Peggy Chang of Activity Hero - Online Booking for Children Activities

Peggy Chang of Activity Hero - Podcast Transcript

Scott:	Welcome to Founders and Friends Podcast with Scott Orn at Kruze Consulting, and my very special guest this week is Peggy Chang from Activity Hero. Welcome, Peggy.
Peggy:	Thanks, Scott. It’s good to talk to you.
Scott:	Yeah. Thanks. So Kruze Consulting has been working with ActivityHero and Peggy for many years. We’ve seen the company grow. It’s been really exciting. This is always one of those ideas that I always thought, ‘Oh my gosh. I totally relate. This needs to happen.’ Can you explain ActivityHero, Peggy?
Peggy:	Sure. What ActivityHero is - we’re a place for a parent to find camp classes for their kids. The way it came about is, I have two kids and it was just a recurring problem - finding camps for them, finding new activities. My daughter would say she wants to do gymnastics and I’d be at a loss for what places to go. And then you’re crazy busy working. So sometimes you don’t see the parents in the playground or you’d have to email people and wait for an answer. So I just felt like there really ought to be a better solution. It was really one of those areas whereas I poked around, looking at other websites, it was really underwhelming what else was available there online.I just found that the state-of-the-art was a directory listing of summer camps. Just basic descriptions. No details, and maybe a link to the website or their phone number. I akin that to having Expedia. What if Expedia had a list of airlines, but they didn’t have any phone number.
Scott:	You couldn’t book it.
Peggy:	Exactly.
Scott:	You couldn’t give them money.
Peggy:	There’s American. There’s United. That’s it. So, that was how the environment was a few years back when we started this. My background’s in Product Management, and I have worked for lots of internet sites. So I just thought, ‘This is pretty simple technology. We just need a search engine.’ Of course, the content was difficult to get but I really felt this was solvable. And just thought, ‘I want to do this. Instead of watching someone else do it.’ I thought it was a great idea. I was lucky to meet my co-founder Shilpa Dalmia and the two of us set out together to build this. This website.
Scott:	That’s awesome. I love what you threw in there at the end like you didn’t want to see someone else build this. How much of a motivator is that? Because you hear that from founders sometime who…maybe they are on their second company and they’re like, ‘I wish there was this other idea I was thinking about.’ But I give you credit for seeing an opportunity and actually acting on it. Was that a big motivator for you?
Peggy:	Yeah, it kind of was. It’s an interesting thing, because even though I went to Stanford Business School and saw some classmate go to startups and things like that. I think I’m part of startups as well, myself. But while you’re doing that, I wasn’t the type of person that says, ‘I’m going to sit down and think of an idea.’ It was more than that. Every time I experienced this actual problem of finding programs for my kids, I keep thinking, ‘Oh, someone ought to do this, or maybe I should do this.’ So when the opportunity presented itself - and I’m not necessarily a risk-seeking person - so I just viewed it as, ‘I think I’m going to regret not doing it,’ more than, ‘If I just went for it, and if it doesn’t turn out the way it was, then you learn something there.’In this case, I would have regretted letting someone else just go ahead and do it, and not being part of it. So it’s just one of those things that struck me. It struck a nerve. I felt like it was a problem that should be solved. I had some great ideas about how to solve it and just the energy to go do it. That’s how I fell into it.
Scott:	I love how you made the point of you weren’t necessarily a risk-seeking person. I think a lot of us - I’ve been guilty of this in my career where sometimes I’ve thought, ‘Maybe I’m not the person who starts a company,’ or, ‘Maybe I’m not the founder on the cover of a magazine.’ But I think what people don’t realize is that we all start this way. You didn’t start that way either, but you just found something so compelling to you that you had to do it. And eventually, as ActivityHero’s grown a lot over the years, and as you guys keep accelerating - you’re going to be on a cover of a magazine, or website or whatever it is. People are going to look at you and say, ‘Oh wow!’It’s cool that all of us can draw inspiration from your approach of like, ‘Hey, I wasn’t Mark Zuckerburg or whatever, I just felt this need, needed to be solved.’
Peggy:	Yeah, that’s why when people ask me about what’s it like starting a company? That’s the story I tell them. Because it’s not like it was a classic textbook and I analyzed five different industries and picked the best one. I think we all do in our own different ways. In my case through experience, I was working and gathering experience as a Product Manager for different sized companies. What’s really interesting is they all kind of culminated into ActivityHero. I worked at Intuit on QuickBooks so a lot of the reports and things that we offer on ActivityHero for small businesses to manage their camps and their classes - I draw on that experience. A lot of things needed to be customized and I had worked on some websites that were SaaS solutions that were highly customizable. So, these different experiences, I didn’t know at that time, of course, they ended up on drawing and putting them all together in this one experience that we call ActivityHero.
Scott:	That’s really inspirational. One of the things I like about ActivityHero is that it doesn’t really matter where you are in the US. If you are searching for activities for your kids - there’s going to be info. I think that’s actually a really smart strategy. Would you like to talk about how you guys approach that, and how you executed on that?
Peggy:	Yeah. Of course, when we first started we concentrated on a smaller area. So, in this case, it was our backyard in the San Francisco Bay Area. So we first started by pulling together content and information about camps and programs. And of course, we went a lot deeper. We went to and added the schedules, the prices, extended care options - all the full details that are akin to a flight schedule that we thought was missing. So we pulled that together for the Bay Area first. And then we stopped and watched and saw the organic traffic coming in. So that’s when we started to see other parts of the country with some basic information. Again we don’t have the full details for every place but when we put out the information on basic camps and programs, we’re watching for that organic traffic to see what areas of the country are interested in our site? Where are we getting the most visits? That becomes our list for where we’re going to expand to next.
Scott:	That’s awesome. What are some of the things? Have there been any interesting or surprising pieces of feedback in that? Did all of a sudden somewhere like Tulane pop up on your radar, that was just like a humongous list that you needed to build? Or somewhere in Florida? Were there any surprises you saw on that data?
Peggy:	Yeah, what surprised us is that parts of the southern half of the US, we felt are just organically a bit stronger for us. Areas like Atlanta, Dallas, Houston, Phoenix. So some of the cities in the southern band just popped up as really strong organically. Of course, the big metros - Chicago, Boston, New York etc. - those are also big but what outpaced them was some of these other cities that are in the southern half. So that’s kind of a surprise. And then when we list programs on ActivityHero, parents not only just see the information but they can actually book these camps and classes. So, today we see registrations coming in from Washington state. Well, Washington state is not really in our target core area - yet, but the fact that people find us organically and they find us, and they found something that they wanted to book. It means a lot. It’s great to see that we help make that match somewhere in the US.
Scott:	Yeah, well that is really surprising that places outside the Bay Area or maybe New York or Santa Monica would be such big markets for you because yeah, everyone has the stereotypes of Silicon Valley or New York being early adopter cities. But I think that’s a great sign that Atlanta and Chicago and some of these other cities are such big places for you. That’s fantastic.
Peggy:	Yeah, I think again it really speaks to the parents across the country who just have the same problem. Their kids are out of school 16 weeks a year.
Scott:	Driving them crazy for 16 weeks.
Peggy:	Yeah, so how many people have 16 weeks of vacation? So, how do you bridge the gap? The good thing is that there are lots of local art studios, soccer coaches - all these different people from different backgrounds who’ve created programs for kids. And they might be creating them specifically for the spring break in the Atlanta school district. So the marketplace on our site is a great place for these providers to list those activities. They go through the trouble of creating the curriculum, so we want to get as many people as possible to know about that. And then for parents, it’s a relief to find out that someone nearby actually has something for your spring break or your President’s Day holiday. So that’s why we feel really proud that we can make that connection and help out both the parents and the activity provider. Right, that’s a perfect match.
Scott:	Yeah, we’ve talked a lot about the family and the parents, but there’s also the people who are putting on the camps. And I feel like those people must absolutely love you.
Peggy:	That’s really the side that was a big learning for me, because not having been a camp operator myself, that was a world I really just dug into going into this. You discover that they’re not going into it because it’s the way they can make the most money. They really are doing this because they like kids. They are teaching. They are choosing to teach kids. And for that, they are the most patient and well-respected people in my mind, because they are deciding to share their gifts with these kids, with their local community. So the fact that we can help them fill out more spots, help them get the word out. Most of them want to be teachers and coaches. They don’t want to be marketers. They don’t want to learn about SEO, or about all these different aspects of marketing. So we can take some of that burden off for them and we share some of these best practices. Our website is already well optimized for them to get the information in, and structured in a way that parents can understand so that they can get bookings.
Scott:	I imagine they can learn a lot using your systems too because it’s like one of the reasons we like [00:11:48 inaudible] or Expensify or QuickBooks because they have really good workflows, and we can map the companies’ processes to that software. I imagine the coaches and the camp directors are doing the same thing for ActivityHero. They can see your standardized workflow, and that simplifies things for them. It probably helps them think of things they maybe haven’t thought of, or maybe it just reduces some of the complexity for them.
Peggy:	Yeah, hopefully, we’re giving them good ideas about what information parents really would like to know before they put the credit card online, and make the purchase. We like to have photos. We like to have a full description of what’s offered - information about the teaching credentials, or the experience of your instructors. What’s your refund policy? Or your cancellation policy. So we structure these, as you say, into these different bite-sized chunks so that they can fill out the questions. And along the way, we’re building a really good profile for them - as a business, as an organization - that parents can read and they can understand what this is all about, and make a purchase without actually having to email or have a conversation with them.
Scott:	That makes so much sense. Have you helped them with their pricing and things like that, too? Because I would also imagine, you guys have some really cool pricing insights across the country. As you said, maybe the coach, who’s doing this in their summer vacation and who by the way just likes being around kids and is just doing this to help the kids out, didn’t realize they could charge two times as much. Or maybe it’s even to reduce the price a little bit that fill up the entire capacity. Have you given them some advice, or given them guidance on that as well?
Peggy:	Yeah, we do do that. Basically, everyone starts out with their price, and we’ve noticed especially if something is not selling as fast as we’d like, then that’s when we’ll take a deep dive and start to analyze. So we have a lot of averages that we have collected on our site, like what’s the average price for a full day camp, which is 6 hours or more a day? What’s the average for a 3-hour camp? So we have these different numbers that we can compare them against. It’s not to say that they can be higher priced or lower priced. It’s just that especially if you’re higher priced, that’s when I recommend you really need to explain it - you’re higher priced because you’re a programming camp and every kid not only gets a computer but there’s also a 3D printer. You need to explain what are the drivers that drive your cost up so that parents can understand the value that they are getting. So that’s my advice. I don’t tell someone, ‘Hey, you’ve got to reduce your price.’ I just share some of the averages. Some of the average discounts that we see at this time of the year. In February, we figured out that the average discount was 13%. So we have these kinds of data points to share with them. They don’t have to give a discount but they just need to know what their neighbors and the other camps are offering so that they can set their expectations accordingly.
Scott:	Well, communicating the value, it seems like is what you’re saying. But that’s really powerful because you’re effectively making them better business people and doing that in a low maintenance way where they’re not having to do a ton of work. They can just rely on ActivityHero.
Peggy:	Yes, that’s right. I like digging into these numbers and sharing these types of insights with them. Hopefully, if we can do it for them, they, of course, need to compare against their own market. It’s just something to consider. It’s like a little bit of benchmarking. So I think when can do that for them - when they are both the instructor and the driver and the lunch maker - they’re wearing many hats so we help to take a little burden off them.
Scott:	And you mentioned something earlier where you were talking about the pictures and presentations. Is that like there’s a classic Airbnb story, where when you have professional pictures of your apartment, you can charge a lot more? Are you seeing kind of the same effect, but for camps?
Peggy:	Yeah, it’s a good observation. We have thought about that, that we should go and take pictures for them. And we experimented with that a little bit. In the end, we just found that showing them what is an example of what’s a good photo or how to describe that - what’s the composition of a good photo? It usually involves kids doing the activity that you’ve described.
Scott:	Yeah.
Peggy:	So usually we’ve gotten much better, improved photos from doing that. But yeah, sometimes we think about ‘Could we go out there and take more photos?’ I think what’s tricky or a little trickier in our market, it’s just that you want those photos of the kids and then you have to do those relief forms and everything like that. So it’s a little easier if they can just handle that. Make sure that the parents of those kids are cool with having the photo taken, and then we’ll just post it, and help them with our cropping tool to make it the right size.
Scott:	But those guidelines are probably really helpful. This is just a fun question, does anything surprise you? What’re the most popular camps that people do? Is there weird or funny stuff like barbecue camps? What are some of the things that would surprise us, in terms of interest that people have for doing certain kinds of camps?
Peggy:	Well, a couple of years ago is when I started seeing the Minecraft camps pop up, and that’s almost become mainstream now. There’s a lot of Minecraft now. Some of the camps follow these trends. They follow what are some building toys that people like. There’s a lot of Lego camps. When Lego Robotics came out, there was a lot of Lego Robotics. Some of these follow some of the popular video games as well, as a way of teaching programming or Java coding. So there’s some of that on the tech side. There are some theatre camps that might follow the trends in terms of the latest Disney movie. I’m sure there was going to be…
Scott:	Frozen camp?
Peggy:	Exactly. There was a Frozen camp. [inaudible] is probably coming out this summer, so there are these different themes like that. I’ve seen some creative ones where they have very interesting combinations. There was one where…I think it’s in the city of San Francisco and it’s called Marine Blasters. It’s a nerf camp, a nerf gun camp.
Scott:	Oh! I’d be interested in that.
Peggy:	Yeah, maybe the classic kind of thing like, ‘Mom doesn’t want you doing this in your house, so she may be willing to sign you up to go do it with a group of kids for a week.’ So sometimes there are really neat things that you don’t get to do at home, or you’ve never experienced before. So, summer camps are just a great time to explore for one week, a new topic that you’ve never experienced before.
Scott:	Yeah, and by the way, you can see why I didn’t eat enough for lunch because I’m taking barbecue camp tonight. That’s the adult version. My nephew actually did Lego camp last summer, and absolutely loved it, so I know there’s so much of this stuff out there. It’s amazing. I don’t want you to give away any secrets or trade secrets, but how did you guys figure out how to let people book? That just seems like a really tough problem, because there are so many of these camp directors and who knows how they can accept payments and things like that. That must have been a scary problem when you first started out.
Peggy:	Yeah, it seemed a little intimidating at first, because we thought there’s a lot that goes into building a registration service, but again when we broke it down into the components. We just started out in a more simple fashion. Some of the challenging things were figuring out how to accommodate people’s discount structures. Right. Some camps give early bird discounts, sibling discounts, session discounts for two or more sessions. We just started out small and more basic and said, ‘Okay, we’re going to only handle…’ We didn’t even handle discounts, I guess, in our very first incarnation. And we just said, ‘Okay, we’re going to issue refunds right on the site.’ So that’s how our approach has been, to be lean and agile. We just built the core functions. And then any exceptions to that, we might handle in a more low-tech way at the beginning. But until we productized it and then rolled it out, so it’s more automated. So that’s how our system has grown. What’s also been challenging about our system or what’s unique about it is that a parent can register for more than one camp at a time, or the next time they register like you register for Lego camp and then two weeks later you decide you want to add a soccer camp - you don’t have to fill out that form again. You don’t have to fill out your kids’ allergy information or the emergency contact. There are 50 fields of information that the average camp wants to know about your kid because you’re being dropped off. What if something happens during that time? They ask for a lot of information, just in case. Just in case someone’s late to pick them up. They need to know a phone number to call. So these are the things that by putting this all together, and we built a system so that the parents can register. Sounds like a common app. Simulation to college thing where you just fill out the form once and you can send in and register for many camps with that same information.
Scott:	That is so smart. I never even thought about that, but you’re right. The parents would have to fill that stuff out on the paper probably, like on a clipboard when they show up for the first day at camp, versus not only just filling it out faster and more efficiently in ActivityHero, but also being able to use that over and over again. That’s really smart. Is that one of those things where you got into it and how you started seeing all these accountings to scale that you can produce for the camp directors?
Peggy:	Yeah, as a parent you just had that experience of filling out form after form. Even if it’s not on paper. Even if it’s an online form, you’re just still typing in the same information again and again, and that doesn’t feel like a good use of time. So we definitely always had this idea that you could, because you can tell, ‘I’m filling out the same information 90% of the time. Why can’t I just answer the two questions that are unique for this tennis program or for the swimming program?’ That’s how we built it. We just said, ‘Okay, parents just want to fill this out once. Now the camps want all of their information filled out. So let’s just do it in a smart way.’ We built these features that ease the friction for both parents and for the providers, right. That’s a beautiful thing. It’s so win-win.
Scott:	I love it. What are some of the new things? Or maybe you can’t say exactly what you’re working on, but what are some of the newer features on ActivityHero and where are you guys going in terms of functionality?
Peggy:	I guess we’re always split into working on features for parents and working on features for activity providers. Say, starting with the parents. Some of the new features are just being smarter about what they see upfront. So, we have some predefined searches for them. They can find with just one click, what are the camps that are on sale - if that’s an attribute that they are interested in, or what are the soccer camps. So we have different ways of segmenting or giving out information just at one click. Other things like search by the hour. Camps consider a full day to be 9 to 3. Again most people still [inaudible] in at 3, so camps have come up with this idea of extended care, that you can take to 5 o’clock or 6 o’clock. So we have a very precise time search now where if you need to drop off your kid at 8 and you cannot pick them up until 6, you can put that specific time range, and we’ll show you only programs that fit that criteria. So those are some of the things that have been rolled out for the season for parents. On the provider’s side, we’re making it easier for them to just manage the listing and be more intuitive like when they do need to add some unique information about the program. They want to add photos. They want to add their next schedule. They want to see the way parents will see the listing on their site. So we are about to roll out a new release to the Dashboard, we call it. That’s basically the backend. The camp organizers and the class organizers get to see it. That’s how they’ll manage their listing. That’s how they’ll see the reports of the registrations that have come in. So that’s one of the things that we’re excited to release out there in the wild.
Scott:	I love it. I love it. It’s so cool. How many people have kids? 50 million or 100 million people in the United States. So this is a problem that affects so many people. It’s so cool for you guys, to see you just growing up as a company, and keep iterating and making it better and better and rolling out into more markets. It’s a really exciting story.
Peggy:	Thanks, thanks yeah. It’s a really very common thing. We’ve also been approached by people from other countries like, ‘When are you going to come here?’ So that’s when we just know to focus on the US for now. It is a big problem. Our estimate is that $30 billion is spent on classes and camps a year in the US. But what’s interesting is that when you talk to investors sometimes, they think this is a niche product. They think this is just us hitting on a slice of the audience. But gosh, anyone that has kids between the ages of 2 and 18 are experiencing this thing again and again. I can say that it’s certainly been my experience as a parent that it doesn’t go away. You’re still looking for new things for them. Then we see that once we feel good about what we’ve done for the kids market, we can expand to adults in between classes. Do you want to take a pottery class or something on glass blowing - who knows what there is. So that’s potentially our next area.
Scott:	Yeah, even the baby boomers. I mean, a lot of baby boomers are starting to hit retirement - and I know from my own parents - they are super active still, taking exactly those kind of classes that you’re talking about. So it is a really huge market.
Peggy:	Yeah.
Scott:	Awesome. Well, maybe you can tell everyone where to find ActivityHero and how to reach you if they are interested in partnering, or interested in listing on the platform.
Peggy:	Sure. Our website is activityhero.dom. All one word. And you can go there if you want to list your business, or just find out, or if you want to search for things. Just go to our website. If you are a parent in a city that we’re not serving, well, just shoot us an email. We’d love to hear from you and hear about what are the programs that you want to find. Our website activityhero.com is where you can find it all.
Scott:	I love it. It’s a really cool company. It’s been such a pleasure to watch you just grow over the years. Even in this podcast, I’ve learned 10 things I didn’t know you guys were doing, and also little things that make the experience so much better for the parents, and for the camp managers. So, kudos to you. Peggy, thank you very much. Please check out ActivityHero. It’s a great company and I hope everyone books a bunch of classes on it, especially the summer which I know is your huge, huge time of the year. But you guys have stuff going on throughout the year, right? It’s not just the summer phenomenon.
Peggy:	Yeah, yeah. As I said, the kids are out of school for spring break and winter break, and these different times. And then they are taking classes - gymnastics, ballet, music, soccer - different classes throughout the year. So it really is a year-round thing.
Scott:	That’s great. Well, Peggy thank you for coming on. And again, you can find Peggy at activityhero.com. Actually, you can even leave in the podcast comments the classes you’ve booked and how much fun you had at these classes. That’ll be fun to check out. Thanks, everyone. Take care.

Peggy Chang of Activity Hero - Online Booking for Children Activities

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