You can always tell when a new service is being hyped up as a billion dollar possibility, because you start seeing a lot of fancy comparisons. Like ‘the reverse Amazon‘ or ‘the Uber for x‘. This is VC short speak for ‘we’ve dumped a ton of money into this venture because we believe it’s going to be incredibly disruptive and change the world. Maybe.’ The PR trick is to associate the new venture with a massive veteran success story, as well as a hot new company which is creating waves. Job done.
So it is with the new MakeSpace service which launched a scant 15 months ago. The company is ostensibly a ‘Dropbox for physical storage’ (there we go again), which means they’re trying to make it super easy for people to store the personal belongings they don’t have space for, in a remote warehouse.
This self storage business is apparently worth $6 billion a year (or $24 bn depending on who you believe) in the US alone, which is a big but not humungous number. And one thing we know about VCs is they don’t deal in merely big. They need much more to keep the money machine running.
So we get MakeSpace (and rivals UrBin and Boxbee). While their backers talk about increased convenience vs the traditional Shurgard type storage services – the new services pick up and return your stuff by van and it’s all managed online or via your phone – there’s more to this than meets the eye.
One of the clues lies in the fact that MakeSpace has just announced a new service called MakeSpace Air, whereby you can ship your stuff to them for free (return shipping is also free) from anywhere, and more importantly the company has started crowing about the fact that users can select parts of their consignments to be returned, using photographs to remind them of what is stored in which box.
Which leads us to the punchline. As embarrassing as it is to admit it, we’ve all got far too much stuff. We’re drowning in appliances, gadgets, gear, clothing and just general stuff. That’s what makes self-storage such a big business, we desperately need places to store all this extra baggage. But the irony is we don’t actually need to store it, what we should be doing is recycling it, but it’s generally too much hassle. And we have all those sentimental reasons etc.
Now imagine that you combine ‘cloud closet’ services with a free classified ads service. So when you send your items off for storage you can specify that they’re automatically available for sale, along with photos, free automatic shipping to buyers and a heap of other services (like optional personal examination at the warehouse or whatever). What’s the biggest hassle with selling on eBay or Craigslist? Yep, packing and shipping.
It would involve marginally more work on the part of the user, they’d have to fill out details of product condition and descriptions etc, and supply more photos allied with box numbers etc, but once that stuff was done it would be simply a matter of waiting around for a buyer to search for or spot the items on the sales site or in their phone app, and everything’s done. No further involvement. And if you get teary eyed in the meantime, just remove it from sale with the click of a button. Brilliant.
Right now it’s obviously very early days for all these new services, and most of them are confined to one or two cities only (even though we’re starting to see international clones start up like LoveSpace in the UK), so there’s lots of consolidation and sweat to come before any of this happens, but the writing is on the wall.
The huge elephant in the room is of course Amazon itself, which has the technical systems, physical buildings and more importantly customer trust already in place to take this market by storm if it wanted to, but maybe that’s a part of the plan all along?
What could be better for a hungry VC than having your cloud closet startup bought out – Google style – by Jeff Bezos for a suitably huge sum of money in two or three years time? Jackpot.