How Phil Murphy Disrupted His Existing Industry One Box At A Time

by Tim Jahn on October 8, 2010

Phil Murphy owns several traditional public storage facilities in Illinois.  After having dinner with a friend and hearing horror stories about how his friend spent $60 in cab fare to get to a traditional public storage facility, Phil knew something had to change.

So he created StorageByTheBox.com, a website that allows anybody to put stuff in storage by simply sending it in boxes via FedEx.  When you need your stuff again, you log on to StorageByTheBox.com, select which box you need, and it comes back to you via FedEx.  No $60 cab fares, no driving to the storage unit.

Transcript

Phil Murphy:
Well, my name is Phil Murphy. I’m the founder and president of Storagebythebox.com. Storagebythebox.com, it’s basically, a new service that puts self-storage, kind of, on its head.

What we do is we get rid of the inconvenient, hard-to-use, the expensive, the cookie-cutter storage options that have been really available to customers in the past. And what we do is we make it, easy to use, more flexible, and more cost efficient.

What we do is we use — we’ve got a centralized warehouse, we use our website to allow customers to order exactly the amount of storage that they need, then we use FedEx as basically our logistics arm to get boxes to and from anywhere in the country.

So, when a customer goes out there, they don’t have to go and rent a 5×10 unit that they may only end up using 10% of. Instead, what we do is we allow them to store by the box, so they can store one box, two boxes, a hundred boxes, if they want too. And then they can store them from month-to-month, or as long as they want and get them back anywhere in the United States when they want them back.

Tim Jahn:
How did you come up with the idea?

Phil Murphy:
Well, I actually came up with the idea while sitting and having dinner with one of my friends in New York. We were sitting down talking about it. He was relaying his storage horror experiences to me, and he had just had a roommate that was moving into his apartment with him, and he had to clear out space. Clear out the closet, extra bedroom, you know how kind of everyone, I guess, kind of creeps into their extra living space.

And what he had done was he went ahead and had to call a cab, box everything up, haul everything down to the cab. Once it was in the cab, he took it to the storage unit, the cab had to sit there and wait while he rented his unit, unloaded his boxes all into his storage unit, and back and forth. By the time he was all done, it ended up costing about $60.00 in cab fare going back and forth.

So, I thought that was just crazy. And so, I went and talked to a few other people that I knew living in the city, and then I actually lived in the city for seven years, and found that it was actually pretty commonplace for people to have to do storage in this manner.

And I just thought that was — there’s got to be something there, there’s got to be an opportunity. And so, from there, I went about doing my research and that’s where Storage by the Box was born.

Tim Jahn:
Have you started companies in the past? I mean, you found a need here and you filled it, and you made a business out of it. Usually people that do that are accustomed to doing that. Have you done that in the past, found a need, and filled it?

Phil Murphy:
Yes. Yeah, I’m actually in the traditional storage business. So, that was one of the reasons where it wasn’t so weird for this guy to come and talk to me about self-storage. People tend to talk to me about that kind of thing. I’ve got eleven self-storage facilities all throughout Illinois. And so people come and talk to me and tell me their stories, and I started off with one and it kind of grew from there.

Tim Jahn:
So you disrupted your own industry?

Phil Murphy:
Well, sometimes you’ve got to eat your own hand, right? It’s one of those things where with being concentrated in Illinois, it’s a capital-intensive business. And so, what I’ve done is my facilities tend to be in suburban and non-urban settings.

This is a storage solution that it works in suburban and less populated areas; however, it makes the most fiscal sense for those customers who live in an urban setting. You know, they don’t typically have a car; they don’t have access to get to and from storage.

And when you go and rent a storage unit, especially downtown Chicago, New York, San Francisco, it can be a $100.00 plus for the smallest unit that’s available to them, and that’s just beyond most people’s budgets for a monthly payment.

Tim Jahn:
What’s been the biggest challenge as you’ve been executing the idea and bringing it to life?

Phil Murphy:
Customer awareness. The biggest thing is getting people out there and getting them to know that this is an option as well as how does the solution work. So, when we get in front of people, and we’ve got some great tools on our website to help people understand that.

We’ve got a two-minute how it works cartoon, basically, and it probably does a better job than I do at explaining the business. But you know, it’s getting in front of people. And once we get in front of people, it’s very easy to sell them.

You know, we have a number of people, once they get to know what it is we do, they latch on to the idea and if they don’t use us, they refer us to friends. And we found our referral network is growing quite a bit when people come across us, and then tell their friend, “Hey, you’re gonna want to check this out.”

Tim Jahn:
Getting people aware of this as a viable option is the biggest challenge, you said. How do you overcome that?

Phil Murphy:
Well, the biggest is just — we found word-of-mouth has been great for us. You know, people try us, their friends hear about us, you know, a lot of things like that. We’ve also had some good success in getting in front of the media, and blogs like your own that really help get that word out there and make people familiar with it, that there is a solution out there for personal storage and business storage.

But then also we’ve been doing some online advertising and some of the more traditional, you know, avenues of getting our name out there and those have all worked out well for us.

Tim Jahn:
So can you give me a sense, I imagine you can’t divulge many numbers, but can you give me a sense of what a business like this makes? I mean, are you, you know, is this a full-time thing now, where you don’t have to worry about anything, or is this kind of like, you know, you’re still starting up, or —

Phil Murphy:
Well, I’m an entrepreneur so there’s never a time when I don’t worry about anything. So when I come across that point, I guess I’m really not going to be in much business anymore.

But no, it’s something where I’ve been able to set a lot of things in place that have helped me, you know, control how much it is that I have to be involved, because remember, I have all those other businesses that I need to run, as well.

And so, I’ve been able to luckily, find the right people, and systems to be put into place that I can not disconnect from my everyday life, and from my other businesses, and let them falter just due to my new business.

Tim Jahn:
How do you go about doing that? I’ve talked to a lot of entrepreneurs where they come to a point where they do need to have more people involved in what that used to be their daily tasks. How do you find the right people that you’re comfortable with to do that, because that’s a big task?

Phil Murphy:
Well, there’s a lot of interviewing, and a lot of talking, and a lot of referrals. And it’s one of those things where, you know, you go out there and there’s kind of a, I guess, a network of people that like to work in these kind of environments. That seek out opportunities working at start-ups and that opportunity.

You know, there’s those people who like to work at IBM, and then there’s those people who want to be there at the, at ground one for a dot com. And coming across those people, you know, you’ll get when a job listing out there, you get everybody to apply.

And it’s hard to kind of separate the wheat from the chaff. But instead what we’ve done is we’ve been lucky to have people that were connected into other networks that have been able to refer us to people. And then also you can kind of tell from a résumé what kind of person, and what kind of work history the person’s had, and what they’re used to, so it’s helped us a little bit.

Tim Jahn:
I imagine that’s kind of hard to get used to, at some point, right? Having someone else kind of work on what used to be your kind of baby tasks?

Phil Murphy:
Yeah, well, and luckily the things that I’m not the best at are the ones that I’ve been able to hand off first. So I’ve got to know my strength, and I’ve got to know my weaknesses. And there’s definitely some weaknesses in there that I’ve been lucky to find the right people to supplement it.

Tim Jahn:
If you were to meet someone who was in the same situation you were, where they discovered there was a problem and there was a possibility to solve that problem, what’s one piece of advice you’d give them?

Phil Murphy:
Well, the biggest piece of advice I’d give anyone is there’s a lot of help out there. There’s a lot of mentorship, there’s a lot of free programs, there’s a lot of opportunities for you to get help — to help along with things. One of the things that we took advantage of when we first started off was some of the local MBA programs. University of Chicago and then Kellogg School of Management at Northwestern University.

We actually worked with different student programs there in order to become class projects to help us figure out — one of my not-as-strong aspects is my marketing side.

And luckily we were able to get in contact with their marketing programs and have their classes help us with marketing plans, and strategic plans, and figuring out how exactly to best approach the market. So there’s a lot of tools out there, and a lot of people that are more than happy to help you solve your problems when you across them.

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