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- Neighbor.com, the Airbnb for Storage 🏘️
Neighbor.com, the Airbnb for Storage 🏘️
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Finlay Williams
July 31, 2024
2 minute wacky businesses, you can tell your buddies about 🧠
Currently enjoying some sun in Cyprus, daily content is currently on pause while I chill on the beach. Will be back in full swing next Monday 😎
Neigbor’s, is a marketplace for people to rent out extra space. Sort of like Airbnb for storage. They’ve raised $71M and are on track to dominate the storage industry, connecting homeowners with spare space to people in need of storage. But how did they get here?
Small communities and basic maths 🧐
Founded in 2017 by Joseph Woodbury, Colton Gardner, and Preston Alder, Neigbor’s mission is to transform underutilised spaces into affordable storage solutions. Think about it: 1 in 10 Americans pay for storage, yet millions of garages and basements sit empty. The demand existed, but the supply didn’t.
Unlike traditional storage companies with big advertising budgets, Neigbor leverages local communities. They encourage hosts to market their space within their networks, creating organic growth and trust. This peer-to-peer strategy means lower customer acquisition costs and higher engagement rates.
What are the nuggets? 💎
🏘️ Origin: Joseph, Colton, and Preston were college friends who realised the untapped potential of underutilised spaces. Their lightbulb moment came when they saw a neighbour struggle to find affordable storage for a boat. With backgrounds in business and tech, they pooled their skills and bootstrapped the initial platform, gaining traction through word-of-mouth.
🏘️ Pivotal Moment: In April 2019, Fast Company named Neighbor a “World Changing Idea”. Along with several other awards, helping them secure the necessary funding needed to get to their critical mass of users.
🏘️ Awesome Marketing Play: Their “Neighbor Host Guarantee” has been a key tool in bolstering market adoption. Offering $1M in insurance coverage for hosts, they eliminate the biggest fear in peer-to-peer storage; trust. This guarantee boosts confidence and drives platform adoption.
🏘️ Funding: Since inception, they’ve raised $71M across several rounds, with major backers like Andreessen Horowitz. This hefty war chest is fueling their rapid expansion and tech development, positioning them to dominate the $40B storage industry.
🏘️ Fun fact: The company uses algorithms to suggest competitive pricing, helping to maintain costs at about half of traditional storage options.
Figures laid out 💵
🏘️ Annual Revenue: $6.8M+ and growing
🏘️ Team Size: 150+
🏘️ Customer Base: Tens of thousands of active users
🏘️ Total Funding: $71M
🏘️ Valuation: $100M-$500M
What’s the cherry on top? 🍒
Neigbor’s success is rooted in their ability to see opportunity where others see clutter. By transforming wasted space into value and fostering community-driven growth, they’ve built a scalable, resilient business. The lesson is clear: look for the hidden gems in everyday life and craft solutions that benefit everyone involved.
Final thoughts 💭
This is an interesting business. Mainly because the “Airbnb for x” model seems so obvious but clearly has potential pitfalls. The biggest one being the critical mass you need to achieve to make the model work. Especially in Neigbor’s case, relying on these small communities to drive word of mouth.
The funding they needed to reach this critical mass ($71M) puts them in a tightly bound position with revenue sitting at $6.8M annually. It would be interesting to hear from them If they believe they’ve achieved critical mass yet, or if that’s still to come.
Stay quirky folks! 👋
Fin
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P.S. If you're crushing it with your own unconventional empire, hit me up! I'm always looking for inspiring stories to share.
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