The Two Numbers This Founder Watches Above Everything Else

Melanie Barr: Welcome to She Built It. I'm your host, Melanie [music] Bar. Today, we're talking about building an unconventional business model, growing without outside investment, AI, and the future of travel, and what leadership looks like when an idea that once felt risky actually starts to scale. Most of us plan a trip [music] by choosing where we want to go first. Lillian Rafson built a company around doing the opposite. She founded Pack Up and Go at 23 with no outside funding and a belief that some of the best travel experiences happen when you let go of the destination. Travelers choose their dates, budget, and preferences. [music] Pack up and Go plans the trip, and the destination stays a surprise until it's time to leave. Eight years later, the company has set more than 40,000 travelers to more than 300 destinations while helping bring tourism dollars to cities travelers may never have considered on their own. Lillian, thank you for being here. Packup and Go is built on asking travelers to give up control. Tell us about your business and how you decided

Speaker 2: on this mission. Pack upingo is a travel agency and we plan curated vacations around the United States, but the catch is that our travelers don't know where they're going until the day they depart.

Why I Started Pack Up and Go

Speaker 2: So, it's definitely a unique spin on a traditional travel agency. But I decided to start the company about 10 and a half years ago. I was 23 years old and had no idea what I wanted to do. I had just quit my first job out of college and was honestly feeling pretty lost. and I was traveling around Eastern Europe and I heard about the concept of surprise vacations which already existed in Europe and a few things dawned on me at once. I am from Pittsburgh, Pennsylvania originally while I was traveling and heard about this idea. I was in Ria Latvia, which was a town that I had never heard of before going there, honestly, and realized I've made it all the way to Latvia, but I had never been to Philadelphia or uh Boston, Massachusetts. And I realized that for some reason I only thought of traveling as traveling overseas and not as traveling domestically. And I come from a family of small business owners. And I thought, how many small businesses in the United States could I be supporting if I wanted to travel domestically? And why is it that I don't think of these cities as a vacation destination and thinking about my hometown, which is so awesome and so many people would never think to visit it. And I moved home and I just built a website on Squarespace and here we are today. Fun. And I have to say it gives me a little bit of anxiety to not know where I [laughter] might go. But we went on a family cruise. It was planned by the family and I was thinking, am I going to like this?

Speaker 2: A lot of uncertainty as to what it was going to be like, but it was the best thing because it was planned for me. I didn't have to think about anything. I'm a mom of twins. I'm constantly organizing and figuring things out, but not having everything planned for me and the unknown was actually a little bit relaxing.

Speaker 2: Yeah. And I always like to clarify that it's a surprise, but it's not random.

Speaker 2: So, all of our trips are handplanned by a person for you. So when you sign up, you fill out a pre-trip survey. So a lot of the people who book our vacations are busy working moms who say, "I have decision fatigue. I am always in charge of making the plans." So you or your family would fill out our pre-trip survey, which takes about 15 minutes, and then you're done. But that's where we get your travel history, dietary restrictions, any preferences. We learn what your kids like or don't like, so that we can plan a vacation that's perfect for you. And then one of our travel planners reads through it. So, it's not like we're not spitting it into an AI algorithm and getting a vacation out of it. It really is personalized.

Speaker 2: And the idea is that yes, it may be a little bit uncomfortable giving up that control. But isn't that the beauty of vacation? I think a lot of times when we plan our own trips, we micromanage everything. We are looking on Tik Tok.

Speaker 2: We're looking on Instagram. We're doing all this research online to find the perfect places to take photos, the perfect restaurants to go to, the perfect hotel to stay in. and we try so hard to control every aspect of it that we forget to just enjoy our vacation.

Speaker 2: There's something to relinquishing control and being able to just show up and actually have fun. I've taken one of our trips and I was excited about the element of surprise and finding out where I would go. But then once I actually got there, it felt like the surprises just continued in a fun way.

Speaker 2: And it was a really nice, refreshing way to travel that I think a lot of us don't do very often. I have to say when I first learned about it I thought oh I don't know if I could do that and then the more I thought about it I thought that sounds really fun. Exactly. It's a really wide range of travelers and so when I started the company and I was 23 I thought okay I'm the target audience.

Speaker 2: We'll get a lot of really young people who have a little bit of disposable income and are excited about an adventure. But what we find is that most of our travelers are either the parents of children or the entire family taking a trip. We've got empty nesters going on vacations who say, "We have been planning for so long and now we just want to treat ourselves and enjoy each other's company. We have retirees. We have newlyweds." We really do have a wide range of travelers going on trips.

Speaker 2: And I think it just proves everyone's tired and everybody is looking for a relaxing vacation uh that they don't have to plan.

Melanie Barr: And you're right, there are so many places in the United States that it would be fun to go and visit. We were just in New York and we hadn't been to DC and our kids hadn't been to DC. So my husband said, "Do you want to drive to DC last minute?" And we made that trip and my husband's been into every state except for Alabama. But when are you going to say, "Okay, I want to plan a

Speaker 2: random trip to Alabama."

Melanie Barr: Right. Exactly. It's a fun challenge and

Speaker 2: we do get a lot of travelers who say, "We are trying to hit all 50 states. These are the eight states that I have not been to. Can you make it happen?"

Speaker 2: Sometimes it's a challenge when the last states are North Dakota and Nebraska, but but we know that if that's what's important to our travelers, we'll make it work.

Melanie Barr: You started the company at 23 with no outside funding. What did staying independent allow you to do differently and what has made growth harder?

Speaker 2: I think there are pros and cons to every path that a business can take, whether you bootstrap, whether you receive funding. There's perks and hardships that come with both routes. I knew early on that I wanted to bootstrap and that was a decision I made right off the bat.

Speaker 2: If you think about businesses in 2016, this was the heyday of Girl Boss and Accelerator programs and Y Combinator and it was right when Uber and Lyft were really taking off and social media was becoming huge and everything out there was VCbacked with hockey stick growth and seemed very lamb and very exciting.

Speaker 2: And my first job out of college was at a ventureback startup. I found it really invigorating in a lot of ways. I was in an entry-level position there, but I could tell that there was a ton of pressure on the company's growth and the company's performance coming from the VC firms that backed it. That felt really intimidating to me. At first, the decision came from just feeling intimidated by that requirement to grow.

Speaker 2: But I also knew that the company would be profitable pretty quickly because the way that Pack Up and Go works, our travelers are prepaying for their vacations and then we use their funds to book their vacation, but we take a little cut out of it. And because the company was just me and my laptop and I was working out of a co-working space, my expenses were really low. And so I knew that I didn't need ventureback funding to to accelerate the growth. and I wanted it to really be a sustainable company. Both of my parents ran their own businesses for decades. I I really liked the idea of having a company that was self-funded, that I maintained 100% control over, that could grow and be healthy and provide me with a healthy salary and employ a couple of team members and grow sustainably over the years and provide an exceptional service to our travelers that we maintained control over that wasn't [clears throat] dictated by someone else's terms or someone else's timeline for growth. That was my original business plan and I am still to this day glad that we did it.

Speaker 2: There have been times, especially during the pandemic, where I thought, wow, having somebody else's money right now would be really helpful and maybe give us a little bit more of a cushion. But it has forced us to really think about what is the profit model here and how do we ensure that we stay in business. And what I've come to realize is that there are basically two KPIs that I think matter most. And the business cannot exist without either one. and they have

Speaker 2: And if you have a business that is purely based on profit, but your clients aren't happy, that also won't last. So being bootstrapped has forced us to really hone in on those two metrics and make sure that they are always working in tandem

Melanie Barr: and it also had to be nice for you to

Speaker 2: make the decisions that you wanted to make as you went through the growth.

Speaker 2: Absolutely. Absolutely. And it's allowed us to chart our own path and for example I am on Mattly right now. I had a baby last month and it was really nice to be able to say, "Okay, for the the last nine months, I instead of focusing just on growth, I was figuring out how to make sure the business would be fine if I stepped back for 3 months." And having the ability to make those changes and determine the course of growth has been huge.

Speaker 2: And I love the slow growth particularly for moms and growing over time as you're home with your family and your lives change. I launched she built it when the twins were two and they now are 13. But it's nice to say I want to grow this at the speed and within the time that I want to and as they get older I'll be able to put more of ourselves and our lives into the business.

Melanie Barr: Absolutely.

Speaker 2: And I respect founders who have gone a different route and have raised money and have really accelerated their business growth. And what's important as a founder is getting really clear on what you want out of your business. I knew that I wanted to grow this healthy, sustainable business that I could run for a long time. And I know other founders who said, "No, I'm growing this because I want an exit. I want to put in a lot of effort and grow it and then I want to cash out." And there's not a right or wrong answer. It's just about getting clear on what you want versus what anybody else wants for you or what you see other people doing and then you build the path that gets you there.

Melanie Barr: Yeah. Yeah. And if you enjoy your business and want it for the longer term, why not? I mean, I understand wanting that exit, too. But if you say, "I want to enjoy this for the next 10, 15 years. Might as well enjoy and wake up loving what you do every day."

Speaker 2: 100%.

Melanie Barr: What has been the hardest operational

Speaker 2: and financial decisions you've made as Pack Up and Go has grown? There was a point in the business's growth where I felt like I strayed from my vision for it. And this was coming out of the pandemic. The pandemic was a really hard time for the travel industry. But counterintuitively, it was a really strong period of growth for us coming out of it. Starting in 2020, because we only planned domestic trips and we offer road trips and we offer outdoors trips.

Post-pandemic growth

Speaker 2: The second half of 2020 and 21 were periods of huge growth for us. And for a while, the company was growing really quickly and I was trying to get people who could plan vacations at desks to plan them so that we could keep up with demand. I realized as we were growing, like this is fine. I had always been very measured and said, "No, we're not going to grow that quickly. We're going to be very mindful about who we hire, when we hire, how we hire." But once we started picking up steam, like the team got really excited about it, and you start getting a lot of press for growing pretty quickly, and we started winning awards for growing quickly. Once you get on that type of bandwagon, people start asking you, Lillian, what's next? What's the next growth opportunity? How big is your team now? What's your headcount?

Rethinking growth

Speaker 2: And I will admit, I got really, really wrapped up at that. And then a couple of years later, once everybody had taken all of the trips that were pent up after the pandemic and people's finances started to catch up with them and people didn't have as much money for vacations and our growth plateaued, I realized that I had gotten us into a pretty precarious financial position and the company was not structured in a way that would allow it to eb and flow. So if demand softened, our headcount stayed the same whether we had 500 trips or 200 trips. And that was not going to work.

Layoffs and Leadership

Speaker 2: And so realizing that financially the only way the business would survive was if I did layoffs was an awful time for me personally and for the business. And it was heart-wrenching. But it was a decision that had to be made. And I think it's the only reason the company is still in business today. And what I had to do was sit back and say, "Okay, I have gotten us here. I made a series of decisions that put the company in this position. What do I want the future of the company to look like and what needs to be done to get there? And it was really hard to untangle myself and my own worth from this decision and the situation that the business was in. So I could take responsibility for getting caught up in this growth and making the decisions to get us there. But I had to realize this is not a reflection of me as a person. I made certain decisions and I can learn and grow from them. But it's fun and it's easy to co-mingle yourself with your business when things are going really well. And then the flip side of that is that when things aren't going well for the business, understanding like no, we are separate entities and both of us will be okay. We just have to make hard decisions to get back on track. And yeah, it's painful to do and it's hard when you really love and care about your team and you are a close-knit team, but but we're on the other side of it now.

Speaker 2: And I hope that everybody has found great positions and landed at other great companies because making tough business decisions is really hard to do.

Melanie Barr: Thank you for being honest and for sharing that story because business is not linear and you took the a great approach as a leader. It is hard to separate yourself from a business especially when you build it from nothing.

Speaker 2: Yeah, exactly. I'm really proud of all the company's achievements. For a long time, I felt so much shame around having to do layoffs and having to let people go and the feeling of disappointing the team members who were let go and disappointing the team members who remained. And for a long time, I felt like I couldn't talk about it. It was deep dark secret that I had to live with. And it felt like such a personal failing. And realizing this is just part of the company's story and my story as a founder and a leader. And now I have put a lot of guardrails in place at the company so that we don't have to go through that again. And and remembering that mistakes happen and nobody is perfect. And now I've talked to other founders who have had the same experience and realizing, oh, this just happens sometimes. And it's awful when people get caught up in it and try to be as human as possible to the people who are being impacted.

Melanie Barr: Yeah. Uh it's hard to step back and think this happens unfortunately in business every day, but when you're in it and it's your business and it's your team and those relationships, it is really hard, but it has to be done in order for the business to grow and be sustainable in the future. So, thank you for sharing that. How are you using AI today? We talked about having all of the trips personally created. Where could it have the biggest impact on personalization, planning, and

Speaker 2: operations? it feel very strongly that AI has a major role to play in business. I think denying that is just not worth it at this point. It's here is here to stay. Everyone's using it. But what I've realized is that I don't think it has a huge role to play in planning our vacations. And I don't know if you've had the experience of using AI to try to plan a vacation and it makes a recommendation for a restaurant that closed 2 years ago or it gives you road trip directions that don't actually make sense or take you in a totally wrong direction. And the other issue with travel planning in AI is that because the models are all trained on online resources, whether it's Reddit, whether it's social media, whether it's listicles, what ends up happening is the same thing that happens when people go to Tik Tok or Instagram for travel recommendations, is everyone starts to do the same thing. And everyone's itineraries start to look alike. And this is where you run into issues with over tourism or things not truly being personalized because it's all just pulling from one pot of recommendations.

Speaker 2: So, it's important to me that we still have humans planning all of our trips.

Speaker 2: And in a weird way, I think that can almost become one of our differentiators that it's not just an algorithm spitting out your vacation. And it might look similar to everyone else's, but AI plays a huge role in back office management in data analysis to help our team make the most informed decisions. We have used a lot of AI backed data analysis tools for a long time now where we have an incredible amount of data at our fingertips. So, we can see from someone's pre-trip survey what their demographics are, what their interests are, what what types of vacations they have gone on in the past, and then we have all of the data from post-trip surveys, we've planned over the trips for over 50,000 people now. So, we can see based on this set of demographics and these things that we booked for someone, do we think someone in the future might like a similar experience if they have a similar demographic background? if they're celebrating the same milestone birthday, if they're traveling with a similar partner, we can make datadriven decisions and using AI tools allows us to to synthesize the feedback that we get from our travelers in a much easier way. It also helps us streamline other operations that every business goes through. Whether it's thinking through your marketing strategy or analyzing the way that people navigate our website and saying if this is our target audience, is this web page set up in the most engaging way for that? It can act as another tool. As a small business, we have a really small team. I try to think like on the back end of things. How can we use this to enhance our traveler experience without losing any of the personalization from having a real person plan the vacations?

Melanie Barr: And I think that is is a great resource for a lot of companies, especially travel agencies. I love that you're using AI in such a smart way with running your business. And you're right, there are restaurants that are probably amazing, but maybe they don't have their site mapped in a way where they will get recognized through AI. at SBI Media, that's what we help our clients do. So, I know that if someone isn't mapped, their website isn't mapped in the right way or they don't have their owned media, they'll be skipped over. So, it is really nice that you're planning those personally to make sure that those restaurants are still getting the customers that they deserve. And also, I just was looking for a hotel in Oceanside for a soccer tournament our family was going to go and do an overnight. And I put in so many different keywords and it kept showing me Hyatt's and I thought Hyatt really has their site and their owned media mapped just because it's what I do. I thought oh wow I'm seeing this in real time because I kept putting in different keywords to try to get boutique hotels and it kept referencing me to Hyatt. So it was interesting to see in real time how certain local businesses could be completely skipped over if they're not mapped in the right way.

Speaker 2: Exactly. And we actually have a dedicated team member who just does our inestination research. her position might be the job that I'm most jealous of at Pack Up and Go because she's the one who is looking in each destination and saying, "What are the hidden gem restaurants that might not be making the list of goals or might not have the best SEO and how can we find them to refer our travelers there?" So, we really want our travelers to feel like a local expert is showing them around town and like it is planned just for them. We also have a stated commitment to making sure that 20% of all businesses that we recommend are women of minority owned.

Speaker 2: And sometimes that can be tricky using AI also because if a website doesn't necessarily list that it's a womanowned business, then we have to go through and we will do the vetting to make sure that we are meeting that commitment.

Melanie Barr: I love that you do that and that you have the commitment for that. It's so great.

Speaker 2: Thank you.

Melanie Barr: Thank you.

Melanie Barr: Travel discovery is becoming increasingly driven by the algorithms which is what we were just talking about. How are you thinking about how people find and trust Packup and Go?

Speaker 2: As I'm sitting here saying, I want your experiences with travel to go beyond just what you see on Instagram and Tik Tok and Facebook. We do as a company rely heavily on those platforms for people to discover us. So, at Packup and Go, we are incredibly fortunate to have a great community of repeat travelers and we have a great community of travelers who were referred by our past travelers. So about 30% of our business is word of mouth. After that, most of it comes from organic social media. But the great thing about running a travel company today is that social media does exist and people love to share their experiences on social media. What we try to do is give people sharable moments with their vacations that people want to share organically. And because we're a bootstrap business, we don't have a marketing budget. So, we're not investing a lot in paid ads or paid placements or paid partnerships. And what we do instead is we could build an app that reveals people's destinations digitally, but instead we pack physical envelopes. And so, each traveler gets an envelope in the mail that they get to open and reveal their destination. And that's such a fun sharable moment. So, we see a lot of our travelers opening it on Instagram live or on Facebook Live and getting their friends to guess when they get their weather forecast before their trip. So, all of those sharable moments help us gain traction on social media. The other thing that we do to help people find out about us is uh we do a lot of partnerships. I firmly believe that a rising tide lifts all boats. And so, we have found ways to partner with other brands where we do a lot of cross promotion. We've partnered with brands like Captain Crunch. They did a sweep stakes where they gave away surprise vacations. Those types of opportunities have really opened a lot of doors for us and allowed us to scale without just pouring money into ads that are sometimes hard to attribute, especially with vacation packages where the conversion funnel is long. People aren't often making impulse decisions when it comes to vacations. We know we're playing a long game when it comes to brand awareness.

Melanie Barr: That's so smart and so smart of you to do the envelope because who wouldn't want to share that? And also you can follow along with the trip as they go, where they're going and then where are they going next.

Speaker 2: And the envelope truly started because it was a bootstrap business and I couldn't afford to develop an app or couldn't afford to develop a fun way to reveal the destination. So for the first couple of trips, I literally went to Staples and I bought envelopes and I printed everything out in my at home printer and just stuffed it. I did not intend for that to be a sharable moment at first, but when our first couple of trips departed and a traveler sent me a video of her opening her envelope and then holding up her destination sign, I thought that's so fun. I'll share that on social media and now it has become the cornerstone of the brand.

Melanie Barr: Yeah, it's so smart because we're looking for more authenticity and also travel is something that can't be replaced by AI.

Speaker 2: Exactly.

Melanie Barr: So, you're in such a good position. Thank you. What has changed most about

Speaker 2: how you lead since starting the company at 23?

Leading as a young founder

Speaker 2: In some ways, I think it was great that I started the company so young because I didn't know better. I didn't have professional management training or a lot of experience in managerial positions because the company started with a small team that was really close.

Leadership transparency

Speaker 2: I've always led with being open with the team. That's just part of my personality. I'm an oversharer by nature and it translates into a lot of visibility for the team that other companies and other leaders might not necessarily give to their team in the same way or the same transparency. But after I realized that the company needed to make layoffs a couple of years ago and and going through that process, I structured and increased the visibility that the team gets. So now every month the company is getting an update on our profitability and our margins. And it became very clear to me that it was important for the team to see the numbers that I am seeing and to make sure that everyone is on the same page about which metrics I am tracking because part of what made those cuts that I had to make so painful was that it felt like only I had that information. I was sitting there drowning in these thoughts about why is nobody panicked about this information in the same way that I am panicked about it. And I realized they might not know.

Speaker 2: they might not see the numbers that I'm seeing. That has definitely been a big transformation for me is understanding that transparency isn't just a nice to have. It really is a need to have so that everybody is rowing in the same direction and working towards the same goals and knows what I am tracking towards so that they can track towards it also. And I'm proud of that transformation. It's been helpful for the team and and honestly helpful for me.

Melanie Barr: Yeah. And it's really smart because it shows probably where they are in each process and when the growth happens they can get excited and everyone can get excited about the growth as a whole.

Speaker 2: Exactly. Exactly. Yeah.

Melanie Barr: What are you protecting more carefully now as a founder? Your time, energy, team or decision making.

Speaker 2: Wow. It's an interesting time for you to ask me that question because having had a baby 5 weeks ago, this is maybe the first time where I have relinquished a lot of control. For a long time, I was in the weeds of every aspect of the business, which I love. Don't get me wrong. But right now, I'm in a stage where I am protecting less than I ever have before because I knew that I wanted to be able to step away and take this time off to be with my baby. And and it feels really good. I like it. There's a few benefits to it. One is obviously that I can take a true maternity leave, which is a gift. But the other is that I now feel more relaxed because I have trained other people at my company to do the parts of the processes and the business that only I was doing. If I get sick or I just want to take a true vacation, there's a lot less pressure on me being the only one, a single source of truth for all of this information.

Speaker 2: And that's really freeing. And I am excited now about diving back in and taking on some projects and exploring some growth opportunities knowing that everything's handled. The baseline of the company is fine without me. And for a long time, I was just holding on so tightly because I felt like no, this is a small business. It will crumble without me. Going on maternity leave has been great. My director of operations at the company has been with me for 9 years and I trust her so much. So, she is now fully on boarded with every process that I've ever done. And we even went so far as to train backups for all of the processes that she oversees so that she could take a vacation while I'm on leave. It forced us to get our SOPs in place, make sure that all of our processes were buttoned up, make sure the flow of communication was really airtight, and I don't think that we would have done that had I not got on leave.

Melanie Barr: And it doesn't matter the size of the business. You still have those responsibilities within a business that you are doing. And it's so smart of you to make those into not repeatable processes, but a process for someone else to be able to do so that you can step away.

Speaker 2: Absolutely. It's so important and I don't know that I would have done it if I didn't have this time based commitment.

Melanie Barr: And it has to feel really good and organized probably for you too. It's great.

Melanie Barr: What is bringing you the most joy in your life today? I think I might know the answer.

Speaker 2: Yeah. Having a baby. It's so fun. It's so interesting because it has brought into focus for me that I really love what I do at work, which is the weird thing to realize when I'm focused on raising a newborn. I realize I guess working. I'm excited to go back and to be able to explore these different opportunities. And it's so wonderful to be able to step back right now. I live in Florida and it's the summer and it's really, really hot. I've always been a person who goes a mile a minute and who does a lot of things. The simplicity of staying at home and feeding my baby and cuddling is a pace of life that I have never experienced before and it's a delight. It's great.

Melanie Barr: Thank you so much for joining us today. Your company is so fun. When I was first learning about it, I thought I don't know if I could go on a trip like that, but now it sounds really fun and exciting. Share with us how and where we

Speaker 2: can find you. Yeah, our website is packupgo.com and we are on social media at packupgo_travel and we'd love to plan a trip for you