From Lucky Strike to Lucky Storage: A Tale of Innovation & Renewal

Lucky Storage is remaking an old tobacco factory—and maybe even reviving a small North Carolina town in the process.

The TL;DR on Lucky Storage

For over 130 years, tobacco was the lifeblood of Reidsville, North Carolina. The Lucky Strike Tobacco Factory—spanning 26 buildings and one million square feet—was the anchor of the community.

Fast forward to today, and enter Lucky Storage. The Filecoin storage provider and early tenant of the old tobacco factory is central to a new technology and ecommerce campus that the Lucky Storage team is jointly establishing. The factory roof has 897 solar panels—with many more to come—and ecommerce and warehouse tenants are beginning to occupy the space. The community of Reidsville is excited about the possibility of economic renewal in the wake of tobacco’s departure.

Lucky Storage is a young company with challenges and successes like any other. But what sets this Filecoin storage provider apart is its emphasis on achieving positive outcomes for not just Lucky Storage stakeholders, but also the Reidsville community at large. Keep reading to get your head around Lucky Storage.

What is Lucky Storage?

Lucky Storage is a decentralized storage provider on the Filecoin network. Lucky Storage is headquartered in the former Lucky Strike Tobacco Factory in Reidsville, North Carolina. The Lucky Strike factory—now owned by the parent company to Lucky Storage—is the centerpoint of this rural town. The factory covers one million square feet across a labyrinth of 26 buildings. 

Lucky Storage was founded as part of a broader plan to redevelop the old Lucky Strike factory. Lucky Storage is among the factory’s earliest tenants, and its parent company is Ascendency, LLC. Lucky Storage and Ascendency together are driving the factory’s redevelopment initiative. The factory is supported by a dedicated power transmission line that supplies up to 16 MW of electricity to two redundant substations, and an 897-panel solar farm is installed on the roof.

Lucky Storage also has data storage operations in Las Vegas, Nevada, at the Switch Core data center. The Filecoin storage provider operates one full 42RU rack at this location.

With two U.S. data storage locations, Lucky Storage is focused on serving U.S-based enterprises. The storage provider is located near Research Triangle Park in North Carolina, making it well situated to store data for research organizations in that region. 

Being located near the Research Triangle is not a coincidence—Lucky Storage is primarily focused on serving clients with large volumes of research data. Lucky Storage works with organizations such as universities, research institutions, and life sciences companies that have large data storage needs.

Lucky Storage has a current data storage capacity of 5 PiB. The storage provider is planning to add another 20 PiB by March of 2023. The Filecoin storage provider is funded by a mixture of seed capital from individual investors and income from tenants at the Lucky Strike factory.

Lucky Storage founders Coren Seglem and Tuan Ho are graduates of the Enterprise Storage Accelerator Program, a seven-month intensive program that educates and mentors Filecoin storage providers. 

Why does Lucky Storage exist?

The Lucky Storage team is redeveloping the former Lucky Strike factory to both expand its decentralized storage capacity and bring economic prosperity back to a rural area. “Our mission is one of economic renewal in a deindustrialized town,” says Lucky Storage co-founder Tuan Ho. “Out of the dust heap of an abandoned tobacco factory, we are [building] a new, modern, blockchain factory and vibrant technology campus.”

The vision of Ascendency and Lucky Storage, according to Tuan, is to bring prosperity back to towns like Reidsville by “transforming uniquely suited factory facilities into technology centers to meet the new infrastructure needs of the new digital economy.”

Coren Seglem, co-founder of Lucky Storage and Ascendency, explains that “part of why we are so excited about our work at the Lucky Strike facility is that we're not just filling a void, we’re replacing an antiquated, addictive, and unhealthy industry with the next wave of fundamentally formative technology, and in a community that could really benefit from the toolset that blockchain technology aspires to deliver.” Coren and the Lucky Storage team believe that blockchain tech has many use cases that can benefit rural areas, even if those use cases are frequently overlooked.

Lucky Storage takes the view that data, and by extension data storage, is increasingly gaining importance in the modern digital economy. The concentration of core data storage infrastructure among only a few behemoth companies creates a risk, one that is especially felt by organizations like research institutions with large datasets.

Lucky Storage sees itself as an “early ecosystem partner” in the transition to a decentralized internet. The company, Tuan says, is focused on “delivering comparable—and ultimately disruptive, distributed versions—of critical cloud services. Data storage is but one component of that ecosystem.”

Lucky Storage chooses to use the Filecoin network because of the technical rigor of the protocol and the practical value created by the Filecoin network. The Lucky Storage team evaluated other decentralized data storage platforms and determined that Filecoin is the best suited for enterprise clients’ data storage needs.

Lucky Storage’s services

The core offering of Lucky Storage is decentralized data storage on the Filecoin network. More broadly, the Ascendency team is developing a range of offerings to support the growth of both its Filecoin data storage business and economic opportunities in Reidsville.

Lucky Storage and Ascendency are currently redeveloping the old tobacco factory to include:

• Filecoin data storage
• Ecommerce warehousing and distribution 
• Palletized storage 
• Facility space for technology startups
• Solar power generation 
• Electric vehicle charging stations
• A cellular tower and related services 

How Lucky Storage stores data

Now let’s dig into how exactly Lucky Storage stores data for enterprise clients.

1. Client prepares and ships data: Lucky Storage clients prepare their data for shipment, which is a physical process for large datasets. Clients use hard drives that are protected by special shipment cases.
2. Data is sealed: Lucky Storage uses a partner—another Filecoin storage provider—to onboard client data to the Filecoin network. The onboarding process, known as sealing, is a computationally intensive one-time process that prepares data for long-term storage.
3. Sealed data is transferred: The sealed data is immediately transferred to Lucky Storage’s servers. In the Las Vegas facility, data is transferred literally across the aisle in a shared data center. Lucky Storage is also leasing a direct, point-to-point fiber connection through AT&T to facilitate data transfer from Las Vegas to North Carolina.
4. Data is stored: Lucky Storage adheres to the standard Filecoin protocols to store client data. Filecoin uses a methodology called proof of spacetime that requires storage providers to continuously prove over time that they have the space to store their clients’ data.
5. Data is retrieved: Lucky Storage can retrieve client data at any time upon the client’s request.

Lucky Storage uses JBOD storage racks containing hard drives. Each rack operated by Lucky Storage is a full-height 42RU rack that stores about 5 PiB of data. Lucky Storage racks also contain servers with limited compute capabilities, which the storage provider uses to adhere to Filecoin’s proof-of-spacetime requirements. Lucky Storage uses the standard software interfaces developed by Filecoin.

A brief history of Lucky Storage

Lucky Storage was formally founded in June 2022 by Tuan Ho and Coren Seglem, along with Evans Richards, the principal partner of Ascendency. Tuan and Coren in 2021 began working together on the precursor to Lucky Storage, a decentralized data storage business known as HPi3. With the 2022 purchase of the Lucky Strike factory, the three-member team coalesced around its mission of revitalization and a diversified business model that includes Web3 data storage.

The first major milestone for Lucky Storage occurred literally one day after its formation. The Filecoin storage provider inked its first data storage contract, with the USC Shoah Foundation. Lucky Storage sealed its first sector of data from the Shoah Foundation in August of 2022.

Who is the Lucky Storage team?

Let’s learn more about each of the Lucky Storage and Ascendency co-founders:

Tuan Ho, Partner

Tuan Ho is a founding partner of Lucky Storage, and a serial tech entrepreneur. Prior to Lucky Storage’s formation, Tuan founded and grew Raydiant, a digital experience platform for brick & mortar companies. Tuan’s first successful tech company was a streaming TV business called Philo, and his career experience includes venture investing with Atomic Labs. Tuan is a Harvard University graduate who participated in the 2017 Filecoin initial coin offering, after debating the future of data storage with a group of Thiel Fellows.

Tuan focuses on deal execution and client relationship management for Lucky Storage. He also oversees the company’s marketing and sales operations, and assists with capital raising efforts.

Coren Seglem, Partner

Coren Seglem is a Lucky Storage and Ascendency co-founder with a background in real estate and the U.S. Marine Corps. Coren’s interest in data storage stems from his extensive working experience with commercial and industrial hardware, and a recognition of the importance of infrastructure in building the Web3 internet. His military experience spans more than 12 years, with a focus on aviation and logistics. Coren is a graduate of the Ross School of Business at the University of Michigan, where he graduated with honors.

Coren oversees the redevelopment of the Lucky Strike factory, which includes developing and expanding Lucky Storage’s Filecoin storage operations. Coren’s mandate includes recruiting and managing a variety of tenants to occupy the former tobacco factory. 

Evans Richards, Partner

Evans Richards is a founding partner of Ascendency and part-owner of the Lucky Strike factory. Evans founded and leads the specialized logistics provider reVend, one of the factory’s first tenants. As the principal member of Ascendency, Evans’ primary focus is on fundraising and the ecommerce and logistics ecosystem for the entire facility.

Lucky Storage is a small team with a scrappy work ethos and bootstrap culture. Aside from each team member having core responsibilities, the members of Lucky Storage each wear many different professional hats.

Who uses Lucky Storage?

Lucky Storage focuses on serving research institutions, universities, and other clients with large research datasets. Lucky Storage is particularly interested in working with research organizations whose missions support the public good, as a public-good ethos aligns strongly with Ascendency’s economic redevelopment efforts.

The Shoah Foundation at the University of Southern California is working with Lucky Storage to store a massive archive of testimonial data. The USC Shoah Foundation is a nonprofit organization that has collected over 55,000 testimonials from survivors of genocide, and relies on the Filecoin network to store the testimonials in a secure and decentralized way. Lucky Storage is among several Filecoin storage providers that maintain copies of the testimonials for the Shoah Foundation.

Lucky Storage is also preparing a contract to store data for a major university medical school. The medical school digitally stores all pathology data, clinical data, and research data, and is required to maintain a full digital archive—both for research purposes and to comply with medical practice requirements. The medical school can benefit from using decentralized file storage because of its low cost, scalability, and customizable security features.

How Lucky Storage approaches sales & marketing

Lucky Storage takes a diversified approach to marketing, using multiple tactics to raise awareness and increase engagement. The Lucky Storage team is prioritizing these methods in its approach to marketing:

• Involvement with academic and research communities
• Engagement with enterprises in North Carolina’s Research Triangle 
• Participation in conferences, events, and trade shows
• Active engagement with the Filecoin community
• Relationship building with enterprises and governments in the local region surrounding Reidsville
• Word-of-mouth marketing by satisfied storage clients

Lucky Storage takes a high-touch approach to sales, fostering close relationships with enterprise clients to clearly understand their unique data storage needs. Lucky Storage as part of the sales process frequently provides a proof of concept by storing a limited volume of duplicate data for a finite period of time.

Challenges for Lucky Storage

Starting and running any business has its challenges. Let’s take a look at the biggest challenges facing Lucky Storage, and what the Filecoin storage provider is doing to overcome these obstacles.

Challenge #1—Lack of proprietary sealing capacity

Lucky Storage currently works with another Filecoin storage provider to seal data—put the data into storage on the Filecoin network. The sealing process occurs only at the start of a data storage contract, and is expensive due the high compute capacity that’s required. Using a sealing-as-a-service provider is a short-term solution for Lucky Storage, which is challenged to develop its own high-capacity sealing service.

Lucky Storage’s strategy to add in-house sealing capabilities is to leverage its ownership of physical infrastructure and access to fiber-optic cable internet. With the ability to seal large volumes of data on the Lucky Storage premises, the Filecoin storage provider can meet its own sealing needs plus begin offering sealing as a service to other storage companies.

Challenge #2—Need for user-friendly applications

With the Filecoin ecosystem still in its relative nascency, Lucky Storage—like many storage providers—is challenged to provide user-friendly applications for clients. A lack of easy-to-use tools for non-technical participants requires Lucky Storage to engage in time-consuming, high-touch processes to onboard and retrieve data for clients.

While this challenge has no easy or simple solution, Lucky Storage can collaborate with potential clients to build customized software tools. Research institutions in particular are expressing to Lucky Storage a willingness to provide resources—research by students and staff, plus research development grants—to assist with the development of client-oriented applications. Lucky Storage can also tackle this challenge independently by hiring developers to create new user interfaces.

Challenge #3—Access to sufficient capital

Lucky Storage, like many startup organizations, is challenged to access sufficient capital to fuel a high rate of growth. As a Filecoin storage provider, Lucky Storage is required to collateralize its storage deals with Filecoin tokens—which requires fiat currency to purchase FIL. In addition, Lucky Storage needs sufficient capital to build its data center operations to full scale.

Lucky Storage is addressing the challenge of securing funding in multiple ways. The Filecoin storage provider is continuing to raise capital from private investors, in addition to developing relationships with institutional investors who are bullish on Web3. Lucky Storage’s parent company is also continuously earning income from ecommerce and warehouse tenants in the Lucky Strike factory, and is developing ancillary on-site business lines to further support the growth of the Lucky Storage business.

Lucky Storage successes

Lucky Storage has already experienced several major wins in its short history. Let’s dig into the biggest feats—so far!—for Lucky Storage and its parent company Ascendency.

Success #1—Acquired the historic Lucky Strike factory

The Lucky Storage and Ascendency team in May 2022 successfully acquired the former Lucky Strike tobacco factory, a process that commenced in early 2020. The Lucky Storage team leveraged strong connections in commercial real estate and superpower negotiation skills to take ownership of a historic facility for a rock-bottom price.

Taking ownership of one million square feet of factory space across 26 buildings was a major step forward for Lucky Storage’s parent company. The Lucky Storage and Ascendency team, over time, plans to further build on this success by acquiring other similar real estate assets. For now, the team is simply monitoring the real estate market in attractive regions like North Carolina and Texas.

Success #2—Became operational as a storage provider

Within a month of formally launching, Lucky Storage began onboarding client data. Wow! Lucky Storage first began working with survivor testimonial data from the USC Shoah Foundation.

Lucky Storage attributes this early success to having strong relationships with universities, plus its active engagement with the Filecoin community. The Filecoin storage provider intends to build on this early success by actively marketing to other universities and institutions, plus continuing to store data for the Shoah Foundation.

Success #3—Acquired first tenants in Lucky Strike factory

Lucky Storage is supported in part by rental income from other factory tenants—so a major success for Lucky Storage and Ascendency was landing the factory’s first tenant. Warehouse Republic, an Amazon third-party-logistics provider, began renting factory space in April of 2022. 

Lucky Storage and Ascendency already have four tenants occupying rental space in the formerly vacant tobacco factory. The Filecoin storage provider and its parent company are continuing to build on this success by actively marketing the available space to local businesses and blockchain-focused technology companies. 

What’s ahead for Lucky Storage?

Lucky Storage is on an upward trajectory, and aiming to carry all of Reidsville along with it. In the near term, over the next six months, Lucky Storage is planning to install five additional full-size JBOD racks to increase its Filecoin storage capacity to 25 PiB.

Lucky Storage and Ascendency are actively establishing a fund to support the group’s capital-raising efforts. Over the next 6-9 months, Lucky Storage and Ascendency expect to create a fund framework that enables private entities to invest in both Filecoin data storage capacity and the redevelopment of the Lucky Strike factory.

Also in the same time period, Lucky Storage is actively pursuing financing options for Filecoin collateral. Lucky Storage is collaborating with private investors, nonprofit organizations, and endowments to explore innovative financing products. One alternative that Lucky Storage is further exploring is the possibility of leveraging institutions’ endowments to meet the collateral requirement. Universities and other institutions, as clients of Lucky Storage, could simultaneously store data on the Filecoin network and reap financial returns from colletarlizing Lucky Storage’s operations. 

Another milestone on the horizon for Lucky Storage is developing in-house sealing capacity. Looking ahead about two years, Lucky Storage expects to be using some of its factory space to host a large, centralized sealing cluster in collaboration with other storage providers. The cluster would benefit Lucky Storage directly, and enable it to provide sealing as a service to other network participants.

While it’s “a bit early” (says Tuan) to make firm plans for five years from now, Lucky Storage and Ascendency envision building a mixed-used technology campus that includes a Web3-focused data center, data services for universities and research institutions, and facility space for ecommerce and technology startups. The facility’s 26 rooftops will glitter with solar panels and the parking lot will ideally include EV charging stations. 

The Lucky Storage team continues to progress toward achieving their goals, and also periodically reflects on what are the markers of continued success. In these early days, Lucky Storage is hyper-focused on growth, with an expectation of achieving results that are always “up and to the right.” But the team takes an unusually broad view of what constitutes results, and is committed to simultaneously bringing innovation and economic renewal to the people of Reidsville.