How I Built This with Guy Raz - PODS & Red Rover: Pete Warhurst

Episode Date: May 9, 2022

Pete Warhurst probably would not have picked “entrepreneur” as a career when he was growing up. He loved his job as a firefighter and paramedic and might have done it for life, had a colleague not recruited him to help launch a company to build 911 call systems. After that business sold, Pete began to think about new problems to solve – like a better way to move and store our stuff. In 1998, he began disrupting the self-storage industry with PODS, a system that brings storage containers to the consumer, then transfers them to a warehouse. The business quickly spread from Clearwater, Florida to franchises across the country, eventually selling for about $450 million. But Pete still thought there was a better way to schlep your stuff to a storage facility, so he launched yet another business—Red Rover—that now competes with PODS. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. your place with all of its personal touches and its amazing location could make someone else's vacation even better your home might be worth more than you think find out how much at a Airbnb.ca slash host a truck pulls up to your house and on the truck is this like it's like a giant bed frame and then this hydraulic thing just like lifts the entire box and then he essentially pushes

the wheels forward and then over the flat bed of the truck. It doesn't look like anything you've ever seen anywhere before except in the Star Wars film. And like the scene where they're in the tundra or something. Am I describing that correctly? Yeah, yeah, I think they're hiring. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today,

how Pete Warhurst wanted to simplify how we store our stuff, so he built an entirely new system called pods, then launched another moving-in-storage business to compete with the first one. The United States is a nation of hoarders. The average house contains 300,000 items, and it's estimated that one out of 10 Americans pays to rent storage space, stuff that, let's face it, is probably not worth paying to store.

And that's you I'm talking about. I'm not trying to shame you. I also pay for storage. Boxes and crates filled with my kids' first grade dioramas and craft projects and old books we've convinced ourselves we can't part with, and even a dried, pressed rose I wore on my lapel at my bar mitzvah. Yes, that is in storage, my friends. So shame on me.

Because one day, long after I die, someone probably my kids will have to go through that stuff. And if I'm being totally honest with myself, they'll throw it away. And I will have spent thousands and thousands of lifetime dollars keeping that stuff safe. But none of this is an indictment of the actual storage industry. Because if you think about it, it's an amazing business. For starters, you don't need too many employees. The overhead is relatively manageable, and only a fraction of the storage units need to be rented for you to make a profit. It's why the global self-storage industry is expected to reach a value of $67 billion within the next four years.

Now, about 30 years ago, Pete Warhurst was a very typical self-storage business owner. He had a single facility outside Clearwater, Florida. And he wondered, is there a way to build innovation into this business? Could you actually improve the existing model? And one day, Pete got an idea. What if, instead of going to the storage facility, the storage facility could come to you? That was the beginning of an innovation that would transform self-storage, a company Pete founded called Pots.

The idea is actually pretty simple in its elegance, but very complex in its execution. The company deposits a storage container in front of a customer's house, the customer fills that container with stuff, and then the company comes to pick that container up, put it on a truck, and bring it to its own storage facility. The idea took off almost immediately, franchising and spreading to locations across the U.S. and around the world. And less than 10 years after he launched it, Pete sold the company for roughly $450 million.

But actually, that was not the end, because it turns out Pete thought there were additional pain points in the moving and storage industry that needed solving. So at the age of almost 70, he decided to start another kind of storage business, which he calls Red Rover. But as you'll hear, even before he built either of those businesses, Pete started with an entirely different concept, one that had nothing to do with storage and everything to do with his first love, working as a firefighter and paramedic. Pete Warhurst was raised in a family of four kids on Long Island in New York. His mom taught elementary school and his dad had what Pete called a tough career in the poultry distribution business. We used to call him a chicken plucker, but he would go into the city around 2 o'clock in the morning and come home around 3 o'clock in the afternoon. And they would receive poultry and all prepared as far as, you know, cleaned and raw. But they repackage it basically and deliver it to shipyards, hotels, airlines, things like that.

And so they were sort of the middleman between the farms and the, and the, the end user, the high-end users. So he would go into the city every day, and as far as you knew, I mean, did you ever go in with him? Did you ever see? Yes, I did. Yes, I did. I enjoyed going in. It was an early morning, and they made sure they put me to work. But I want to say there was maybe, oh, six, seven guys in the actual warehouse repackaging,

and they had a dozen drivers or so. So your dad was gone by the time you woke up and probably asleep, really, by the time you kind of were getting ready for dinner. Yeah, no, he'd go to bed 7 o'clock. He was hour at 2. There was the occasion that I'd be coming home at 2 and he'd be going out and he'd just shake his head. When you were in high school? High school and after high school, yeah. All right, so you, I think in high school you got a job at a gas station, which I identify with because one of my first jobs was at an ARCO AMPM mini market gas station. in the San Fernando Valley.

Very important job. I learned how to chop onions at that job. I learned how to make the burgers for the... This is probably a different kind of gas station. Was this a full-service gas station where you worked? Yeah, it was full service, though. When I was there, it was unheard of for you to pump your own gas. So my primary responsibility was to go out and be pleasant and pump the gas.

Squeegee the windows, yeah. Clean the gas pumps when I've got down. downtime and so, yeah. There was something that happened one day while you were working at that gas station, which would have an impact on decisions you would make later on. Tell me what happened. Yeah, I was out at the gas pumps. I think I was pumping gas or I was cleaning the pumps. I mean, my station was out at the gas pumps, being ready for the next customer.

And all of a sudden behind me, I heard screeching of the brakes. and, you know, a thump and, you know, yells and horns. And I ran up there to see what went on. And a little girl had gotten hit by car. And I stood there and I looked and I really didn't know what to do or how to do it and stuff. And I ran back into the gas station and called the local fire department, which literally was a quarter of a mile away, you know, a third of a mile away. And it was a volunteer department.

But they showed up and took the girl. often and unfortunately she did not make it. But it was hard for me to watch and not be able to help. You didn't know, like probably most people, a CPR or... The CPR, I don't even think was invented then. Right, right, wow. And seeing that, from what I gather, from what I read about, you kind of got the gears turning in your head about wanting to be involved somehow

in rescue work. Right, right. That was life-changing. You had to be 18 to join the volunteer fire department, and as soon as I was 18, I signed up and I joined the fire department. And what did that mean? You would spend a night there every other weekend or once a month or how to work? No, no.

You basically would listen for the fire whistle to go off. At that time, we didn't have pagers or BlackBerry. or anything like that. And they hooked into your phone at home, and it gave a rapid ring, so you knew it was a call. But, yeah, you weren't obligated to put in any time. I always, you know, went on training drills

and, you know, took the first aid courses and went to all the meetings. And, you know, I wasn't deeply ingrained in it. So it sounds like this was kind of a turning point. You wanted to be a fireman. I mean, I read that you, You wanted to join the New York City Fire Department, but I guess that process was like moving slowly for you. So then what?

You began to look elsewhere? Exactly. I heard that they were hiring firefighters down in Florida. And my best friend at the time had moved to Florida. And I said, you know what? I'm just going to do it. And I packed up. I had an MGB, which is, you know, like a little triumph.

I don't know if you know the car, but a very small. Sure, the triumph. Oh, they're great cars. Yeah. Everything I owned went in that MGB. And on October 6th, I arrived. And by November 1st, I was on a paid department in Largo, Florida, which is... In Largo, Florida. Yeah, right near Clearwater. It's like one of those sliding doors moments. You know, had you gotten a job in New York, your life would have been completely different. But you ended up going to Florida because there was demand for firefighters. Exactly. So tell me a little bit about that. time. I mean, what did that entail? You would live in the fire station or you'd sleep there,

what, two, three nights a week? We were on a 2448 shift. So that meant you showed up at 7 o'clock in the morning, you went home 7 o'clock the next morning, and then you had two days off. And I remember thinking to myself, you know what? They're still looking for a lot of firefighters, right? They had a big hiring going on, and I thought to myself, I'll work the second day for free. I was enjoying myself so much, you know? Wow. What was it about being a fireman that you liked so much? You know, my first day on the job was, as I said, November 1st, 1973. The night before, a tornado went through and wiped out mobile homes, killed a few people, unfortunately.

And I'm in the state for three weeks, and I show up on the job the very first day. I go out and I look at this devastation, and I think to myself, holy cow, what have you got? cutting yourself into, you know? Yeah. But, you know, I went through the training. The fire chief came out one day, and they had a mandatory meeting at night. And he said, listen, guys, he says, the mayor wants us to get a paramedic program going in the fire department.

He says, I got to tell you, I'm here because he told me I have to be here. And I'm asking if you guys, if anybody wants to go to paramedic school, but I want you to know, I hate the idea. I don't want paramedics. I don't support paramedics. But I'm asking if anybody wants to volunteer. volunteer. I stood right up and threw my hand up, but I said, I'm it. But that was my real passion. I mean, fighting fire fires is one thing. And, you know, you're saving property and stuff.

But going through paramedic school and saving lives is something completely different. I was one of the first paramedics in the state. You know, I want to say in the first hundred paramedics in the entire state. Wow. Wow. Because this was not, this was not, I mean, EMTs like that, That's a thing now. That didn't exist. Paramedics, that was a new concept in 1975. Yeah, yeah. I tell people that if I could go back and do it tomorrow, I'd do it in the heartbeat. You know, it was the most rewarding thing I ever did in my life. All right. So you're living in Clearwater, and were you married at that time? When I first joined the fire department, I was not, but I did end up getting married.

79? Got it, got it. Okay. So, so you're, but you're, you're a young guy. You're in your 20s. Right. And, you know, you got a great career going. But this is actually where your first business starts to get launched. And I need to preface this by explaining to everyone, including myself, because I didn't know this, that this is like the, this is like the late 1970s when the concept of 911 is relatively new. That even in the late 70s, I think only like one quarter of Americans. have access to 9-1-1 systems. Like, you still have to dial up, like, a seven-digit number to reach the fire department. Correct. Correct. All right. So at this time, right, these 911 systems are rolling out across the country.

And at some point, I guess, your fire chief comes up to you and asks if you want to help with the new system for your area, right? Exactly. So the chief came to me and said, would you be interested? in helping me implement the 911 system. I said, well, sure. I mean, I'm willing to look at it and stuff. He says, well, what do you know about computers? And I said, not a damn thing.

He said, are you willing to learn? And I said, sure. So the goal was we had, I think it was 23 or 21 fire districts within Pinellas County, which is St. P. Clairota, basically. And I think there was 21 independence. So anyway, the problem with 911 is they're going to, people are going to be able to dial that three digit number and it's got a ring somewhere. And, you know, they didn't know where to ship that call or whether to the 23 or 21, whatever it was, departments.

So where do I transfer that customer to? Because up until that time, every department had its own dispatches. Exactly, exactly. There was 21 dispatches. Yeah, yeah. Let me try to understand. I want to try to figure out how you started to learn about this because you were not, as you say, you were not a computer. computer guy. I guess the county hired consultants to help them create some kind of automated or

computerized processes. This is the early, this is a late 70s, so computers are, you know, we're talking about the Stone Age compared to today. But I think there was a guy that they hired to kind of write the software who was an outside consultant. Right. His name is Bob Timberlake. and he has an electrical engineering degree. He was working for a power company and had a software company called Economometrics Associates. So he had the knowledge,

and you were paired up with him to kind of learn this system and then help implement it? Is that more or less what happened? That's exactly what happened. Yeah, wow. Again, this is a guy that didn't know anything about computers, but we were actually setting off printers in the fire stations, opening fire station doors, alerting bridges that the fire truck is coming, have the bridge down.

And so we automated a lot of processes. And we literally took a dispatch process down from several minutes to tens of seconds, you know, 15, 20, 30 seconds to get the appropriate equipment on the road. All right. So you are, what? working on this system and clearly mastering it. But how did you start to think about this as a business? Did Bob approach you?

Did you approach him? Did you approach somebody else and say, hey, you know, maybe we should roll this out around the country? Well, Bob was definitely smart enough to have retained the rights to the software. Oh, he kept the rights of this thing that he'd be created. Correct. Correct. Very smart. So he didn't, he didn't, it wasn't the intellectual property of, of, of, you kept the right?

the county. Correct. As it turned out, you know, as people heard about this new system and 9-1 was being installed around the country, they came from all over the country, all over the world to see this. So we were sort of on the bleeding edge and they'd either approach Bob or they'd approach the fire chief that, you know, and say, you know, how can I get this in my city? And Jerry being progressive thinker. Jerry was the fire chief? Fire chief, yeah. I'm sure. Sure said, Bob, you know, why don't we sell this and people can take some time off from work and go down there and help them get it set up and we can make some bucks on it, whatever it is. So in 1985, you leave the fire department, essentially. You resign. Yes, I did resign, and that was one of the toughest decisions of my life, but I sort of saw where this business was going.

And, you know, you think about your family and, you know, your career path, and I was always financially dream. driven, you know, to raise money and live well. So I made a very, very tough decision, and it worked out well for me. And so essentially, you along with Bob and Jerry, the three of you start this business. Exactly. This was called 911 EAI Systems. And the idea is to replicate what you did in Pinellas County in other places in the U.S. That's right. And absolutely had a tremendous amount of people wanting to come see the product. But we would also go to trade shows and, you know, Jerry would give a talk and we'd have a booth set up and so.

Initially imagining it was, you were expanding around Florida, right? Yeah, the first three, four, five markets, I guess were around Florida, but we ended up going nationwide and up into Canada. That's incredible. I mean, within five years, you become, I think, the second largest, you become, I think, the second largest provider of 9-1-1 services in the U.S. I mean, so demand must have been really high, but I can also imagine that you guys had a hard time keeping up with it, right? Without a doubt.

I mean, you know, it was easy to sell because it was a great product, and we had professionally great hardware and all this. But the installation period could run a minimum of a year and often ran two and three years to get the equipment up and running, the database loaded, the people trained, the network put in place. And so, you know, our backlog of installation grew and grew and grew, and therefore, the consumer was getting more and more frustrated with us. So our growth was almost our demise. Did you feel that? You were not the CEO, right? I was not.

You were an officer of the company, but did you feel that stress? Oh, yeah. Oh, yeah, more than anybody because that was my job. That was my half of the bill. A third of the business was to get the systems up and running. You know, Jerry was the sales guy, and he was having a ball doing it, right? He was like, come on, I'm selling these things. Exactly.

Exactly. So you had the cash, but you couldn't actually fulfill these orders as quickly. And probably some of these customers were complaining about how long it took. Absolutely. And, you know, promises and commitments were made of what the system did or could do. that weren't always 100% there. We could do 80% of what they asked for, and so now I'm facing them and say,

well, this is what we thought you bought. It was a tough business. So at the age of 33, you joined this business, and it sounds like for seven years, you were probably on the road all the time, just living in airports. I was. I was.

And how was that for your personal life? That's hard. Really, really hard. No doubt about it. You know, I was traveling virtually every week. I remember waking up many mornings and thinking, where am I? You know, I couldn't even remember what town I was in, no less what a hotel or what I was going to do the next day. So that obviously puts a strain on our marriage and on a family situation.

So, and then when I did get home, I was exhausted, right? Yeah. So, and we didn't, we didn't, the business didn't last that long. We were fortunate that one of the baby bells came along and wanted to buy the business. And so that gave us our exit. But I do believe we would have cratered had we not sold. Had you not sold. So 1992 you sold to Bell Atlantic.

Yeah, right. Today part of Verizon. And they made you a pretty good offer, a very good offer. because what guys had created, the IP and the network was still very successful. There was a business to build around it. Absolutely. I mean, they saw the potential,

and they wanted to expand for whatever reasons, and they came in, and they made us a generous offer. You know, you're talking to a guy that when I started the fire department, I think I was making $30,000 a year or something, you know. Wow. And walked away with seven digits. Yeah. You were 40. I was 40. I retired at the age of 40.

You retired at the age of 40. You basically had made enough money where you didn't have to work for the rest of your life at that point. That's true. You know, what do you do? What did you do? Yeah, I mean, you know, we bought a new home and I played a lot of golf. That was one of my hobbies. Did a little boating. I had a sailboat at the time.

and a little travel, but started to get bored. Yeah. It's not what it's cracked up to be, so. Right, right. What did you decide to, I mean, what did you sort of start to think about in terms of the next thing? Because it wasn't that long before you kind of, well, I guess it was a couple years. What other ideas were you thinking about? Yeah, I don't know that I really thought about a whole lot.

I mean, back of that air, you heard about and read about mini storage, and I started to investigate that. Why mini storage? What was attractive to you about mini storage? Well, the number one thing is that you only need one or two employees. So I thought, okay, that's a lot better than what it came from, right? So having one or two employees, it was a recurring revenue. You know, you didn't have one key customer. You had 500 customers.

So if you lost, you know, five or ten of them in a week, it's no big deal. You replace them. You know, it was a high return. I mean, the margins were good. And I just started looking at it. And at a coincidence, you know, eighth of a mile from my house was a four-acre, three-acre piece of property that was sitting there vacant. And I thought, well, what if I put them any store?

And then people could store their stuff, and it's great because they're just getting money in the door. I mean, the upfront costs are high because you've got to build it. But then they're basically just like chain link fences, right? Well, it's a traditional mini storage. So you have the little storage rooms, if you will, that you would rent out. Right. Okay. So basically, you bought this piece of land and you built this storage center. And did you finance it yourself?

Yeah, I did. The piece of land was owned by a gentleman that lived in the community, member of the same golf club. And I went to buy it. And when he asked me what I was doing with it, and I told him I was going to build a mini store, he says, well, I don't want to sell it. I want to be your partner. So, you know, I could care less. You know, at that point, I was just looking for something to do. So I said, sure, you can be my partner.

Roy Courtney was his name. So the two of you basically finance the construction of a warehouse on the land? Exactly. Wow. How much of that cost, do you remember? Is it a very, I mean, it's Florida, so land was cheaper, is cheaper in Florida than other parts of, I'm in California, for example, or it's not cheap. But how much, do you remember, how much it cost to set this whole thing up? You know, I want to say the construction for the units themselves was under $100 a foot, but I want to say all in, we had just over $2 million.

and in it between the land and the buildings. So this wasn't a crazy investment. I mean, this wasn't a crazy investment. You knew you did the math. You knew that the math of a storage unit was going to bring in a profit relatively quickly. Correct. And we were in an affluent community. And, you know, and everybody needs storage, especially in Florida where you don't have basements.

Right. Yeah. So I was very confident. And it was convenient because I could walk to it, you know. People don't have basements in Florida because the water table is high. Correct. So that's actually amazing because a storage business, like Florida was designed for the storage business. They certainly do well here.

And as Americans, we are reluctant to throw things away, you know. I know. I know. It's terrible. All right. So you guys start this business. and I mean, were you pretty much almost like 100% booked? Is it like a hotel where you're like 90% booked or 100% booked? You know, during my tenure, I don't think we did get to 100%. Before we actually had a CEO and could open, I started to look for a second site because I was so confident I had learned, you know, the idiosyncrasies of it.

I'd successfully built the unit and I knew I could get more financing to do another one. All right. So what happens? Well, if you know Pinellas County, St. Peak Clearwater, it is very, very densely populated. And so land in general is scarce, especially when you're looking for, you know, a three-acre, four-acre parcel that's on a main artery, you know, that has the right zoning. So that was difficult. And then if you did find one, you had to do that same math where where's your closest competitor. and typically I'd find something and across the street was a competitor, you know, so really had a hard time and never did find the second parcel. We finally did open and we were growing quickly.

But I couldn't find that next piece and continue to drive around looking. Wow. But this was supposed to be a lifestyle business. This was going to be passive income for you. You'd only have two or three employees that you really didn't need to manage them because it was really self-storage. This was going to be passive income. and you could kind of, you know, dip in and out more or less. Exactly.

As we started to rent up, and I got more and more excited and more anxious to find another lot and just never did. I eventually quit looking because I came up with a new idea. Why don't we come back in just a moment, how Pete takes his new idea, buys a bunch of two-by-fours from Home Depot, and starts to disrupt an entire industry. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1997, and P. Warhurst is hoping to expand his fledgling storage company. So he's looking around Pinellas County, Florida, for a second facility. And kind of out of the blue, he gets an idea for a completely new business. Literally driving down the road, looking for a piece of property, and frustrated and stuff, and just one day he said, what if we brought the storage to the house? And, you know, you sort of scratch your head and think, you know,

how would you do that type thing? And I was intrigued by the concept, and, you know, the Internet was pretty young back then. And I got on the Internet and tried to see if there was anybody out there doing something like that. And I didn't find any. Doing what? But back up, because this is a big idea, Pete. You're talking about a revolutionary idea here.

I mean, we have to just pause and recognize this moment. How does, I mean, does the idea come to your mind? Does it come to somebody else's mind? Are you talking with somebody about it? Yeah, I was actually driving with Roy Courtney, and we were talking about another business that he had invested in that was picking up medical waste in a container and stuff. And I was envisioning the truck, and I'd seen the trucks around and stuff,

and I said, well, you know, I said, well, there's a truck. you know, how do we do this? And I said, what if we bring the storage to the house? And it was that simple. I mean, what if we bring the storage unit to the house? That was the question. Yeah, that's it. All right.

Now, just to put this in a context, there have been, for a long time, on construction sites, huge containers where waste and stuff is just dumped, right? Especially demolition stuff. Dumped into the container. And then eventually a truck comes, picks up the container. and then takes it to a dump. So that concept was out there. But essentially what you started to think of was,

wait, what if we take that concept and turn it into a storage unit in front of someone's house that we just drop off and then pick up? Exactly, yeah. And I definitely looked at the big steel cargo containers and I thought to myself, you know, that's not the right container. I said, well, my wife, I used yours,

the litmus test, right? Well, my wife put our stuff in that in that steel, rusty steel container. And I said, no, that's not the right container for us. And internet didn't really provide anything. And I thought, well, you know, I'm sort of into building and things. I bet you I can build a box. And I knew that, I knew that the most popular mini storage was a 10 by 10. So, you know, I thought, well, what if I do a 12 by 8 box, which sort of met the dimensions of plywood? I felt my wife would put our stuff in these nice wooden boxes that were clean and fresh. And so the next challenge was, you know, how do I deliver them?

And then I had to, before I did any of that, including build the boxes, I had to say, you know, what do the economics look like? Right. Did you, when you start to think about this, did you continue, I mean, did you say, all right, I mean, if I'm serious, if you were serious about this, right, about, bringing the storage box to someone's house, that's a different business. That's a completely different business that requires a whole new set of capital, right, to make it happen. Did you sell the mini storage site that you had, or did you keep that going? The answer is yes, eventually I did sell it, but not right away. I wanted to explore and research the concept. And so it was probably a year or so after I came up with the idea.

before I started to try and sell the mini storage. Right. So the first challenge is you got to come up with the box, right? And so you knew how to build things, right? You know how to build things. So did you do it yourself? Did you bring some friends in? How did you just build a prototype?

Well, you know, Dave Raville, my paramedic partner and the fire union president and stuff, helped me build the mini storage. And then he was with me then. And so I was bouncing these ideas off of him. And he said, well, let me draw up a box. And he probably is a much better woodworker than I am. But he optimized the dimensions of off-the-shelf materials and said, we can build a box this way.

And we think it'll hold up. And, you know, we can build a hundred of these. And I could do the math and say, okay, that's what it's going to cost to build a hundred of these things. And so that's what we set off to do. Did you, like, go to Home Depot? Mm-hmm. Yeah, it just went and bought, like, plywood and, and, and, and, and, and, and, uh, two by fours.

And where did you, where did you build them? Um, you know, we, we started building the first one in, um, another firefighter buddy of mine, uh, in his driveway. We started to build the boxes there and, uh, realized that we couldn't build 100 boxes in his driveway, so I rented a warehouse, and we opened up a little production line that OSHA would have put me in jail for if they had come and inspected us. Wow. All right, so you guys build these, and the idea is you're going to try to start a business

where you bring these boxes to people's homes. They fill them up with their junk or stuff. Let's not call it junk. Their prized positions. No, a lot of times it's junk. A lot of times junk. and then that box is going to be picked up, put on a truck, and brought to a storage facility. So completely new model, but how are you going to pick the boxes up and drop them off?

These are heavy plywood and steel storage containers. Right. Yeah, that unit was probably pushing 10,000 pounds when it's loaded. So that was a challenge, no doubt. When we looked at off-the-shelf stuff, I looked at the, you've probably seen cranes on the back of trucks that can pick up and offload with a crane. Right. You know, with that system, I said, geez, you know, that's going to go up with the power lines or trees and everything else. Yeah.

I discounted that. Trying to lift that with a crane and it's dangling and that's just a recipe. Right. Okay, so that was not going to work. And looked at the roll off, you know, the tow trucks that tilt bed. Oh, yeah. Same way the steel cargo containers get delivered, you know, they tilt them off and roll them off and stuff. Right.

Some people use that methodology today. My concern with that was twofold is, number one, you've got to put them on some number of degrees, 30-degree angle. And, you know, if people haven't packed them and tied the goods down well enough, they're going to break. Things are going tumble, right? It didn't seem logical to tilt it. The leading edge, when you're redelivering it, the leading edge hits the driveway first. And then you pull the truck forward in the last six inches or so, the unit drops around. You're going to break all my glasses. Yeah, my China. Exactly.

So I saw a liability written all over that methodology. So what? What do you do? I mean, this sounds like a pretty insurmountable challenge, right? Like, how are you going to bring a container to someone's house, lift it up vertically so it doesn't break anything, and then carefully place it on the back of a truck and then drive off? I mean, if all the stuff available was not going to work, it seems like game over. We had to figure it out.

And the same guy that was building the original container went to him, and he's very, very mechanically inclined. He's with me again today. He was one of the first people I met when I moved to Florida. And we've been in France for 50 years. Roy Hensler. All right. So you find this guy, Roy. Right.

to help and you go to him and you say hey what do we do here right right he was involved in building the boxes and uh we started talking about it and and uh you know and so we went through version after version after version after version and i think even today they still make minor tweaks to it but uh we ended up building a lift system that looks a lot like a bed frame you know with the the post and the rails and stuff and uh somebody fondly calls it uh uh Podzilla, it evolved into a piece of equipment that has never dropped. They've done over 4 million pickups and deliveries. They've never dropped a container, never had a bottom fall out of a container.

So the containers were built well and the machinery was built well. And that's a pretty good testimonial. Right. I want to describe this truck because I've used pot what would become pods. I've used it before. and I think a lot of people listening have. It's basically a truck pulls up to your house and on the truck is this like, as you say, it's like a giant bed frame and the bottom of the mattress frame. Right, right.

And it comes, it sort of is lowered and then it's rolled off on these giant tires and then over the pod box and then the driver like hooks it hooks it. bunch of steel chains around the pod box and then this hydraulic thing just like lifts. I don't know if it's hydraulic, I'm assuming it is, lifts the entire box and then the, and then he essentially pushes the entire thing, right? I think they push the wheels forward and then over the flat bed of the truck and then carefully lower it. Am I describing that correctly? Yeah, yeah, I think they're hiring.

But it is the weirdest thing because it doesn't look like anything you've ever seen anywhere before except in the Star Wars film. And like, you know, the scene where they're, you know, just, I don't know, in the tundra or something, you know. Yeah, I mean, we were able to get several patents awarded for it. So it was obviously unique. Right. So you have this very, two big challenges. First, how do we build a box? and then how do we get the box to the customer and then get the box back?

Now, you've solved those two challenges, but you've got another enormous challenge, which is this is going to be really expensive. I mean, you've got this mini storage company. It costs you $2 million to build. You're getting a nice, making a nice kind of passive income from it. You know, you made quite a bit of money from the sale of that first business, but not enough money to finance a company like this that's going to require this kind of capital. I mean, did any of that in any way intimidate you? Because you would have to manufacture this truck and the boxes. You're talking about tens of millions of dollars.

It definitely cost sleepless nights. I did venture into it. Let's face it, before I even spent a dime, I tried to model it out, financially model it out. And the economics were very compelling. You know, the way I looked at it back in those days, I could rent a warehouse for $5 a square foot. And this warehouse was 30 feet high and, you know, a few columns in it and stuff. So you could stack the boxes. I can stack the boxes, right?

So I'm renting the boxes for virtually $15 a square foot, I think is the number I was using back then. And I could stack them three high. So I'm generating $45 a square foot for what I'm paying $5 a square foot. So I said, those economics were. You don't have to have an MBA to figure that one out. Wow. I want to back up for a sec, because I know you officially launched the company in 1998, and you call it pods.

And I think that stands for portable on-demand storage. Portable on-demand storage. Brilliant name. Pod. It's a pod. It's a pod in front of your house. And it's on-demand storage. And so with the $7 million, you're able to launch it in,

Right. In Tampa Bay, right? Right. But how are you going to finance this business? I mean, how are you going to finance this idea? You've got to put a lot of cash up front to make enough units. And not only do you need the warehouse, but you need the trucks and you need the boxes. And the employees and the factories.

And this is going to be heavy duty, a lot of employees, not one or two or three like your mini storage. Exactly. This is a big headache. Yeah. You know, I finance. the beginnings of the Tampa Bay area on my own, but that was quickly drying out as you can, as you are articulating. But, you know, I was fortunate. I had a lot of high net worth friends, and so I did a friends and family round, and actually went to a dear friend of mine that

was a doctor, and he took it to his accountant who took it to somebody else. One of the gentlemen that got involved actually ran a full-fledged business model on the business and came back fairly astonished at what this thing could grow to be like. And so I did my first round of capital raise. I think I raised $7 million on that first friends and family round. And was that enough to like prototype or build the first truck? Oh, yeah. The trucks were built. there were a lot of materials

but we were building them ourselves buying stock trucks and building them ourselves and so we could build them and we could finance that's an asset that we could finance the asset we couldn't finance we leased the warehouses but the containers you take a wooden box that some guy built

in his driveway to a bank and say I need to buy 10,000 of these or build 10,000 of these they look at and say what am I going to do with that thing if you don't make it, right? And, of course, nobody had ever heard of portable storage before this time. And so financing those containers was a bear, and virtually impossible, virtually impossible,

without personal guarantees and things like that. So that was the real weightlifting is getting those taken care of. But we did raise enough money, and Tampa Bay grew. We started in Pinellas County and spread over to Tampa and stuff. And, you know, I tell people, one of the reasons, reasons, three major reasons why pods grew and was so successful. And number one is we dropped right in between two major industries, the full service movers, the Mayflowers, they allied those guys. Yeah. And the truck rental people, U-Haul. If you think about it back in those

days before portable storage, if you went to move from House A to House B, you had those two options. Yep. Neither of those two options had or even have great reputations, right? I mean, they're not the best experiences in the world. So we disrupted an industry, moving storage industry, with a new concept that was price point in between them, had a lot of flexibility. And so that was step one. Step two, we were sticking these things in people's driveways, and they were huge billboards. You know, think of another business.

You can put a billboard in somebody's driveway for six months. It would say pods and giant letters on the box. Exactly. Exactly. Exactly. With the number. Exactly. And so, you know, so we were putting billboards in residential communities.

But we disrupted an industry with an intuitive product and we did it in a tourist community. So people would come into Tampa Bay on vacation, drive down the street or past the hotel or past the gate, whatever it is, and see these boxes. And they'd say, I get it. I get it, you know. And literally they stopped their vacations and came and visited us. And I'm just curious, because you were able to do this. How many trucks did you have to build to make it work for the first facility you'd be in? Yeah. I insisted that we had two primarily because if one broke, you had to have a backup, right? So I insisted we started with two. I want to say Tampa Bay now has 40, 30. to 40 somewhere in there. Okay.

So for to work, you have to have one to two, because it depends on how many pods you're picking up and dropping off. You had to lease the warehouse, which you found. And these are like, what, like Costco-sized warehouses? I started smaller than that because I thought I was only going to have 100 boxes. So stacking them three high, I didn't need Costco. Got it. And how did you get attract customers?

I mean, did you advertise? Did you run any ads or anything like that? Because you have this business, and how do you introduce this concept to people? Yeah, and cable TV was just sort of becoming of age or had just become of age. And then there was this new channel, Bay News 9 in Tampa Bay, which was just coming out at that time. And it was a 24-hour news channel. And they came to me and they pitched me to advertise on Bay, News 9, they said, we can control down to the neighborhood where you advertise.

Yeah. But it was interesting. Before I did that, I actually was doing radio. And I had my very first ad on the morning commute. I don't remember what that cost me. But we were all sitting around listening to the ad and stuff and anxious to see if we got any response. And we got five, six, seven phone calls off that first radio ad. And two of the people said, tell me more about this. this sounds like an interesting business I may want to use you.

And the other four or five people that called said, I want to invest in your business. Wow. And that just threw me back. You know, I thought, hmm, you know, I'll make a note of that one, right? Yeah. Yeah, but you didn't necessarily have to take those investment offers, right? Because early on, I think like less than a year in, you were able to start growing the company in other ways. right? Exactly. The way to grow a business without capital is through franchising. Franchising is really

a financing tool. So we started a franchising program and people saw it and said, I'm going to take this back to Indianapolis. I'm going to take it back to Baton Rouge, whatever it is, and open it up. And so we started a franchise business and we started selling those which were become immediately profitable for the parent company because you really have no cash out all you collect for services and licenses and royalty fees and things like that. Yeah. That's how we got around the lack of capital. All right.

So you are, this concept really kind of starts to take off in and around Sarasota, the Sarasota area where you had your, I think your first franchise. That was the first franchise location. But it really starts to take off. meantime, you start to run into problems that many years later, companies like Airbnb and Uber would run into, which is municipal regulations first in the Tampa Bay Area because they were saying, people started, there were people were complaining about these boxes, these pods sitting in front of their homes or their neighbor's homes. And then they had these big words and pods on the side.

Billboards. And there's a billboards. And then the city council in Tampa Bay was saying, yeah, these are billboards. board. So tell me a little bit about some of that pushback. Yeah, no doubt. I mean, it's an industry that should be regulated, you know, and it is. I was disappointed because Clearwater is where we started. Yeah. My argument with them was that you guys don't like mini storage. My mini storage I built was in clear water and, you know, they just don't like mini storage. They take up nice highway frontage and they're not that appealing. or attractive.

And so they really try and regulate those out of being able to do it, the zoning and so forth. And then I come up with this business and I say to them, you know, listen, guys, you don't want mini storage. I'm taking the mini storage business and I'm putting it back in the industrial parks where it belongs and getting it off your highways. Why are you giving me a hard time, right? Yeah. To this day, I think Clearwater is still the hardest city to do business in. Because what were the, the issue was,

there were all kinds of rules around like how long these pods can be in front of the homes or sometimes aren't driveways but sometimes when there's no driveway it's on the sidewalk or it's on it's on the along the sidewalk um and the signs were big people didn't like the word pods and big letters and the signs and the city you know argued hey this is a violation of our billboard rules and and so how did you guys deal with that yeah i mean it was a chore um we worked with the city and, you know, tried to present our arguments. You know, truth be known, if I parked the truck with the sign, the box on it, I was legal because it was a registered vehicle and I could park it on the, in that place. So I was legal. But if I take it off and get rid of the truck, all of a sudden I'm illegal. Once it's a pod on the street, it's illegal. But if it's a pod on the truck, it's legal. Right.

Okay. The sign is legal, I should say. Right. Pete, this is what I'm wondering about. You had in the emergency dispatch business, you had a lot of interest coming in hard and fast, and you could not keep up with demand. How did you keep up with the demand? I mean, people wanted to start franchises. They had to buy the trucks from you.

First of all, how are you making the trucks so quickly? Yeah, we ended up putting together a fairly low-cost production line that we could just move the list. systems. We didn't build the trucks. We just built the lift systems that sat on the trucks, right? So that became a component manufacturing facility that you welded the pieces together. You slid the rams inside and you connect the hoses and out the other end of the door. Were you doing that in Florida? We were doing that in Florida. Then we ended up building a more sophisticated manufacturing line for the containers that would start at one end of a big Costco,

bigger than Costco. It started at one end as raw materials and come at the other end as a finished product. Also in Florida? You were doing that in Florida? Also in Florida, right in the same facility. But we ended up actually creating seven manufacturing facilities

for the containers across the country. Wow. So you really had an economy of scale there. I mean, you were really able to scale that up relatively quickly. We were. And of course, we're creating a brand while we're doing it and increasing our footprint and attracting customers and investors. I'm curious about the ambitions of the company because within six years of launching, there were 295 franchise locations in serving 7,000, more than 7,000 cities and more.

40 plus states in the United States. I mean, that is a massive expansion from going from nothing to 300 franchise locations in six years. Initially, when you thought of this idea in 1997 and worked on it, was it in your mind going to be a Florida local business? Or did you really think this is going to be a national, international business? No, I think I said that I thought we were going to build 100 boxes and put them in this little 15,000 square foot. warehouse or whatever it was and um you know that was going to be my bolt on to the to the mini storage and you know it just took off and and then what was really happening is the consumer was dragging us into more and more options i mean when we started out we thought all the containers were going

and come back to the to the warehouse and then all of a sudden people started to want to store them in their driveways during remodeling or for whatever behind their businesses and stuff so that's another branch and then the next thing you know is And we loaded somebody up or gave somebody in Clearwater container, and they said, well, I'm moving into a new house down in St. Pete. Will you move me down to St. Pete? And we thought, well, why not, right? Just move the container down there, yeah. And that's how Tampa started. And the next thing, we sold Sarasota, and somebody wants to move from Sarasota to Clearwater, and all of a sudden, we're one of the nation's largest moving companies. And that wasn't even part of your original business model.

I was nowhere near that smart. It was the customers who were demanding this. Exactly. The customer drove us to a national footprint and ultimately international, right? Yeah. I think by 2006, Pods, so this is like eight years in, it's franchised in 45 states in the U.S. It expands to Canada and Australia. There were thousands of pickups and deliveries a day.

I mean, you probably were doing $300 million in revenue. at that point. And around that time, I think it was 2007. You did an interview on a local public television show. And, you know, this guy, this guy's interviewing you about your story. And he says, what do you want to do? Where do you see pods going? And you say in this interview, oh, I think we can be, you know, like work with eBay or, you know, if people want to sell, you know, their exercise equipment, you could just stick in a pod. And we can ship that over to another part of the country really quickly like FedEx or UPS and make it seamless and frictionless. And shortly after that, you sold the company.

Yeah, yeah. Which surprised. I was just the timeline surprised me because you seemed so optimistic, so committed to this future. Walk me through that. Did you get bored with it? Were you kind of done with it? What was going on? I did not get bored with it.

And, you know, timing is everything. And I think a lot of different factors, you know, the system had grown and the franchises were wonderful, but you always get those bad apples, right? Oh, yeah. Franchise business is tough because they have a lot of – they can really make your life miserable, right? If they don't like corporate. They were. They were making my life miserable, and I was frustrated. How so?

What do you remember? They were saying. Yeah, they were. almost tag teaming me as to we need you to do this and we need that. And so one guy would come in and petition me for something. And, you know, I try and be a team player. And I try and be fair and stuff. So I may acquiesce on something.

And then a day or two later, somebody else would come in and hit me for the thing. And, of course, if I do it for one, I have to do it for all of them and stuff. And it was just getting exhausting. They had demands for, like, new products and services they wanted introduced? No, they just want a bigger piece of the pie and really had no justification. for it other than they felt entitlement and stuff. And I told franchises no to many things. And, you know, I'm willing to make the tough decision, even if it's disappointing to

whoever it is, even if it's a friend that I've had for a while. Yeah. You were like the mayor of pods. They were dealing with hundreds of constituents. Yeah, well. And that was part of the reason. The other part of the reason is I had these early investors that had been in now for 10 years. Yeah. And really had seen no return on their investment and certainly were entitled to it.

And so I was taking care of them. And the timing just seemed right. And I teamed up with an investment bank that felt that they could get us a pretty good offer. And in fact, we did. And I said, you know what, it's time to retire. I was tired. And why not? You reportedly sold for about $430 and $450 million to an investment firm, which is a great, I mean, what a great outcome after 10 years to sell that business. And what a great return for the early investors. And you truly are, I mean, now you've walked away with a lot of money. You are retired and done. And what do you do? Yeah, unfortunately, I was also in the middle of a divorce. Yeah. I mean, let's face the, you know, I'm sure 90% of the issues were generated because I was a workahawk or I am a workahawk. And, you know, the family sacrificed. And so, you know, that generated friction, obviously.

Yeah. That was a life-changing experience. I'm sorry. It was an ugly divorce. You can imagine money doesn't do good things. in a divorce. It makes life difficult. And so that process took two or three years to go through and finally settle and try and part friends. Um, you know, unfortunately I had a stepdaughter that I adopted and things went south with her and I as well. And so it wasn't, it wasn't fun. And I ended up

deciding that maybe just a restart was in order. So I moved over to Orlando. And, uh, and started fresh over there. And what did you do in Orlando? I mean, you know, it was going to be a couple more years before you would start your next business, which we're going to talk about. But what did you, yeah, what did you do? Did you just, were you an investor? I mean, did you, what did you do on a day-to-day basis? How did you occupy your time?

Yeah. Well, first of all, I was fortunate that I met a young lady that I'm now married to and have another stepdaughter. Congratulations. Thank you very much. And so we traveled during our getting to know each other period. Where'd you go? Oh, boy, everywhere. We love cruises.

You know, I don't know if you know that, but I am a pilot so we would fly around the country and down to Caribbean and so forth. And I guess on one of those trips, something happened. You actually had a life-altering event. something that was really serious at the time, right? Right, right. I actually went up to New Hampshire area and went skiing my first run of the day because it was a cold, you know, the cold air, snowy, rainy and stuff. And I fell and got back up.

And I honestly believe if I had not had that training, I would not have made it because I would have kept going. You were on the ski slopes? I was. I was. And I looked up at my wife and I said, I'm having a lot. heart attack. Wow. I think she thought I was saying it just so I didn't have to snow as our ski in that crappy weather, but no, I did. And the ambulance came, tried to get an IV in me. I finally said, put it right here or I'll do it type thing. And they got it in. So, you know, I think that

the doctor, when he put me in the ambulance, the head down, didn't have a lot of faith that I was going to be there. Wow. They gave me some medication and stuff. They tried to get another IV. I mean, was already in collapse. My arms and my legs felt like they were going to fall off of me. You know, the body was shutting down and they couldn't get another IV. And they said, we can't medevac yet because of the weather. So I had a three-hour ride down to the hospital that could treat me. And I swear that ambulance backed up and the doors opened within five minutes of opening

the ambulance doors to the time they had a stent in me or within five minutes they had a stent in me. And I ended up very lucky no heart damage at all. So what did they find? I mean, basically... Yeah, there was an obvious blockage. And they literally five minutes from the time they opened the ambulance doors to the tongue, I was okay. Wow. It was unbelievable.

Pete, that experience must have completely changed the way you see the world because you are really close to dying. Well, I was. at least I believe I was. It certainly changes your perspective on a lot of things. And, you know, you do make life changes and stuff. Yeah. But I've never been one to, you know, jog and run and eat right and things like that. So I have a lot of bad habits.

I like to think I corrected a lot of them. But the stress didn't help. Let's put it that way. And that's really all contradictory to starting another big. business, right? Which is exactly what happens next. Pete starts another business. A business that tackles another unsolved problem in moving in storage and one that puts Pete in direct competition with the company he founded. Stay with this. I'm Guy Raz back in a moment with more of how I built this. Hey, welcome back to how I built this. I'm Guy Raz. So it's around 2018. And even though Pete has already built

one successful storage and moving company, he's not done. He wants to go back into the same space. Yeah, I never stopped thinking about how to make things better, how to change things. My mother used to say that to me. She says, no matter what it is, you look at it and you say, I can do that better than that. Yeah, and that is my nature. I look at things and say there's got to be a better way. So that's sort of what happened.

You were in your mid-60s when you started this new business, right? So you could completely not do any of this stuff, but you can't get out here. So tell me the genesis of the next idea. I think initially you thought, all right, I want to work with pods again. I miss those guys. Let me go back and see what I can do with them. What was the idea that you brought to them? Yeah, I felt that, you know, let's face it, we started an industry and built it from the ground up

and didn't know what we were going to grow up to be, right? I thought we were going to have 100 boxes. I don't know how many hundreds of thousands they have now. But obviously when you do something like that, hindsight's 2020, right? And I look back and I saw two or three things that I thought, you know, if we had done it this way or if pods would convert to doing it this way, they'd have a much better product and a better customer experience and, you know, better margins and all these things. And what was that way? What were you proposing they do? The problem with pods is the delivery system.

As powerful as it is and, you know, as successful as it has been, the company can't make money on the delivery system. So what happens is the customer is paying $2, $300, $500 for delivery services. And the company's trying to dispatch their certified drivers in these complex trucks to, make the delivery and they show up late, they put the container in the wrong place, they run over the mailbox, they hit the rose bushes or whatever it is, and it's a huge dissatisfaction for the consumer. Yeah. And the consumer's paying $200 or whatever, it depends on the market, whatever it is, and the company's not making any money. So who's winning in that process? And so I went to them and I said, listen, I got this new idea. I said, you know, sign a non-compete,

non-disclosure, and I'll tell you what it is. And I was looking to make $10 every time I use the idea. All right. What was the idea that you were going to pitch them? They signed the non-compete. Let's say they were going to sign the non-compete. You walk into room and they say, all right, Pete, what's your idea? What was it? If the consumers having to pay $2 to $500 for a service that makes them mad that you're not doing a very good job of, and you're not making any money on that, why have that service? I said, I would have said, let's develop a truck that the consumer can drive themselves and bring the container home, load it up, and bring the truck back so that the company can never be late, can never run over the mailbox. If the customer calls up and says, I ran over the mailbox, the answer is, I'm awfully sorry to hear that, but I hope you didn't hurt my truck.

You know, you reverse that whole thing. You eliminate 40, 50 people in the market that are doing that delivery service. And, you know, it's a win-win. The customer saves money. They do it at their own time on their own pace. And the company eliminates a whole division with logistics and all these headaches and problems. And, you know, I just felt like it was a win-win. But I still don't understand.

What is this thing that you were going to do? Well, I understand the concept that Pods wasn't making money off the deliveries and the pickups. But how are you going to solve that? Right. And that was the key. So we had to develop a truck. that the consumer could drive. So it had to be under the 26,000 GVW.

What's GVW, by the way? Gross vehicle weight. I'm sorry. I got you. Okay. You go above that and you have to have a special license. Got it. Okay.

So it's about weight. It's not about the size of the truck? No, it's really weight. Okay. And what we basically did is we dropped this company, Red Rover, in between U.Hall and pods. I said earlier we dropped pods between U. Hall and the movers. Now what we do is we drop the new company, new solution, new offering for the consumer between U-Haul and pods that saves the customer money, lets them take everything under their own control, saves us a ton of logistics and headaches, and we don't charge a dime for the truck. So we give the truck, the mileage, the tolls, the fuel, and even a free hand truck to the consumer.

So it doesn't cost the customer a dime for the truck. They come get it. They'd take it home. All right. So you took this idea to your former colleagues at PODs to see if they would sign a non-compete agreement with you, right? Exactly. And I was willing to offer to help get it off the ground. And I believed it would add a third revenue stream to their business, right, that they didn't currently enjoy.

And the CEO refused to sign it. So I waited another three, four, five months. And I finally called one of the board members. and said, listen, same thing. He refused to sign it. I ended up getting invited to their 20th anniversary. Yeah. And before I went, I said, listen, I'm glad to come and say a few words at the anniversary, drink your drinks, eat your food.

Yeah. But I got to be honest with you. I'm going to start this business that you don't want to hear about. And they said, yeah, yeah, yeah, whatever. Come on. Come to the party, right? And so. Yeah.

So I didn't. And then I actually confirmed with the CFO at the time. Are you guys making any money on the deliveries and stuff? And he said, no, we don't make any money on it. He says, if I get rid of that piece of the business, I'd do it in a heartbeat. Not knowing what I was thinking, you know. Okay, but the people at pods have said no essentially to your idea. And I guess you decide to go ahead and launch it anyway.

Correct. And this concept that you had was it's not a pod. It's not a U-Haul. It's a U-Haul and a pod together. It's like a, it's not peanut butter, it's not chocolate, it's a recess peanut butter cup. Well stated. You're basically putting the storage unit on the truck. You're saying, hey, you can go pick up the truck, drive it to your house, you load up the truck, and then you drive the truck back to our facility.

And then we will take the box off the truck and store it for you? Correct. We're giving you a free U-Haul. You don't have to unpack into the mini-storage, as you said. Yeah. We're giving you all the advantages of a portable container on a free U-Haul. So this is like completely new. I mean, because pods, it inspired competitors.

And they even sued U-Haul at a certain point because I think U-Haul was using a product that they called a pod. I don't know why they would do that. And I think pods won. But lots of competitors now. There are lots of companies that basically replicated the pods model. You didn't want to do that. You want to actually create something new. That's right.

That's right. You know, the same guy that came up with the pods name, I reached out to him and I said, listen, this is what we're doing. What do you think and stuff? And he came down, he said, well, first of all, Pete, you're not really a pod, okay, or a portable storage company. Yeah. And you don't want to go against pods and portable storage.

As you say, there's hundreds of them out there, right? Sure. You're a startup. And you're not really a truck rental. you're giving the truck away for free, number one, and number two, you got the container on there. So he said, let's create a new industry and call it fetchable storage. So you come down and you fetch the truck with the container, you take it home, you load it up, you bring it back, you're done. And let's call the company Red Rover.

So Fetchable storage brought to you by Red Rover. And we, you know, have created a whole new industry at this point, just like we did with pods. And so, I mean, I guess pods is now a competitor, right? I mean, let's be honest. I mean, you guys are competitors. We are, we are. But to be honest with you, you know, I feel our product is a price point product, right? And I kid and I say, Bill Gates is never going to use a pot of a Red Rover or a U-Hull, right?

I can't see him loading his own stuff, no. Exactly. So he's at a financial plateau in life that that's where. what he's going to do. We're attracting the lower income folks, you know, the young families and the startups and some seniors that are on fixed incomes that see the value proposition that we offer. And I say we're really stealing more customers from U-Haul, right? You have to go rent the U-Haul, fill it, drive it to a mini storage, unpack it, and then take the U-Haul back. Or is you get the truck for free, you fill it, and you're done.

Right. You're paying the storage. You pay the storage fee. You pay the storage. You pay the storage. We're just paying the storage on U-Hauls. I think we're going to grab more customer share from U-Haul than we will pods, but we will certainly get the portable storage customer as well. But, you know, I always ask the question, you know, how does U-Hull compete with a free truck? Yeah.

You, I think, have done three rounds of fundraisers, and you've raised around close of $40 million. Is the model the same as pods? Is it a franchise model? Is that the idea? You know, first, we've had a few rounds. Friends and family, we raised almost $20 million, just under $20 million for friends and family.

And we just, this week, completed around north of $50 million. Oh, wow. So you've raised a lot more than, yeah, okay. Yeah, $50 million. from the Oppenheimer group out of New York. So that capital is going to let us grow nationwide. Wow. You know, all the major markets.

The franchise question comes up almost on a daily basis, but certainly on a weekly basis. And right now, it looks like we probably will enter the franchising later this quarter. That decision isn't finalized, but there's a great likelihood. Even with that much capital, we're going to open 2025 big markets, L.A., New York, you know,

all the big Chicago's, all the big markets on top of what we already have opened. But that doesn't handle the Boise's and the Schenectady's and things like that, and that's a great vehicle for franchisees to get involved. You know, the reservation and the concern around it was, you know, how do we avoid the pitfalls that we had in the pods franchisee? I'm curious.

I mean, here you are. You are, I think you'll be 70 in 2022. I mean, you're a startup. You got another startup going. And that's a lot. It's a lot. Right? And there's a lot of, I mean, it's a lot of time.

It's a lot of moving parts. It's a lot of logistics. You've done it before. But clearly you're not doing this for the money at this point. You're doing this for some other reason. It's fun. I mean, at the end of the day, I'm having fun. I would tell you that, you know, we've been in this now called two years.

I'd say we're at the same level of pods was seven years into the business. You know, our growth, our capital raising. This year is going to be unbelievable growth. And, you know, it took me 10 years to build pods and ultimately sell it. We're going to be on everybody's radar by the end of this year. I think, you know, I've told my investors and the Alpenheimer group at New York that, you know, this is a three to five year program. I think there's a chance that something could happen earlier than the five years. I think it could happen in three or four.

But, you know, the team I have around me does all the heavy lifting. You know, I'm sort of the guy that points. Let's take it this way. And so as long as it stays fun, I'm happy to do it. Pete, when you think about this journey that you've gone on from, you know, volunteer firefighter to real firefighter to paramedic and, you know, to just kind of just raising your hand. I mean, really, you just raised your hand.

Who wants to be a paramedic? I do. Who wants to be, who wants to help us set up this animal? I do. And then you start this pods of business. You completely transform moving and storage. And then that business is sold. And I get this one, and I think it's very likely to be the next biggest thing in moving in storage.

What do you attribute your success to? I mean, how much of that do you think is because of your hard work? Because you raised your hand, because you grinded, you know, how much do you think has to do with, getting lucky. You know, the people you met, the, the fact that you didn't get a job as a firefighter in New York City, but you got a job in Clearwater, Florida, you know, those kinds of things. How much, how much has to do with luck and how much has to do with just how hard you work? Well, you know, I think being blessed and being cared for has gone a long way. I also believe I'm very lucky. I think that, you know, being at the right time, at the right place,

having the courage to take the chance. I tell people all the time it's a great idea. Are you willing to walk away from everything to pursue it? You know, and I see my job seriously is just listening to your employees and your partners in the business and coming to an agreement so that we're all focused on the same goal line and showing the growth and sharing in the growth. You know, all my senior staff and many of my employees have stock in the company. so they're motivated to help grow. It's just doing the right thing for people,

doing the right thing in life, and having the willpower and the strength to take the chance. That's Pete Warhurst, founder of Pods and Red Rover moving in storage. By the way, what's the weirdest thing you ever found in a storage unit? Well, you know, we haven't had much of that in our, experience here so far. But, you know, I think, I remember things like, um, uh, one guy, uh, put a car in one and didn't secure it very well. And as it was driving down, as the pod delivery truck was driving down the street, it actually rolled out the back door and hung off the back of the

truck. Somebody put a car into a pod? It's just crazy what people do. I, I can't believe that, that over all these years of, of doing storage in Florida, you never found an alligator in a pod. No, no alligator. Unfortunately, no dead bodies either. No dead bodies, no alligators. Exactly. Exactly. Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is hibt at ID.wondery.com. And if you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. On Instagram or at How I Built This, and I'm at guy.org. This episode was produced by Carrie Thompson

with music composed by Rumpteen Arablewee. It was edited by Neva Grant with research help from Claire Mirashima. Our production staff also includes Liz Metzger, Alex Chung, J.C. Howard, Josh Lash, Sam Paulson, Catherine Seifer, Elaine Coates, John Isabella,

Chris Messini, and Carla Estabez. I'm Guy Raz, and you've been listening to How I Built This.