Sam Rosen

Founder & CEO at MakeSpace. First Entrepreneur in Residence at UpfrontVC

THIS CHAT HAPPENED ON February 25, 2016

Discussion

Sam Rosen@sir · CEO & Founder, MakeSpace
I'm Sam Rosen, founder and CEO of MakeSpace. MakeSpace was born after a particularly horrible self-storage experience in the aftermath of Hurricane Sandy. Ever since we've been utilizing tech and streamlining operations to reinvent the antiquated self-storage industry. Happy to be here - ask me anything!
Ryan Hoover@rrhoover · Founder, Product Hunt
Sam! What's the weirdest thing you've stored at MakeSpace? 😊
Sam Rosen@sir · CEO & Founder, MakeSpace
@rrhoover well, without breaking confidentiality of our customers, let's just say that if you can think of it, we've stored it. Live / Dead things and illegals are against our TOS, so nothing Breaking Bad style, but the reality is we've stored tens of thousands (approaching hundreds of thousands) of individual items. I literally have no idea at this point what the weirdest things are! That said, I'll never forget the college student who gave us a swiffer. The moose head. And of course, I'm sure we have our fair share of the various "adult" items that find their way into MakeSpace. We're an internet company after all. So what would we be without our fair share.
Nik Sharma@mrsharma · Director of Performance Marketing, hint
Hey Sam, congrats on the new funding! With MakeSpace not being a 100% tech company (meaning you have people moving items to storage on the ground), what were some of the biggest challenges getting started for you? And, what advice would you give yourself if you could do it again? Thank you!
Sam Rosen@sir · CEO & Founder, MakeSpace
@mrsharma Hey Nik! Thanks for the question. I look at MakeSpace as just a part of my entrepreneurial journey. I've been slogging away at trying to figure out the startup thing since leaving investment banking in 2009. I think the biggest challenge in entrepreneurship is just getting started! As a "non-programming" founder (rather than non-technical -- I can communicate well with engineers), the hardest part is having a network to chose from, having relationships with people you want to build a company with, and having the right investors along for the ride. It took me a while to find my place, build a network, find team members, etc., so if anything, I would have told myself to go work for a startup for 3-5 years and learned the ropes of a startup. I would have cut my teeth at a company that gave me an opportunity to grow and then I would have started my own thing. My investor @msuster has a great post on this here: http://www.bothsidesofthetable.c...
Nik Sharma@mrsharma · Director of Performance Marketing, hint
@sir @msuster Love it! Thanks for the answer, Sam!
Ben Tossell@bentossell · newCo
What is it like to be an EIR at Upfront?
Sam Rosen@sir · CEO & Founder, MakeSpace
@bentossell EIR was a great gig. Unlike many shops, we actually structured the EIR role as an investment. The way VCs make money is two ways -- they charge a % (usually 20%) on the returns above the capital raised and a management fee of about 2%. This 2%/20% is standard. So VCs usually have 2% per year on the fund to manage ops. What the means is, if there is a 400MM fund, VCs have about $8MM per year for salaries, expenses, etc. Sounds like a lot but it's pretty lean. We didn't allocate any funds out of that management fee for my EIR gig. It was structured as an investment from the fund (in this case, the $400MM that gets deployed to support entrepreneurs). Now, Mark Suster took a chance on me on a napkin (read more of the story here: http://www.bothsidesofthetable.c...). He gave me a $100K check and told me to run. I had the opportunity to work on MakeSpace, potentially help look at investments, maybe even go work for a portfolio company. That's typically what can happen with EIRs. But for me, I pretty much started working on MakeSpace from day 1. I was given the opportunity to sit inside of a VC fund and watch the deal process, how to pitch, etc., but day to day I was recruiting people like Rahul Gandhi to build the company with, getting the first prototype up and running, etc. It was actually pretty similar to the other companies I've started except that I had free office space :)
Ben Tossell@bentossell · newCo
@sir it's an awesome story! I remember reading @msuster's post about you :)
Sam Rosen@sir · CEO & Founder, MakeSpace
Heather Garrick@heather_jones
Hi Sam, congratulations on the raise, $17.5m is really impressive! What was the valuation?
Sam Rosen@sir · CEO & Founder, MakeSpace
@heather_jones not public.
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What industries would you place your bets on in the next 10-20 years?
Sam Rosen@sir · CEO & Founder, MakeSpace
@jacqvon VR and Self-Driving cars/Hyperloop/ transport. we're social beings. I can't wait for the day I go to a restaurant that has some type of camera and have "dinner" with my mother and father, sister and brother in law, nephew (and hopefully more), and eating food while being able to "touch" my family members. It's going to be insane I also LOVE the self-driving car opportunity. I think cities will be massively transformed. Parking garages will be located outside the cities. I think there will be self-driving only lanes that travel at speeds of 125MPH that does to existing traffic what "easy-pass" did to the toll-booth. I think it will help grow cities while also increasing urban sprawl. In my mind, with a self driving car / hyperloop you'll have cities like buffalo, philly, albany, upstate ny, etc etc (using NYC cause that's what I know) as feeder cities into major metros like NY. My parents moved 45 min outside of NY 30 years ago to give us a "better life." If only they knew about what would happen with upper west side real estate -- but I digress. That distance is going to be much greater in the future w/ rapid transit. This is US specific. You see it with rail in Europe. But high speed transport and self-driving cars is going to make the US much more connected. I have to imagine it'll be equally important in other countries, too.
Manoli Kulutbanis@upscalability · Managing Partner, UpScalability LLC
Great progress. Well done to you and your team. Could you please share some more insight and thoughts on your lessons with regards to recruiting and building teams in each city.
Sam Rosen@sir · CEO & Founder, MakeSpace
@upscalability 1. hiring locally -- start with your network. 2. hiring in other cities -- find a great person in that network and trust them to build a team
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What qualities make someone a good founder?
Sam Rosen@sir · CEO & Founder, MakeSpace
@ems_hodge I know it's the @msuster love fest, but I couldn't sum it up any better than this: http://www.bothsidesofthetable.c...
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Sam - thanks for being here today! What have been some of the biggest challenges you've faced setting up MakeSpace - how did you overcome them?
Sam Rosen@sir · CEO & Founder, MakeSpace
@ems_hodge there's no overwhelming challenge to getting a business like this up and running. Maybe that happens in highly regulated industries like insurance (e.g. Oscar Health) or medical fields with FDA approval. With companies like MakeSpace, it's the SMALL challenges we've faced. 1. Build our own routing algo or find a company that can do it for us (we built ourself) 2. convince our insurance company to also cover our drivers/warehouse folks. It's easy to get coverage for people who sit in an office. But that was really hard to get and the premium is 2-3x what it is for office workers. After two years we finally got them to cover the entire company for personal health care (as of 1/1/16), and now, thankfully, all makespace have access to these benefits 3. We were growing so fast Mercedes Benz wouldn't lease us more vehicles. Rahul and I personally have $400K of leased van rentals on our heads! 4. Personal stuff. The hardest part about a business is running it while still being a human being. My partner Rahul has kids and a family. It's not easy being a good dad or good husband when you're slogging through a startup. Not saying it can't be done. But I certainly had it "easier" than Rahul in that regard being single and w/o kids. What about personal health, friendships, wanting to travel, etc etc. You have to be willing to put "life" on hold. But at the same time, I've really found that my best friends are also CEO's of other companies because they can really relate. So it's a constant battle. I love this post to describe all the stuff you have to be willing to put up with: http://www.bothsidesofthetable.c...
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
What is the premium you pay to use MakeSpace?
Sam Rosen@sir · CEO & Founder, MakeSpace
@andrewmettinger MakeSpace is actually cheaper than many local storage companies. Why? Well it's the same reason why Amazon could provide the same books as Borders but at a cheaper price. We pass along the cost savings to customers of the low-cost areas outside of cities where our warehouses are. We inventory people's things so they can always see them in storage. And we never raise the rate. Imagine if your landlord told you the price of your apartment would never increase! Here's a comparison for MakeSpace vs. our local incumbent in NYC. You can see it's a better service and cheaper? No brainer!
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What has surprised you the most about founding a company?
Sam Rosen@sir · CEO & Founder, MakeSpace
@ems_hodge just how important it is to have the right people along the way. It's effing hard. Above all, my brother was there for me. He literally helped me pay groceries in the early days. I was broke and on unemployment. We have a nice little agreement that one day I'll buy him a brownstone :) My investor Mark was there for me. My parents were there for me. And now, my business partner @rghandi10 is there alongside every day. I've learned so much about people in this job. What their motivations are. What keeps them happy. Why they show up here every day. I know I link a lot to @msuster, but this one resonates a ton: http://www.bothsidesofthetable.c...
Vincent Guilloux@vincentguilloux · Newscrush.io, gamificationstack.com
Hi Sam, I like people who add user and care experience in old industry: how many external services/start up (for logistic, landing page, CRM, storage) did you use to create makespace?
Sam Rosen@sir · CEO & Founder, MakeSpace
@vincentguilloux At various points of a startup the answer to this will change. Sure, in the beginning, we used unbounce for landing pages and RelateIQ for CRM. But now we have to work on building both because they're so specific to our business and these outside platforms don't do *exactly* what we want. Stripe started as our full billing system but at this point is essentially no more than a payment processor that we could interchange with Braintree. So to answer your question, it's constantly changing and I can't give an exact answer, but anywhere from 20-40?
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
Who is the target user of MakeSpace? Which has been the surprise demo?
Sam Rosen@sir · CEO & Founder, MakeSpace
@andrewmettinger The self-storage business is massive. $27Bn. 1/10 US households use it. And it's predominantly Do-It-Yourself. You have to rent the truck. You have to schlep to the storage unit. You have to be creeped out in the facility. etc MakeSpace picks up at your home, takes away to our storage facility, inventories so you never forget what's in storage, and delivers at the push of a button. We think EVERYONE could use MakeSpace over traditional storage. This is a business that is largely driven by a few "life events." Death. Downsize. Divorce. Disaster. (The Four D's). And moving. Since we're full service, it's no surprise that women, who control a majority of house hold spend, are our main customers. About 65-ish percent of MakeSpace is female 25-40. I think the other surprise demos are: 1. Millennials/City dwellers living in small spaces. Micro apartments are on the rise and the number one reason why people think they can't live in them is not having enough space for their stuff. 2. Elderly -- we're full service, so anyone who needs a helping hand loves MakeSpace. Baby boomers will be huge especially as they relocate to cities (my parents are living a much more active life than my grandparents) 3. Young professionals -- who wants to schlep to a storage facility on a Saturday when you're working your butt off M-F?
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Who are some of your mentors, or people you look up to and are inspired by?
Sam Rosen@sir · CEO & Founder, MakeSpace
@ems_hodge great one 1. My Siblings -- My brother is the smartest person I know. Teacher at 25 at Yale. Sure, we fight often, but I love him and he's been the #1 believer in me from day 1. My little sister is smart and caring. She'll be the one raising the kids so grandma and grandpa don't ask me "When are you having children" :) 2. My parents -- they haven't had it easy, but they are extremely loyalty and I think that's something missing in this world. 3. It's obvious, but I really look up to @msuster and @davemcclure. Both invest on conviction of the person and don't give a crap about what other VCs say (most are followers). They have very different strategies but at the core I think both invest if they truly believe in the person (and subsequently a good idea). 4. I think I find inspiration in many many people. But my friends (Alex, Gabe, Jason, Michael, Devan, Jameson, I'm sure I'm forgetting some) all teach me something every time I'm with them.
Ben Tossell@bentossell · newCo
What do you think are the best questions to ask founders?
Sam Rosen@sir · CEO & Founder, MakeSpace
@bentossell what they would do differently if they could do it again. Mine: 1. Work at a startup for a few years before launching one 2. Choose life. Live where you want to live. Then find your "dream" job. Move for that boyfriend / girlfriend and don't have regrets if it doesn't work out
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@sir @bentossell Love this answer! 🙌
alexandremayol@alexandremayol · DayPass: hotel pools & fitness on demand
Hi Sam, congrats for the journey so far & thanks sharing with us, how do you see the storage / moving industry evolving in the future? Without disclosing, any plan for MakeSpace , like are you going B2B? hints on future awesome features at MakeSpace? i.e could I be sent my pair of ski at a resort directly? thanks & best of luck
Sam Rosen@sir · CEO & Founder, MakeSpace
@jackdiver Thanks for the question! I think this massive business consolidates. REITs like Public Storage are going to try to roll up the space but we'll see consolidation. You used to have to drive around to find a McDonalds. So there was one on every corner. But now you search on your phone. So in addition to change in consumer behavior, you're also seeing that you don't need a McDonalds on every corner. The same I think happens in this space. Storage comes to you. At a cheaper price. In places where storage companies can't build because it's not an effective return (FWIW, there's no publicly traded storage company in Manhattan. All up in the Bronx. And customers don't schlep up there because then they lose "access" since it's a pain). No doubt we'll have a B2B product. And other verticals I won't disclose but are obvious. This is what I'll say: MakeSpace is building a company that provides *hospitality for your physical stuff.* The cost of ownership of stuff is massive. I'm not long rental (I only think a few of these "shared economy startups" like Airbnb, Getaround will work). I'm very much long ownership. Lastly, the "ship my skis to a resort" sounds good on paper but the reality is you're more likely to rent skis than ship them. For the avid skiier, like yourself, you probably will just bring them. But most people are okay renting them, so the "ship my skis" is a bit of a niche.
alexandremayol@alexandremayol · DayPass: hotel pools & fitness on demand
@sir Thank you for the complete answer. agreed for the belongings Ownership part, We basically want to keep our stuff. The "Storage comes to you" part is fantastic, customer re-empowerment, I like that. Keep quoting @msuster, so straight to the point, very inspiring. Wish best for the scaling, another big journey ahead.