142. Larry Serota: Case Studies on Creating Purpose-Built-Ecosystems

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142 - Larry Serota: Case Studies on Creating Purpose-Built-Ecosystems

00:00:01 Welcome to the everything Coworking podcast, where you learn what you need to know about how the world wants to work. And now, your host, co working space owner and trend expert Jamie Russo way. Welcome to everything. Coworking Podcast, This is Jamie Russo. Thank you for joining me today. We have a great guest today. I think all of my guests are great, but I especially enjoyed this discussion because it was a little bit unexpected. I ran across an article written by someone that I had met a long time ago in Chicago and reached out and was just super interested in the work that's being done by

Larry, 00:00:44 Sarah and his team at Trans Western. And you're gonna really love these stories. The case study shared today happened to be specific to them, not for profit space. But this model can be extended to really any vertical. And I think that what's happening in these case studies is really sort of leapfrogging things that are happening in the co working world. So it's an example of ecosystems that are being created in a shared workspace environment, and the things that they're accomplishing are literally world changing. So I can't wait for you to hear more details on that so really quickly before we dive in.

00:01:23 This episode is brought to you by Community Manager University, which is a training and development platform for community managers to support them from day one to regional manager. The platform includes many courses that cover the major buckets of the community manager role, including operations, community management, sales and marketing. Finance and leadership in the content is laid out in a graduated learning path so that the community manager can identify the content that is relevant to them, given their experience. And they will also get deep training on one topic per month.

00:01:57 Resource is templates. We do Q and A calls every month. And there's a really active slack group for folks to get day to day support on sort of just in time questions that they have to help them run their business better and enjoy their role even more. If you are interested in learning more than you can, go to www dot everything coworking dot com forward slash community managers. Now I hope you enjoy my conversation with Larry. I have a special guest today. It joining me from Chicago. Larry Serotta is the executive managing director and board member at Transwestern,

00:02:34 and Larry reminded me that we met many years ago, probably close to eight years ago. It started Michael Workings face in Chicago, and I came across an article that Leary wrote that I will link to in the show notes. It's called the flexibility, tradeoff. Industry ecosystems provide benefits over conventional co working models. And I was just saying to Larry that I started reading it thinking, Oh, it's, you know, another article about how we should be thinking about ecosystems. But it quickly surprised me because he included several case studies about the work that they're doing in Chicago,

00:03:08 mostly with nonprofits creating real life, productive ecosystems created around shared workspace. So I emailed Larry and asked him if you would come on the podcast and share his story. So, Larry, thank you for joining me today. Thank you for the opportunity. It's an honor to join and thank you for your thought leadership in the field. Yeah, well, I'm excited to share your story in the leadership that you're taking. I think this will be inspiring to a lot of folks listening so give us a little bit.

00:03:35 You're live in Chicago. Give us a little bit about your background, you know, sort of personally and professionally before we dive into our details here. Sure, uh, live in Chicago. I've got two young boys and a superstar wife. One's an organization called Dare to Try, which is a nonprofit that's focused on helping kids, adults injured, military, all physical disabilities and community based sports. I am also very involved in the nonprofit world, certainly professionally, but also personally served on the board of directors of Chicago Children's Museum and also the board of directors for Leadership Greater Chicago.

00:04:20 So I'm certainly very much very passionate about the community at large, and it's fascinating when our personal passion can certainly be fused with our professional. And to that end, I have been working with non profits for quite some time and which is certainly led us to the discussion we're having to date relative to vertical villages. As you've noted, we've been doing a lot in this space, both for profit and nonprofit. However, there's been a series of recent case studies that are a little more geared through the philanthropic and nonprofit world.

00:05:02 Yeah, So can you give us the story of how this came to be? So I asked Larry before we started chatting. You know what you did to start working in traditional Coworking, but not really sort of leapfrogged right into this. What I think is, you know, a pretty strategic approach to I love the term vertical village. You know, Larry and I were talking about how you know, it's sort of a lot of discussion about how we should be thinking about ecosystems, but you just don't hear is much about it yet in practice.

00:05:31 And I think part of that as the players involved. So I think your role And maybe you could just talk about your, you know, kind of get detailed on you know what you do professionally, who you represent, sort of where you fit into the process, because I hadn't really thought about you playing such a strategic role in making this happen, because I think the ecosystem play is really about, you know, getting the asset owners to activate and, you know, partnerships between operators. But you've sort of inserted yourself to bring this all together,

00:06:00 which I think is really interesting. So can you just kind of talk about how that works for people who don't know anything about your world? Well, as you had mentioned Service executive managing director of Transwestern and also on the board of directors in somewhat of a Player Coach Model I My day to day practice is representing occupiers of space, and the way that you know this really came together and started working in the vertical village field happened organically. It started with a client and friend. Stacy Ratner, who was running an organization at the time called Open Books and Open Books,

00:06:47 is an award winning nonprofit that is a physical and online bookstore. And people donate their books, which fund literacy programs throughout Chicago and open books. And Stacy's extraordinary visionary is an aside. She was named Chicago End of the Year along with Chance, the rapper company Hey certainly did Company for Chance. And so what happened with Open books is they were doing this great work in a school in Chicago and realized that there were other like minded nonprofit organizations in the same school and somewhat unaware of one another, you know,

00:07:31 in some cases doing duplicative work Yeah, And Stacy had this epiphany that, you know, this isn't right, that there must be a better way and that these organizations need to be more collaborative in nature. And ultimately she had formed what's called Chicago Literacy Alliance, which was this umbrella organization Well, before we ever thought about space. And this umbrella organization was for nonprofits focus on literacy. So we set out to test the model and really started with understanding the landscape. You know, surveying the players involved,

00:08:14 understanding their needs, whether from a real estate perspective, these were organizations who already had a larger office space or if they we're working off their kitchen table clean. And ultimately we built, which is now commonly referred to as literal center and litter center hosts. Today, about 100 and 30 nonprofits all focused on literacy, all cohabitating under one roof. And it's really been an extraordinary model, not only for the back office efficiency,

00:08:58 you know, from a cost perspective for the non profits for collaboration, but we've even seen a series of mergers that have taken place just by virtue of proximity,

00:09:11 of these organizations being together, working on common goals and realizing that you know, their missions are aligned and all striving for greater literacy.

00:09:25 Basically been in Chicago and beyond. It was very much an organic approach. How we got involved in today later center is striving.

00:09:34 We're on our third expansion. I'm not sure we could build a building large enough to accommodate the demand that we have.

00:09:42 You know, it's just this inspiring, innovative space. We took a lot of cues from the tech world.

00:09:49 You know, you look at models like 18 71 and the like, and they're inspiring spaces to be in.

00:09:56 And we felt that so, too should the nonprofit world have a space, you know, that would have,

00:10:03 you know, great amenities. It would have a great natural light that would really encourage people to come to work and be their best self,

00:10:11 you know, and not worry about the administrative burden or overhead, or be in, you know, tired space,

00:10:18 which often times is you know, how nonprofits have operated. You know, it's not as attractive for a funder to fund office space,

00:10:28 you know, operation. And so that was a model that we really had, uh, you know,

00:10:33 help create together and show that there is a better way. So this is a super practical question. Who signed the lease?

00:10:40 What's the underlying infrastructure for all these folks to come together? Sure, it's a great question, and it happens in variety ways.

00:10:47 In the case of Litter Center, how we structured it is the same brutal organization that I previously mentioned.

00:10:54 Chicago Literacy Alliance ultimately signed the lease, and we had what we call anchor tenants who were, you know,

00:11:06 those larger organizations in nature and in the case of Litter Center, really, the two acres that helped launch the project were wits,

00:11:15 which is working in the schools as well as open books, which was Stacy's nonprofit. So which she was also the founder,

00:11:22 of course, later center, but also has a penchant earlier open book. So you have those two anchors that sign effectively,

00:11:32 you know, long term leases, and then we have a membership model. You no license model organizations consigned shorter term license agreements that don't necessarily have to be true terminus of the master lease and who is the license?

00:11:48 Or, in the case of litter center, the landlord of the building has traded hands. A couple of times since our initial occupancy,

00:11:59 and today it's our two, which is proven to be a great landlord. You know, it's important point because you know you really,

00:12:07 in the case of these nonprofit ecosystems or vertical villages, it's important to find a partner that a landler that has a philanthropic bent right,

00:12:20 that understands that this is more than just space that is not looking at the quote unquote underlying credit. Yeah,

00:12:30 but you know, understands division, understands the groups coming together and really acts. Moore is a partner than a conventional landlord tenant relationship.

00:12:40 Yeah, I mean, it's really interesting. So they're handling the licensing, and they're sort of accepting of the shorter term.

00:12:46 Although is it the case that sort of the folks in the community? What's the 10 year? Are they generally there for years versus months?

00:12:56 It's a good question. So in the case of Litter Center and just clarify, the licensing is being handled by Shaka Literacy Alliance.

00:13:05 Okay, that is tthe e entity that signed the Peace way. We free negotiated essentially the acres as well as the ability to do what we call license agreements or death sharing so that it's not a cumbersome process.

00:13:24 You know, like a conventional sub least, Yeah, assignment language where you'll be consent for each and every group.

00:13:31 There's a much more flexibility in the model, so long as you know, under certain space thresholds that there's not a need to reach out for consent.

00:13:40 And then did the Chicago Literacy Alliance like fund to build out and furnished the space? Yeah, the cases.

00:13:46 Great question in the case later center. In that case, you know, we had a significant landlord,

00:13:53 you know, figure out there's attendant proven allows, but ultimately it was a turnkey okay by the landlord.

00:13:59 So they had under the build out, we went out to various partners from, you know, carpet manufacturers,

00:14:08 furniture dealers to seek, reduce pricing and or donations for organizations you know to basically get exposure, you know,

00:14:18 or we, you know, put plaques on the wall. We treat those groups is true partners, you know,

00:14:24 in the process because, you know, it's challenging toe, you know, have this innovative space and could be costly.

00:14:32 And so you need to really reach out and find like minded partners. Vendors that understand that that want to be part of you know something like this.

00:14:43 So that's really how it came together in the case of Letter Center to answer your earlier question of term lanes,

00:14:50 you know, litter center. Some of them the anchors are much longer term in nature. And then I would say,

00:14:56 for the most part, many of the organizations are more in the 123 year term. And then we have shorter term users as well,

00:15:06 you know, access members, if you will. Fabric Impact House is another model that we just launched and in the case of fabric,

00:15:18 and these are now, instead of the nonprofits, these air the funders to the nonprofit world. Okay,

00:15:24 philanthropic organizations coming together under one roof, household names in Chicago, Chicago Public Library Foundation Okay and Woods Fund and Field Foundation.

00:15:38 All of these larger groups United States artists they sign long term. In many cases, co terminus leases with fabrics, 00:15:48 which is the entity sign that signed the lease, which is led by Israel Donna J, which is Ah,

00:15:54 former bear and a force for good in the world who's got a number of different charitable endeavors. So they signed fabrics and a long term lease and we had all of these acres and their several of them.

00:16:06 In the case of fabric that signed upto terminus leases and before we even open our doors, each of the offices this is 45,000 square feet.

00:16:19 Each of the offices and work stations have already been fully leased, and so now our focus is turning to driving.

00:16:28 We call access membership, so these might be individuals, organizations, whether they run a family foundation or family office by virtue of Israel.

00:16:39 Donna Jay's background in the sports world we've got a lot of athletes took great interest in learning about giving and either starting a foundation or not profit or teeming with existing foundations that are doing great work.

00:16:56 And in that case, we have an access membership model where individuals can come access the house similar to like a SoHo house type model,

00:17:07 where they're not necessarily renting physical office space. But they can be a member that they can come to events that they can work out of our tenant lounges and learn about impact in Chicago beyond super interesting.

00:17:23 I mean, it just makes so much sense, but like I said, it just is really kind of taking to the next level.

00:17:29 The idea of I mean, it's really it's so community focused. It's like it's absolutely community first and it's,

00:17:35 you know, the workspace distorted the means to an end. You know, more than well, let's start with a place for people to get work done.

00:17:41 It's really place making for these people that come together. It's fascinating that so well said. I mean,

00:17:47 you know, we think about there's so much greatness to co working and you know there's so many different models out there.

00:17:55 But what we found is, in some cases there's a randomness you know, do these operations, and as a result,

00:18:07 while they're beautiful spaces and they're fun and you've got, you know, ping pong tables and calm Butch on tap.

00:18:15 That's really not enough. Thio heat the loyalty of, ah, potential tenant or member coming back and not moving from one operation to another.

00:18:27 But what we found is when you have a common thread that connects all of the organizations under one roof,

00:18:37 that it greens tremendous loyalty and they want to be there forever, you know. And we've got waiting lists as long as one can imagine,

00:18:48 because it's not just about another co working space. As you said, the space is really secondary, you know,

00:18:55 it's about the sense of community. Yeah, I think. I mean, it's a really, like paradigm shift almost around for people who are used to co working.

00:19:02 I mean, I know that's why I started like, Well, what's your background and co working? You're like,

00:19:06 No, I was just trying to Britney's organizations together, and it happened that this was the right way to do it.

00:19:11 And to your point, it's like if this is happening in a community, how can you not be involved?

00:19:17 And so it's got this automatic like magnetism, you versus the whole. If you build it, then you have to try to fill it up.

00:19:23 And, you know, it takes a tremendous amount of effort when there's not that sort of common thread that exists,

00:19:29 Okay, and then you have one more. The civic exchange case study that you mentioned in the article.

00:19:34 Do you wanna talk about that? Absolutely. So civic exchange is really interesting because unlike a fabric impact house or a litter center where we had one entity that signed the lease along with these other anchors.

00:19:55 This was very organic in nature, where we had a number of these groups really focused around civic tack and journalism. 00:20:06 That said, We want to live together. You know, we feel very isolated today around the city.

00:20:13 We are already sharing ideas, but you know, there's challenges when you're not together under one roof. And so they came to us without even a structure,

00:20:28 a name, a brand or an idea of how to do it and just said, we want to live together,

00:20:34 you know? How do we go about it? And so what we ended up with is today we really started it an initial phase.

00:20:44 You on something like that, we, you know, wanted to walk, of course, before we ran and really test out the idea.

00:20:51 And so we started in a sub lease in a shorter term stubbly scenario that was very cost effective. That was beautiful,

00:20:59 inspiring space that was, you know, in the right location for a number of these groups. And we tested the concept and together we literally built the brand,

00:21:12 you know, our in house trans westerns in house marketing and branding people you know, built the road,

00:21:18 you know, treated the logo, created the concept, rated the marketing materials, and we basically had these organizations pay their proportionate share of space.

00:21:30 They would occupy and put together kind of an ad hoc committee. You know, where they could learn from each other and share best practices.

00:21:39 And the same is true. You know, it's been just an extraordinary opportunity. We've got a lot of groups knocking on the door,

00:21:49 a long waiting list. We now have funders that are expressing a lot of interest in this model and saying,

00:21:58 You know, this is really beautiful. This should be the future of journalism, you know? And how do we partake in it?

00:22:04 It's, uh, kind of, Ah, reverse engineering, you know, the vertical village. And that's something that we've learned on each and every one of these projects,

00:22:15 that there's not a one size fits all approach. You know, your common earlier. You know, kind of the old school thinking is,

00:22:23 if you build it, they will come, you know, and we believe that each of these groups are so unique,

00:22:30 you know, and they have such unique needs and interests and what will work for one it will not work for,

00:22:39 you know the other. So while there's lessons learned and we certainly have, you know, great working models and understand from a workplace strategy component are consulting arm is heavily involved,

00:22:53 you know, in all of these and understanding the nuances and surveying the members and the like that we'd be kidding ourselves to say,

00:23:02 You know, this is the approach. This is kind of the one size fits all but rather, you know,

00:23:08 forming and creating. You know, the right structure for the organization's at hand. And today, what's really need about this is,

00:23:17 um, while these are representative case studies that air tried and true, we now have about 12 active vertical villages in the pipeline across the country,

00:23:29 from global development nonprofits wanting to come together under one roof to religious organizations and social justice groups wanting to live together to immigration.

00:23:42 You name it that these groups air, saying, You know, we want to be together. We know there's a better way and help us think through the challenges,

00:23:52 the obstacles and the business structure of how to do it. And so we're very active, really, across the country on these very Do you love your job,

00:24:03 The love of my job and love Theo team, You know, that I worked with, you know,

00:24:10 both internally and externally, because these projects for true partnerships, you know that this is not a conventional Tenet rap assignment also will go find space.

00:24:23 You know, this is really from initial visioning Thio. You know, interviewing key state holders to surveying potential fits at large to partnering to building the business model,

00:24:40 tow understanding the workplace to finding the right landlord to finding the right building. You know that this is true partnership in every sense of the word.

00:24:51 And so it's an honor and a privilege to be a part of these because we see it's magic, You know,

00:24:58 when we get these groups together for a greater good. Yeah, So I'm just curious. When these opportunities first presented themselves,

00:25:08 it was this, like, a no brainer for your company, or was this like, uh Okay,

00:25:14 well, you know, let's figure this out. I mean, it feels like to your point, like a scope that's not common for Tenet rep.

00:25:21 I mean, I'm sure you get involved strategically and have a lot of sort of ancillary support for occupiers,

00:25:27 but was this just kind of really beyond the scope of what you typically do? Yes, certainly. I mean,

00:25:32 we there's not a handbook. Yeah, I'm gonna do it now. There are great organizations, you know,

00:25:40 out there that are extremely effective, Not to mention, you know, the work that you're doing personally,

00:25:48 you know, to really guide and assess. But you look at, you know, the non profit centers network,

00:25:55 you know, So there's certainly, you know, great thought leadership that's coming out on this very topic.

00:26:01 But it wasn't something that we could just say. No, here's how it's done. Are you know,

00:26:07 this is the way it's always been done because it's really a new concept. And so we learn, through childs and tribulations,

00:26:15 I think very fortunate to work at a company that is extremely entrepreneurial and nature, you know, by being one of the largest privately held ferns were encouraged,

00:26:28 you know, to really invest their time and talents and resource is into companies and into projects that are not necessarily always middle of the fairway.

00:26:39 Right. And that's where you know our world becomes all the more valuable to our clients and that our work becomes more interesting and frankly,

00:26:51 more meaningful and than traditional. 10. A rap which we do plenty of traditional tenant rap assignments as well.

00:26:58 But these are, you know, this place making building community in these verticals has just really taken on Ah,

00:27:06 really interesting and exciting life of its own, you know, And we just see how organizations for profit or nonprofit are able to thrive,

00:27:17 you know, when they're able, you know, to be in one of these innovative, purpose built ecosystems.

00:27:23 What is the biggest challenge in creating these ecosystems and putting all these pieces together? That's a great question.

00:27:29 There's many challenges, you know, I think certainly because it's a new concept because Coworking in some cases in recent times has become somewhat of a dirty word.

00:27:42 Yeah, you know, I think oftentimes, one of the biggest challenges, frankly, was we faces getting landlords understand it,

00:27:49 you know, to see the vision to know that is mentioned earlier. You know, I can't look at this Is traditional underwriting your credit and finding the right partners.

00:28:01 And really, it's plain in that this is not conventional Coworking which, you know there's nothing bad about co working career,

00:28:10 you know, But it's different. Yeah, carrots. But it's very different and getting landlords to see it,

00:28:17 to understand it, to be able to think, you know, outside of the box and understand that they could be a part of something really special that these spaces,

00:28:30 you know, are not only good for the community, but good for the building at large. I think that that's been one of the greatest challenges.

00:28:39 But it's a welcome challenge. And when we find you know, the right landlords, it helps. You know that's financially Thio achieving our goals.

00:28:49 What a great story for them I mean to your point. And that's a lot of the reasons Well,

00:28:54 when we talk about ecosystems in terms of, you know, traditional landlords and assets and you know some of the benefits being recruiting other tenants and having flexible space and,

00:29:05 you know, spill over space and meeting rooms and events based on potentially working on creating community among the tenants there.

00:29:11 But to your point, that's challenging because all those folks there are certain awful, you know, we're somewhat randomly there,

00:29:16 but you know, a story for that asset to have such a unique community embedded in it and to attract other folks that,

00:29:25 you know, kind of wanna be near that or want to be a part of that in some way.

00:29:28 Absolutely. So you mentioned you've given a couple of case studies and that you're doing some work around the country.

00:29:35 So tell me either what advice would you give to folks who are listening, who you are in a group who want to create something like this?

00:29:42 And also, if someone wants to talk to you about working with you and your team, you know,

00:29:48 how can that happen? Sure. The advice that I would give to anyone thinking about it is that it's a great idea,

00:29:57 Frank. You know that not to shy away from it, that if they, you know, the real key is finding that common thread right.

00:30:08 And if your part of a group of like minded organizations in an industry you know, it starts at those early discussions with your potential partners and we can help facilitate those were delighted,

00:30:28 you know, to speak to anyone, anywhere in the country or beyond. In exploring this model, you know,

00:30:35 and we would encourage also to talk to other groups that have done it. You know, I think that walking litter center It's one thing to read about it,

00:30:45 you know, on paper. But it's another thing to experience it firsthand, you know, and fabric impact house,

00:30:53 which opens, you know, just in a matter of weeks. And so we'd encourage discussion with others that have done it.

00:31:01 We'd encourage tours, inspirational tours, and we're always open to a dialogue. You know that we're not,

00:31:09 you know, looking at every potential discussion. As you know, this will happen. And here's the timeline that you know,

00:31:16 is what we've got, you know, 12 plus in the pipeline. We've got plenty others that you know,

00:31:21 have just explored it or noodling around it, and that our doors are always open to discuss it, you know,

00:31:28 to explore it. Even if the ultimate decision is, well, it's not really viable. And, you know,

00:31:34 I think I'll join or just go into conventional coworking. We think that straight to you know, and we can you know,

00:31:41 direct people to be appropriate places accordingly. But I think if you're thinking about it, if you're dreaming about it.

00:31:48 Our message is that it really works. You know that it's really all and that it's a great way.

00:31:54 You know, These vertical villages, in large part, you know, may become, hopefully become part of the future of what we know of collaborative workspace and co working,

00:32:04 you know? And so we're thrilled to have a seat at the collective table. Yeah, well, thank you for sharing your story,

00:32:12 and your experience with these initiatives just mean totally eye opening for me. And I would imagine most of the people listening.

00:32:20 Larry, if people want to find you, what's the best way to you? Get in contact. Call directly or email.

00:32:26 Email is larry dot Serotta transwestern dot com or phone number is 3128817038 My cell phone is always fair game as well.

00:32:38 Oh, no, wait. I won't put that out there. Okay, good. I know that you work here.

00:32:45 We've got a really thoughtful, robust team across the country that didn't help. And we'd be delighted. Just engage in an exploratory conversation.

00:32:56 Perfect. And I will put your contact details in the show notes for this episode on a website and everything coworking dot com For anybody who's driving and didn't get to write that down,

00:33:05 it will be available. Well, Larry, thank you again for taking the time to share. I really appreciate it.

00:33:11 And just super interesting and can't wait to see what other projects you work on. Well, thank you.

00:33:17 Such a pleasure speaking with you. And so appreciate all of your leadership in the field. So I really appreciate the opportunity to be here.

00:33:27 Love following your work and look forward to finding more ways to work together. Perfect. Thanks, Larry.

00:33:33 Thanks so much. Thanks for joining us on this episode of everything CO working. Be sure to click the subscribe button so you can stay up to date on the latest trends and how two's until next time.

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Jamie Russo