PODS & Red Rover: Pete Warhurst

Pete Warhurst probably would not have picked “entrepreneur” as a career when he was growing up. He loved his job as a firefighter and paramedic and might have done it for life, had a colleague not recruited him to help launch a company to build 911 call systems. After that business sold, Pete began to think about new problems to solve – like a better way to move and store our stuff. In 1998, he began disrupting the self-storage industry with PODS, a system that brings storage containers to the consumer, then transfers them to a warehouse. The business quickly spread from Clearwater, Florida to franchises across the country, eventually selling for about $450 million. But Pete still thought there was a better way to schlep your stuff to a storage facility, so he launched yet another business—Red Rover—that now competes with PODS. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

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• 1:32Guy Raz?

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• 2:14Guy Raz?

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• 3:40Guy Raz?

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• 4:23Guy Raz?

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• 5:07Guy Raz?

  Visit mobili fuels.com for details. A truck pulls up to your house. And on the truck is this like, it's like a giant bed frame. And then this hydraulic thing just like lifts the entire box. And then he essentially pushes the wheels forward and then over the flatbed of the truck. It doesn't look like anything you've ever seen anywhere before, except in the Star Wars film and like the scene where they're in the tundra or something. Am I describing that correctly?

• 5:38Speaker 01

  Yeah, yeah, I think they're hiring.

• 5:50Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:01Guy Raz?

  I'm Guy Raz, and on the show today, how Pete Warhurst wanted to simplify how we store our stuff. So he built an entirely new system called Pods, then launched another moving and storage business to compete with the first one.

• 6:20Guy Raz?

  The United States is a nation of hoarders. The average house contains 300,000 items. And it's estimated that 1 out of 10 Americans pays to rent storage space. Stuff that, let's face it, is probably not worth paying to store. And that's you I'm talking about. I'm not trying to shame you. I also pay for storage. Boxes and crates filled with my kids' first-grade dioramas, and craft projects, and old books we've convinced ourselves we can't part with, and even a dried, pressed rose I wore on my lapel at my bar mitzvah. Yes, that is in storage, my friends.

• 7:03Guy Raz?

  So shame on me. Because one day, long after I die, someone, probably my kids, will have to go through that stuff. And if I'm being totally honest with myself, they'll throw it away. And I will have spent thousands and thousands of lifetime dollars keeping that stuff safe. But none of this is an indictment of the actual storage industry. Because if you think about it, it's an amazing business. For starters, you don't need too many employees. The overhead is relatively manageable, and only a fraction of the storage units need to be rented for you to make a profit. It's why the global self-storage industry

• 7:47Guy Raz?

  is expected to reach a value of $67 billion within the next four years. Now, about 30 years ago, Pete Warhurst was a very typical self-storage business owner. He had a single facility outside Clearwater, Florida. And he wondered, is there a way to build innovation into this business? Could you actually improve the existing model? And one day, Pete got an idea. What if, instead of going to the storage facility, the storage facility could come to you? That was the beginning of an innovation that would transform self-storage, a company Pete founded called Pods.

• 8:31Guy Raz?

  The idea is actually pretty simple in its elegance, but very complex in its execution. The company deposits a storage container in front of a customer's house. The customer fills that container with stuff, and then the company comes to pick that container up, put it on a truck, and bring it to its own storage facility. The idea took off almost immediately, franchising and spreading to locations across the US and around the world. And less than 10 years after he launched it, Pete sold the company for roughly $450 million. But actually, that was not the end, because it turns out Pete thought there were additional

• 9:14Guy Raz?

  pain points in the moving and storage industry that needed solving. So at the age of almost 70, he decided to start another kind of storage business, which he calls Red Rover. But as you'll hear, even before he built either of those businesses, Pete started with an entirely different concept, one that had nothing to do with storage and everything to do with his first love, working as a firefighter and paramedic. Pete Warhurst was raised in a family of four kids on Long Island in New York. His mom taught elementary school, and his dad had what Pete called "a tough career" in the poultry distribution business.

• 9:55Speaker 01

  We used to call him a chicken plucker, but he would go into the city around 2 o'clock in the morning, and he'd come home around 3 o'clock in the afternoon. And they would receive poultry, and all prepared, as far as cleaned and raw, but they'd repackage it, basically, and deliver it to shipyards, hotels, airlines, things like that. And so they were sort of the middleman between the farms and the end users, the high-end users.

• 10:28Guy Raz?

  So he would go into the city every day, and as far as you knew, I mean, did you ever go in with him? Did you ever see?

• 10:34Speaker 01

  Yes, I did. Yes, I did. I enjoyed going in. It was early morning, and they made sure they put me to work, but I want to say there was maybe... Oh, six, seven guys in the, in the actual warehouse repackaging and they had a dozen drivers or so.

• 10:53Guy Raz?

  So your dad was gone when, by the time you woke up and probably asleep, really, by the time you kind of were getting ready for dinner.

• 11:01Speaker 01

  Yeah, no, he, he'd go to bed seven o'clock, he was out at two. There was the occasion that I'd be coming home at two and he'd be going out and he'd just shake his head.

• 11:10Guy Raz?

  When you were in high school?

• 11:11Speaker 01

  High school and after high school, yeah.

• 11:13Guy Raz?

  All right, so you, I think in high school, you got a job at a gas station, which I identify with, because one of my first jobs was at an Arco AM PM mini-market gas station in the San Fernando Valley.

• 11:25Speaker 01

  Yeah.

• 11:25Guy Raz?

  Very important job. I learned how to chop onions at that job. I learned how to make the burgers for the, this is probably a different kind of gas station. Was this a full-service gas station where you worked?

• 11:35Speaker 01

  Yeah, it was full-service, though, when, when I was there, it was unheard of for you to pump your own gas.

• 11:41Guy Raz?

  Right.

• 11:42Speaker 01

  So my primary responsibility was to go out and be pleasant and pump the gas and...

• 11:48Guy Raz?

  Squeegee the windows?

• 11:50Speaker 01

  Yeah. I cleaned the gas pumps when I've got downtime and, and so, yeah.

• 11:55Guy Raz?

  There was something that happened one day while you were working at that gas station, which would have an impact on, on decisions you would make later on. Tell me what, what, what happened?

• 12:07Speaker 01

  Yeah, I was out at the gas pumps, I think I was pumping gas or I was cleaning the pumps. I mean, my, my station was out at the gas pumps, being ready for the next customer. And all of a sudden, behind me, I heard a screeching of the brakes and, you know, a thump and, and, you know, yells and horns and, you know. And I ran up there to see what went on and a little girl had gotten hit by a car. And I stood there and I looked and I really didn't know what to do or how to do it and stuff. And I ran back into the gas station and called the local fire department, which literally was... A quarter of a mile away, you know, a third of a mile away.

• 12:49Speaker 01

  And it was a volunteer department, but they showed up and took the girl off and unfortunately she did not make it. But it was hard for me to watch and not be able to help.

• 13:02Guy Raz?

  You didn't know, like probably most people, CPR or?

• 13:05Speaker 01

  CPR, I don't even think was invented then.

• 13:08Guy Raz?

  Right, right, wow. And seeing that, from what I gather, from what I heard about you, kind of got the gears turning in your head about wanting to be involved somehow in rescue work.

• 13:22Speaker 01

  Right, right. That was life changing. You had to be 18 to join the volunteer fire department and as soon as I was 18, I signed up and I joined the fire department.

• 13:34Guy Raz?

  And what did that, what did that mean? You would spend a night there every other weekend or once a month or how to work?

• 13:41Speaker 01

  No, no. You basically would listen for the fire whistle to go off. At that time, we didn't have pagers or blackberries or anything like that and they hooked into your phone at home and it gave a rapid ring so you knew it was a call. But yeah, you didn't, you weren't obligated to put in any time. I always went on training drills and took the first aid courses and went to all the meetings and I was deeply ingrained in it.

• 14:13Guy Raz?

  So it sounds like this was kind of a turning point. You wanted to be a fireman. I mean, I read that you wanted to join the New York City Fire Department, but I guess that process was like moving slowly for you. So then what? You began to look elsewhere?

• 14:33Speaker 01

  Exactly. I heard that they were hiring firefighters down in Florida and my best friend at the time had moved to Florida and I said, you know what? I'm just gonna do it. And I packed up, I had an MGB, which is, you know, like a little Triumph, I don't know if you know the car or not, but a very small.

• 14:51Guy Raz?

  Sure, the Triumph, yeah. Oh, they're great cars, yeah.

• 14:54Speaker 01

  Everything I owned went in that MGB and I... On October 6th, I arrived and by November 1st, I was on a paid department in Largo, Florida, which is-

• 15:05Guy Raz?

  In Largo, Florida?

• 15:06Speaker 01

  Yeah, right near Clearwater.

• 15:08Guy Raz?

  It's like one of those sliding doors moments, you know? Had you gotten a job in New York, your life would have been completely different. But you ended up going to Florida because there was demand for firefighters.

• 15:19Speaker 01

  Exactly.

• 15:19Guy Raz?

  So what, tell me a little bit about that time. I mean, what did that entail? You would live in the fire station or you'd sleep there, what, two, three nights a week?

• 15:29Speaker 01

  We were on a 24/48 shift. So that meant you showed up at 7 o'clock in the morning, you went home 7 o'clock the next morning, and then you had two days off. And I remember thinking to myself, you know what? They're still looking for a lot of firefighters, right? They had a big hiring going on and I thought to myself, I'll work the second day for free. I was enjoying myself so much, you know?

• 15:50Guy Raz?

  Wow.

• 15:53Guy Raz?

  What did you, what was it about being a fireman that you liked so much?

• 15:57Speaker 01

  You know, my first day on the job was, as I said, November 1st, 1973. The night before, a tornado went through and wiped out mobile homes, killed a few people unfortunately. And I'm in the state for three weeks and I show up on the job the very first day. I go out and I look at this devastation and I think to myself, holy cow, what have you gotten yourself into, you know?

• 16:24Guy Raz?

  Yeah.

• 16:24Speaker 01

  But, you know, I went through the training. The fire chief came out one day and they had a mandatory meeting at night and he said, listen guys, he says, the mayor wants us to get a paramedic program going in the fire department. He says, I gotta tell you, I'm here because he told me I have to be here and I'm asking if you guys, if anybody wants to go to paramedic school, but I want you to know, I hate the idea, I don't want paramedics, I don't support paramedics, but I'm asking if anybody wants to volunteer. I stood right up and threw my hand up and I said, I'm in. But that was my real passion. I mean, fighting fires is one thing and, you know, you're saving property and stuff, but going through paramedic school and-

• 17:08Speaker 01

  Saving lives is something completely different. I was one of the first paramedics in the state. You know, I want to say in the first 100 paramedics in the entire state.

• 17:16Guy Raz?

  Wow. Wow. Because this was not, this was not, I mean, EMT is like, that's a thing now. That didn't exist. Paramedics, that was a new concept in 1975.

• 17:28Speaker 01

  Yeah. Yeah. I tell people that if I could go back and do it tomorrow, I'd do it in a heartbeat. You know, it was the most rewarding thing I ever did in my life.

• 17:36Guy Raz?

  All right. So you're living in Clearwater. And were you, were you married at that time?

• 17:42Speaker 01

  When I first joined the fire department, I was not, but I did end up getting married. Seventy-nine?

• 17:50Guy Raz?

  Got it. Got it. Okay. So, so you're, but you're, you're a young guy. You're in your twenties.

• 17:55Speaker 01

  Right.

• 17:55Guy Raz?

  And, you know, you've got a great career going. But this is actually where your first business starts to get launched. And I need to preface this by explaining to everyone, including myself, because I didn't know this, that this is like the, this is like the late 1970s, when the concept of 911 is relatively new. That even in the late 70s, I think only like, one quarter of Americans had access to 911 systems. Like, you still had to dial a, like, a seven-digit number to reach the fire department.

• 18:28Speaker 01

  Correct. Correct.

• 18:30Guy Raz?

  All right. So, at this time, right, these 911 systems are rolling out across the country. And at some point, I guess, your fire chief comes up to you and asks if you want to help with the, the new system for your area, right?

• 18:47Speaker 01

  Exactly. So, the chief came to me and said, Pete, would you be interested in helping me implement the 911 system? I said, well, sure. I mean, I'm willing to look at it and stuff. And he says, well, what do you know about computers? And I said, not a damn thing. He said, are you willing to learn? I said, sure. So, the, the goal was, we had, I think it was 23 or 21. Fired districts within Pinellas County, which is St. Pete, Colorado, basically. And I think there was 21 independents. So, anyway, the problem with 911 is, is they're going, people are going to be able to dial that three-digit number, and it's got a ring somewhere.

• 19:26Guy Raz?

  Yeah.

• 19:27Speaker 01

  And, you know, they didn't know where to ship that call, or whether, to the 23 or 21, whatever it was, department. So where do I, where do I transfer that customer to?

• 19:37Guy Raz?

  Because up until that time, every department had its own dispatch.

• 19:40Speaker 01

  Exactly, exactly.

• 19:41Guy Raz?

  There was 21 dispatches.

• 19:43Speaker 01

  Yeah, yeah.

• 19:44Guy Raz?

  Let me try to understand. I want to try to figure out how, I want to figure out how you started to learn about this, because you were not, as you say, you were not a computer guy. The, I guess the county hired consultants to help them create some kind of automated or computerized processes. The early, this is the late 70s, so computers are, this is, you know, we're talking about the Stone Age compared to today.

• 20:06Speaker 01

  Exactly.

• 20:07Guy Raz?

  But, but I think there was a guy that they hired to kind of write the software, who was an outside consultant.

• 20:14Speaker 01

  Right. His name is, is Bob Timberlake, and he has an electrical engineering degree. He was working for a power company and had a software company called Econometrics Associates.

• 20:30Guy Raz?

  So he had the knowledge, and you were paired up with him to kind of learn this system and then help, help implement it? Is that more or less what happened?

• 20:39Speaker 01

  That's exactly what happened.

• 20:41Guy Raz?

  Yeah, wow.

• 20:42Speaker 01

  Again, this is a guy that didn't know anything about computers, but we were actually setting off printers in the fire stations, opening fire station doors, alerting bridges that the fire truck is coming, have the bridge down. And so we automated a lot of processes, and we literally took a dispatch process down from several minutes to, you know, tens of seconds, you know, 15, 20, 30 seconds to get the appropriate equipment on the road.

• 21:11Guy Raz?

  All right, so you are... Working on this system and clearly mastering it. But how did you, how did you start to think about this as a business? Did Bob approach you? Did you approach him? Did you approach somebody else and say, hey, you know, maybe we should roll this out around the country?

• 21:28Speaker 01

  Well, Bob was definitely smart enough to have retained the rights to the software.

• 21:35Guy Raz?

  Oh, he kept, he kept the rights to this thing that he created?

• 21:38Speaker 01

  Correct, correct.

• 21:40Guy Raz?

  Very smart. So he didn't, he didn't, it wasn't the intellectual property of, of the county?

• 21:44Speaker 01

  Correct. As it turned out, you know, as, as people heard about this new system and 911 was being installed around the country, they came from all over the country, all over the world to see this. So we were sort of on the bleeding edge and they'd either approach Bob or they'd approach the fire chief that, you know, and say, you know, how, how can I get this in my city? And Jerry being a progressive thinker.

• 22:10Guy Raz?

  Jerry was the fire chief?

• 22:11Speaker 01

  Fire chief, yeah. I'm sure said, Bob, you know, why don't we sell this and Pete can take some time off from work and go down there and help them get it set up and we can make some bucks on it, whatever it is.

• 22:23Guy Raz?

  So 1985, you leave the fire department, essentially. You resign.

• 22:29Speaker 01

  Yes, I did resign and that was one of the toughest decisions of my life, but I sort of saw where this business was going and, and, you know, you think about your family and, and, you know, your career path and I was always financially driven, you know, to, to raise money and live well. So I made a very, very tough decision and it worked out well for me.

• 22:51Guy Raz?

  And it, and so essentially you, along with Bob and Jerry, the three of you start this business.

• 22:59Speaker 01

  Exactly.

• 23:00Guy Raz?

  This was called 911 EAI Systems and the idea is to replicate what you did in Pinellas County in other places in the US.

• 23:08Speaker 01

  That's right. And absolutely had a tremendous amount of people wanting to come see the product. But we would also go to trade shows and, and, you know, give a, Jerry would give a talk and we'd have a booth set up and so.

• 23:24Guy Raz?

  Initially imagining it was you were expanding around Florida, right?

• 23:29Speaker 01

  Uh, yeah, the first three, four, five markets, I guess, were around Florida, but we ended up going nationwide and up into Canada.

• 23:35Guy Raz?

  That's incredible. I mean, within five years, you you become, I think, the second largest provider of of 911 services in the US. I mean, so I mean, so demand must have been really high, but but I can also imagine that you guys had a hard time keeping up with it, right?

• 23:55Speaker 01

  Without a doubt. I mean, you know, it was easy to sell because it was a great product and we had professionally great hardware and all this. But the installation period could run a minimum of a year and often ran two and three years to get the equipment up and running, the database loaded, the people trained, the network put in place. And so, you know, our backlog of installation grew and grew and grew and therefore the consumer was was getting more and more frustrated with us. So our growth was almost our demise.

• 24:32Guy Raz?

  Did you feel that? You were not the CEO, right?

• 24:34Speaker 01

  I was not.

• 24:35Guy Raz?

  You were an officer of the company, but did you feel that stress?

• 24:38Speaker 01

  Oh, yeah. Oh, yeah. More than anybody, because that was my job. That was my half of the bill. A third of the business was to get the systems up and running. You know, Jerry was the sales guy and he was having a ball doing it, right?

• 24:50Guy Raz?

  But he was he was like, come on, I'm selling these things. Come on.

• 24:54Speaker 01

  Exactly.

• 24:55Guy Raz?

  So you had the cash, but you didn't you couldn't actually fulfill these orders as quickly and probably some of these customers were complaining about how long it took.

• 25:03Speaker 01

  Absolutely. And and, you know, promises and commitments were made of what the system did or could do that, you know, weren't always 100% there, you know, we could do 80% of what they asked for. And so now I'm facing them and say, well, this is what we thought you bought. It was it was a tough business.

• 25:24Guy Raz?

  So at the age of 33, you joined this business and It sounds like for seven years, you were probably on the road all the time, just living in airports.

• 25:35Speaker 01

  I was. I was.

• 25:37Guy Raz?

  And how was that for your personal life? That's hard.

• 25:41Speaker 01

  Really, really hard. No doubt about it. You know, I was traveling virtually every week. I remember waking up many mornings and thinking, where am I? You know, couldn't even remember what town I was in, no less what hotel or what I was going to do the next day. So that obviously puts a strain on my marriage and on a family situation. So and then when I did get home, I was exhausted, right?

• 26:05Guy Raz?

  Yeah.

• 26:06Speaker 01

  So, and we didn't, we didn't, the business didn't last that long. We were fortunate that one of the Baby Belles came along and wanted to buy the business. And so that gave us our exit. But I do believe we would have cratered had we not sold.

• 26:22Guy Raz?

  Had you not sold. So 1992, you sold to?

• 26:25Speaker 01

  Bell Atlantic.

• 26:26Guy Raz?

  Yeah, right. Today, part of Verizon. And they made you a pretty good offer, a very good offer. Because what you had, both guys had created, the IP and the network was very, still very successful. There was a business to build around it.

• 26:45Speaker 01

  Absolutely. I mean, they saw the potential and they wanted to expand for whatever reasons and they came in and they made us a generous offer. You know, you're talking to a guy that, when I started the fire department, I think I was making $30,000 a year or something, you know? And walked away with seven digits.

• 27:06Guy Raz?

  Yeah. You were 40.

• 27:08Speaker 01

  I was 40. I retired at the age of 40. Thought the...

• 27:11Guy Raz?

  You retired at the age of 40. You basically had made enough money where you didn't have to work for the rest of your life at that point.

• 27:19Speaker 01

  That's true.

• 27:20Guy Raz?

  You know, what do you do? What'd you do?

• 27:23Speaker 01

  Yeah, I mean, you know, we bought a new home and I played a lot of golf. That was one of my hobbies. Did a little boating. I had a sailboat at the time and a little travel, but started to get bored.

• 27:38Guy Raz?

  Yeah.

• 27:39Speaker 01

  It's not what it's cracked up to be, though.

• 27:43Guy Raz?

  Right. Right. What did you decide to? I mean... What did you sort of start to think about in terms of the next thing? Because it wasn't that long before you kind of, well, I guess it was a couple of years. What other ideas were you thinking about?

• 27:59Speaker 01

  Yeah, I don't know that I really thought about a whole lot. I mean, back in that era, you heard about and read about mini storage. And I started to investigate that.

• 28:13Guy Raz?

  Why mini storage? What was attractive to you about mini storage?

• 28:17Speaker 01

  Well, the number one thing is that you only need one or two employees. So I thought, OK, that's a lot better than where I came from, right? So having one or two employees, it was a recurring revenue. You know, you didn't have one key customer. You had 500 customers. So if you lost, you know, five or 10 of them in a week, it's no big deal. You replace them. You know, it was a high return. I mean, the margins were good. And I just started looking at it. And out of coincidence, you know, an eighth of a mile from my house was a four acre, three acre piece of property that was sitting there vacant. And I thought, well, what if I put in mini storage?

• 28:59Guy Raz?

  And then people could store their stuff. And it's great because you're just getting money in the door. I mean, the upfront costs are high because you've got to build it. But then they're basically just like chain link fences, right?

• 29:12Speaker 01

  Well, it's a traditional mini storage. So you have the little storage rooms, if you will, that you would rent out.

• 29:19Guy Raz?

  Right, OK. So basically, you bought this piece of land and you built this storage center. And did you finance it yourself?

• 29:28Speaker 01

  Yeah, I did. The piece of land was owned by a gentleman that lived in the community, a member of the same golf club.

• 29:40Speaker 01

  And I went to buy it and when he asked me what I was doing with it, with it, and I told him I was going to build a mini store. He says, well, I don't want to sell it. I want to be your partner. So, you know, I could care less. You know, at that point I was just looking for something to do. So I said, sure, you can be my partner.

• 29:54Guy Raz?

  Yep.

• 29:55Speaker 01

  Um, Roy Courtney was his name.

• 29:57Guy Raz?

  So the two of you basically financed the construction of a warehouse on the land?

• 30:02Speaker 01

  Exactly.

• 30:03Guy Raz?

  Wow. How much did that cost? Do you remember? Is it, is it a very, I mean, it's Florida, so land was cheaper, is cheaper in Florida than other parts of, I'm in California, for example, where it's not cheap. But how much, do you remember how much it cost to set this whole thing up?

• 30:17Speaker 01

  You know, I want to say the construction for the, the units themselves was like under a hundred dollars a foot. But I want to say all in, we had just over $2 million in it between the land and the, and the buildings.

• 30:30Guy Raz?

  So this was a, uh, I mean, this wasn't a crazy investment. I mean, this was, and you, you knew, you, you did the math. You knew that the, the math of a storage unit was going to bring in a profit relatively quickly.

• 30:43Speaker 01

  Correct. And we were in an affluent community and, um, you know, and everybody needs storage, especially in Florida where you don't have basements and, and.

• 30:53Guy Raz?

  Right.

• 30:54Speaker 01

  You know, so I was very confident and it was convenient because I could walk to it, you know?

• 30:59Guy Raz?

  People don't have basements in Florida because the water table is high?

• 31:02Speaker 01

  Correct.

• 31:02Guy Raz?

  So that's actually amazing because the storage business, like Florida was designed for the storage business.

• 31:10Speaker 01

  Um, they certainly do well here. And as, as Americans, uh, we are reluctant to throw things away, you know?

• 31:18Guy Raz?

  I know, I know. It's terrible. Um, all right. So you, you guys start this business and, I mean, were you pretty much almost like 100% booked? Is it like a hotel where you're like, oh, we're 90% booked or 100% booked or?

• 31:34Speaker 01

  You know, during my tenure, I don't think we did get to 100% um, before we actually had a CEO and could open. I started to look for a second site because I was so confident I had learned, you know, the idiosyncrasies of it. I had successfully built the unit and I knew I could get more financing to do another one.

• 31:53Guy Raz?

  All right. So what happens?

• 31:55Speaker 01

  Well, if you know Pinellas County, St. Pete, Clearwater, it is very, very densely populated. And so land in general is scarce, especially when you're looking for, you know, a three acre, four acre parcel that's on a main artery, you know, that has the right zoning. So that was difficult. And then if you did find one, you had to do that same math where where's your closest competitor? And typically I'd find something and across the street was a competitor, you know, so I really had a hard time and never did find the second parcel. We finally did open and we were growing quickly, but I couldn't find that next piece and continued to drive around looking.

• 32:38Guy Raz?

  Wow. But this was supposed to be a lifestyle business. This was going to be passive income for you. You'd only have two or three employees that you really didn't need to manage them because it was really self-storage. This was going to be passive income and you could kind of, you know, dip in and out, more or less?

• 32:54Speaker 01

  Exactly. As we started to rent up and I got more and more excited and more anxious to find another lot and just never did. Eventually I quit looking because I came up with a new idea.

• 33:10Guy Raz?

  When we come back in just a moment, how Pete takes his new idea, buys a bunch of two by fours from Home Depot and starts to disrupt an entire industry. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 33:34Guy Raz?

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• 34:19Guy Raz?

  and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 35:01Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization and how to position your business to prosper from it.

• 35:46Guy Raz?

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• 36:06Speaker 02

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• 36:42Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1997, and Pete Warhearth is hoping to expand his fledgling storage company. So he's looking around Pinellas County, Florida, for a second facility. And kind of out of the blue, he gets an idea for a completely new business.

• 37:03Speaker 01

  Literally driving down the road, looking for a piece of property, frustrated and stuff, and just one day he said, what if we brought the storage to the house? And you sort of scratch your head and think, how would you do that type thing? I was intrigued by the concept, and the internet was pretty young back then. And I got on the internet and tried to see if there was anybody out there doing something like that, and I didn't find any.

• 37:30Guy Raz?

  Doing what? But back up, because this is a big idea, Pete. You're talking about a revolutionary idea here. I mean, we have to just pause and recognize this moment. How does, I mean, does the idea come to your mind? Does it come to somebody else's mind? Are you talking with somebody about it?

• 37:47Speaker 01

  Yeah, I was actually driving with Roy Courtney, and we were talking about another business that he had invested in that was picking up medical waste in a container and stuff. And I was envisioning the truck, and I'd seen the trucks around and stuff. And I said, well, there's a truck. How do we do this? And I said, What if we bring the storage to the house? It was that simple. I mean.

• 38:13Guy Raz?

  What if we bring the storage unit to the house? That was, that was the question.

• 38:17Speaker 01

  Yeah, that's it.

• 38:18Guy Raz?

  All right, now, just to, to put this in context, there have been, for a long time, on construction sites, huge containers where waste and stuff is just dumped, right? Especially demolition stuff dumped into the container. And then eventually a truck comes, picks up the container, and then takes it to a dump. So that concept was out there. But your, essentially, what you started to think of was, wait, what if we take that concept and turn it into a storage unit in front of someone's house that we just drop off and then pick up?

• 38:56Speaker 01

  Exactly, yeah. And I definitely looked at the, the big steel cargo containers. And I thought to myself, you know, that's not the right container. I said, well, my wife, I used yours as the litmus test, right? Well, my wife put our stuff in that, in that steel, rusty steel container. And I said, no, that's not the right container for us. And internet didn't really provide anything. And I thought, well, you know, I'm sort of into building and things. I bet you I can build a box. And I knew that, I knew that the most popular mini storage was a 10 by 10. So, you know, I thought, well, what if I do a 12 by 8 box, which sort of met the dimensions of plywood? I felt my wife would put our stuff in these wooden,

• 39:39Speaker 01

  nice wooden boxes that were clean and fresh. And, and so the next challenge was, you know, how do I deliver them? And then I had to, before I did any of that, including build the boxes, I had to say, you know, what, what do the economics look like?

• 39:53Guy Raz?

  Right. Did you, when, when you started to think about this,

• 40:00Guy Raz?

  did you, did you continue, I mean, did you say, all right, I mean, if I'm, if you were serious about this, right? About bringing the storage box to someone's house, that's a different business. That's a completely different business. It requires a whole new set of, of, of capital, right? To, to make it happen.

• 40:19Guy Raz?

  Did you sell the mini storage site that you had or did you keep that going?

• 40:23Speaker 01

  The answer is yes, eventually I did sell it, but not right away. I wanted to explore and research the concept. And so I, you know, it was probably a year or so after I came up with the idea before I started to try and sell the mini storage.

• 40:40Guy Raz?

  Right. So the first challenge is you got to come up with the box, right? And so you knew how to build things, right? You know how to build things. So did you do it yourself? Did you bring some friends in? What, how did you just build a prototype?

• 40:54Speaker 01

  Well, you know, Dave Revell, my paramedic partner and the fire union president and stuff, helped me build the mini storage. And then he, he was with me then. And so I was bouncing these ideas off of him. And he said, well, let me draw up a box, you know, and he probably is a much better woodworker than I am. But he optimized the dimensions of off the shelf materials and said, we can build a box this way. And we think it'll hold up. And, you know, we can build 100 of these. And I could do the math and say, okay, that's what it's going to cost to build 100 of these things. And so that's what we set off to do.

• 41:36Guy Raz?

  Did you like go to Home Depot?

• 41:38Speaker 01

  Mm hmm.

• 41:38Guy Raz?

  Yeah, I just, you just went and bought like plywood and, and

• 41:45Speaker 01

  Two by fours.

• 41:45Guy Raz?

  And where did you, where did you build them?

• 41:48Speaker 01

  Um, you know, we, we started building the first one in another firefighter buddy of mine in his driveway. We started to build the boxes there and realized that we couldn't build 100 boxes in his driveway. So I rented a warehouse and we opened up a little production line that OSHA would have put me in jail for if they had come and inspected us.

• 42:14Guy Raz?

  Wow. All right. So you guys build these. And the idea is you're gonna try to start a business where you bring these boxes to people's homes. They fill them up with their junk or stuff. Let's not call it junk. They're prized possessions.

• 42:29Speaker 01

  A lot of times it's junk.

• 42:30Guy Raz?

  A lot of times junk. And then that box is going to be picked up, put on a truck, and brought to a storage facility. So completely new model. But how are you going to pick the boxes up and drop them off, right? These are heavy plywood and steel storage containers.

• 42:50Speaker 01

  Right. Yeah, that unit was probably pushing 10,000 pounds when it's loaded. So that was a challenge. You know that one. We looked at off-the-shelf stuff. I looked at the, you've probably seen cranes on the back of trucks that can pick up and offload with a crane.

• 43:07Guy Raz?

  Right.

• 43:08Speaker 01

  You know, with that system, I said, geez, you know, that's gonna go up with the power lines or trees and everything else. I discounted that.

• 43:14Guy Raz?

  Trying to lift that with a crane and it's dangling and that's just a recipe. Okay, so that was not gonna work.

• 43:19Speaker 01

  And looked at the roll-off, you know, the tow trucks that tilt beds. The same way the steel cargo containers get delivered, you know, they tilt them off and roll them off and stuff.

• 43:31Guy Raz?

  Right.

• 43:32Speaker 01

  Some people use that methodology today. My concern with that was twofold is number one, you gotta put them on some number of degrees, 30-degree angle. And, you know, if people haven't packed them and tied the goods down well enough, they're gonna break. Things are gonna tumble, right? It didn't seem logical to tilt it. The leading edge, when you're redelivering it, the leading edge hits the driveway first, and then you pull the truck forward and the last six inches or so, the unit drops around.

• 44:01Guy Raz?

  You're gonna break all my glasses. My China.

• 44:05Speaker 01

  Exactly. So I saw a liability written all over that methodology.

• 44:09Guy Raz?

  So what? What do you do? I mean, this is, this sounds like a pretty insurmountable challenge, right? Like, how are you going to bring a container to someone's house, lift it up vertically so it doesn't break anything, and then carefully place it on the back of a truck, and then drive off? I mean, if all the stuff available was not gonna work, it seems like game over.

• 44:31Speaker 01

  We had to figure it out. And...

• 44:35Speaker 01

  The same guy that was building the original container went to him and he's very, very mechanically inclined. He's with me again today. He was one of the first people I met when I moved to Florida and we've been friends for 15 years.

• 44:49Guy Raz?

  What's his name?

• 44:50Speaker 01

  Roy Hensler.

• 44:52Guy Raz?

  All right. So you find this guy, Roy, right?

• 44:55Speaker 01

  Right.

• 44:56Guy Raz?

  To help and you go to him and you say, hey, what do we do here?

• 44:59Speaker 01

  Right. He was involved in building the boxes and we started talking about it and, you know, and so we went through version after version after version after version. And I think even today they still make minor tweaks to it, but we ended up building a lift system that looks a lot like a bed frame, you know, with the posts and the rails and stuff. And somebody fondly calls it Podzilla. It evolved into a piece of equipment that has never dropped. They've done over 4 million pickups and deliveries. They've never dropped a container, never had a bottom fall out of a container. So the containers were built

• 45:40Speaker 01

  well and the machinery was built well. And that's a pretty good testimonial.

• 45:45Guy Raz?

  Right. I wanted to, I want to describe this, this truck because I've used pot, what would become pods. I've used it before and I think people, a lot of people listening have. It's basically a truck pulls up to your house and on the truck is this like, as you say, it's like a giant bed frame and the bottom of the, you know, with the mattress frame, right?

• 46:08Speaker 01

  Right, right.

• 46:09Guy Raz?

  And then, and it comes, it's sort of, it's sort of is lowered and then it's rolled off on these giant tires and then over, over the pod box and then the driver like hooks it, hooks a bunch of steel chains around the pod box. And then this hydraulic thing just like lifts, I don't know if it's hydraulic, I'm assuming it is, lifts the entire box and then the, and then he essentially pushes the, the entire thing, right? I think they push the wheels forward and then over the flat bed of the truck and then carefully lower it. Am I describing that correctly?

• 46:49Speaker 01

  Yeah, yeah. I think they're hiring.

• 46:54Guy Raz?

  But it is, it is the weirdest thing because it doesn't look like anything you've ever seen anywhere before, except in the Star Wars film. And like, you know, the scene where they're, you know, just, I don't know, in the, in the tundra or something.

• 47:08Speaker 01

  Yeah, I mean, we were able to get several patents awarded for it, so it was obviously unique.

• 47:15Guy Raz?

  Right. So you have this very, two big challenges. First, how do we build a box? And then how do we get the box to the customer and then get the box back? Now, you've solved those two challenges, but, but you've got another enormous challenge, which is, this is going to be really expensive. I mean, you just, you've got this mini storage company, it costs you $2 million to build, you're getting a nice, making a nice kind of passive income from it. You know, you made quite a bit of money from the sale of that first business, but not enough money to finance a company like this, that's going to require this kind of capital. I mean, did any of that in any way intimidate you? Because you would have to manufacture these, this truck and the boxes.

• 47:57Guy Raz?

  You're talking about tens of millions of dollars.

• 48:01Speaker 01

  It, it definitely caused sleepless nights. I did venture into it, you know? Let's face it, before I even spent a dime, I tried to model it out, financially model it out, and, and the economics were very compelling, you know? The, the way I looked at it, back in those days, I could rent a warehouse for $5 a square foot. And this warehouse was 30 feet high and, you know, a few columns in it and stuff.

• 48:29Guy Raz?

  So you could stack the boxes?

• 48:31Speaker 01

  I can stack the boxes, right? So I'm selling, I'm renting the boxes for virtually $15 a square foot, I think is the number I was using back then. And I could stack them three high, so I'm generating $45 a square foot for what I'm paying $5 a square foot. So I said, those economics work, right? You don't have to have an MBA to figure that one out.

• 48:50Guy Raz?

  Wow. I want to back up for a sec because I know you officially launched the company in 1998. And you call it PODS. And I think that stands for...

• 49:01Speaker 01

  Portable On-Demand Storage.

• 49:03Guy Raz?

  Portable On-Demand Storage. Brilliant name, PODS. It's a pod. It's a pod in front of your house. And it's on-demand storage. And so with the $7 million, you were able to launch it in Tampa Bay, right?

• 49:19Speaker 01

  Right.

• 49:19Guy Raz?

  But how are you going to finance this business? I mean, how are you going to finance this idea? You've got to put a lot of cash up front to make enough units. And not only do you need the warehouse, but you need the trucks and you need the boxes.

• 49:33Speaker 01

  And the employees and the factories.

• 49:36Guy Raz?

  And this is going to be heavy-duty, a lot of employees, not one or two or three like your mini-storage.

• 49:41Speaker 01

  Exactly.

• 49:42Guy Raz?

  This is a big headache.

• 49:44Speaker 01

  Yeah. You know, I financed the beginnings of the Tampa Bay area on my own. But that was quickly drying out, as you are articulating. But you know, I was fortunate. I had a lot of high-net worth friends. And so I did a friends and family round. And actually went to a dear friend of mine that was a doctor. And he took it to his accountant, who took it to somebody else. And anyway, one of the gentlemen that got involved actually ran a full-fledged business model on the business.

• 50:25Speaker 01

  And came back fairly astonished at what this thing could grow to be like. And so I did my first round of capital raise. I think I raised $7 million on the first friends and family round.

• 50:38Guy Raz?

  And was that enough to prototype or build the first truck?

• 50:42Speaker 01

  Oh, yeah. The trucks were built. There were a lot of materials, but we were building them ourselves, buying stock trucks and building them ourselves. And so we could build them and we could finance them. That's an asset that we could finance. The asset we couldn't finance, we leased the warehouses. But the containers, you take a wooden box that some guy built in his driveway to a bank and say, "I need to buy 10,000 of these," or "build 10,000 of these." They look at it and say, "What am I going to do with that thing if you don't make it?" Right? And of course, nobody had ever heard of portable storage before this time. And so financing those containers was a bear and all virtually impossible,

• 51:24Speaker 01

  virtually impossible without personal guarantees and things like that. So that was the the the real weightlifting is is getting those taken care of. But uh, we we did raise enough money and Tampa Bay grew. Uh, we started in Penaltz County and spread over to Tampa and stuff. And, you know, I tell people, one of the reasons, three, three major reasons why pods grew and was so successful. And number one is we dropped right in between two major industries, the full service movers, the Mayflowers, the Allies, those those guys.

• 51:58Guy Raz?

  Yeah.

• 51:59Speaker 01

  And the truck rental people, U-Haul. There, if you think about it, back in those days, before portable storage, if you went to move from house A to house B, you had those two options.

• 52:09Guy Raz?

  Yep.

• 52:10Speaker 01

  Neither of those two options had or even have uh, great reputations, right? I mean, the the the not the best experiences in the world.

• 52:20Guy Raz?

  Mm hmm.

• 52:21Speaker 01

  So we disrupted an industry, moving and storage industry with a a new concept that was price point in between them. I had a lot of flexibility. Uh, and so that was step one. Step two, we were sticking these things in people's driveways and they were huge billboards. You know, think of another business, you can put a billboard in in somebody's driveway

• 52:42Guy Raz?

  Right. It said pods, it would say pods in giant letters on the box.

• 52:46Speaker 01

  Exactly, exactly.

• 52:48Guy Raz?

  With a number.

• 52:49Speaker 01

  Exactly. And so, um, you know, so we were putting billboards in in residential communities, but we disrupted an industry with an intuitive product and we did it in a tourist community. So people would come into Tampa Bay on vacation, drive down the street or past the hotel or past the guy, whatever it is, and see these boxes. And they'd say, I get it. I get it. You know, and literally they they uh, stopped their vacations and came and visited us.

• 53:16Guy Raz?

  And I'm just curious. You were able to do this, how many trucks did you have to build to make it work for the first facility?

• 53:25Speaker 01

  Yeah, I insisted that we had two primarily because if one broke, you had to have a backup, right? So I insisted that we started with two. I want to say Tampa Bay now has 40, 30 to 40, somewhere in there.

• 53:41Guy Raz?

  Okay, so for it to work, you had to have one to two because it depends on how many pods you're picking up and dropping off. You had to lease the warehouse, which you found, and these are like Costco-sized warehouses?

• 53:54Speaker 01

  I started smaller than that because I thought I was only going to have 100 boxes. So stacking them three high, I didn't need Costco.

• 54:02Guy Raz?

  Got it. And how did you get, attract customers? I mean, did you advertise? Did you run any ads or anything like that? Because you have this business and how do you introduce this concept to people?

• 54:15Speaker 01

  Yeah, and cable TV was just sort of becoming of age or had just become of age. And then there was this new channel, Bay News 9 in Tampa Bay, which was just coming out at that time, and it was a 24-hour news channel. And they came to me and they pitched me to advertise on Bay News 9. They said, "We can control down to the neighborhood where you advertise."

• 54:43Guy Raz?

  Yeah.

• 54:44Speaker 01

  But what was interesting, before I did that, I actually was doing radio and I had my very first ad on the morning commute. I don't remember what that cost me, but we were all sitting around, listening to the ad and stuff, and anxious to see if we got any response. And we got five, six, seven phone calls off that first radio ad. And two of the people said, "Tell me more about this. This sounds like an interesting business. I may want to use you." And the other four or five people that called said, "I want to invest in your business."

• 55:15Guy Raz?

  Wow.

• 55:17Speaker 01

  And that just threw me back. You know, I thought, hmm, you know, I'll make a note of that one, right?

• 55:22Guy Raz?

  Yeah, yeah, but you didn't necessarily have to to take those investment offers, right? Because early on, I think like, less than a year in, you you were able to start growing the company in other ways, right?

• 55:37Speaker 01

  Exactly. The way to grow a business without capital is through franchising. Franchising is really a financing tool. So we started a franchising program and people saw it and said, I'm going to take this back to Indianapolis. I'm going to take it back to, you know, Baton Rouge, wherever it is, and open it up. And so we we started a franchise business and we started selling those, which were become immediately profitable for the parent company because you really have no cash out, you collect for services and licenses and royalty fees and things like that.

• 56:13Guy Raz?

  Yeah.

• 56:14Speaker 01

  So that's, you know, that's how we got around the lack of capital.

• 56:17Guy Raz?

  All right. So you are, this concept really kind of starts to take off in and around Sarasota, the Sarasota area, where you had your, I think, your first.

• 56:27Speaker 01

  First franchise.

• 56:28Guy Raz?

  That was the first franchise location, but it really starts to take off. Meantime, you start to run into problems that many years later, companies like Airbnb and Uber would run into, which is municipal regulations, first in Tampa, the Tampa Bay area, because they were saying, people started, there were people complaining about these boxes, these pods, sitting in front of their homes or their neighbors' homes. And then they had these big words and pods on the side.

• 56:56Speaker 01

  Billboards.

• 56:57Guy Raz?

  And people were saying, there's a billboard. And then the city council in Tampa Bay was saying, and these are billboards. So tell me a little bit about some of that pushback.

• 57:05Speaker 01

  Yeah, no doubt. I mean, it's an industry that should be regulated, and it is. I was disappointed because Clearwater is where we started.

• 57:16Guy Raz?

  Yeah.

• 57:17Speaker 01

  My argument with them was that you guys don't like mini-storages. My mini-storage I built was in Clearwater. And, you know, they just don't like mini-storage. They take up nice highway frontage and they're not that appealing or attractive. And so they really try and regulate those out of being able to do it, the zoning and so forth. And then I come up with this business and I say to them, you know, listen, guys, you don't want mini storage. I'm taking the mini storage business and I'm putting it back in the industrial parks where it belongs and getting it off your highways. Why are you giving me a hard time, right?

• 57:53Guy Raz?

  Yeah.

• 57:55Speaker 01

  To this day, I think Clearwater is still the hardest city to do business in.

• 57:59Guy Raz?

  Because what were the, the issue was there were, there were all kinds of rules around, like how long these pods can be in front of the homes or sometimes they're in driveways, but sometimes if there's no driveway, it's on the sidewalk or it's on, it's on the, along the sidewalk. And the signs were big. People didn't like the, the word pods in big letters in the signs and then the city, you know, argued, hey, this is a violation of our billboard rules. And, and, and so how did you guys deal with that?

• 58:27Speaker 01

  Yeah. I mean, it, it was a chore. We worked with the city and, and, you know, tried to present our arguments. You know, truth be known, if I parked the truck with the, the sign, the box on it, I was legal because it was a registered vehicle and I could park it on the, in that place. So I was legal. But if I take it off and get rid of the truck, all of a sudden I'm illegal. Yeah. So there was all sorts of-

• 58:49Guy Raz?

  Once it's a pod, once it's a pod on the street, it's illegal. But if it's a pod on the truck, it's legal.

• 58:55Speaker 01

  Right, right.

• 58:56Guy Raz?

  Okay. The sign is legal, I should say.

• 58:59Speaker 01

  Right.

• 59:00Guy Raz?

  Pete, this is what I'm wondering about. You had in the emergency dispatch business, you had a lot of interest coming in hard and fast and you could not keep up with demand. How did you keep up with the demand? I mean, people wanted to start franchises. They had to buy the trucks from you. First of all, how are you making the trucks so quickly?

• 59:20Speaker 01

  Yeah, we, we ended up putting together a fairly low cost production line that, you know, we could just move the lift systems. We didn't build the trucks. We just built the lift systems that sat on the trucks, right? So that became a component manufacturing facility that you welded the pieces together. You slid the rams inside and you connect the hoses and out the other end of the door.

• 59:46Guy Raz?

  Were you doing that in Florida?

• 59:48Speaker 01

  Uh, we were doing that in Florida. Then we, uh, we ended up building a, um, more sophisticated, um, manufacturing line for the containers that would start at one end of a, a big Costco, bigger than Costco. It started at one end as raw materials and come out the other end as a finished product.

• 1:00:07Guy Raz?

  Also in Florida, you were doing that?

• 1:00:09Speaker 01

  Also in Florida, uh, right in the same facility. But we ended up actually creating seven manufacturing facilities for the containers across the country.

• 1:00:18Guy Raz?

  Wow. So you really had, you really had an economy of scale there. I mean, you were really able to scale that up relatively quickly.

• 1:00:26Speaker 01

  We were. And of course, we're creating a brand while we're doing it and, and increasing our footprint and attracting customers and, and investors.

• 1:00:35Guy Raz?

  I'm curious about, about your, the ambitions of the company because within six years of launching, uh, there were 295 franchise locations in, in seven, serving 7,000, more than 7,000 cities in more than 40 plus states in the United States. I mean, that is a massive expansion from going from nothing to 300 franchise locations in six years. Initially, when you thought of this idea in 1997 and worked on it, was, was it in your mind going to be a Florida local business? Or did you really think this is going to be a national, international business?

• 1:01:15Speaker 01

  No, I, uh, I think I said that I thought we were going to build a hundred boxes and then put them in this little 15,000 square foot warehouse or whatever it was. And, um, you know, that was going to be my bolt on to the, to the mini storage. And, you know, it just took off. And then what was really happening is the consumer was dragging us into more and more options. I mean, when we started out, we thought all the containers were going to come back to the, to the warehouse. And then all of a sudden, people started to want to store them on their, in the driveways during remodeling or for whatever, behind their businesses and stuff. So that's another branch. And then the next thing you know is You know, we loaded somebody up or gave somebody in Clearwater a container.

• 1:01:58Speaker 01

  And they said, "Well, I'm moving to a new house down in St. Pete. Will you move me down to St. Pete?" And we thought, "Well, why not, right?"

• 1:02:04Guy Raz?

  Just move the container down there, yeah.

• 1:02:06Speaker 01

  And that's how Tampa started. And the next thing we sold Sarasota, and somebody wants to move from Sarasota to Clearwater. And all of a sudden, we're one of the nation's largest moving companies.

• 1:02:16Guy Raz?

  And that wasn't even part of your original business model?

• 1:02:19Speaker 01

  I was nowhere near that smart.

• 1:02:22Guy Raz?

  It was the customers who were demanding this.

• 1:02:24Speaker 01

  Exactly. The customer drove us to a national footprint and ultimately international, right?

• 1:02:30Guy Raz?

  Yeah. I think by 2006, Pods, so this is like eight years in. It's franchised in 45 states in the US. It expands to Canada and Australia. There were thousands of pickups and deliveries a day. I mean, you probably were doing $300 million in revenue at that point. And around that time, I think it was 2007, you did an interview on a local public television show. And, you know, this guy's interviewing you about your story. And he says, "What do you want to do? Where do you see Pods going?"

• 1:03:10Guy Raz?

  And you say in this interview, "Oh, I think we can be, you know, like work with eBay or, you know, where if people want to sell, you know, their exercise equipment, you could just stick in a pod and we can ship that over to another part of the country really quickly, like FedEx or UPS and make it seamless and frictionless." And shortly after that, you sold the company.

• 1:03:33Speaker 01

  Yeah, yeah.

• 1:03:35Guy Raz?

  Which surprised, I was, just the timeline surprised me because you seemed so optimistic, so committed to this future. Walk me through that. Did you get bored with it? Were you kind of done with it? What was going on?

• 1:03:48Speaker 01

  I did not get bored with it. And, you know, timing is everything. And I think a lot of different factors, you know. The, uh, the system had grown and, you know, the franchises were wonderful, but you always get those bad apples, right?

• 1:04:07Guy Raz?

  Oh, yeah. Franchise business is tough because they have a lot of, they can really make your life miserable, right? If they don't, if they don't like corporate.

• 1:04:14Speaker 01

  They were, they were making my life miserable and, and I was frustrated.

• 1:04:18Guy Raz?

  How so? What do you remember? They were, they were saying.

• 1:04:21Speaker 01

  Yeah, they were almost tag teaming me as to, we need you to do this and we need that. And, and so one guy had come in and petitioned me for something and, you know, I try and be a team player and I try and, and be fair and stuff. So I may acquiesce on, on something and then a day or two later, somebody else would come in and hit me for this. And of course, if I do it for one, I have to do it for all of them and stuff. And it was just getting exhausting.

• 1:04:44Guy Raz?

  They had demands for like new products and services they wanted introduced?

• 1:04:48Speaker 01

  No, they just want a bigger piece of the pie and, and really had no justification for it other than they felt entitlement and stuff. And I told franchises no to many things and, uh, you know, I'm, I, I'm willing to make the tough decision, even if it's, um, disappointing to whoever it is, even if it's a, a friend that I've had for a while, you know?

• 1:05:07Guy Raz?

  Yeah. You were like the mayor of Pods. You were dealing with, with hundreds of constituents.

• 1:05:13Speaker 01

  Yeah, well, and that was part of the reason. The other part of the reason is I had these early investors that had been in now for 10 years.

• 1:05:22Guy Raz?

  Yeah.

• 1:05:22Speaker 01

  And really had seen no return on their investment and, uh, certainly were entitled to it. And so, uh, I, you know, I was taking care of them and, uh, the timing just seemed right. And I teamed up with an investment bank that, um, felt that they could get us a pretty good offer. And in fact, we did. And I said, you know what? It's time to retire. You know, I was tired and, uh, why not?

• 1:05:48Guy Raz?

  You reportedly sold for about 400, between 430 and 450 million dollars to, um, to an investment firm, uh, which is a great, I mean, what a great outcome after 10 years to sell that business and what a great return for the, the early investors. And you truly are, I mean, now you've, you've walked away with a lot of money. You are retired and done. And what do you do?

• 1:06:14Speaker 01

  Yeah, unfortunately, I was also in the middle of a divorce.

• 1:06:20Guy Raz?

  Yeah.

• 1:06:21Speaker 01

  I mean, let's face the, you know, I'm sure 90% of the issues were generated because I was a workahog or I am a workahog and, and, you know, the family sacrificed and, and so, you know, that generated friction, obviously.

• 1:06:36Guy Raz?

  Yeah.

• 1:06:36Speaker 01

  Um, that, that was a life-changing experience and

• 1:06:40Guy Raz?

  I'm sorry.

• 1:06:40Speaker 01

  It was an ugly divorce. You can imagine money doesn't do good things in a divorce. It makes, it makes life difficult and so, uh, that process took two or three years to, to go through and, and finally, yeah, settle and, and try and part friends. Um, you know, unfortunately, I had a stepdaughter that I adopted and, and things went south with, uh, her and I as well. And so it wasn't, it wasn't fun and, uh, I ended up deciding that maybe just a, a restart was in, in order. So I moved over to Orlando and, uh, and, uh, started fresh over there.

• 1:07:17Guy Raz?

  And, and what did you do in Orlando? I mean, you know, it was going to be a couple more years before you would start your next business, which we're going to talk about, but what did you, yeah, what'd you do? Did you just, were you an investor? I mean, did you, what'd you do on a day-to-day basis? How'd you occupy your time?

• 1:07:32Speaker 01

  Yeah, um, well, first of all, I was fortunate that I, I met a young lady that I'm now married to and, uh, have another stepdaughter.

• 1:07:40Guy Raz?

  Congratulations.

• 1:07:42Speaker 01

  Thank you very much. And, uh, so, uh, we traveled during our, um, uh, getting to know each other period and, uh, yes.

• 1:07:52Guy Raz?

  Where'd you go?

• 1:07:53Speaker 01

  Oh, boy, everywhere. We love cruises, um, you know, I, I don't know if you know that, but I am a pilot, so we would fly around, uh, the country and down to Caribbean and so forth.

• 1:08:04Guy Raz?

  And, and I guess on one of those trips, um, something happened. You, you actually had a, a life-altering event, something that was, was really serious at the time, right?

• 1:08:16Speaker 01

  Right, right. I actually, uh, went up to, uh, New Hampshire area and, uh, went skiing my first run of the day and, uh, because it was a cold, you know, the cold air, it was snowy, rainy and stuff and I fell and got back up and, uh, I honestly believe if I had not had that training, I would not have made it because I would have kept going.

• 1:08:37Guy Raz?

  You were on the ski slopes?

• 1:08:38Speaker 01

  I was. I was. And I looked up at my wife and I said, I'm having a heart attack.

• 1:08:43Guy Raz?

  Wow.

• 1:08:44Speaker 01

  I think she thought I was, I was saying it just so I didn't have to snow as our ski in that crappy weather, but no, I did. The ambulance came, tried to get an IV in me. I finally said, put it right here or I'll do it type thing. And they got it in. So, you know, I think that the doctor, when he put me in the ambulance to head down, didn't, didn't have a lot of faith that I was going to be there.

• 1:09:07Guy Raz?

  Wow.

• 1:09:09Speaker 01

  They gave me some medication and stuff. They tried to get another IV in me. I was already in collapse. My arms and my legs felt like they were going to fall off of me. You know, the body was shutting down and they couldn't get another IV. And they said, we can't medevac yet because of the weather. So I had a three hour ride down to the hospital that could treat me. And I swear that ambulance backed up and the doors opened. Within five minutes of opening that, the ambulance doors to the time they had a stent in me, or within five minutes, they had a stent in me. And I ended up very lucky. No, no heart damage at all. So.

• 1:09:47Guy Raz?

  So what did they find? I mean, that basically.

• 1:09:51Speaker 01

  There was an obvious blockage and they, literally five minutes from the time they opened the ambulance doors to the time I was, I was okay.

• 1:09:59Guy Raz?

  Wow.

• 1:10:00Speaker 01

  It was, it was unbelievable.

• 1:10:02Guy Raz?

  Pete, that experience must have completely changed the way you see the world because you were really close to dying.

• 1:10:09Speaker 01

  Well, I was, at least I believe I was. It certainly changes your perspective on, on a lot of things. And, you know, you do, you do make life changes and stuff.

• 1:10:20Guy Raz?

  Yeah.

• 1:10:20Speaker 01

  But I've never been one to, you know, jog and run and eat right and things like that. So I have a lot of bad habits. I like to think I corrected a lot of them, but.

• 1:10:31Guy Raz?

  Yeah.

• 1:10:32Speaker 01

  The stress didn't help. Let's put it that way. And that's really all contradictory to starting another business, right?

• 1:10:42Guy Raz?

  Which is exactly what happens next. Pete starts another business, a business that tackles another unsolved problem in moving and storage, and one that puts Pete in direct competition with the company he founded. Stay with us. I'm Guy Raz. Back in a moment with more of How I Built This.

• 1:11:21Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2018, and even though Pete has already built one successful storage and moving company, he's not done. He wants to go back into the same space.

• 1:11:36Speaker 01

  Yeah, I never stopped thinking about how to make things better, how to change things. My mother used to say that to me. She says, no matter what, as you look at it, you say, I can do that better than that. Yeah, and that is my nature. I look at things and say, there's got to be a better way. So that's sort of what happened.

• 1:11:54Guy Raz?

  You were in your mid-60s when you started this new business, right? So you could completely not do any of this stuff, but you can't get out of here. So tell me the genesis of the next idea. I think initially you thought, all right, I want to work with Pods again. I miss those guys. Let me go back and see what I can do with them. What was the idea you brought to them?

• 1:12:14Speaker 01

  Yeah, I felt that, you know, let's face it, we started an industry and built it from the ground up and didn't know what we were going to grow up to be, right? I thought we were going to have 100 boxes. I don't know how many hundreds of thousands they have now, but obviously, when you do something like that, hindsight's 20/20, right? And I look back and I saw two or three things that I thought, you know, if we had done it this way, or if Pods would convert to doing it this way. They'd have a much better product and a better customer experience and, you know, better margins and all these things.

• 1:12:51Guy Raz?

  And what was that way? What were you proposing they do?

• 1:12:56Speaker 01

  The problem with pods is the delivery system. As powerful as it is and, you know, as successful as it has been, the company can't make money on the delivery system. So what happens is the customer's paying two, three, four, five hundred dollars for delivery services and the company's trying to dispatch their certified drivers in these complex trucks to make the delivery and they show up late, they put the container in the wrong place, they run over the mailbox, they hit the rose bushes or whatever it is. And it's a huge dissatisfaction for the consumer.

• 1:13:39Guy Raz?

  Yeah.

• 1:13:40Speaker 01

  And the consumer's paying two to five hundred dollars, whatever, it depends on the market, whatever it is, and the company's not making any money. So who's winning in that process? And so I went to them and I said, listen, I got this new idea. I said, you know, sign a non-compete, non-disclosure and I'll tell you what it is. And I was looking to make ten bucks every time I use the idea.

• 1:14:02Guy Raz?

  All right. What was the idea that you were going to pitch them? They sign a non-compete, let's say they were going to sign a non-compete, you walk into a room and they say, all right, Pete, what's your idea? What was it?

• 1:14:12Speaker 01

  If the consumer's having to pay two to five hundred dollars for a service that makes them mad, that you're not doing a very good job of, and you're not making any money on that, why have that service? I said, I would have said, let's develop a truck that the consumer can drive themselves and bring the container home, load it up and bring the truck back so that the company can never be late, can never run over the mailbox. If the customer calls up and says, I ran over the mailbox, the answer is, I'm awfully sorry to hear that, but I hope you didn't hurt my truck. You know, you sort of, you reverse that whole thing. You eliminate forty, fifty people in the market that are doing that delivery service and... You know, it's a win-win. The customer saves money.

• 1:14:57Speaker 01

  They do it at their own time, on their own pace. And the company eliminates a whole division with logistics and all these headaches and problems. And, you know, I just felt like it was a win-win.

• 1:15:07Guy Raz?

  But I still don't understand, what is this thing that you were gonna do?

• 1:15:11Speaker 01

  Well.

• 1:15:12Guy Raz?

  I understand the concept that Pods wasn't making money off the deliveries and the pickups, but how are you gonna solve that?

• 1:15:18Speaker 01

  Right, and that was the key. So, we had to develop a truck that the consumer could drive. So, it had to be under the 26,000 GVW.

• 1:15:27Guy Raz?

  What's GVW, by the way?

• 1:15:28Speaker 01

  Gross vehicle weight, I'm sorry.

• 1:15:30Guy Raz?

  I gotcha, okay.

• 1:15:32Speaker 01

  You go above that and you have to have a special license.

• 1:15:35Guy Raz?

  Got it, okay. So, it's about weight? It's not about the size of the truck?

• 1:15:38Speaker 01

  No, it's really weight.

• 1:15:40Guy Raz?

  Okay.

• 1:15:41Speaker 01

  And what we basically did is we dropped this company, Red Rover, in between U-Haul and Pods. I said earlier, we dropped Pods between U-Haul and the movers. Now, what we did is we dropped a new company, this new solution, new offering for the consumer, between U-Haul and Pods, that saves the customer money, lets them take everything under their own control, saves us a ton of logistics and headaches. And we don't charge a dime for the truck. So, we give the truck the mileage, the tolls, the fuel, and even a free hand truck to the consumer. So, it doesn't cost the customer a dime for the truck. They come get it, they take it home.

• 1:16:22Guy Raz?

  All right, so you took this idea to your former colleagues at Pods to see if they would sign a non-compete agreement with you, right?

• 1:16:30Speaker 01

  Exactly. And I was willing to offer to help get it off the ground. And I believed it would add a third revenue stream to their business, right? That they didn't currently enjoy.

• 1:16:44Speaker 01

  The CEO refused to sign it, so I waited another three, four, five months and I finally called one of the board members and said, listen, same thing. He refused to sign it. I ended up getting invited to their 20th anniversary.

• 1:16:59Guy Raz?

  Yeah.

• 1:16:59Speaker 01

  And before I went, I said, listen, you know, I'm glad to come and say a few words at the anniversary, drink your drinks, eat your food.

• 1:17:08Guy Raz?

  Yeah.

• 1:17:08Speaker 01

  But I gotta be honest with you, I'm gonna start this business that you don't wanna hear about. And they said, yeah, yeah, yeah, whatever, come on, come to the party, right? And so.

• 1:17:15Guy Raz?

  Yeah, yeah.

• 1:17:17Speaker 01

  So I did. And then I actually confirmed with the CFO at the time, are you guys making any money at the, on the deliveries and stuff? And he said, no, we don't make any money. He says, if I get rid of that piece of the business, I'd do it in a heartbeat. Not knowing what I was thinking, you know?

• 1:17:34Guy Raz?

  Okay, but the, the people at Pods have said no essentially to your idea. And I guess you decide to go ahead and launch it anyway.

• 1:17:42Speaker 01

  Correct.

• 1:17:43Guy Raz?

  And this concept that you had was, it's not a pod, it's not a U-Haul, it's a U-Haul and a pod together. It's like a, like a, it's not peanut butter, it's not chocolate, it's a Reese's peanut butter cup.

• 1:17:56Speaker 01

  Well stated.

• 1:17:57Guy Raz?

  You're basically putting, you're putting the storage unit on the truck. You're saying, hey, you can go pick up the truck, drive it to your house, you load up the truck, and then you drive the truck back to our facility, and then we will take the box off the truck and store it for you?

• 1:18:14Speaker 01

  Correct. We're, we're giving you a free U-Haul. You don't have to unpack into the mini-storage, as you said.

• 1:18:20Guy Raz?

  Yeah.

• 1:18:21Speaker 01

  We're giving you all the advantages of a portable container on a free U-Haul.

• 1:18:26Guy Raz?

  So this is like completely new. I mean, because Pods, it, it, it inspired competitors. And they even sued U-Haul at a certain point, because I think U-Haul was, was using a product that they called a pod. I don't know why they would do that. And, and I think Pods won. But, but lots of competitors now, there are lots of companies that basically replicated the Pods model. You didn't want to do that. You wanted to actually create something new.

• 1:18:54Speaker 01

  That's right. That's right. You know, the same guy that came up with the Pods name, I reached out to him and I said, listen, this is what we're doing. What do you think? And stuff. And he came down, he said, well, first of all, Pete, you're not really a pod, okay? Or a portable storage company.

• 1:19:07Guy Raz?

  Yeah.

• 1:19:08Speaker 01

  And you don't want to go against. Pods and portable storage, as you say, there's hundreds of them out there, right?

• 1:19:14Guy Raz?

  Sure.

• 1:19:15Speaker 01

  You're a startup and you're not really a truck rental. You're giving the truck away for free, number one. And number two, you've got the container on there. So he said, let's create a new industry and call it fetchable storage. So you come down and you fetch the truck with the container. You take it home, you load it up, you bring it back, you're done. And let's call the company Red Rover. So fetchable storage brought to you by Red Rover. And we have created a whole new industry at this point, just like we did with pods.

• 1:19:48Guy Raz?

  And so, I mean, I guess pods is now a competitor, right? I mean, let's, let's be honest. I mean, they're, you guys are competitors.

• 1:19:58Speaker 01

  We are, we are, but to be honest with you, you know, I feel our, our product is a, a price point product, right? And, and I kid and I say, Bill Gates is never going to use a pod of a Red Rover or, or a U-Haul, right?

• 1:20:12Guy Raz?

  I can't see him loading his own stuff, no.

• 1:20:14Speaker 01

  Exactly. So he's at a financial plateau in life that that's what he's going to do. We're attracting the, the lower income folks, you know, the young families and the startups and some seniors that are on fixed incomes that see the value proposition that we offer. And I say, we're really stealing more customers from U-Haul, right? You have to go rent the U-Haul, fill it, drive it to them, any storage, unpack it, and then take the U-Haul back. Ours, you get the truck for free, you fill it and you're done.

• 1:20:48Guy Raz?

  Right, you're paying the storage, you pay the storage fee.

• 1:20:50Speaker 01

  You pay the storage, you pay one month for the storage, but you're just paying the storage on U-Hauls. I think we're going to grab more customer share from U-Haul than we will pods, but we will certainly get the portable storage customer as well. But, you know, I, I always ask the question, you know, how does U-Haul compete with a free truck?

• 1:21:10Guy Raz?

  Yeah.

• 1:21:12Guy Raz?

  You, I think, have done three rounds of fundraises. And you've raised around close to $40 million. Is the model the same as Pods? Is it a franchise model? Is that the idea?

• 1:21:26Speaker 01

  Yeah. First, we've had a few rounds. Friends and family, we raised almost $20 million, just under $20 million. Friends and family. And we just, this week, completed around north of $50 million.

• 1:21:41Guy Raz?

  Wow. So you've raised a lot more than, yeah, okay.

• 1:21:44Speaker 01

  Yeah. $50 million from the Oppenheimer Group out of New York. So that capital is going to let us grow nationwide.

• 1:21:54Guy Raz?

  Wow.

• 1:21:55Speaker 01

  You know, all the major markets. The franchise question comes up almost on a daily basis, but certainly on a weekly basis. And right now, it looks like we probably will enter the franchising later this quarter. That decision isn't finalized, but there's a great likelihood. Even with that much capital, you know, we're going to open 2025 big markets, LA, New York, you know, all the big Chicago's, all the big markets on top of what we already have opened. But that doesn't handle the Boise's and the Schenectady's and things like that. And that's a great vehicle for a franchisees to get involved.

• 1:22:37Speaker 01

  You know, the reservation and the concern around it was, you know, how do we avoid the pitfalls that we had in Pods franchising?

• 1:22:50Guy Raz?

  I'm curious. I mean, here you are. You are, I think you'll be 70 in 2022. I mean, you're a startup. You've got another startup going. And that's a lot.

• 1:23:04Speaker 01

  Yes, I do.

• 1:23:05Guy Raz?

  That's a lot, right? And there's a lot of, I mean, it's a lot of time. It's a lot of moving parts. It's a lot of logistics. You've done it before. But clearly, you're not doing this for the money at this point. You're doing this for some other reason.

• 1:23:20Speaker 01

  It's fun. I mean, at the end of the day, I'm having fun. I would tell you that, you know, we've been in this now called two years. I'd say we're at the same level Pods was seven years into the business. You know, our growth, our capital raising, this year's going to be unbelievable growth. And, you know, it took me 10 years to build Pods and ultimately sell it. We're going to be on everybody's radar by the end of this year. I think, you know, I've told my investors and the Alpenheimer Group out of New York that, you know, this is a three to five year program. I think there's a chance that something could happen earlier than the five years. I think it could happen in three

• 1:24:02Speaker 01

  or four. But, you know, the team I have around me does all the heavy lifting. You know, I'm sort of the guy that points, let's take it this way. And so, as long as it stays fun, I'm happy to do it.

• 1:24:17Guy Raz?

  Pete, when you think about this journey that you've gone on from, you know, volunteer firefighter to real firefighter to paramedic and, you know, to just kind of just raising your hand. I mean, really, you just raised your hand. Who wants to be a paramedic? I do. Who wants to be, who wants to help us set up this? I do. And then you start this Pods business and you completely transform moving and storage. And then that business is sold. And I get this one and it's a, you know, I think it's very likely to be the next biggest thing in moving and storage. What do you attribute your success to? I

• 1:24:58Guy Raz?

  mean, how much, how much of that do you think is, is because of your hard work? Because you, you raised your hand? Because you grinded? You know, how much do you think has to do with, with getting lucky? You know, the people you met? The, the fact that you didn't get a job as a firefighter in New York City, but you got a job in Clearwater, Florida? You know, those kinds of things. How much, how much has to do with luck and how much has to do with, with just how hard you worked?

• 1:25:27Speaker 01

  Uh, you know, I think being blessed and being cared for has gone a long way. I also believe I'm very lucky. I think that, you know, being at the right time, at the right place, having the courage to take the chance. I tell people all the time, it's a great idea. Are you willing to walk away from everything to pursue it, you know? And I see my job seriously is just listening to your employees and your partners in the business and coming to an agreement so that we're all focused on the same goal line and showing the growth and sharing in the growth. You know, all my senior staff and many of my employees have stock in the company, so they're motivated to help grow.

• 1:26:12Speaker 01

  It's just doing the right thing for people, doing the right thing in life and, you know, having the willpower and the strength to take the chance.

• 1:26:23Guy Raz?

  That's Pete Warhurst, founder of Pods and Red Rover Moving and Storage. By the way, what's the weirdest thing you ever found in a storage unit?

• 1:26:34Speaker 01

  Well, you know, we haven't had much of that in our experience here so far, but, you know, I remember things like one guy put a car in one and didn't secure it very well. And as it was driving down, as the pod delivery truck was driving down the street, it actually rolled out the back door and hung off the back of the truck.

• 1:26:58Guy Raz?

  Somebody put a car into a pod?

• 1:27:01Speaker 01

  It's just crazy what people do.

• 1:27:02Guy Raz?

  I can't believe that over all these years of doing storage in Florida, you never found an alligator in a pod.

• 1:27:10Speaker 01

  No, no alligator, and fortunately, no dead bodies either, you know?

• 1:27:14Guy Raz?

  No dead bodies, no alligators.

• 1:27:16Speaker 01

  Exactly, exactly.

• 1:27:19Guy Raz?

  Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is [email protected]. And if you want to follow us on Twitter, our account is @howibuiltthis and mine is @GuyRaz. On Instagram, we're @howibuiltthis and I'm @Guy.Raz. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Liz Metzger, Alex Chung, J.C. Howard, Josh Lash, Sam Paulson, Catherine Seifer, Elaine Coats, John Isabella, Chris Messini, and Carla Estevez.

• 1:28:02Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This.