Self-storage operators could do a better job of listening to their customers, said Marcus Mollman, founder and CEO of Closetbox, which is fresh off of raising $5.5 million in a round of funding that ended March 22.
“I’m not sure anyone in the traditional storage industry has tried to understand what the customer is looking for, what the customer needs,” Mollman said. “They’ve never look at it from the customer’s viewpoint. They’ve added lighting, key card access and cameras all over because safety is important to people, yet they never looked at how renters may want to experience storage.”
Mollman’s solution? Closetbox, which opened in spring 2014 in Greenwood Village, CO, offers a concierge storage service that specializes in free home pickup and delivery. It generated $5 million in revenue in 2016, about seven times the 2015 amount.
Filling that niche is working: Closetbox has grown rapidly, with 65 markets in 35 states plus in Washington, D.C. In its home state, Closetbox has locations in Denver, Fort Collins, Boulder and Colorado Springs.
Closetbox and its competitors expect more growth, fueled by the continuing development of small living units –- 300 square feet, in one Denver example — in urban areas nationwide. Residents simply can’t fit all their belongings in these units and have flocked to self-storage units.
Speaking of the competition, Mollman said, “Our only competitor is awareness, letting people know that we’re available. The market is big enough for several full-service companies. I don’t see a competitor that’s constraining our growth or will constrain our growth in the future.”
The company has raised a total of $12.3 million in three funding rounds. Previous investor Boulder Ventures led the most recent round.
How will Closetbox spend the new money?
“We’re going to be spending it for growth and product development,” said Mollman, 41, whose background is in buying and redeveloping real estate. “We’re in most of the major U.S. markets; we will be looking to grow within those markets for the near term.”
Mollman also plans to invest in new technology for his business. “We’re going to roll out some great technology that will differentiate us from the rest of the storage market and drastically change the customer experience,” he said. “Our proprietary logistics platform is powering advancements in our ability to better deliver our service.”
Mollman said the company plans to add features that will help customers better manage the items they have stored.
“These will make it easier to order storage, making the process look more efficient and better for customers.”
Closetbox has more than 40 employees, and Mollman is picky about who he hires.
“Assembling a best-in-class team has been very rewarding, but it takes time and it takes work to get great people,” he said. “That’s probably been the most challenging. Finding the best people is really hard, but worth it.
Has the company’s fast growth surprised Mollman?
“I wasn’t expecting to grow this fast,” he said. “I thought…that full service would be more of a luxury product. What we have found is that it’s a necessity.”
For example, a single mother who needs to put her son’s and daughter’s possessions in storage for awhile has few choices when it comes to getting the items there, he said.
“We’ve obviously shown a demand for our product and a need for our product.”