Kristoph Mathews is a jet-set, globe-trotting entrepreneur who is a recent recipient of angel funds to advance the development of his brainchild, Boxbee, Simple Urban Storage. If you think his company’s name says it all, you’re wrong. There is a lot more to Boxbee than simple ‘urban storage’.
Boxbee’s unique value proposition to New Yorkers and San Franciscans doesn’t just offer them generic storage lockers and space. It offers customers the boxes to store their belongings, the secure space to store those boxes, the prompt pick-up of those boxes at any time of day, and the delivery of those boxes back to the customer anytime they wish. Imagine it to be like Dropbox, only for physical stuff.
The Nuts and Bolts
I really like what Boxbee is trying to do; and if they pull it off, this company could be a worldwide success in personal space management. Here is the way I see it:
In a world where space comes at a premium, space optimization dictates that we streamline living quarters. To do so requires the delineation between storage and living space. Why would you want to pay $400 per square foot of living space (average cost per square foot in many metropolises) and use up 300 square feet of that as a store room for things you use intermittently? That’s an awful expense when you think about it. This is where Boxbee comes into play.
Boxbee allows homeowners and renters to maximize their living space. The company provides on-call storage by delivering Boxbee’s signature yellow boxes, providing drop off and pick up service and remote storage. This service allows people who are short on living space to maximize their investment. Think about it. What if, by using Boxbee’s service, it opened up an additional 300 sq ft in someone’s home? Or an additional bedroom in an apartment? What was once a wasted storage area could be turned into a lettable space that could earn the cost of the Boxbee storage plus a premium that could go towards paying down a mortgage. Think about that. That’s the crux of why I like Boxbee. Very forward thinking, very cutting edge! They’ve materialized a way to monetize extra space which the lay person could profit from. It creates an option to optimize your square footage. This is totally disruptive to the rental market, storage industry and even housing market.
Strengths and Weaknesses
The strength of Boxbee’s business model, aside from its innovative service, is that it has a programmer and researcher at the helm. Kristoph Mathews is the Founder and CEO of Boxbee. He’s a numbers guy who has been around optimization for most of his career, dating back to Stanford. He has also led companies in their growth phase and understands the unique challenges it takes to pull all the necessary elements together.
At the moment, Boxbee is only serving New York and San Francisco, with plans to expand in the works. Choosing these two cities was a stroke of genius, or pure luck, only time will tell. But understanding how consumers in space-conscious, concentrated New York and spread-out San Francisco respond, will ultimately portend the company’s potential. But from feedback on the ground, Boxbee’s urban choices seem to be working out well.
On the downside, there is an adoption curve for people to trust the Boxbee brand. The company does not own much of the actual storage place – the epicentre of its service. The customer adoption curve is a short-term issue that Boxbee will need to overcome. Every startup has to go through this stage, but Boxbee will be held to a much higher standard by its customers given that it will be responsible for personal belongings. Much like working in a bank, and dealing with people’s money, there will be a lot of emotion attached to this business from a customer standpoint. Boxbee’s long-term growth prospects depend on trust and protecting its clients’ possessions. Theft, acts of nature, and negligence are all things that could destroy Boxbee’s reputation. The company must make certain that there is a zero tolerance and triple redundancy for these items.
Boxbee currently doesn’t own much of the storage and logistics assets. That could be a negative or positive. It could be a huge cost saver and bottom line booster, or it could be their greatest risk. Storage locations must be strategic, and if Boxbee loses a lease after the contract expires, this could be tragic. Naturally, strong relationships with their landlords for storage spaces will be paramount; because when you strip away the storage space, the intercity logistics and transportation, what you’re left with is a pretty website, some intracity pick-up trucks and a handful of employees. Not much to go by. But then again, eBay started with less.
Key Success Issues
One key area that will drive Boxbee’s success is the movement towards smart living. I imagine this service would do fabulously in Tokyo and other premium-space cities around the world, such as London, Vancouver, Hong Kong and France. That should be their target. I don’t expect someone on a ranch in Texas needing to avail themselves of this.
We will come to a point where we can measure the productivity of space, including living space. If we did that now we will find that moving inanimate, unproductive objects, no matter how sentimental, to a location off site and freeing up space for more productive endeavors makes more sense. Educating key customers on this fact is vital for Boxbee.
Long Term Value
Boxbee’s value will track in the same direction as property value in the long-term. Energy prices will have a net positive effect on them because the higher the energy cost, the closer to crowded cities people will be, and it would be cheaper to store off site.
As the Internet of Everything picks up, and items can be digitally tagged, storage loss will be virtually zero and that will benefit this industry as a whole. It is the cross between Just In Time inventory and Dropbox, but on a more personal level.
Kristoph’s idea is fabulous. It’s one of those ideas I wish I had. But as a startup, Boxbee has a long way to go, many relationships to make and keep, as well as many boxes to keep track off. But ultimately, this endeavor is very doable. Boxbee has cost of living and various other economic trends on its side. This business model is genius.