Entrepreneur Lonnie Bickford says that when he participated in a pilot program for an online auction for abandoned storage units a few years ago, he didn’t expect it to work very well. But when a person two hours away outbid local bidders in the first auction and followed through to pick up the merchandise, Bickford was intrigued. When it happened two more times, he saw an opportunity.
Bickford, who owns several storage facilities in Louisiana and Texas, started researching the space and found the existing auction sites weren’t meeting the needs of the industry. “There was no one with storage experience and none of the sites had functionalities that were specific to storage units,” he says. “They were like mini eBay sites, but that was not what we needed as storage people. We decided that we had to build our own platform and proprietary software from the ground up.”
The result was StorageAuctions.com, which launched in July 2016 and has grown significantly over the past two years to become a leader in the space, completing more than 1,000 auctions a month across 42 states.
SPOTTING AN OPPORTUNITY IN A HUGE HASSLE
The U.S. self-storage industry has grown steadily over the past decade, climbing to more than 45,000 facilities generating $38 billion in annual revenue. Predictably, the number of abandoned units has jumped along with the industry boom, creating an industry on its own and a pop-culture phenomenon documented in the television show “Storage Wars.” By law if a customer abandons a storage unit, the facility’s owner must follow a lien process that ends with a mandatory auction.
While such auctions may sound like a financial boon, Bickford says they can actually be a burden on facility owners, creating messes that have to be cleaned up and requiring time and resources for managers to host the auctions on-site. “It’s just a disruption to the operation of the business,” he says.
StorageAuctions.com seeks to ease these pain points. The system allows sellers to create an auction event that will include one or more units, schedule an end date, upload photos of the unit and then publish the auction.
After the auction is published, bidders who have created an account and added their billing information can bid on it. When the auction clock ends, the highest bidder wins. The company collects a commission from both the buyer and seller based on the winning bid.
DRAWING ON HIS UNIQUE PERSPECTIVE
StorageAuctions.com launched with a minimal viable product after a few months of development, and it immediately discovered there was a demand for the service. Bickford says his experience as an owner of storage units gave him a unique understanding of what would actually work, as well as insight into which features offered by competitors were unnecessary.
“I knew what people wanted because I was one of the people — I owned the store,” he says. “I had a problem that I needed to solve, and I didn’t need every bell and whistle. We were able to drill down to what matters most.”
Bickford, who has started more than a dozen companies but none in technology, was able to focus his development team on what mattered to customers despite a lack of coding experience. “I just try to put the faces in the right chairs, and so far it’s worked really well,” he says.
SPREADING THE WORD
The focus on efficiency and simplicity has paid off. Bickford says the company is experiencing 20 percent to 30 percent month-over-month growth and is staffing up to handle that additional business. “It’s growing really fast,” he says.
Bickford spends much of his time traveling to storage industry conventions to spread the word about the product. He says the investment in sales is something he thinks many technology startups overlook, focusing instead on development and fundraising. “If you don’t have someone who can drive sales, it doesn’t matter how good your product is,” he says.
The company, which already handles multiple large accounts, including U-Haul, is poised for continued growth, Bickford says. It’s also developing a mobile app for store managers to streamline the photographing of abandoned storage items and other tedious auction processes. “I’m terribly excited about where we’ve been and where we’re going,” he says.
We’d like to thank the Louisiana Tech for such an insightful piece on our quickly growing business! You can read more here!