237. On-Demand, Financed Furniture for Coworking Spaces

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237. On-Demand, Financed Furniture for Coworking Spaces

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 coworking space owner and trend expert, Jamie Russo, Welcome to the Everything Coworking podcast. This is your host, Jamie Russo, you are going to love today's episode. I read about this pilot that WeWork was doing with Feather around creating a custom office,

00:00:42 built their tool, which essentially allows WeWork members to go online and custom design an office space from one to 20 people. So if there's a group joining WeWork and they want to customize how they're going to use the space, they don't want all desks. They want some collaboration space. They want a whiteboard, they want a sofa. They want a phone booth,

00:01:03 whatever it is they want, they can mix and match, choose it themselves. They order it online. It gets delivered and assembled, and they're good to go. So I saw this and reached out to Feather and said, I need to know more about this for my audience, because this ability to access furniture on demand and a variety of furniture that's designed to be reused and shared in this way is a game changer for folks listening that are considering a business model,

00:01:36 where they want to offer this type of choice and flexibility to larger users of either their current space or adjacent space in the building. So if you're thinking about partnering with your landlord, that furniture pieces are real friction point, isn't it. So even for a coworking space, that's launching can be really hard to guess at what the members want. Right? It's hard to know how is this going to play out?

00:02:01 I'm going to open. I'm making a lot of assumptions. I'm putting things in that I think look good and will work, but the use cases may be different. And so how do you adjust for that? If you've purchased furniture and you've had to use your startup funds to purchase that expensive furniture, furniture is one of the, you know, biggest line items on your startup cost budget.

00:02:21 So Feather solves many of these problems. So you're going to love this episode with Ilyse Kaplan. She's the president and COO of Feather. I reached out to the team and I said, I need to get someone on the podcast to walk through how this works. So it is fairly short and sweet, but just walks through the model, what they're doing with WeWork,

00:02:42 how they came to be. So without further ado, I hope you enjoy our conversation. And I hope that it sparks some ideas for your own business model and the way you handle the furniture piece. Welcome. I am here with Ilyse Kaplan. She is the president and COO of Feather, and she has recently moved from New York City to Ann Arbor, Michigan.

00:03:06 So all of my Midwestern listeners can give her a wave. So trading in, I'm guessing you're doing some shoveling. I don't know if Anarbor has seen a lot of snow yet this year. A little bit. Yeah. And we're hoping for more. I love this Now. Oh, good. Okay. Yes, that is. You have to, or else you wouldn't have chosen,

00:03:26 you had some warm weather options and landed on in our birth. So I love that. So I really appreciate Ilyse you taking the time I came across the program that you're running with WIWORK and it is really, really compelling. And I think really enables some of the business models that folks are trying to run in the co-working flex office world because you and able sort of flexible on demand furniture.

00:03:54 And I want to dive into your model. So I'll just kind of read, I pulled a segment from the, probably the press release on what you're doing with WeWork. So I'm going to read that really quickly. And then we'll dive into sort of how, what Feather does, how it came to be. So WeWork and Feather, created a custom office builder tool,

00:04:17 which you can see online. We'll link to it in the show notes for WeWork members to design their office spaces with furniture rented directly from Feather. So a WeWork member can select their city building office layout and number of employees and the tool recommend a new layout and Feather furniture to fit the space. And they can choose from our collection of curated office bundles,

00:04:39 as well as Allah cart furniture from desk to chairs to whiteboards, just sofas cabinets. I looked, I went into the tool the other day and I was like, I can pick lamps. I can pick anything and like add it to the cart. It's yeah, it's amazing. Okay. So I wanted to kind of peak my audience's attention. So anybody struggling with,

00:04:58 okay, how do I build out a space? How do I offer larger, you know, team opportunities? How do I work with a landlord who's not used to budgeting for furniture or acquiring furniture and how do I do this in a more flexible with plug and play approach that really fits the needs of the end user? And I, I think you're,

00:05:19 you're, you've got this all solved. I'm sure there are things that you're still working out. So yeah. Tell us, like, add on to what I described Feather started as a residential solution. I think so. Yeah. Kind of walk us through a little, you know, the more official version of Feather and how you evolved into the commercial furniture space.

00:05:39 Yeah, Absolutely. Well, first of all, thank you so much for having me, I'm thrilled to be here. And as you mentioned at the top of the show, I, I recently moved to Anarbor myself and I think that that's just an indication of the way that we're living in the way that we're working is ever changing. And obviously hybrid work is becoming more and more a part of the future of work.

00:05:56 And everybody I think is trying to figure out, well, what exactly does that mean for me and for my business? And if I'm a property owner, what does that mean in terms of finding the right tenant? If I have a coworking space, how do we best structure this to serve their needs? And so this is something that, that we've been working on with WeWork really for over a year to make sure that we were getting it right,

00:06:16 and that we're addressing a lot of these needs and what we're hearing from people. And what we're experiencing ourselves is that people really want more flexibility. And convenience. Feather was started back in 2017 by Jay Reno. And it was really solved to, to your point on the consumer side of the house, solve a couple of key problems. So the need for more flexibility and convenience,

00:06:40 and also to really address the growing problem of furniture waste. So I'd be remiss if I don't do a quick plug on that one furniture is the second largest contributor to landfills in the U S after food it's bonkers. And if you just take a second to think about that, and then maybe have flashbacks to walking down the streets of Chicago or in New York,

00:06:58 and just seeing sofas on the side of the road, it's a really hard asset to get rid of it's, as we say, in the industry, big and bulky, and it's a real problem. And so consumers living in big cities who are, who we targeted out of the gate back starting in 2017, they move frequently and their needs change. I think I moved every year until I bought my condo in Chicago.

00:07:22 Yeah. Somewhat roommates change or, you know, who knows what changes, but it's constant. Yeah. And then maybe you have stuff, but the new roommate doesn't have, you know, so now you have gaps and He moved in with a partner and all you have is one double sized bed and realize maybe it's time to upgrade. I mean, those changes are constant.

00:07:40 And in particular people like you and me, you know, professionals living in big cities, it's constant that change. And it turns out that actually the needs that companies have, have changed a lot and are constantly changing also. And so, you know, as we were all collectively living through COVID and realizing what people need is different than what it was a year or two or three years ago.

00:08:03 And today when people are going into an office space and you and your listeners know this, they're looking for something different than before. They're not just looking to have a sea of desks. And so whether that is brainstorming, teamwork, innovation, collaborative spaces, that's what people are showing up for today. Or if they go in, they want an ergonomic workstation,

00:08:22 they want to sit stand desks, like the standing desk that I'm at right now. And it has to be as good as what they have at home. Right. Because everybody's installed those amenities at home. Yeah, absolutely. And we're servicing those folks in their homes at their home office set ups. Right Now you get both sides of it. Yeah.

00:08:39 That's a good Model. Yeah, totally. I think in addition to the podcast, this is going to air on YouTube. So, you know, this is the Feather Highland bookcase. We have all of these great products that people are using in their homes, Very nicely styled, But yeah, the needs of companies are totally changing. And then also,

00:08:58 you know, if you flip it to the perspective of the landlord or the Coworking owner, you all are oftentimes are not experts in furniture. And so figuring out a way for, for that to be a really turnkey solution that you can offer as part of your offering, turning a cap into an OPEX. So instead of buying a bunch of furniture on day one that maybe isn't the right fit for what the needs will be for the tenants.

00:09:18 And instead having that flexibility and convenience and it's financially prudent. And so we're, we're really excited about this partnership. Yeah. I think, I mean a few opportunities. So to your point, so I help operators start spaces and there's always the furniture buy. And the guessing of somebody asked me the other day, well, what should I buy a mix of chairs?

00:09:41 Should I buy all the same chairs? Like even the simple question of what chairs do I get? And then what if they turn out not to be the right chair. Right. And you've bought them in, you're stuck with them. I think the other piece just for sort of true Coworking, like serviced Coworking that serves the smaller user is, you know,

00:10:00 if people show up often refreshing the space is something you'd love to do, refresh the lounge areas or right. Add whiteboard, you know, you get demand, you know, those requests all the time for, and you just want to sort of make the space different because people get used to it and sort of like, you know, bored of it when they're coming in all the time,

00:10:19 but you don't have, there's no way aside from a Feather to accomplish that without right. And putting furniture in the landfill. I remember by the way, my daughter, who's now 10, this would have been a few years ago, but I think she, we had just watched toy story. And I don't know if you like, there's a, I can't remember which toy story,

00:10:37 but there's this scene where all the characters are like stuck in a landfill and it's a stressful scene, especially for like a seven year old. And we went to get a new sofa and she was like traumatized by picturing the fact that sofa, the old sofa was probably going into the landfill. So yeah, just the value proposition of that. And she was clearly like more damaged by that idea then,

00:11:02 you know, my generation has Right. And she she's tuning into that in a way that I think we, we oftentimes just aren't aware of what a big epidemic this is. And I think that we, as a society really tuned into a lot of the problems of fast fashion, a number of years ago, but fast furniture, it's really a huge issue.

00:11:18 And one of the ways that we've tried to tackle that at Feather is really building and designing furniture that's built to last, right? So you as a client will only be using that furniture for as long as you need it, whether it's in your home. And then, you know, you, you move across the country and no longer needed, or whether it's an office that today is really set up for collaboration.

00:11:36 But a year from now, people are wanting to just come back to that sort of proverbial sea of desks. We take those items, we refurbish them and put them back out on their next life. And the reason we're able to do that so successfully is because we've built this furniture with rental first principles. So it's simple stuff, but a basic sofa that you might look to move from one apartment to the other,

00:11:55 you take off the feet and it could strip the threading, not out as are all built with component parts. So you can't do that one every year for six years. I feel for that, it's got a built in obsolescence and we want to make sure that we extend the life of these items. Even if it means swapping out one cushion, that's not going to make it to the next deployment.

00:12:14 Well, that's okay because it's built in that way. And so we're really trying to think ahead about all of the different ways that it will be used because ultimately we're the ones who are, are making sure we have the right product at the right place in the right. Hey there, our next cohort for our management agreement course called the creative Coworking partnerships is starting on Monday,

00:12:35 January 24th. If you are a landlord or a coworking space operator, looking to get into a creative partnership structure, to put a co-working flex office into the building that has the right upside for each party, while being confident that you've covered all the who does what and what ifs before you commit, then you need to become an expert on how management agreements and other creative deal structures work.

00:13:03 I've partnered with management agreement, expert and real estate expert Mike Abrams, to develop a course covering structuring and negotiating management agreements and other creative partnerships from a to Z. If you are a coworking space operator looking to expand your creative deal structure, or you're a landlord looking to add Coworking or flex your building, we designed this course for you. You can get all the details at Everything.

00:13:29 Coworking dot com forward slash management agreements. The course is online and it's actually available anytime, but we like to run cohorts because we feel there's a ton of value in participating in the group calls. So you can get your questions answered live, and you can learn from what others are up to. Because we have a lot of folks who are actively negotiating and jumping into their creative Coworking partnerships.

00:13:58 Right now, we actually launched this course almost a year ago, which seems crazy. We invite any past students into our new cohort so that they can continue to learn, continue to get questions asked because we know these deals can sometimes take a while to get done. So the next cohort starts on Monday, January 21st. So sign up now so that you can jump into that cohort.

00:14:21 You can get all the details at Everything Coworking dot com forward slash management agreements. Yeah. So this is intentionally designing for sustainability, but also creating a tech platform that facilitates the marketplace. Because one of the other things I advise my folks starting spaces is, Hey, there's so much furniture out there right now. Right? Cause there's so much transition. So go look at the liquidators,

00:14:47 but it's really challenging. I did this last year, I'm looking on the site. We can't really, it's hard to tell, like if the furniture's going to fit, it's just like not a great experience. Right. And your site sort of takes that. Right, right. Applying this technology to the furniture market. Yeah, Yeah, absolutely. And actually at our partnership with Uber,

00:15:09 we have this really cool tool, the office builder tool. And I know you mentioned you'd link to it in the show notes. It's great because it enables somebody who's going into a space and WeWork to say, okay, I'm in this building on Madison avenue, it's a 10 person office and I want to use it for this function. And then we'll tell you all of the things that make sense for that space.

00:15:25 So you take out a lot of the guesswork of does this go with that? It takes not also a lot of the guests work of will this fit in my space because Totally right. Because right. I, when I redid my office, I used a website called Modsy and they do this little yeah. Layout. Cause I'm like, I have no idea what fits does the desk fit to desk fit?

00:15:46 Yeah, I can't tell either. Yeah. Yeah. A lot of that, that VR technology is amazing. And actually on our live Feather.com website, we enable that also for you to be able to just visualize a piece in your space and sort of display what it would look like in your own living room. And it's super helpful because, you know,

00:16:02 people just don't know what faces in their spaces and certainly not an office space that maybe you haven't spent time in ahead of moving in. So yeah, we're finding users of the tool really finding it helpful from a tenant perspective to just have that turnkey solution and know that what they're picking out is going to work Because the other piece of sort of this like increased flexibility is the increased choice.

00:16:26 Like what do I want to do in that space? So to your point, if you have, you know, five sets of 10 people, they may each want to use that space differently. And so you're giving them the opportunity to sort of select these settings from a kit of parts that makes it really easy for them to figure it out and not spend a bunch of time on it.

00:16:46 Cause that's right, the whole plug and play, but customized plug-in play. And without having to get even designers involved, right? Like they can really do it themselves 100%. And from the flexibility, from the perspective of the tenant, the flexibility means that they can choose what they want on day one. But if their needs change, let's say three months into their 12 month lease in a coworking space,

00:17:05 they can change that space, even midterm, if it makes sense for them. And then from the perspective of the coworking space owner, again, they're sort of indifferent, right? Like as long as the customer is happy with what they have, they haven't made any initial capital investment into that state. So if the tenant is the one choosing it themselves,

00:17:23 now you can also envision a world in which the Coworking provider or the landlord is the one making those calls and it's on, it's on their P and L, but they're able to pass through the expenses that they're incurring with Feather to just having a more premium, customized space to their tenants. So there's a lot of ways to make it work. Yeah.

00:17:40 I mean the other scenario we start to see happening is space operators who have sort of a highly service space and they want to expand in the building with the landlord and they want to offer those 10 seat 20 seat spaces. And they're not sort of designing for every user they're designing, you know, exactly like a, WeWork tends to be at higher scale,

00:18:05 they'll take 50,000 square feet. You know, most coworking spaces don't do that. And so in order to serve sort of the HQ model or the hub and spoke model where somebody comes in and says, okay, you know, I'd love access to the Coworking, but we want our own space. When you have that conversation with the landlord. One of the first questions exactly as like,

00:18:25 well, who furnishes it landlord doesn't have the budget for the furniture and the operator, right. May not have the capital to do it all at once. And so the ability to customize and give the end user that choice and just sort of remove the friction for everyone. That, again, that that's one of the things that excites me about it enables that model because there's still like some friction points in that model that make it hard to execute.

00:18:50 So For sure, it's beautiful furniture, it's convenient, it's flexible. And, you know, as a former finance person, myself, like the value prop of turning a capital expenditure into an OPEX and just paying monthly for what you need while you need it is really compelling. Yeah. Okay. So from a logistical standpoint, I order the kit of parts.

00:19:11 I've got my beautiful new office set up. How does it gets delivered, set up? How does that work? Yeah, we do white glove delivery and assembly. And that's both on the office side of the house as well as on the residential side of the house, we have partners across the country. So in some markets we'll have Feather employees doing that in other markets,

00:19:29 we'll be working with three PL partners in all cases, adhering to our really high standards and making sure that everything is delivered and assembled and placed exactly where you want it for, how you want to work Really and play. I don't have to find my task rabbit or talk, talk my team into, I can remember the first startup I worked in, in Chicago.

00:19:48 You had to build your own desk. I'm sure it was an Ikea desk and you welcome here's, you know, your little hand Allen wrench build your desk and then you can start working. So I grew up, my father owned a hardware store growing up. So I'm like better with a set of tools probably than your average bear. But at the same time,

00:20:09 I don't want that to be my like day one work experience either. Right, exactly. Yeah, exactly. Especially today at this, at this point. Good for the weekend hobbies. But so I'm curious. So you're operating currently in New York, San Francisco, LA orange county, Dallas, Houston, Austin, the DC area for those listening, not in one of those major metros what's next.

00:20:38 Yeah. So those are all of the markets that we service for consumers in their home again at Lyft. Okay. But we are national from a B2B perspective. And so we are in a, I think at last count, 160 zip codes. And if we're not in yours, we're probably able to serve it pretty quickly. So really the contiguous United States,

00:20:59 we're not yet there in Alaska or Hawaii, but we are national with the WIWORK partnership and we are national more broadly on a B2B perspective. So is it safe to say if there's a WeWork, your, you serve that market? Yes. I mean, it's a, it's a great way to, to expand is Canada on the list? I have a lot of Canadian Western.

00:21:21 Yeah. You know, I would say that in terms of international expansion, Canada is the most obvious next place that we will be headed. And here in Michigan, it's like literally just a half hour from where I live to get to Canada. So I wait for it in my own heart, but, you know, it's, it's, I think a big opportunity for us still within the United States before we take that leap.

00:21:42 Yep. That makes sense. So I am curious is how are you experiencing any of the challenging, like supply chain issues that we're having? Are you stuck on anything or are you mostly can fulfill what, what folks are looking for? Yeah. The things that we're seeing from a supply chain perspective, I think we would all agree are pretty unprecedented in recent history.

00:22:09 And so every company is I think experiencing it to a certain extent, Southern is in a really good position to navigate this fortunately for a couple of reasons. So first of all, our business model is reliant on furniture going out and coming back to us. Right. So we're not just dependent on what we buy the first time. It's the fact that we're able to redeploy those assets over to your way.

00:22:30 Yeah. We've got multiple ways to sort of service are available to rent inventory. And so that's been, been great also, we're, we're really able to use that inventory across multiple use cases. So whether it is for someone who is staging a home, a home staging is another area that we, we have services in, whether it's someone using those items in their apartment or whether it's within an office,

00:22:50 a lot of the items are actually the same items. And so obviously not a lot of beds being deployed to offices, but a, a beautiful sofa will work in any of those spaces. And so we're really able to use those assets And tables or lamps or, yeah, that makes sense. Yep. And then also like we, WeWork with great partners domestically and internationally to make sure that we constantly have a,

00:23:11 a good roster of folks who are able to meet our needs. And obviously the, the furniture that we've designed ourselves with those rental first principles to be deployed over and over is a big part of that. But then we have other great domestic partners with whom WeWork. And so Herman Miller being one of them, Floyd out of Detroit being another one.

00:23:29 And so just having the mix of suppliers really helps us ensure that we're not struggling too much from an inventory perspective. And do you have a range of kind of levels of furniture? It sounds like Herman Miller makes obviously great office chairs, not, you know, a fit for every budget, but I love that other They're fantastic. We also have an entry level office chair and,

00:23:50 and some of those, yeah, it really depends on what the customer's need is. And I think that with Office customers in particular, there is a subset for whom the ergonomics are just of the utmost importance, which is part of why we have, you know, products at that really high end of the range as well. And then other folks are really just happy in a more basic task chair.

00:24:10 And so don't need to spend the extra money. Yep. Makes sense. So just to clarify, cause I know there'll be folks listening who are thinking any coworking space can use Feather as a service, not just WeWork. So anyone across the us can reach out to us directly and have a conversation we're always looking to work with more and more partners across the U S and figure out whether it is something that works directly for that a tenant within the space.

00:24:38 We can help you with that. Or if there's a coworking space that wants to explore a deeper partnership with us, please reach out. And right now the most turnkey way is to go to a WeWork because our partnership with them is it's launched it's national and this live out in the market. And really, as we discussed, easy to self-service kind of way.

00:24:57 Yeah, yeah. It's public for anybody listening, you can check out there. I was curious, it's so public. I was like, what if I just, well, I guess I'd have to pay for it. I put some things in my cart and I had, you know, $8,000 worth of lamps. And I was like, yes, obviously I'd have to pay for it to get delivered,

00:25:14 but that'd be a fun surprise to deliver Ilyse anything I'm missing about the model that you want to share. I, my interest, so I filled out your form on your website and your team was fantastic and being responsive. So anybody who wants to reach out that was really helpful. And I just thought, I need more people to know, you know,

00:25:39 that this is happening and that this is a model that can really enable some of the things that people are working on. So that was my goal for having you on was just to kind of amplify, you know, the awareness of what you're up to, but yeah, anything I missed it we should know about. No. And I really appreciate that.

00:25:56 I think that one thing that I would add is it, regardless of the size of your office, we have solutions that can work for you. And so the office builder tool is primarily targeted and call it one to 20 person offices. But WeWork with large enterprises, also taking on a full floor space, dedicated spaces that are much bigger than 20,

00:26:15 you know, up to 200. And so don't, don't think that this is too big or too small for you, no matter the size of your business. I think that, that we have solutions that work for everybody. And what else? I think you captured a lot of it, It's a simple model that solves a lot of problems. So I love it.

00:26:38 I, you know, it must be an exciting time to be a part of the team because, you know, it's, it serves such a need and a need that's like really accelerating due to COVID. And I also think, you know, sort of growing environmental challenge awareness, and you solve some of those problems too, so we're not solved, but relief,

00:26:57 the pain relieve some of the pain that we're causing to the environment with our furniture use. Absolutely. You know, the, our mission is to change people's relationship with material goods for a healthier and happier planet. And so it's at the core of why we're doing what we're doing. The impact is small sofa by sofa, but it adds up and, and to know that we are having an impact in that way and that,

00:27:19 you know, the tenants and the landlords and space operators can also do their part of their, I think that that that's the icing on the cake. And then of course, just the business value prop, like it really is a great way to make your space functional in the ways that you want it to be today. Yeah. I love it. Well,

00:27:38 thank you for taking the time to kind of share the details of the model. We will link to your website and the, WeWork builder in the show notes, and I hope everybody checks that out. Thank you again. And for some snow, for you, for the remainder of the winter, It's going to be cold anyway. I'd rather snowy,

00:28:00 you know, it's, It's totally, exactly give you something to play in. Yeah. Thank You, Ilyse. Thank you so much, Jamie. 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. 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.

00:28:32 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. We'd love to see you there.

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