Get ready for an inspiring episode of Exit Rich! Join us as we welcome David Sodemann and Brett Ellenson, the innovative co-founders of Boho Camper Vans. These visionary entrepreneurs are revolutionizing travel and living by offering mobile tiny homes that promise freedom and a better quality of life. Whether you’re an entrepreneur, adventurer, or simply curious, this episode will be a thrilling journey into how they’re transforming the way we experience life on the road. Buckle up for an engaging conversation filled with insights, excitement, and the secrets behind their Shark Tank success!

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Boho Camper Vans With Brett Ellenson And David Sodemann

We’ve been doing special episodes featuring Shark Tank guests and I have a new guest, two men, which I’m very excited to have on the show. All of you entrepreneurs will be very excited as well because they are changing how we travel. They’re changing the way we live. They’re changing the way that we live a quality life. I can’t wait to have these two gentlemen on the show and they’re sitting in their products, which is very exciting. Welcome to the show, Davis Sodemann and Brett Ellenson. They are both co-founders and partners of Boho Camper Vans. Both of them are located in Arizona. Welcome to the show, gentlemen.

Thank you, Michelle.

I’m happy to have you on. This is going to be an exciting ride. Start your engines, gentlemen. Let’s get excited. My audience, start your engines. This is going to be like drinking from a fire hose. Take good notes and make sure you go back and read this episode again and again. Let’s get started here. We’re going to go ahead and start with the Shark Tank episode. This was season 11.

“First into the tank is a stylish trend in accommodation.

Hi Sharks, my name is Brett Ellenson and I’m from Tempe, Arizona and my name is David Sodemann and I’m from Phoenix, Arizona. Our company is Boho Camper Vans. We’re seeking a $300,000 investment in exchange for.”

One question here. David, where did your hair go?

I have two kids now. They’ve been pulling it out for the last three years.

I just noticed that. I thought, “You had a forehead of hair, David. Where did your hair go?” That’s entrepreneurialism. Once you start a business, you start losing your hair, especially if you have kids on top of that.

Starting a business often requires sacrifices, but the freedom and innovation you create make it all worthwhile. Share on X

It’s one of the sacrifices you make.

It’s either you lose it or it turns gray.

I didn’t catch that earlier. I just now caught that. Without getting too much ahead of ourselves, how did you come up with that valuation?

We were a year and a half into our business. The first year we did $100,000 in revenue. The year we were halfway through on Shark Tank, we had done $500,000 in revenue and we were projected for the next year to do $1.9 million. That’s where we came up with the number.

Boho’s Business Valuation

Those were the number of your revenue, not of your EBITDA. For the audience, EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. You guys are more valuated off the revenue, which a lot of business owners do.

We were small at the time. Dave and I had to try to figure out the numbers quickly. We didn’t have too much EBITDA to work off of. It was pretty quick and dirty numbers and easier to calculate by going off of revenue because a year and a half into business, you don’t have necessarily a whole ton of EBITDA that you’re working with. We don’t have a whole backlog of other assets internally within the company.

We’re going to get into that further later, but just to educate the audience here, you never base a business on revenue. It’s always off of EBITDA unless you’re a SaaS company selling software as a service. We’ll continue to talk about their numbers and talk about their evaluations as we go, but it’s always based on EBITDA numbers. I see why they did it, and they’re going to get slaughtered a little bit here, but they come back. Let’s see what’s next.

“Boho Camper Vans is changing the way that people travel and live through one simple, yet powerful word, freedom.

Boho Camper Vans is changing the way people travel and live through one simple yet powerful word: freedom. Share on X

We hear the word freedom all the time, but most of us never get to truly experience it. The average American is swimming to death, tied to an inflexible work schedule, and trying to keep up with the cost of living. Most of us feel as though we’ll never catch up, and there must be a better way to experience life.

Boho Camper Vans is giving people.”

Let’s stop it right there. What I love here is that they didn’t just develop a product. They’re changing the lifestyle and they’re revolutionizing the hotel industry, the camper industry, the real estate industry, and they’re focused on what people want. Many business owners go and develop a product, but they don’t look at what are people looking for, and what’s the biggest problem that people are trying to solve.

Boho Camper Vans: Revolutionizing the hotel, camper, and real estate industries with a focus on what people truly want—freedom. Share on X

You guys hit the nail on the head when you said people are looking for freedom. They’re looking for a better quality of life. They’re looking for a flexible work schedule. You can work from these things. You guys hit the nail on the head right out of the gate, and you’re revolutionizing more than one industry. That’s why we’re so impressed by what you do.

We’re both working in one right now.

 

David said they are working on one right now. You can tell they are in two separate vehicles. That’s why they’re talking over each other a little bit. Go ahead. Brett, what were you going to say?

Innovations In Camper Vans

I was going to say that the aspect of being able to work out of these with innovations of Starlink and easier satellite services. We have people who are working remotely for a business or their own business. We have several traveling nurses who live out of their vans. It opens up the world as far as where you want to work when you want to work, and how you want to work.

It opens the world to many different possibilities that we’re going to continue to talk about. Most people never come to Shark Tank with such a profound message that pretty much touches everybody from all different walks of life and all different levels of income. That’s what I love about the product. I love how you just brought it down to what people are gravitating towards and hungry for. They’re hungry for it. They’re hungry for the freedom. Life is too short to not live it and not see the world. Let’s see what else is here.

“Rent and we sell them. Whether you’re looking for a tiny home on wheels for your short-term adventure or the ability to live on the road full-time, Boho Camper Vans has everything you need. Camp beds, kitchenettes with running water, solar-powered electricity, pull-out countertops, and more. The best part is you can take them anywhere.

Mobile living is not a new concept, but Boho Vans is different because we cater to a broader demographic. Our vans are affordable, easy to drive, and let’s be honest, extremely photogenic. Let’s help people live more with less.”

I love that. That’s funny. What I love about this too is that you guys came out with two revenue streams right away. A lot of entrepreneurs come to Shark Tank or just entrepreneurs in general, come to the market with one way they get paid. That’s what happened in COVID. You saw a lot of restaurants die.

Hospitality took a huge hit. The reason restaurants died is because they have one way they get paid. You come and eat or you take food out or you’re selling them or renting them. That was good. Every company should have 4 to 7 different revenue streams. You guys are doing a lot of things. Any commentary here?

We started as purely a rental company and about six months into the business, we had requests from people who said, “I don’t want to rent one. I want to buy one.” Overnight, we met up at my apartment. We sat down and said, “Let’s put together a page on our website. Let’s get some pricing together, let’s figure out how to sell these.” We turned that revenue stream on in a night, opened it up the next day and an order started coming in. It was brought out because of need, not because we need two revenue streams. It was like, “We’re renting them, people want to buy them, let’s make that happen.”

That’s a great point because here’s what happens, David and for my audience, a lot of people will say, even me from the beginning, my background is in franchise sales, franchise development, and franchise consulting. I had a lot of sellers come to me and say, “I’m not a franchise, but I want you to sell my company.”

I’d have buyers come to me and say, “I want to buy a business, but I don’t want to buy a franchise.” I would say, “No, we just do franchise sales and franchise development.” Many people say, “We just do this. We don’t do this and that.” When you have clients coming to you, listen up. They’re trying to throw dollars at you and they’re saying, “This is how I want to do business with your company.”

Don’t say, “I just do this.” You always have to be open to new opportunities, and new revenue streams because every company has to have 4 to 7 revenue streams, otherwise you die. That was very profound that you guys listened and said, “Let’s figure it out.” That’s what David and Brett did. Anything else to add to that? I love your smiles.

“Lock us all in there.

We try to make it look like a tiny home.

I love it.

It had a shower. Running water?

Yes. You can hit the switch right under the countertop right there.

Let’s see if it works.

There’s a shower back there.

I don’t see that too often.

We do butcher block countertops. This comes out about another 3 feet. You can do all your cooking under here. Extra storage.

It’s cool.

Thank you.

What’s your background? How did you get into this?”

I’m going to stop there. One thing that you gentlemen did well is you sell the sizzle. You have to sell the sizzle. You have to get people in your space, in your home. It’s like real estate agents. What’s the first thing they do? They have people place their furniture and make it their own. You guys got the sharks in there. You got them involved. You got them excited. My audience will find out later on how that paid off in a big way. Good job on getting them emotionally involved because people buy what they want, not always what they need.

We knew we had to get the sharks inside the van. That was the key because it’s very unassuming from the outside, which is to show what it looks like and how comfortable it feels. As Brett said in the video, it’s a tiny home.

It’s a tiny home, which revolutionizes that industry too because tiny homes can be pretty pricey and you can’t move your tiny home as easily. You got a mobile tiny home. One thing I would have done differently, I would have turned the shower on Mark Cuban. I got them all wet.

It was great to have everybody fit in there. Everybody sat in and that was some of the other comments that, didn’t make the taping. There are a lot of things that don’t make taping, but there is a lot of good commentary from the sharks as they were sitting in the van and complimenting the build quality, the space use, the components, and the layout.

That was early on in our adventure of creating this company that we are head and shoulders above where that was actually at, but just getting that initial wave of, “Keep it going, keep it going. This is all looking great. It’s probably bred a lot of the driving confidence that we would have into building the company and sitting here six years later.

I agree. You could not have written or paid for a better commercial than getting all the sharks inside your tiny home. Focus on the quality, the benefits, and the features.

Something that didn’t make the airing but happened, which was funny, was Kevin got in the front seat and he said, “Everybody, get in. I’m taking you all to jail.” I understand why I didn’t make the airing, but we thought that was pretty funny.

I wish we had a trailer on that. We would show that. That’s hilarious. Well done on showing the sizzle and getting people involved. That’s what sale is and that’s what entrepreneurship is.

“But first, let’s try it.

Who wants to check out the view?

This looks like totally fun.

You make it look like a tiny home.

I love it.

You can hit the switch right under the countertop right there.

What does it take to do a shower?

You’re going to have a shower.

It comes out to be just under $200 a night and we have a three-night minimum.

Cool.

Thank you.

What’s your background? How did you get into this?

Starting The Business

The idea came from a trip. I went with my girlfriend to Maui and we explored the island in a camper van. We came back and realized no one was doing this in Phoenix. It’s such a hot tourist town. Everybody rents their cars, they go to the Grand Canyon, and lodging up there. I called Brett because I know he’s a great builder. He’s a master at his craft. We discussed it over one night and the next couple of days we bought a van and got to work.

My background is in machining and fabrication. I’ve been doing tool-and-die work since I was fourteen years old.

What’s your background?

I went to school for design and marketing. We started this as a passion. We want to just use it and maybe make a little money on the side if we weren’t using it. We couldn’t even use it because it was booked up much so we built another one and another one.

You have a whole bunch of vans.

We have five vans in our rental fleet and we’ve sold.”

You guys are doing everything right. I haven’t found too much you’re doing wrong other than evaluating a company on revenues. I love this story here because many products are developed and created out of necessity, a hobby, or a passion. It started with going to Hawaii in a camper, experiencing Hawaii from that luxury travel, and realizing there’s nothing in Arizona.

Many entrepreneurs come across different problems. We all have problems in our lives and we’re like, “I could solve this problem by doing that, we could create this, or we could create that.” That’s what Jeff Hoffman did when he created Priceline. That’s what Alex Sturm did when he created Constant Contact. There are many ways to make money.

If people say there’s no way to make money in America, that’s so wrong on every level. Lots of ways to make money. I love that David came back and said, “We need to do this. There’s nothing like this in Arizona.” Not only did he go to David but you were friends before. You were buddies.

When I moved to Arizona in 2013, David and I lived together for two and a half years.

Not in one of these.

No.

I love that David approached Brett because it’s very important for entrepreneurs to focus on their strengths and hire out or partner with their weaknesses. David knew his skill sets, but he also knew what Brad’s were because what Brad does, David doesn’t touch, and vice versa. It’s good to know you’re starting development, and starting grading who are your partners? Who’s your team? Who are you going to bring in? What are your strengths? What are your weaknesses? What’s your superpower? What are you the best at? What strengths do I have to partner with or hire out? You guys did that brilliantly because your skills are opposite but both are so needed for this project. You couldn’t do it without the two of you.

 

A crucial part of the business is I run our manufacturing and David handles all of our web development, sales, and marketing. Our skill sets in that couldn’t be further apart. I have said a minute like a million and one times that sometimes I feel like I leave the office and I’ll come back in, David will say, “Here look at the the new page on the website that I set up.” I assume he has some wizard wand that he hovers over the laptop and then it happens. Coding and doing all that stuff is not my forte but he knocks it out of the park with stuff like that. The machine shop and all the stuff, I take care of with our guys.

Partnership And Growth

You are an expert at machine shops and he’s an expert at websites and coding. Guess what? His work is just as valuable and hard as yours is. It might not be labor intensive. I love that story. The other thing I like too is that you guys stay in your lanes. Many people become partners and many partners come to us to sell their company.

We have one right now and they said, “We were best friends.” One guy left Europe. The other guy moved as well. They purchased the company and now they realize, “We’re in each other’s space all the time. We haven’t identified each other’s roles. We haven’t identified each other’s strengths. We’re on top of each other and it’s ruining our friendship.” Now they want to sell their company. You guys did a beautiful job of identifying the strengths and weaknesses in each other and staying in your lanes.

We’re still friends six years later after we started. I was the best man at Brett’s wedding a couple of months ago.

Sometimes that’s more important than making money because many people who are friends go into business together and they end up as ex-friends. Money is great but you can always make money. You can’t always make good solid friends.

Great advice.

You guys listen to me out there because the majority of what we sell are partnerships that go bad. You guys take a page out of their book because they’ve got it all figured out here.

“You sold 12.

How much did you rent this out for?

It comes out to be under $200 a night and we have a three-night minimum.

Once you buy it and trick it out, how much are you into the van for?

For our rental vans, we’re into them.”

I love “trick it out.” You’re not pimps. I thought, “What are you saying? You’re not a pimp.” What’s he talking about by tricking it out?

“Right at about $20,000.

That’s it?

That’s not bad.

We’re buying the vans. We’re sourcing them used.

On a $20,000 van, how much revenue can you generate in a year?

We’re doing about $2,000 a month per van.

Would you say that you pay back a van within a year?

Eight months.

How many of you guys sold for people to live in?

Out of the twelve vans that we sold, it’s half of them.

We see this as mobile real estate. We see this as the next level of.”

I love all of that. You guys know your numbers and that’s important. I don’t know too many products that you can build and within eight months, get all of your money back. This is a cash cow. It’s a machine. It’s mailbox money because you build these vans and you can rent them repeatedly. How many are you renting a year versus how many are you selling a year now?

It’s about 80% sales, and 20% rentals as far as our revenue goes.

How much are you making a year right now just on rentals?

We’re doing about half a million. I was just looking at the numbers this morning and we’re at a quarter million and. it’s been half a year, so about half a million.

I love how somebody does half a million and like you just increase that. Listen to this, a half a million. It’s like gumball machines. It’s like mailbox money. How many vehicles is that?

It’s usually between 10 and 15 vans.

Ten and fifteen vans. They have a minimum of three days are you still renting them for $200 a day?

The vans have gotten bigger, more powerful, and have more features. We’re renting them for under $300 a night but we still have the three-night minimum.

We’re starting to get ahead of ourselves too. Listen to these, guys. They have a huge rental business that can continue to explode and hurt some of the hotel industry. I love it. I go back to the fact that you’re not just real estate, you’re not just a travel van. People are staying in your vans versus staying in hotels, versus getting RVs, versus spending money at a campground. Are they still going to the campground with your products?

They still go to the campgrounds for sure. I think the one thing that would be is that you’re not spending money on a rental car. It’s all in one.

You’re not spending money on a rental car. You’re not spending money on trains and planes. You’re not spending money on hotels. In some cases, people are not spending money on homes because this has become their home. This has taken a bite out of hotels, it’s taken a bite out of RVs, it’s taken a bite out of maybe some campgrounds, and it’s taken a bite out of the real estate industry.

We think of it in real estate terms. Our rentals are like Airbnbs or short-term vacation homes, and then our sales are like flipping a house. We’re renovating the house, buying it cheap, flipping it for a higher price. That’s how we think of it in terms of our rental fleet versus call it our sales or our builds for end users.

Genius. Most entrepreneurs will tackle one industry. They don’t go after all these different industries and you’re doing it by being strategic because your camper vans are the answer to freedom, to a better quality of life, and in a lot of cases, your home. Let’s see what’s next. I’m proud of both of you, I can’t stop bragging about you guys.

Thanks, Michelle.

You can tell I’ve had some bad clients. I said bad shark take me full and then you guys are brilliant. What’s not brilliant is this stupid video I’m playing.

“What gives you guys an edge and a difference and how do you scale this model beyond a master craftsman?

First off, they’re very affordable in this space. We have lots and lots of people who have reached out to us wanting to get on our list to build a van.

Tell me what it’s fitting out like that cost.

This van was $15,000 used, and we charged $29,000 for this build-out.

I’m curious, how long does it take you to do that?

Right now we have a process of just under three weeks.

Do you have any debt?

None. Zero

No debt. How much did you make in the last year?

In the last eight months of 2019, we’re at $195,500 net.

Our sales total this year calendar year is $493,000

Wow. That’s impressive.

You’re looking for money from us?

Yes.

What are you going to do with that money?

I’m going to take the money and I’m going to put it in the manufacturing so we can have finished pieces ready to go in the van and we can hire installers.”

This is a good point too and the reason this is valuable information to my audience is because how many times have you seen someone go on Shark Tank and the sharks typically ask, “What are you going to do with the money?” I invest in companies and I always ask, “What are you going to do with the money?” Many guests from Shark Tank and many of my clients don’t have a good answer.

They open their mouth and a fly flies in. They just don’t have a good solid comeback for that. You guys knew exactly what you were going to do with that money. You were going to put in manufacturing and get prefab parts. That’s a brilliant lesson for entrepreneurs out there. When you’re asking for money, know what you’re going to do with the money and be specific. Anything to add there?

We always see what the bottlenecks and the pinch points are in the company. We keep opening those up and making them more efficient. For us, it’s manufacturing and any way that we can improve our manufacturing. That’s been the thing since day one, increasing our productivity and manufacturing capability.

If you’re going to scale, that is the backbone of your business. That is why you have to constantly focus on turning and turning. I also love the fact that you have zero debt. You see a lot of entrepreneurs who start a business, they’ve already invested much money, and then they start raising capital. They don’t raise capital smartly.

They raise a bunch of capital, they give away a bunch of equity. How many times have you seen somebody on Shark Tank say, “I only own 40% of my company now?” They’ve raised all this capital. Also, your sales were $495,000. You had an EBITDA of $197,000. Remember, you asked for a $3 million valuation and you valued it off revenues. Don’t say anything because we’re about to get into this.

“Let’s go to the numbers because I’m a numbers guy. If I’m an investor, what am I going to make next year?

We’re going to project to be at 800,000 in sales at the end of the year. Next year, we’re projecting 1.9.

1.9? What am I going to make of that? Free tax.

I think we’re going to be close to a million.

A million?

Out of 1.9, you’re getting to net a million?

Based on our margins now.

Why don’t you have a lot of competitors?

We talk about it a lot. It’s time, it’s space, and it’s know-how.

I’m in.

For how much?

Hold your horses, Barb. It’s a Shark Tank. I love your numbers, but you’re only doing $495,000. Let’s round it up for $500,000 and you are asking for a valuation of $3 million. That’s a sporty valuation.

They’re making a million in profit next year.

Wait a second. That’s assuming everything goes.”

This is huge. There are a lot of lessons here to unpack. Number one, remember they valued this off revenues but that’s because they just got started in the business. They were doing everything very quickly. You guys have learned a lot since this. If you look at the valuation based on EBITDA, they were at $495,000 in revenues, $197,000 EBITDA. Is that correct, gentlemen?

Yes.

They’re projecting $1.97 million in sales and $1 million in EBITDA, right?

Right.

On a $3 million evaluation, if you’re doing a million in EBITDA for what they’re doing, now they don’t have any patents or anything like that, that’s almost a little low of an evaluation. This is why people can’t just look at something and say, “You’re too high. That valuation doesn’t make sense.” Don’t look at the revenue.

The revenue is irrelevant unless you’re a SaaS company. It’s the EBITDA that’s important. It would have been good to lead with that EBITDA when you’re the first one out there versus just the revenue. Does that make sense? It all worked out for you but people going on to show, lead with that EBITDA, lead with that net income, lead with sales, but also make sure you get that EBITDA in there. Now, what’s his name? Rohan?

Rohan Oza.

Mr. Oza. He’s right and Mr. Wonderful said, “You don’t know what’s going to happen. Yes, a million dollars if nothing goes wrong. We know in entrepreneurship and business, things go wrong all the time. Did you hit that million-dollar mark?

No.

Exactly.

As you scale, you’re renting a bigger place, you’re hiring more employees, and you have more costs. I think at the time, that question caught us off guard and maybe you could tell from my response, but millions sounded good and they ate it up.

This is why every offer is content about due diligence, especially in the Shark Tank, because everybody gets excited. The sharks are throwing out offers quickly. They’re talking over each other. Sometimes it’s hard to hear and the guests are getting very excited and are thinking, “Yes, we’re going to make a million dollars.” Mark said, “They’re going to make a million dollars.” Mark was wrong. Mr. Wonderful was accurate because that’s in a perfect world and when you scale, you’re never going to have the same profit margins as you are when you’re much smaller. What did you end up making that year?

It was $300,000.

You weren’t even close. At $3 million and $300,000, that’s a ten times multiple.

You’ll see how the show ends but it was more in line with what we got.

Don’t give the cat. Don’t give our secrets away here. What were you going to say, Brett?

It was more in line with what we have.

You guys will see how it ends. This is why it’s important, audience, to know your numbers. We help people get ready to go on Shark Tank to know your numbers and to know that valuation. It ended very well for them. It doesn’t end well for everybody. You want to make sure you know those numbers. Here’s the deal. Here’s what I need everybody to learn.

My clients come to me all the time and go, “Michelle, we’re projected in 2024 to hit $2 million. In 2025 we’re going to hit 2.5, 3, 4, and then 5. Those are projections. Sometimes that’s just a pie in the sky. Nobody puts a lot of value and a lot of emphasis on projections. You have to have them, but there’s not a lot of emphasis and a lot of value that goes into those projections.

Buyers are not going to pay you for projections. They might do an earn-out. They might say, “If you can get to $1.5 million, then I’ll pay you this percentage of revenues, gross profits, and EBITDA, but if you ever do earn outs on EBITDA, you got to protect yourself because everybody can play with EBITDA. They didn’t even hit a million. They hit $300,000. That’s ten times multiple.

The reason I’m stressing this is because everyone who always comes to us to sell their company. Let me ask you this. You both have kids, right?

I do not. David has two boys.

David has two kids and that’s how he lost his hair. David, don’t you think your kids are the prettiest in the world?

One of them. I’m just kidding. Of course.

Everybody thinks their kids are the smartest, the prettiest, this and that. We always think our kids are the best. We think the same thing about our business. We think our business is the best. We think our business is the prettiest. We think our business is this and this. Everybody has unrealistic expectations when it comes to valuation.

You may always think, I have all this potential but guess what? Buyers are going to pay for what it is and not the potential because you don’t earn potential without doing anything, or without spending any money. You have to spend money to make money and you have to put a lot of energy, effort, and work into it. Just like David said earlier, “We could have made that, but when we went to go scale, it costs more money. You got to hire more people.”

The profit margin drops. You have to have those realistic expectations of what the business is because people aren’t going to pay you on projections and people are not going to pay for potential. They’re going to pay for what it is but these gentlemen, you’re going to see how brilliant they are and how that’s worked out for them.

“I think it’s a great business for you all, but it’s just not a fit for me right now. Congratulations, man, but I’m out.”

I’m shocked that he backed out because he’s the owner of the Mavericks. All of those people need your camper van so they can go to all of the games. Same on planes, trains, and hotels. I’m going to give a huge discount to all the people to come to the games and see some ticket owners.

We just had a client, Kansas City Chiefs fan pick up their van, and they plan to go to all the games, and tailgate. We put some cheese flags up on their van. They were super psyched when they saw it. You even hear about certain athletes. There was an article that came out about a baseball player who lives in his van. We’ve built vans for athletes as well.

I think he missed the mark because all those vans could have been decorated with Maverick’s logo or Maverick’s brand. They all could have been branded Maverick, put Maverick all over the streets and all over the country, and sold to your season ticket holders at a discount maybe, and he makes a fortune. I think he missed a mark. You got it wrong this time, Cuban, I’m sorry.

I agree.

“The way I see it, the way I look at it.

I haven’t finished that Kevin, sorry, go ahead.

Give me a moment because my juices are flowing. I look at it and say that I should be the third partner at 33.3%. I’ll give you the 300,000, I want a third of the business because I’m Mr. Wonderful.

They don’t look happy, Kevin.

They look very happy. You should always be happy when you get an offer from Mr. Wonderful.

He’s trying to gouge you. Can you come back to me because I was putting some real numbers on that, please?

Thank you for the offer. We appreciate it.

Thank you for the offer, but piss off.

What are you going to do, Rohan?

You got to get to a more reasonable operation on this. A third is too much. I would go for the $300,000. Happy to bring all the marketing muscle and awareness building that this thing needs to have, but I’d want 25%.

What’s the difference? You give us the wonderful, just see what’s the point.

I’m a quarter, they’re three quarters, it’s a big delta. If you guys are interested, let’s talk about it. If not, I’m fine to move out, you guys got to pick it up and leave it.

You haven’t heard from me yet and who was most excited?

You were very excited.

One Shark is out. David and Brett have two offers on the table for their designer van business, Boho, but Lori also seems interested.

I think it’s super cool. I could see people loving this. I’m going to think for a minute.

While she thinks for a minute, turn to me for a minute.

If you guys want feedback, great, if not, I’m happy to be out.

They want more offers, and here comes an offer. I don’t think you need a partner at all. I think you need cash. That’s it. You’ve got a plan, you’re working the plan that’s going exactly as you had wished it would, probably better. I do believe your projections that you’re going to make a million dollars next year. I’ll give you exactly what you want, $300,000 for 10%, but I’ll give it to you in the form of $150,000 in cash upfront and $150,000 in credit line. If the business expands and continues to grow at the same rate, and I see no reason why not, I’ll continue to fund the growth. Simple.

Interesting?

How is that a shock offer? You give them exactly what they want.

No, it’s not exactly what they wanted. That’s what they offer.

If you’re considering debt, I’m far more creative than Barbara is and I can make you an offer you might find extremely attractive.

You still get the shots.

I’m going to loan you the $300,000 at 9% for two years, venture debt, and I get 7% quickly.

You can walk into a bank and get it for less.

Respectfully, we try to be debt-free. We do.

You don’t want to do debt. You were listening to Barbara with her debt deal.

Let me make you an offer. I’ll do the $300,000 at 20%, but mine has a caveat. I want a charitable component in this.

To a van?

I want you to see a van.

It’s a homeless cause.

Hear me out. I hear you.

Give it to a charity.

There’s a lot of homeless people in America. I see it constantly because I’m always in just major cities.

We love that idea. It’s something we’ve been wanting to align with, a social cause. We love it.”

Have you all done that? Have you aligned with the social cause?

We’ve done various partnerships with some of the parks, and some of the local breweries that donate to the parks. We’ve been offering rental packages where the proceeds go towards funding those charities. We’ve done some merchandise sales as well with different charities, but we haven’t solidified that this is the charity we want to work with every year, but we’ve tested it. We did a giveaway with Junior Achievement, which was cool. We had a woman who spent $20 on a lottery ticket and won a $130,000 van.

A $130,000 van. If you remember from the beginning, we’re going to talk about life after the tank, but in the beginning, they said these vans sell for 20,000. How much were you guys selling them for?

The one on the show was 15 plus 29, about 45.

$45,000 and he just said $300,000. We’re going to talk about life in a few minutes after the tank and how they increased everything. I would love to see a component too where it’s tied into homeless people. Maybe trying to get the government to pay for some of these versus paying for these shelters that nobody will go to. It’s got to be a way because the homeless are out of control in major cities. I’m going to play again.

“Respectfully, would you be able to go down to 15% with that same offer?

I would stick at the 20%. My offer is the best here. It’s exactly what you need. In addition to that, there’s nobody here that can market better than me. You can laugh all you want.

Shark Tank Offers

You shouldn’t be overly concerned with debt. You’re a profitable company. Take the debt issue off the table.”

I’m sorry, I disagree with him a thousand percent. If you can continue to run your business debt-free, that’s how you should run your business. I can’t tell you how many business owners have become upside down in their business because they were over-leverage. They have way too much debt on their company or they gave away too much equity.

One of the biggest shows on Shark Tank took an investor. Not a Shark Tank investor, an outside investor, because they didn’t get to deal with Shark Tank. That investor now is controlling the company and pretty much fired that founder. I disagree with him. You guys have played this brilliantly all the way through. Debt-free is how all business owners should think. You might have to get a line of credit. You might have to get an investor, but don’t give up control of your company, and don’t get over-leveraged. Many business owners sell because they’re over-leverage. Don’t do that. You guys are doing it the right way. Don’t take his advice.

“Debt-free strategy, but I wouldn’t be concerned with these guys. They’re not gouging you at a 20% interest rate.

Thank you for your business advice.”

Were you sincere when you said, “Thank you for the business advice?

It truly was. It came off a little snarky, but it was cool because you’re getting all these. All the sharks are yelling at us and some of the things that you don’t see, Cuban, he’s given us some advice to another side and it was a genuine thing. It came off. Everyone says, “You just put him in his place.” I was like, “No, it wasn’t.” Rohan, we appreciate you helping us along and working through some of the deals. It mentally helped us process them genuinely.

Do you know what? He has a good point there. If you’re all going to borrow money, borrow it as low as possible, what happens is business owners get in binds where they can’t pay their employees, they get upside down, they go start borrowing money at 16%, 18%, or 20% interest from loan sharks versus shark tank sharks. A 9% is a lot cheaper than some of those other loans. If you do have to go into debt, make sure you get the best interest rate you can.

“Cost deal, if you think about it, by miles. A $300,000 is down to 9% for two years and 24 months. I only want 7% equity.

What was the interest on the loan?

Whatever interest I get on the loan that I pass on to you, it’s not to make money. It’s that for you to take off the table the least amount of stock because I’ve been in the position of almost selling a lot of stock. A few years later, realizing that I made a terrible mistake when I had done the deal. Hold on, and I’m a sweetheart.

Let’s give up 7.

Do a drum roll, please.”

Let’s talk about this before you divulge who you went with. You have everybody going after you at once, except for Mark Cuban, who should have been the biggest player here, in my opinion. You had everybody throwing offers at you. There’s a lot of stuff that’s not here on video. Don’t say who you picked.

What led you to this decision because you started chatting with each other. I don’t know if you had a perception or an idea of what shark you wanted to begin with because a lot of entrepreneurs will go to the tank and say, “I want to deal with Lori.” “I want to deal with Cuban.” “I want to deal with Mr. Wonderful.” Tell me about that process without giving it away.

We had four offers on the table and the pow-wow that Brett and I were having was just to make sure we had them all right because the episode was 15 minutes. We were in the tank for 45. There was a lot of back and forth. I was just trying to understand. Kevin changed his offer from a partner to just giving us a loan.

He’s still taking 7%.

Yes. He started at 33 and that’s what threw us off. At first, we were like, “No, is this house going to go for us?” He then dropped to being the lowest equity out of anybody at 7%.

It is a full loan. It is the issue. I think we were saying, “Do we have this right? I want to make sure everything’s clear. Ultimately, we took the best offer on the table.

Let’s stop right there. If you sharks are tuning in to this. If you’re not, you should be. One thing the shark should do, I don’t know if you ever watched The Profit by Marcus Lamonis, but they should have a screen aboard where they are putting up the offers so that the audience can see it because you can tend to get a little lost. Especially, when they’re throwing them out there and all talking over everybody. They change their offers sometimes. I do think the Sharks could improve upon that. Let’s see who you gentlemen pick. Did you have an idea before you came into the tank who you were going to pick or who you wanted?

We just knew the sharks as far as what industries they were in. We based off of who we would hope that we could get. We wanted any one of them but the thing was we knew maybe whose industry we would fall into. We were more of an assumption of who would be most attracted to our business, if that makes sense, as far as not necessarily shooting for one shark or the other because you just want to get somebody. We were going through what industries they were in and assuming who would be most attracted to our business.

I would suggest entrepreneurs try to figure out who’s the most strategic, and who can offer the most because it’s not just about the money. Lots of businesses get money and then are back in the same spot a year from now. You want to also look at who’s the best strategic partner, who has the most industry experience, who could blow us up the quickest, or who has the biggest captive audience like Cuban. Let’s see who they picked. If we were live, I would have the audience vote.

Drum roll.

Drum roll!

“That was good. Barbara.

You got it, baby.

Thank you very much.

Congratulations.

Congrats guys.

Barbara was a perfect fit for us because she knew we didn’t want any debt. She gave us a way to pay it off quickly.

Choosing Barbara Corcoran

She knows real estate. We keep touting that we’re a mobile real estate. We’re the future of it. We’re glad to have her on board because she’s going to take us places.”

I think that was another great point that she knows real estate. You are a mobile real estate company. You’re a mobile hotel. Anything you want to add to picking Barbara or let’s talk about life after the tank? What’s it like to work with Barbara? Did you make the right choice?

I can start with that and David, you could fill in anything I miss. Working with Barb is awesome because Barbara is famous for shooting from the hip, telling you what she thinks, and take it or leave it. It works out perfectly for David and me because we’re upfront and honest people about our business dealings and our interactions.

She’s been a blessing to us as far as her marketing skillset as well. As far as going into this, we wanted a shark who understood the dynamic of us. We were trying to come off as mobile real estate. She’s the real estate queen out of New York. With her attitude, we thought she would be a great fit as just as far as having a partner within the company.

She’s fun and she wants to invest in fun companies. She’s been doing it a long time and she wants to work with people she enjoys working with and investing in products that potentially change people’s lives, which is what we’re doing here. She honestly says, “I don’t know anything about building vans. What I do know about is marketing, promotion, and running a business.”

We lean on her for that advice. To be honest, she lets us do our thing. She’ll give us advice and if we don’t want to take it, she even acknowledges, “You don’t have to take it. You’re going to do your own thing anyways, but this is what I’ve seen in the past and this is what I’d recommend.” That’s been perfect for us because we didn’t need the money at the time. To be quite honest, we wanted the commercial more than anything and we did get it.

Stop. They wanted the commercial more than anything. That’s why a lot of them go on Shark Tank because they want that commercial more than anything. Let me tell you something, you got it. Having them all in your van, you can’t pay for something like that. You can get better advertisements if you want to. That’s brilliant. A lot of people go on there because they don’t need the money. Are you glad you went on and you’re glad you partnered with Barbara? I’m sure you are.

Absolutely. It was the adventure of a lifetime. The producers are on your side and they want you to have success. They probably tell everybody, “Calm down, try to take everything in, take it as slow as you can, and just take some deep breaths. It’s only the biggest moment of your entire life.” You’re like, “That’s great. That calmed us down.”

They are on your side and they are trying to pump you up. They know that the sharks are their people and they know what they’re doing. They’re there to support you, push you, and tell you, “You do not stop selling until there isn’t a deal to be had.” We knew some people who we were out in the taping with that maybe didn’t go well for, but David and I, honestly, it couldn’t have gone better for us.

Let’s talk about life after the tank. We got to deal with Barbara and things have evolved. Your vans went from $45,000, now $300,000, you went from one size to a much bigger size. Why don’t we talk about life after the tank? I noticed they didn’t give you a lot of advice. I don’t know how many Shark Tank shows you’ve watched, but most of them are giving advice and asking questions. There wasn’t a whole lot of advice here other than, “You can afford to take on some debt.” That was awesome. They didn’t ask you a lot of deep questions. They didn’t ask you, “How do you sell your vans? What platform do you sell them on? How do you sell the vans?”

The most expensive van we’ve built is $200,000. That’s for the brand new chassis and call it a build-out of about $120,000 to $130,000. At the time of Shark Tank, we were building on a used chassis, which you could buy for $15,000. Now, if you want to buy a van, you’re going to spend at least $30,000 to $35,000, and new, you’re going to be spending almost $60,000.

Our conversion cost, which is what we do and what we can control is from $29,000, which was the conversion on that van on Shark Tank, to our conversion starting in the mid $40,000 now. The price jump has been because of the van size and the price of vehicles at this time but our conversions have only gone up. Call it from $30,000 to $50,000 on average. We haven’t raised that much, but it’s the industry as a whole, the campers and the vehicles are getting more expensive, more elaborate, and more fun.

That’s a good clarification point. it’s not much that your prices have raised. It’s just larger vans, newer versus used, and also depends upon the features that you put in there. How do you sell the vans?

We have great organic traffic. We’ve done a good job with partnerships, with earned media, and with our social media.

What is earned media?

PR and advertising and free advertising from big media outlets that have picked us up, run articles on us and created stories about us.

Name a couple.

Business Insider and we were mentioned on the Joe Rogan podcast.

The Joe Rogan podcast is huge.

Wall Street Journal, all the major industry ones like New Atlas, Curb.com, and all the local news stations. We’ve been through it all. That’s been a huge part of it.

That’s a good point though. You got to stop because I don’t know if you realize how profound that is. Earned media is always better than paid media for the audience out there. I agree that clients have had their favorite things in Oprah. Oprah is about as big as it gets. We’ve had people who have a client who have products on Today Show, Good Morning America, and all these different outlets. That’s free publicity. Whenever you can get earned media, you need to go after earned media and not just focus on paid. Focus on earned. That’s a great job. Go ahead, David.

Honestly, we haven’t paid for media until this year. This is the first year we’ve paid for media. What that earned media does is create backlinks, which increase your Google search rankings and your SEO. That allows us to rank highly when anyone googles Camper Van or Phoenix Camper Van Rental. We’re globally ranking. We just pop up anytime people are searching for this type of thing from anywhere.

It also gives you huge credibility because if you’re on the Rogan podcast, if you’re on the Today’s Show, if you’re at Wall Street Journal, that’s huge credibility. I’m sure you sell out a lot when you get this earned media. You get a lot of something.

Both of those were customers talking about the product. Both the one in the Wall Street Journal and the Joe Rogan podcast, it was Tom Green talking about owning one of our products on those platforms. It’s right there. It’s an actual vetting of the product by an actual user.

That’s even better because it’s always better when somebody else tells you than when you sell yourself. We all need raving fans in our company. You’re selling a majority on your website. Is that correct?

Yes, that’s predominantly where we’re selling them.

What percentage?

Right now it’s 100%. It’s hard. We’ve been doing a lot of events and shows this year and been tracking that. Call a few here and there, but we just started doing events. Predominantly, call it 95% straight from, direct to consumer, or direct to our website.

This is another brilliant move on their behalf because we interviewed a Shark Tank guest and I think it was 75% to 80% of all of their revenues come from Amazon. Amazon is like customer concentration. If Amazon decides to get rid of you or something happens in Amazon, you just lose 70% of your business.

Guess what? They’re controlling the traffic, they’re controlling the market, they’re coming to their website, and they’re not going to lose their website. They have a lot less risk of losing clients, losing that brand, and name recognition because they’re on their platform. It’s always going to be diversified to have multiple platforms just like it is to have multiple client bases. They are dealing with people who want to live in these things. They’re dealing with people who want to travel.

They’re dealing with people who want to have a better quality of life and work from them. They have many different demographics, and we haven’t even gotten into their demographics yet. You want to have multiple platforms but the best thing you can ever do in your company is do what these gentlemen did and build it from your website. Who is a better marketer? You, David, or Barbara?

Barbara, for sure. She’s been doing it for hundreds of companies.

Has she been marketing your company?

Yes. Just her face in any marketing material automatically puts her over the edge.

It is because she’s your brand ambassador. She’s your celebrity endorsement. Why don’t you give us a tour and show us what it looks like in there? Both of these gentlemen are in a different camper van. We’re going to look at the one that Brett is in.

Tour Of The Camper Van

This one is Delray. It’s our show van. I back it up here. We have our kitchenette right here. We do the waterfall backsplash under the butcher block countertop that we use our CNC to cut in. It’s got a two-burner stove. We have a microwave up top. Up here we have a super powerful, because we’re in Arizona, we have a 19,000 BTU air conditioner.

We have different lighting features. This lighting sconce over the bed. Turn that on. It’s Antelope Canyon. It’s pretty cool. Just a ton of power here, like battery management and power systems. Over here, you have your kitchen sink. Just cool stuff that we can evolve to now is adding in cool features as far as our pullout pantry, and stuff like that.

Everything that we do is all in-house. Getting back to your control of the website and other things like that. If we were to buy and do our rental fleet and things by buying from another manufacturer, we might lose control of them changing the product in any way, shape, and form that they would want to. We have 100% control over where we buy our vans, what vans we buy, and what vans we sell because we are the manufacturing company and we are upfitting all of these vans to our specifications.

Our specifications are super high levels of quality, craftsmanship, and fine finishes. What we’re known for giving a flip on the script for the RV market. It’s got a bad reputation for bad quality. Maybe stale environments, stuff like that. Maybe some bad customer service. Our whole company is predicated on excellent customer service with a superior product for quality and craftsmanship.

I would have to say that the camper van looks much more bougie, nicer than the one that was on the shark tank. You guys are going to build me a Barbie van with a Tiffany kitchen. I love this. Let’s talk about the changes because we’re running out of time here, but let’s talk about what you changed, and what’s evolved. You’re doing bigger vans, you’re upfitting them with more features, more benefits. What else has changed?

We have additional revenue streams.

What are the revenue streams? We talked about rental and we talked about sales.

We have an online part store. We have recommended items that we install in our vans that we can sell and ship to consumers who may be doing their DIY builds but want to purchase battery systems, fans, or components. That’s one. Another one is we have owners who are looking to make extra money off of their camper van.

We promote their rental. People are privately renting their vans that they’ve purchased when they’re not using them to start their rental businesses. Almost like an Airbnb. We’re using our marketing muscle to draw reservations and eyeballs to their vans. We also help clients sell their vans if they’re looking to get out of it and get into a newer model. We have multiple ways to continue to get revenue going.

We’re selling, we’re renting, and we’re selling parts. We’re selling the used ones that you’ve already sold to someone and you’re helping your clients rent them out. You’ve got five different ways you’re getting paid.

One more is probably the biggest that I didn’t mention and Brett’s probably thinking about it. We’re doing partial installs, we’re doing service work, and that has been a huge part of our business so far this year.

Now you’re at six and what did I say? Every business should be at 4 to 7 different concurrent revenue streams, how you get paid. One thing I would say is you have a great model but one thing in specific that’s a great model is you have residual income because you’re renting. Are you a seller financing these camper homes for people who can’t afford them?

We do have a financing company that we work with that we brought on this last year. To answer your question more honestly, we don’t do it in-house.

That would be another good way that’s like a growth revenue stream where you can also get interest, and then you repo the van if they don’t pay you. We get some money upfront. I would also look at seller financing needs because you’re getting the interest, but you’re making even more money. The other thing I love about these vans is hurricane season.

Louisiana, Florida, storms, Houston, the storms. You’ve got tornadoes, you’ve got flooding, and you’ve got hurricanes. I live in a hurricane region, I’m in New Orleans, and I spent a lot of time in Florida. These are great for people who have lost power especially if you can plug them in, and charge them, like a car.

These are great because you can’t always get hotels. You can’t always bring your pets, especially if you’re in a bad area. You need to get out of Dodge. It might be too late to get a plane. What are you doing? Driving your car, you can’t get a hotel, and you can’t bring your pets with you. This is a great escape van too to get out of the bad weather zones. I would look at that opportunity as well. What else have we done? I’m excited.

That is the revenue streams that we have right now and we’re trying to refine those. A few of those that David talked about, David and I see those in their infant stages that there are tremendous amounts of growth available for each one of those aspects of the company.

There are storms everywhere. Houston just lost power. Can you attach a generator to these?

You could if you needed to. The one that I’m in right now, it’s a massive battery bank. The company is Battle Born Batteries. The batteries that we have in here is a 13-kilowatt system, and just to put your head around it, we can run our air conditioner, we can run heat, we can run all of our appliances for days on end without plugging into any shore power, or even needing any sun, but we’re also charging off of solar panels as well.

There’s a third way that we charge the van. We got shore power, we plug it into an outlet or a generator like you’re talking about. We charge the solar with the sun. When you drive your van and you’re escaping away from a hurricane and everything else, you’re charging your battery bank off of the engine when you’re going down the road.

This is a perfect camper van for Louisiana, Texas, and Florida. Even earthquakes and fires in California. People don’t think about it that way. Sometimes I think it might be less expensive than buying a generator and easier to use. You can get out of the Dodge.

We have a few clients who have mentioned they’re a little bit worried about the state of the world. This is their bug-out vehicle. I think about that sometimes, too.

You guys have not just created a camper van. You guys have revolutionized the industry and have created a better quality of life and many different things for many different people. At the end of the day, it’s all about freedom. It’s all about quality of life. It’s all about living our best life because life is short. You have many different aspects you can plug into. I see this as a great franchisable model too. You guys were not business owners before.

We had tried.

This is the first successful one for us. Any advice out there? Last minute thoughts for all of our entrepreneurs? We’ve got over a quarter of a million people tuning in to this.

I can start David real quick. I think that if you have an idea, Dave and I talk about this a lot. Don’t let paralysis by analysis set in. If you have something, you have it on paper, find your MVP, your minimal viable product that you can at least get out to the market and see what’s available, see what people think of it, and have people break it, our rentals.

Time out, because that was profound. Number one is analysis by paralysis because that’s what many people do. I’ve seen it happen time and time with my clients, my partners, and other companies that I own. Know your MVP. Brilliant things. Anything else?

Pick an industry that you have a passion for. Don’t do it for the money. Surround yourself with people who you enjoy working with because you’re going to be with them a lot.

I’m going to say one thing to there. Pick a thing that you’re passionate about. Don’t do it for the money. However, you need to make money and you need to test the market. You guys did test the market. You created it because you wanted it, “We can sell this to our friends.” You created it and then you ended up leasing all these vehicles that you didn’t even have one for yourself. You trust but verify. You tested the market. Many people build it a lot and spend all this money on it, and then there are no buyers for it.

We’ve had it where we’ve been approached by other companies. They did that exact model. Can’t prevent companies that have tried to start up and their product just didn’t sell like they couldn’t get people into their vehicles.

Probably because they were doing it for the money and not for the passion.

They thought their idea was the best and they weren’t like Jeff Bezos and Steve Jobs. They didn’t obsess over the customer’s want. They obsessed over what they wanted to offer the customer, as you said earlier, Michelle. We took employees from those companies because they closed the doors or we bought equipment from those companies because they closed their doors. They didn’t do it in the order that you’ve explained and that we’ve always understood to only make sense.

That was another brilliant thing. If you guys didn’t pick up on it, be obsessed with your customers. Love your customers. Get obsessed with your customers. Many people are obsessed with owners or obsessed with themselves. How much money do you need to make? How do you need to support their family? They’re not obsessed. There are two things you should be obsessed with, your customers and your employees. If you don’t have that, you don’t have a business. You have a glorified job that you work at every day. Not a business that works for you. David, I know you have something else in there.

I forgot, but I think it’s important to understand that it’s going to take a lot of time, and a lot of late nights. It’s going to be on your mind constantly. Work with people you enjoy working with, pick an industry that you love, and make some money doing it.

Pick your strengths. Don’t hire your strengths, hire your weaknesses. Many people want to hire people just like them. You got to go and see who’s got different skill sets. You guys have done it brilliantly. I can’t say any more. You’ve revolutionized many different industries, created a better quality of life, and made the world a better place. Well done.

Thank you very much.

I want to thank my audience for tuning in to another episode of Exit Rich. I know this was a powerful episode with lots of golden nuggets. You need to make sure you share this with your circle of influence and share it with your fellow entrepreneurs. Anybody who’s thought about going into business or getting on Shark Tank should watch this show.

Make sure you subscribe to Exit Rich and if you’re interested in getting on Shark Tank, come see us. If you’re interested in getting your business valuated, come see us. Also, check out our book, Exit Rich, and thank you, gentlemen, so much for being on. Until we see you next time on another episode of Exit Rich.

 

Important Links

• Davis Sodemann – LinkedIn
• Brett Ellenson – LinkedIn
• Boho Camper Vans – Website
• Exit Rich – Mentioned Book