234. Jim Heid on the Impact of Small Scale Development

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234. Jim Heid on the Impact of Small Scale Development

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. Welcome to the Everything Coworking podcast. This is your host. Jamie Russo. Thank you for joining me. I think you're going to love this episode. You are particularly going to love this episode.

00:00:37 If you happen to be a building owner or someone who thinks about how to add value to smaller communities. So Jim Hyde is my guest today and Jim is the host of the annual small-scale development forum, which is part of ULI. And he just hosted his 16th annual event. And he invited me to speak, which was a complete treat. The group was amazing.

00:01:04 Anybody who was in Coworking, I think would've loved the group. I think the ethos of the, his group and Coworking in general really overlap around the passion for making a difference in people's lives at a local level, through the built environment and through building community. So I wanted to have Jim on to share his story. He is a small-scale developer. He is a built environment,

00:01:29 entrepreneur. He wrote a book about building small, which is I recommend it to anyone. I have it. I love it. And he's the founder of Kraftwerk Coworking in Healdsburg, California. So I do a longer detailed intro to Jim, but I think you're going to enjoy this. And I think it's going to give you some framework for thinking about how Coworking fits into the local community.

00:01:56 And if you are one of the folks who, you know, are a building owner and kind of doing a small scale development, you're really going to appreciate getting to know Jim. So enjoy my conversation. Welcome. I have a special guest today. He's sort of local, sorta not a couple of hours away, Jim Hyde. Jim, thank you for joining me.

00:02:17 I cannot wait for this conversation, which is ironic. Cause I feel like I was dodging you for awhile. I felt like that too. Totally. So I'll, I'll introduce Jim by way of saying he would send me emails. He opened a co-working space in Healdsburg, which is one of my favorite places, probably like in the world. Healdsburg is a lovely place and we can talk a little bit about what Jim's been up to there to say,

00:02:43 come over, come, you know, chat, let's meet and it's a couple of hours away. And so I don't get to Healdsburg all the time. And when I'm there, I'm like vacation mode, not Coworking mode. So I hadn't been to visit. And then this is a, a good case study and subject lines and email. And I think the subject was,

00:03:05 what's not to like, and I was like, what does Jim have to say? Jim invited me to be on a panel and an event. He was hosting and it's fall in wine country. So I said, yeah, I'll come up for the day and attend, you know, attend the event, which you invited me to do and dinner and you know,

00:03:26 all the things. And so I got to finally meet you in person and now you're in trouble because I had such a great time at your event. I loved the people there. It was great to meet you and see what you're doing in Healdsburg. And so now I'm like, Jim, when can we talk Wednesday? So it worked well. That was my,

00:03:46 that was my strategy all along. So that's good. Literally now I'm like, how did I not realize who this guy was? So, so I'm going to read a little bit of, well, I'll give you the quick overview of why I think my listeners will enjoy gym because you have to meet Jim in person. He's very special and charismatic. But also I think the work that you do is very aligned with the why of people in Coworking in general.

00:04:12 Right? So that was very clear from the group that I met at the ULI event, which we can talk about in a second. So the folks who are listening, who do small scale development in their own communities, maybe own a building and they've put Coworking in it. Like Jim is kind of all about that. So you've spent, well, I guess we could say it's in your bio.

00:04:35 So I'll say it's been 40 years focused on the built environment, specifically how we build community, how we improve the quality of life in towns and cities and how real estate development can and should play an outsized role in improving people's lives. So consulting founding innovation companies, real estate development, and the common threads in that work for you are innovation, sustainability,

00:04:59 creating stronger connections to the environment and helping clients and communities make better decisions through improved processes, better information and constructive examples and dialogue. But for me, it's like really about sort of the, yeah, just the ethos of what you're up to really aligns with Coworking. And do you also created a coworking space in Healdsburg, which has a very cool story on its own.

00:05:25 So Jim, the, I met you at the ULI event that you host, which is the small-scale developer forum. This was your 16th event, right? Correct. Wild. Okay. And you also hold on, I gotta look at my camera and make sure you've got, you've got that in your background. I've got it here. Tim wrote this book,

00:05:46 which I knew about before the event. And then I bought, I have an autographed copy from the event now. And I was saying to Jim, it's a beautiful book, a it's literally beautiful photos. And, and also now I know some of the people that are talked about in the book, I was like, wait, they were at the event.

00:06:03 Now everybody's going to want to come to this event. So we'll have to be careful about, you know, over creating too much demand for your event, for the folks who listen, who would, who would fit into that. But again, it just I'm struck as a reader. It, I'm thinking about some of the folks who've been in my Coworking Startup School who are small-scale developers like you and your community who have a why.

00:06:26 And I just, I, yeah, I love the book. So we'll link to your book, but let's, so I've been talking about who you are, tell us in your own words, kind of, yeah. A little bit about what you're up to that we haven't covered yet. And well, we can start with the coworking space. Well,

00:06:44 tell us about your development activities and then what the heck made you decide that you wanted to do a coworking space, which you actually leased and has a great story behind it. So give us a little, a little more gym detail and then Yeah, that's all. Thank you. That was a great intro. I'm going to need to, I have to hire you to do my marketing pitches.

00:07:04 That was, that was one of the best ones I've ever. It was great. Yeah. And, and it was interesting listening to you cause I'm trying to think it was, it was it Coworking that led to his Coworking, the manifestation of all the values that I hold about real estate development, whereas real estate development, the kind of, you know,

00:07:25 what drove me to do co-workers sunlight. So I have to think a little bit about that, but yeah, the short, the short back story that I like to share is so I, I was trained as a landscape architect and spent many years doing design and have a really strong passion for design, which you obviously saw when you were here, believe in the power of good design to really inspire people.

00:07:45 But after about 15 years spent in design firms, drawing stuff went back and did graduate work in real estate because real estate development is, as I like to say, most of the stuff I drew never got built. And it was like, what is it that I don't understand about our clients or the way they make decisions that, you know, I've got all this stuff I'm really passionate about and drawing and I'm staying up late.

00:08:06 And then it all gets, you know, pushed aside or something like that. And for me, it was like learning a foreign language. That's so much of the world faces it's decisions on quantitative economics, you know, math, and we're talking about design and subjectivity. I think that's changed a lot in the last decade where there is much more appreciation for the power of place for creating communities,

00:08:30 for creating experiences. And, you know, that's what many ways Coworking is all about it's it's experiential office work, as opposed to just, you know, going to a cubicle. So there was a natural intersection, I think, between what I was doing and you know, where, where the craft work kind of grew out of the other piece of the puzzle,

00:08:48 I'd say is, you know, most of my work early in my career were very big projects, you know, 25,000 acre planned communities in the Nevada desert and, you know, big 300 room resorts over in Hawaii and stuff like that. And, but when I would go and travel to these places, I always find myself wanting to spend time in the nooks and crannies of towns that had kind of had that patina,

00:09:12 you know, the warehouse districts, the evolved kind of character. And so it was that small, incremental, you know, creative, organic kind of neighborhoods that really caught, you know, struck me and caught my passion. And so in many ways, while the big projects maybe helped pay the bills, it was the passion laid in the smaller projects.

00:09:33 And so over time and the small-scale developer forum, which you mentioned, which was founded by myself and a colleague with the support of the urban land Institute, he had mentioned ULI was really meant to find people that were interested in smaller scale development. Not because they couldn't do bigger scale, but because they really believed in the power of it to transform communities,

00:09:57 create great places, help rebuild and heal communities in a way that, you know, big institutional development just can't do. And, you know, as you said, 8, 8, 9 years, let's see, we started in 2012. So nine years later now we've really kind of between the book, the 16th forum. There's a lot of discussion. There's a lot of other organizations that are focusing on this and,

00:10:18 and the goal is not to disparage a big development, but to try and elevate small development as an alternative for communities that want to see something different happen in their, in their towns and places. So I think the book for me, I mean exactly what you mentioned, like when I travel, I want to the nooks and crannies. Yeah. I want the local feel like I,

00:10:42 I, you know, I guess I can, you know, go downtown or like Chicago is a great example. Like I always want people, Chicago is a gorgeous city, but then it has some amazing neighborhoods with, you know, just lots of good, like cool local would you call it like the, like the fabric and the, like the granularity,

00:11:01 like, I'm trying to remember the, the words that you use, I'm looking at the book, but it's like, yeah, you want people to really get into that stuff. And the book talks about like, that's what people, like a lot of people like that stuff. So you, you put words to like this feeling I had about places like that.

00:11:18 And you're like, yeah. And it can be it. Yeah. And then, and then at the forum, you do the super cool activity where you had, like, everybody in the room gets a chance to say for like 30 seconds they're working on and it's super effective. I'm going to have to borrow that. But I mean, everybody in that room was working on some sort of like cool thing that was going to make a difference in a community.

00:11:43 Yeah. Wasn't it, it was amazing. Wasn't it just to see that, that kind of rapid fire, you know, you know, everybody gets three slides, 15 seconds each, and it's just amazing to see the diversity and the passion and the kinds of things people are doing and the inspired design and the, you know, completely, you know,

00:12:00 a lot of it's so disruptive. And so, you know, unconventional and all driven by people committed to what they're doing, which is great. Yeah. So some, yeah, some beautiful stories and some of them doing Coworking in various shapes and forms, I think not because they, some of them had thought about it kind of as a business model.

00:12:21 So a lot of my listeners are, you know, get into the performance, you know, figure, but like, because they feel like that's what should be in the building or, you know, be part of the project, which I thought was, was very cool. So, okay. So you will, we'll zoom back out a little bit,

00:12:38 but, well, so, you know, I do want to mention ULI a little bit more. I have never been so urban land Institute, I've heard mention of it many times, and there are a lot of folks who are in the Coworking industry who kind of overlap with ULI folks. I'd never been to an event before if somebody is in a local market and is like,

00:12:58 yeah, this stuff that Jim's doing is really interesting. Do they join a local chapter? Like what's the inroad for two to ULI. Yeah. So, so you can, I mean, there is a, the district what's called the district councils, which are kind of the local, and I think there's about 55 of them around the country now are where you can kind of engage at the local level and they become pretty powerful and they have different levels of membership.

00:13:20 Like a lot of organizations, the organization itself is about 50,000 members. It's global. It's probably, you know, arguably the premier research and education and kind of thought leadership organization around the built environment. And they like to describe themselves as a tentmaker meaning. They really bring together different disciplines, which is one of the reasons that I have spent so much of my career involved because I could spend time with,

00:13:49 you know, the group of landscape architects or other designers, but we're all, you know, it's like, you're, you're hearing the same thing from the same people versus ULI as policy makers, it's capital it's developers, it's, you know, active citizens. And you have sometimes the tough conversations about why this stuff is so hard and how to make it actually happen.

00:14:07 So I get a lot out of, and you can join at the local level, there's a chapters there's product councils. And then the small scale forum as you and I talked about is it is a national program that we hold twice a year in a different city every time. So 16th one was Healdsburg, and that was our 16th city. And you mentioned the book and the book was really an outgrowth of the stories and the lessons and the challenges that I'd heard probably by the time we'd gotten to our 12th program and said,

00:14:39 you know, there's just too much good stuff here that needs to be shared that because it's small and it's so diffused people, aren't getting a chance to kind of see it as a, as a total story. And there's, there's a lot of power here that was really the Genesis of the book. Yeah. And that's how I felt about the forum.

00:14:56 Like you could tell it was special for people to come together and say, oh, this, these are like my people. And they get to hear each other's stories and sort of validate like what they're working on. Cause some of them are pretty special projects that are to your point, not always ROI driven, I mean some return, but really a focus on impact in the community.

00:15:19 So. Okay. Let's talk about your, your coworking space and yeah, but let's tell a little bit, I do have some, some slides here, which I might pull up. Okay. We'll start with the, you found the building. Yeah. It had a vault And maybe back up a little bit, Tell us the why just to paint the story that what's the population of Healdsburg 12,000.

00:15:50 Yeah. It's like an hour and a half from San Francisco, so correct. And, and, you know, it's, it's one of these, what I would call lifestyle communities, some call it amenities. It's, it's, you know, it's a resort town without necessarily the resort that th th the town is kind of the presort in many ways,

00:16:08 because it's such a special, you know, great community fabric, all the things. The first time we went, if we went to Healdsburg before we lived here, but the first, like real memory I have of the town square is 4th of July, 2012, maybe. And like, you had like the, the little band where they're like, what does that call the bank?

00:16:37 Yeah. They were in the gazebo, but like this old tiny band playing the 4th of July music. And there was like a little kid parade and everybody's picnicking in the square. And actually we sat next to the band sheet folks now like such a big part of the community. And they must have been already in the dog patch or wherever they were, but they were telling us like,

00:16:58 oh, we're going to try this tasting room, you know, on the square. So that was early days, but it was so like, I conic 4th of July. So cute. Yeah. It's kind of, in some ways, Norman Rockwell meets, I don't know, hipster, you know, USA. So it's, it's got this constantly evolving dynamic,

00:17:19 which I think continues to attract people that that is their psychographic. And so it continually evolves as opposed to a lot of places that are kind of resort towns and they, they stagnate because people don't want any change. And we certainly have our challenges here, but it's, you know, it's, it's a, it's a good, it's a good place.

00:17:36 And, and, you know, the Genesis for this is as you and I talked about, I mean, passion for community loved the whole Coworking thing had kind of been into, I had used one when I lived in San Francisco, cause I'd lived there for about 20 years before moving here full time. And it was really when we went to Detroit for the forum,

00:17:53 I forget which number it was, but 2017. Cause I thought, oh, that was a little early, probably for Coworking in Detroit. Oh, interesting. Well, it was just exploding. And we actually did though, and each of our forums is themed around something. So as you know, Healdsburg was about small meets, small meetings, small development in a small town,

00:18:11 but Detroit was about coworking, urban manufacturing and maker space. And so we toured a number of them and, you know, I just, I just came away from that, just so inspired and just thought the spaces were so cool. And so came home and thought, you know, this is a town that I think this could work it's it would be,

00:18:29 you know, it's not going to be 50,000 square feet. We work model, but it could be, it could be smaller. And I had kind of envisioned and you'll, you'll appreciate this. I don't know how many of the other listeners on this spend it. My, my, my shorthand when I was trying to describe it to people was hotel Healdsburg lobby meets banshee tasting room meets flying goat coffee.

00:18:51 So it's that, it's that kind of a vibe and aesthetic. So it's sophisticated and it's flexible, but it's, you know, kind of busy and it's local and it's a little bit eclectic. And so, you know, and I would talk to people and they said, what do you think that's going to work here? And I'm like, well,

00:19:08 I don't know. So I did a survey and I gave it to the chamber and they sent it out to their members. And in two weeks I had an 80 people expressed interest. And so do the survey for you. Yeah. Yeah, because they liked the idea. They thought it was good, you know, good for them. They're always having people ask about office space or whatever else.

00:19:24 So they had said, okay, there's something here. And then I, in the survey, I said, are you interested in, like, how often would you use it? Would you want an office? Would you want a desk? Whatever. And so I immediately went to the people that selected an office called them up when they had coffee and,

00:19:40 you know, just sat down and said, what do you need? What are you looking for? What would make this really good for you? So it really helped kind of sort things out for me. And then the other thing I did was I made a bunch of posters. I put up said opening soon, you know, craft work and didn't put the location,

00:19:53 just kind of put it up. There had some cool images from great coworking spaces that I'd seen. And, you know, I started getting emails and calls from people. So it started to validate, okay, there's something here worth going on. So then as you said, then the space, then the goal was to find the space. There was a tired,

00:20:10 old shopping center that's right around the corner from where I live, I'd walked by it forever thought it had good potential intuitively. And I'm not quite sure why, but intuitively I always felt it should be a ground floor use that. And I saw it almost as a retail use that you merchandise as opposed to an office use that's on the second floor. And I think that was,

00:20:31 that actually has proven itself really well. I think people love kind of being seen and being part of the street scene and all that kind of stuff. So it helped a lot. But the, the funny story was, so I go to the landlord and this is a third generation family that owned. So classic, you know, small town, real estate,

00:20:50 the center was built in 1963. So I'm dealing with the son of the guy who built it, who is passed away and the son and the granddaughter or daughter. So the son is 90 and the granddaughter is 67. So I walked in with my flip book and I'm showing them all these cool pictures of Coworking and here's how it would work and everything.

00:21:09 And the son, the elderly gentlemen, 90 says, wow, you know, I don't know that daddy said you should never put office in your retail centers. And I'm like, well, don't think of it like office. They give it like a gym and this is 5,000 square feet. And there's this thing called Amazon where I'm not sure in a small town,

00:21:28 you're going to fill 5,000 square feet. It's been vacant. So pretty quickly within about an hour, he says, so if I was an entrepreneur and I needed a place for have a desk and I wouldn't have to like sign a lease and I wouldn't have to get internet, it would all be there. And that's really cool. I think we should do this.

00:21:45 So, you know, kind of won them over and, and we, you know, started the process. So it was, as you said, it was an old bank, it was Wells Fargo. And so it had this huge monolithic concrete, which was the vault. And it was really awkward in terms of space planning, but we were able to work around it.

00:22:05 And then I don't know if you have any Well, like it was, was it wide open except for the vault? Well, the volt we've, you know, once we got to the place, so first of all, the place was just like horrific. I mean, it was like your classic, you know, 30, 40 years of just bad sheet,

00:22:20 rock and bad colors and misuse. And, you know, so we got it up and underneath, it was this beautiful structure. So we were able to like capitalize on that. And then there was this concrete block in the middle. So we literally cut through to sort of remove, it was $30,000. And, and obviously a ton of concrete, I told Jim,

00:22:40 I was like, okay, when we do the podcast, you have to start with, and if you're thinking about using a bank, building dot, dot dot, because there are lots of listeners out there who are like, oh my God, I did this, you know, the same thing because bank buildings are so compelling. They are, And they're making,

00:22:58 and they're big and they're, And they typically have parking, which was for us surprisingly in a town that is so walkable and so much, you know, bicycle friendly that we just did a member survey. That was like the number two amenity was the fact that we've got free parking. So we're two blocks from the Plaza. And this amenity rich, you know,

00:23:18 three Michelin star restaurant down to the coolest Tacori you could ever find, but we have free parking, which is great. But so the vault was there was going to be 30 grand to remove it. And so we decided we would cut out the back of it. And actually I'm in the vault now. So you have this thing, it's 18 inches,

00:23:35 18 inches thick. We cut out the back of it, lined it with a Walnut paneling. And behind the image, there is a, we sandblasted the concrete, put in some glass stores. You know, we had to core drill through the concrete to drop in some wifi cause nothing was going to get in here. And it's a cool it's, it's cool.

00:23:54 We use it for private dinners, for wine tasting, you know, board rooms. And then obviously people use it for stuff like podcasts and talking to you. So it's great. And it's, it's become a signature feature of the space that really kind of defines it. So it was one of those lemons into lemonade kind of thing. And you opened February of 2020,

00:24:17 we opened 63 days before shelter in place in COVID, but who's counting, right? So January 6th, 2020, and you know, opened way ahead of plan. Our goal was a hundred members in a hundred days and we had 95 members on our 50th day. And revenue is great way ahead of our plan. I've been pretty conservative underwriting it and then March 17 tit.

00:24:44 And, and then, you know, and then it's like, oh my God, what's going to happen now. And so we had three really interesting epics. We had a group of members that came in and they said, this is too important to town. Keep billing me. I'm not going to come in too risky, but keep billing me. This is really important.

00:25:00 I want to make sure you make it. And they lasted for about 90 days. And then they said, you know, this is going to be longer than we thought I'm going to have to, I'm going to have to terminate my membership. But we had a whole wave of people move up from San Francisco rent. An Airbnb shelter in place in Healdsburg is a lot better than sheltering in place in downtown San Francisco,

00:25:18 but they have a lousy internet and they were in tech. And so they said, we'd brought, we'd spent, you know, 10 grand to bring dedicated fiber to our space. So they're like, you know, we've got super fast up and down and they're like, perfect. So they, they took that on. And then about September, we had the parents that came in and said,

00:25:36 oh my God, my kids are still homeschooling. I've got no bandwidth. I can't get anything done. You know, we're going to do it. So we limped through the first year. And then in probably about April of this year, we kinda things really turned a positive for us. And a big part of our business model, unlike maybe a traditional Coworking or big part of our business model was corporate retreats.

00:25:59 So you talked about how lovely Healdsburg is to come to. We thought there was a part of the business thesis was there, our corporate team C-suite think tanks, strategy teams that want to come up for a two day retreat. And the only place to do that is in a hotel. And typically in a hotel, you've got to eat their food. You got to buy their rooms,

00:26:20 the rooms. Yeah, yeah, yeah. The workspace, you know, has art on the walls. You can't move the furniture around. So we created what we call the urban workshop, which is a place for about 30 people, highly flexible, you know, super high deaths, TV screen on one end old school whiteboard on the other end pinup walls,

00:26:38 everywhere, big patio doors that go out to our outdoor patio. And the idea was we would these teams at one or two day retreats, they can, they can schedule lunch out. We can bring it in, give them a whole Healdsburg experience. So when we first opened, we had eight of those scheduled for our third month. And we were like,

00:26:57 you know, and there were a couple grand a day. So it was, you know, was super, and then they all canceled, like, because of COVID like within 72 hours. So that was, there was a real kick to the gut, but I still believe that model is relevant. And when people do start meeting, I think it will be really valuable for us because you know,

00:27:13 everybody wants to get together after what we've all been through there just don't know when. So, Hey, I just wanted to jump in really quickly before we continue with our discussion. If you're working on opening a co-working space, I want to invite you to join me for my free masterclass three behind the scenes secrets to opening a coworking space. If you're working on opening a coworking space,

00:27:36 I want to share the three decisions that I've seen successful operators make when they're creating their Coworking business. The masterclass is totally free. It's about an hour and includes some Q and a. If you'd like to join me, you can register at Everything Coworking dot com forward slash masterclass. If you already have a coworking space, I want to make sure you know,

00:27:58 about Community Manager, University, Community Manager, University is a training and development platform for community managers. And it can be for owner operators. It has content training resources, templates from day one to general manager. The platform includes many courses that cover the major buckets of the Community Manager role from community management, operations, sales, and marketing, finance, and leadership.

00:28:26 The content is laid out in a graduated learning path. So the Community Manager can identify what content is most relevant to them, depending on their experience and kind of jump in from there. We provide a live brand new training every single month for the Community Manager group. We also host a live Q and a call every single month so that the community managers can work through any challenges that they're having or opportunities get ideas from other community managers build their own peer network.

00:28:58 We also have a private slack group for the group. So if you're interested in learning more, you can go to Everything, Coworking dot com forward slash Community Manager. So you haven't seen that come back yet Fits and starts. We'd have some small ones, but yeah, no. I mean like our, our model was two per month, then we're probably getting one every other month.

00:29:20 Yeah, Yeah. You'll start to get there. Okay. I'm sharing for anybody. And I love how intentional this is because you kind of grouped your amenity spaces. Well, except for the beautiful fireplace in the front. So let's not forget about that. The right, the corporate retreat kind of happens in the back with the patio and they can sort of spread out and use whatever kind of components that they need to use.

00:29:49 Right. They can have the vault, they can have the kitchen at, and that's kind of closed off from the workspace. Yeah. And you know, there are a couple of really good lessons in all of this. You know, I'd love to say this is a, you know, brilliant linear process that, you know, I came up with this,

00:30:04 but this is really the evolution of talking to a lot of people, Natasha Julianna, who runs a work Petaluma in Petaluma was very generous with their time, spent a day with me up here. And she was the one, you know, originally my idea was most public space upfront. Semi-private all the way to private. And she's like, you know,

00:30:24 in the city, that might be good. But up here, the people in the offices kind of want to feel the vibe of like, you know, the energy what's gone on the center. So we came up with this more of that, the two edges focused around the open space and it really has played out well, cause people do, they,

00:30:39 they want to feel a part of the, you know, what's happening in the center core, but also be able to close the doors. The other thing that happened was in the very back there where we've got that second kitchen, we, as we were building out, I brought in some event planners that I'd met here in town. And I said,

00:30:56 you know, walk through, tell me how you would use this. Could we rent the entire space for a wedding reception? You know what? We can do this. And so they came to the back and they said, you know, if you had a kitchen back here, you could rent the vault and the workshop and close that off. And people could have breakout space.

00:31:11 It could have a caterer, a slide in that back door. And so what was originally going to be some additional offices in the back there became that second kitchen. So, you know, a lot of my design process is talk to as many people as you can and get the benefit of their wisdom and experience, and then just kind of keep nurturing it through the plan.

00:31:29 So I think I drove the contractor and the architect nuts because I was constantly changing stuff. I talked to somebody else and they said, no, I love that though, because you, you know, have a background in, you know, the built environment and could have made a lot of assumptions. And yet you still did kind of the bootstrap things that are the right things to do,

00:31:52 like your survey, your posters, you know, all the things to validate that this was going to work and that people wanted this and that wanted, you know, the same thing that you were envisioning. So Well validate. And also at customized, I mean, I learned so much from all of those things, talking to people that, you know,

00:32:10 it was, it was, it was really, really good. The other, the other quick thing that I will say, and I can't remember if I told you this when we were together, but you know, I finally had to open the doors. I'm kind of a perfectionist, but I finally had to open the doors, even though I didn't have all the furniture I wanted and I'd run out of money and all that kind of stuff.

00:32:27 And that was like the best thing ever, because having continued, first of all, there were a lot of things I was trying to do that I had never done and ended up not doing it all. And it so good because the space works really well without them, you know, some of the built-in stuff. But the other thing was, I think there is a culture and a psychographic that likes Coworking.

00:32:48 I mean, they're entrepreneurs, the people that want to be part of something that's happening. So to come in every week to come in every month and see the thing continuing to evolve and grow and take on new personality was really fun for people. And they felt a sense of authorship of what we were doing as opposed to, you know, it was perfect day one and that's the way it was.

00:33:08 So they were kind of along for the ride and it really made them mentally, I think, bigger, you know, mental owners of the, of the place, which has been really great. I love that you shared that because right. It's sort of a mindset thing. You're either the type that like wants it all in a bow before people. I talk about that a lot in terms of pre-selling like,

00:33:29 some people don't even want to pre-sell until it's perfect. Right. And by then you're paying rent like a bills. And so if you can shift your mindset, I love the, you know, the term authorship to get your community engaged and yet they like it that way. So yeah. And here's kind of a photo. The space is really beautiful.

00:33:52 I also love the cables from the ceiling. Cause how far are the ceilings, Ceilings and 14 feet and, you know, so we didn't have any power in that center core. So, you know, one of the budget cuts was, well, I can't dig that up and run stuff in there. So it's like, yeah, we'll just get some,

00:34:09 you know, some industrial cords from home Depot and we'll, we've got all the conduit and the power up there. We'll just drop them down and it gives it this kind of workshop, you know, cool garage feel. And it's been great because again, as we've had to move desks around, spread them out, you know, for COVID, whatever else,

00:34:26 it's super flexible, as opposed to having like laid out every plug in the floor. And then three months in found out we had them in the wrong spot, Which is another right. Sort of pro for not having ordered all your furniture is you have Spread out apart. I mean the number of members, I almost don't even want to say this, that you said it earlier is 95 and in 60 days,

00:34:51 and you had all your offices rented at open half of your dedicated, desperate take in, but this is a, again, a big kudos to you just did the work upfront, like the fact that you did the survey and you said, okay, I'm going to go have a coffee with an office and Hey, you're validating that they're real and they meet it.

00:35:09 And then, you know, you're, you're sort of pre-selling them and making sure you actually build what you want to build, but I mean, that's a tremendous, you know, pre-sell and fill up effort. And unfortunately it was 63 days in front of a shutdown. So, so that, sorry, it's not funny at all, but you did the work and you created,

00:35:32 you know, the thing that attracted your ideal members and you also did the here I'll share this for anybody watching CUDA, your, your ideal community, avatar, you know, you, you did the work on, you know, who are they? What's interesting to them, what do they need, what do they want? So you've got really pretty deep into what is the average age of your member?

00:35:53 Your, your male ICA is 52. Yeah, it's probably, so I think it, you know, just across sections that we just didn't remember. So we're probably, I would say average is 45, but we span about, you know, 30 to 65. I think we definitely skew more older just because of the nature of town. We skew more professional and kind of independent solo worker professional,

00:36:19 you know, finance consultant, technology, developer, creative artists, journalists, that kind of stuff. So that's a little different than what you might find in a Metro area. And we, you know, one of the things we started early on, so, you know, a couple of things that, you know, early on decided about this was we wanted to make sure that the community loved this and felt this was important.

00:36:45 And so, you know, our values around supporting the local economic ecosystem, you know, building high performance workspace for everybody creating a place for what we call doers, as opposed to entrepreneurs, doers to grow both professionally and personally. So those were things that we, you know, unlike maybe a corporate Coworking, we wanted to be a hub for the community.

00:37:10 So we have like a non-profit policy where if your mission aligns with our values, you know, free pro bono space in the evening half rates during the day we partner with locally owned businesses to provide a lot of our goods and services and then promote them to when we have our retreats or if the people come in, they're the ones that are doing the catering and the drinks and the,

00:37:33 you know, the local wineries and the distillery that, you know, does our, does our cocktails and stuff. And then, and then they give our members discounts. So there's kind of a, a quid pro quo there where we have special things with all of them. But the idea was we wanted people to feel like this was really important to town and it was part of the time and it kind of played out when COVID hit.

00:37:56 And they said, you're too important to go away. So, so it's, you know, I think that that was a, that was a big part of our, our business model and thesis was in, you know, it'd be loved by the community and be important to the community so that they continue. So one of the other things that we did was we call created this membership category called,

00:38:16 which was not ready to retire. And the thinking was, there were a bunch of people who saw, you know, captains of industry. They were living out in dry Creek valley now. And it's like, how many times do you really want to like, have breakfast with your wife in the morning? So I'm going to go out for my bike ride.

00:38:31 I'm going to go downtown. I got to grab a coffee and I could come in and sit at Kraftwerk and check my email and sit next to some person who's developing a business and share some wisdom and create these kinds of, you know, organic mentorships and see how that works out. So, and give them a chance to kind of stay connected into the community.

00:38:49 And that hasn't, that hasn't played out the way I had hoped, but I still think it's a valid concept and something where coworkers, not just, you know, not just for young people and it's not just for work. There's a lot of other things that we can do with it. So Totally I would, yes. I think, I think that's one of those probably a COVID thing too.

00:39:08 It'll take time to build, and then you might be fighting them off. All the guys were, or the ladies who don't want to have a breakfast with their husbands. You want to sit in your lobby and read their paper and drink their, drink, your coffee. Yeah. We've had a couple of women's do like book club in the evening, get a wine,

00:39:25 sit around the fireplace. So that idea that it's kind of the community living room. If you're a member it's kind of a club. I actually, I used to use the term club working instead of Coworking. So the idea that, you know, it's this kind of special place after, after five o'clock, you know, come in and hang out type of thing.

00:39:41 So, So I think that's actually a really interesting comment because I think, you know, part of your, why is that connection to the community? And so you're intentionally trying to create a space that is people don't think of only for work. Right? Yeah. And I, so I think that's really interesting and will become more of a, an approach.

00:40:05 It's not very common. Most people are very focused on, you know, when, when you look at sort of the amenities on the website, it's, you know, the wifi and the, this and the meeting rooms and the, but this whole like community place where you can accomplish more than one thing is super interesting to me. And I think in communities that are smaller,

00:40:25 it works or even communities that, that are bigger. There's a woman who was on the podcast. Tessa, I'm trying to think of her last name. She's in Victoria, Canada. And she calls her space, Calum quench. And it has a lot of open space. And I think that works for her because she has really actually delivered on this whole,

00:40:51 it's a big space. I think it's 25,000 square feet. And so it doesn't have the number of offices that I would expect you need to have, but she has been successful in what you're talking about. Like creating this idea, like you come here for more than just work. And so she's selling more memberships that way. And I don't think any,

00:41:10 everybody can do that or has the same sort of why or the same, you know, maybe place in a community. But I think I kind of love that, that evolution. So I also want to make sure we cover, you also did an economic impact survey. So you mentioned being important to the community in more ways than one. So yeah.

00:41:32 Talk about a little bit about the, the economic impact you remember, And, you know, this was something I've, I've really been fascinated by because, you know, in, I mean, part of the back drop here is there's a lot of hand wringing about Healdsburg, just all about tourism and, you know, it's just a tourist and it's all about wine and drinking,

00:41:51 stuff like that. And so it's like, okay, we've got 110 members here now. And I think only a few of them are in food and beverage and the other ones are doing really interesting stuff. So what are people doing and what kind of companies are they working for? And then more importantly, what are they spending downtown? Have we created a,

00:42:09 an epicenter of spending that's supporting other businesses because people are buying coffee, they're buying lunch, you know, all the things that you would expect and in a small town and in a shopping center where we are, which is a little bit tired, you know, that really matters. And I'm also getting, you know, about a year out from renewing my lease and I wanted some data to at least go to the landlord and say,

00:42:30 look at how much value we've created for our neighbors in those, in the center at let alone downtown. So it, you know, this is a, I wouldn't say this isn't a highly statistical survey, but we just, we just sent a survey out to all our members. We had about a 50% return rate and we asked them, how much do you spend weekly on neighboring businesses?

00:42:52 And then how much do you spend in downtown? So including what you spend in the neighboring businesses. Cause I wanted to know neighboring businesses for conversations with the landlord and downtown as a larger part of, you know, conversation and PR you know, to the, to the community leaders. And you can kind of see the numbers there, but so that the short,

00:43:12 you know, the short sound bite is when you extrapolate these numbers over 52 weeks a year. And then what we spend through our craft partners programs with local vendors and providers, you know, cleaning, hiring a local cleaning from all those kinds of things. It comes out to about a quarter of a million dollars worth of impact. So to me, that's,

00:43:32 you know, that's, that's material that really matters and I think is important to end. And I think just taking the time to understand that and explain the value creation, you know, to people is really important. So I would encourage anybody that's operating one of these to try and figure out. I tried to see if there was any data out there on there.

00:43:52 Then there were a few people that had kind of done similar surveys. There's obviously no industry data, but I think it's a really important part of the story that needs to be told that, you know, we're creating jobs, we're creating economic value for surrounding businesses. And in this case, I mean the, you know, the, the non quantitative,

00:44:10 but qualitative value add is people come into the space and they're like, I had no idea this has done so much for this part of town or so much for this shopping center, which was like, so tired and run down. And now this is great. So yeah, I feel like it had a lot of value in both economic terms, as well as kind of psychic rewards to the community.

00:44:31 Yeah. I Love that you did that. And to your point, it's, I hear people attempt to do it, and I think it's an important, and even again, it doesn't have to be perfect. Just send it out, get some data. And I loved just again, I'll put the link to your book in the show notes, but I pulled a stat.

00:44:51 You're talking about kind of the, the, the economic impact. I mean, small business in general, I was really surprised about the stat it's early in the book and it says a 2012 analysis of the salt lake region turned or showed that 52% of small business dollars recirculated in the local economy versus 13% for national chains. And, you know, again,

00:45:15 it's just kind of, there's a place for both, but an argument for the impact that small development can have on a community. And I think for anybody who's thinking about, you know, building locally or doing a coworking space locally, the book has a lot of good stats and just kind of ways of thinking about things, if you're working with your local,

00:45:35 you know, economic group or the folks who make the decisions about what goes in Jim, I'm curious, since you are a real estate developer, you signed a lease on this one. What's your, would you build next time? Would you, what do you think about the model, Lisa? Yeah, no great question. And really tough because it was like,

00:45:57 you know, because it was an older center and very tired. My rent structure was very favorable, but I had to pay for all my Tia. So, you know, a hundred bucks a foot to build out six months free rent, you know, 75 cents to a buck 50, you know, at, at the, at the peak year. So our operating costs are relatively low,

00:46:21 which was great during COVID. I didn't have like a big mortgage payment or something like that, but you, yeah, you wonder, I'm gonna sorry to spend half a million dollars to build out the space. And unless I renewed the lease, that's kind of like lost money. It's going to be a long time coming back. So it's a tough dilemma.

00:46:36 I mean, the larger strategy was this to be a catalyst or a fly wheel for other things I would like to do in the, in the surrounding area to really use this, to drive energy, create brand. I mean, it's, it's a little bit what we call fate in the building, small world phase 0.0, where you kind of establish a place and get it on the map app and create some activity,

00:47:01 it's know the cool factor and then are able to do real estate that creates value as a result of that. But I'm still in the early stages of that. I think if I could have bought something, I probably, yeah, with an SBA loan or something like that would probably prefer to do that. It's just the real estate here is so insanely expensive that,

00:47:20 you know, you can't, it's, it's the difference, the Delta between a monthly rent payment and knowing that, you know, you're done in five years versus taking on a sizeable mortgage and then not sure what's going to happen is, you know, for all the other risks I was taking on that seem like the best way to manage risk. So yeah,

00:47:38 Yeah, no, I like it. And your comment about sort of a 0.0, that was a big takeaway for me from your event, is that not everything has an immediate or clear ROI. Like when I talked to people about opening a business, I'm always very opening a coworking space, specifically very concerned about their financial goals and helping them understand like,

00:48:04 well, what does it look like to create that, right? And your group like had a lot of mixed, like why it's like, maybe it's because it makes a big impact on the rest of the project. And we're not overly concerned about, you know, the, the actual cashflow from that part of the project, you know, or to your point,

00:48:23 like, you've got to, you know, a longer term plan and this is part of the plan. And so this is not the end goal and, you know, or you just like, it's a legacy thing, right? Like you're, placemaking in a community that you live in and making a huge impact in the community. And maybe that's something you just wanted to get done.

00:48:43 Yeah. They're there. I mean, it was all, it was, it was all of those. And I think the key though, is it any of this stuff? And we hear it in any of the, you know, colleagues that are doing the building small thing. I mean, it is about patient capital. And it's about as a,

00:48:56 as I talk about in the books, one of the hallmarks of smallest real estate, as the means to the end, as opposed to the end itself. And I think so much real estate has gotten divorced from its purpose and the humanity of it versus building small is really by creating these great places that lead, you know, the end result is great places and great community using the real estate as the vehicle to create that.

00:49:20 Now it can't be philanthropy, but it can be a different calculus in terms of the way you look at return and value creation. Yeah. 100%. Yes. That was kind of the takeaway, right? It's not philanthropy, but there's a lot of commingled wives Happening. Jim. I feel like I could have talked to you for days and ask you more questions,

00:49:42 but I think I probably should let you get back to your, your day. Well, this was so much fun, Jamie long overdue, but so much fun. So Wait before we go, actually speaking of your day, cause I think people always wonder this. How do you spend the day? Are you in the space most of the time? What are you,

00:49:58 what does your day-to-day look like? Yeah. Great question. Yeah. So the short answer is yes, I'm in here a lot. I do, I spend a lot of time fiddling with the dials on this as anybody that's doing Coworking or intern Coworking knows it's all about the Community Manager. So I do have a great Community Manager and they kind of,

00:50:19 you know, run the day-to-day and the meet and greet and putting out the drinks and snacks and all that stuff, which by the way we do for free, which adds a little premium effect. And this is money well spent for sure. And then I'm, I'm around. So I'm work. I have a desk here. I work here. I work on my real estate projects.

00:50:37 I work on, you know, my speaking and all that kind of stuff. So it's nice being in a space and it wasn't always that way for the first, probably six months I was not here kind of intentionally. And, but I found out actually I liked being in here, you know, and I liked being around and I liked meeting, you know,

00:50:52 I love it when somebody comes in for a tour and I can go over and say, hi, and how'd you hear about us and all that kind of stuff. And it's just, you know, personally, it's very fulfilling in that sense. So yeah, and I, I would say in a given week, I'm probably spending 10 hours a week on this,

00:51:09 you know, checking the numbers, making sure we're all. Cause it's, it's, it's still a bit razor thin. You have to constantly fiddle with the dials and make sure you're not running a file of the numbers, but, and, you know, touring people and trying to sell people and events and all that kind of stuff, but it's still,

00:51:26 still a labor of love. So it's okay. Yeah. I love it. Awesome. Well, we'll let you get back to your many flavors of love and yeah. Thanks for sharing your story. Yeah, no, thanks. It was really great. Jamie, so look forward to seeing you again, Believe me, spring is on the list. Now that I have a coworking space,

00:51:45 I can do my, my own personal quarterly offsite. Yeah. Great. And you've got the website I presume for this in your, in your chat. I wake up to all the show notes. So you can look at pictures, Tim's book, Jim's website and all the, all the things you can find in the show notes. So we'll make those readily available.

00:52:03 Thank you. And thanks for all you do and all the work that you're doing and we've pulled the industry together and share these lessons. And you know, this is really valuable. I mean, the one thing I was going to say is that when we started, you know, it was if the real estate or was it the Coworking, you know what led and I think in my kind of journey through all this,

00:52:24 this is such an open source kind of personality that I think people want everybody to succeed. So I was so amazed at how gracious everybody was with sharing numbers and sharing ideas and sharing lessons. And it, you know, to me, it's, it's, it's emblematic of what real estate could be because people want to do the right thing and they see that,

00:52:43 you know, the rising tide lifts all boats. So It's great. It takes a village. Yes, it does. Right. Jamie, thanks so much. Hey there, thanks for sticking with us through the end of the episode, don't forget to subscribe on your favorite podcast player. And if you were enjoying the podcast, please go leave us a review.

00:53:09 It helps other folks find the podcast who are thinking about starting a coworking space or already operating a coworking space and are looking to stay up to speed on tips and trends. And we started a YouTube channel. We'd love to have you catch us on video. You can join us for podcast, videos, and Q and a videos and other things that we post to the channel.

00:53:33 We'd love to see you there.

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