Self Storage University Podcast: Episode 40

Nice People Finish Last

We all like nice people, but having a kind and gentle disposition can often be a hindrance when it comes to buying and operating a self-storage facility. In this Self-Storage University podcast we’re going to review when you can and can’t be “nice” and still be successful – as well as tips on being “tougher” for the sake of your investment.

Episode 40: Nice People Finish Last Transcript

There's an old saying that nice people finish last. And sadly, it's true. This is Frank Rolfe , the Self Storage University Podcast. We're going to talk about how nice people do tend to not get what they want out of self storage investing or management, and then how you can learn to be a little tougher for the sake of your investment.

Let's start off with the definition of nice. Nice is defined by Webster's as pleasant, agreeable and satisfactory. It means basically, you try and please others. The problem is when you're buying, or operating a self storage facility, pleasing others isn't always your best option. Now, when pleasing others means your customers, sure, then you want to be nice. But when we're buying that storage facility, and when we're being a tough, hardened operator, trying to extract as much money as we can out of it, being all kinds of pleasant, and agreeable is typically not the best modus operandi.

So why can't you be nice? Well, let's break it down into pieces. Let's start with buying a self storage facility. We are all in competition with each other. There is a defined number of storage properties in America, roughly around 40,000 of them. So what you have is you have people who are all vying with each other to buy those storage properties at the lowest price they humanly can. So we are locked in mortal combat, both with other storage buyers, as well as the sellers of those facilities. Now, if you just turn the other cheek, if every intersection, you allow the other person to turn, first, what will happen is you'll be beaten out on every deal you ever look at. So the whole concept here is that I am more concerned about what other people think than I am my own opinions and future, then sadly you're in the wrong position.

Time and time again, you'll call the broker, call the seller, they'll say, "Well, I have someone else looking at it too." And you'll say, "Oh, well, gosh, well, I guess let them go first. And if that doesn't work, then come back to me." You know, sellers can hear in your voice whether or not you have that fiery passion that typically leads to a deal closing. And if you don't have that, if they don't hear that kind of enthusiasm, then they'll go with the other person. And when you're trying to be nice, you don't have that. You're trying to be agreeable and you don't really show that that fiery passion. So it's just never really been a good thing.

Now, that's not entirely true. When you're bonding with a mom and pop seller, or bonding with a broker, then sometimes it's advantageous for you. Because when you when you are nice person, they like nice people. But as far as getting your foot in the door, then nice people do typically finish last, sadly. And then you have the fact that you are also competing for the best price you can get on the facility. If you try be too nice with the seller, if your whole attitude is you're more concerned about the seller than yourself, then you'll lock yourself into contracts time and time again, which are too high or could have been lower. The seller, as much as he may like you, he also wants to get the best price that he can. So you've got to make sure that you strike a tough deal, as tough as you can humanly strike, to make sure that you pay as little for the facility as you can.

Then comes the issue of operating it. Most Self Storage properties have a manager. And studies have shown that when it comes to an owner and a manager, typically being the nice person isn't the most successful. There was something on PBS years ago where they took two basketball coaches, and they took 10 college basketball players, and they had each coach take a different demeanor. One was the nice coach, the happy coach, and the other was the tough and the mean coach. So what would happen is the guy would try and shoot the free throws and they had each player try and do 10 free throws. So there was basically 100 potential points. 10 people, 10 free throws. So the nice coach, when they would throw the free throw and miss he'd say, "Well, that was a good try. Here try it again. Oh, don't worry about that one here. Try again." The tough coach would say, "You're never going to make it into the NBA if you can't do better than that. Oh my gosh, you're not paying attention at all. What are you doing? Where's your posture?"

Well, guess who won? The nice coach or what people would say the tough, the mean coach? Well, the mean coach clobbered the nice coach almost by a two to one margin. That's because the players under the mean coach but they were more focused. They had more of an adrenaline rush. They really, really, really wanted to make the basket. But with a nice coach, they just didn't much care. They were already thinking about, you know what they were going to do next. Because they knew that no matter what they did nice coach wouldn't yell at them, everything would be fine. That's how it is with your property too. So if you're a boss, if you supervise your manager with the attitude that nothing they do, can be wrong, that it's all good and you're just trying to be the nice guy. Well, then they will have a very lackluster performance just like those basketball players did.

If however you say, "Alright, here's the deal. Here's our budget. How are we doing on hitting it? Wait, what do you mean, we're not hitting it on the revenue? What do you mean, you did what with that expense? Sadly, even though we'd all rather be more pleasant, that just doesn't work as well. It's been scientifically proven that if you own the property, and you're managing it, the tougher more unhappy person does better than the one that is nice.

So if we're all in agreement, that being too nice is not necessarily the best attribute in buying and running a storage facility well, how can you toughen yourself up? We're all born with this inherent desire to be liked. And if you look at small children, invariably, they're always nice. We all started off nice. So how can you become a little less nice when it's to your betterment? Well, first thing you need to do is you need to understand that you only live once, you're kind of on a mission. If you're going to buy a self storage facility, then this is your shot, this is the only shot you have, you're going to have to face the reality that it is a dog eat dog world, it's a competitive world out there. And even though you may be nice in business, let's not be so nice. You have to kind of compartmentalize your brain. In your personal life when you're around your personal friends and family, in your own personal pursuits,  then you can be as nice as you want. However, when you are onstage in a business format, you have to be a different persona, you got to be a whole lot tougher.

If y'all ever seen an interview like Michael Jackson, the pop singer from the past? You know, when he was onstage, he was extremely outgoing and loud. But offstage, he could barely talk he was so insanely shy. Because he had developed a second persona, which is what allowed him to be the superstar he was because the real him would have never been successful at all. That's the same thing you have to do. You have to realize that even though you like to be a nice person, and you want to be a nice person in your personal realm, that you have to be a lot more hardened when it comes to work. So sadly, you're going to have to if you don't have that natural, tough persona, you're going to have to develop that.

And then you also need to read lots of biographies are different people. I like read biographies on business, and also war, and look at how those people think. Again, you have people who are typically very nice people like Omar Bradley, the American general in WWII. Super nice guy but when he was in battle, he was super tough, a super tough boss, because he knew how important it was to win. So maybe the key to it all is just to acknowledge and embrace the mantra that you want to win. You want to win at finding that storage property and you want to win at operating it, you want to win and hit in your budget, you want to win maximizing the income from it.

So really, maybe the key to being the tough person you need to be is just to acknowledge that self storage, investing in many ways is just like a sport. Maybe that's the best way to think of it. So if you have a child who plays sports, you'll know that all the time, their initial personality may be super nice, but part of the key of the coach is to teach them it's okay to be tough. It's okay not to be nice when they're engaged in the sport. And if your sport is storage, investing, then you have to acknowledge that you've got to adopt the personality, the framework that is the best for you to succeed. And that means that you can't just always be nice. This is Frank Rolfe, the Self Storage University podcast. Hope you enjoyed this. Talk to you again soon.