The holy grail for a disruptive business is to tackle an everyday problem that no one has done anything about. Like many of the best startup stories, the idea for bag storage startup CityStasher came to its co-founders by accident.
Matt Majewski was faced with the prospect of travelling from Oxford, where he’d spent the summer doing an internship, to his home in Norwich, by way of a friend’s 21st birthday party in Edinburgh. Not wanting to carry a summer’s worth of luggage to Edinburgh, Majewski asked his friend Anthony Collias if he’d mind storing the bags at his house for the weekend. “Yes, but I’ll have to charge you,” he replied.
“[We realised] no one was innovating in the storage space and there was nothing on offer for just dropping stuff off for a short time,” says CityStasher’s third co-founder, Jacob Wedderburn-Day.
Two years on, the co-founders have finished their degrees at Oxford University and, thanks to £100,000 secured from James Gibson, the chief executive of Big Yellow Storage, are working on the business full-time.
Their initial market research showed that although demand for storage from travellers had increased – thanks partly to the rise in accommodation options such as Airbnb, which don’t let guests store their bags all day – the number of left-luggage facilities had declined. In stations and airports, this is largely because space is at a premium and more commonly leased for retail. The facilities that do exist are expensive – competitors such as the Excess Baggage Company can charge up to £6 an hour per bag.
By comparison, CityStasher charges customers £4 to store a bag for up to three hours, and £6 for between three and 24 hours, plus £5 for each additional 24 hours. It’s also an attractive proposition for the small businesses hosting bags, which are known as StashPoints. There are no upfront fees for hosts and revenue is split with them 50/50.
The firm has a presence in 18 UK cities and Amsterdam, after they were approached by a business wanting to work with them there. They store bags at around 90 small businesses such as hotels or independent retailers that can offer space, long opening hours and security features such as CCTV and a locked luggage room. The company has stored more than 25,000 bags so far (currently averaging 1,500 a week), with revenues increasing by 50% each month.
Building trust has been hard and securing insurance was a make or break obstacle for the startup team. “The obvious challenge with this business is people might question how safe it is,” says Wedderburn-Day. Every bag CityStasher stores is insured for up to £750 and each business can, at their discretion, check the contents of luggage when it is dropped off (but only in the presence of the luggage owner) before the security tag goes on. So far there have been no claims or issues with luggage contents.
Making sure that StashPoints meet basic security requirements, such as having a lockable room, is another important point, Wedderburn-Day adds. “Anything going wrong in that regard would be a disaster so we want to make sure we’re really hot on security.”
Growing the business has also been a balancing act. The vision, Majewski says, is for customers to always be within 100 metres of a site. However, if supply outstrips demand, they run the risk of upsetting established hosts, who are earning revenue from hosting bags. The firm recently employed a sales person to sign up sites in the north of England, but in the early days, it was a laborious task to personally approach hotels, florists, newsagents and barber shops to encourage them to take part.
“We try and be as strategic as possible when we sign places up,” says Wedderburn-Day. “At Kings Cross, for example, we’ve got three near the station and all of them are doing a great level of business. There’s no reason to sign someone else up there until the demand gets to where we need it to.”
But there are ambitious plans to scale CityStasher in the coming months. The team is investigating possibilities for a second wave of investment and are hoping to get £750,000 by the autumn. The money will go on towards launching CityStasher in Europe – primarily in weekend break destinations – developing an app and trialling a service to move bags around London.
“We’re not sure if that would be a full-scale courier service or a delivery system where we’re running, say, 40 routes across London,” Majewski says, adding the idea is to help people make the most of the last day of their holiday.
The team has had some unusual requests already – such as a traveller with diabetes who needed short-term storage with a plug socket for his insulin fridge, and helping a girl set up an elaborate treasure hunt for her boyfriend. The intention, Majewski says, is to be established enough to help with all requests. “You know that feeling you get when it’s late, you book an Uber because you’re desperate to get home, and it’s such a relief to have that on hand? We want to provide a similar feeling.”
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