Gateway to Adventure

AdventurousTraveler.com, the business Spencer Newman began on a shoestring, is making strides in the adventure travel industry

by Portland Helmich

Adventurous Traveler is the contact point for people who want to dream about a trip, research it, book it and plan more trips when they return, says Spencer Newman about his Burlington-based business.

Spencer Newman's father probably thought he was passing on a love of botany to his oldest child. From the swamps of Georgia to the mountains of Newfoundland, the young boy traveled with his mother and two younger sisters while his father, a pathologist, went on zealous missions to collect alpine and carnivorous plants. Though Newman didn't share his father's passion, the adventures it precipitated may have sparked his own. "I wasn't excited about the plants," he recalls, "but I was excited about going places."

He still is. At 32, the Manchester, N.H., native sits at the helm of AdventurousTraveler.com, a Burlington-based mail-order/Internet company that sells outdoor and adventure travel information and products to more than 100,000 customers around the world. Books, maps, videos, CD-ROMs, photographs, posters, language tapes, and travel accessories comprise most of the six-year-old company's inventory.

Skimming through the catalog and browsing adventuroustraveler.com, the website, one comes across a wealth of unusual finds. There are books on diving in the Caribbean, kayaking in Alaska, and hiking in the Alps. There are Kilimanjaro trekking maps, Indonesian phrase books, South Pacific cruising videos, and waterproof pens. The rare and out-of-print collection even houses mountaineering books from the 1800s.

That's not all. In October, the company merged with Away.com, an adventure travel services outfit based out of Washington, D.C. and Portland, Maine. The result is that Newman's informational products company is now evolving into a prominent travel services company that aims to fill every need consumers interested in outdoor and adventure travel might possess. "We want to be the contact point for people who want to dream about a trip, research it, book it, and entertain other trips when they return," Newman explains. Currently, the two companies are integrating their Web sites so that customers will be able to take advantage of one-stop travel planning; the linkage should be completed before the end of the first quarter.

As senior vice president of the merchandising division of Away.com (his new title since the merger), Newman seeks to grow the expanding company aggressively. That means raising venture capital, buying other adventure-travel Internet companies whose funds are drying up, and working through third parties to distribute both companies' travel products and services to the greatest number of people. For example, Away.com is running Discovery's entire online travel services division; it's also managing Outside Online's web site, a spin-off of Outside magazine. "We sell our products through their Web sites," he says. "They're big distribution channels for us."

Most of the company's customer service agents are outdoor enthusiasts, an asset when selling travel books and accessories. The South Champlain Street business employs about 40.

Newman admits that aggressive growth and profitability don't often go hand in hand. Though AdventurousTraveler.com is growing at a rate of 50 percent a year, the company still spends more than it makes. According to Newman, that's OK for now. "We could easily be a three-million-dollar-a-year company and be profitable," he suggests. "What we want to be, though, is a 50-or-100-million-dollar-a-year company that's profitable, and you've got to spend a lot in order to get to that level."

Spending requires resources, and, Newman concedes, the venture capital environment for Internet companies is indisputably tight. Funding is hard to come by because so many other cyberspace businesses have dissolved. In addition, Newman believes Adventurous Traveler's headquarters can be a liability when attracting investors. "There are a lot of misconceptions about Burlington," he says. "People think we're in the woods eating squirrels. There's a perception that everyone is up here because of a lifestyle choice, and everything else comes second. You're not taken as seriously as you would be if you lived in New York or Boston."

Despite the challenges, Newman is undeterred. T.J. Whalen, Adventurous Traveler's vice president of product and merchandise strategy, says Newman has a positive outlook, the sign of a good entrepreneur. "In the face of contracting capital markets this summer, there was nobody who was more optimistic about the prospects for our success," he notes. "He didn't believe failure was an option." More impressive than his optimism, Whalen adds, is Newman's ability to recognize his limitations and allocate internal resources accordingly. "He's great at delegating," Whalen points out. "He knew enough to know that he didn't know a lot about marketing, which is critical to transitioning a small business into a legitimate corporation. I wouldn't have come on if he hadn't realized he needed help."

Newman would concur. "You can't do everything when you're running a company, so you've got to make sure the people closest to you are outstanding, and that filters down." Today, the South Champlain Street business is made up of approximately 40 employees (some are part-time) who work in various departments: customer service, information technology, merchandising and marketing, product development, administration, editorial, and fulfillment.

That's a far cry from the company's humble beginnings in Newman's Hinesburg apartment. In 1994, Newman was working at Peregrine Outfitters, a burgeoning wholesale distributor of outdoor sporting goods. (He had joined the Williston company in 1990, after graduating magna cum laude from Tufts University with a double major in American studies and political science). "I think I was their third employee," Newman recalls, "so I did a little bit of everything. I answered phones, packed orders, bought products, and drove sales." Another of his responsibilities was to help build the company's book program, which had begun selling outdoor travel books to retailers like Climb High and The Alpine Shop.

Newman noticed a niche that wasn't being addressed. "I saw that there were a lot of books that stores wouldn't carry because they couldn't sell enough of them in any one place," he explains. "Hiking the Dolomites is an example. There's decent demand for that in the aggregate population of the U.S., but no one bookstore is going to carry it." Furthermore, realized the budding entrepreneur, many books on hiking and other outdoor adventures were only available in the areas where such activities took place. "It seemed like a natural for a mail-order catalog," he continues, "a way to get those books to the people that needed them."

For six months, Newman continued working part-time at Peregrine while trying to get his vision off the ground. Bob Olsen, Peregrine Outfitter's CEO and Newman's self-proclaimed mentor, knew it was the ambitious youth's intention to develop his own business, and he supported him without reservation. "Spencer had a balancing act to follow for a while," Olsen recalls, "but I let him stay on at Peregrine because he was smart and talented at what he did. Also, he wasn't leaving to compete with us; he was leaving to become a customer."

"When we put a book on the Internet, there's no additional cost to us. It sits in a database; we don't have to carry the inventory," Newman explains. Pictured: Erich Finley, director of production systems.

Not quite so fast, however. Newman admits he was "totally clueless" when he first out. "I had no idea how to run a mail-order catalog," he admits. Relying on a mailing list he had rented for "a few hundred dollars," the 26-year-old sent out 5,000 copies of the catalog he designed and hired Offset House to print. "There were very few sales," he remembers. "I was lucky if I got an order a day." Looking back, the outdoor enthusiast is glad he began his endeavor on a shoestring. "I made huge mistakes early on that didn't cost me the business," he notes, "like thinking I could send out 5,000 catalogs and get responses from 5 to 10 percent of them." In reality, only 1 to 2 percent of catalogs mailed resulted in sales. "If I had invested a lot of money up front in that first catalog with the product mix I had and the list I was renting," he adds, "I would have been out of business in two months."

Months passed until one day in 1995. Newman, still working out of his home, received a surprise call from someone who wanted to know if he would be interested in having his catalog items listed on Outdoor Adventure Online, a new website that would be carried on America Online. "The guy had already called my competitors, and they refused to do it because they didn't know what the Internet was," Newman offers. Though he had never contemplated selling on the Internet, either, Newman was open. "It was so slow business-wise," he recalls, "I thought, 'What do I have to lose?'"

A new distribution channel subsequently opened up, and Newman was introduced to the Internet's potential. Soon after, he hired his first employee and moved into an office in Hinesburg. Later that year, another fledgling Internet company called Great Outdoor Recreation Pages (GORP) approached Newman, promising him an interactive shopping cart and his own site linked to GORP in exchange for commissions on all of Adventurous Traveler's Internet sales. It was a profitable association that eventually encompassed half of his company's total sales.

When Adventurous Traveler moved to Burlington in 1997, Newman opened a retail store that sold the same products customers could find in print and online. His intent, he says, was to "franchise it out." The store lasted two years, closing down in 1999 when it became evident that franchising wouldn't work. "People's purchasing habits are changing," he offers. "Even if you live in New York City, it's easier to buy a book online than to trek down the street to get it." Also, he asserts, "We were trying to become an Internet company, and focusing on retail was not going to get us where we wanted to be."

"This is not the kind of job to have if you can't live with stress," says Newman, "because you're constantly juggling every facet of the business and making critical decisions all the time." Pictured: the administration department.

Be that as it may, his foray into operating a retail store gave him an appreciation of the economics of operating an Internet company. "When we put a book on the Internet, there's no additional cost to us. It sits in a database; we don't have to carry the inventory," he explains. "Also, there's no additional cost to have more people use our site. For every additional customer you have in a store, however, you need a corresponding increase in people working in that store."

How did someone with no business background learn to talk like a seasoned corporate executive? On-the-job training, says Newman. "I feel like I've been through about three M.B.A. programs at this point," he chuckles. The training really began, though, when Newman worked under Olsen at Peregrine Outfitters. "I learned how to treat employees well there," he says. Treating employees well, Newman delineates, means meeting your commitments to them, empowering them to figure out a way to do their jobs most efficiently, making work a fun place to be, and making sure they have a stake in the company's financial goals and objectives. Almost all of Newman's employees have option grants that allow them to purchase equity in the company at a later date.

Not only did Newman learn how to treat staff well during his Peregrine days, he learned how to treat vendors well and how to manage cash flow. "Cash is your greatest asset, so watch it carefully," he advises. "It takes constant vigilance. Spend your pennies like they're quarters."

The uncertainties inherent in starting a business from the ground up do not appear to cause the entrepreneur too much angst; on the contrary, he says he finds stress to be a motivator. "This is not the kind of job to have if you can't live with stress," he says, "because you're constantly juggling every facet of the business and making critical decisions all the time. Friction is inevitable; problems always crop up, and you need to relish the challenges they bring about."

For Newman, who says the most exotic place he's visited is Vietnam, the next challenge is to "leverage the assets" his company's merger with Away.com brings to the table by selling trips through them. His own customer service agents should be an asset in that regard, as almost all of them are outdoor enthusiasts themselves. As for Adventurous Traveler's catalog, which contains1,500 items, Newman speculates that it will evolve to help support the website, which now boasts 10 times as many products.

Ambition is not a quality this company founder lacks. "Now we have the tools," he says, "to put together a really solid business and become the leading adventure travel company in the world." Like the passion that inspired his father's travels, Spencer Newman's thirst for adventure is taking him places he'd only read about in books.

Originally published in February 2001 Business People-Vermont