By Caryn Spain
Tim Riley developed an "inside the box" strategy as he rewrote the rules for the storage and moving industries in the creation of Door to Door.
Tim Riley gave himself something few CEOs ever have access to: time to think, explore, and strategically position his business. The results are evident.
When he retired as the director of marketing for Shurgard Storage Centers, he wanted to start his own business. For six months he cast about and explored various possibilities in search of a new business strategy for the self-storage industry. As a result of stepping back and taking a good hard strategic look at his choices, he developed a vision that has rewritten the rules for doing business in his industry. With the Door to Door Storage concept, he created a niche for mobile, residential, self-storage service.
The essence of business strategy is the differentiation of your business from others in your industry that results in a competitive advantage. When you compete on the same basis as others in your industry, your choices for creating a competitive advantage are limited. You can try to be faster, or better, or cheaper, but in the eyes of the customer there is often very little clear differentiation between you and other companies using similar strategies. Instead of trying to be faster, better, or cheaper, Riley differentiated his company by providing convenient home delivery and pickup of self-storage units. Doing so created a significant competitive advantage.
Presumptions about how an industry is supposed to operate are the primary obstacles to rewriting its rules as Tim Riley did. He found a way through these obstacles by looking at the situation from several different angles, by giving himself time to think and a process for organizing his thoughts. He combined different and sometimes opposing perspectives to develop and see new strategies. In this instance, the perspectives that contributed most to Riley's breakthrough were his understanding of market needs in his industry and a systematic competitive analysis.
Developing a strategy
Riley began by studying the market trends that affect users of mini-storage. He learned that people use mini-storage during times of significant change in their lives (e.g., marriage, changing jobs, selling a home, having a baby, etc.) He also took into account one of the acknowledged "symptoms" of our times: the prevalent feeling that there is too much to do and too little time to do it in. He wanted to find a mini-storage solution that would fit into people's lives rather than force people to shape their lives around time-consuming trips to the mini-storage facility.
Riley considered several successful strategies used in industries other than self-storage to gain insight. He reflected on Mobile Mini's use of standardized shipping containers to provide mobile storage service to commercial accounts. He also paid attention to the resurgence in home delivery, as exemplified by Federal Express. These considerations resulted in a breakthrough when he applied the concept of standardized containers to the residential market.
The second perspective that Riley used to evaluate his vision was a competitive analysis.
"I understood that I had two types of competitors," he says. "The traditional self-storage business, which is very low-cost but inconvenient, and the moving and storage company that is convenient but relatively expensive. No one had yet figured out a way to serve the middle-those people who wanted a little more convenience, but were not able or willing to pay for full-service moving and storage. I set out to find a solution for those folks."
Riley readily admits he was not the first to look in the direction of portable self-storage: "There were two little companies already exploring some variations of this approach." However, they had not fully developed the concept, nor were they prepared to make the required investment to totally develop the niche. Once Riley envisioned his strategy, he knew he had to prove the business model and move fast. With a clear strategy in mind, he was able to attract investors and open Door to Door locations in Washington and California, with a rollout plan to open more in Boston, Washington, D.C., Fort Lauderdale, Dallas, and Chicago.
As is often true with a strategic breakthrough, copycats quickly appeared. Sometimes copycats are backed by companies with strong brand identities and capital structures. Asked what his response was to Shurgard and others marketing his portable self-storage concept, Riley replies that he is not overly concerned. His understanding of the traditional self-storage business gives him confidence that he will have the necessary lead time to build market share and brand awareness.
"Companies in the traditional self-storage business are really in the real estate business," he says. "Their investments in real estate make it difficult for them to compete with our model. Their primary focus is to manage and lease their core asset, real estate. Those companies who have traditionally been on the other end of the market, moving and storage, are really in the labor business. They have a business model that relies on the markup of labor."
Unhampered by the burdens of perception and weighty financial investments associated with these older business models, Door to Door is able to see that "we are really in the distribution business," Riley explains. "We run our centers as you would a distribution center, using low-cost centralized locations. This understanding provides us with a significant competitive advantage over other players in the industry."
What is next for his company? "We are launching City to City," he says. City to City, an extension of service to the same middle market, is intended to fill the niche between low-cost, low-convenience, self-moving services like U-Haul and the more expensive and convenient full-service moving and storage companies like Mayflower. Riley is leveraging the Door to Door infrastructure to provide a more convenient moving and relocation solution.
Visionary characteristics
Visionary business leaders like Tim Riley have several characteristics in common.
First, they do not define their businesses in terms of their industries. Mistaking your business for your industry greatly limits strategic choices. Many strategic breakthroughs are the result of cross-industry applications of strategies.
Second, visionary business leaders approach strategy from a place of "not knowing." This requires maintaining an open mind and trusting your employees so you can get your head above and away from day-to-day operational problem solving.
Third, they look for a strategic position that fills a specific market need and provides a direct benefit to the company. By specific, I mean focused and in keeping with the first law of business strategy: You cannot be all things to all people. In Tim Riley's case, he found a solution for an underserved market sector, and at the same time was also able to reduce the price of doing business by not having to make the same costly real estate investments traditionally associated with the self-storage industry.
Riley leaves each of us with the question: What would it be like to rewrite the rules in my industry?
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