A common problem people have is needing storage— whether it is for short- or long-term purposes. Often, people need temporary storage when they move. For example, a person’s new job might begin on April 1 while the house or apartment into which they are moving will be available on June 1. People with excess possessions or who have a seasonal item such as an RV or boat that they use primarily during the summer months, causing them to need a storage option during winter months, require storage capabilities on something more than a temporary basis. The \($29\) billion self-storage industry exists to solve these problems. Almost every town in the United States and many communities in other nations as well have one or more self-storage companies. Less Mess, for example, claims to be the most popular self storage company in Poland and the Czech Republic while Giba Self-Storage serves South Africa. According to Spare Foot, the go-to source for news and data on the U.S. self-storage industry, there are over 51,200 self storage facilities in the country with 11.1 percent of U.S. households renting a self-storage unit. As with all industries, the self-storage industry is not without issues. As examples, some people complain that there is not a self-storage facility close to where they live, that the prices are too high, and that transporting items to and from the storage facility is inconvenient. Additionally, because self-storage units charge by square foot, there is an incentive for users to maximize the number of items they place in a storage unit. That makes items hard to find and hard to access, limiting personal storage to items that people use infrequently. As illustrated throughout this text, problems cause entrepreneurs to take notice, and this is the case in the self-storage industry. The following is a brief recap of two startups that tackled the same problem: how to disrupt the self-storage industry and provide customers with a better experience. Both companies raised substantial funding (\($35.3\) million for the one that failed and \($65.7\) million and counting for the other that is succeeding). While these two firms set out to tackle the same problem, their business plans to do so differed substantially. Indeed, one business plan did not lead to firm success while the other one did....

Discussion Questions:

1.Why do you think Omni’s approach to providing storage solutions to its customers failed while Neighbor’s approach is working? List three factors that you believe account for the value of Neighbor’s approach compared to Omni’s.
2.Reread the section in this chapter titled “The Economics of Business.” In your judgment, were the economics of the business sound for Omni from the outset? In what ways did Neighbor set up its business in a manner that the economics of the business made more sense?
3.Go to Neighbor’s website and look at the rentals that are available in your city or town. On a scale of 1 to 10 (10 is high), how impressed or unimpressed are you with the offerings? Explain your answer. If you could provide Neighbor’s management team one piece of advice about their business plan, what would that be?
4.List three lessons founders of startup firms can learn from Omni’s and Neighbor’s experiences.