From Teen Student Entrepreneur in Australia to a Mature Global E-commerce Entrepreneur: Mike Rosenbaum, CEO of Spacer (Part 5)

Sramana Mitra: What worked?

Mike Rosenbaum: It’s hard to say when we started getting product-market fit. Over time, we just got better and better at targeting the right customers whether that was through Google or Facebook or offline channels. Eventually, it was word of mouth. Now, most of our new supply is people telling other people about the positive experience that they’ve had.

One of the biggest challenges we had is – this wasn’t something that people knew they could do. We had to build awareness. That took a lot of time. Because it was hyperlocal as well, it took even more time. We certainly needed that million dollars. I’d like to think we were fairly efficient. 

Sramana Mitra: When did it start clicking in gear?

Mike Rosenbaum: It took two years or more. We needed to hire more people then. 

Sramana Mitra: Once you hit that steady state, what conclusion did you arrive at on each side of the marketplace? How were you acquiring the inventory for space? How were you acquiring the people who wanted to rent the space?

Mike Rosenbaum: The network effect started to take off. People were listing without us needing to do too much. We just refined the product. The marketplace built itself. 

Sramana Mitra: What commission did you take? 15%

Mike Rosenbaum: Yes, we now take 20%.

Sramana Mitra: How long did it take you to hit the million dollar revenue mark?

Mike Rosenbaum: Three years.

Sramana Mitra: So 2018.

Mike Rosenbaum: Yes.

Sramana Mitra: What happened in 2019?

Mike Rosenbaum: We went through COVID. That was challenging. We were down a little bit.

Sramana Mitra: What is the primary use case for your business? Is it people just needing extra storage?

Mike Rosenbaum: We do both storage and parking. Our parking customers are long-term. They’re either commuters who need parking at their work or they’re residents who don’t have parking spots. The other thing we did was just before COVID, we launched in the US. That’s been growing rapidly. Australia was in a much harder lockdown than the US, which is challenging.

Now we’re coming out of it and we’re seeing extremely strong demand. In the US, we were growing very fast. We managed to take all the learnings in Australia and applied it in the US. The US business is growing faster.

Sramana Mitra: Where in US are you doing this?

Mike Rosenbaum: We started in San Francisco. Then we moved to Boston, Chicago, and other cities. Now, we’re in a dozen cities. 

Sramana Mitra: Besides the million dollars you raised in the beginning, have you raised more?

Mike Rosenbaum: We’ve raised more money and made acquisitions as well. The business is now at a point where it’s self-sustaining. 

Sramana Mitra: How much more money did you raise?

Mike Rosenbaum: In total, we’ve raised over $4 million.

Sramana Mitra: The other $3 million, you raised in Australia?

Mike Rosenbaum: Yes. 

Sramana Mitra: From angels?

Mike Rosenbaum: We’ve raised from angels and the largest storage company in Australia called National Storage. 

Sramana Mitra: Interesting. It’s still quite a capital-efficient company. For the time you’ve been in business, $4 million is not a huge amount of capital infusion. You’re profitable and reinvesting. That’s a fairly capital-efficient path in this day and age especially. 

Mike Rosenbaum: Australian businesses, in particular, have to be efficient because we don’t have the same access to capital. US investors are only interested if you’re in the biggest market. We came from a bootstrapped environment previously, so raising capital is actually quite foreign to us. 

This segment is part 5 in the series : From Teen Student Entrepreneur in Australia to a Mature Global E-commerce Entrepreneur: Mike Rosenbaum, CEO of Spacer
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