startup. So this is like my version of cheating on my wife. It's like working on a startup without telling her. Honey, I have to tell you something. Exactly. I've been doing something on the side. It's a startup. And she was great.

No, she was basically like, yeah, it's the only thing that I can see that's making you happy and interesting you about work. So do it. Find a side hustle. Set a deadline for raising money. and you can do it. And so that's kind of like the origin story. And how it's going?

I mean, it's been going really great. I mean, September, which is wrapping up, we're, you know, 85, 86 percent occupied. Our room ranks up to over $230 a night. You know, and 85, 86 percent occupancy, you know, that is like approaching kind of like a practical limit because we have to take cars out or vehicles out for maintenance. Got it. Sometimes people drop it off on a Tuesday, pick it up on a Wednesday. But really going well. Explain what the 1.0 of the van is.

What type of van is it? What is the experience like? Yeah. So, basically, I mean, what is the experience? Like, it really, like, what we're shooting for, and I think what we're getting pretty darn close to is a hotel on wheels. So the idea is something super simple as all the amenities that you had got in a hotel room. So super comfortable bed, like 8 inch memory foam mattress. television, free Wi-Fi instead of trying to upcharge you on it. And then a full shower and toilet and sink,

right, so that you can, you know, get cleaned up. I'm six, four, and I was kind of our design human, so it fits me. And then it's got some social space. So you and whoever you're traveling with can sit down and have a glass of wine or a can of beer. And all of that is fit in Ford Transit high roof van that's about the length of a Chevy suburban. So it's a Ford Transit 250.

Is that the model number? Correct. So that is a shell of a cargo van, basically. That's Ford's platform vehicle around the world for doing commerce, right? Like if you were a plumber or you're delivering, it's got the sliding doors on the side. It's got a nice high ceiling by default. And it's a really well-built, rugged shell of a vehicle. But you had to build everything inside of it, correct?

You're doing that on your own custom. You're customizing the inside of these. No, that's exactly right. So it's, you know, everything from, you know, kind of like running all the wiring that we need, insulating it so that you can, you know, sleep in, you know, outside of ski resort in the middle of winter all the way to, you know, kind of like finishing out so that finishes, the fit and finish like, it fits kind of a hotel room. And those, I know those transit fans cost about $50,000. So then you spend another 50 grand outfitting it or something in that range? Our first set of vans, the first 10 vans that we built were right around 100K to build out. And then the next batch of vans that we're currently building, same model, same buildout is coming in at around 80. Okay. So you got some economies of scale building the 20th or 30th one is a little bit cheap.

Exactly, exactly. And we think we can bring the cost down to probably 65 to 70 before we get into like, you know, really modular production. Let's talk about the water system in there. You said it's got a bathroom with a shower and a toilet. Yep. That to me seems incredible in such a small footprint. How much water is stored in the vehicle? How long of a shower can you take?

And then how many times can you reasonably use the bathroom? I don't want to get too graphic here. Yeah, yeah. I was curious about that. And then if you were on a road trip, how would you get the water out and evacuate the toilet. Yeah, no, that's great. So, you can basically, we have 45 gallons of freshwater storage, and then we have 45 gallons of gray water storage. So that's basically the shower, you know, runs the shower system. And then the toilet has about five gallons of water storage or waste

storage. So right now you can get on the order of about 80 minutes of shower time in the van. Yeah, so we're constantly looking at what is the limiting factor in terms of. of allowing you to go off grid. And so we put like kind of a regulator in the shower head that gives us a ton of range. The toilet right now, if you have two people traveling and assuming that everything is going well, you know, with your diet, you probably get four to five days off grid. What happens at that point is you can basically take it to anywhere, you know, that you can service an RV and you can just dump it out yourself and refill the water.

If you don't fill it up, you know, before, say you're on a shorter trip or you don't fill a whole thing up, we take care of it for you at the end of your trip. So you basically, if you're taking a shorter trip, it's no must, no fuss. We take care of everything. All right. When we get back from this quick break, thank you for letting us know about it. You got a couple of days of showers, a couple of days of using the bathroom. You can then service it yourself if you go to a RV hookup station, which there are plenty of them around and have that changed out and keep going, keep on trucking as it were. When we get back from this quick break, I want to understand what the legalities of these are and are,

I'm obviously going on a campground and paying to be at a campground is a no-brainer, and that's well-established. I'm curious, what is the experience of people parking on the street, i.e. if I would have drive this to L.A., could I just park on the street in L.A. somewhere and sleep? And is that the intended purpose to compete with hotel rooms, heads up, in major cities? Let's talk about that when we get back on this week in startups. This week in startups is brought to you by Silicon Valley Bank. What's next? What if? Are we ready?

Now what? These are the questions that can keep founders up at night, and no one understands this quite like our friends at Silicon Valley Bank. For over 35 years, Silicon Valley Bank has helped thousands of high growth companies by providing scalable financial solutions, along with insights and expertise that many other banks just can't. From healthcare or hardware, software to infrastructure, Silicon Valley Bank works with companies across the innovation landscape at all stages of the journey, anticipating their needs before they do. And by providing access to insights and in-depth reports, SVB can help you make more informed decisions

and assist in turning your great idea into a great business, which could be why 50% of US-based venture-back tech and life science companies bank with SVB. Will your business be next? Learn more at SVB.com slash next. Silicon Valley Bank built for what's next. We're back on this weekend startups with Scott Kubli from Cabana. You can check out Cabana.coma. Life to see there $200 a night rentable vans that have a bed, a shower, a bathroom, and a stove. And it's incredibly well laid out. It's like a really modular micro home on wheels for only $235 a night, I think is the official price. Is that right? Yep. And are you doing surge pricing, or is it just going to be like set it and forget at $2.35 a night? Right now, it's just $2.35 a night.

You know, we anticipate that we'll get more to a hotel pricing model down the road. And do, what's the average number of nights people have been renting it for? This service has been now for a couple of months now. Yeah, it's about four and a half to five. A little longer in the summer, a little shorter in the winter. Got it. So people are weekend warriors or maybe taking it for a week. Yeah. To my question before the break, I'm curious, we here in Silicon Valley

are seeing people with RVs parking on the street, up and down, El Camino Real. From what I understand, professors at Stanford were staying in RVs because there was an inability

to pay for housing in the Bay Area because of prices. And people were parking the RVs. And when I lived in L.A. in Marina Del Rey in Santa Monica, there were these weird side streets where you'd see RVs parked permanently and people were obviously living in them. What are the basic regulations of parking,

an RV or a van and sleeping in it overnight? In a city, it's really various jurisdiction to jurisdiction. So here in Seattle, where we started, it's completely legal to sleep in a well-maintained vehicle. And so, you know, if you want to get like the million-dollar view, you can absolutely get it. You don't have to worry about getting hassled if you're parking, you know, about parking illegally. I've stayed in San Francisco, you know, three or four nights when I brought down the vehicle to show to David and a couple other investors. Stay down in the financial district one night, uh, in the hate, another in the outer sunset visiting a friend. No problems. Generally speaking, can't get a little loud. You might have, the hate, it didn't get a little loud on

on the street. No, I might have had too much to drink. So I walked back to my van from that to be clear. To be clear, I walked back. Yeah. And it was plenty quiet. You can sleep drunk in a van. You just can't drive the van drunk. Correct. That is, yes, 100%. No, so every city is a little bit different.

I think L.A., it's legal in some places, not in others. And it varies, like, when they renew the legislation. That makes it so. But generally, you're good to park on the street. Yeah. Is there any best practice around that in terms of security? Yeah. I mean, my thing would be, like, draw your curtains, right?

Yep. So that, you know, it's, people can't see a light. on coming in from the outside. That's for your privacy and theirs. You know, I wouldn't park in front of somebody's front door, right? Like, if you're, you know, if there's a side street that doesn't have a front door on it, park there. If there's a park across the street, park next to the park, basically don't take somebody's parking space. Yes. You know, if they're a resident, and you're generally going to be okay. You know, if you're staying in a place just a night or two, nobody's going to notice you until you're gone, right? And these vehicles are really well

maintained. They look good. And so, you know, generally speaking, wherever you are, you know, you're not, you're not going to get complaints from the neighbors is what we have found. And do they have like the logo of or are they just plain? It's a subtle branding, but it does have the logo on it. Yeah. And the brand name. And so are people actually using them in cities as opposed to using a hotel room?

because I always dreamed when I was on a budget, it would be very cool. When you used to come to Silicon Valley, and I would go up and down to Santa Road, you had to have a rent-a-car and a hotel. Rent-a-car was 100 and change a day. Hotel was 200 and change a day. Exactly.

Put those two together. You're at $4,500 for the day. And here, you're $2.35. You're basically cutting your costs in half. Yeah. No, I mean, that's exactly the vision, right? It's like you have, like, the ultimate flexibility. You can move around without checking in or checking out of hotel rooms.

And what we found pre-COVID, we had about 50% of our travelers or customers were locals and 50% were people coming in from out of town. Those people coming in from out of town, I would say about two-thirds of them were using it to stay in the city at least one night. We've had people use it for Thanksgiving, like the spare bedroom when the in-laws come in town. Ah, very smart. Or that are planning on using it for that per kind of like their inquiries to us.

We've had people use it as a spare bedroom for quarantining when they're visiting relatives. You know, so we had one guy who rents an Airbnb, who has an Airbnb-based bed and breakfast, who actually rented one so he could park it in his driveway so he could rent out a room in his Airbnb. Ah, right. Right. Because he's probably getting more than $2.35 for his place. So you get the arbitrage between those two things. And so who is the customer today?

And I know it's early days. You've got what we're here in September of 2020. You've got two dozen of these, three dozen of these on the road. How many have you have on the road? And what's the early adopter look like for you? Yeah, we have 10 on the road and we have 24 more, 25 more on the way. That'll be opening a few new markets. So early customer is, I would say, generally 25 to 45,

trending to the early 30s, usually couples, about 50, 50, male, female. mostly people that have never done this before. Interesting. So, you know, it's people that probably wouldn't use a more traditional RV. They're not like the hardcore dirtbag climbers or, you know, mountain bikers. They want like an elevated experience, but they want to get out into nature. Because we've basically seen gone from 50, 50 locals, tourists to 95% locals who are just using it to get out of town.

Ah, that's fascinating. So you're only operating in Seattle right now, correct? Yep, correct. And so you would think it might be people coming into Seattle, then taking it, doing a business trip, and then maybe doing a little off-roading. But instead, it's the people who are in Seattle who are doing a weekend away or a long weekend away and trying to get a road trip under their belt.

Exactly. And that's I, you know, it's funny because when we first started, we were absolutely like going after kind of hotel replacement, the bleasier traveler that's trying to do like a business trip and then some climbing or, you know, whatever. What did you call that? Bleasier. business leisure. It's a portmanteau.

So yeah, but what we found is like really like COVID. Wait, business leisure travel. Yep, exactly. So this is like a thing that people actually do. Wow. Leisure is an actual term. There it is. Bleasier travel, B-L-E-I-S-U-R-E-T travel, is a portmanteau. I guess a portmanteau is a combination of words. Is that what it is? Yeah, exactly. A portmanteau is a large trunk or suitcase or a word blending the sounds and combining the meaning of two others.

For example, Motel from Motor and Hotel. Got it. Or brunch for breakfasts. I didn't know what a portmanteau was. But I'm actually now, this is why you should listen to this week. It's right. Now I've learned two buzzwords for your dinner party. A portmanteau is actually one of those suitcases that had all the different,

um, you know, equal parts. It's like one of the ones that folds up. Did you know that that's a portmanteau as well, Scott? I did not know that was the origin, but I love that all of the examples are travel related. Yes, a portmanteau is a word, unless it's by words, but it is also a large, trunker suitcase, typically made of stiff leather and opening into two equal parts. So you know, when you open those and it would be like a bunch of liquor bottles on one side and, you know, like the cocktail equipment on the other, it's, that's a portmanteau.

I love it. I did not know that. I just, yeah. The portmanteau is a lost art. You know, I feel like it is. So, yeah. So anyway, so what I love about it is it, when COVID hit, we were doing well before COVID. You know, we had done a soft launch.

We had every single booking we had cancel. And it was really scary. It was quite scary. That's pretty scary. Right? So, you know, we did a lot of belt trimming or belt tightening and things like that. But then, you know, it started taking off and it like flipped from tourists where we were trying to try to get into this urban hotel replacement to locals that are trying to get out

town and it really like causes light bulb to go off on my head which is basically you know what we're offering is just flexible lodging wherever you want it right whenever you want it and you can use it for whatever you need to use it for and right now people are using it to you know take road trips we've had somebody you know we've had folks go all the way to Michigan or Austin Texas to visit relatives because they don't want to fly anymore that makes total sense I mean in a pandemic the fear is not your hotel room because we've gotten pretty close to understanding that contact, you know, with surfaces and stuff like that is a very hard way or it's a very low risk activity according

to everything I've read. But the high risk activity would be being in a closed space with somebody, i.e. an elevator or a hallway is almost the definition of that. And then being in a hotel that has recirculated air, that's the big killer, is recirculated air. So this is like a hotel room with no lobby, no elevator, and no recycled air. Yeah. And even on the surface as front, like we disinfect between every visit. We actually blast it with UVC light. You know, basically anything that we can do to, you know, minimize risk. All right. When we get back from this break, I want to understand the economics of the business I've invested in because you and I

haven't gone too deep into this, even though I'm an investment. But doing a quick back of the envelope math, if you were to rent this thing for 300 days or so a year, which seems possible, if not probable, but even 250. 250 times $100 to be $25,000 a year in revenue, $200 would be $50,000 in revenue. So it seems to me that these can do $50,000 in revenue. They cost 80. There is a business here. I want to understand the economics of how this scales and how to scale an asset heavy business like yours when we get back on this week and start. If you're a founder, the IRS owes you some serious cash. Now, we're not telling you to go full Tony Soprano and break their kneecaps,

but the only thing stopping you from claiming your cash is much worse. Paperwork. Yeah, you got to do all this paperwork to get that money back. Well, that's where Main Street comes in. They are experts at getting you the biggest possible slice of the billions, the IRS sets aside each year to encourage and support startups. It takes only 20 minutes. and they grab all the data directly from your payroll system,

and they save startups an average of $51,000 in just the first month. Plus, they'll keep fighting for you after you onboard, qualifying you against hundreds of tax credits every month for free. They only get paid when you win your cash back. They win startups more money every day that I invested in Uber. That's right. Sandbox VR got back to 82,000. Italic got back $12,000.

It really is that simple. on board, wait, and get cash. Sometimes things that sound too good to be true can be good and also true. They're trusted and backed by the best in Silicon Valley. Product Hunts Ryan Hoover, who's been on the program as an investor, shrug capital's investor, gradient's investor, Raq Comways, SV Angels investor. They are the real deal. And Twist listeners can get 25% off their fees for life by visiting Mainstreet.

us slash twist, mainstreet. dot us slash twist. For more details and a priority onboarding with somebody on their team. Go ahead and check out mainstreet. com. Welcome back to this week in startups. I love having a company we've invested in on the pod because I get to explain my thesis to you, my listeners.

And one of the great things, great joys in my life has been able, is being able to share my deal flow at the syndicate.com. Now you have to be an accredited investor. to be part of that, which means you're in the top 5% of earners in the United States. But that's going to change. The SEC is working on expanding the definition of accredited investors. Scott, you've announced the round that we invested in or not? We're announcing it.

We're literally doing it right now. Okay. So I invested some money in the company. What did I invest? And I did the last round. Yeah, yeah, yeah. Between you and the syndicate, I think it's around 700K,000. Between the first round and the next round.

Yep. And this was a seed plus or a seed extension. Basically, we did a 3.625 seed. And then we did an extension that was, I guess, what would it, 1.175 in equity. And then we closed a $2.3 million debt financing or equipment financing round. So that gets us to our discussion here about the scary nature of investing in a hardware business for me as an investor. Obviously, we have CafeX. or density of hardware business,

where we've had some startups that didn't make it like butterfly and Bertie, the smoke detector and the camera company. So we've got our scar tissue with hardware companies and we know how challenging it is. You have a very asset-heavy business. How does one convince a world-class investor like David Sachs to be involved in investing in this

when people hate hardware businesses and they hate things that are asset-heavy, the asset here being this $80,000, van, you have to buy as opposed to just building software. Like, couldn't you have made a marketplace of vans that you could rent as opposed to actually owning the vans, right? Uber doesn't own the cars famously or Airbnb doesn't famously own theirs. Why did you choose to own your vans and own that experience?

Well, what we wanted to do is own the experience. I think that puts the, hits the nail right on the head, which is, you know, there are marketplaces out there for vehicles and, you know, and housing. I just had a really horrible Airbnb experience this week. Oh, really? What happened? Like, well, the listing didn't meet expectations. There was like rat droppings and, you know, it wasn't clean.

There was a leaky roof, a smoke detector that wouldn't turn off. Did you just bounce? Did you just leave? Oh, no. I mean, it was everything grew on itself. It was a pretty big space. So we kept finding problems. Oh, my Lord.

Anyways. But yeah, we wanted to basically control the end-to-end experience and make it. a really elevated experience, which I don't think you can do with a marketplace. I think there's all sorts of different kinds of businesses that you can build. And I think from building an asset heavy business, I mean, right now, you know, to get started, yeah, we own the vans. But longer term, like our big challenge is how do we get more capital efficient? And that can be, you know, equipment financing.

It can be, you know, a franchise or license model. can be an consignment model. So there's all sorts of different ways that we can get asset light. What we want to do is like first and foremost, like basically get our unit economics dialed, right? So you mentioned, you know, 50, 60 grand a month or a year per vehicle. Is that right? Am I nailing it right there? Yeah, ballpark.

Yeah. I mean, the unit economy is basically you're running a hotel. That's basically what we're doing is we're running a hotel. If you're building a hotel, you know, you're building like a boutique hotel in a downtown. You're spending three to $500,000 per room. We're building them for 80, right? Ah, so that's an interesting way to look at it. You have shaved off 80%, no, 70% of the cost of building a room.

So you're doing it for one-fifth maybe or something like that? Yeah, exactly. Yeah, the cost. Call it a fourth or fifth. And then instead of taking two to three years to get a COP certificate of occupancy, you're getting them, you know, you can get them built like right now where they're hand-built versus, you know, really dialing our supply chain. It's two, three weeks per van to get it built, right, versus three years. So it's faster to the market. You can build them

one at a time instead of 50 to 100 units at a time, right? So that's better. And then they're mobile. And so if the market tanks, you can move, or through you have a lot of seasonality in a market, you can move them where the demand is. And so you can optimize your occupancy. The union economics, big drivers are room rate, vacancy rate, or occupancy rate, and then your cap X, right? And then... Well, it's also staffing, too, right? Like, at a hotel, you have this whole staff. So you've also swapped out having to have a concierge and a lobby staff and a bellhop and all that stuff.

Yeah, I mean, I don't like, you know, I feel like I don't want to, like, give away all the secret sauce and, like, tell people how easy it is because it's really hard. And we started by... I mean, you're going to have to also maintain these vans. There's going to be accidents. Things are going to get damaged. I mean, this is a mobile hotel room, so that adds a whole different level. The hotel rooms, you can keep an eye on them, right? Yeah.

Oh, and to dissuade any would-be competitors, I did clean toilets on my front porch for six months while we were getting up and off the ground. Lest anybody want to take on this business, it's going to be brutally hard. I mean, I knew this is going to be a hard execution business when I invested. And as long as the founder is up for that, then it's, fine with me, right? You know this is going to be an operationally intense and you worked at Lyme. So there must have been some lessons from Lyme. What lesson did you learn in the micro mobility space? And do you think those micromobility companies are going to ultimately be profitable in work?

Yeah. I mean, I don't know. That's a long pause, Scott. No, I mean, I don't know. I don't like, I don't know. I was what I liked about this business. How about I focus on what I like about this business? Yes. Well, it's also, but also the lessons from Lyme, I mean, the scooter companies, they have challenging unit economics, right? They do. And so what I really like about this business is there's a lot of similar muscle memory and technology and things like that, user flow and whatnot. It's very capital intensive, as you mentioned, but from an operational standpoint, like,

there's a lot of details that are much more intense here, but there are some that are way easier. And what I like about it is that I think the barrier to entry is higher. And I think your success is predicated more on execution than capital availability. So when I look at like a lime bird fight, it's really about like your customers are competing for price and they're choosing based on price and proximity, right, and to a much lesser degree quality. And with a, you know, average transaction of three or four dollars, right, is pretty hard to create an experience that, you know, people are going to choose you, even if they have to walk a little further. Whereas, you know, our average transaction is, you know, $1,200, right? And so we really, really can focus

on high quality execution and it actually matters. Yeah. And so that's, that to me, a lot of the lessons learned are kind of on the operational side, but then, you know, the lessons to unlearn are you really, really have to focus on the consumer experience and you can't, you know, everything needs to work. And so when you're turning over the vehicle, what is that process like and where do you keep them? Like there's been this thing where you like leave the cars and people come up to them and they open them with an app for get around or, you know, zip cars and stuff like that.

Is that the plan here is to have them in a central location or to have them living in a bunch of remote locations, have remote cleaning crew go? Or how do you handle all that? And how do you think about the drop off pickup kind of scenario? No, it's kind of that distributed hardware model. And we basically, right now, we basically have a box truck that serves as a room cart. And we just drive between the vans and turn them over. And the box truck's filled with all the things that you need to do to turn over, you know,

six to seven rooms a day. Ah, so you can drive up to the car and you can. change the water and your box car has water in it? Water, wastewater, bedding, you know, sundries, you know, kitchens, tableware, like everything in the back of a box truck and we can turn a room in about 45 minutes. Wow, that's absolutely fantastic. Now, what about, you know, the thing I was attracted to with this business was there are sometimes when, I think you've got a great business and people just sort of taking these on the road

and, you know, that kind of business, the weekends, the staycations, or having people at your house, you need an extra room, I get it. The thing I was fascinated about was if you could get to 10,000 of these rooms, let's say, and you had a thousand of them that were mobile, when there is a festival like Coachella or there is a conference like Salesforce, you could ship these thousand incremental units to a location like, you probably wouldn't want to take them to Burning Man because it could get pretty beat up. But you could take them to Coachella with permission and park them in a Coachella-like situation. And Coachella could rent them for $500 a night and have on camping, on campground, you know, sort of pop-up hotel. And you could monetize it for an even greater amount. I'm curious about your plans for mobile swarming hotel rooms when we get back on this week and start-ups. Hey, everybody, I want to tell you about an amazing new website, masterworks.io. This is the first company that allows any type of investor, whether you're a retail investor or accredited.

You guys know the definition there, to gain exposure into the blue chip artwork asset class. Many of you are saying, hey, I'd love to be an art, but I don't know how to buy a painting. Well, Masterworks.io takes care of that for you. I even had the founder, Scott Lynn, on the podcast back in July on episode 1087. You should go watch that. It's fascinating to think that art has appreciated so much. much over the decades, and it's really hard to get exposure to that asset class. Well, this is Scott's genius. He created essentially a syndicate where you as an individual can buy shares in an amazing

Picasso or a Warhol or a Basquiat, any of these amazing artists. And the appreciation has been 8% to 30% annually. You can look all this up online. Well, how does it work? It's very simple. Masterworks buys a painting and then it sells shares to investors. Just like Netflix or Uber sell shares to investors or Tesla, they sell a portion of that piece of art to you, the individual retail investor. And when that painting sells, you will receive a portion of the proceeds. Or you can trade your shares in the platform. So now there's a secondary market where if I bought, you know, Picasso's and you bought the Warhol, I could sell you some shares in mine. You could sell me some shares in yours. And there are 5,000 people on the wait list right now.

But fear not, Twist listeners can skip to the front of the line as it should be by going to I. Dot, masterworks. Dot, I.O. slash twist. It's very cool. The bottom line is you're going to be able to diversify your portfolio by investing in an asset class. That is not correlated with the stock market. Art is on its own trajectory.

That's different historically than the stock market. And you can get in on it by going to I, the letter I, dot Masterwork, dot i.o slash twist and you will skip the 5,000 person waiting list. Okay, great job, Masterworks. And let's get back to this amazing episode. Welcome back to this week and startups. I'm your host, Jason Callaghanis. You can follow me on Twitter. I'm at Jason or Instagram at Jason or jason.com. If you still use that, I don't. My guest today is Scott Kubli. He is S-K-U-B-L-Y on the Twitter. He is the CEO and co-founder of Cabana, which you can visit at cabana.com. They have very fans in Seattle right now that you can rent for 200 and change a night and have an amazing

experience. And soon you will be in another city? A couple other cities. A couple of other cities coming soon. How do you think about picking the second city? Are we going to announce a second city here? We will be, I mean, it's on our website. So we're going to be launching a couple California cities in the late fall.

Late fall. Yeah. And how do you think about California? L.A is a no one. no-brainer. Yeah, L.A., San Francisco, San Diego all seem kind of like no-brainer markets. I think you probably have seasonal markets as well, you know, or smaller markets. Like you'd easily see a Tahoe market, Sacramento. For sure. Yeah. So, and then also you could, do you allow people to drive it somewhere and then pay you a fee to bring it back? So if I wanted to drive, you know,

from San Francisco to San Diego and hit the San Diego Zoo and go to Legoland, but that's, and I wanted to drop the van off and, you know, stay there or something. Yeah. Have people requested that yet? We've had a fair number of people requested yet. We just haven't been able to satisfy it yet because we, you know, we can't make that work until we're a little bigger scale, but that's absolutely on the roadmap. And what about picking people up at the airport?

See, I think that could be a huge unlock. If I could just say, for $100, pick me up at the airport with the van. Exactly. That would be killer. Can you imagine you get to LAX and you just get picked up in your van? put your bags in and that's it. And then when you get dropped off, the person's waiting there to pick up the van again. Yeah, that's kind of the vision is basically to have it exactly where you want it when you want it. Oh, so good. Yeah. And so, you know, we're not there yet. Like concierge is just going to

take, you know, a little bit to get to. We want to figure out, like, we want to make beds really, really well and clean vans really, really well before we start trying to, you know, ratchet up the, the complexity of the operations. What about this idea of the swore? hotel for places that need an extra 500 rooms, an extra thousand rooms for the Super Bowl, and you can take over a Costco parking lot and have the central water truck going and cleaning things out on demand. No, I mean, absolutely. So I shared a little bit of the origin story with my trip to Australia, but the other

was when I was commuting from Seattle to San Francisco for Lyme, I was basically staying in the tenderloin every single week. What? You crazy? Why? Because they had a budget? You're a masochist? You crazy?

Yeah, a little bit of both. All of the above. No, I mean, I just like, I don't know. I view it as a badge of honor to see how cheap I can like stay. Yeah. Don't be a hero. This is my advice. Especially if you're on a corporate account.

Don't be a hero. Yeah, you know, this is like I started like when they were like a series B. And so, you know, yeah, it's a little smaller company. Tendoline is crazy. I would not, I'm going to go ahead and say, please do not park your cabana life van. the tendriline as an investor. I'm not sure if you're going to survive that. But what about have you?

No, I mean, I would see dream. You could basically map conferences by room rate. And so like dream force rolls around and your $120 hotel in the tenderloin goes to $450 a night. Yes. It's still available. Right. And so that was kind of this genesis of you can surge supply and demand, whether it's to a

Dreamforce or a Coachella or South by Southwest or a NASCAR event or a Super Bowl or like a big 10 football game on a Sunday. Saturday, rather. And so how do you think about an extended cab product? Because I notice you've picked like the, what I think the 250 is like a mid-size conversion. But there are larger conversion vans that go a little bit wider. Have you thought about putting like a table in the middle and,

you know, two more captain's chairs and making an Excel version of this? Yeah. So we do have a table in there now. But yeah, We're working on what we call our family van. And it's basically going to be a four-passenger van, generally four passengers for, you know, kids that are, you know, preteen, younger, right?

Or like probably one adult. There'll be a second bed set up. You can pull out of a couch or something. It'll be slightly longer, right? But not too much longer, about 20 inches longer than the existing in the same width. And basically, like, that's the, that's, I think one of our big, one of the pieces of our secret sauce is I think we have really, really amazing design. and are really, really creative about how we use the space.

So basically we're going to have one of the beds drop out of the ceiling. Sweet. And one of the beds sort of like where it currently is. And then you'll have a second row of seating. We'll keep the shower, keep the bathroom, all of that stuff. Yeah. And you can park. These are only 10 feet tall, right?

You can get into most garages or not? Not garages. So yeah, they're about 10.5 feet of clearance. So most garages are in the seven, six to eight foot range. So surface lots all. and like definitely look for bridge heights. Ah, there are some bridges that this wouldn't take it. Yeah, not too many.

Not too many. Like I think there's one in like the, or a couple in the Seattle area that are problems. Got it. And so what do you think the eventuality of this business is and what are you going to need to get there? Obviously, this financing is great because you can, you can what, spread the payments out for one of these for five years?

Not quite yet. Like three years, but three years. Yeah. And what do you think the duty cycle is, three years? Three to five. Three to five. And then I think we offload, we sell them as used vehicles. So we've already had a fair number of our customers inquire about buying them.

The builders that we use have already started taking orders for them, a few orders for the exact model. Oh, so your builder will sell them directly to people. Yeah. This is like the tough part about being a startup is like you're not negotiating from, you know, a great point of leverage when you start. So yeah, our original builder is able to sell them. But long term, we're going to own. We're going to own that as well. Yeah.

I was about to say I would love to get one of these for 80 grand or 90 grand. And so have you gotten any of these deals yet for an event yet? Not yet. I mean, we're small enough and like there's no events going on right now. It was interesting. I was talking to somebody that is with Golden Voice, which I think is the company that does Coachella. And his observation when he saw the van, his observation was like, actually it's for the talent.

He's like, you know, you're on a tour bus with a bunch of different people. This is like your own hotel room right next to the tour bus, right? So I think there's a lot of different avenues that we can pursue as we start to scale. Yeah, for sure. Is it too cheap right now at 2.35 a night? I thought the pricing was too cheap, but I don't know. And do you do a weekly? We don't do a weekly, yeah.

It's 2.35 a night. So we started at $200 and that was definitely too cheap. And so we started raising our prices to $2.35 and our bookings actually started going up. That's what I was thinking is like it's a little bit too cheap and it would make me think that it's not going to be a great experience. I feel like it needs to be $300 a night is the right price. Yeah. I mean, we're going to, I mean, we're still testing and learning, right? So, you know, we want it's what I would say is from a customer experience standpoint, it's easier to start lower and go higher versus.

start higher and go lower. Yeah. Right? Because then, you know, if we pick the wrong number and drop, then every customer that booked early, you know, is going to be a little bit disappointed. Is there a limit on where you can take it right now or how many miles you can put on in a day? We, so unlimited mileage.

We give you a free 100, I think 100 miles a day. And then after that, it's about 35 cents a mile. You can take it anywhere in the U.S. And Canada. Wait, so it's not unlimited. It's, yeah. I mean, you could. drive it as much as you want, you get 100 free miles, right?

Oh, God, okay. So you can drive it as much as you want, but you have to pay. So you get 100 miles a day. And if you go above that, you pay. So if you were to take it for five days to L.A. and back, that's 300 miles. So you would basically be 100 miles over for 35 cents, which would be another incremental 35 bucks. Exactly.

So not that much. So if you did take it, if you do an extra 200 miles a day, you go to 300 miles. $300 a day. Yeah, exactly. But the idea would be you'll be driving somewhere and parking for three days, so you then accumulate another 300 miles for sitting there. Exactly. So, like, we give you 200 miles the first day, 100 miles the every day thereafter.

Oh, you do it by day, not the cumulative. Yeah, because basically for the first day, that way, if you just take it for one night, you get 100 miles on each end, right? And then every day in between, you get 100. Got it, got it. And then, yeah, anywhere, U.S. and Canada, you know, our current insurance policy doesn't allow us to go into Mexico yet. But obviously, we'd love to, you know, if you're in L.A., the ability to drive it down to, you know, Baja would be amazing. How long does that take?

Somebody told me they drove down that and I was like, I'm not sure I want to drive down the Baja Peninsula or not, but how long would that take? I don't know. You just talked to my co-founder. He, like, has driven from British Columbia down to Panama looking for surf spots. So, really? He would be the guy to talk to about that. Well, I mean, I think that's where this van life thing started as you had all these, uh, You know, rock climbers, like the kid who does free solo. Exactly. He lives in a van.

Alex Honnold? Yeah. He lives in a really raw conversion van. Yeah. If I was like in my 20s and single, that is the lifestyle that I would want to be living right now. But I'm not in my 20s and singles. And single so I need like a little more luxurious product.

So you all know you're successful with this business when what happens. What do you think, you know, for you personally, you need to see in order to know that you've you figured this out. Oh, that's a really good question. Are there milestones you're thinking about for the first year or two that you want to hit? I mean, raising money was one and getting to 86% sold out. Those are good signs. Yeah, I mean, like, that's a really good question. I just like, I'm so focused right now and like, like, getting the experience done right that I haven't like stopped to think about like when do, when does this like when is good enough and like when is enough enough? You know, I've always been

kind of motivated by trying to make a mark on the world. And so I guess, like, once we've achieved that, that will be when we have achieved success. Yeah, I'll say 10,000. I'll say you have a thousand. I think a thousand would prove that the scales. A thousand would be $100 million in cars on the road. Yeah. I mean, if you're talking like literal, just like business, yeah, like I think 200 vans is when

we start being self-sustaining, right? Oh, you can pay for the executive team and all that kind of stuff. Exactly. Two hundred vans were self-sustaining, great lifestyle business, right? Like a thousand, five thousand, right? Like 10,000 vans. That's where I think like we start making a mark, right? Yeah, you'd be at 10 million in revenue a year easily. Yeah. When people like think about a cabana, they're thinking about a van instead of like a pool side. Yeah, that would be great too. That is success, right? All right. Well, listen, continued success. Thanks for including us in the journey. It's a privilege to be able to be a shareholder in the company. And are you hiring now? Are there any positions you're hiring for? We are. We're hiring for engineering talent. So to help us build up the tech platform.

And can they be anywhere? Can they live in a van? Yeah, they can live in a van down by a river. They can live wherever they want. Great. So if you're a developer, you know what to do. First name at cabana. Dot.

Wait, what's the URL again? Cabana. Dot life. Yep, Scott atcabana. coma. There you go. Scott atcabana. adult life. Thanks for including us in the journey and continued success. And yeah, I would like to

get one of these. If you can get me one, I'd like to buy one. But I'm not to wait for the family one because I don't want to take the kids. But when you get the family one, just put me down for one, okay? We'll do. Absolutely. All right. Continued success, Scott, and everybody who wants to work at a super dope company that's in the seed stage and get some of that yum yum founder early stage equity. Now's the time, people. Get on the journey. And you get 10 free nights of staying in a If you take the job. Is that okay as a signing bonus?

10 free cabana nights? Absolutely. 10 nights as a cabana bonus. And if you refer the person, you also get five free nights. A five-night referral. Sure, absolutely. There you go. Use the promo code, Jason.

You get free espresso. Now, you put one of those pot coffee machines in too, right? Yeah, yeah. I mean, it's literally like everything you get in a hotel we've got. You know what I notice is? The more expensive the hotel I stay in, and Scott, I'm very successful now you know, I stay in very expensive.

hotels, you understand. And I used to be on a budget. And this is the thing that's making me crazy. When I was on a budget, I would stay at extended stay hotels because you would get a suite. Yep. And you get a kitchen. And you would get a coffee machine and you get coffee and you could make some eggs and you got free

Wi-Fi. And then I start staying at like these expensive hotels. No coffee. I stay at the Beekman Hotel and I asked them to put a coffee machine in the room. we don't do that. I'm like, I'm spending $600 a night staying at the Beekman in New York. I'm like, I'm coming. I'm staying for 10 days. I'm giving you $6,000. Put a goddamn coffee machine in the we can't do that. I'm like, okay, I'm going to stay in another hotel if you don't put a coffee machine in my room. And they're like, sorry, sir.

I'm like, did you look at my account? The last three times I stayed there, I ate in the restaurant every night. Like, are you guys stupid? And like, the Beakman Hotel is so stupid. They lost my business. And I just, I was like, I could order. They charge $40 to deliver. coffee to the room every morning. And I was like, I could literally buy a one-touch machine and throw it in the garbage. Yeah. You have a higher class of problems than I do. It's making me crazy.

And then they charge you for the Wi-Fi. Yeah. And I'm like, wait a second. I'm paying you $400, $500 a night for a room at the Beekman Hotel. It's a great dope hotel downtown. You're going to charge me for the Wi-Fi? So this is like our Airbnb had a $2,500 espresso maker in it and rat droppings. I just could not figure it out.

Had the Jura? Had the Jura machine? I don't even know what the name. My wife looked it up. Listen, we ran an Airbnb for a little bit. We tested it. And yeah, it's hard to run an Airbnb. Basically, every 10th customer wants to throw a party.

So you're basically, your entire life is telling people five times. You cannot have a party here. Yeah. There's a camera right in the driveway. And if you hit 10 people, we see it. and we will send you a note and the cops will show up because it's in a town where the neighbors call the cops and still people would throw a party. So what I have found is like with this Airbnb, I would say a year and a half ago I would

have just like suffered through it and not been that bothered. But actually now being in the hospitality industry, every single part of it was irritating to me like doubt of like the cheap hand soap that they were giving us. I mean, you basically, you know, Airbnb is you have to read the reviews. Don't stay at somewhere without a review. It's like using Yelp. You have to really know how to use that tool to make sure you're getting a good place. And you can just tell by looking at how many reviews they have.

When you get past like 10 good reviews, it's not a fluke. Yeah, yeah, yeah. And this, I think, was like brand new, no reviews. And so never stay at no reviews. I know, but it was like actually that. On Team 10 reviews. Really? Team 10 reviews.

I mean, I like VRB or Airbnb because I like to rent a house. Yeah. When I go to Hawaii or I go to, you know, Malibu, I like to rent a beach house, right? Yeah. And that's where the inventory is. And when you rent a house like that, I just got to look at the reviews and you'll get a pretty good idea. Well, lesson learned. Lesson learned.

Next time, just take one of your goddamn vans. Well, you know, I was with my, so the problem was I was with my parents and I have a toddler and I only have a two-passenger van. This is like the most tragic part of the thing. this company. It's like, it's going to be a year before I can actually use our product with my family. I think that's why I was asking. I think when you get the family thing dialed in, I, and I think kids love a road trip. So I've been talking to people. And my friend Sundip, who's an investor in the company who works at Ford X, Sundip Madra, who's also an investor,

and he went on a road trip this summer. And he had a great experience. And I think my kids are obsessed with these, you know, RVs and stuff like that. They're dream. go on a trip. So I want to make that dream come true for everybody. And that's why we're very proud investors in commanded. Life. If you need more money, I think we were oversubscribed. People really want to invest in this company. So let's let me know when you want to do the next round. Maybe I'll maybe I'll chip off another milly and we can chip off another milly when you're ready. Let's keep that growth. You have to basically show three X growth year over year. You can do that, right? Yeah, I think so. If you're growing 20% month over month, it's like this business is very

refundable. Yeah. No, I mean, that's, I think like, let's talk once we launch a couple California markets. That's going to be the magic, man. When you can take this and drive from, I know for me, I drive my own Tesla's down from San Francisco to LA. I don't like to, I don't like to fly with the kids and everything. It's just easier to drive. Yeah. You pack up and you have your car down there. But if I could pick up one of these, that the kids could stay in and we could drive that? And then we'd have, when we park at our Airbnb, we also have the rooms from this. Then I could invite more people to come stay with us. Oh my lord. That's going to be the big one. I can't wait for the $300 one. And then being able to hand it off to you when you get to a certain city,

that's going to be dope. All right, Ben, great job. And stay safe. And if you're looking for a gig, Cabana.combe.com. All right. We'll see you all next time. Bye-bye.