HAVING worked with space for the past 20 years, Michael Hagbeck realises it’s a frontier with lots of opportunities.
The veteran of several storage solution companies, Hagbeck realised that the sharing economy offered an opportunity for him to involve more people in the process.
Space Next Door (SND) was developed from an idea in 2017 into a website that allows people with unused space to let it out to people in need of storage room.
This could be a room in a house or even a cupboard, but the idea is to allow unused space to be utilised by people who can’t have enough of it.
While it is still in its early stages of activation, Hagbeck sees potential for it to be developed in space-hungry Singapore, and then taken overseas.
Small Spaces, Smaller Outlays
One of the key drivers for the SND project was to break away from big investors, explains Hagbeck, who is also the CEO of self-storage management company Store It! and Minibox Self Storage, a joint venture with Blackstone Real Estate Partners in Hong Kong.
“We want to use technology to reduce our operating costs and scale up operations. We didn’t want to be beholden to big financial investors and large property owners.”
By reaching out to people with spare space in their homes, offices or buildings, the net has been cast wider, across the island. It means greater convenience for those looking for storage space, as they are able to check the app and find a convenient location close by.
“This model allowed us to get investors in small chunks, as and when required. We haven’t grown super fast and have been experimenting with, and upgrading the app. We are looking at going faster now, at lower cost,” Hagbeck explains.
Some of the challenges of being in the blue ocean space is that not everyone sees the horizon or glimpses land on the other side.
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“You have to build in a lot of time for something new – from convincing potential partners to explaining the business model to stakeholders.
“Our investor’s lawyer didn’t understand the structure, which delayed things for months.
“We decided to work with larger partners, but the key personnel in those corporations changed. Things slowed down as we waited for them to catch up.
“Being too patient is a problem.
“A new idea takes a long time to go through bureaucracy, compliance, legal,” Hagbeck points out.
These are just some of the challenges faced by start-up ventures as they venture into new areas of the sharing economy.
Michael Hagbeck was one of the panellists at the recent STORM event Keep It Going: By Design on The Biz Behind The Sharing Economy.