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The Storage Investor Show
Remote Storage Management: Insights from White Label Storage Founders
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https://www.whitelabelstorage.com/
DESCRIPTION
I chat with Alex Hartman and Peter Smyth, the duo behind White Label Storage, who started their self-storage journey as Harvard classmates and now manage over 90 facilities. Their journey offers a blueprint for success in third-party self-storage management.
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Hey everybody, welcome to the Storage Investors Show. My guests today started White Label Storage. They do third-party storage management, remote management for owners and operators out there in the self-storage space. Alex Hartman and Peter Smyth they're co-founders of White Label Storage. We're gonna get into their story and really get some advice from them and how you can operate your facility remotely, give you some tips and tricks and then find out what services they offer, because you might need a little help along the way. But, alex and Peter, welcome to the show. Thanks for having me. Happy to be here.
Speaker 1:All right, guys, I usually don't do this but because it's kind of like a startup thing and you guys have gone from like a rocket ship right, you've gone from zero to like 90 plus stores, thousands of square feet in self-sorge under management. You started in New York City with kind of a different background. Talk about that real quick, guys and gals, if you're listening, hang around. We'll get to some tips and tricks and advice for you guys. But I kind of want to get into the story a little bit about how White Label Storage started. So give us a background on where you started and what got you to where you are today.
Speaker 2:Sure, so we were business school classmates at Harvard. We had this concept where we wanted to convert unused space in urban areas into small local storage facilities. The typical urban consumer or dweller is kind of not served by a traditional self-storage product unless there's a legacy asset. I mean, for a number of reasons, there are not self-storage facilities in the highest density and highest income parts of cities. So, uh, you're either forced to do a drop off and delivery product, which is not super convenient if you need something in real time, like you know, scheduling to have the verizon guy come. There was a product called Clutter and MakeSpace. They're still floating around.
Speaker 1:Yeah, I was going to say, yeah, clutter was a big one. I remember they did a big push back in the day. I would see them at the conferences walking around and all that. So they folded right. I think they went, they sold or something happened.
Speaker 2:Yeah, they got bought by Iron Mountain, out of bankruptcy or not, a happy acquisition, that's right. Yeah, we don't know those guys, we don't know their business. Other than that, that is way more. That's a logistics business. Right, it's a pickup and delivery, it's completely different.
Speaker 1:Yeah, I mean, to be honest, I criticized them before because they were trying to disrupt self-storage and telling this big story about how you know, so on and so forth, and I said there's no way, this doesn't make any sense. Uh, outside of larger cities it's not self-storage like he would think it's, it's a whole different business. Uh, but anyway, you know I'm not criticizing the people who started it. You got to have vision, a little bit of grit, you know, determination, raising capital those are all difficult things to do, so I respect what they did. I just didn't think the business plan had many, had much legs and so, uh, you know it turned out that way, but go ahead yeah, and that, by the way, they were like maybe they just needed massive scale and being with iron mountain, that'll work.
Speaker 2:Um, they did.
Speaker 1:But the problem is like when rents get down for a 10 by 10, like they are now, they would have folded anyway. Because when, like here in mooresville, I live in charlotte, north carolina, for example, I don't know what it is right now, but just a few months ago there's extra space shores giving away 10 by 10s in a climate controlled building for less than 20 a month.
Speaker 2:Yeah, you cannot compete with that stuff, it's not possible.
Speaker 1:so as far as if you're running a clutter type business, it's even hard for self-storage operators to compete with that. So it just when rents are high they would would work, you know, in New York city or whatever that makes sense, but anyway.
Speaker 2:Yeah, so continue on. No, it's a good, it's a good segue. So when we looked at the market, we said, well, I mean, what is the product that's sort of missing here and it actually sort of exists. Buildings have most apartment buildings or condo buildings or many of them have in building storage and, um, and that stuff tends to either sell out in condos they sell it like it's an actual purchase. It comes to the condo. In many places they rent it.
Speaker 2:Our idea was all right, let's build this product for for all the buildings and residents who do not have a local product. Um, and what that led us, you know, over a course of two to three years we scaled it to over 40 stores and one of the things we needed to do while we were building that business was find a way to service and manage a decentralized sort of network of small stores. Um, yeah, there's not. You couldn't individually staff each store. So we sort of, from first principles, needed to come up with a playbook that involved a combination of technology and service and people to run that business. And, as a result, we sort of a couple of years later, looked at ourselves and said, oh man, I mean, now we are, you could run the same playbook that we'd put together for small or remote, for non-traditional or non-institutional self-storage facilities under a certain size.
Speaker 1:Now, did you get inspired by kind of looking out in the landscape of who else is out there kind of running remote facilities, For example like a 10 Federal or previously like a Jefferson Shreve who was at Storage Express and a few other guys? Is that what helped you kind of see that, hey, there's potential here?
Speaker 2:Yes and no, because those groups that you just mentioned, you know they typically are their owner operators, as far as I understand. So the amount of sort of element number, facilities they need to manage for to be a good business, if you're owning it is sort of drastically different than if you're, if you're managing right, and so there was enough out there that sort of proved like it can be done. Uh, some groups have had success managing remotely, um, and we had some of our own success too. There was enough proof. But there hasn't been an organization that has you know, I would say, truly scaled and hit scale in the sort of remote management world, the, the sub-institutional assets, um. So we both then saw like that market opportunity. But also because there's not this scale organization doing it, it left. There's a lot of self-storage owners who need that sort of help. One other point to make there is there are groups with large portfolios that are managing them remotely, but there's not a dedicated third-party provider there that's doing more than a couple hundred dollars, party provider there that's doing more than a couple hundred dollars, and and that's because once you're an owner, that's where you have. You have lps, you're a fiduciary and you're just going to make more money as an owner than you are as a manager. So we already were building a services business and it expanded our market opportunity and was a you know.
Speaker 2:We looked around and said, look, there's just not nobody's trying to serve this market Somebody. Everybody either wants to be pure software or an owner, and there's not. There's not a lot of players that are either not trying. To many folks are trying to use property management as sort of a lead generation tool to find new deals because you know you got the best look at something that might go to sale. To find new deals because you know you got the best look at something that might go to sale. That's how extra space scaled for a long time successfully, um, or you've just got folks that have built it because they I mean 10 federal's a well, they're an owner. Now they manage for other people as well, but they um, that's not their sole focus. They have competing priorities and, and again, they're a great, great business. And now they've got other businesses in DaVinci, or at least the founders do. But this was our differentiating factor as a sole service provider.
Speaker 1:Yeah, I mean, there is Copper Storage Solutions they launched. Well, we used them back in 2021 and before we came along along, I think they had 40 locations or something like that. It wasn't as many as they had now and they were completely remote management at that time.
Speaker 2:Um, but bob caught those guys have owned right they're.
Speaker 1:They're an owner as well yeah, they own their own, but they did offer, and they do offer, third-party management. I think they've gone to a hybrid model with the remote versus uh, because they were just remote before. I don't quote me on that, but I think they're at a hybrid point now.
Speaker 2:Um, we've seen them a bit federal.
Speaker 1:Yeah, yeah, they're, I mean great guys. And then, um, uh, 10, federal. We did offer I worked there so we did offer sole third party. But you're saying there's no third party remote management operator out there who just is trying to operate Yep, that's right, not trying to purchase. So you guys don't, you're not trying to purchase any facilities right now.
Speaker 2:No, we're not, and that's like I think that helps. You know, we do have a lot of owners that we're talking to, that sort of ask us hey, am I going to be competing with you at some point? Am I, are we going to be trying to buy the same assets? Or and yeah, we, we think it's an advantage for us and it forces us to provide a better service, because we're just solely focused on delivering the best product and creating value.
Speaker 1:Do you think you'd ever yeah, do you think you'd ever pivot at some point? And that's okay, you know, because sometimes you have a business plan and you realize, hey, this is going great, but we can add this, or hey, this isn't going so great, we should pivot and do this, or hey, we should add on this other line of business at some point. Do you think you ever would want to?
Speaker 2:I don't want to, you know, rule it out or say, you know, we would never maybe independently buy an asset or anything like that or anything like that. Right now, with where we're at as a company, like in order to become, you know, we want to be the best remote manager by far in the industry. In order to do that, there's still just a tremendous amount of wood to chop to get there right. So like if we then said, hey, let's split our time between figuring out how to be better managers and let's raise a fund, roll up an acquisitions team and maybe, you know, do now sort of just become investors and owners. At a minimum, our attention is diverted. And now I think then our sort of current goal of being the best manager as possible, that is harder to achieve to the extent our, our focus, it split um, yeah, at some point it might make sense.
Speaker 1:Like you said, you probably would bring on and bring a team together and you know all that stuff and give them a mandate to go and purchase, because it does make sense to have that at some point in the future.
Speaker 2:And it's okay, chris, are you committing to seat us with the capital, or even exactly?
Speaker 1:yeah, it makes. It makes a ton of sense. You guys are based out of New York, right? Yeah, yeah.
Speaker 2:So, dude, I mean yeah, and then owning's great. It just us owning does not help us, help our clients at the moment.
Speaker 1:No, I get that.
Speaker 2:Maybe that will change in the future. And then even now, like one of the sort of you know, nice things we can offer. Sometimes we're working with just mom and pop operators. They've owned one store, they'll only ever own one store. But then we're seeing, increasingly, you know we're called smaller investors who are trying to, you know, slowly scale up. They have LPs, so they're, you know, entering and exiting the stillies that they own. So we can help our owners and make these connections too. You know we know people who are selling. We know people are buying. We're trying to build a little bit of that network. A little bit harder too if to do that, if we're sort of, you know, taking first look and then passing on things we don't want and so on yeah, no, I understand it's uh, it's a dual man.
Speaker 1:It would be a dual mandate in that sense, and that's tough to focus on both things at the same time. What's that? Uh book? The one thing if you try to catch two rabbits, you'll catch none. That's like some saying in the book. So anyway, good deal, okay. So you guys obviously pivoted a little bit, went to the remote, looked at the storage space and said, hey, there's an opportunity within this space to offer remote management for third-party facility for owners. How did you get your first one?
Speaker 2:Yeah, we had a. We had an owner reach out to us just that we knew from our personal network who had an office building where he converted. He sort of did his own like local locker. He tried to build his own individual, one-off, sort of small self-storage facility using unused space. And what we sort of know from that is the economics One as a office property manager and owner. It's a completely different business, right, it's a consumer-facing business. You got to chase people down. They call a phone number the way that an office tenant never would. And so he came to us and was like this isn't working for me. Do you guys think you could manage this for me? And that is really.
Speaker 2:We were already thinking about it and it provided a good sort of test case for let's see if our, if our we've got the chops to do this.
Speaker 2:And at the same time we were we were looking at some deals where in new markets where we wanted to do conversions but where we weren't really confident that we wanted to pay for the bit, like we weren't super confident the we thought it'd be a good product Definitely was going to be no other use for space. Landlord wanted to try it and we sort of came up with a sort of hybrid structure where we used our local locker brand, the landlord paid for the build out, owns the space and we manage on the same fee contract that we manage for a traditional self-storage facility Okay, for a traditional self-storage facility. So it was kind of a couple of things were going on at once that, you know, didn't I don't want to say forced our hand, but encouraged us that it was something that was worth doing. And then, as soon as we got in, we saw that it made all the sense in the world.
Speaker 1:So then, going from zero to one is obviously a hurdle at some time. So you got there. Did you just start making calls to get this next one and the next one? Because you guys have scaled to 90 in a short period of time. It gets a little bit easier as you get more under the belt, but how did you get to the second and third? What did that look like?
Speaker 2:trade shows just showing up. Just we didn't have a sales team. Really we were. It was through our um, just kind of word of mouth and trying to get the word out. We wanted to do a few and we didn't want to sort of overwhelm ourselves in case there was some use case. That didn't work for us and once we had what was it? 10 facilities that we were managing, we sort of decided, all right, let's build a team here and chase this. And that started end of last year. We started assembling the team sort of end of last year and now we're adding 10 stores a month.
Speaker 1:That's awesome man, so talk to me about. I'm still curious about the story a little bit more. Are you guys private equity backed, or is it just all bootstrapped? What does that look like as far as the funding and capitalization of everything?
Speaker 2:Yeah, we have some investors, but a little more sort of some hybrid of investors and bootstrap.
Speaker 2:We're not like doing the clutter thing of raising a few hundred million dollars in equity that, say, will be worth $10 million in a few years. So raising some outside capital has allowed us expedite some of the things we want to do uh around. You know we have an engineer, a computer engineer, on our team that requires a lot of scale to do uh, but while you're scaling you're really wanting that. You know engineer. So you either sort of wait and you can't make the product improvements you want when you need them, or you can raise some outside. So you either sort of wait and you can't make the product improvements you want when you need them, or you can raise some outside capital and pull some of that stuff forward Because, like, ultimately we want to get to the point where we can sort of provide the same level of sort of service but also product data analysis that you know, say, extra Space does right, but then if you look at the size of extra space is steam right that you know and see.
Speaker 2:So you got to bridge that gap um different animal.
Speaker 1:It's a different animal and good.
Speaker 2:One of the other things that was a piece of that is as we were building our own product and then we started managing for other people like these are small stores or at least met the originals or cohort that we manage were small stores. We're now managing some bigger stuff as well, but there's so many software products and tools in the market that you need to use to piece together the tech stack to manage a self-storage facility. And if we are trying, these management fees are not huge for big buildings or small buildings. They're just not large dollar value in relation to the you know, noi or the revenue of the building. Um, and the tech starts to add up to be a meaningful piece if not, yeah, you think of it as a piece of the fee or separate from the fee and sometimes equal depending on how big the facility is.
Speaker 2:So so Alex mentioned we have an engineer. We started saying, all right, which are these tools? We should just start building our own tools Leverage. We don't want to be a software provider, but we can develop some software that one allows us to do our job better and two allows us to strip costs out that we can pass along in the form of savings to owners, which is again a differentiator. We want to make money on our manager fee. We don't. You know, we love being able to go to people and say, look, you don't need to pay $500 a month for a website anymore because we've developed a website. We have our own website and, uh, you know, it's a de minimis cost for us to maintain it. The all of the costs was, you know, onetime expenditure to develop it and then a little bit of maintenance, but across all of our facilities it's not much Same thing with we built our own pricing tool.
Speaker 2:So, going back to, you mentioned tips and tricks here. It is important to think about the choices you make when you're kind of putting that stack together Because the stuff adds. Just map out everything you're going to need because it it really adds up. And we've tried to do that on our side on behalf of our clients so that they don't have to go and figure out all right, which? Which software do I need? Okay now, which access control? Or which one? Be all these fees? Kind of surprise you, is there a recurring access control fee, revenue management how am I going to do that? It's all you know. There's a million products.
Speaker 1:Yeah, I'm curious. So talk real quick about that, like what is the if they were to, if someone were to? Well, back up for a quick second, what does somebody need to manage remotely? And then what do you guys offer in terms of savings? So make that like contrast between the two. Yeah, definitely.
Speaker 2:So what? And taking a little step back on that, like when, particularly when we see work with a lot of first-time investors and they'll be acquiring their first facility, maybe a broker put together a pro forma, there's always a missing piece of like, often who's actually doing the work? Because you know there's some real estate asset class where it's reasonable to assume that the owner can actually do the work. Right, if you have three residential buildings, apartments, you can self-manage that. It's easier, you know, know, maybe that costs you a million dollars to purchase. If you purchase a million dollar self-storage facility, the amount of work require who operate it at all, let alone operate it effectively is always way more, I think, than people budget for.
Speaker 2:Um, you're dealing with 100. You need to find new customers each month, right, you're not signing a one-year lease on a residential and then just doing a lease renewal. So, in order to, you know, manage something and I'll get to the sort of tech stack and what you need. But you don't need it. Who's doing the work? Is it me or is it a third party manager, and am I accounting for this when I'm purchasing the asset? We often see sort of a gap in that analysis, but then, in terms of how to sort of third party manage, so like this is sort of tied in you need someone to answer the phone and ideally you're answering the phone, you know, 60, 70 hours a week, hours a week uh, you certainly need a website that allows online booking um, you certainly need sort of a delinquency and pricing playbook um, it is a best practice also, then, to have to automate everything, right. So you need a gate uh, it's integrated to your software, you want. You need cameras uh, you need. You're not going to have a person there. So you need to build out the tools and invest in the technology to close some of that gap with not having someone there 40 hours a week.
Speaker 2:Yeah, security is a big piece that, like you, at the very least, you need some way to restrict and then also distribute access, and there are a lot of ways you could do that and then also distribute access, and there are a lot of ways you could do that. You definitely want a fence, but if you wanted to play it loose and probably reduce upfront investment on an asset because we have seen this you at the very least need some sort of locks that work with your software, like a DaVinci or a KISS lock because you just don't want open units. And if you have just typical cylinder or padlocks on units when somebody signs up, you're just going to create a ton of labor and headache for yourself. If you need to go, let them in and so so you need some way to access. You probably should have both cameras, a gate andlock, but you need at least one of those things.
Speaker 1:Yeah, so in other words, if somebody rents a unit online and they want to go access their unit and you're not there to let them in, to take off your lock, because you've, as the owner, have secured the unit with a lock presumably, then now you have a problem because you always have to show up for these folks, whereas if you use an electronic lock davinci lock, whatever they can access it themselves. That's what you're saying, that's uh, and you don't.
Speaker 2:You don't have to be there yeah, because there's, as there's a serial number. Just for people who aren't familiar with that product, there's a serial number on the back of the lock. That serial number corresponds with the code in your software and when somebody books that unit, the software will send the code that is unique to that lock on the door when a tenant moves in. Now you could get really analog with it and go and have a Dropbox and have a static code, have somebody go there once a week and change the code and put new locks in that. That's also a lot of work when a couple thousand bucks to put those locks on site yeah.
Speaker 1:so you need, uh, obviously, security, gate fence uh some places don't have a fence, but ideally gate fence uh, cameras, those are super important, uh, at least to deter a bit and then obviously try and catch somebody if they're in the active or to show the police later if they try to steal something. But a way to rent online. So you got to guys there's so many stores, there's so many that don't have a simple website where you can actually rent a unit online. So being able to do that, then they'll be able to collect some delinquency If people don't pay, text them some sort of messaging thing. And then you got to be able to pick up the phone, answer customer questions and if there's a problem something happens, there's a leak customer calls, they need to let somebody know that there's an issue at the facility. So I think that's pretty much. I might be missing something. Are we missing anything or is that pretty much yeah?
Speaker 2:I mean, there's sort of like there's what you need, sort of bare minimum operationally, and then what? What you need to be successful, fancy with it.
Speaker 1:Yeah, you get like individual door lock, door alarms, and I've always thought there may be some value to that, but, um, we never had those. So, uh, but you can do other things, so I think that's at a bare minimum. So then, what do you guys? We could be missing something, but, whatever, what do you guys offer? Because you did mention you've built the website, you've done a few other things like how does it differentiate, how do you guys differentiate yourself from, maybe honestly, like a copper or atomic storage group or whoever the heck else is going to be managing remotely, like what's the difference?
Speaker 2:and we, you know we haven't. We're not owners, so we haven't worked with these groups. I I can't say you know specifically how they are or how they are not yeah, so disclaimer, if you're listening.
Speaker 1:We're not trying to put anybody down or disparage anybody. We're not trying to put anybody down or disparage anybody. We're just trying to say, hey, it's a business, here's how we run our business.
Speaker 2:So generally speaking, we enter the market with a lower price point because of some of the technology advanced things. We've implemented similar product development. So if you have a hundred unit facility, it's not that atomic or or copper won't manage it, it's just that their fee structure really eats up a lot of the noi and often makes it cost prohibitive. So that's sort of one thing is competing. Uh, we're able to compete a little bit more on price and for a lot of first-time investors, first-time acquirers, people are starting small right. Most people are acquiring a 600-unit facility on their first one, where there's a lot of managers whose economic model works. I would say that that is the biggest thing. The other thing and I think wait, let me talk numbers with that, with a couple examples, so, specifically speaking, a couple of the tools that we built, that strip costs out and what those dollar amounts are when you have a facility, you have the website and the software. The website is that you go to Google Maps and click website. That's the front end, and then as soon as you go through the booking flow, the software connects with the website. During the booking flow and once you have paid for your unit, signed your lease, the software takes over. Often it takes over during that booking flow and those can either be the same product or different products. We decided we built our own people call them FMS or PMSs property management software, facility management software. We built our own people call them FMS or PMSs property management software, facility management software. We built our own facility management software for our stores.
Speaker 2:We learned some hard lessons while doing that, because we're building it for us, not for others. But what we realized is the website's not easy, but it's not the most. Yeah, it's a. It's a product that we think gets really marked up, um, and can be expensive. It can be the cheapest website you could find uh, might be like a U-Haul website for a little bit less than a hundred dollars a month, and then and and websites can go all the way up to $750 for the full sort of SEO. You know we have built in our own SEO. We've thought about the architecture for page speed. We've looked hard at booking. We took over the booking process, which usually you can't do. We did that by tying into the API with storage, and so we think we have a website that competes with the high end of the market, but we provide it for free. Similarly, pricing there are tools like Veritech that will scrape competitor pricing.
Speaker 2:How do you run cops when you're trying to determine your street rate? It's about quality at proximity and then the rates among those things. So I'm kind of back to Alex's point. Apartment rents because people sign up for one-year contracts, they don't move that frequently. Storage rents can move every day. We don't change rates every day but we change them frequently. It's hard, especially for small episodes. Don't get a ton of volume. You need to let the rate sit to understand if it is a rate that'll sell. Um, but we have. We use the store track api, which is way cheaper if you could build software on top of it than using just store track. As a tool to.
Speaker 2:For pool comps, we determine a set of comps and it's, you know, variable, comparable facilities. So we're looking at what are the five to six facilities within a two to three mile radius that we think are most similar to ours and that people might compare us to. For price, and then we pull that API, we call the API and we understand what the prices are. We determine a weighted street and then we determine what we want to be in relation to that weighted street based on our own occupancy, our leasing velocity, those things. So you're saving per facility. That's de minimis cost to us costs a bunch of money to you know, in engineering costs to like build all that stuff.
Speaker 2:But now we just pay for the API for each facility. It's a couple bucks a month and you're you know, and we capture some of our costs and our fee, but you're then no longer paying $150 a month for Veritech. So that's just another example of something that we built and then we also it's not a black box we can mess around with the formula. We can mess around with how we determine what we think the street rate is. We don't have to let some software determine for us what the street is. We can dig into the numbers. So that's. Those are two sort of examples that strip out close to $1,000 in costs right there. And a lot of these facilities that we manage for don't even generate. You know they're generating $10,000 a month, sometimes on the small side, and that's 10% of your revenue, right there.
Speaker 1:Yeah, it could be meaningful. Yeah, it could be very meaningful. How do you guys? So, having gone through we've used a couple of third-party management companies in the past I learned some hard lessons, going through some tough times in 2023, 2022, with interest rates and things kind of slowing down, and you realize, hey, it's really important to drive.
Speaker 1:If I think about acquisitions or just development, looking for sites, whatever, you have a deal flow like funnel, where you get a bunch of different leads, stuff from brokers, whatever, and then they filter through. You underwrite some. They work, some don't. You make offers on some. Hopefully some get accepted and then you close some. So you have like a closing ratio In management as well. Like you have leads that come in, maybe somebody calls the call center or whatever. They visit your website and then you know that's like it's a customer funnel, sales funnel.
Speaker 1:How do you guys drive that top of funnel? Um, like I should say just the customer interest or whatever, whatever you want to call it, that top of funnel where it's a bunch of leads. You know, that's to me really important because you're, if you have a closing ratio I don't know what number might be 25% or whatever People who visit your website end up renting from you. Whatever that number looks like, if you expand the number of people looking, then obviously the theory would be that you would close more rentals, you know. So just driving that top of funnel, I know that's market dependent. You can't make magic work everywhere with every location at every facility, totally get that. But just in general, you had mentioned some stuff that you guys do online Google Maps, et cetera but do you guys do SEO? Do you guys do pay-per-click ads? How do you guys actually drive customers to the website to build a rental unit?
Speaker 2:Yes, and this is where we spend a lot of our time, uh, always trying to find the best possible strategy. So we have a dedicated marketing team who's working on this um, because that is arguably the most important thing um you could do for for your asset. Just getting eyeballs on it. There it is. It is sort of hard to expand demand in storage, right. People kind of either need it or they don't. So the demand is there, so now how do you capture it?
Speaker 2:So the probably most important thing is SEO ranking, but it's fairly complicated. It's not the tremendous amount of sort of day-to-day work, but you just really need to understand SEO infrastructure and set your websites up correctly and then tied into that is like the Google, my business listings. You know a lot of people will get to their go on their phone, type in self-storage near me and look at the pins. What sort of pops up first and most prominently. That's a product of a few things how many clicks you get. Website speed, where your tags are, number of reviews, and Google's always changing their algorithm. So it's not realistic to expect a sole proprietor or storage owner to be able to stay on top of it With scale.
Speaker 2:We can have a team who can, once you get the leagues or you know the eyeballs now the name of the game is not losing them, right?
Speaker 2:Um, so that is one having a really you know, easy to book website where you're not creating needless friction. Um, we do some things that, uh, very few other like operators do, or managers, where if you're coming through and booking a unit with us, the first thing we ask is name email. Once someone puts in their email, we now have that sort of data. If they abandon their car, they decide they don't want to book, they go probably shop somewhere else. We can sort of retarget them with some emails saying hey, thank you for considering us, come back and book, we'll give you 25% off your first month, and that moves the needle a little bit. And then, if someone gets to your website and makes a phone call, it's now getting them in your CRM. So you're following up on the leads, you're having the right sales strategy and training for your managers and your customer service associates, so they're converting that lead into an actual book.
Speaker 1:That's good that you guys have thought through the process. Because you mentioned, hey, the abandoned cart situation. Most people don't think about that. They get to the website or they might have their as an owner. You have your website set up and, especially with storage, like they've only recently, I think, allowed you to kind of see or access that information or something to that effect.
Speaker 1:I remember we ran into that issue. We're like, okay, we lose, like we don't know what's happening. Somebody, like clicks, reserve a unit, let's say they click on it and then you don't know what happened. Like they didn't reserve it or but they clicked on it. Where'd they go? Like what happened? How do we retarget those people? Well, we can't. Well, that's stupid.
Speaker 1:So you know, because you got to fix that, that that's part of your funnel. Like if I'm looking at deals and I'm trying to close a deal and I know I have a target of closing X, number per quarter or whatever the number is, uh, however, you measure that, well, if I can't figure out, like that funnel, that flow, I'm like in the dark on it. You know, like, okay, I don't know, I can't tell you anything. So I just I learned some hard lessons myself, uh, through that process and one of them was like anybody can literally get the gate fixed, or we could go fix the gate right. We can call a third party vendor to fix something or call the police if there's a break-in. Anybody can do that, but a third-party management company needs to drive revenue. So it's good that you guys are actually thinking through that process, but I think someone was going to say something. I didn't mean to jump in there.
Speaker 2:Talk about tools, specifically about tools to generate demand, but that is why we just to close that out. That's why we built our own booking flow. Like we started, we only had our website to start and then the booking flow was still store edges and it took us a while but we got. We were like we need to. We just need to own this so we can tag it and look where people drop off. And then the phase after that was now we need to ping them when they do and try to recapture those leads. So that was something we rolled.
Speaker 2:But to tool, you specifically mentioned PPC and Google Maps. I mean, in my mind there's sort of the big four Signage Google Maps, sparefood and PPC at Google Ads. You need to do those things, those four things, well. And then there are some other things that will not be, I don't think, the biggest needle movers, but you have to live off those four things. I mean good signage and you can't control where your facility is other than on the buy, but you have prominent location. You need to have good signage with good calls to action. It's not just the signage itself, it's the calls to action. Signage with good calls to act. It's not just the signage itself.
Speaker 2:It's the calls to action. Um, yeah, same thing with the, with google's like is your information correct? It's not all obvious, you know, and even something as simple as like. There's sort of like two little tricks of google maps. One is getting the pin set up, like do that as early in your first facility or your purchase process, and it's the pins set up requires a verification which often requires either a video or sending a postcard to the facility, and then you're dealing with sort of Google's contractors, so it can end up taking weeks or months in some Some of it.
Speaker 2:You know exactly what, and then, once you do, google won't really respect you until you have like four or five reviews. You need to get reviews as quickly as possible to show up when people search. I mean it's you're not having people be able to see the pin on your mac on the google map is the same thing as not having a sign at your facility. Yeah, people won't even know that you're there. And if you have zero reviews, if somebody even gets to your page when you do have zero reviews, not having any reviews also does not lend legitimacy to the business. It's unclear if it's open. Is the store open? Is it shut down? Is it real? Because there is such a thing. They're reading it out a little bit more, but a lot of companies will drop fake pins around on maps to generate leads in their area.
Speaker 2:So, uh, these these are just like things you need to think through and we should just like you. We've learned things the hard way. Pins first, you know having it being open without a pin. You do that. Once that you realize it's a problem, like wait a second.
Speaker 1:Wait a second. Right, wait a second. How do you guys capture uh reviews from customers?
Speaker 2:the most important time to do that is on the move in, because that's can often be the happiest that a storage customer might ever be, especially when you're transit, like a lot of times we are coming in, we're working with god. Maybe more than 50 of our clients are like new or not new owners.
Speaker 2:But owning this, owning new facilities, we're coming in at an important time of a close or a transition from one owner to another and in that case there's just always if you transfer your software, you're rolling out insurance. If you're doing price increases, people are just unhappy, like just finding software, you're rolling out insurance. If you're doing price increases, people are just unhappy, like just finding it. When you're reminded of your storage unit, you're just going to be just unhappy.
Speaker 1:Super super mad.
Speaker 2:Yes, Usually we don't. You're not ever reaching out to a tenant to tell them that they're going to start paying less.
Speaker 1:Bro, you never reach out to a tenant unless you tell them you're going to start paying more, right?
Speaker 2:That you never, or your door is left open or something like that. It's a pain in the butt and you don't want to disturb people. Yeah, go ahead. Sort of opportunities. If you are helping out a tenant or you're, you know they're saying, hey, I have some hardship, or can you waive this fee, maybe barter a little bit and finding those opportunities where, okay, we'll, we'll do this for you, we'll make an exception, but you can please leave us a review but you cannot solicit you cannot solicit google.
Speaker 2:You cannot solicit Google. You cannot solicit. You can't pay for reviews. That's a really good way to get your pin taken down. You just want to. You need to check. You don't want that. We're not telling you to pay for reviews. Do not do that you just ask. Yeah, when you ask, when you've done them a favor, when they're happy, that's when you ask. You don't ask when they're there.
Speaker 1:Yeah, and we don't tell them hey, leave us a five star. Say something like hey can you just leave us a review that we really appreciate it. You know absolutely Nothing wrong with that.
Speaker 2:And that's part of the training process for anyone that is working for us is like you just got to identify the opportunities when you're working with a happy and just try to get them to write a review.
Speaker 1:Yeah, atomic. When we used them they did a fantastic job in capturing reviews and just helping boost some of those things because we had some reviews. I call it the death spiral, like the downward death spiral, when you start getting bad reviews and then your responses to the reviews are written from someone overseas and it's kind of canned, you know, because you have a call center or whatever. It looks really bad and like now you have this death spiral at your facility because it's really hard to bury those bad reviews if you don't have enough good ones out there. I never want to see all five star. You know like it's okay to have four. Point something because somebody's going to mess up something at some point. Get mad, you can't please everybody, that's fine, but at least trying to. You know, respond to every review. It can't reviews. Respond to every review. Try to help the customer as much as possible. I have an idea for you guys. So you ever like sign up for those newsletters? You know like we're all in social media, you're out there trying to whatever and you like, for example, like Justin Welsh. Have you guys ever heard of Justin Welsh? Okay, he's a. He's on LinkedIn. He's one of the like top users of LinkedIn. If you go to his profile he has like I don't know how many followers. Every single post gets like thousands of likes and comments and all this stuff. Great guy. If you go to his website, he just teaches you how to grow your personal brand. So I've looked at his stuff and then you kind of go down the rabbit hole of that and you realize, oh, there's a lot of people out there that help you. Whatever it is you're trying to do, they help you, but whenever you sign up for their newsletter they will give you social proof immediately. So they will say, like for Justin Welsh I don't know what the number is, but it'll say join 300,000 other entrepreneurs every Saturday and receive he has this newsletter called the Saturday Solopreneur because he teaches people how to build like a one man business basically. And so there's always social proof If you go to somebody else's who's in that kind of similar space or whatever. They always say join 35,000 other investors every Saturday. Reading the newsletter, other investors every Saturday. Reading the newsletter, I've always thought on a storage facility, let's say there's 50 units and you're like 30% or I'm sorry, you're like 90% occupied.
Speaker 1:Whatever it is, you can make it up. Whatever it is, I'm not saying lie, but just make up a easy to understand number and you say join. If it's a hundred units, you say join 90 other customers at our facility. You know, like giving some sort of like social proof. It's a very small thing we're on a podcast, obviously, but I could share my screen and show you what I'm talking about, but it helps, you know, like, oh, there's actually other people here. You know there's other customers. You can see the reviews, of course, but like knowing, oh, like, if you had a 700 unit facility and we had 600 units occupied, I would say and we can, we keep that number pretty steady.
Speaker 1:You know it might go up and down, but I would say join 600 other tenants, happy customers at our location. You know, right by the rent now button or somewhere on that website, when you find the hero image or somewhere in there, uh, because it gives a little extra social proof. I've mentioned that to other people, but they don't ever. You know it is what it is. It's a small thing, not a big thing. So take it for what you will. You know, since you guys run your own website yeah, we could, I would you roll it.
Speaker 2:That's definitely a good idea. In particular, I think it might lend itself better actually to like your kind of your smaller facilities.
Speaker 1:Yeah yeah, I think so. Join 3 000 people. Yeah, just join 100 of your fellow community members exactly join 100 neighbors renting at our facility like that sounds great to me, you know, then you that's in itself that's not going to sell anything. But then you add the components together of that clean website, easy to rent, social proof of the customer reviews, you know some other things there and it kind of okay, I have some confidence renting from these guys.
Speaker 2:It all adds together yeah, you just got me thinking about another idea and like not like thinking about the funnel and like how can we capture everybody? Yeah, getting a click, getting information. It's easiest to capture a lead if you get the leads information and then you can follow up with that. That is.
Speaker 1:That is where conversion rate yeah, even in your follow-up you could say the same thing. Yeah, you know, hey, 25 off, join 100 other customers or happy tenants at our location. Yeah, it's easy to put in that follow-up email. Yeah, you know, a little bit of social proof in there. And then like, maybe I don't want to, you can get granular with this, but like, have one like five-star review with one little snippet in there and a picture of a person who left a review, whatever. Anyway, just my thought, I'll join the team happily and help you guys.
Speaker 1:Yeah, yeah, anyway, yeah, man, let's go ahead and wrap everything up with the final four questions. It's been super helpful. I like the story that you guys have. I like the vision and everything. I wouldn't be surprised if you guys grow two times as much, three times as much, healthy, in 2025. And then maybe add that other vertical. We won't talk about it now, but we add the other vertical of raising some capital and buying some of these deals. I think that would be amazing. It's another. It makes a ton of sense to me, but if that's not the plan, it's not the plan. So let's get to the final four. Guys Talk real quick about a high point in your guys' career or partnership and what did you learn from that experience?
Speaker 2:I think uh probably have different high points. My high point, I think, would be sort of opening our first local locker location and successfully filling it up First time. You're anxious, you're a little scared you could fail, uh, and just not not doing that much nicer than than the alternative.
Speaker 1:Yeah, we did used to joke.
Speaker 2:We were like what if we never get one customer like that would be so embarrassing. It's just like everyone thinks it's a stupid idea, like we wouldn't have to go into hiding that would suck.
Speaker 1:You know it's not the end of the world, though, because then you've gotten feedback from the market and you know you got to pivot a little bit.
Speaker 2:So it's okay. That's okay. Yeah, mine is. Mine is probably similar to that, like we both were. We weren't we needed to get some sort of external validation for this idea, I mean. So we did some pitch competitions in in business school and in one of the competitions we came in second place and we got one of those big golf checks and it was like it was enough for us to Alex actually had a. He had a. He had accepted an offer to go back into consulting.
Speaker 1:Oh nice.
Speaker 2:That's. You know, we got enough momentum during school where we both sort of just they were like you know we have to. We just we both sort of just they were like you know we have to, we just have to see this through, and so that was yeah, you know, just like these incremental things that pushed us along along the way.
Speaker 2:And then, you know, it was kind of. We opened our first facility and decided we didn't have to, you know, go into hiding when we got some customers, we were, we were fully into that's fine.
Speaker 1:Did you guys get was it undergrad or grad? Like MBA, MBA At Harvard, MBA? Okay, got it. So, yeah, so you hopefully make this work, because you can't go back at your MBA in Pitt. No, it's too late. That's what a lot of people do.
Speaker 2:We did our. We did our. We're storage warriors now, yeah, so Maybe they'll have us back.
Speaker 1:Yeah, exactly Just out of curiosity. What consulting firm?
Speaker 2:Boston Consulting Group.
Speaker 1:Oh yeah.
Speaker 2:BCG. I like that man.
Speaker 1:BCG. There you go, good deal, all right. So what was a low point in your guys' career? What did you learn from that experience?
Speaker 2:Because often we learn from the low points more than we do the high. Well, when we just started, it was just Pete and I are doing everything, so I guess having to just work with Pete every day wouldn't have a variety. Spend more time with him. We used to be friends.
Speaker 1:Yeah.
Speaker 2:Yeah Than anywhere else. No low point. There's not a I don't have one specific moment, but the. When we were doing local locker, we were, you know that's closer to being owners. Now we've sort of pivoted to client service and I am from the the client service world prior to storage. So we, we dealt as managers do everything perfectly Well. Sometimes we ask for feedback, sometimes we'll just get feedback, and when we either, when we have fallen short of our clients expectations, that that sort of stings a little bit. That's part of the process. It will happen, but you never, you never feel good about that, uh no yeah yeah, that sucks.
Speaker 2:Same thing on the mean, like to a lesser extent on the yeah, we used to answer the phones for for local locker and you can get getting negative feedback or just having them. Having somebody kind of tell you all the reasons that you're doing a bad job is tough and if you care about you, like we have to care about our business, like it's our livelihood here, so it's just like it's motivating, but it is you you dwell on it when it happens.
Speaker 1:Yeah, yeah, that can be pretty tough sometimes, but it helps you learn Right and you can pivot and you can not pivot, but you would add and fix those problems, add some new services or whatever it is. So that's it can be very valuable if you want to listen to it. So that's very good. What's a good business resource that you guys recommend for the listeners? It could be a book, podcast, conference, doesn't matter. What would you recommend?
Speaker 2:Oh man, I would say for me, I think this would work with your listener base. But the conferences are really helpful, and not the when you go to the self-storage conference. A lot of times it's the same thing if you're just going and listening to the panels, because it's the same people who are traveling around these things. Usually they might be trying to sell something you know you've got like. Scott zucker is the sort of legal authority in self-storage world. He's usually speaking at every other conference. If you've seen him speak recently, you'll probably see what he says the next time. But talking to Scott like having an opportunity to just interact with him or anybody else in the industry at those conferences is is hugely helpful. Because they'll say, hey, go stop by that boot. Like there's a pretty cool product over there and and or I don't know. Like well, I don't know how they're talking about conversion, Like 60% conversion sounds high. Like how high in the funnel are we talking about here? And you just start to like look at your own KPIs and think through learn a lot from other people in the industry.
Speaker 2:If you haven't been to a conference, the panels are also very helpful as well. If you're just traveling to these things all the time. You might see the same thing twice. That would be what I'd say if you're, if you're either in the industry or or joining the industry, um, and outside of your podcast, uh, it was rank one. Um, I like just finding reading a book about an industry or, uh, some founder, unrelated uh who's had success, and then finding one thing that we could try and apply to our business or personal life or job. I've found that very helpful.
Speaker 1:Yeah, I think that's a good one. I just picked up. I just started reading the Elon book like last week I think it was so that was actually really interesting to read about his childhood and all that he just got it. I just finished the story of him selling their first company for like he got like $15 million or something like that.
Speaker 2:Yeah, I love Walter Isaacs, since I read that book as soon as it came out.
Speaker 1:The Steve Jobs one previously. That was a really good one too. I enjoyed that one.
Speaker 2:Yeah, Alex is a big he reads a book a month and I always know when he's finished, because then I get to hear he comes in.
Speaker 1:You get to hear about the story. Well, he needs to, of course, tell me that he's read another book, right, yeah, it makes him feel good about himself, and then it's part of it, and then he's got.
Speaker 2:I can tell when he's trying to set the new up. Oh it is. I don't have to read the book and I still benefit from it what you guys should listen to.
Speaker 1:Uh, the acquired podcast. You ever heard of it? Acquired it's not about real estate, it's uh, they they sit down, they do like it's like a three or four hour long form episode. They do one a month and, um, they either interview or tell a story about a founder. So they do like nike and tesla and some other ones, but uh, the most recent one they did, I think they they interviewed mark zuckerberg at some event and then they also did the howard, howard schultz, the founder of starbucks. Uh, that was a very interesting interview. Um, so I coffee. So that was, that was a good one. But anyway, the point is is that it's in depth about something or someone in business. So if you can't read or you don't have time or whatever, it's nice to listen to the podcast. It's really good. It's actually the number one, I think, business podcast in the world, if I'm not mistaken yeah.
Speaker 1:Guys, I try to get sponsors for mine. They get $750,000 per quarter to sponsor their podcast. They have a partnership with JP Morgan. What the heck I need to scale up bro.
Speaker 2:That's high margin.
Speaker 1:I mean, it's so simple, it's not hard at all, the best type. I know that we're getting off track here. We'll wrap it up, but the best podcasts are the ones in person. I've done two of those. So if you, if the three of us, were local, we would be sitting down and doing this because there's so much better, and that's why some of those guys I know there's other reasons too, but that's one of the reasons a sit-down interview is so much better than doing it over the screen. But work with what you got.
Speaker 2:You didn't invite us. We come next time.
Speaker 1:We'll do it, man. All right guys. How can listeners get in touch with you if they want to inquire about third-party management or if they just want to bug you with questions? How can they reach out?
Speaker 2:Yeah, easiest way is just visit our website whitelabelstoragecom and visit our website whitelabelstoragecom and there's a form you would click out and hit submit, and then Pete and I are very involved with the business, so just let us know you heard us on the podcast and we'll personally reach out and schedule a call. Neither of us are big social media people, so I don't have an Instagram handle or LinkedIn. I have a LinkedIn profile, but I'm not active on it, so it's hard to find me on those places. Our marketing director is not a fan of that, though.
Speaker 1:I think it's more engaged.
Speaker 2:I was going to say it's a missed opportunity, that's for sure.
Speaker 1:All right guys. Thank you guys for being on the show. Appreciate it. My best wishes, Hope you guys grow to leaps and bounds in 2025.