Ep. 208: How this entrepreneur organically grew a self storage company and become an online entrepreneur with Kevin Shee
In this episode, I speak with Kevin who is a pioneer of the self storage industry in Hong Kong and Macau.
Kevin founded SC Storage in 2001 and organically grew the company into a 63 self storage chain with over 1,100,000 sf.
Currently, Kevin and his team manage all 63 properties under the SC Storage Brand, managing all aspects of the operations.
Listen to find out how Kevin organically grow his storage company and became one of the largest in the country.
Listen Below:
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My Offbeat Journey: Make your lifestyle the goal, not your income!
Transcription:
Debbie:
Hey everyone. Thank you so much for being here today. I am really excited for my guest today, Kevin
Hey Kevin, how are you?
Kevin:
Hi, Debbie. Nice to meet you.
Debbie:
Thank you so much, it’s so nice to meet you too.
Can you tell us about you and why you live an offbeat life?
Kevin:
I started with an offbeat life 2 years ago. I was a very engaged and hard-working business guy for 20 years almost. I live in Hong Kong and I run a self storage center. It’s the biggest in Hong Kong, the second biggest in Asia, and I had a big accident four years ago.
So we had a big fire, the longest fire in Hong Kong history and unfortunately two firemen died. That really hit me hard and that’s when I started having a midlife crisis. I started traveling the world for the last two years. That’s about it.
Debbie:
Well, all of that obviously makes a huge impact on you, especially when there are people who have lost their lives. How did you get to the point where you knew that there had to be changes when that huge fire happened?
Actually, Kevin, let’s go back to the beginning because that sentence is super short but there’s a lot to dig into that, right?
First of all, how on Earth did you manage to have one of the largest self storage companies in Asia? Let’s go to that first.
Kevin:
My parents were entrepreneurs. We had a factory and then because he was badly managed, he left me nothing except an empty building with a lot of loans. So I was underwater as we owe the bank more money than it was worth.
And since we can rent it out and I was talking to the guy next door he said, “Hey, why don’t you just cut some rooms and rent it out and then make a side income?” So I started doing that while looking for a job – that was 20 years ago.
Back then the startup wasn’t hot. Everybody wants to be an investment banker. I could not get a job as an investment banker but then I was renting 50-60 rooms already. And then by the time the internet happened, I realized it’s called self storage and there was no self storage in Hong Kong back in those days.
So I decided to commit myself to be a self storage company operator and because I always like digital marketing, I was able to brand myself online and I was very aggressive. I borrow money from loan sharks just to open sites.
Back in the old days, I was very egotistical. I always want to prove to the world I was successful and bring fame back to the family and then maybe at some point, I overextended it. And then we care about safety. I mean, I didn’t do anything illegal but expansion was my number one thing and then we got to the point where we had a fire and then everything changed.
Debbie:
And I also do have to say you and I come from an Asian family and Asian background and I have to reiterate that a lot of what we have to go through when we’re growing up is saving face, right?
You always have to make sure that your family name is thought of and seen as something that is really well. You can’t embarrass your family because that’s one of the things that you should never ever do.
So, that’s probably one of the things that lit that fire behind you to keep going because you want to make sure that you are having your family name and making it better than what it was.
Kevin:
Also, I think I was partially very lucky. My grandfather, when he died, he left a lot of properties for my father. And because he wanted to do business, he started mortgaging and selling the property to get capital to do his business in which he wasted all the money. So I knew the importance of properties in Asia.
As an Asian, we are always about land and property. So I start buying a lot of properties as early as possible, as much as possible. And I caught the biggest wave back in 2003, it was the lowest point of property prices in Hong Kong, and all the way up to now, during the fire two years ago, all of the properties I bought went up 13, 14 times.
I was hardworking but I was also lucky.
Debbie:
I don’t like it when you say that, Kevin, because you’re not lucky. A lot of people are probably going back to that time right now to this day and be like, “I should have done that.” But you had balls and you had guts to actually do it, right?
There’s a lot of people that would just say, “I should have done that” or “I could have done that” and now they’re kicking themselves in the ass but you actually took that chance and you took that risk to do it and that’s really what makes you different from other people because you’re not just a talker, you’re a doer.
Kevin:
I would always say this, and this is kinda controversial, it’s like you, if you’re in the Philippines or in Hong Kong for that matter and you have a chance, I would go all out. I would leverage 95% and flip properties the max.
Why? Because I have a Canadian passport, you have an American passport and we go belly-up, we go bankrupt in Hong Kong – we go back to Canada. We work, we start clean, there’s no consequence. Sounds a bit controversial but with a Canadian passport, I can just leave if it didn’t work out right?
Debbie:
That’s definitely a different way of thinking about it. And I think a lot of people do not like to think about that because it’s a lot of risks and honestly, that’s why someone like you, Kevin, is extremely successful when they do these things because you’re willing to take that risk and a lot of people are afraid.
There’s a lot of fears that go into this type of industry, especially the one that you’re in. And so when you actually started your company, like you said, you didn’t really have much, you didn’t have a lot of experience, you didn’t know what you were doing essentially when you started your self storage company, how did you prepare for it?
I mean, how did you make yourself go from nothing and be one of the top people in Asia to be able to do this?
Kevin:
My parents left with one factory with no construction money. So I just drew lines on the floor and then I just start putting flyers and posters on the street. And then when people come in I would sweet-talk them, “Why don’t you prepay me and two years and I’ll give you 20% off?” And then they would give me some money and I would pay the construction guy to build maybe 10units.
And then I would persuade another person to prepay for 2 years, I would do another 20 units. So that’s how I started it. When I did the posters on the wall, the government kept ripping them off and started finding me. So I bought a ladder that’s not very high and I put them very very high so that the government guy cannot remove the flyers.
Back in my old days, there’s no Google, there’s no Yahoo, there’s this thing called Yellow Page. I don’t know if you recall that.
Debbie:
Yeah. I do.
Kevin:
We don’t want to disclose either one’s age but it was a long time ago. There’s a telephone number you can call for Yellow Page. There are a few similar operators but they’re not big and they’re not really doing this business. Honesty, I just hustled. I just started incorporating names same as them and registering with Yellow Pages.
So when people start looking for other people they get redirected to me.
Debbie:
Wow. That’s a pretty genius idea.
Kevin:
Everybody has a past.
Debbie:
Hey! Especially when you’re starting in the beginning you try different things. You got to do what you got to do.
Kevin:
Yeah.
So, I hustled, and then there were a lot of government-assisted loans for factories. Again, those are no-consequences loans. You can apply, they can either accept you and not accept you. They’re like interest-free loans.
So I exaggerated a lot of stuff to fit the qualifications and I got a loan to spend.
Debbie:
Hearing from you doing all of these different things that you did, a lot of people wouldn’t even think about that. So you’re definitely an entrepreneur, you find ways to solve issues when you have an obstacle in front of you.
And I think what really makes an entrepreneur, a real entrepreneur, is that, you know this, Kevin, when you start a business, there’s always going to be something that’s blocking you from going forward and someone like you always finds a way to go over it, under it, around it. And that’s how you become really successful at this.
Kevin:
Honestly, we’re laughing at it now and I’ve always tried to have this kind of wit, being a hustler, or smarts but until that fire happens I start to, I would say, regret or wonder, “Is that the correct way? Have I been doing too many shortcuts? Have I been doing too many of my digs that caused that to happen?”
I had a real calling, soul searching on myself. All these years I’ve become successful but now this has happened. Is it because I didn’t follow the proper path? I was always looking for shortcuts. I had two years of traveling around the world, asking myself a lot of questions.
Debbie:
Of course. This is a segway to my next question: we always have that what now moment once we either leave or 9 to 5 or start a new business, what was yours like, Kevin, and how did you handle that?
Kevin:
When I came back from Canada, from University, I was supposed to help my family out and when I came back, I realized my dad owed the bank like 8, 10 million USD.
Debbie:
Wow.
Kevin:
And the repayment rate was about $100,000 per month. As an only male child, I can’t get a job. No matter how much salary they give me I cannot support my family. So my back was against the wall. And also I have a backup plan: if it fails, I’ll just go back to Canada.
The job was never an option for me because I have to take over the family mess and try to recover it. Getting a job – I can’t save my family, the Empire so to say.
Debbie:
I want to go into your psyche when you’re faced with an issue like this because for a lot of people they just curl up, they start getting depressed but you did the total opposite. This kind of gave you more fire, more determination and it really allowed you to become extremely successful.
How do you really deal with that? Because there are so many things that go on in our mind, especially when we’re faced with failures that really stop us or debilitates you from doing so many things. How did you go about that? How did you go beyond it to keep going?
Kevin:
If a problem comes to you, you feel overwhelmed. You cannot solve it and you probably cannot at one go. What I would recommend, I’ve been to three crises in my life so I’m quite an expert, turn all your problems into small chunks.
Say there’s a problem, instead of seeing it as one coming at you, see it like 10 or 12 mini-steps that you can do to slowly solve that problem. And you start attacking step one, step two at a time.
And every time you accomplish a small goal, one of those steps, then you celebrate. Take your family out for dinner or go on a small holiday, then you start getting the psyche of, “Hey, I can do this,” because it was such a big task you get overwhelmed and you give up but it was one step, two steps, three steps then you slowly tackled the problem.
That’s one advice I give.
Debbie:
I think we definitely underestimate those small wins. And like you said, it’s a really great thing to celebrate that and just have gratitude that you were actually able to solve those issues and then you solve bigger ones. So that’s such a great mentality and tip that you just gave.
As an American, I think we’re all often, especially me as a New Yorker, told, “You just need to keep hustling, hustling, hustling,” and nothing is ever enough and we really overlook the small wins. And that actually helps us, in the long run, to celebrate like what you’re doing to keep going.
Kevin:
Exactly.
Celebrate your small wins and also if you make a mistake, if something happens to you, don’t blame it on bad luck. Most things that happen to us, like the buyers, for example, all they think is, “Oh, this is not our time. It’s bad luck. Then, you just don’t think about it, right?
Some of the things within this “bad luck” can be modified and can be changed. You got to filter out what was your fault and what was luck. Something you can do to minimize the impact. So every time something bad happens to me or I made a mistake or something, I try to learn from it and stop blaming it on luck.
So next time the same thing happened, at least I can minimize it.
Debbie:
I also feel like there’s always something to learn from this even during this pandemic that obviously a lot of people have lost their job. It’s just a horrendous thing for a lot of people but also you see It on the other side where now you know what you need to work on especially if you have a business.
And if you’re working from 9 to 5 and you lost it now, you know that you need to do something else that’s maybe working remotely so you can work even though you can’t be outside. So there’s always something that you can find from it that will help you in the long run.
Kevin:
Exactly.
Always try to learn what can be changed and what can improve your odds next time.
Debbie:
What about you, Kevin? What has been the biggest thing that you have learned from what’s happening right now? We have the pandemic going on and you can’t travel as much as you want, what have you been doing to make yourself really be? I don’t know. I guess it’s like survival for most people right now. it’s just mentally trying to survive.
Kevin:
I feel like God is keeping me around honestly speaking. So what happened was after my fire, I got lawsuits everywhere and then the bank wanted me to pay them back, and then the customers were suing me. It was troubling for the first two years for me, right?
And then I realized, I do self storage, I sell my property and I use my money and I buy self storage REITs with some leverage and margin, I make the same money. So I’m like, “What the heck?! I’m working for 20 years and now you’re telling me I invest in other people doing the same thing, I can make just as much.”
So I just sold half of my self storage business because of the lawsuits and everything and put 80% of it into storage REITs and I started traveling. I was telling everybody I’m such an idiot for working for so long. I should just be a travel blogger and just do this.
And then March happened and then all the REITs went down 40%. And since I was on margin, I got a margin call. Honestly, I lost 30% net wealth. At my age, that’s worth a lot of money because, at our age, you can’t recover that fast, right?
If it wasn’t because of the fire, I do what I do. I will lose 30% of my money, right? Since then, I gained 10% back so I’m still down to 20 people. What I learned is if you invest and you use margin, every 10 years something’s gonna get and get wiped out. Buy and hold does not work.
The funny thing is, because everybody’s closing down, I still have my business. Everything is closing down before moving into smaller houses, closing their shops, my self storage business is booming again. So now I’m using my money to buy more storage now. I’m like, “Oh, man..”
It’s really funny. I thought my life changed and God said, “No, you got to go back.”
Debbie:
It’s so interesting where life takes you and even when you go through the lowest of the low if you just keep going and also because you’ve learned so much throughout the years, Kevin, from 20 some odd years of being a business owner and entrepreneur, it’s in your blood to just keep going.
And you’ve gone through so much already. There have been so many setbacks and you don’t know any other way but just keep going forward.
Kevin:
You can have a lot of money and properties and something like this happens, you’re in trouble. My mentor always tells me, “Don’t do anything criminal.” If you break a rule to make money and you get a fine, that’s okay. In my book. that’s okay. But you break a rule you go to jail – no. Don’t do anything like nothing.
The second thing is to always be liquid, always have enough cash. If anything happens, you can pay it because those are the turning points that break a person. I know a lot of rich people, they have so many buildings and properties but they don’t have any cash. And then the time comes and then they try to get some back but they have to close. So always stay liquid.
Debbie:
Yeah, that’s definitely great advice and I think we’re feeling that right now. You always need to have cash on hand just like anything happens. Who knew this whole thing was going to happen to us? Which is kind of ridiculous.
So for somebody who’s not obviously at your level yet, well, most of us are not in your level yet, Kevin, and somebody who’s just starting outright and they want to start a business or maybe they want to start investing, what would be the first thing that they should do and how do they keep going forward from that just building up their assets?
Kevin:
If you’re going to do business, don’t think outside of the box.
I always advise starting young. I don’t know how it is in the US but in Asia, people are kind of conservative, if you get a job and you want to be an entrepreneur started as soon as possible. Don’t get married and definitely do not have a kid.
Because if you got married and you have a kid and your boss gave you a promotion, there is no way you’re gonna risk it. And that’s it, that’s your life. You have good pay and then you have a mortgage to pay, kids to feed – you’re not going to risk it. So risking it takes a lot of guts a lot of flexibility
So start young, don’t try to reinvent the wheel, don’t try to think of something nobody thought of because everything has been thought of already. Try networking and find industries that you’re interested in. Go work for them, meet the people, learn the trade, and then when you’re ready, start growing.
Build up your network of people first and have some expertise in that knowledge. And then when you’re ready you can go start. And if you know that you’re scaling fast, I mean, if you’re scaling fast and then you’re doing well, don’t stop.
Usually, for a start-up, there’s only a very short window of time but you’re doing well before all the competition comes in and starts copying you. So you need to be very big and have a hold around the business before people start copying you and take you out.
Honestly, the one last advice I would say is don’t get greedy. I know startup people that did something well, they’re very big but they’re not making money, and then big companies offer them millions of dollars to buy them out and they say no and so they just copy them. And now because of the virus, they’re in debt, they’re going to close the business.
Two years ago, they each would have pocketed at least 5, 6 million US. So don’t get greedy, don’t try to be a billionaire. I mean, there are not too many billionaires in the world, only on TV, and you’ll need to be a billionaire. Be happy with what you have and when an opportunity comes just take it. That’s my advice.
Debbie:
Yeah, that’s definitely solid and you don’t need that much money to be happy honestly. And after a certain amount of money, it all seems the same to me. I guess if you just have fun making money, that’s one thing.
Kevin:
More money, more problems, right?
Debbie:
So, Kevin, when you left after everything happened, you say you had your crises at that moment when you had the fire and you started traveling and you still were running another business, you found out another way to create income and you still made the same amount of money, how are you able to make sure that you were balancing work and fun and travel at the same time?
Because I think that’s what a lot of people have an issue with, have a problem with, to be able to do both at the same time.
Kevin:
Our business wasn’t thinking about money, I was trying to help my parents out, it didn’t work well. But the storage was making money and because I sold a lot of my properties, just a dividend on that, I was able to provide for my family, right?
Obviously, it wasn’t sustainable because I used leverage and the crash came and I lost 30% of that but then my storage business started booming again. So it’s always either storage or investment for me, there’s no anything else.
How do I manage my staff? Honestly, I know your podcast and you’re an entrepreneur, you’re talking to a guy who’s over the hill for that. I’ve been betrayed by employees and friends a few times. So that’s one of the things I really don’t like about doing business.
My best friend copied me and stole my logo and we had a fight. He is the third biggest self storage in Asia. He was the computer guy who did the system for my self storage company. I didn’t know he was my competitor until five years later.
Debbie:
Oh my God.
Kevin:
That was a betrayal. I peel my company seven years ago, I didn’t work out now, that’s another crisis, by the way, it’s not the prices for the way. And then afterward, my second-in-command that I really trusted, I thought he’s keen on being the CEO of the company, left. Two-day notice and he just left me hanging there.
And then last year I had another key staff left and started looking for my competition.
I love doing business but all this betrayal. When you’re investing, you’re not competing with anybody, right? Everybody’s your friend. You make money, you lose money – it’s the same. When your friends start doing what you’re doing and then we compete for the same resources, it hurts friendships
Debbie:
Honestly, this is really sad to say and I am upset but I have to say this: what Kevin is saying is so true. Like, I’ve had three businesses before I’ve had this one and I can’t tell you how many times, because with me, I’m always trying to see the positive of things, so it’s either people betraying you that you’re working with or people that you know that maybe sees that you’re going forward and it changes relationships. It really does.
And it’s really sad to say because you don’t think that’s going to happen because you feel like these people are close to you or if you have people you’re working with and it turns out great in the beginning and then all the sudden money starts to come in and the relationship changes which is kind of ridiculous.
And it makes you jaded, right? And it’s really sad and then people think that entrepreneurs are the sharks and they don’t have hearts but when you have been burnt so many times by people that you thought you could trust and it goes the other way, it turns you into a different person and you’re not as likely to trust as you were in the beginning.
That’s sad but it’s true.
Kevin:
We’re supposed to motivate people to be entrepreneurs on the show. We should stop talking about this now.
Debbie:
But I also love to tell people the realities of this because there are other obstacles you have to face aside from: How do you make money from this? How do you find the projects that you need to work with?
It’s also about how do you find the right people and actually build that trust and how do you deal when there’s mistrust that happens which is a huge thing. And it does happen more often than we think it actually does.
Kevin:
That’s the question. I mean, if you’re making more money, it’s going a lot, okay, fine, it’s part of the game, this is given, right?
But if you’re in a state where let’s say, your business is not growing anymore and you have nothing left for your retirement, start asking yourself: do you want to continue running this and get betrayed and have all this BS or do you want to travel?
Again, my investment crashed down, I can’t travel anymore. So I went back to my old job as a storage guy.
Debbie:
But hopefully, Kevin, this is not going to be forever. Maybe by next year things will start getting back to, I don’t know, a new normal.
It’s kind of crazy how the entire world, not just a small corner or even one country, it’s like the entire world has been stopped by this. It’s really crazy to me.
Kevin:
Yeah. So I guess we’re lucky to have our health, our family, we’re not on the streets so be grateful.
Debbie:
Yeah. Things to be grateful for. I think I love listing those things right now, especially right now because otherwise, you’re just going to go insane but that’s for another day.
So, Kevin, let’s fast-forward to 20 to 30 years from now and you’re looking back at your life, what legacy would you like to leave and what do you want to be remembered for?
Kevin:
Besides storage and investing, I’ve been mentoring kits for 4, 5 years now. Some of the kids that I mentor have been really really well. So I hope to be a positive force for good. I hope to make an impact on more entrepreneurs. I can help them either by networking them with the right person, the right investor, or make me sure that they got their growth strategy right.
So that’s something I have a passion for and that’s why I do my podcast. I also have a Chinese podcast. On Facebook and YouTube, we get 10,00 views per episode.
I don’t dare to have another goal of how much money I’m going to make or how big my storage is, that’s what got me in trouble in the first place but I’m having fun doing it. No promises if fun. Like, I would call my staff, “I am not going to push you to get the numbers. Make numbers up for a bonus but if you don’t make the numbers, I’m just going to keep on closing shops until the whole thing vanishes.”
I’m not going to bring my kids into the business because I believe the world changes so fast. I think they should enjoy their own destiny. I should just maybe give them a small safety net so that they’ll have a house to live in.
I just hope to be a force for good and don’t cause any more lives.
Debbie:
I love that your impact is really changing the next generation and I do have to say this: I grew up in America and even in schools they really don’t teach how to be entrepreneurs. It’s not what we’re taught to be and that’s why for us who want to go outside of that box, it’s so much harder, right?
So if we had someone like you, Kevin, who mentored us in the beginning, a lot of children probably would have gone further out sooner because you do have someone who knows what they’re doing and not just the basic things in life and things.
Honestly, I went to school, I got my Master’s Degree, and most of the things I learned I don’t even use any time. So it’s kind of ridiculous how most of it is useless.
Kevin:
I think if they should learn one thing, it should be money management, how to save money, spend, etc.
Another thigh is trust. I mean, I always say there are only two ways you can really fail in your business. One is you trust the wrong person or the wrong institution. The other is over leverage. If you know that your business is turning around, it’s not going well and you close it properly, you wouldn’t lose your share.
But most people either trust the wrong person, invested with the wrong person or the over-leverage. So just make sure of those two key points, you’re okay then you’re going to be fine.
Debbie:
This is going to be the last thing but, Kevin, after all these years, and I want to learn this from you, it’s probably going to be like you don’t know until but how do you know? Do you have an instinct now from people when you know you can actually trust them or not?
Kevin:
No, I just don’t trust anyone. Seriously, why would I trust them?
This is not a joke, the key to success is to get everybody to trust you and never trust anybody and then you win. Sounds bad but if you invested in anybody, hey, you win.
Debbie:
Yeah. It sounds really harsh, guys. I haven’t done business that long, obviously, not as long as Kevin but I can’t even tell you how people will just do that. It’s really sad to say. I don’t want to say this, I would rather say people can be trusted.
Kevin:
Go and trust them with money if you think it’s okay but key things that will make you lose your share, don’t expose yourself for that.
One misstep takes you years to get it back. Try to bear that in mind and you’ll be good.
Debbie:
There are also different ways to go around it. Like, maybe doing a little bit of time with that person or having them put their money out first to make sure that you can trust them with it. There are different ways, different strategies to it but yeah, don’t trust anybody right away.
Even after years of working with somebody things can turn the other way once the money starts coming in. So yeah, guys, I’m sorry to say that.
Thank you so much for being here today with us, Kevin. If our listeners want to know more about you, where can they find you?
Kevin:
I’m on Facebook, you can be at KevinShee and I always have a podcast called The Kevin Shee show.
Debbie:
Perfect. I can’t wait to listen to more of your episodes and for all of our listeners to go there as well. Thank you so much, Kevin, we really appreciate you.
Kevin:
Thanks a lot.
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