258. The Dynamic Duo On Their Space-As-A-Service Business: Self-Storage, Coworking And Co-Warehousing
Everything Coworking Featured Resources:
Masterclass: 3 Behind-the-Scenes Secrets to Opening a Coworking Space
Creative Coworking Partnerships: How to negotiate and structure management agreements from the landlord and operator perspective
Resources Mentioned in this Podcast:
TRANSCRIPTION
258. The Dynamic Duo On Their Space-As-A-Service Business: Self-Storage, Coworking And Co-Warehousing
00:00:03 Welcome to the Everything Coworking podcast, where every week I keep you updated on the latest trends and how tos in Coworking. I owned and operated coworking spaces for eight years, and then served as the executive director of the global workspace association for five years. And today I work with hundreds of operators and community managers every month, allowing me to bring you thought provoking operator,
00:00:29 case studies and inspirational interviews with industry thought leaders to help you confidently stay on top of what's important and what you can apply to your own role in the Coworking industry. Welcome to the Everything Coworking podcast. This is your host, Jamie Russo. You're going to love today's episode. I know. I always say that I enjoyed today's episode a tremendous amount. I got to spend some time with Laura and Dave Fisher.
00:00:59 I know Laura pretty well. I don't know Dave as well. Laura and Dave did our Coworking Startup School, but mostly I talked to Laura. Laura was in our Flight Group program, which has now evolved into the Everything Coworking Academy for a long time. And their community managers have been in our Community Manager program. I think since it opened in December, 2019.
00:01:23 So I know a lot of detail about their business. Like I knew the story that Laura shared about having to add sound masking. She has FaceTimed me their mail setup, which is gorgeous. So I've been kind of in some of the details, but had not heard some of the bigger picture things that they shared, which I think you're also going to enjoy.
00:01:45 So this is a great episode for anyone thinking about opening a coworking space or thinking about expanding. You're going to learn a lot from how they think about their business in terms of solving problems and creating an offer out of problems that have been demonstrated by potential customers being super intentional about who they serve and how they serve them. Laura talks about having some pretty good insights about who their members were going to be based on businesses that they were already running and designing the space to align with them both from a design perspective and a pricing perspective and a product mix perspective.
00:02:27 And that is super, super critical. I often see, and I just, you know, gotten to a kerfluffle in our Facebook group with someone who really wanted to do, I don't know, 80 flex stuff, something like that. And I very passionately kind of responded about why that was challenging unless that person had done all the due diligence and had determined that that's exactly what her ideal customer needed in her market and knew what they were willing to pay for it.
00:02:56 And that that would meet her financial goals. So that's what Laura and Dave do. They're very intentional. They do a lot of homework around what they're trying to create, and it's always aligned with the problem that they're solving for specific people. Who've proven that they need this. Sarah Travers said the same thing. I keep referring to the Searchie first podcasts,
00:03:14 which is actually the live this week over on the flex uncensored podcast. So that is the new podcast that I launched with Giovanni pelvic zucchini. I should say that he launched and I'm his cohost. So he initiated it. So the interview with Sarah was just super interesting and the promo clip I chose, actually I was debating over promo clips. There were so many good ones to choose from her interview,
00:03:38 but one of them was, I think I picked a different one. She said that, you know, they don't create any product that is not a hundred percent validated by their customers. They're not going to waste their time or anybody else's time by putting things into the marketplace that they don't know that their members want, which I thought it sounds obvious. And so many people do it in the reverse.
00:04:02 They make something and then try to sell it. So listen to Sarah's podcast episode, when you're done with this one, you'll have to flip over and subscribe to the FlexPen censored podcast. So Dave and Laura gives some really interesting insight about the things that they've thought about in advance of starting their space. They also talk about a couple of trouble spots they had,
00:04:20 which I think will be informative. And Dave is super inspiring around how he thinks about what's next for the business. They are just, you know, growing, expanding. He talks about how he frames their business as space as a service, but it, that it shows up in different forms. I think you're going to find that very interesting. So they do self storage and they do a number of things,
00:04:43 but in the building where they're co-working spaces, they do self storage and like Office storage sort of on the first floor and then coworking space on the second floor. They're now doing 40,000 square feet of no, sorry, 50,000 square feet of co-housing 10,000 of which will be office in 40,000 of which will be co warehousing in Houston. So I think some of you will be really interested in hearing about how they're going to approach that model.
00:05:10 The other thing that I think is really interesting about Laura and Dave is they are a true like dynamic duo for any of you that are Gino Wickman, traction, EOS fans. Dave is just absolutely the visionary and Laura is the integrator. You can see that from how they view the roles that they play and what they talk about. They will share that pretty explicitly.
00:05:34 They didn't use those terms. Although I should have asked them if they, if they use EOS are familiar with it, but it's super interesting to kind of hear the dynamic between the two of them. So it works really well. They make a great team and you know, they leverage that in terms of, you know, the vibe that they're creating in their businesses in terms of being family run.
00:05:54 So without further ado, let's jump into interview with Laura and Dave Fisher. Welcome. We are diving right in here because I've already told Laura and Dave, I don't know how we're going to do this in an hour, and I want to respect their time. So I am super excited to have Laura and David Fisher with me on the podcast today. They own and operate many businesses,
00:06:19 which we'll dive in today. The business that I got to know them through is business eats sweets in Sugarland, Texas. They built the building from ground up their self storage on the first floor and a beautiful shared office space on the second floor. You can see it in Laura's background. If you're on YouTube, you can see the logo mug. When David takes it,
00:06:41 drink of his coffee. Wait, David it's three o'clock. Is that coffee? Yeah, it is coffee box, but I can drink coffee right before I go to bed. It's fine. And it doesn't. Okay. So is it doing anything for you now or are you just like, it doesn't work anymore? It's just a habit and it's, and it's fully caffeinated.
00:07:01 I don't waste my time with Even do the decaf. Yeah. Okay. So first I was trying to remember when we met, we have like one of those serendipitous interactions of meeting We met when we went to the, in Washington DC and we ended up sharing an Uber together. Yeah. Cause the Uber came to the hotel and the Uber I think was like,
00:07:26 we're here for Dave. And I think I was with Abigail. Right, Right. And we were like, are you going to the same place? We just we're going to get in with you. And Abigail is a bit of a force. And I think she was like, you guys got to get into, so you didn't do the Coworking Startup School.
00:07:43 You jumped into the Flight Group. Now we did start up school And get all of it. Okay. Jamie, you were a big help in just giving us confidence that we could do it. You gave us a lot of insights. It was nice to be a part of a Flight Group. We were all kind of the same steps obviously. But unfortunately,
00:08:02 as soon as we all began, that's when COVID hit and we were all struggling with, oh my God, how are we going to open when no one wants to be here? So you've been a great support to us and our staff. Well, not just that they didn't want to be here. So they couldn't be here. The county shut down.
00:08:21 Yeah. It was a hard, I know there were a lot of folks. I talked to somebody else today who opened in on March 15th in Madison, Wisconsin in 2020. It was such a hard time. I know. And you guys have this gorgeous space. Okay. So I'm so grateful that we met that we ended up in that Uber together because it's been a real treat to watch your journey and Laura,
00:08:41 to get to know you. I want to talk about your podcast. I got to know Colin. Who's also in the family. Okay. So you guys are married, family run business. Tell me how you decided to build this building and how you decided that you were going to do Coworking in the building. I'm gonna let Dave tell that cause he's a better storyteller than I am.
00:09:00 Okay, Dave. So we bought a storage facility in 2011. It was a storage facility, nothing more. And in the very back of it, we had some land and we built small warehouses truth. Be told there, supposed to be covered RV parking, but nobody rented them. So we enclosed them and made them warehouses, small being 12 by 40 16 foot high or 24 by 40 16 foot high,
00:09:26 pretty much. That's what we did. The land adjacent to us had a, a fourplex, which is four 16 by 60 modular buildings, all bolted together that was built like way back in the medieval times. And it was used as a construction office for the company that built the storage because they also had a lot of their heavier construction equipment here and everything else.
00:09:54 So bought it in 2011. And in 2015, they moved off the property. So they lease back the office and the space for their heavy equipment in 2015. And that was it. We kept running out of climate controlled storage spaces. So in 2016, I decided to do an expansion. And those warehouses in the back, we had people that wanted like air conditioned office in them,
00:10:23 as well as the warehouse. So I designed an entire bottom floor of 14 office warehouses and I decided to be on the property. Oh. And we were going to expand our storage facility. We're going to double it to make it seventy-five percent climate controlled units. So I decided to be on the property when they did it. And since they had vacated the year before I turned that space into an office,
00:10:51 it was, it actually had 14 offices. It was all. And it was, we were just going to tear it down And it looks like a cabin that you have at a Lakeside retreat. That's pretty much So I'm in there working, we're working on blueprints, drawings, performance, everything else. In the meantime, in order to make the space workable.
00:11:17 I said to Laura, that I needed a couple of thousand dollars to paint it, get internet to it and everything else. I think it was like $15,000 later that the space was good. And Laura who handles the money was really upset. And she said, how are you going to make this up? And I said, well, there's 14 offices.
00:11:38 I occupied one all leased out the rest. And so we leased them out on a month to month basis. And they filled up really quick That had shared internet, just like your home. Everybody has the same password. There was a curious machine. The restrooms don't meet ADA is terrible place. Right. And it was full. Okay. And I'll be honest with you.
00:12:07 This happened in 2016 and it's been full ever since. Okay. I'm sitting there. Why? After the architect designed the bottom floor, the new storage and everything else. And it dawns on me that we're not just a storage facility, we're a business park. We have office space, parking space, storage space and warehouse space. We're not just a sleepy old storage facility.
00:12:36 In fact, we're also one of the largest U-Haul dealers in the state of Texas. So I called the architect up and I said, is there any way on top of the building that houses, those office warehouses, that you can stick offices up there so that we can rent those out to our tenants. And he said, of course, you know,
00:12:56 we're just in the design stage. What would you like them to look at or look like? And so I had Laura and Taryn who worked with at the time go out to several coworking spaces, like work suites and regions, and To choose from more like regions. You know, I want it for plants, just for plans and pricing. Cause I really didn't know what it was going to be.
00:13:22 So they do that and they come back and we send it to the architect. He designs the whole thing. I don't know what looks good, what looks bad? So I said, it looks good and we're moving forward. We're getting prices, right? Yeah. Did you say, Hey, Laura, I need a couple grand to do this. You know,
00:13:42 their projects, Not that one. However, then I read in the newspaper that we work had build a new space in the Houston Galleria. So I'd go to the Houston Galleria. And I look at this, we work cause I'd never seen them before. And oh my, it was amazing. First of all, the walls were not solid in the hallways.
00:14:09 There was all glass. I mean, they literally redefined the word community and I got it. In fact, I got it so much that I wanted to run an office from them. And it's way out of my way. So I, I face-time my architect. And I said, I want you to do this. So the hallway. And he says to me,
00:14:30 you know, this is going to cost a whole lot more to do that. And I said, I don't care. I don't want you to build a building that looks like Regis, or at least the old school Regis. I want you to make it look like this. And he did. And that's what we built. And I have to tell you it's magnificent and to pay homage to the fact that we are at a business part,
00:14:54 but we have no ceiling. It's all you look up and you say insulation, you see a sea ducks, you see cabling, very industrial, very cool. I like it. And so that is what we did. And it it's fitting to the fact that we're at a business park because you don't need a drop ceiling. You don't, we don't need to.
00:15:16 And people like it. Okay. I tell everybody that we're a class, a facility at class B prices because you can't really get class a prices at a business park or a storage facility. So that's kind of how we came to create businesses And tell us about the aviation theme. So I sell an appraise corporate jets and helicopters, and I've done so for the last two,
00:15:46 I started Western aviation in 2000, but I had experienced going back to my days in the air force in the eighties. And so I'll be honest with, and I don't know that I've ever told us, but she likes airplanes more than I do. Okay. For me, they are metal and rubber and leather. Okay. And some people are Google Gaga about airplanes,
00:16:11 but to me, it's a business and I love it, but she loves the actual aircraft themselves. And so she's the one who's took off with the aviation thing. Well, I'll tell you what happened. Jamie. When we went and looked at all the fancy coworking spaces, I saw a lot of fancy people in them. You know, they're all looking nice,
00:16:31 but here we are to business park. We've got entrepreneurs, we have blue collar workers here. And even though they work in constructions, they go home to a nice house. You know, they have nice cars, they park them here. So I know that they like nice things, but I didn't have a big budget. And so I like themes.
00:16:49 I like things that pulled a design together because when you have a design theme, you, you get to say no to a lot of things that don't make sense. And you say yes to the things that makes sense. So it created a industrial environment, but I did the aviation theme. So how that works out is I've got some murals on the wall.
00:17:08 And so instead of having a Coworking room, we have it, we name it, we call it the hanger. And then we have another Coworking room called the pilot lounge. And so in the hangar I have, if you, if you're looking at it on YouTube right now, you can see one of the murals I have in the background. It looks like you're inside a hanger.
00:17:25 And then every meeting room, instead of calling it meeting room a, B or C, I named each meeting room after a corporate jet. So we have the Mustang, we have the Hawker, we have the Sikorsky, which is a corporate helicopter. We have the Falcon, which if you ever ride in a Falcon, you feel like an executive. And it's the executive boardroom.
00:17:46 Then we have the Gulf stream, which is a large. And we use that for our training room. And then we have the Piper and assessment, which are smaller meeting rooms and people really love it. You know? And I have a couple other murals in the building and that's all I needed. I just needed a few large artwork installations and that clever naming in the building.
00:18:09 And it just looks like, well, it looks good. It's the kind of thing that an entrepreneur wants to feel like. Yeah. I like beautiful things, but that doesn't mean I bought fancy chairs. They're plastic. You know, it doesn't matter. People, it feel good in here. And that's what, that's what it was about. The only thing she didn't listen to me on was one of my favorite jets is the citations yet.
00:18:31 And she would not name a room, the citation, I didn't, I thought, you know, citation sounds like you're getting a ticket or we gotta have, we have to listen to the real word. Yeah. Unfortunately there's a lot of connotation there. I love it. It's funny, Dave, when you talk about, you know, like, well,
00:18:46 it's a business park and it's industrial, but it's really well done. It's a very professional space. And to your point where the theme is so compelling and I feel like that's even more important post COVID, like where people want to leave their house for something more interesting than just an office space. Well, we're getting ready to open another place. And the theme I picked there is Houston.
00:19:10 Cause it's in Houston and in Houston, there's quite a few iconic things in Houston. And one of them is this, the overpass where somebody is always doing graffiti on it and it's famous. But the one famous graffiti in Houston is called be someone. And so I have this huge mural wall that has this graffiti on it. And because that's what you're trying to be,
00:19:34 you're trying to be somebody, you know, when you're an entrepreneur. And so in that, in that space, I'm going to have artwork that reflects the neighborhood of Houston. And I make may I haven't decided on all the room names, but I'll probably do famous streets that are in that neighborhood like Washington or the Galleria or things like that that are very regional to that part of Houston.
00:19:58 I'm feeling a lot of yin and yang here, which is super cool. So Laura, when Dave came home and was like, here's what we're, here's what I'm thinking, where you in. I feel like this is one of those like dream teams that couldn't happen with only one of you. No, Dave saves the dreamer, the dreamer And you you're like,
00:20:18 and here's what he did. And here's the theme. And here's why. And like you're putting all the pieces together. Jamie, she's never in. I come up with the idea. I do all the research. I start working on it. I arranged the funding, the financing, everything. And then when Laura finds out figures out that she's not going to be able to say no.
00:20:42 And when I figure it out, when I figure out it's real, oh, it's really happening. Okay. That's when I get involved. So I know you have a lot of things in the works I want to go in order is the Houston location, another shared workspace. Th the next location is, is a warehouse. And so we're going into co warehousing.
00:21:04 So I'll tell you why everything on our property has been built upon a problem that we could solve. So the RV spaces that didn't rent turned into warehouses that have a waiting list. So then the co warehousing on the bottom floor that rented, but people moved out of them because they needed loading docks and they needed to expand more room. And we can't do that.
00:21:34 It's not a problem that they move because literally our vacancy on our office warehouses downstairs is like a day or two. Okay. But you still want to know why they're okay, because you want to know For the next business idea. Exactly. And so you want to know if there's a problem to solve. And so they need loading dock. They need Air conditioning and Ability,
00:21:56 air conditioning and things like that. And so it came across my mind that I needed to basically provide a warehouse where they could work within and have what they need. So I started to research it and I figured out that it already exists and it's called co warehousing. So, which is great because instead of having to reinvent the wheel or invent the wheel,
00:22:23 I could just copy the successful people who do it. So we went to go look at ready spaces and cube works and soap box and loading dock and all of these companies. And I tried to look at the best of breed. And so, so we did. And as a result of that, kefi spaces was born. And what does kefi mean lore?
00:22:48 It means passion, the spirit of passion and enthusiasm. It's A Greek word And a great name. See, thank goodness you got Laura involved. Exactly. So Kathy spaces was born. I don't think Laura was enrolled in it until I signed a 10 year lease. And at that point she was okay And there was no getting out of it. So,
00:23:15 so then what we did is we, you know, plan the design and the walls, and it has a 50,000 square feet. And 10,000 of it is his office and, and 40,000 of it is warehouse. And so it is going into it, not a cheap area in Houston in the Heights. And it's going to be our flagship location now, unlike salt box and ready spaces,
00:23:40 I believe that we should have 31 plate. Okay. Like Baskin Robbins. And so I'm intend to have a class C version like ready spaces does with no air conditioning and, you know, corrugated steel walls, loading dock has a chain-link fence. Saltbox uses these really expensive high-end panels. I'd say saltbox is more of the class, a, of the industry.
00:24:05 They're more like your Hyatt Regency. I always think of ourselves as more in the Marriott category. Right. But I think that just like a hotel chain where they have many different brands and many different classes, we should do the same thing. And so as appropriate, we'll go into a certain area and we'll do that. But our flagship is going to be a class a and I have to pay homage to Tyler over there at saltbox.
00:24:34 Him and his team has done a really, really good job. And so that's it. But when you look at ready spaces, which I think there is definitely a class C or deep product, there's still a hundred percent occupied and they're still getting a phenomenal rate per square foot based on what they're probably paying for rent. Well, I know what they're paying for rent and they're really getting a great markup.
00:24:55 Okay. And so for that matter, I wanted to be in each category and I'm not going to be the number one self storage facility in the world because public storage is so far ahead. They're impossible to get there. And when it comes to pole working, you're not going to go out there and be Regis with their 32 or 3,300 locations. Or even there are just so many different like industrious and we work and stuff,
00:25:24 you know, I think it's good just to have an excellent product in many different categories. And then when it comes to Coworking, if you look at a company like cube works, they've got hundreds of locations already, but nominal operation. So I think we just need to be really good at what we do and we do it, men manage. So they purpose of co warehousing is to address an issue where we have people that need to expand and we want to be there next step.
00:25:58 Okay. And that's what we're going to do. So Can I interrupt for just a second? I know one thing that we've noticed, because we have Coworking and storage, our customers are the ones that are growing out of their living room or growing out of their garage and they're selling a product or something, or they've hired a new employee where they've worked from home.
00:26:21 And so that's been our experience at small business entrepreneur who's growing. And I think the cafe spaces is going to be a little higher end where the location is it's right in the center of Houston and the design center. So it'd also be good for logistics. And so that's one thing we look at is too, is where the location is, That's it.
00:26:43 But you know, people say you're in too many things. Okay. Well, the fact of the matter is when it comes to our space business, we're in one business, we provide spaces of service. Okay. And that is the only thing that we do be it warehouse space, parking space, office space, storage space, climate controls, non climate.
00:27:06 We've been have walk-in coolers and freezers that we lease out. Okay. The fact of the matter is we're just in the business of space, that's all we do and it's space as a service. And as a result of that, I think that if people understand the business we're in, we really stay very true to providing one product. And that is space,
00:27:30 many different flavors, just like Baskin-Robbins. But the bottom line is they're in the ice cream business and we're in the space business, regardless of how many flavors we have. 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.
00:27:57 If you're working on opening a coworking space, 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,
00:28:21 I want to make sure you know, 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,
00:28:46 sales, and marketing, finance, and leadership. 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.
00:29:20 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. It's a super interesting perspective, and it makes a ton of sense to me, you're solving slightly different problems with different types of space. Talk to me about, so you, you built the,
00:29:43 the current location, which is self storage on the bottom and the office warehousing, and then shared workspace on the top. You built that and own it, but you just signed a lease for 50,000 feet, maybe an expensive lease you're right. You believe in the model that take that risk on signing a lease. I don't believe in that I want to own the real estate.
00:30:05 I do have the option to buy the real estate. I may exercise that option. At some point in the future. I would not go into a lease where I didn't have the option to purchase the real estate, because I always feel that I want the dirt, but in this particular case, at that particular location, it was the best way to go was to lease it with the option to purchase.
00:30:30 In this particular case, we have nine acres. It's ours building the co working and eventually on this property, we'll, we'll also build a warehousing. I'm already working on that. Right next door. I have an acre and a half sitting literally right out my window, that is going to become a warehouse. The fact is, you know, I got to lease it.
00:30:52 I mean, I got to build it because it's not like I'm going to lease the land next to me. I already own the land next to me. So in that regard, it made sense to build it. Would I build it again? Absolutely. I think building is great, but I got to tell you there's so many challenges to building it and getting the bank loans.
00:31:10 You know, when I built this place, I actually went to 25 different plans over a period of two years, kept getting rejected and rejected and rejected until I finally understood the source of their rejection. And then when I understood it, then I was able to tackle the problem. But I couldn't say they just said no. And they would never tell you why 25 lenders later,
00:31:31 I finally got an answer. And then my 26 lender finance That's tenacity, what it takes. I was like, that's why I know Dave. Well, we can do a separate episode on yeah. Your business life, super interested in all the things that you've done. But it's also a great reminder. Right? I hear that a lot people getting turned down from lenders or investors,
00:31:54 or you, you know, if you believed in it and you just knew, you had to figure out how to, to get the right person on the other side, or to tell the story the right way, I'm guessing, or to show the numbers the right way. So just to back up, because I realized we didn't talk about this, Laura,
00:32:10 can you just run through, what does the space look like in terms of square feet? You know, what's, you know, product mix, you kind of talked a little bit about your end user, which I love because Here at Business E suites Yeah. We're about 15,000 square feet. A second story of a two-story building. We have like more office space,
00:32:30 private office space, which did turn out good during the COVID. Yeah, I remember you saying this might be a good mix for you. And it was, we have about 40 private offices and two large open areas and six meeting room spaces. And then our product mix we sell probably you. I know one of the things you, you may ask me is what was one of our surprises is we have grown our virtual office or virtual mail product line.
00:32:57 We do virtual mail for 1899 a month. And I look at each one of those as an ongoing hot lead, because when they come in, they're getting their mail. They're seeing we're friendly. And I treat them all like little baby little companies, and they're going to grow in day and they're going to need space from us. And so we've grown from like 10,
00:33:18 when we opened the building to now, we have over 200 of those. And then our virtual office is I knew I didn't want to give away my Google, my business listing the value of that. So we packaged that. It's the same thing as Google. It's the same thing as the mail, but we packaged it, that they could use our address in a public way.
00:33:40 And we would approve it to use are there are addresses or Google listing. And we also give them two days a month. They can come into here and work. And if they really want it, we'll throw in a virtual phone. It's very simple and that's only $99 a month. And those usually grow. I think we've started off with one. And I think now we're at like 20.
00:33:59 So the virtual business is better than I thought. And to me, they're just a lead source. And we use any time nail to get leads from that. And I postal, I recommend both, but interestingly, we get most of them direct and that, I love that. That is interesting. Do you think that's something specific about your website or how it's set up or SEO or what drives that magic?
00:34:23 I I'll tell you exactly what drives it. They want to be in sugar land, Texas, and they want a suite number, not a box number. Cause when you're applying for your LLC, you need a sweetener. And when they look at our Google listing, they see a building that reflects their values and their image. Yeah. I love it.
00:34:42 Okay. So speaking of you talked about how you nurture those leads and all the things you do. When they come in and friendly staff, you have 31, 5 star Google reviews. What drives that? Oh, caring. We really care about them. They come in, how you doing how's business. What's going on? Hey, we haven't seen you in a while.
00:35:04 What's going on. It's just being friendly and genuinely caring since Dave and I are both entrepreneurs ourselves. We know the struggle that tenacity, it takes to work, make anything work. And we care. We do lunch and learns for free professional development. We've got one coming up on e-commerce. That is a lot of people don't know how Shopify works. I found an expert.
00:35:27 That's actually in my building the following month, it'll be commercial insurance. So many people don't know that they need a, an inexpensive it's called a general liability policy. It can be very inexpensive based on your business and try to let people know we have so many baby entrepreneurs. I even have some that, that like, Hey, I went to my,
00:35:48 I need to pay my taxes, but they've been mixing their personal national money. And so I'm like, Hey, you need QuickBooks. I mean, it's just that kind of caring and listening. That's what that's probably why. So I think one of the reviews mentioned a family business and Colin used to work on the team. Do your members generally know that it's a family owned and operated business?
00:36:10 Do you talk about Probably we were proud of it because a lot of entrepreneurs, they are family businesses. So we're very proud of it. So they relate to it. Yeah. I love it. Okay. Tell me some of the, what's the hard lesson that you learned besides opening during COVID Dave, you got that. Well, there's so many hard lessons.
00:36:31 Oh, I've got one. I got one opening in COVID. We gave deals when COVID is over, they want a better deal than the deal we gave them. We're like, Hey, we can't do that. So that's a hard lesson starting, you know, wanting to open the business with such. You don't want to say desperate, but you know,
00:36:49 you want to have people come in. I think Dave wouldn't you agree? That's probably been our hardest lesson is getting somebody in on a discount and then them setting the expectation to stay at that discount level is so hard to get them to stay at the new, improved, real life price that it takes to run a business. Well, here's the other thing.
00:37:10 When you have people that work for you and they want close the deal, they want to provide the service that they were hired to provide like the space. You have to educate your staff on how not to negotiate. Okay? So people always think that dropping their price is a successful negotiation tactic. And I think knowledge is power. Understanding your competition, understanding what they offer.
00:37:40 And a lot of times, especially where we are in Sugarland, which is one of the, my most diverse communities in America. You've got a lot of Pakistanis Indians, Asians. And let me tell you, this group of population learn how to negotiate and okay. And so when they want, you know, they want to deal. I mean, if you offered it to them for free,
00:38:02 they'd want a deal on top of that. And so what I've educated our staff to do, and we didn't start off doing that, was to understand the competition, to quote our price, to feel comfortable with our price, our rates. And if they say that they want to shop around, share with them where they should go look, okay, oh,
00:38:24 here, here, and here. And this is what you'll expect. And these are what their rates are and let them go. They don't go for it by them. They don't go far because either number they've already shopped and they already know what you're saying is true. Or number two, they, they know it's true because you're letting them walk out the door psychologically.
00:38:43 If somebody is allowed to walk out the door, it's because you've pretty much hit the bottom and that's it. But I don't negotiate at all. And to educate my staff on not negotiating, I shouldn't say I never negotiate, but I rarely negotiate. What I do is I basically share with them that they should feel strong about their product by learning more about the competition.
00:39:08 Okay. And by their education, even when we have our Community Manager and Laura and then go to the competition and look at it and then they come back and they realize, wow, our facility is so much nicer and this is, and then I say, and so now you know why they're cheap? And I tell them, it's okay to be a motel six because motel six does very well.
00:39:32 And it's okay to be a Hyatt Regency because higher Regency does very well. But the motel six people in the Hyatt, Regency people are different tenants. They don't motel six. People don't go to the Hyatt Regency. And if the Hyatt Regency dropped their price to a motel six price, wouldn't that be a disaster? I said, we like to stay in the Marriott Hilton.
00:39:52 Okay. And so if people are looking for something that like a motel six, send them to motel six, send them to our competition that, you know, fits their budget because they're not our class of, of a tenant anyway. And I've talked to other buildings that are doing Coworking in a small way and really cheap. And the biggest thing I hear from the building managers is these tenants that we have here are disasters.
00:40:24 Okay. And so that's what I hear. So in that particular case, and I say to these managers, if you changed your space and up your pricing, you'd bring in the class of tenant that you deserve. So we don't negotiate. Rarely do we negotiate. The only time I ever, ever, ever negotiate is if I have an existing tenant and they're adding on a space,
00:40:47 I may give them a little break. Or a lot of times like I did today, a guy's a two-year agreement got a year and a half left in. It wants to add an office. I made it coterminous so that, you know, at the end of two years, everything expires together. So, you know, as opposed to piece by piece.
00:41:06 And so other than that, that's, so I give him a two year rate for a year and a half term. That's that's about it. I feel good about our price. We do the same for storage. If they want cheap, cheap, cheap, you know, we, we know places that are cheap, but you're not going to get the quality that we provide.
00:41:22 So I went to a class one time and they talked about for real estate when I owned a bunch of rent houses and they talked about, you want to have the best product for the best price. That's the strategy. As long as you're not in a pandemic to Laura's point. You know, when we opened in the pandemic, you know, we wanted to get people in,
00:41:41 we offered a promotion and where we learned that lesson is at the end of it, they were like, you can't raise my rate by a hundred or $200 a month. You know, even though you gave me 50% off to get in here for a six month or a year term, now that it's over. So they couldn't afford it in the first place they couldn't.
00:42:03 And when I say they can't afford it, it doesn't mean they don't have the money. It means they haven't budgeted that money. And if that's the particular case, they need to go somewhere that fits their budget. Okay. And so the biggest lesson that we have, and we teach our staff is you got to feel good about your product. You really gotta feel good about your price.
00:42:25 And then you gotta stick to it. I think a lot of folks that dealt with COVID can relate to exactly the challenge that you're having. Yeah. You adjust the price. It wasn't in the budget. It's not in the budget, but you're great. You're probably grateful for that revenue while you had it, or I'm curious, you opened a podcast studio.
00:42:45 Yes. And branded it. How was that going? And you started your own podcast. How was the podcast studio doing? Because folks ask about that all the time. And then I want to hear a little bit about the why behind your podcast. Well, we opened a podcast studio because other people were doing it. We weren't certain that we would make any revenue off of it.
00:43:06 And I will tell you, now we have not made any significant revenue. We do package it with the Coworking. We call it the executive Coworking plan. And we will give them a certain amount of hours in the podcast studio. And I have like three customers that do that. But I would say, no, it has not generated revenue. The reason why I branded it and gave it,
00:43:26 its own name is because I wanted to single it out and market it. So hopefully I could get some revenue from it. So it hasn't occurred yet. It doesn't mean I'm going to close it down because it is one of those things like a gym membership. When you go in there and you go, oh, that's nice. I'd like to do that one day.
00:43:46 I have a lot of people that say, I want to be, I want to do that. And they haven't done it yet. Podcasters that are glad it's there when they Exactly. And so one of the things I noticed, even in our sales process, that nobody actually knew how to use it. We did get a really nice system. It's a road it's very easy.
00:44:03 I could just push the button and you go. I thought, well, I need to learn it. So when I learned it, I found out that I actually sounded pretty good and I would interview people. And I, I don't like talking about myself. I'd rather interview somebody else. It was kind of a natural. And I thought, well,
00:44:21 I have the perfect audience here. And I have the perfect, I can get guests here all the time. Cause I wanted to focus on small business. So I call it small business insights. I do it weekly. And I ask people to come on to give just general, just how'd you get started. Why'd you get started? What are you,
00:44:39 how's it going for you? How do you make money and got any tips for my listeners and keeping it very focused on small business insights has, I think has been very successful. I'm using it. I'm using the podcast in my local network, local community to network and branch out. So when I have people come here to record, they get to see the facility.
00:45:03 So I have not made revenue from the podcast studio, but I have made revenue from people that come here and say, I want to work here. I want to do business here. And I've probably gotten about 10 customers from it, but not podcasts. So it's interesting. I like to see it's growing and I'm getting better at it. And when you get better,
00:45:24 you kind of like, well, I want to do more, but so I enjoy it. And I admire you because you do it weekly. And I do it weekly and it's a lot of work and You don't listen to her as much as I do. She does it twice a week. Oh, I know Jamie does. Now. I do.
00:45:42 Yeah. Giovanni Giovanni is a hoop. I will share with you that Laura wants to put or said to me, she wanted to put one in cafe. This is not going to happen. You know, officially Laura is not getting the part yet. Now you tell me I do that. That's okay. I'm looking at my questions to see what we haven't covered yet.
00:46:05 We did have a problem also when we started, oh Yeah. Tell us more. When we first started and we built this, we discovered Laura had an attorney. Who's a tenant now in a private office, you didn't have a private office time. He wanted to go into the office next to Laura for a meeting or whatever. And Laura could hear everything she said,
00:46:27 or he said everything. And she came to me and said, you know, this is bad. I, you know, I can hear everything. He said, I heard everything. And it was juicy. And I was like, normally lawyers, stuff's pretty boring. So we, we, we were scratching our head about a solution. Cause it wasn't something that we thought would be,
00:46:47 we didn't even think about it. And so what we ended up doing was I was trying to brainstorm construction-wise what do we do to the building to do it? Do we add more sheet rock to it? Do we do, do we, I mean, the walls are already insulated doing, you know, if you add more sheet rock, you've got to move all the light switch plates and you know,
00:47:06 just a lot of work. And so anyway, we ended up calling a company that deals with sound masking and it was a, what was it? $28,000. So it was more than we expected was then again, we expected zero. So anything was more and it did solve our problem. It really did a really good job sound masking. And it's now a feature that we talk to clients about saying,
00:47:30 Hey, you see all these speakers, this is what it does in our conference rooms. We actually have a, a volume control. We don't in the offices. The volume is downstairs in the data closet, but upstairs in the conference rooms, it is. And so I'm able to go in there and they can't hear the sound masking because it's doing what it's supposed to do.
00:47:50 But if you turn it off, then they hear the absence of it. And they're like, oh, so they thought it was like air conditioning. And then when you turn it off or like, no, that's actually sound masking. What you're hearing is air conditioning is that our air conditioner actually doesn't make it Sound masking, makes the noise. And that is what you're hearing.
00:48:08 And that's why we have the speakers all over. And so that was an unexpected expense and it was a great solution. We did not found mass downstairs. So Laura told you we have 15,000 square foot upstairs. We also have 10,000 square foot downstairs. So the upstairs building overhangs, the downstairs building by five foot all the way around. So when you're standing on the edge of your office,
00:48:34 you're like on the edge of a cliff, I liked the effect of that. It's really cool. And I tell people, even though I made it up later that all entrepreneurs have to stand on the edge of a cliff and decide whether it's going to jump or not. And when they jump, they can fly and they love it. That is really True.
00:48:56 It's true. What they're working in corporate America and the like, do I ever jump and start my own business or do I just stay on the safe side? Entrepreneurs are willing to jump. Yeah. Laura, do you remember the name of the sound masking company? Data Vox. It's in Houston. Okay. Local. Yeah. You're happy. I think they're a national company.
00:49:22 I think they have installed. I think Databox is national, but sound masking is. And you know, I think that your listeners, regardless of where they are in the world can find a sound masking company. If they just Google. Yeah. The sound management topic is super challenging. It's not that easy to address with construction even, you know, beforehand.
00:49:44 So if you really care about it, the sound masking, maybe the way to go, because sound travels through everything, right? The, the air condition, you know, there are the HVAC, the, you know, under doors through any, you know, if you don't take the walls to the deck. So Yeah, anybody that's planning to build out a storage facility ought to put in,
00:50:06 I mean, I'm sorry, a co working facilities Budget somewhere in the neighborhood of, you know, at least $25,000 per, you know, 15,000 square feet, you know, just as a contingency in case the unmasking has to go in. And if it ends up being a little bit lower, they're in good shape. And if it's a little bit higher and they're still in the ballpark,
00:50:29 but if they don't have a budget for it, like we, didn't, all of a sudden it comes out of your operating capital and that's never fun. But if you have a contingency in there as you're building out and you put this money aside to use in case of problem, but you won't know. And you know, I talked to architects about it and they don't know all the time.
00:50:50 They just, so, Yep. That's what I think I was just talking to somebody earlier and I always use your example, Laura, because I think you shared on a Flight Group call. You're like when I was sitting in this office and it really drives it home for people. Cause I think it's hard to think of it in advance then to your point,
00:51:09 you have to get the right architects to understand how to solve it or can even predict where it's going to be. And even then it's hard to manage down completely because it's yeah, it goes wherever it wants to go. So I'm curious, what are you most excited about David? You seem to have all sorts of ideas about what's going to happen in the future.
00:51:32 What's so co warehousing next what's the next five years hold for your space as a service business. My goal is to go after management agreements for Coworking coal warehousing and to acquire warehouses and other buildings that I could convert into Coworking and co warehousing. I believe that's a really great solution. I really don't think a co warehousing solution is good without having an office component to it.
00:52:06 Most warehouses are built with offices, but most of them don't have very much office. So my goal is to look at that. So I'm actually working with an investment. That's a startup PPM to raise capital and to be able to strike while I see a good opportunity because getting a warehouse right now is very at such a premium, okay. We're by offices are a dime a dozen,
00:52:30 but then again, you know, I think that's where management agreements come in play really well because you know, you see somebody with vacant space, they're not leasing it. They haven't leased it. They're not going to lease it. They know they're not going to, they just don't want to pay for the improvements. You know, it's funny because if they're waiting for this fantasy tenant,
00:52:52 who's going to come in there and they're going to say, Hey, we want to pay, you know, we want a TBI of 50 or a hundred dollars square foot, and we're going to sign a 10 or 15 year lease and give you a personal guarantee and blah, blah, blah, blah, blah. These people don't exist very much. Okay.
00:53:11 And so when you talk to them, they say, well, where's your skin in the game? Well, my skin is my knowledge, my expertise, my management company, which Laura runs is going to be doing all of this work. And we're not going to be compensated until such time is this thing really starts to build revenue and that's our skin in the game.
00:53:31 And if they don't like it, there's more efficiency. I really feel that. So anybody who's looking at management agreement and I did go, I did attend the management agreement cohort that, that you did. And I loved it. And I, I love Mike Abrams. It's fantastic. I talked to him every once in a while. The fact is if companies can't get their hands head around management agreements,
00:53:53 they're going to fit into categories. A they're just going to have vacant space. They're going to end up selling their buildings at distressed prices because their NOI, their value of their building is based on a multiple of the NOI, the NOI isn't going to go up when they have their third floor of their building, completely vacant. And because if they're going to skimp out on that,
00:54:14 they're going to skip out on other things. And then on the flip side, you have the innovative people who actually read and learn and everything else. And they're either going to sign with a, a company that can do the management agreement, or they're going to do it themselves to the extent that they want to, or, you know, I mean,
00:54:34 even very large companies have, have tried it and they just, it's not the world they live in. They're used to, you know, doing it in such a way that they're used to leasing out the whole for, you know, to one or two tenants on long-term leases. And I know there are people that are interested in it and some of them may succeed in some of them won't.
00:54:54 But for the most part, I think management agreements are great partnership that I feel like I want to expand on the co warehousing also, but I don't think I'm going to really do management agreements on warehouses because literally those things are, you know, warehouses, you, you build it, you lease it. It's it's, it's like offices in the yeah,
00:55:14 No, no incentive for the landlord to do something creative. Yeah. And those people that don't want to saw a tenant improvements, but they're willing to give a, a, a, another company the same money to build out space. It doesn't make any sense to me. And I tell them this because you can generate a significantly amount, more revenue with a management agreement in your pocket by paying the same amount of tenant improvements versus plus you have the diversification of multiple tenants occupying the space as opposed to an anchor tenant.
00:55:49 And when they leave, you you're end up with the whole thing. Again, you've got to these, the space out, you've got to pay for tenant improvements and everything else whereby the reason many storage is such a popular investment is because you're never going to see 10% of your tenants move out at the same time, But it's not 10%. Absolutely. It's not gonna happen.
00:56:11 And that's what is so promising about Coworking versus, you know, the standard leasing out the office space. And they know it. Some of them will come to it. Some of them won't those that don't will end up flipping their building in distress sales. And that's the way life It may. You'll pick up a couple of bargains. I'm not going to buy office.
00:56:35 Okay. Awesome. Laura, what are you most excited about over the next few years G growing the business? I'm curious to see where my podcast goes. I'm looking forward to that growing cause that'll allow me to meet more people and use the podcast to influence and educate small businesses because they're thirsty. I mean, most of the podcasts are for big businesses and you know,
00:56:59 like, I, I just think there's a lot of, a lot of potential there. The guy, I have some, a lady in my church that listens to it and she has a little oil change place. She goes, I love your show. I get tips from it all the time. And you know, that's the market. And we know that America is built on small business.
00:57:19 So I'm looking forward to see how that goes. You're a different way for you to make an impact outside of just your space. Maybe one day I'll make money doing the podcast. That's the goal. All right. Laura has your own business plans here outside of what Dave dreams up. Thank you guys for taking the time to do this. Like I said,
00:57:38 I could go on for hours and ask you all sorts of questions. You run a great business, and you're also thinking big about what's next and thinking creatively, Dave, I love your, the way you framed the space as a service. And obviously you're doing the service side of it. Well as well with your 31 5 star Google reviews. So I look forward to continuing to watch your journey and we have to have you back on when the co warehousing space is open and you have some things to share about that.
00:58:05 Thanks, Jamie. We're big fans of yours. Thank you for letting us be on your show and keep it up. You're doing great work. You're helping the community. Thanks guys. We'll talk to you soon. All right, bye. Thank you for listening to today's episode. If you liked what you heard, tell a friend, hit that subscribe button and leave us a rating and review.
00:58:27 It makes a huge difference in helping others. Like you find us. If you'd like to learn more about our education and coaching programs, head over to Everything. Coworking dot com. We'll see you next week.
For the full show notes of this episode, click here.
Want to join our coworking conversation in the Everything Coworking Facebook Group? Find us here!
Looking for a specific episode? Go to the episode index here.