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Welcome to the Self-Storage University Podcast, where you will learn the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate self-storage facilities. And your host is a partner in one of the largest real estate portfolios in the U.S. with nearly $1 billion of holdings, Frank Rolfe.
Elvis Presley was not a man of few words. He sang thousands and thousands of words in just about every movie and had many speaking roles in every movie he was ever in, not to mention all of his many shows in Las Vegas, etc. But he did not dispense a lot of quotes or quotable material on life experiences. His quotes are fairly few and far between, in fact, but one of them is very accurate and very applicable to the self-storage industry. And that quote is, "If you let your head get too big, it'll break your neck." This is Frank Rolfe with the Self-Storage University podcast. We're gonna talk about Elvis Presley's quote concerning ego and the fact that ego can pretty much ruin your career, maybe even ruin your life, and apply that to the typical self-storage owner and the things that you certainly don't want to be doing simply out of ego.
Now, the first thing we need to discuss is that ego typically is defined as acts that are representative of someone to bolster their own self-worth in their own mind. But often these very things that we do to feel more important or better about ourselves has very bad aftershocks, byproducts that really don't help you. So the very thing that we think is gonna make us better actually makes us worse. And we see that all the time in the media and in movies of people in different roles who just get the big head and suddenly they're no longer nearly as good a person or as productive a force in entertainment or business as they formerly were. And it's sad to watch, and none of us like to watch that because we like watching people who are really good at something continue on doing that thing and not derail and ruin themselves simply out of ego.
So here's some things that self-storage owners sometimes do out of ego that has alarming consequences. The number one is just the creation of their own websites or materials for their own kind of vanity as far as public relations, because a lot of these things are more turn-offs to your customers than turn-ons. Most people in the storage arena, when they're looking at renting a unit, they're looking on a very micro scale regarding trying to find a storage place that's in the general vicinity of what they're looking for. But they don't want to hear all about how great you are or how big your portfolio is. Remember that many Americans don't consider big as better. A lot of the best things today that we all like, Gucci handbags, Rolls-Royce automobiles, these are finely crafted tiny things. So when you want to talk about how big you are, to many people, how big you are means lack of customer service or lots of bureaucracy or red tape or slow demeanor.
So if you're creating a website, if you're creating your self-storage portfolio simply under the goal of impressing friends and neighbors, it may have a not similar reaction by the viewing public. So make sure that your websites, whatever you create, is focused on that storage facility and its prices and what a great offering it is and what a great location it is. But don't base it just on how big you are. Having your founder story and all those things, we all know that those have nothing to do with people actually renting anything. Those are simply there to soothe people's egos and make themselves sound important. Also, don't forget another quote. I don't know who wrote this quote, but it wasn't Elvis. And the quote is, "First you get on, then you get honest, but never get honorable." What the heck does that quote even mean? It's a very commonly used phrase in real estate and business.
And what it means is first you have to do anything you can to get your foot in the door, right? So you're gonna go out there and you're gonna try and buy that storage facility using perhaps hard money lending or, I've used credit cards in the past to get my foot in the door to get things going. Things that we know are not probably correct, but you have to start somewhere. So you use that to get your foot in the door. And then once your foot's in the door, then you can get honest as far as doing things the correct way, because you're now in business, you bought that property, and now you want to try and run it and morph it into something that is 100% legitimate and good. But you never really want to get to where it's all about your ego. That's what honorable means.
In the St. Louis area, which I live near, we had Budweiser beer. We've all heard of Budweiser. And Budweiser got bought out years ago by InBev. And InBev bought Budweiser because there was so much waste to be cut in general and administrative. And I read the book on it. I can't remember the exact number, but I want to say it was close to $2 billion that was being squandered by Budweiser based on just any number of things they did strictly out of ego. I think, as I recall, they had somewhere around 50 private airplanes, all paying monthly hangar storage and maintenance and all those things that come with a private jet. But they were only using, out of all of those jets, 10 of them. And the rest were all sitting there, and they never wanted to dispose of them because the owners felt it to be very exciting to have this giant collection of private airplanes.
And sure, that would kind of sound neat at a cocktail party. "Yes, we've got 50 jets." Most people don't have any jets. Private football players who are all excited on their ego might buy a jet, but having a large quantity is certainly something that would impress people. But the problem was it wasn't really good for business because it was a huge amount of overhead expended on something that wasn't actually making any money. And those are the things you want to stay away from in business and certainly in the self-storage industry. And these are things that are 100% based just on ego. There's no financial reason for it.
And there are other problems when you get the big head, that it will break your neck and really hurt you. Because when you go out to buy properties from people, sometimes if you have gotten this big ego thing going, your whole demeanor and your cockiness will lead sellers to not like you. I know of a real estate group once that liked to arrive at meetings to buy properties in a limousine. That's really dumb business. You pull up in a limousine, mom and pop are thinking, of course, number one, they have nothing in common with you, but number two, you're obviously foolish with your money, so they need to demand more. So many of these trappings of success that people carry around with them through ego, it only makes it harder to buy stuff.
Also, people with big egos often not only feel like they know what everything is, they get lazy on some of the key items you have to do, like due diligence. Because.. The worst due diligence I've seen on properties typically stems from the most overconfident players. They think they can size up something just at a glance. No reason to do due diligence because they already know everything about everything. So why do we need to bother to really get granular on the details and the financials? And of course, that leads often to certain doom. The bottom line is there's no benefit at all ever in having or carrying around a big ego. You have to check that at the door. I'll give you a quick story.
Socrates. I believe it was Socrates, the famous philosopher. He lived in a kingdom once and the king called him in and said, "Hey, Socrates, who's the happiest guy in the kingdom?" And Socrates said, "Well, let's see. It's this guy, John Smith. Yeah, that's the happiest guy." And the king was enraged and said, "What do you mean? I am the happiest guy. I'm the king." So he banished Socrates from the country. And when he got kicked out of that country, another country picked him up immediately, made him their philosopher. Years later, he was riding with the king on one of those ships that was rowed by all these people who had been captured in battles and they lived chained to these oars and they threw them a piece of bread occasionally. And there, amongst the people rowing, he sees the king from that first kingdom and he says, "Hey, king, what the heck?" And the king's like, "Yeah, Socrates, you were right. I wasn't the luckiest guy, wasn't the smartest guy, wasn't the most successful guy, and look how I've ended up."
And Socrates said, "Yeah, that's what I was trying to tell you. You see, you can't in the end know how successful you are until, in fact, you're dead, because we have to see how the movie turns out." And think about that whenever you get the big head on something. It's not a good thing to suddenly declare yourself the winner until the very end of the movie. You never know how things will turn out. All of us need to stick with the mission. The mission, if you're in the storage industry, is to buy a storage facility at a good price and then run it profitably. That's the hallmark of success. Don't be taking on all these trappings of things that make you feel like you're a big shot because you need to get that affirmation from those close to you, maybe friends and family, or self-confidence yourself. But every time someone has tried to go out and Elvis was correct and try and be a really big deal, like Ron Burgundy on Weatherman, it typically leads to disaster. This is Frank Rolfe, the Self Storage University podcast. Hope you enjoyed this. Talk to you again soon.