|1||FROM ISOLATION TO OUTSIDE! Outdoor Activities poised for huge growth due to Covid-19 rebound.|
|2||Record growth as social isolation regulations lift|
|3||Benefits Corporation Certified in 2019, Built to last, built to lead by example, focused on the triple bottom line.|
|4||Sailing into a blue ocean segment worth over $400B.|
|5||Help us help you and your Tribe get outside this season. All your trip logistics in your pocket.|
Tribe Pilot, the mobile tool specifically designed to enable group outdoor adventures by providing a single online location for tripmates to create, store, edit and share all the details of a group adventure, is perfectly positioned to capitalize on the post-reopening rush to the outdoors. With industry and financial experts betting that post-COVID travelers will focus on secluded outdoor activities, and with health experts finding that COVID-19 spreads far less easily outdoors, it’s almost as if Tribe Pilot was built for this exact moment.
As we seek financing to help us scale, Tribe Pilot represents a unique, exciting and immediate investment opportunity, particularly for those who are passionate about outdoor adventure and business being used as a force for good (in our case, we’re a Benefit Corporation committed to fighting climate change via carbon sequestration efforts).
Into the Great Wide Open - Predictions for Post-COVID Travel
The cabin fever created by the COVID-19 pandemic has generated a fierce global desire to reunite outside with friends and family. In the US, as states reopen and restrictions lift, the yearning to travel is palpable; according to a study cited in The New York Times, “one-third of Americans said they hope to travel within three months after restrictions are lifted.” But airline and international travel is not on their minds. Instead, experts predict “a boom in road trips,” which provide a “sense of freedom with personal controls [that] will be ideal for people who want security.”
Along with post COVID behavior changing to include traveling closer to home, “more than half of American travelers say they plan to avoid crowded destinations when they resume traveling.”
“Travelers will have a strong desire to get out to and explore the great outdoors, including less-populated destinations,” predicts executive director for the Wyoming Office of Tourism
Diana Shober, as quoted in The Wall Street Journal. Further influencing this trend is the discovery that, according to health experts, “people are significantly less likely to get the coronavirus while outside.”
Says financial writer Michael Brush in MarketWatch, “Even if the virus subsides, which is by no means a given, we will be reprogrammed to favor outdoor activities that don’t involve a lot of other people.”
Continues Brush, “Money manager Eric Marshall at Hodges Capital Management in Dallas predicts this trend will boost sales at companies in boating, golf, recreational vehicles and camping.”
As a mobile tool specifically designed to enable group outdoor adventures by providing all tripmates mobile access to the same information at the same time, Tribe Pilot is perfectly positioned to capitalize on the post-COVID rush to the outdoors; it’s almost as if we were built for this exact moment.
In fact, we’re already seeing user behavior change in real time: The week of May 18, as Phase 1 opening announcements spread across the United States, we saw a shift in attitude and resultant activity in our uses. That week, Tribe Pilot saw a record number of upgrades, without any active marketing campaigns; one-in-ten new users upgraded their accounts to Pro status, a statistic that puts us in the upper tier of consumer-facing software companies (equivalent industry average conversion rates fall between 1 and 2 percent). We intend to ride this expert and analyst predicted trend of post-stay-at-home travel through summer, into next year and well into the post-COVID future.
When taken as a whole, the outdoor industry accounts for about $412 billion in annual economic activity; that’s over 2% of GDP. In terms of consumer spending, it's a bigger market than either Pharmaceuticals or Automobiles.
Yet this powerful and popular consumer segment is still looking for a purpose-built tool to support their outdoor adventures. Our users are begging us to answer their call for an app that makes outdoor experience happen.
Tribe Pilot is a social tool purpose-built to facilitate the discovery, organization, and execution of outdoor adventures. We're aiming to be the comprehensive in-pocket resource for all your outdoor needs. Regardless of your outdoor aptitude, if you've ever organized a group activity—from potlucks to family reunions—you've recognized our opportunity. ~Note: 20% of trips on Tribe Pilot are not outdoor related.
With Tribe Pilot, everything related to your trip lives in one shared location, so everyone has access to and can contribute to the trip, and communications are central yet separate from actual trip logistics. We’re talking dates, locations, activities, maps, gear, accommodations, to-dos, food lists, and more.
We believe business can and should be used as a force for good, which is why we became a Benefit Corporation within our first year of operation. To us, “good” means we’re thoughtful and deliberate about how we build our business and our company culture, and we consider how our actions impact our investors, shareholders, employees, users, community and the environment.
Additionally, as an adventure-focused company, we passionately believe we need to protect the planet we love and all the places we play. That’s why we’re committed to taking action on carbon sequestration, actively participating in the removal of carbon dioxide from our atmosphere to slow—or even reverse—the process of climate change.
Upon our initial release, in May of 2019, Tribe Pilot quickly attracted more than 3,500 users who’ve used the app to plan 3,000 trips in 48 states and 50 countries. And that’s all without any active marketing efforts; so far, it’s all word of mouth.
We’re now on the third version of Tribe Pilot. As we move through 2020 the company is in a strong position to scale profitably.
And that’s where you come in.
Tribe Pilot is functional upon initial download to all users at no cost. Enhanced features and functionality are purchased through a monthly pro-membership. In February and March the company realized a positive return on advertising spend and showed that the market can be reached and monetized in a profitable manner. The metrics work as follows.
Every year 145 million Americans travel into the outdoors, of these 20 million participate in activities that put them in a category ripe for our product. We target 10% of these or 2 million users as actively ready for a solution that we can sell to them. For reference STRAVA, a company similar in product scope with a similar (but not overlapping) market, added 1 million users per month in 2019.
2 Million paying users is worth around $15 million in monthly recurring revenue.
Our financials are built on a more conservative case and predict (though cannot be guaranteed) a year 4 MRR of around 1.5 million in Monthly Recurring Revenue (MRR)
To date, Tribe Pilot has been self-funded...with the help of a few good friends; we’ve bootstrapped the company to this point. Now, with the major risks retired, it is time to scale.
We need to spread the word and introduce our adventure-planning app to the 145 million Americans participating in outdoor adventure each year. We need to reach one-hundred million annual trips planned on Tribe Pilot. And we need to capitalize on our position of first-mover by building out new and important features in a timely fashion.
Slow adoption is one of our biggest risks. If we don’t grow our paying user base fast enough, we’ll burn our cash reserves on operations instead of growth and be susceptible to incoming competition.
To mitigate that risk, we are raising a minimum of $500,000 to accelerate product and feature development and capture our first 1-2 million trips in 2020.
Tribe Pilot has financial statements ending December 31 2019. Our cash in hand is $16,000, as of March 2020. Over the three months prior, revenues averaged $50/month, cost of goods sold has averaged $5/month, and operational expenses have averaged $12,000/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some o2085f the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview and Company History
Tribe Pilot, Inc. ("the Company") is a corporation first formed in June 2017 under the laws of the State of Oregon. It is a registered Benefits Corporation, meaning it has an obligation to consider its impact on society and the environment in the business decision-making process, in addition to earning a profit.
The Company was created to build an app for frustrated outdoorists and adventurers. It has built a social platform, with outdoor-specific tools to help users and their friends and family discover, plan, organize, experience, and remember outdoor adventures. No other unified tool, other than the Tribe Pilot app, currently exists that performs these functions. Dozens of different types of outdoor, and other adventures, can be planned with the Tribe Pilot app, which is available through the Apple and Google Play stores. The Company is now ready to invest in marketing to greatly increase the user base.
2017. Founding of Tribe Pilot, LLC, to research and test demand and potential for an outdoorist-targeted app. Some $68,000 of founder funding supported this work. The $5,000 of revenues recorded in 2017 were prize awards secured at two pitch festivals.
2018. A first version Tribe Pilot app, coded in two different programming languages (one for the Apple store, one for the Google Play store), was released in February, and allowed the Company to conduct extensive testing of product/market fit, user behavior, the reaction of other outdoor industry participants and professionals, and the market itself. This work provided user feedback that was used to focus the app’s development on users’ stated needs and wishes. In the Fall, the founder and 2 of the founding team went full time, working solely for equity. To support cash-consuming operations such as General and Administrative and contractor costs, an additional $95,000 of capital was contributed by the founder.
2019. In February, the Company changed its structure to become an Oregon C Corporation. This was done to allow for simplified equity-based compensation for the founding team and advisors, and to allow for a better understood vehicle for the first potential outside investors. Founder Matt Smith became CEO of Tribe Pilot, Inc., a 3-person Board of Directors was created, and the first option-compensated advisors joined the company. In April, the company launched its new app, based on React Native, a single code base, ensuring that Android and iOS users were equally well served, now through a single app. In addition to ongoing founder contributions, the Company conducted a small capital raise in the second quarter using a Shared Earnings Agreement. The proceeds raised were used to transition 2 key employees from “sweat equity” to paid compensation. In the fourth quarter the company pursued and was successful in obtaining Benefits Corporation status. The Company launched its first “freemium” version of the app and earned its first product-related (upgrade) revenue.
2020. The company hired a Chief Content Officer to support its scaling plans. It intends now to conduct a crowdfund offering to raise operating and expansion capital.
Due to the COVID-19 outbreak affecting the economy at large, we do not know if we will successfully raise the needed capital. If we hit our minimum funding target, we intend to resume our scaling efforts as soon as “stay at home” orders are lifted and the economy is re-opened.
2017. Founding. Outdoor professionals validate the Tribe Pilot idea with awards at 2 pitch festivals.
2018. First version Tribe Pilot app, code specific for each of Google Play and Apple stores. First 3 full time employees. Enthusiastic user feedback received that was used to focus the app’s development on users’ stated needs and wishes.
2019. First outside investor and successful capital raise with Shared Earnings Agreement. First 2 paid employees. First formal advisors. First paid user acquisition tests conducted. Account creation crosses 3,500, with 3,000+ trips planned to 48 states and 50 countries. Transition to React Native unifies code base, permits Over The Air updates, update cycle accelerates to every two weeks. MapBox integration, Dark Mode, integrated chat function, home screen “memory lane,” push notifications and badges, co-planner feature and freemium version launched. First product revenues. First automated QA testing. Monitoring and back end systems prepared for scaling.
2020. Chief Content Officer hired. A crowdfunding capital raise is planned. We plan to use the proceeds to grow our operations as set forth in this Form C under "Use of Funds."
Historical Results of Operations
Our company was organized in June 2017 and has limited operations history upon which prospective investors may base an evaluation of our performance. In particular, our business strategy has been to focus on building for product/market fit, market understanding and freemium conversion prior to scaling, rather than the inverse of “blitzscaling” before other considerations.
Our results reflect this choice with operational results showing a focus on product and business development across 2018 and 2019, with revenue development coming from freemium conversion commencing late in 2019. Cumulative marketing spending since 2017 is less than $1,000.
2020 is the year our strategy calls for expanded marketing spending and paid user acquisition. While we have been pleased with the results of our ongoing acquisition test probes and test exercises and believe that the strategies we have developed will successfully scale our business, our plans are yet to be tested at scale, and we cannot reliably depend on how much revenue we will receive in the future, if any.
Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $71 compared to the year ended December 31, 2018, when the Company had revenues of $0.
Assets. Our principal asset is capitalized software which we amortize as described in the notes to our financials. As of December 31, 2019, the Company had total assets of $112,601, including $12,964 in cash. As of December 31, 2018, the Company had $24,684 in total assets, including $12,418 in cash.
Net Loss. The Company had net losses of $80,228 and $78,865 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
Liabilities. The Company's liabilities totaled $2,182 for the fiscal year ended December 31, 2019 and $0 for the fiscal year ended December 31, 2018.
Liquidity & Capital Resources
To-date, the company has been financed by $6,075 from issuance of common stock, $162,279 of founder cash contributions, and $165,000 of investor Shared Earnings Agreements.
After the conclusion of this Offering, should we reach our funding target of $107,000, our projected runway is 9 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds." We do not have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy in a post-COVID 19 environment, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to fully implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors. The Company’s ability to continue as a going concern or to achieve management’s objectives may be dependent on the outcome of the offering, or management’s other efforts to raise operating and expansion capital.
Runway & Short/Mid Term Expenses
Because we are a new business, and entering a period of scaling and growth, we do not consider our historic cash flows to be representative of what investors should expect in the future. Should we reach our funding target of $107,000 with this Offering, we anticipate a use of funds as set out in “Use of Funds” in this Form C, and a runway of approximately 9 months. In this same time period, if we recruit and convert users at the level achieved in our test exercises, our revenues will increase substantially. If we scale as planned, our monthly recurring revenue will be in the order of $10,800 per month, close to our operational breakeven. It is likely we will be required to raise additional capital before the end of 2020. The use of those funds would be to take the business to the point where it is self-sustaining on operational cash flows. The Company’s ability to achieve management’s objectives or to continue as a going concern may be dependent on the outcome of the offering, or management’s other efforts to raise operating and expansion capital.
Although there are currently no known similar or direct competitors, we recognize that if one enters the market we may be under capitalized to sufficiently compete and be forced to raise more money.
The COVID-19 crisis could last longer than expected, which would deter people from using our service. It's also possible that the market demand for outdoor adventures will diminish in light of the pandemic, even after quarantine regulations are lifted.
Economic downturns affect the recreation and travel industry early in their cycle and we may find our markets shrink. Though we find our price point today is acceptable with our target user groups, this could change with household income changes.
As with most software companies, as we scale our user base earnings grow faster than our expenses. Certain expenses that we have little control over grow in lock step with revenue. These include mainly Apple and Android store fees, 3 rd party software services, and online advertising costs. If any of these 3 rd parties significantly change their pricing, we could find our margins shrink to unsustainable levels.
Our successes to date have been in small campaigns, cohorts, probes, and tests. We have every reason to believe that these metrics will hold across scale, however this is not a guarantee.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Ours is a consumer market. Consumer protection laws, particularly those addressing privacy or security concerns might require us to divert growth resources to quickly update code. This may harm our growth or margins.
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