When Hurricane Ian nearly destroyed this resort, they used the Scaling Up platform to rebound
November 2, 2023AI is not the only sector dodging a funding slowdown
November 9, 2023
By Verne Harnish
Carlos Abisambra was frustrated. His Denver-based company Travelers Haven—which provides short term housing to nurses and doctors, construction workers, sports teams and other nomadic professionals—was growing rapidly in 2020. But growth was sucking cash at the bootstrapped scaleup, launched in 2008.
“We always seemed to get stuck at a certain revenue or employee headcount and couldn’t grow beyond that,” says Abisambra, who took the helm in 2020 as CEO, president and an owner. “The more revenue we added, the more it costs us, so it was clearly a scalability problem.”
To achieve more profitable growth, he turned to Scaling Up Certified Coach George Morris in July 2022. With Morris on board as a coach, the bootstrapped company grew to more than $100 million in revenue in 2022, with sustained profitability. Its secret weapon was a creative and highly successful Quarterly Theme built around the Super Mario Bros. video game.
Even better, the work they did positioned the company for acquisition. In February 2023, Blueground, which describes itself as the largest global operator of furnished rentals for 30+ day stays, acquired Travelers Haven. Abisambra is now transitioning out of his role as CEO, as a new CEO, Peter Herman, takes on that role.
Here is how they pulled it off using the Scaling Up platform.
Achieving harmony
When Abisambra became CEO, a lack of trust pervaded the organization. Factions had developed after a previous merger. To address the infighting, he and Morris devoted four to five months working on the functions of the team, making sure the right people were in the right seats on the bus.
This work resulted in some attrition. Some team members left—they were not willing to sign up for the new norms that Scaling Up ushered in. “That was a good outcome,” says Abisambra.
They also did a calibration of the management layer, putting specific growth plans in place for every manager, to ensure that the team was well-positioned to achieve profitable growth.
“We weren’t hiring much,” says Abisambra. “There was a lot of uncertainty with the markets and interest rates and the Fed, so I wanted to implement top line.”
Ultimately, they created a healthier work environment. The company has been recognized as a Top Workplace by the Denver Post and a 2022 Best Places to Work Colorado by Built In, which recognizes tech companies.
Getting focused on Execution
By the third quarter of working with Springer, Travelers Haven switched most of its focus to Execution. That started with weekly huddles, a monthly manager’s meeting, and a Sunday of learning for the leadership team.
That communication, in turn, led to a creative way to improve profitability. Temporary housing is a low-margin business, so small costs—like repairs in an apartment—can eat away at profits quickly. The company was losing 30 to 35% of its profits this way every month. “If you annualize that—and all of these costs are small—$5 here $20 there, $50 there—they could add up to half a million or $1,000,000 a year,” says Abisambra.
Bringing gamification to a Quarterly Theme
To address the margin leakage, the leadership team created a Quarterly theme built around the Super Mario Bros. theme. “Since they are plumbers, they can fix the leaks,” explains Abisambra.
When the team returned to the office after the pandemic, the company hosted an in-office Mario Kart tournament. Two-thirds of the office signed up.
“When everybody walked in that first week in July, there was Mario all over the walls and every person had Mario candy on her desk,” recalls Abisambra. The company did an all-company huddle where it introduced the concept of margin leakage, explaining that the Mario Brothers were plumbers and were going to help with the leaks.
There were opportunities to win Mario-themed prizes and rewards for the entire company if it hit each of three tiers of margin improvement: hiring of an in-office barista; half-day closures on Halloween or the day after, depending on the employee’s preference; and everyone working fully remote in December.
Tracking the results
Although one VP was skeptical—“He thought it was too immature,” recalls Abisambra—he became a believer after getting very positive feedback in one-on-ones with the team and seeing the results.
The company shared its progress in meeting goals every Tuesday, revealing how the company was trending in achieving one of the three tiers: a 1% improvement in margin, a 1.5% improvement or a 2% improvement.
The company was able to reduce margin leakage by 80% in one quarter and is now on its fourth straight quarter of record margin growth. “In six months, we’ve already beat the EBITDA we generated in the entirety of 2022,” says Abisambra.
Achieving an exit
By November of 2022, the company was ready to exit and sold to Blueground, a venture backed company in New York City founded by a McKinsey alum. Blueground owns more than 12,000 furnished apartments in 30 major cities and developed a prop tech app that enables quick and easy booking.
Abisambra saw Blueground as an ideal partner. “We’ve always been on-demand because we started with travel nurses, and travel nurses go anywhere in the US,” says Abisambra. “We couldn’t tie ourselves to inventory, so we developed a network of suppliers that could give us the properties, the furniture rentals, and everything we needed across the US.”
Under the Blueground brand, the combined organization now employs more than 1,200 team members and projects $600 million in revenue for 2023. Blueground plans to expand to 50 cities by 2025.
Abisambra is now involved in helping the company to transition to its new leadership. Travelers Haven intends to continue deploying Super Mario theme to fuel profitable growth, with new activities ahead. “It was such a success the theme is still the same,” he says. “We know there’s still opportunity, and people loved it.” Who says Scaling Up can’t be fun?
