254. Jason Anderson, President of the World’s Largest Coworking Franchise - Preview of Flex Uncensored

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254. Jason Anderson, President of the World’s Largest Coworking Franchise - Preview of Flex Uncensored

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. Thank you for joining me. So I was at the juicy conference last week and I had to do my intro for a team from Canada.

00:00:40 I don't think that very often. So that was fun. It was so fun. So, so fun to meet some folks in person, some of you that are listening, some folks that have worked with for a long time have not met in person being in person. And I know most of you spend lots of time with people in person. Since I do not currently have a coworking space,

00:01:00 I only see people on zoom. So it was just a huge, huge treat for me to go to this conference. I was talking to Mark Gilbreath. Who's the CEO of LiquidSpace on the phone. When I just, the first day I'd been at the conference and he said, you sound buoyant. Like I feel buoyant. I am so excited to see all my Coworking friends in person.

00:01:22 So if you're listening and you can't wait for that, either the global workspace association conference is in September in Dallas, September. Hold on. I'm getting the date. I think it's the 21st and 22nd. So mark your calendar, book your flights to Dallas. It is actually in Frisco, but I can't wait. I will definitely be there. So my new podcast host was at GC and we took some photos.

00:01:49 Maybe I'll link to a photo in the show notes. My new podcast host is Giovanni Palavacini. I have known Giovanni a little bit for a while. He has been in the industry forever. I remember going to a juicy, it was a very big deal that Giovanni was there. So Giovanni worked for, he's along real estate background. He worked for Regis,

00:02:14 worked for Southwest and their real estate group started his own commercial real estate brokerage. And is now on the team at Avison young, he is a principal and their flexible office solutions group, along with Charlie and who else is in that group? Lots of folks. So anyway, Giovanni called me one day and said, I want to start a podcast and let's talk about it.

00:02:40 And I think he wanted to start his own podcast. And I said, let's do it together because I love collaborating. And some of you do this too, so I don't want to have a business partner because that's really complicated, but I love collaborating. And he's already, I think, bringing out like adding it's a plus plus plus, you know,

00:03:03 I love recording episodes with him. He asked some really fun questions. So we called the new podcast Flex Uncensored. So the goal is to get larger operators. Multi-site operators, landlords who are doing flex, folks who were at the brokerage is doing, you know, kind of deep projects on flex to share some behind the scenes about, you know, what's happening.

00:03:28 What do they really see out there in a learn a little bit about them personally? So that's been really fun. It's fun to have a co-host cause I think, I don't know, maybe I'm a little, you know, more outside the shell. He's definitely uncensored in real life. Super fun, tons of energy. And so I'm having a great time collaborating.

00:03:53 So we are publishing once a week. Giovanni would like it to be a daily podcast, I think, but that's a lot. So we're publishing right now once a week, I will put the link to the podcast in the notes. If you're on your apple podcast player, you can just open this episode in your phone and you can link right to it.

00:04:14 I don't know about the other players, hopefully that shows up as well so that you can find the flex podcasts. So we're going to play a preview today of our first episode on that podcast. And then we'll encourage you to flip over and go subscribe, subscribe to both. Okay. So how are they different? So here's what I think. I think this one is going to continue to be what it's always been a place where you can go to find tips and trends on Coworking.

00:04:43 So I won't do any solo episodes with Giovanni it's, him and me. He may do some solo episodes if I can't make the interviews, you know, he's really running the show on that one. I'm along for the ride. And this one I will continue to do solo episodes. We'll continue to do case studies on coworking space operators that I work with,

00:05:03 the occasional Community Manager and still some bigger picture industry folks, but really focused on like keeping it practical. We're not super practical on the Flex Uncentered podcast. It's more about what's happening in the industry and kind of the, you know, the, the behind the scenes stuff and kind of getting to know some of the people that you wouldn't normally have access to.

00:05:23 So I think it's a great mix. I think, yeah, those of you who love the practical day-to-day stuff and listening to operators who are like, you stay with this one and when you want kind of bigger picture stuff, flip over to the other one, and now we could be in your ear twice a week. So super fun. Make sure you check that out.

00:05:47 So this first episode we did with Jason Anderson, who is super interesting. He was on the podcast a long time ago, not really 2019, but I guess that's about three years ago. He had two little girls during the pandemic, but probably most interestingly for you, he is the president of Co-works LLC and the brand Venture X and now Office Evolution fall under that umbrella to make them the third-largest operator after we work.

00:06:20 And IWG so that's pretty exciting news. They just acquired Office Evolution. They call it like a strategic alliance, but it was an actual acquisition, but they're looking at it as an alliance because they want to make the pie bigger. So they're segmenting, they are interested in pursuing the bond voice strategy, where they have an umbrella of brands that fit the needs of different types of consumers.

00:06:46 So he shares, you know, kind of a little bit about that acquisition and what that will look like and more about their vision. And Giovanni gets him to share a little bit about himself personally, a side hustle that he has and a few other interesting tidbits. So we're going to do the preview and then we'll encourage you to flip over and listen to the full episode over at the Flex Uncensored podcast.

00:07:12 And I will be back with a solo episode next week. So hang in there, Welcome to the Flex Uncensored podcast. This is Jamie Russo. I'm here with my cohost Giovanni Palavacin. Welcome to the Flex Uncensored podcast where every week we interview industry thought leaders and ask them the questions that are on their mind and our mind in an industry that's growing and changing faster than you can keep track of on your own.

00:07:43 We're here to give you the behind the scenes perspective on what's really happening in the flex opposite industry and the personalities behind it. Jason, thank you for taking time to talk to Gio and I today because I suspect your calendar is full. Although I guess you're not the boots on the ground, but we talked you into joining us today to talk about the alliance between Venture X and Office Evolution.

00:08:12 And I asked you before we started recording, you know, when did this go on the vision board? And you said a long time ago, so I'd love to hear the backstory on it. And you know what your vision was to bring those two companies together. But before we do this, Giovanni also shared that you recently made an addition to your family while the craziness is going on.

00:08:32 So daughter number two was born a few weeks ago, The daughter number two. So I've had, you know, two flow blown, I guess she still qualifies as a pandemic baby, but this time we didn't have to wear masks while she was giving birth. So that was a little bit better. And I was able to go to the appointments, but I have a two year old as a Friday and a two week old.

00:08:52 So yeah, hands full. So they they're two weeks apart, two years in two weeks, About two years apart, Less than digging. My wife said the days it's like 700 and whatever that is two years, minus two weeks worth of apart, That's wild, right? Pandemic, baby. And this one. So you had a lot going on what you're pulling this deal together.

00:09:15 So give us a story. Sure. So it really probably goes back to some of the original conversations I have with Ray. When we were looking to turn Venture X into a franchise and little bit of that history, it started in 2012 and Naples one location, 8,000 square feet with a real estate developer started conversations in 2015 about franchising that, and actually launched as a franchise in May, 2016.

00:09:40 And really at that point, we were pretty easy to stay. We were outsiders to, you know, modern Coworking at that point. I think we were all taken aback. How archaic Coworking still was in 20 15, 20 16. You know, you still had just a few players that were out there, you know, you're two big guys, right? You had Regis and we worked at everybody has started using WIWORK synonymous with the industry kind of like clean Xs,

00:10:03 you know? Yeah, Probably right about, yeah, right around then. Yeah. That's when the dream was still completely alive with, we weren't changing the world with these types of things. But you know, when we looked at is, you know, what's really the difference in these locations. And the only analogy we can make was hospitality and how hospitality was in a similar juncture 30,

00:10:23 40 years ago when they were developing the star rating system. And these brands started to combine, we didn't want to sell fluff is the bottom line point, right? We felt like a lot of the brands, they were just selling fluff about what made them different. They were feelings and things that made you feel different, which is great. I believe in,

00:10:40 you know, selling the dream and customer service. But I said, what's actually different between these two, right? Like how do you place these? Is this a two star, three star, four star five star. So we started really putting star ratings and all the brands that were out there and thought that there was a big opportunity to be that for four and a half star type brand,

00:10:59 right. Five stars sometimes can get a little bit of stuffy at times. Right. I prefer, you know, the vibe of a four seasons or a Western over Ritz-Carlton and just my personal preference per se. So we thought, you know, there's a lot of people that are kind of like the courtyard by Marriott, but who's the Marriott, right?

00:11:17 There's some Hampton ends, but who's the Hilton, if that makes sense. Right. So we thought that there was a crowd that was growing up in Coworking that wanted a nice space and that was venture, right? So we thought Venture X would fill that void at that four and a half star type of professional class, a office space, nicer furniture.

00:11:35 We said, let's make actual differences. We saw people at 36 and 48 inch desks. We wanted 60 inch desks. We originally worked with against their own design, Herman Miller. Some of these other big brands kind of developed the space top-notch technology. And again, the same thing you would expect going into the Hilton versus the Hampton and nicer toiletries, nicer sheets,

00:11:56 better, better mattress, better pillows, things you could touch and feel and not just feel good things. So that was step one of that. But with that same analogy, we thought, well, is there an opportunity to become the Hilton or the Marriott of the industry, right? Because under Marriott, whether you want the courtyard, the Moxie, the Marriott,

00:12:16 the JW Marriott, the four seasons, the w like you have all of these variables, they have 38 brands, which means, you know, they have 38 teams worth of people, all rowing in the same direction. Most importantly, consumers have the bond boy program. Hilton has the honors program. So you get your points and let's just, it's not really reciprocity and hotels,

00:12:38 but you get your points right. Staying within that family of brands. So that's buying power. If you think about it from a hiring perspective, you can now hire somebody that can support 38 different brands. That company could go public. It's sustainable. It's built by franchising. And that's really where the initial idea came from is we looked at hospitality as the place holder to where Coworking could go five or six years ago.

00:13:02 So right. Titus, my friend and mentor founder, and the other franchise group believed in that. And 2019, as you know, we acquired Venture at, it started off as a joint venture, the original founder, they're still involved. They have a beautiful location outside of Naples. So they're still in the Venture X family, but we acquired Venture X.

00:13:21 And that's when I took over as the president. And that was part of the plan. Part of the plan. Me moving back to Dallas was to try to put this Coworking thing into place, but, you know, the pandemic had had something to say about that when it hits 30 days later, but that takes us up to the history of Venture X,

00:13:39 if that makes sense and kind of answers that first question, and then started conversations with mark at Office Evolution, probably right at the beginning, the onset of the pandemic about that, you know, cause his background was also in hospitality. It didn't start as this, you know, takeover or buying or acquisition. It's more like conversations I had with GL where it's like,

00:14:00 look, I'm an outsider, right? I didn't come in and think I knew everything about Coworking. This could be a pipe dream. Am I just completely insane thinking this? And most people I talked to said, Hey, that makes sense. I like this Marriott, this bond boy, everybody rowing in the same direction. Consumers can go to multiple different locations.

00:14:20 So a lot of smart people, I said that to thought it made sense. And that's how the conversation started back in 2020. So I think it's really interesting. Let's kind of take a step back and overall UFG doesn't have a real estate background other than the real estate they obviously do for, for their existing brands, but such a major part of Venture X is the real estate,

00:14:44 right? So there's been a learning curve over the last few years as y'all stepped into that. So you have a really, really strong real estate background. So you want to talk about your real estate background a little bit and how it helped and what the growing pains kinda have been to grow into the brand if you will. Sure. So next month will be my 15th year as a licensed real estate person.

00:15:09 Before that I started just kind of for a hobby using my VA loan to buy and flip houses and Abilene, Texas through Atlanta. Wait, were you in Abilene? I was station that was, Got it. Yeah. So I was stationed at Dyess air force base. When I, when I bought my first house and two acres of land and I had to push lawn mower.

00:15:28 So that made sense to me back then, you know, but it was, you know, at that point you could close out a house in seven days, VA loan, a hundred percent funding. And I could just, I wasn't even fixing houses, just putting them back on the market. Right. They would just sell for more than I paid for them.

00:15:44 And I typically closed before I even made a first payment on the house. Right. So I was buying them pretty much just flipping the contract to somebody before I moved into them. And after allowing a real estate agent to make money a few times on me, I was like, I'm never letting one of these idiots make money off me again. How,

00:15:59 what does it take to get my license? Right? So that's why I got my license, was to do my own deals that turned into a real estate brokerage. And that eventually is what got me into franchising. As I turned that company into a franchise and sold that to a local, publicly traded company. That was my claims, the things that I'm still riding the wave on the Forbes first edition of Forbes,

00:16:20 30 under 30, which was 10 years ago. That was the very Last I was on the list. Yeah. So I was on the very first Forbes, 30 under 30, you know, some other big giants were in there. So I'm kind of, you know, you could Google it and it still shows up, but there was some big people in that magazine,

00:16:36 but I made the cover of realtor magazine that same year 30, under 30. I did my first home. A few of the reality TV shows the casting for million dollar listing Dallas, but it never aired. You know, Gio could tell you there's we have a lot of million dollar houses and all the drama, but it's not as sexy of a house.

00:16:54 A $5 million house in Highland park is not as enticing or makes for good TV as a house in Malibu or New York. It's not as interesting, but that's my background. And I started all of that from a flexible office space back when it wasn't cool. I was in flexible office back when you were kind of like a second class business citizen, and nobody really understood it back in 2007,

00:17:14 2008. So that's my background, but now I'm actively still a broker here in Texas, California and in Florida. So I'm licensed in three states. That's awesome. So growing things on the real estate side, right? I mean, going from taking down 25 to 5,000 feet per sign rom that had taken down, you know, well, 15 y'all just took down 44,000 square feet in downtown Denver.

00:17:40 I mean, there's major, major differences between those that you want to share kind of some of those things that have gone on and how not only internally I've got with it, but how you've gotten franchisees comfortable with that investment. Sure. So really the good thing about most aspects of real estate and there's a lot of checks and balances where even one person doesn't have all the information to really know what they're doing.

00:18:04 There's a lot of other parties involved in that typical transaction. So in early days we leaned very heavily kind of on our real estate partners and still do to this day. And with that, we knew that we could pull up information and really a lot of that information wasn't available back in 20 15, 20 16, because websites that CoStar that are the keeper of all commercial real estate information didn't really have Coworking well segmented.

00:18:30 So you can combine that. So we had to base it on traditional type of office-based demographics that we could get at that point, which were helpful, but not nearly the type of information that we have today. So for those first few locations, if you remember, our partners were real estate developers, so they were well-connected and knew some of those things we brought in a team of people hired a few people that had retail and office space experience,

00:18:55 but it was a lot, a lot of heavy lifting done by our third party partners and resources like Gio and some other companies we worked with early in those days. And we met, we had some early successes. So that was really helpful. Our very first franchise with Canada, which they own the real estate. So we sold the country of Canada as the first franchise and they,

00:19:15 they, they own The building, the license to the whole country, Whole country. They also own all 22 countries in the middle east, north Africa. So they actually own 23 countries collectively. That was our first deal. And they own the real estate. And that sold out with like within six months. Then our second location also happened to be ability Was that first location,

00:19:37 it was 11 or 12,000 square feet, But then They expanded it to something. They called the Venture annex where they, you know, opened up another office space kind of across the street in the same development. Our second location was down in San Antonio, similar scenario. They own the real estate already. They were repurposing. The building had really early on success that sold out.

00:19:59 And a lot of these markets again were markets that some of the other players at the time weren't really looking in. So this is Mississauga outside of Toronto, right? So, you know, a suburb, this is 20 miles north of the Riverwalk, you know, in San Antonio, some of these markets were people like, Hey, that's crazy. But we thought people want to work where they live.

00:20:20 Right. It's like, This was back in the day. Like I had Mara Hauser on the podcast, we did an episode called like the suburban Coworking work, because right back then people were like, I don't know. Yeah. I mean, cause I think everybody thinks, you know, look if PWC and Accenture is paying you the big bucks and you're driving down to the ivory tower.

00:20:39 Great. But it's like, if you had the choice, you know, do you really want to leave, you know, new Haven, Connecticut and take the train into Manhattan. And you know, when you could just, you know, work in your treeline, little enclave out in Connecticut, somewhere a fair lawn, or for that case in the suburbs of San Antonio GLT here in Dallas,

00:20:58 I mean the traffic is getting as bad as that lay at times, like people ask to meet like an uptown, I'm like I need to get a hotel or something. Right. I stopped at Addison halfway to go to whole foods. Like, you know, traffic is bad. So, you know, making that 45 50 minute commute didn't make sense four or five years ago.

00:21:16 And it definitely does that make sense in today's world. So I, I think suburban Coworking is here to stay. Jason, how many of your, what percentage of your franchisees own their assets? It, no, it's probably only about 25%. We've actually had people that own buildings that still ended up leasing a space because the landlord gave them a better deal than they could give himself on their own real estate.

00:21:40 And we've had a lot of people that own buildings that just were not good fits for Venture X. So we had to turn down. So that number would probably be higher if we just kind of openly approved beach. But our process of selecting franchisees is fairly exhaustive. We've had 31,000 people inquire about owning a Ventrac, that's a real number and we've approved 50 franchisees.

00:22:02 So just to kind of put that in perspective, we have a refundable application fee process that we have people like Gio beating down every location they look at and telling them, no, this is terrible. And if we can't find them a space and then we work on that, right. This is the good news, bad news about working with Gio right.

00:22:17 Gio treats, every location like it's coming out of his own bank account. Yeah. You know, that, that's what I mean by the checks and balances of real estate kind of really made up for a lot of our initial shortcomings, what we may not have known and understood. So we just really partnered with the best people. Jamie, we worked with you early on.

00:22:36 If you remember that. And Remember, I know that was a long time. I mean, so, you know, we leveraged, you know, all, all, all industry players that we could find assets and training and concepts to, to get us where we were. I think that's the exciting part. Go ahead, Jamie. I was just going to say the challenge with managing real estate and saying no is I bet when you get those,

00:22:59 you know, the, yes. The few yeses that you make, they want to go now, right? They want to sign a lease now and Gio’s, like, Nope. That's not going to work. Nope. That's perfect. Also the other problem we used to have right was with some of the big players that were there in the market, then there's,

00:23:17 outbidding us on deals like the landlords shopping our deals to those players. It doesn't happen today. Like it did back in 2018 and 2019, but getting a landlord to understand that we have a person, not some corporate entity with unlimited funds, right. But you know, I've talked to other people in the industry that are collecting data. The data now proves it,

00:23:37 that that single unit person was more reliable than the corporate people, you know, that made blanket kind of decisions to, you know, put a thousand into default. So you know, where that sound like a sales pitch to landlords back in 20 18, 19 now has shown to be true that that individual play or the smaller person was more reliable because they actually had something to lose,

00:23:59 not some corporate guarantee that was, you know, it was impossible to Pierce through this corporate veil, but this person was like, Hey, my house, my, you know, this, I have something actually on the line I put up guaranteed big chunk of my personal net worth into this. They were much more likely to work through those hardships. Wait,

00:24:16 Gio, I have one more question. What was the average size of the new locations that you're opening 20,000 probably it's jumped up, but that's the statistical average. It's probably closer to 25, 20 6,000 now with some of the new locations, but also some of the older locations we had that were smaller average. Okay. We're going to cut it there and encourage you to pop over,

00:24:39 to listen to the rest of the episode on the new podcast, Flex Uncensored. We hope to see you over there and we hope you'll stick with us here. We'll publish weekly on both podcasts. So we'll see you next week. Hey there, thanks for sticking with us through the end of the episode, don't forget to subscribe on your favorite podcast player.

00:25:00 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. And we started a YouTube channel. We'd love to have you catch us on video. You can join us for podcast,

00:25:25 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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