The entrepreneur hopes to disrupt the £355m storage market
Brett Akker sold his last business for $50m, having launched it just six years before. Streetcar was the British car club he founded in 2004 with old Durham uni mate Andrew Valentine. They built it to 40,000 members and a fleet of 1,400 cars, operating across eight UK cities. Then Zipcar, the world’s largest car sharing service, snapped it up.
How and why has Akker ended up in the storage industry? This year he launched LoveSpace, which collects items from your door, stores them for any given time period, and returns them to any address in the UK. Prices start at £4.95 a month.
Boxing up other people’s stuff doesn’t seem quite as zazzy as zipping around cities in a Streetcar. But storage is a market ripe for disruption, Akker believes – and a market worth £355m at that. And he thinks that LoveSpace is “Streetcar but for storage” – more on which shortly.
LoveSpace has attracted £500,000 seed investment from Smedvig Capital and First Risk Capital, both original Streetcar investors, and storage industry stalwarts August Ameln, Lasse Hoydal and Arnaud Ripert.
It soft-launched over the summer and has just re-emerged, having had a facelift and a few new fancy features added in. The business is based in Southfields (Wimbledon’s neighbour in southwest London), with a team of six. We catch up with Akker to unbox his plans.
How did you get from car-sharing to storage, and what have you learnt from Streetcar?
We’re seeing urbanisation taking place. Cities are getting more densely populated. Transport is getting better but congestion is getting worse. That was really behind Streetcar – and it’s behind the thinking of LoveSpace as well.
More and more people are living in cities every single year, and there are aspects of urbanisation that are happening more and more not just in London, but in all cities. People are moving more and more central. There’s more accommodation and more property being built, but it tends to be small – flats are expensive and space is at a premium.
But with LoveSpace we were in a different position from when started Streetcar. [When we started Streetcar] we had just two of us with money we’d saved to fund the business – that was really it.
LoveSpace is slightly different – we’ve got a good board and we’ve had investment from day one. We’ve got that network of people we did not have in the early days of Streetcar.
Who are your main target markets?
Students are the one key market in terms of our first marketing campaign over the summer, which did exceptionally well.
There’s also businesses, for their storage and archived files – there’s nothing in place for SMEs there.
There’s also people moving house, both when they actually move and when their house is on the market so they want to de-clutter.
Then there are people who are downsizing [homes]: older couples whose kids have moved out of home but they don’t necessarily want to throw things away.
I guess there are also other aspects of people who need to de-clutter and make space: expecting parents who are putting baby clothes into storage until the next one arrives; people storing ski gear during the summer and summer sports gear in the winter; and so on.
How much are they each worth to the business?
They will vary by different segments. So small businesses will store for longer because they need to keep and archive files for five or six years.
Students, we know, are likely to want just three or four months storage [during the summer holidays], but we’ve found that some store four or five boxes on average.
So how will you reach target customers?
Partnerships will be extremely important, so we launched one with Mainstay [the property management company]. That’s the sort of thing that will work exceptionally well as they’re managing exactly the right sort of people.
Why have you re-launched LoveSpace? What will be new?
We did a soft launch in summer this year for students, and learnt a lot from them in terms of service and user experience. We tweaked the back and front-end so user experience is better for people when they first come onto the site.
People were also after pricing that’s dynamic – if you’re storing more or for longer, you want a discount on storage, so we’re building that in too.
It’s not necessarily that things weren’t working, but there are things we’ve tweaked in the service. So with our third-party courier partner, for example, we tried a few and have now decided to go with CityLink as they have a very good service for us.
We will do some delivery in-house for those doing urgent stuff nearby, and potentially using other partners.
What are the highest-risk variables in your business model?
Being able to market effectively to those different segments. So with Streetcar, for instance, the two of us were standing outside a station in London at 7:30am and we knew 80% of the people coming through would be target members.
With LoveSpace, things like that could work to a certain degree, but it’s not as clear.
Which companies are your main competition?
You’ve got more traditional self-storage players like Big Yellow and Safe Store and those guys. Then on the business side you’ve got Iron Mountain, who are a very, very large operator in that field.
Where we see LoveSpace is similar to Streetcar: rather than direct competition, we think there is no direct competition as LoveSpace is an extension of the storage market.
What would success look like in terms of annual turnover, and how soon do you expect to get there?
Turnover is a tricky one. It’s very, very difficult to come up with an exact figure on that.
Success for us is to quickly prove the segment we’re looking to target, and build a successful growing business across the UK.
Then there’s potential for international expansion of the brand across Europe. We’ve [set it up] so that we could potentially launch within Europe.
At this stage it’s really proving the concept, fast growth, then looking further afield.
You’ve got a team of just six people – how is that made up?
We’ve got an MD at the moment so I’m slightly on the outside: he is really, really good and entrepreneurial and really gets start-up thinking. He knows the digital space – and this might be storage, but it is effectively an online business.
Then we have customer services, which is absolutely vital as that will help the business grow, as when people have a good experience you get good word of mouth. Then there’s marketing and warehouse operations and logistics, our fleet and third-party partners, and business development and sales.
What attributes are you looking for when you hire?
We’ve always looked for very bright, ambitious, entrepreneurially-minded people.
Experience [in this niche] is non-existent as it hadn’t existed before, so instead we look for very, very driven, hard-working people who are entrepreneurial.
Once you’ve recruited, it might take longer for them to get to grips with stuff [than someone who has direct experience] but then within three or four months they’re over-delivering.
Where is the storage space you’ll use? Do you own the warehouses?
We sub-let them. We’ve got a few diff spaces as were growing, but we will be looking to own our own warehouse and facilities.
Then probably we’re likely to create some hub-and-spoke service across the UK. So [we’d have] warehouse in big cities, so we can do deliveries and collection in-house for fast delivery service, and potentially have little warehouses further outside cities for those storing for longer periods of time.
What’s your exit strategy?
I’m not thinking about that at all. I’m just focusing on growing a successful business and proving the concept.
That’s what all entrepreneurs say! What are your future funding plans then?
We’re looking to raise over the coming months to expand across the UK.
Good luck with that Brett and thanks for your time.
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