Meet what could be the next generation of storage.
Several storage startups have launched or expanded this year, aiming to disrupt the traditional self-storage business model by offering pickup and delivery of storage bins and even single items.
The service provided by these companies is not to be confused with portable storage units that can hold a whole house full of stuff. Instead, the boxes provided by these companies are around 3 cubic feet, perfect for holding items such as winter coats, holiday decorations and camping gear.
A common thread among the new companies is a heavy emphasis on technology. Most offer technology that enables users to catalog the items they’re storing and summon them via cellphone.
The founders of these companies share similar reasons for starting up, chief among them the inconvenience of retrieving items from self-storage facilities and remembering what is kept inside them.
The companies share another important aspect. While most have launched and now are limited to their home cities, they aspire to expand to urban markets nationwide.
Boxbee offers containers–each 2 feet long and 1 foot high–for customers to store their stuff. The service costs $6 a month per container in San Francisco and $9 in New York. Pickup of packed boxes is free, while retrieval costs $15 plus $2 per box.
“Once people learn how we are different, they quite love the idea,” said Stéphanie Read, operations manager at Boxbee.
Read said the customer base has grown significantly since last summer, but she couldn’t release an exact figure. The company had about 200 customers in June, according to the San Francisco Business Times.
Despite expanding to a second city, the company remains small, with just six employees and one delivery truck in each location, according to Read.
Read said the company tentatively plans to expand to Toronto and Los Angeles. “There are no concrete launch dates, but we are definitely moving in that direction,” Read said.
The company’s arrival in New York puts the company into direct competition with a local startup offering a nearly identical service. That competitor, MakeSpace, launched in late September.
Sam Rosen, CEO of MakeSpace, isn’t worried about competition.
“I think this is a very difficult space, and ultimately it comes down to operational excellence,” Rosen said.
MakeSpace offers a minimum of four bins for $25 a month, and additional bins for $6.25 each. Having your bins delivered costs $29, whether you need one or all of them.
Rosen was inspired to start the company after he and his girlfriend had a poor experience with a facility where they stored the contents of her flooded Hoboken, NJ, apartment after Hurricane Sandy. He started working on the concept in November 2012. The MakeSpace slogan: “Never visit a storage unit again.”
MakeSpace addresses the difficulty of remembering what you’ve stored by having your contents photographed by professional drivers. Customers can access the images through their online accounts.
Like other companies operating in the space, MakeSpace stores customers’ belongings in leased warehouse space.
As with Boxbee, MakeSpace has its sights set on expansion. But for now, the company is focusing on being the market leader in the New York City area.
“I think it is great if other companies have the lead in other cities. It proves to us the idea works, and then we can come in and compete,” Rosen said.
Joining the field of newly hatched storage startups is Los Angeles-based Clutter, which rolled out in August.
Brian Thomas, founder and CEO, said the emergence of several competing companies around the same time is a good sign for the burgeoning business model. Thomas said his company will stand out based on its technology and its customer service.
Clutter offers an iPhone app that customers can use to photograph and catalog their stored items as well as schedule pickup and delivery. Customers can manage their accounts online.
Beyond Los Angeles, Clutter is eyeing major metro markets “where people put a premium on space,” Thomas said.
However, Thomas said he’d like to expand within California before setting up shop in another urban market, like New York. “We need to figure out the blueprint before we go to expansion,” Thomas said.
Part of that involves adjusting the business model to meet the needs of customers. Initially touting its plastic storage bins for $10 month, Thomas said the company realized consumers want to store more than what will fit in a small box.
“We switched the pricing model in October. Now, we can store anything that fits in a van and a moving truck. That was a big takeaway,” Thomas said.
In addition to storage of plastic bins, Clutter will store whatever you can cram into a midsize cargo van for $100 a month or a large cargo van for $200 a month. The other startups mentioned previously also encountered demand for more options from its customers and include options for storage of individual items such as bicycles, small furniture and golf clubs.
“I think the market is now ready for using technology to help manage their lives,” Thomas said.
The latest startup to enter the storage fray is Storrage, a Seattle company started by entrepreneur Terry Drayton. Drayton founded HomeGrocer.com in 1997, one of the first online grocery-ordering companies. HomeGrocer.com was purchased by competitor Webvan, which eventually went out of business.
Storrage became available to the public in November. While the concept is nearly identical to what the other startups offer, one key difference is that Storrage wants to establish franchises, starting in Seattle.
“The expectation is to have about three franchises here,” Drayton said. “The focus is to get Seattle going, and then we would like to do a fairly quick national rollout over the course of two or three years.”
Drayton said he wants to market franchises primarily to military veterans. “In my experience, the best people for … logistics businesses and the best drivers have always been ex-military,” he said.
The advantage of adopting a franchise model is that as the business expands, it won’t need to raise huge amounts of capital. Instead, franchise owners would be forking over money. The company will enlist business partners in each location, rather than the locations on its own.
Drayton said the company will operate the warehousing and technology aspects of the business, while franchisees will handle pickup, delivery and marketing.
Storrage now employs 10 people.
Storrage offers container storage for $4 a month, with a minimum order of five containers. Pickup and delivery is $15, plus $2 for each container. Storrage also offers storage for bikes, golf clubs and other sports equipment. Customers can purchase a container $19, cutting the monthly storage cost to $2.
The company provides a mobile app for customers to manage their belongings. The company also uses apps internally to track containers and to route drivers.
Drayton said the storage-by-the-bin phenomenon “is a really wonderful market opportunity. I think this will be a multibillion-dollar business,” Drayton said.