While waiting for the perfect idea, I started searching for an internship.
The initial excitement of landing a summer gig at UBS ($14/hr) wore off as I realized $5600 before taxes, for the ENTIRE summer, wasn’t going to cut it.
So, I approached my friend with an opportunity…
The international and out of state students needed summer storage.
You can’t bring dorm room stuff on a plane!
Simple Storage was born.
I self-coded a website and my partner distributed flyers
Signups started rolling in...
A week later, 67 students needed our service, but…
We had a problem, storage space was too expensive.
We’d lose money - so I did what anyone would do.
I called my Mom.
“Can I store a few things in the basement for the summer....15-20 boxes max!”
Apprehensively she said “Yes”.
She knew I was sugarcoating it.
Now, all we needed was a small capital injection for the U-Haul ($300).
I'd already called Mom...
Time to hit up the old man.
As an entrepreneur himself, he loved it and happily whipped out a credit card.
Officially in business, and ready to get to work.
During finals week, we picked up and stored 350+ items in my parent's basement - it was PACKED.
Needless to say, Mom was furious, stressed (and a bit impressed.)
After a backbreaking & sweaty week we had made…over $20K!
2X my internship money in a week - it was insane.
The money was great, but the real value came in the following lesson:
Like sports, nobody is going to hand you anything in the real world - if you want more, go get it.
My value went from $14/hr to $42/hr because I decided to act.
Once experienced, it changes you forever.
In the last 5 years, we rebranded to OnDemand Storage to catch the full service storage trend.
We’ve added residential, commercial and container storage while filling 3 warehouses, inking 13 student contracts, building/selling software, and storing over 8,000 customers.
My foray into entrepreneurship was heartbreaking and backbreaking at times, but the bootstrapped nature is in my DNA.
How did you start your first business?
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The most important metric for building a profit machine...
Customer acquisition cost.
The lowest CAC will win in the long run. Every time. Every industry.
Earned attention and repeat customers are the two biggest drivers of low CAC.
3 Sure fire ways to lower CAC:
SEO: Organic traffic CONVERTS (as much as 10X paid traffic). My company, OnDemand Storage gets 85% of our jobs through SEO. In an industry with 18% profit margins, we maintain over 40%!
You will not outspend the biggest players, be agile and commit to building website equity.
AUDIENCE: Build a loyal following by consistently putting in work to earn goodwill. This can be done by building a social media following or consistently contributing to your community in a positive manner to earn good press.
Here's how I got into the container storage business with $0 and owning 76% of the company with my business partners.
In 2016 we started "OnDemand Storage" with the purpose of providing storage with pickup and student storage...
We've done well and continued to grow.
Recently, an investor approached the team about the red hot container storage business.
He felt "OnDemand Storage" IP is a competitive advantage - everyone knows exactly what it means.
We set up a separate company where he retains 24% of the ownership. The investor put 100% of the money into the company and financed the containers at $4K/each.
Starting a (low risk/ low cost) business is LESS risky than working for a company.
Side note: all entrepreneurs should first start a low cost/low risk service business to generate cash flow and learn about selling and delivering service.
Once the basics are mastered, then it may be time to lever up, raise capital go for something "bigger".
Back to risk and entrepreneurship.
Imagine a sales job offer of $40K + commission.
That sounds much safer than starting a business with no immediate income, but is it?
No, because Company X is not going to keep a salesman that cannot sell employed longer than 3 or 4 months.
(see Frank Slootman discussing A, B, and C players).
If the salesman decided to start his service business, he must sell or he will not earn any money.
Early-stage companies are in a constant battle between growth and staying alive.
I’ve made (and make) several mistakes, here are 6 to avoid:
1. Wasting time on raising capital too early.
Win customers, prove your business model, print profit and maybe you’ll be lucky enough to never need outside capital. Many early-stage hours wasted here.
Investors do not want to invest in pre-revenue startups.
2. Credit cards
Financing marketing campaigns rarely works out well – they need time to optimize. Also, the SaaS recurring fees add up (and most products aren't as good as advertised).