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In high school, Brandon Gotlieb wanted to earn some money. He asked his parents if he could use Airbnb to rent out a spare room in their family home to guests.
Not surprisingly, they weren't too keen on the idea of having strangers stay in their home.
Brandon knew there must be some way to make money off of all the unused space his parents and many other Americans had in their homes; he just needed to figure out what it was. He put his idea on the back burner while he graduated from high school and headed off to college at Ohio State University, and that's where the idea hit him—he'd create the Airbnb for people's extra stuff.
We spoke with Brandon to learn more about how he started NXSTOR (pronounced “next store”), and how he's managing the side business as he and his team head into their junior year of college.
How did you get the idea for NXSTOR?
"Americans don’t really use that much of their homes. I live in northern Ohio, and every house nearby me has a basement that goes unused for the most part. People that live in apartments don’t have that same amount of space, and might eventually need it.
"I thought I could change the way that people interact with one another, and the way communities develop. It’s really gross, looking at some of these communities and seeing a self-storage facility. We wanted to change the way people thought about that concept. We wanted to build something that lets you put up a piece of space and have someone connect to you and use that space."
How did you get the company started?
"There’s an organization at Ohio State called Business Builders Club that was throwing a pitch competition at the time. My roommate, Mike Gargasz—who is also one of NXSTOR’s cofounders—and I had never really pitched anything before, but we saw this as an opportunity to do something fun.
"We just entered ourselves, and prepared a pitch in one night. It was your typical college experience—throwing something together and going and presenting it in front of 100 people who have no idea about what you’re talking about.
"But we won $1,000 and started building it from there. We got a little bit of help, financially, and some support from mentors. We ended up doing a summer storage program for international students, and we raised another good bit of money. We’ve been bootstrapping it ever since then."
Tell us about the foreign exchange student program.
"We really wanted to raise enough money to start building the website, and we thought that it might make sense for us to get a better understanding of the way that people are storing things nowadays. So we rented out a storage unit, and we stored items for, I think, 25 international students for the entire summer, so that we could see what the moving process was like and what going through additional self-storage was like.
"We got to break it down and do customer surveys and ask, 'What if we were to take your stuff to somebody’s house? How would you feel if it were stored in their basement?' Overall the feedback was just amazing. And we also raised a good bit of money, about $4,000 storing their stuff for the summer."
So you found people right in your area who had this problem, and you found a solution for it?
"Yeah. It’s really easy when you go to a college campus, because every summer the all kids from out-of-state need some place to store their stuff."
What were some of the biggest challenges when you were starting out?
"There were so many. Legal regulations and insurance—those are really big. But just changing people’s perceptions, especially. Not everybody is comfortable with all aspects of this sharing economy, so convincing older individuals to let us rent out their space has been a great challenge. But something that we’re getting very good at is convincing people that this concept makes sense for them and can help them earn money and support their communities."
Is there something specific you have to do to get older generations accustomed to it? Or do you think it’s more a matter of time, as people get more used to peer-to-peer programs?
"I think it’s two-fold. Airbnb has done a great job of priming people to think in that mindset, and we’re incredibly grateful for that. But also, breaking down the benefits side of things for older individuals always helps. Meeting people in person and showing them our past successes has been really great. A vast amount of the people that we end up signing up as hosts we meet in person, or at least we've had a decent interaction with them. I think that developing that good base of people will help us well into the future."
What mistakes did you make, and what did you learn from them?
"When we were initially getting started, we went to so many people to ask them to become hosts, and we got nothing back from most of that initial batch of people. We were wondering: Why are we not getting the number of hosts that we want out of this? And we realized that we were addressing a group of people who had no need for it.
"We saw these people with larger houses and thought they were perfect hosts. Why wouldn’t they want to make a little bit of money to help pay for the houses? But then we realized that in addressing that kind of market, where people are wealthier, we were dealing with people who didn’t want the hassle that they thought would arise with people coming in to their house. And they also didn’t need the money to offset the cost of that house.
"Re-working things to find the ideal host was a really big learning step for us. It helped us identify the ideal house to walk up to. Our take-away was that not everybody that has space is going to be willing to share it. And it’s not always money that’s going to incentivize someone feel good about what they’re doing.
"That’s when we found out that our values can’t entirely be based on monetary gain for these people. A lot of it has to be, what can they do to improve their community, and what can they do to improve the world with a greener way of doing things."
How did you get the word out and find people to participate?
"We do a lot of online advertising; that’s a huge one. And we just do massive amounts of [outreach] with people through media sites and social media. We’re also trying to work with companies; doing partnerships is big for us."
Online advertising: is that though Facebook? Google Ads?
"We typically don’t do Google ads, but we’ll run a lot of social media campaigns. Facebook is one that we really like to tap into for hosts, and Instagram has been one that we like to tap into for potential renters. We have seen a varying demographic of people that we feel are best suited for those categories. Older people, generally, are using Facebook more now; and younger people who we see as renters, who are living in apartments and need the space—they are going to be on Instagram."
What kind of partnerships are you making?
"We’re really excited for one that’s about to come onto the site. We’ve partnered with a company called MUVE, that does peer-to-peer moving. All they do is in-city shipping, so it’s kind of like Uber for shipping. People come, they grab your items, and they drop it off. What we’ve done is brought them onto our website, and offered one quick pick-up and drop-off for your items."
So you're currently operating in Columbus?
"Yes. We’re in all of Ohio, and we’ve got the Midwestern metros as our next big move. Our biggest strategy for growing into another state or city is identifying hosts first, so we’re steadily building up a host network in those cities. Because before we offer things to renters, we’d like to have the space available. So, really we're just targeting as many hosts as possible, working with different student agents in those cities to discuss what we do with community members, and working with people on the ground to start drumming up host support."
Have you ever had anybody store something really weird?
"We have a huge set of terms and conditions, so there are a lot of things that cannot be stored. But I think the funniest thing that I’ve personally seen stored was when a student who was going home one semester only had one box, and that one box was filled with cleaning supplies. I think it was literally just laundry detergent. I was like 'Why? Why do you have all this?' I think they spent more money storing the stuff for the summer than the laundry detergent was worth."
What regulations do you have? How did you learn what limits you had to place on what is allowed to be stored?
"We looked at a bunch of sets of terms and conditions of other businesses. As far as exact regulations go, we just wanted to do all we could to protect both parties. Trust is such a huge thing for us, so we wanted to ensure that nobody was storing things that would make the host uncomfortable; nobody was storing anything that would make the host unsafe. We don’t allow guns, knives, weapons, chemicals—anything like that."
You mentioned insurance earlier. Do you currently have any sort of insurance partnerships or offerings?
"Currently, your homeowners insurance has contents coverage. That's generally applicable for other people’s items within your home. So we’re operating under that guideline for now; but we wanted to offer something more.
"So we're in the process of partnering with an international insurance group. They are bringing this brand new variety of insurance to America that is perfectly tailored to this situation."
Are you generating revenue?
"We’re making money from the people that are storing items. We’ve got our initial cohort of people that were trial-run customers, and now we’ve been adding more spaces.
"We’ve generally invested everything back into the company, and we’re happy, because it’s offsetting our meager costs of running it."
You're going into your junior year now. Do you plan to continue this business after you graduate?
We’re in the process of raising seed funding right now. The idea with that is, we’d like to raise the money we need to keep doing this full-time. I think everybody on the team right now is so passionate that we could never give it up. We’re following this one through.
The article, A College Student and His Friends Create the Airbnb for Your Stuff , originally appeared on ValuePenguin .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
