In this interview segment, Joseph Chat explains how Neighbor’s original assumption—that price would be the main attraction for users—proved wrong. While the service offers 30‑50% cheaper storage than traditional self‑storage, user feedback and NPS scores revealed that the biggest driver of adoption is convenience: the ability to reserve space instantly via an app, avoiding a half‑hour drive and paperwork. This insight aligns with industry research showing proximity is the single most important factor when choosing a storage unit; customers will pay more for a location closer to home. Consequently, Neighbor shifted its marketing from a price‑focused message to emphasizing ease of use, hyper‑local availability, and proximity, re‑branding around the “Neighbor” concept. The discussion highlights the importance of validating assumptions with real user data and adapting go‑to‑market strategy accordingly.
So I'm kind of curious, are there any non-obvious problems that maybe earlier on you weren't really aware of that you were solving for with Neighbor and maybe even the kind of product experience that you've created?
Yeah, absolutely. More than I can count. But one user thing that we, I don't know, just our assumptions were incorrect. about this is we thought that people would want to use us because we are cheaper and we are. We're like 30% to 50% cheaper than a traditional self-storage unit, which is— this isn't like saving 10% on your Amazon cart. This is meaningful money because if you're paying $300 a month for something, saving 30% to 50%, it's like $1,000 to $2,000 a year. I mean, we like to tell our users, if you switch from a traditional unit to a Neighbor unit, give you a stimulus check in savings every year for the rest of your life. So we thought that was going to be the big draw from, from a demand perspective is how cheap it is. But as we've gathered user feedback and as we've gotten lots of reviews and NPS scores over the years, hands down, the biggest thing that people call out is just that it's easier, not that it's cheaper. It's that instead of having to drive a half hour across town to some industrial park and sign a bunch of paperwork, I can just download an app and a couple clicks and I know I have my space. And it's like, okay, that Saturday project's done already. I still got to go move the items, but the booking of the space is so much easier. And that we didn't anticipate at all. And it changes how you'd want to approach those users. and talk to them and market to them. And so we marketed for several years just as cheaper, cheaper, cheaper. We still include that in our marketing, but we've really shifted our marketing message to focus on the convenience aspect. The Self Storage Almanac, which is kind of an industry research guide, talks about how proximity is the single biggest factor in someone choosing a storage unit, they will choose a more expensive storage unit that's closer to their home over a cheaper storage facility that's further away. You just want the closest facility to your home. And Neighbor, I mean, it's why we're called Neighbor. We're literally as proximate as you can get. We just didn't lean quite as much into that as we would. I can think of a few other examples unless you want to move to Oh no, I'd love to get into more examples.
That'd be great.
So yeah. And so, so just to restate it again, it was, it was things, things that were kind of non-obvious on the platform. One thing that was non-obvious for us is that we thought this was going to be— we're in some ways, we're the most hyperlocal marketplace ever. Airbnb, you're staying in a different city than where you live. Like you stay in an Airbnb in Thailand. Uber, I use an Uber when I'm in Chicago and I don't have a rental car and I need to get an Uber. I'm probably never going to talk to my Uber driver ever again after I step out of that car. Same with an Airbnb host. I'm probably never going to talk to them. Neighbors, one of the first platforms at least that you use a neighbor and then, and it's a 6-month or 12-month or 18-month or 24-month transaction or longer. And you live quite close to them. You're probably going to talk to them all the time and build a relationship. So it's very hyperlocal and the supply and demand need to be hyperlocal. So we thought We, I mean, we knew, we didn't just think, we knew that this business was going to need to be built city by city, location by location, where we build up enough supply, we build up enough demand. And we were totally wrong. Like, we were completely wrong about that. We followed an Uber playbook for all the markets we launched, was like Uber, where we had a GM in the market and a community manager in the market. And it worked really well. Like when LA was our first market outside of Utah, and when we launched in LA with like an Uber-style GM, we got as many hosts in the first 7 weeks in LA as we'd gotten in the first year and a half in Utah. So it was like, okay, we've got a repeatable playbook. And so we were really hesitant to move away from a playbook that was working, but it turns out that a national model You would think it wouldn't work for a localized marketplace like us, but again, we just overestimated what kind of liquidity we needed in markets. There was organic liquidity being created. And once we saw that, that users were signing up and just a few users were able to get rented, and that there was this kind of one-to-one relationship and you didn't need a whole host of users, you just needed users. Then we shifted to a national model and now we don't have a single employee outside of the state of Utah. We're entirely headquarters-centric. We don't have market launchers or anything like that. It's much more of an Airbnb-style marketing playbook. And that was a total, like, even after we, even up until the point where we raised our Series A, we were still kind of on the other side of that question.
