For July 4th this year, I went out with some friends to Lake Washington. We rented a boat for a few hours, directly from this couple living right on the water. The rental experience was a delight: quick, convenient, and a price we felt great about. Having rented a boat online in a similar peer-to-peer way in 2022, I asked to see if was the same business (my friend had rented the boat) - it wasn't.
It felt similarly convenient to what I love about AirBnb: you drive up and get settled right away. For what seems like a great business, there haven't been any runaway successes yet. I thought, "What's up with that?"
Seems there are a few peer-to-peer boat rental companies, but nobody dominates. See: Boatsetter (2012), GetMyBoat (2013), Click&Boat (2013), Borrow A Boat (2014).
Are boat rentals a good business?
The data says, absolutely (just get past the high-barrier to entry of actually owning boats and access to equipment!). Boat rentals are a $16.5B industry with business margins high as 60%. You need expertise to run a boat rental business, but much less to rent out an individual boat. While it is true business has to be concentrated around water, 90% of the world's population lives within 10km. [1] [2]
Does this actually solve a burning problem for people?
Google indicates there are more searches for boat rentals than vacation rentals. So on the surface, there seems to be ample demand.
Thinking from my own experiences with boat rentals, this is an industry somewhat stuck in the past. I can order most of the services I interact with daily through digital interfaces, even when traveling to remote places. Every single boat I've rented (with the two aforementioned exceptions aside) has required multiple calls and personal information shared over phone. But, no matter how many hoops I have to jump through, I still end up renting the boat. Which is to say, this may not be so much solving a pain point for current customers as it is paving the way for a new customer base that hasn't yet bothered to figure it out (cc: Gen Z & Alpha).
There should be enough supply too, as "most boats spent more than 50% of their functional live docked or inactive." [3]
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The average age to rent a boat is 18-25 across the US -- as younger generations reach this age, I believe we'll see demand for better solutions.
Reasons to explain a lack of clear winners
Let's agree that digitizing the boat rental experience is a good opportunity. Why then is there no clear leader yet? I believe it's due to a combination of factors:
Fractured complexity. The types of boats, who can drive them, and how they can be operated safely varies widely by region: regulation and bathymetry (i.e. features of underwater terrain) can vary by body of water. Standardizing these into a cohesive product offering presents a big challenge.
Slow adoption. Boat renters are less likely to experiment and invest in new technology due to high risk nature of the business (seasonality, cost). Business owners put a lot of effort into coordinating the flow of funds to ensure they can pay for things like repairs & storage during the off-season, so it makes sense why changes face headwinds.
No appetite. An upstart would need a lot of money to get started with this kind of business. You would need to cover high cost purchases (boats & storage), training, operations, and long periods with low cashflow. Maybe doing this type of business is just too expensive and without rabid demand today, there hasn't been enough interest.
Boat owners may also have no appetite. Majority could feel there is too much risk and renting out their boats is inconvenient, but that can be overcome with trust and proper incentives.
Can there be an AirBnb-like success?
Retail rental businesses aside, there are no digitally native incumbents to compete with. The market is large enough that even taking over a few percent share could mean a billion dollar business. Fortify a few differentiators (e.g. reach, brand, inventory), effectively turn managed barriers into strengths, and you'd be on your way.
I find AirBnb's blueprint to be a helpful reference point. Here's how Lenny Rachitsky, a former Product Lead at Airbnb, breaks down what made them a success:
Airbnb (1) built trust between travelers and homeowners, (2) created a new supply that never existed, (3) developed strong referral programs / word-of-mouth, and (4) digitized a commodity.
It's reasonable to see 3 out of 4 factors playing out similarly for a peer-to-peer boat rental business (#2 is the only outlier; you can already pull up to any shore and find a place to rent boats).
"The AirBnb for Boat Rentals"
I can imagine a future where my vacation experience is entirely peer-to-peer and more convenient than ever. I pick a destination and rent a trustworthy local's house (AirBnb), boat ("BoatBnb"), and car (Turo) for an immersive travel experience. From the moment I step off the plane, I travel around as if I've been living there for years.
The opportunity for this kind of digitized peer-to-peer boat rental business is here and viable; a winning business emerging is a matter of when not if.
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*Sources: [1] Boat rental business stats; [2] Where people live; [3] Boat rental industry stats.