Project Name: Beach Stuff
Problem trying to solve:
A trip to the beach is a hassle, especially for families with kids. How can I make it easier for them? They'll probabaly go to the beach more often if it isn't such a hassle (carrying chairs, umbrellas, putting them in the car, dragging them to the desired spot on the beach, clearing the sand off of everything -on top of themselves and their kids when done-).
Solution:
Beach rentals for the individual (vacation feeling without vacation pricing) or the whole family (trips to the beach would become something to look forward to and not a nuissance). Show up to the beach with you towel & shades. We take care of everything else- set up and cleanup when you're done.
Risky assumptions to test:
1. Can we get a beach contract to provide this service?
2. If 1 is settled, then would these type of services catch on in areas where people are so used to bringing their own stuff?
1. Sent proposals to about 10 towns in the Long Area (starting at Jones beach and ending at Montauk). Only one lead sounded promising. The Town of Oyster bay for Tobay Beach. The town representative said that the concession rights for the beach have been granted to a private company that owns the beach concession stands. This private entity however may be interested in subcontracting the rights to display beach loungers and beach umbrellas.
Obtained beach rights for a flat yearly fee.
2. Set beach rights to one year. Decided to re-evaluate the profitability of the business after year one. Essentially I decided to test the idea for one season.
Design and execution:
What do people hate the most? Surprisingly it was not putting all the beach equipment in their car, it was dragging it from the car to the desired spot on the beach. Long Island beaches are quite wide and the parking lot is not exactly close. On average people end up walking anywhere between .3 and .6 miles from the car to the beach (no joke).
The value that we can give them lies not only in providing the "Beach Stuff" but also in set up/removal. How do we ensure people don't steal it? Leave the ID as collateral. When they leave they just stop by, show us where the equipment we rented them is so we can bring it back and we return their license.
Beach Stuff Procurement:
How much "Beach Stuff" do I need and where do I get it from? Did a ballpark estimation and beach attendance. On average during a weekend there are about 12,000 at Tobay beach on any given weekend between Memorial day and Labour day. I used an easy (in hindsight too easy) assumption that on average I will be able to convert 4%- 5% of this number. This assumption put the number of Beach Stuff to 400 loungers, 200 umbrellas and 100 regular chairs.
How did I get this stuff. Friend of a friend in China was able to help me import the equipment at wholesale costs.
Marketing:
All this was happening during the summer of 2008 (Iphone was just coming out). Chose to distribute flyers throughout the Town of Oyster Bay about 2 months in advance. Built a webpage detailing the services available ad listed a phone # and email address for reservations or group pricing.
Pricing:
Researched rental prices in vacation areas, overage income in the Town of Oyster Bay, data on average beachgoer age. Came up with 2 pricing packages, one available Monday to Friday, the second available Saturday and Sunday. Both packages advertised price/lounger, price/umbrella, price per 1lounger+umbrella, 2 loungers+umbrella, 3 loungers+umbrella and so on.
Group or private event pricing upon request.
Execution:
Tobay beach is comprised of a 3000 cars parking lot spread over the length of a mile. There are 3 entrances (tunnels) that lead to the beach, east, central and west.
I set up 3 manned outposts on the beach in close proximity to all these entrances. All 3 were active during the weekend. During the course of the week they were closed.
Hours of operations were 8.30am to 5pm.
Outcome:
Season started slow but volume picked up the more people learned about the service. About 70% of our total users were repeat users. Mostly families with kids. I was only able to convert about 1% of total assumed beach goers (overshot by A LOT)
Lessons learned:
1. Don't overestimate demand.
Especially when this type of service is not habitual. I've made the error of overestimating the demand instead of reminding myself that this is a test and at the end of the test i'll have to store or get rid of a lot of "Beach Stuff".
2. Don't get FOMO, Listen to your clients and test assumptions based on what they tell you.
Same as with not overestimating demand, I also got FOMO when it came to pricing. I had a few clients asking me about buying a beach pass for the whole summer. Instead of testing this idea further, I was too worried about if the price they offered me was too low and focused on one time price negotiations instead of seeing the big picture for a better opportunity.