In Episode 13 of The Crowd, we connect with Jon Gillon, CEO and co-founder of Roost, to discuss how Roost is redefining self storage in the sharing economy.

For more information about Roost: https://roost.com/

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Transcript:

 

Kevin:            Hi. Welcome to The Crowd, a podcast by Near Me. We’re talking about peer-to-peer marketplaces. We’re talking about collaborative economy. We’re talking about thought leadership. We’re talking about all these things, any and all of them with some of the best minds in the field. And of course, I’m your host Kevin Cohen.

 

                        Today, we’re going to be talking with Jon Gillon, a co-founder of Roost. What is Roost? Roost is a storage marketplace where people can rent out unused space to people who need short-term or long-term storage. Anyway, let’s jump in to the interview.

 

                        I’m super excited about our interview here today. I’ll be joined by Jon Gillon from Roost. Jon is the co-founder of Roost, a seasoned business development exec and marketer. Jon, welcome to the show.

 

Jon:                Thanks for having me, Kevin.

 

Kevin:            Of course. Before we dive in, why don’t you tell everybody about Roost? What is Roost? What does it do? How did you come up with the idea?

 

Jon:                Sure. Roost is a peer-to-peer marketplace for finding and renting storage and parking spaces in private homes. So if you’ve got space in your attic, your basement, garage, your closet or even the corner of your living room, you can earn money on it and passive income on it by renting it out to your neighbors. Now, on the flip side, if you need storage space, you could find it in your building, across the street, nearby instead of having to rent a truck and go far away to find a storage facility.

 

Kevin:            What markets are you guys currently operating in?

 

Jon:                We’re just beta in San Francisco right now. We’re alive in the Bay Area but soon to be expanding in the next few months. And how the idea came about was about last year my older brother moved from Austin to San Francisco and he had a car full of junk that he needed to find a storage space for. He only needed to store it for a week and he tried to rent a storage facility and they required a minimum 1 month rental and it was almost 300 dollars for a 5x5 unit. So it was absurd. And he was already crashing on my couch for the week and so I offered him, I said, ‘Hey, you’re already crashed on the couch. I can make some space for you in my storage closet that I have in my apartment. You just got to buy me dinner and drinks for the rest of the week.” And when I saw the look of relief on his face and when he jumped at it, I had the boom, aha moment that wow, we got this brotherly trust here. How do we recreate that to let strangers transact in the same way that we’re doing right now.

 

 

Kevin:            Very cool. Before we go deep into Roost, why don’t you tell me a little bit about your journey? I’d like to hear what you did before you started Roost.

 

Jon:                Sure. So I’ve always been kind of a hustler. My parents used to tell me that I’d either run a company or end up in jail. And I got kicked out of two high schools, almost got kicked out of college and finally made it. In college, I started five businesses ranging from a travel tech company to a sporting goods company. I invented a new type of footwear, a new type of drink, some kind of gag, kitschy products. I was always thinking of something, always had my mind racing and kind of going after the next big thing. But the reason that none of those in college went anywhere is because I ended up going to the next year. And if I had dropped out, then maybe any one of those products would have come-up. And it’s kind of funny that most of the companies that had started in college, four out of five of them are now successful businesses that are the very, very same thing that I used to do. But I left college and I came out to San Francisco right away and I was doing business development for a tech company but I ended up kind of burning out. I realized, I found in myself that if it was a job working for someone else, then I burn hot but then burn out. The only thing that I can do sustainably is something that’s my idea, my passion where my drive and my decisions are the ones that count. That’s what gets me up in the morning. That’s what keeps me up at night. That sort of keeps being productive. So a background in sales and marketing is biz dev but really there’s only been the one best option for me which is starting my own company.

 

Kevin:            So when exactly did you start Roost? When was the actual launch of your beta product?

 

Jon:                So to step back, before Roost, after college, I started one company that was mildly successful called Droperty Tax helping homeowners drop their property taxes. And I was working on that at the time when – and I was also doing biz dev on the side for a friend’s company when my brother moved to Austin. And that was a year ago, a year and one month ago. And when we had that idea then, it was all about validating that idea, raising the money, finding the person who could code, a technical co-founder because I’m not technical at all. I couldn’t code my way out of a paper bag. But I found my co-founder, Bunny Lai who is very technical and she’s great. And we launched the product August 20, 2014.

 

Kevin:            When you launched Roost, how did you drive users to it? How did you drive people who wanted to rent out space? What was your customer and vendor acquisition process like?

 

Jon:                Well, I was still trying to figure that one out but the original users and everything, they came through a lot of press that we had around the launch.

 

Kevin:            Yup.

 

Jon:                And right now, our user acquisition model is very manual, very unscaleable. We’re doing the things that don’t scale in order to get the high quality early adopters who love us and who help us improve. Since we’re still on beta, every day is a constant shipping new code, learning new things, iterating, trying to figure out the perfect product-market fit which to be honest I don’t think we’re quite there yet. There are always sort of growth hacking things that you can do but if you don’t have the right product-market fit then it’s going to hurt the company.

 

Kevin:            Sure. Does Craigslist advertising play into part of that strategy?

 

Jon:                Sure although you’re not supposed to say that.

 

Kevin:            Yeah. I mean it’s just – we’re going to have other entrepreneurs that are following this podcast. So they’re going to be looking at what kind of strategies they could incorporate to launch their product. At Near Me, we talk to entrepreneurs all the time that are trying to figure out, how do you launch a product? What kind of guerilla tactics can you use? And the reality is whether you’re starting a marketplace or any other type of business you’re going to have to hustle.

 

Jon:                Right. It’s a lot of hustle. One of the tactics that we’re using is going where there’s most fish in the barrel so finding property managers or multifamily unit homeowners that have access to the most space. And once you get one, they come along with 30 spaces, 40 spaces.

 

Kevin:            Right.

 

Jon:                And those we found at various places from meet ups to conferences, blogs, things like that. Basically, the landlords have their own cult “property managers.” They have their own groups that they like to play in so we just go there, find them there.

 

Kevin:            Right. So what are the kinds of trends or things that have come out that you’ve seen since your launch? I mean obviously there’s day-to-day stuff. But kind of what are the macro level trends that have –

 

Jon:                That helped us?

 

Kevin:            Yeah.

 

Jon:                So, on the macro level, it’s the constant rising cost of living that’s the best trend for Roost. So people are getting price out of their homes. They’re having to pay more and more every month. Their rent goes up 20 bucks. Well, that’s 20 bucks they need to make somewhere else. So people are trying to get creative and not everyone has a car to rent out or not everyone has a spare room to rent out maybe on Airbnb. But chances are most people – we tell people to get creative on your space. You can rent out a corner of your living room. You could rent out the cupboards under your sink. Literally, anything can be rented out. So we provide tools and tips for decluttering, organizing and creating an extra source of passive income.

 

Kevin:            Right. One of our other interviewees recently shared this term with us which I think you’ll love. The term for a person who participates in the peer-to-peer economy or the collaborative economy and either lease space or uses their car, they call them income entrepreneurs. I thought it was a great term. They’re leveraging the tools they have to generate income.

 

Jon:                Yeah. Income entrepreneurs, micro entrepreneurs, you want to call them.

 

Kevin:            Yeah. I love that term. So what’s going well? What are some of your wins that you’ve had early on that you’re proud of?

 

Jon:                We’ve just reached over 100 listings in the city. What have been going well have been our sort of manual processes of getting these hosts, you know, via Craigslist and other things. We’re finding that when we have the opportunity to talk to someone and tell them about the product and not only just talk at them but collaborate and ask what are their concerns, what are their issues, how can our products best help them and then showing them how – oh, that’s what you wanted. Well, this is exactly how this is built to address. Then we found that they’re a lot more open to it because oh, they’re right. This product is for me. I have the opportunity to quell any concerns up front. And by doing that sort of educate them and educate myself on their problems and in that way find more high quality hosts, the people with the spaces that are aware of the different aspects of what makes Roost different from other types of companies.

 

Kevin:            Very cool. What have been some of the challenges that you face in your early going?

 

Jon:                Challenges are definitely how to balance the three big pieces of a beta company. One, the holes in the bucket. You’ve got a product that’s not perfect yet. So how do you have this bucket with holes but put in the right amount of water on either end, the host and the renter, the supply and the demand to keep each of them happy but not break the system as well? So it’s a delicate balance. On one hand, you need the supply so anyone who wants to rent something out can go there and see that there are enough options and they have a good experience. If someone goes and there are no options, then they’re not going to come back to the site. They’re going to say, “It’s b***crap. There’s nothing available.” But on the other hand, if you take too long if you’re a host, if you’re one of those supply sides and you sign on and you don’t get anybody asking to rent out your space for a while, then you’re left feeling jaded there. So being able to throttle the different knobs at different levels and still worry about well sh*t our platform is still not perfect and now we’re getting bugs. And people are now complaining about this and that. So it’s a delicate dance.

 

Kevin:            Right.

 

Jon:                That’s definitely the biggest challenge as it is in every peer double-sided marketplace.

 

Kevin:            So 2015 is just around the corner, what are some of the big things that you have in your pipeline for this next year?

 

Jon:                So Roost is in 500 startups right now and we’re just closing our next round of funding. So coming up now is finding that right product-market fit and blowing it out, hiring a bunch more people to help with the community engagement and improving our on boarding processes, adding more robust insurance, developing a mobile app and then moving to other high density cities and metropolitan areas specifically New York and DC next.

 

Kevin:            Right. For all of our new entrepreneurs listening, what are some of the tips that you would give them when considering whether to start a peer-to-peer marketplace? What are some of the things that you didn’t see jumping into this venture that they would probably benefit from?

 

Jon:                So speaking specifically about peer to peer?

 

Kevin:            Yeah. I mean whatever whether it’s general entrepreneurial learnings or specifically about peer to peer.

 

Jon:                So one, generally, don’t start a business unless it keeps you up at night. If you’ve got something that you want to start and it doesn’t drive you crazy that you’re not starting it, then chances are you’re going to burn out. It’s got to be something that drives you crazy unless you go gung-ho about it. So one, you may be an idea man but unless it’s a burning, burning passion to start this, chances are that you’re going to give up when some big road block comes. And that’s from my personal experience. Regarding the peer-to-peer marketplaces, I would say that one of the big mistakes that people make is everyone tries to do peer-to-peer tools, this and that but unless the price point is high enough that someone could make a significant amount of income which I think is probably over, you know, minimum a thousand dollars a year or something like that although it should be more, then it’s not going to be enough incentive to get people off of their a**es. So the price that they can earn, their money earned has to reach a certain level in order to get someone to create a profile to communicate with someone. Otherwise, people are going to be like, eh, whatever, my time is worth more than that.

 

Kevin:            Right. That makes sense. Yeah. The other thing that I would say is that we’ve seen in talking to entrepreneurs is market size. You got to have enough – you got to have a big problem, you have to have a big enough problem that people are searching for a solution. And you have to have a big enough problem where people actually are spending dollars to solve their pain and in a meaningful way. And obviously, in the sharing economy, there are non-dollar currencies that are being exchanged and I’m not referring to those.

 

Jon:                Right.

 

Kevin:            I’m talking about marketplaces where transactions occur. For us, in your case, the alternative to renting out – let’s say if someone’s 100-dollar-a-month storage unit which I don’t know if that’s a reasonable transaction value or not in your marketplace, it’s 300 dollars or whether you can spend 150 instead of 300 renting out an extra storage space, that’s a meaningful difference in terms of a delta. And it also on an annualized basis meets your thousand dollar criteria or greater to make it relevant. So for us, always when we’re talking to entrepreneurs we’re like make sure it’s a market where there’s an existing history of transaction volume.

 

Jon:                Make sure the market is growing.

 

Kevin:            Right.

 

Jon:                A lot of people may start something in a market that’s kind of shrinking. And you say, oh, I’m going to capture most of this market but the market is shrinking. So that’s going to go down and down. You can take a little bit of something that’s growing. It’s better than a lot of something that’s shrinking.

 

Kevin:            Right. That iterative approach to product, to creating a new business often works really well. I mean you look at the whole Sidecar, Lyft, Uber phenomenon, you have in major cities a transportation problem. People don’t own cars to the same extent in large cities that are densely populated and crowded because it’s expensive and it just doesn’t make economic sense. And the problem is that taxis and public transportation aren’t filling the need for customers on a lot of levels. Taxis are dirty. They’re expensive and it’s not a great experience. So the iterative approach to the transportation segment makes a lot of sense. It’s a newer product. You’re connecting with a driver on a more personal level and it’s a much better customer experience. So there are just a lot of things that can be learned from those types of case studies.

 

Jon:                Right, definitely.

 

Kevin:            Give us your 2015 prediction on the sharing economy. And what’s going to happen beyond that?

 

Jon:                So 2015 and beyond, I see a new type of class in sort of social structure in society. So right now, the biggest driver of this change that I’m about to talk about I think is access to smartphones.

 

Kevin:            Okay.

 

Jon:                It’s something that Jeremiah talks about a lot. But access to smartphones allows the lowest class, the people who have no assets to trade or to rent out to use themselves, manual work in order to make money. So that’s TaskRabbit, that’s Homejoy, those things that you don’t need anything but some time and a little bit of hard work to make some money. Then there’s lower middle class. Maybe you’ve got a car that you’re driving people. They are the people who have some assets kind of rising up in class because now they are putting them into the best use as you said the income entrepreneurs searching for ways to make passive income while still working their day job. They end up having more money to spend and having more assets to rent, to use, to share kind of raise it up. And then the upper class that has the spaces, the vacation rentals, the multiple cars, they’re going to start realizing that hey, I may have a lot of income but why not make a lot more. And so they will be boosted into sort of a new level of wealthy but also sharing. So you’ve got multiple houses that are all on Airbnb, multiple cars that are all on Getaround. And they got their kids to drive one of the cars on Lyft kind of thing. It’s a way to teach your kids how to learn the value of a dollar. It just sort of boosts everyone from point A to point A and a half as a starting point. That’s my prediction.

 

Kevin:            It makes sense. Yeah. So there are opportunities economically that weren’t there before that can easily be implemented into everybody’s lives and not only just to provide economic benefit but it also will provide interaction in community in ways that we’ve never seen before.

 

Jon:                Right. So the once homeless man who’s now a TaskRabbit and a professional cleaner on Homejoy is interacting in a positive way with the wealthy upper class family who wouldn’t have looked twice before. But now, they’re letting these people into their homes because they’re starting to trust more and the people who they’re trusting are more trustworthy. So it kind of opens up better social aspect in a society.

 

Kevin:            Very cool. That’s a really great prediction. It’s fascinating to hear how it could connect people that were normally not connected in any way before due to essentially their socioeconomics or where they are in terms of employment or not employed. Well, Jon, we really have enjoyed having you here today. How can our listeners find out more about Roost? Give us where they can go and what to expect when they get there.

 

Jon:                Well, I mean the easiest way is to go to the website. It’s roost.com. You can follow us on Twitter @rooststorage or on Instagram @rooststorage as well. And if you got any space, make some money.

 

Kevin:            That sounds great. Awesome. Well, everybody please go to roost.com. Check it out. If you have some space that you want to sublet out to someone who needs storage, go there. Or if you’re looking to put your stuff in somebody’s storage locker and avoid hefty fees, go there as well. Thank you, Jon. We’re really very happy to have you here today. Thank you.

 

Jon:                My pleasure.

 

Kevin:            So that’s it for today’s show everybody. I’d like to thank Jon from Roost for joining us here today. If you’d like to learn more about Jon or Roost, go to our show notes at near-me.com. Click on blog and then go to the podcast listing. Also, if you liked today’s show, we’d really appreciate it if you could go to iTunes and leave us a five-star review. It really helps us out. Lastly, make sure to subscribe while you’re there. Anyway, make it a great day.