On the Right Track
While popular culture has a voyeuristic enthusiasm for reality TV, there is something intriguing about possessing unfettered access to someone's experience. For the next year, I'll be tracking one man's quest to build a thriving business in its very first year. Beginning with this month's introduction to Scott Duffy, 33, and his path to starting Self Storage Capital Group, each installment will offer an insider's look into Duffy's life as an entrepreneur, complete with the ups and downs that path invariably includes.
It was a car accident in the fall of 1990-Duffy's junior year-that forced him to drop out of the University of San Diego. Recovering from two brain hemorrhages and only able to listen to music and tapes, this speech communications major was so excited by the Anthony Robbins program that he sought an internship with the bestselling author and speaker. After impressing the company in interviews, Duffy landed a job with Robbins Research, traveling and promoting Robbins' books and workshops.
Duffy waited six months to fully recover, then embarked on his new adventure in July 1991-leaving college for good. Having always considered himself an entrepreneur, Duffy recalls, "I had the opportunity to meet some incredible people [who] had started successful businesses or overcome incredible adversity. It played a major part in shaping me and what I am today."
After a year with Robbins Research, Duffy left and was subsequently injured in a bicycle accident that left him recuperating for the following year. Then an opportunity to help start a consumer Internet access business in the San Francisco Bay area arose. Although the enterprise ultimately failed, the experience allowed him to become familiar with people and companies emerging in the dotcom world. Duffy stuck through tough times-sleeping in his car for a period of time-to make it in the tech sector. Eventually, he spent a few years helping to launch CBS SportsLine.com, financial news and information site Quote.com, and community and tools site Xoom.com-focusing primarily on sales for each.
After taking time off, Duffy returned to Los Angeles to help relaunch Fox Sports' Internet division. After being promised an entrepreneurial working environment, he pledged two years-despite fears the situation would not be as entrepreneurial as he wanted. Soon after his start in 2001, those fears materialized. Out with his brother-in-law one night, Duffy asked, "What is 180 degrees different from what I do?" His brother-in-law pointed out the window to a self-storage business. Before long, Duffy had commissioned a preliminary market study, the results of which gave him the push he needed to pursue the idea of a real estate investment company specializing in acquiring, developing and managing public self-storage companies.
Preparing the Way
Though Duffy started Self Storage Capital Group in May 2003, he had long prepared himself for the shift. "I spent a year deciding that this was something I wanted to do," reveals Duffy. "[I] was really diligent and methodical [about] how to approach it." Writing a comprehensive business plan, building a team and lining up equity were essential before leaving Fox Sports.
Though self-storage is a $17 billion to $20 billion market, with more than 45,000 storage facilities in the United States, the biggest player-Public Storage-controls less than 5 percent of the market, with the next runner-up controlling less than half that. "It's a highly fragmented, relatively unsophisticated market," observes Duffy. "I see this great opportunity to come into the industry with a sophisticated, methodical way of approaching the business-consolidating mom-and-pop operators to create a larger [operation]."
Now working on closing his first deal, Duffy has ambitious goals for 2004: acquiring one facility and one group, or portfolio, of properties; securing a development deal to build units from the ground up; and finding one major backer and one major bank to finance Self Storage Capital Group. With an office in Santa Monica, California, Duffy has already armed himself with a team of experts in the self-storage field and advisors who have built companies that Duffy would like to model his after. Independent contractors-a real estate broker, a bookkeeper, an attorney, an accountant and a part-time administrative assistant-help him run his business, in addition to a team of professionals who work on a project-by-project basis. Stay tuned for next month's installment, where we'll find out how Duffy was able to finance his startup.