Creating a startup isn’t just about a great idea — it’s also about a focused product. STORD CEO and founder Sean Henry, who along with co-founder Jacob Boudreau created the company to break into the $163 billion storage industry, recently found this out. After attending the Dynamo accelerator in Chattanooga, TN, the STORD team decided to change gears and shift their business model, despite already turning a profit.
STORD has transitioned from a unique storage list app to a warehousing liaison company. They connect warehouse facilities with excess capacity to small businesses that need storage space. STORD manages everything on the customer side, from inventory management to billing. This model allows for more revenue to the vendors by filling space that was formally sitting empty and provides affordable solutions to businesses.
“It was a very difficult decision to pivot,” says Henry, also currently a student at Georgia Tech. “The most critical factors we considered before switching to our current model were: market impact, customer need, and most importantly what are we equipped to do better than anyone else?” The successful pivot has led to growth for the startup — they are expanding and hiring in sales.
Henry talks to Hypepotamus about the decision behind their pivot, how the accelerator helped them focus, and how he balances his student and founder duties on a daily basis.
Can you give us a funding update?
To date, STORD has raised just under $250k in angel and pre-seed funding. Beyond initial founder contributions, our first investment came from the Dynamo Accelerator and Fund in July of 2016. More recently, we completed a larger round of funding that closed in December of 2016. This round was led by Atlanta Investor Chris Klaus. We initially met Chris through Startup Summer at Georgia Tech and developed a relationship that drew in his support for our round. We are excited to move forward with excellent support from our investors and advisors.
Why did you shift your model?
Starting with market impact, it was clear that we could build a sustainable consumer storage business, but it didn’t appear we provided enough added value to the market. Instead, we were just thought of as another storage company. Because of this, the customer need was unclear. When your customers view you as a market alternative, it becomes increasingly difficult to demonstrate your differentiation that makes you new and exciting.
Finally, the question of what we are best fit to tackle is what led our decision making process. Utilizing our mentors at the Dynamo Accelerator, it was clear that we were perfectly positioned to disrupt warehousing. Whereas we had spent months validating our consumer storage model, we now had large corporations behind us explaining the problems they faced in warehousing and how we could solve them. The timing was undeniably right, and we decided to switch our focus.
How did the Dynamo accelerator help you nail down your pitch?
Upon our arrival at Dynamo, we spent the first month breaking down our progress and analyzing what pieces of our business had worked. We narrowed in on a few fundamental attributes of consumer storage, and the mentors around us began to narrate how those same concepts applied to their needs as a business. This led us to learn about how a business uses storage — warehousing and distribution. After learning about the challenges of warehousing from industry leaders such as GE, UPS, and Ryder, it was an empowering experience to have these companies turn towards us in search of a solution.
Once we began STORD, our mission and excitement was clear: we intend to streamline warehousing and distribution for businesses so that they save money and improve efficiency, while empowering small businesses by providing new partnerships and bottom line revenue.
What problem are you now solving?
Warehousing companies have a legacy footprint that is not built to serve dynamic businesses. It is an industry driven solely by assets — who owns what building and where. Because the building and operation cost is so high, the industry is inherently dominated by small and regional companies. This fragmentation leads to price inconsistency, operational and setup hassle for customers, and a lack of consistent technology and warehouse management systems (WMS).
Simultaneously, the primary concern of any warehouse is what capacity they have and how they are going to fill it. For the owner of this legacy asset, there is massive opportunity to dynamically fill their space with customers whose needs are not met by traditional solutions.
What’s your revenue model?
Once the customer’s product is in the facility, STORD manages the entire backend such as payment, customer support, and contracts. For each transaction, we capture a 10-15% margin on the services provided. Whereas a typical contract can range from $5-$15k in MRR, our margin fluctuates with account size and vendor rates.
How do you balance your studies with leading a startup?
I have maintained a very dynamic relationship with Georgia Tech. Most importantly, I do not let the two commitments detract from each other. For example, we attended Dynamo in Chattanooga over the summer while also participating in the Startup Summer class at Georgia Tech, part-time. These experiences proved very complimentary and led us to our recent round of funding.
Beyond balancing the workload, it is not difficult to schedule classes in a consolidated block of time such as early in the morning. I attend classes early in the morning and then spend the remainder of my time in the office focused on STORD. Regardless of school, our entire team at STORD still exceeds 40+ hour weeks without questions.
What resources at Georgia Tech and in the Atlanta tech community have helped you grow as a founder and encouraged you to build your own company?
Ultimately, Georgia Tech has been a pivotal resource while building STORD. Both geographically and through strong mentorship networks, Georgia Tech is very supportive of startup culture. Initially found support through ATDC courses in Tech Square. I attended some of these courses outside of classes as I explored early product-market fit. Following this, I networked with other student founders who have succeeded while at Tech. This led us to sign up for Startup Summer where we met one of our current investors.
The most beneficial aspect of the school has been the surrounding community. Since beginning the company, I have spent much time in surrounding work spaces (ATDC, Switchyards, TSL, the Garage, etc.) meeting new mentors and advisors to offer us support. I believe any student at Georgia Tech should immerse themselves in these communities to begin developing out their network in the Atlanta tech community.