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This is Capitalism: Up Close, Inspired, Explained

Mar 15, 2018

Ray Hoffman introduces Mobile Mini Solutions and its CEO, Erik Olsson. Between 1980 and 2000, the metropolitan population of Phoenix grew by 45%. As amazing as that might seem, consider the growth in the exurban city of Chandler, Arizona — 22 miles from downtown Phoenix — it grew by 460%. Peoria, Arizona — 14 miles out — grew by 740%. This formed perfect conditions for the growth of a company called Mobile Mini to provide contractors and other jobbers with mobile secure space for storing their stuff on-site. Thirty-five years later, Mobile Mini is doing $500 million a year in sales, and not only is it a national brand but under CEO Erik Olsson, it’s also become less dependent on the ups and downs of the real estate cycle. Today, it’s known as Mobile Mini Solutions, offering not only job site storage space but also mobile office rentals and containment systems for water and other fluids. Erik Olsson grew up in Sweden. What brought him to Phoenix? You might say capitalism.



Key Takeaways:

[1:28] At the University of Gothenburg, Erik’s impression of American capitalism was of freedom and choice, free markets, private ownership, entrepreneurship and innovation, small government, and robust institutions. Erik compared that to his home country of Sweden, and found Sweden sorely lacking in these concepts.

[2:16] After managing businesses on three continents, Erik understands even more about it today. He sees now the value or importance of incentives. Everybody reacts to incentives, whether they’re negative or positive. Erik’s biggest learning since school is that everything governments and companies do impacts people and has consequences.

[3:03] Erik agrees that giving people individual freedom, opportunity, choice, and innovation, capitalism shows a better understanding of human nature than socialism, which stifles all of those things.

[3:29] In Europe, management is regulated to a higher degree and there are more laws. They are much more unionized. It is more difficult than in the U.S.. In South America, the workers do what the manager tells them to do. Managers have to be careful how they express themselves because what they say is what they will get.

[4:10] In the U.S., the incentive is to better themselves and better their lives. Employees generally contribute to a much greater degree to the betterment of the company and the relationship between management and employees.

[4:31] The can-do attitude is part of the American dream. It is very hard to find in Europe.

[5:08] Erik talks about the metrics of his prior company, RSC Holdings, the number one player in terms of growth rates. The people wanted to show the rest of the world that they can do this; they’re much better than everyone else in this industry. That attitude in large part led to their success.

[5:42] Atlas Copco, the Swedish maker of mining equipment, was Erik’s first employer after school. He credits them with his success. He calls them a very decentralized organization with crystallized levels of responsibility. Very early on, you get the accountability of the position you are in. Learning that on a global scale was great.

[6:46] Atlas Copco sent Erik to Brazil at age 28 or 29, right in the middle of the hyperinflation. It was very turbulent, trying to manage a P&L in hyperinflation, but he counts all he learned as a blessing. He found much he could take back to the U.S.

[8:13] RSC Holdings rented heavy equipment. 2008-2009 was not a good time for renting heavy equipment. At Mobile Mini Storage, they are constantly on the watch for the rate of growth. Their products are less cyclical. Customers will always have to store their stuff somewhere.

[9:02] At Mobile Mini Solutions, they focus on national accounts, with a strong team signing them up. This leads to stability regardless of the local economy. Individual offices sign up local accounts. With a national account, there is a single point of contact, wherever the storage is needed. National accounts provide 30% of their revenue.

[10:12] On the tank side, national accounts provide over 50% of the revenue stream.

[10:26] Mobile Mini’s Net Promoters 2016 customer loyalty and recommendation score was above Costco, Starbucks, Amazon and Apple.
[11:00] Erik discusses how the culture of service was created and maintained. They constantly discuss it and measure the Net Promoter score down to a branch level, so they can see who is contributing to the number and who is dilutive to the number. They hold people accountable and provide training. They coach salespeople on calls.

[11:44] Erik started at Mobile Mini when there were about 120 locations. Today, there are 150 locations. Erik sees room for 50 more locations in North America over the next years.

[12:12] All locations are company-owned. They maintain direct contact with their customers and want to be in charge of their Net Promoter Score. They don’t want to outsource great customer service.

[12:27] Mobile Mini is the largest player in their market, so they can afford to invest in technology. They are using a portal where the customer can manage their entire relationship, from placing an order, paying an invoice, looking at their history, seeing on a map where they have mobile units, and creating a report. That technology keeps them in the lead.

[13:11] Mobile Mini’s Ideal Client Profile is a builder on a job site, keeping stuff in a storage facility on site, overnight during the construction season.

[13:27] Erik has a vision for the ideal growth path for Mobile Mini. As the largest player, Mobile Mini has around a fifth of the market. Going forward, they can get much larger than what they are.

[13:49] Erik really enjoys the speed and competitiveness of the business, where things can change in a day.

[14:28] Erik started as a finance guy and became a customer service guy. Those were requirements for becoming a CEO: knowing the customers and the people.

[14:54] As Erik will tell you, those Net Promoter Scores and good customer service in general, are increasingly important in a free, competitive marketplace. This is capitalism.



Mentioned in This Episode:

Mobile Mini Solutions

RSC Equipment Rental (Now United Rentals)

Atlas Copco

Net Promoter

This Is Capitalism