Name: Matthew Jensen
Business: The Electric Boat Company
Location: Seattle, WA
Before Matthew Jensen came aboard his family’s electric-boat rental company, he was busy in San Francisco working in mergers and acquisitions and starting up a few businesses of his own. A year ago he returned to Seattle to help with the management and logistics of The Electric Boat Company, a thriving business that lets customers toodle around Lake Union with a boatload of friends, their family or with business colleagues.
We spoke with Matthew about how he confronts the challenges of operating a seasonal business and how The Electric Boat Company has scaled to keep the operation afloat for nearly 14 years.
Matthew, what made you decide to come back to Seattle and focus your career on the family business?
I worked as a management consultant for Ernst and Young for about five years. My goal was to get enough experience learning from other businesses to become a successful entrepreneur. I came back to help the family business with streamlining logistics and converting to QuickBooks Online, since I’m also a CPA. I’ve also started my own consulting company helping other small businesses here in Seattle.
Tell me about The Electric Boat Company. What do you guys do?
We rent entirely electric boats to go out on Lake Union in Seattle. We wanted to provide people with a simple and sustainable way to get out on the water. Boating is something people rarely get to do, so we help them to have that experience.
We have 25 boats, and we cater to a diverse customer base: families, birthday parties, bachelorette parties, corporate team building. Today I have events happening for Microsoft, Boeing and Amazon. The boats seat ten to 12 people, which is great for smaller groups, and we also have large corporate groups take out a whole fleet. We now offer scavenger hunts, and we can provide locally-sourced catering options to our customers.
How did the business get started in 2005?
My mother originally bought a fleet of five boats with the intention of starting out as a water taxi business on Lake Union. In true entrepreneurial startup fashion we realized right away that it wasn’t going to work, so we quickly pivoted from the taxi business to become a boat rental company instead.
My family is all from Alaska, and we’ve grown up with boats. My mom was a world-class sailor, and our family still has two sailboats. Before buying the boats, my mom had always worked in corporate America. When she quasi-retired, she thought this could be a great business model.
We’ve grown from five to 25 boats, and now we’re also a boat dealer. So, we have three different businesses under the Electric Boat Company umbrella -- boat rentals, boat sales and catering.
Did you diversify your business based on customer demand or purely to boost revenue?
It was a little of both. For instance, if we have only ten boats and we maximize our rental revenue on them all summer, there’s nowhere to go from there. It was easy math. If a boat is worth x-amount and we can rent it for x-amount each weekend, it starts to pay for itself. We had the space and the demand to grow, so more rental boats and more value-adds like catering equals more revenue. So it has been both figuring out how to better support our customers and also finding new sources of revenue.
Yes. We’re opened year-round, but our summer weekends are always sold out. By adding catering and team-building activities like the scavenger hunt, we’ve been able to offer more to our customers all year. Our boats can be completely enclosed, and they are heated. The winters are actually great because no one is out on the lake. With the scavenger hunts, we have a couple different games where customers take out tablets on the water and solve clues. Corporate groups take out multiple boats and compete against each other. We’ve also seen a huge demand from families for activities like this.
What are your strategies for managing the seasonal revenue of your business?
Obviously cash flow is an issue. If you make 80% of your revenue in six months, how are you balancing the rest of the year? In order to mitigate that cash-flow issue, we launched an online rental system that takes a 20% deposit fee with a reservation. We can get 200 reservations in February for the summer and have a percentage of that summer-rental fee during the slower months. It comes down to planning and balancing.
The seasonality also has an upside. While it can be stressful, it’s also kind of a boon because we can shut down in January. We’re able to take a lot of time off and focus on other projects.
What are some of the unique challenges of operating your business?
The unique challenge would absolutely be the timing and the logistical operations of running a rental company. We sometimes have 100 groups going out in one day, so if any of those groups are late in returning this not only throws off the schedule, but the boats start losing battery power, too. There’s a huge planning and logistical aspect to this business because of the power limitations. We have to be able to adapt on the fly if someone breaks the boat or comes back late. Right now we plug in the boats overnight, and they run the next day on that charge. Now we are looking at solar panels as a new option so we can charge the boats throughout the day.
What tips would you offer to new entrepreneurs?
As someone who has started a couple failed businesses in addition to running a successful one, I’d say don’t be afraid to change direction if your business isn’t working. Very rarely does someone’s first idea become their best idea.
Matthew added catering and games to his existing rental company. What are your ideas for adding value to your existing business model?
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