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Making It with Jon Davids
261 - The $6 Billion "Mountain" Business You've Never Heard of | Iron Mountain
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This is Herman. He bought a mountain and turned it into a $6 billion business. I'm talking about Herman Nost, who was a mushroom farmer. Born in September 1895 in New York, he would eventually go on to be known as the Mushroom King because he built a hell of a mushroom business. But his bigger contribution is that he's the founder of Iron Mountain, a company you've probably never heard of. But this company is actually the biggest enterprise storage business in the world. They store the most valuable documents for biggest companies in the United States and the world. The United States government, major banks, insurance companies, law firms. They've got the original masters to Elvis Presley. They've got priceless Picasso paintings and a lot more. This is a $6 billion revenue business. And it's a crazy, crazy story with a lot to learn. I'll break it all down and tell you exactly how he did it. And I'll give you three big lessons you can take away. Apply to your business right now, maybe change your whole life. My name's John Davids. I'm the found of Influicity, a marketing agency where we generate many millions in sales for businesses like these. And if you're a business builder, you're going to love this. Let's do it. You're listening to Making it with John Davids. So rewind to 1936. Herman's running a mushroom business. And it's kind of a simple business. Grow mushrooms, sell mushrooms, make money. And these mushrooms are selling food fast. And Herman needs more space to grow. So he picks up an abandoned iron ore mine in New York. It's this huge mountain, and it's got these underground tunnels which are perfect for growing mushrooms. He names it Iron Mountain. And things are good. Business is growing, and things are going well. Then World War II happens, and Herman's mushroom business takes a hit. Sales fall fast, and Herman needs to pivot. And that's when he discovers a much better use for his mountain. A much mushroom farm under a mountain is a good business in good times, but in bad times. You know what's an even better business? A nuclear bomb shelter. That's right. In 1950, American companies are terrified of nuclear attack, especially big banks, because they gotta protect their records no matter what happens. They need a safe place to put them. And Herman's mountain is looking pretty good about now. After all, it's hundreds of feet underground, and it's reinforced with rock. So Herman starts renting out space in his mountain to banks. It's very simple. Give us your most valuable goods. And we'll keep them safe. And sales are ticking up fast. But this is just the beginning. Fast forward to the 1960s. Now, Iron Mountain is holding onto some of America's most valuable corporate records. And those companies are starting to have a lot more stuff to store. Hospitals have medical records. Insurance companies have policy documents. Law firms have case files. And they all turn to Iron Mountain. All turned to our boy Herman. This company is starting to expand really fast. They're outgrowing their mountain. So they buy a warehouse in Chicago, they buy a record center in Boston, a data facility in Rhode Island. Today they've got 100 million square feet of storage. And they're holding on to some of the world's most valuable pieces of history. If your business is doing a million bucks a year or more in sales and you think you could be growing faster, head over to JohnDavids.com grow I want to show you the growth system we've used at Influicity. With over 200 clients in just the last year. Go to JohnDavids.com grow watch the short video and if it sounds like it could be helpful to you, book a call on that page. And one more thing, guys. If you already have a marketing budget, spending on Google Ads, Facebook ads, Instagram ads, TikTok, LinkedIn, do not skip this. Go to johndavids.com grow and I'll see you there. So as I was reading this story, I just love the idea that the business starts out with one function and then turns to a whole different function. But the product stays the same the entire time. Literally. It was a mountain at the beginning, and for a very long time, it was still a mountain. And the reason I love that part of the story is because it shows you how important packaging is to your business. Here's what I mean. You can take an asset like a mountain. Let's just say you buy a mountain just like Herman did. What would you do with it? And in the case of Herman, he uses it to grow mushrooms, makes it a mushroom farm. But it can be a lot of other things, right? You could turn your mountain into a hiking trail. You can turn it into a camping ground and rent out spots so people can drive their trailers up and go camping. You can turn it into a tourist attraction where people can come and take photos. It can be a luxury resort so you can build out these blinged out cabins or tree houses. You can do whatever you want. Or you can make it a nuclear bomb shelter and store your most valuable goods there. It can literally be all those things, one single asset. And the best businesses decide on the most profitable and durable use cases for their assets. But this is also where so many companies screw up. And frankly, so many people screw up. There are two ways you can screw it up. Listen. Number one, you can pick the wrong thing, which actually isn't that bad because as long as you're focused on something and you're decently good at it, you'll probably do fine. But number two, the much more common mistake, the terrible mistake that drives me nuts is the everything to everyone positioning. We're going to take this asset and just make it whatever you want to whoever will give us money. Ugh. So let me give you a crystal clear example of this, because sometimes it can be really insidious. I've got a buddy who, who is a super talented software developer. And I remember back in kind of the late 2000s, maybe 2009 or 2010, he was taking odd jobs as a developer, as a lot of people do. He was making pretty good money. Small businesses would hire him to build out their websites. Occasionally he'd get a gig at a big company and maybe four or five months long, he'd get paid pretty well for that. And around this time, again, 2009, ish, Apple comes out with the iPhone and it's really big. And then Apple launches the app store and suddenly there are all these developers who pivot to iPhone development, specifically developing apps to go into the Apple app store. And these developers were making so much money. If you wanted to develop an iPhone app back in like 2010, there was some special language you had to use. I think it was called objective C. Maybe it's still called objective C. I have no idea. So maybe a develop who was developing normal software would have this tiny learning curve to learn this new language. But it wasn't that hard. And I had a conversation with my Buddy back in 2009 saying, hey, why don't you stop being a general software developer and focus on this iPhone development thing? Because you could do basically the same work and probably make double or triple the money, just raise your rates. And I knew this because I was hiring a lot of iPhone developers back at that time and they were charging me a few fortune. So right away that would be a more profitable and better use case of the same skill. Right? That one simple change. You can position yourself as a software developer or you can position yourself as an iPhone developer and make a lot more money. Cool. So that's a little better. But you can do even better than that because there was this whole other group of developers who actually said, forget about developing iPhone apps for other people. Let's just make our own iPhone apps, get them into the Apple Store ourselves, and charge money for the apps. Forget about making them for other people. And that was an even better business. Between 2009 and 2012, there was a surge of apps that just crushed. There was an app called Ibear that basically made your phone look like a glass of beer. Really stupid. But that app made something like $10 million. There was an app called Sleep Cycle that would monitor your sleep and give you insights on your sleep patterns. Before anybody knew how to do that, those guys made like 20 or 30 million bucks. There was another app I remember called Scanner, which just let you scan your receipts, your contracts, your documents. Those guys cleared something like $25 million. And these all sound so basic and simple today, because iPhones can do all these things for free. But 15 years ago, it wasn't so common. There were also a ton of games. Pocket God Doodle Jump, Fruit Ninja, Tiny Wings. Again, generating millions and millions of dollars for these developers, and in some cases, over $100 million on a single game. So all those software developers, just like my buddy, could have been general software developers, or they could have been iPhone app developers. But they realized the best packaging and the best positioning for their skills was developing their own apps. And it worked. A lot of those guys, by the way, developed 10, 20, 30 apps. They didn't hit on the first one. In fact, they rarely hit on more than one. But all you gotta do is be right one time. There's no limits to how many at bats you can have. Just like in any business, it's gotta keep going anyways. So that's three levels of packaging on the same asset. In this case, a skillset. But I got one more for you. Some of those developers teamed up with really smart entrepreneurs and raised venture capital. And that's where you got names like Uber, Instagram, WhatsApp, Snapchat, Venmo Square. Again, we're talking about the same skill set, the same asset, but the levels that you can go with the right packaging make all the difference. So what does this mean for your business or for any business right now? Well, it means the guy who has a generic restaurant is not going to do as well as the guy who runs the best pizzeria in town. And it doesn't mean the owners of the pizzeria don't know how to run a generic restaurant or can't make general food. It means that they know the best Use of their skills, of their assets, is packaging it up as a pizzeria and being one of one instead of one of a hundred. And this is a disease that entrepreneurs have. It really is a disease. It's an illness. I know because I had this illness. I was sick. I suffered from it myself. When you're very talented, where you can do a lot of things, which a lot of us entrepreneurs face it, we all think we can do everything. You feel the need and the desire to do everything right. A handyman will say, I'm really good at painting, but I'm also really good at woodwork. I'm also really good at laying down tile. I'm also really good at wallpaper, and I'm really good at designing kitchens and bathrooms. And I'm pretty good with roofing, and I'm also good at landscaping. So I'll just do it all. I'll do everything that anybody wants. Whatever you'll pay me for, that's what I'll do. And they build a business that does 92 different things, and the business sucks. It's a terrible business. And they wonder what's wrong. They wonder what the hell's going on. I'm so good at my craft, but the guy down the street who just remodels kitchens is making 20 million a year while I'm killing myself here making 400,000. And that other business that just focuses on one type of imported marble from Venice makes even more money at a higher profit margin. Why? Because of packaging and positioning. This is so important, guys. This is like everything. So let's go all the way back to Iron Mountain. Herman buys the mountain because he needs a place to grow the mushrooms. And the tunnels underneath are the perfect place for that. Cool temperatures, high humidity, darkness, all that. And that's what he used it for. But when demand for mushrooms dried up in the 1940s and then you got fear of nuclear attack growing in the 50s, he repositions it and finds the next best use case. And by the way, maybe it was messier than that. I'm just telling the story here to show you what it's like when you have a bad versus a good. Whatever your business is today. You might have the best packaging and the best positioning, and that's great. But if you don't, or if you're not even sure if you do, you should stress test this. Look at your assets, look at your skill set, look at your team, look at your capital assets. Look at the investments you've made. Look at what your customers are doing what they're asking for. Look at the relationships you have, the network, the marketplace. Really say to yourself, what is the highest and best use case of what I could sell? You don't have to learn anything new or buy anything new or reinvent the wheel. Just dig deep and ask yourself that question for real. It's always better to be an inch wide and a mile deep because nobody needs a generalist. It can be a point of pride to say that you can do everything for everyone, but it's not a point of profit. My friends choose profit over pride. If you spend any money on Google Ads or Meta ads, I've got something that you're going to love. It's Influicity's AI Ads generator. And you can get it right now for free@johndavids.com ads. So here's the deal, guys. We took a decade of our best ads that we've been running for clients at Influicity. Literally something like 6,000 different ads that have all crushed on Meta and Google over the years. We put them into a database so that you can make ads that are just as good. Seriously, we use this thing internally all the time to come up with copy ideas and it's so good. So if you spend any money on Google or Meta ads, I want you to head over to johndavids.com ads. Get it now for free. Something else in this story that happens a few times is that the marketplace dictates a company's value proposition. The value a company brings and the value of any particular product or service is always a direct consequence of what's happening in the market. Always. That's why businesses change over time. Products change, and if they don't, they die. It's because the markets change, the world changes. So let me go full McKinsey on you for a minute. I'm going to go all out. Boston Consulting Group, maybe some Bain and Company. So if I was a super nerdy business consultant, this is what I would do right now. I would tell you about the pastel analysis. Pestell P E S T E L and Pestel stands for political, economic, social, technological, environmental, and legal. Please don't fall asleep. I promise this is gonna be fun and you're gonna learn a lot. And these are the six factors that all companies have to look at and understand at all times to know if they're doing the right thing. So let's go through them really quick. Political. This is things like, what is the government doing? Wars, trade policy. This is actually super timely right now. In 2026 because we've got a lot of wars. We've got Iran, we've got the Strait of Hormuz, we've got tariffs, we've got the war in Ukraine. There's actually a lot happening on the political front that's affecting so many companies. Think about tariffs. A year ago, every retail business, every E Commerce founder that I knew, man, these guys were getting crushed because the political environment changed so fast. Economic, okay, this is things like inflation, interest rates, recessions, consumer spending. What your business does in a high inflation environment or when interest rates go up is going to be wildly different than at times when that's not happening. And if you don't know it's happening, then you're going to be hit with some big change. Maybe you're going to say, what the hell's going on? Why are these spending patterns changing? Why is this happening? Well, it could be the economic environment. Next you've got social, this is the culture, demographics, lifestyle changes, consumer attitudes. Right? During COVID This was huge. The George Floyd protests. The culture of wokeness that every company had to engage with and couldn't ignore it. Every company had to watch what they were saying, what they were doing, what they were talking about, their positioning, right? Everything mattered from a cultural standpoint. And how people consume information, the remote work economy, the enormous impact that work from home had on every business, society and culture have a massive impact on your business. Gotta pay attention to that, right? Then you've got the environment. I'm talking about climate, sustainability, natural resources, weather events for certain businesses, not all, but for some businesses, that has a huge impact. If you're in landscaping, if you build pools, if you do roofing, anything construction or real estate related, you better know what the weather related events are, right? If you're in E Commerce, you sell clothing or any kind of consumer goods, right? The environment has enormous impact on you. The last one is legal, that's the L. So we're talking about regulations, compliance, privacy, all that kind of stuff. Now let's go back to Iron Mountain. I want you to think about pastel, right? Think about pastel and the effect that that had on Iron Mountain over the last hundred years. So let's start with politics, right? World War II, that completely destroyed Norman's mushroom business. And the Cold war creates the storage business because the threat of nuclear attack, government agencies who have a lot of valuable records to protect, and law firms, banks, insurance companies, they become the first customers of Iron Mountain. All right, okay, what else? Let's talk economics. The original Business, the mushroom business goes downhill in the 1940s. That's an economic trend. Another one is post war growth. All these companies after World War II, America's booming in the 70s, 80s and 90s. They got more workers, they got more paperwork, more stuff to store. And that economic trend does very well for the business. Okay, let's go. What about social? Well, you have the rise of the white collar workforce. You got lots of people and lots of offices, creating lots of documents. Again, that opens up a big, big market for Herman. Okay, this one's good. Let's talk technology. I didn't really mention this too much, but in the early days, Iron Mountain was basically storing just papers and physical items. But these days, and over the last few decades, they've had to get into data centers because they're securing digital goods, digital footage. Right. So they're doing a lot more than just physical items. If they had missed the technological shifts, you know, they wouldn't be in business today. That's had a very obvious impact, the environment for sure. I mean, early on, Herman literally bought an iron ore mine so that he could have a humid place to grow mushrooms. Okay, pretty obvious the environment has an effect there. And then finally, we've got legal, and this is a very big one, because companies over time, over the decades, were legally required to hold onto records for a longer period of time. There's a lot of legal liability that comes with that. Banks have legal exposure if their documents are hacked or stolen in any way. Hospitals have legal exposure. Insurance companies, you got privacy and compliance. So all this government red tape, it was so good for Herman, so good for Iron Mountain. They basically have to work with Iron Mountain or they stand to risk a lot. So when you're looking at your business, run this analysis, pastel, politics, economics, society and culture, technology, environment and legal. That'll help you think about what you're doing today, what opportunities you have, what threats are on the horizon, and how your business is really impacted by the world around you. Because, guys, every business is just here to provide value to the customer. And if you don't know what's going on, if you don't know what they're going through, you can't possibly provide value. Let me finish off with a whole bunch of just crazy, weird things that I found in my research here. So check this out. Iron Mountain stores the original master recordings of Elvis Presley, the actual tapes Elvis recorded on through the 50s and 60s. They've also got the master recordings of Frank Sinatra, Louis Armstrong, Bob Marley. They've got the original film of the wizard of Oz and Casablanca, Gone with the Wind, a lot of the biggest movies of all times. In fact, they store all the film for Warner Bros. Paramount, Universal. Bill Gates apparently stores his photo archive and his enormous art collection in Iron Mountain. Museums all over the world store their most valuable artwork and collections in Iron Mountain. Most of the world's most famous patents, the physical pieces of paper, are in Iron Mountain. Election records from U.S. elections and Elections all over the world are stored in Iron Mountain. And this isn't actually all a mountain today. They have warehouses and facilities across the world now over 100 million square feet. But it's kind of fun to think about all this stuff just sitting in a mountain. And maybe in the case of, God forbid, some nuclear war or some crazy thing happening, future generations, like hundreds and thousands of years will find artifacts of our civilization buried in a mountain somewhere. It's a very cool business. And it all started with a mushroom farm. That's the story of iron mountain, the $6 billion company. My name is John Davids. Get my best stuff to your inbox@johndavids.com if you sell B2B products or services and you want to generate more qualified sales opportunities, I want you to head over to johndavitz.com grow. I'll show you the growth system we've used at influicity with 40 B2B companies in just the last year. Go to johndavids.com grow and watch the short video. And by the way, if you're already spending money on LinkedIn and trade shows and sales enablement and all the rest, this is even more important because it could give you a huge advantage in the marketplace. Go to johndavids.com grow and I'll see you there.