310. Shannon & Emiliano Lerda Share the Behind the Scenes of Elevator, their Cowarehousing Business

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310. Shannon & Emiliano Lerda Share the Behind the Scenes of Elevator, their Cowarehousing Business

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 case studies and inspirational interviews with industry thought leaders to help confidently stay on top of what's important and what you can apply to your own role in the Coworking industry."

00:00:44,"Welcome to the Everything Coworking podcast. This is your host, Jamie Russo. I'm so glad you're here with me today. The interview today is with Shannon and Emiliano Lerda and they are the founders of Elevator, which is a co warehousing space in Omaha, Nebraska. You are gonna love this interview. First of all, they have a really fun, compelling story."

00:01:09,"They are married and business partners. Shannon actually started the business and then Emiliano joined her. Shannon went through our Coworking, Startup School, which is how I knew her, and then did our management agreement course. There are a few other people that have gone through our programs that are working on co warehousing spaces, so they've connected. I love this model."

00:01:29,"I think it's super interesting. We actually hosted a, how I did this session on co warehousing that was phenomenal. I was like furiously taking notes. I thought it was so interesting. And it was with e-Com Spaces in Atlanta, The Loading Dock in Raleigh and Palletized. And all three of them have very different models, really interesting stories, share lots of details about how their business models work."

00:01:59,"Super interesting. So I'm gonna share a link to that episode. It's actually a webinar that we did and panel format. I will share the link to that. You can opt in to grab that and watch it if you're interested in the model, I'm gonna put that at Everything Coworking dot com slash co warehousing. So if you wanna watch that webinar, you can do that and see the panelists and learn all about their stories."

00:02:24,"So back to Shannon and Emiliano. They have 56,000 square feet in Nebraska. They’re in Omaha, it's downtown, which is super interesting. They have 75 warehouse spaces, they have 17 private offices, 70% of their members businesses are women and or minor minority owned. Is that not amazing? They just opened in October, 2022. So they're still getting their feet under them,"

00:02:52,"but they have 58 business members so far, which is just amazing. They have a photo studio, a video studio, a training room for 30. They have a big lobby where they do events, they have a loading dock, they have a kitchen. They're really focused on creating a really positive supportive culture. All of their memberships are month to month."

00:03:11,"Little summary on their website is elevator serves, small to medium-sized businesses, e-commerce companies and makers through co warehousing and our amazing community. And they focus a lot on community and their Community Manager is in our Community Manager University program too, which is really fun. You're gonna love this interview. Lots of good nuggets even if you're not interested in co warehousing, although I encourage you,"

00:03:32,"anyone who's just interested in what's happening in the industry overall, I think we're gonna see more and more co warehousing. The founder of the loading dock in Raleigh thinks that co warehousing is actually even more relevant than co-working in smaller markets because he thinks there are folks that need the co warehousing, you know, sort of storage fulfillment, et cetera, services literally everywhere in like every town."

00:04:02,"So we may end up seeing more of these than Coworking spaces, but generally you find a blend co warehousing plus co-working or office space. Again, if you wanna grab the recording of the how I did this panel that we did with the other co warehousing folks, you can do that at Everything Coworking dot com slash co warehousing. Okay, enjoy our interview."

00:04:23,"I have two guests, husband and wife, business partner Duo Shannon Lerda and Emiliano Lerda co-founder, Shannon's co-founder and president of Elevator. And Emiliano is co-founder and now CEO. And I know you just recently, somewhat recently came onto the business full-time. So I am super excited to chat with both of you. I think this is such a fun business model we'll talk about."

00:04:52,"So co warehousing with Coworking, I'll have you guys talk through the business model, but Shannon and I met you, you went through our Coworking, Startup School, so I got to know Yeah, a little bit about you and the model. I think you were one of the only, you, maybe you were the only one at the time doing co warehousing,"

00:05:10,"although David Fisher, you've built like a little network of folks working on this new model, which is fun. Yes. I think David Fisher was in the cohort. Okay. Yeah. Or that's where I met him probably in the management agreement course. And now you, you met him, had you met him before in person at Juicy? No, just that juicy first time."

00:05:30,"It's really fun to I know, connect and I wish I'd gotten to spend more time with both of you. So we get to meet in person briefly at Juicy a few weeks ago and I said we get to do a podcast and I know you guys are still fairly new, so thank you for being brave. And I think, I thought, I've been telling your story."

00:05:46,"I think one of the things that's interesting about what's happening in the industry right now is, and I'd be curious like how you categorize what you do because it's not true, it's not strictly Coworking, but there's a lot of folks working on models that are like this shared model that maybe has workspace, really trying to figure out how to serve people right. In this sort of unique way."

00:06:11,"And you guys, I bet are first in your market with co warehousing, but I'd be curious. Anyway, let's jump in and we'll let you answer all the questions, but I am looking forward to this and thrilled that you took the time to do it. Okay. Tell us about, first just tell us a little bit about Elevator and then we'll back into how it came to be and your backgrounds."

00:06:35,"Excellent. Shannon Willis. Shannon for, oh yeah, Want me to start? Okay. Emiliano already said he talks too much. So I'll, I'll moderate, I'll jump in. Elevator is a combination, it's co warehousing about 80% and then we have some private offices and co-working members, but it is definitely beyond mostly co warehousing. And this came about because of a need that we saw in the market."

00:07:04,"Milano and I had an e-commerce company where we were selling pet supplies. Okay. And that doesn't show up on either of your LinkedIn profiles, I feel like I now remember this from your story. Yes. Okay. So I was doing it from home. We had all the shipments of toys and dog treats coming through our house and then shipping it out from there."

00:07:27,"We sold on Amazon, which is a very adventurous learning experience. And we were doing that for three years actually and grew significantly during that time to the point we were busting out of our seams at our house and really just needed, we were looking for warehouse space to get out of our home because it was not a great living, living environment, climbing over boxes and poly bags."

00:07:55,"So we were just looking to get out of our house. But with a, with a new adventure like that, you don't know if it's going to go really well or if you're gonna need to switch gears. And so we were looking for flexibility, small and small. Like we wanted 500 square feet to start and then with the ability to grow and scale and that's what we didn't,"

00:08:17,"couldn't find, looked and looked and couldn't find. So that's what led us to launching elevator. Okay. So did you ditch the pet supply business and start this myth venture? Yes, we did. There's only, we have two kids and there's only so much time in the day. So we feel like focusing on one business is gonna give us the best,"

00:08:42,"the best outcome. So we wound down the pet supplies Okay. Company and full in on co warehousing and elevator. Okay. And you, do you have, do you have pets? We do. We have a dog and a cat. Okay, I figured you were in the pet supply business. You gotta have a pet. I have two dogs and I'm constantly like,"

00:09:05,"oh my god, the amount of money we spend on one of them's a puppy so she'd chews everything. She still will like chew the pillows if I don't remove them. That that's, It's painful. Yep. So I'm sure that was a good business. Our Dog likes to chew eyeglasses and AirPods. So expensive. Its expensive pace. Yes. Still Thank God."

00:09:27,"Yeah. I wonder how many dogs have swallowed AirPods? As a matter of fact. Yeah. Yeah. Too many. Okay. Tell us about your professional background because the pet supply thing I had forgotten about, Shannon, you have a bit of a like real estate finance background. Emiliano, I'm very interested your background, it's like totally unrelated but interesting."

00:09:52,"So Emiliano, do you, you wanna go first? I'll switch over to you. Sure. I'm originally from Argentina and I went to law school. I'm a licensed attorney, never practiced and don't intend to practice, but I know enough to be dangerous and ask questions. Okay. I, for almost a decade I was the executive director of rapidly growing nonprofit and we not only grew it in terms of the annual operating budget but also the number of employees."

00:10:21,"We have more than 40 and we had to open branches across the state of Nebraska in southwest Iowa. And then for the last three and a half years I work in a family office that does real estate development and also invest investments. So real estate development that includes basically commercial real estate like retail office, multifamily, residential, and also venture capital investments. I was president of the office and I learned a lot,"

00:10:56,"especially working through covid and understanding how complex financial instruments can be used and leverage to basically farther your vision. The family office also developed a, an innovation district and so I was very much in the ecosystem of understanding how to activate and how to help people with a small and medium businesses. Okay, got it. That totally makes more sense now. And a real like general manager sort of c e o."

00:11:31,"Yeah. Role in the first one. And then, so you also have real estate experience, so that might play into you guys Divi deciding to take the leap. Leap. Okay. Shannon, tell us about your background. Yeah, absolutely. So I'm from Iowas, small town, born and raised and Milano and I met in undergrad, university of northern Iowa."

00:11:52,"It was wonderful how you met. Yes. 2019 year wedding anniversary was yesterday. Oh no, congrats. Yeah, so we, I've always been entrepreneurial. I think I, I claimed to have started my first business when I was four and basically never really lost the interest and the desire for that. And Emiliano is very much the same way. We started our first business together in 2000 and then we took a break and we all did."

00:12:21,"We both did careers and I studied finance and then went to work at Principal Financial Group and doing commercial real estate lending. And then after that just dove back into the entrepreneurial adventure and started the, after having a lot of real estate experience, I knew I didn't wanna go back to the corporate life and I wanted, we wanted to try something different and we always wanted to go back into business together."

00:12:49,"So this was the opportunity, the right time, the right place and the right idea and it married both of our skill sets very serendipitously. Okay. This is perfect. Yeah, it's hard to weave this story together. Looking at LinkedIn profile so we're getting a little behind the scenes. Emiliano, we interview Gio and I interviewed Jamie Hodari on the podcast."

00:13:14,"I don't know if you listen to it. His dad is from Argentina. Awesome. A really nice story. Geo is very good at asking like personal questions. Yeah, it's definitely worth a listen. And you guys probably saw him speak at I did At gc, yeah. I love, yes, yes. Just like such a, like an authentic guy I like like listening to him."

00:13:40,"Okay. Okay. So you had a personal pain point around the co warehousing business, but talk about your journey. Does the model exist in, you're in Omaha cuz you mentioned the Yeah, tell us about the, yeah, let's talk about the model first. Does it exist or were you early to the market in your area? Yeah, we were first to market here at Omaha and because I was working with a family that invested and was in real estate development,"

00:14:12,"I was very aware of other challenges with the management agreements when it comes to Coworking and even the pain points of striking the right balance and having the right economics or Coworking to actually work. And so that understanding that, that was in the back of my mind and it was truly Shannon that said, what I really like is the community sense that you get and the networking and the support that you find in a Coworking setting."

00:14:45,"And she was the one that said, I remember the moment very clearly. It was one of those moments where she says we really need to co warehousing. And I stopped on my tracks and I understood the challenges of Coworking and, and some of the key variables, the economics and then the stickiness of the model Immediately I said, I think this is a brilliant b l,"

00:15:11,"it's not it. And then we started researching it and there was another company doing it, so that was validation. And so yeah, that's basically, we were first to market here in Omaha, but we have ambitious plans for growth in the future. We'll talk about that later. I'm sure totally we'll talk about that. Yeah. Was there any hesitancy to be first or did you feel like this is an opportunity,"

00:15:34,"it's not here, we're gonna do it? Yeah, I would say definitely we see the having the early mover advantage is as a positive for us. It is a challenge because we have to educate our potential members on what is co warehousing and nobody's heard of that term, so there's some education that goes into it ahead of time. But it's been very,"

00:16:01,"very well received. We've got a lot of support from not just community like the members that we have here, but also community organizations and investors from the chamber on and beyond. It's such an interesting model for supporting like economic development. Right? I'm doing this task that is a little, probably it's a challenge for me. It's this group in Colorado that supports really small towns and all the folks on the call are just really interested in economic development."

00:16:35,"So they're talking about like shared kitchens, some Coworking and some co warehousing type things like how do we help entrepreneurs who have a product or go to market and that really can facilitate that. Okay. So yeah, talk about, yeah, talk about the space square feet where it's located. You said a couple of things that surprised me when I met you at juicy ensuring like warehouse wait in a cornfield kind of thing,"

00:17:06,"but it's not No. Tell us how you decide. Decided location, size and then real estate model. I'd love to hear some of those details. We, we looked at buildings all across the city and tour a lot of buildings and it was very opportunistic how we ended up getting in front of this particular building. We're in the urban core, very close to an area's called the old market and basically it's part of the old market."

00:17:36,"It said a hundred year old building four story side brick building. It's not your traditional warehouse. And, and that's interesting, right? Because we had to make a decision and we thought if this building is interesting enough and if we build the right community, people will be willing to travel if they're not immediately adjacent to us. Now this is Omaha, so a long commute here would be 20 minutes,"

00:18:02,"right? So, so this is also very accessible still for people that don't live immediately in the urban core. But yes, we have a beautiful building. It's a historic building and very close to a lot of amenities. And we started, we have geo located all of our members and there are people that are driving long distances to be here because they love the building,"

00:18:24,"they love the community that we're building, but they also love the access to amenities. They're within walking distance. So if you wanna have a coffee or a beer or wine or lunch in a really cool restaurant, this is very walkable right here. Shannon, I don't know if you want to talk more about the process of the building. Yeah, so the building itself,"

00:18:48,"it's Milliano said it's four stories. It's 56,000 square feet plus another 22,000 below grade, which is an underground parking garage. Oh, got it. Okay. Yes, we have 75 warehouse suites and 17 private offices. Okay. And so that gives you an idea of the breakdown and the portions that we have here. We have a kitchen and break. We're own a photo studio and video studio."

00:19:16,"We have a training room that's set up classroom style for about 20, 20 to 30 people. And that we have a great lobby that has been used a lot for events our members lot. Sometimes when they move in here, they want to share that with their customers. Okay. And so they'll host a grand opening and in our lobby and our space and welcome their network in."

00:19:39,"That's been really positive for us. We, we have a loading dock, which is an essential item for us so that we can receive pallet deliveries directly off the back of a semi and that saves our members time and money. And then we have daily carrier pickups, so U P S U S P S and FedEx Picking up their daily. Right. Something that we learned firsthand is it really is inconvenient to have to be at your home or somewhere else waiting for the deliveries or waiting for 'em to pick up your shipments."

00:20:16,"And so that that is included. It's Not like Amazon membership, you're to sign for it, right? Yeah. Right. A pallet Without a signature And having that, that that assistance. We heard it from many members where a lot of people, it's funny you mentioned this, they sometimes you look at LinkedIn, but a lot of people have side gigs and they have side businesses."

00:20:40,"They're getting started and they don't put 'em on LinkedIn. A lot of the entrepreneurs that we're serving come here night or over the weekends and then they don't have time to be here to receive the shipments or to make the shipments. Yeah. So you receive them. Yes. You, what are the other services you offer? Do you take the product like to their warehouse?"

00:21:04,"Yeah. What do you call it? Just a warehouse space. What's the space that they rent called? We call it their warehouse and yeah. Okay. We do, we receive shipments, we scan them in, we, they get an email saying that their shipment was received. We replace it in their units. Okay. So it is, we've had a problem where if we wanted to go on vacation for a week,"

00:21:26,"we were trying to figure out what was gonna show up on our front doorstep and we would have to ask neighbors to go lift these 30 to 50 pound boxes. Oh yeah. Off of our front porch and yeah, take them downstairs and store, take them down to their house and store them for us. So it was a major inconvenience and a constant source of stress and worry that we completely eliminate that for our members."

00:21:51,"As far as our members go, we have 56 businesses already here and that Wait, And when did you open? So yeah, We opened October 1st. Just this 2022. Yeah, you're right. So you're still, yeah, you're still very new. That's amazing. It is that like what you thought hoped might happen, thought might happen ahead of expectations."

00:22:19,"To me it sounds great. We're really excited about the traction. I think it's been the hardest part is getting the word out and right. Reaching people and letting them know that hey, we're here because most entrepreneurs are extremely busy and they are heads down working and they don't get a lot of time to just come up for, to come up for air."

00:22:40,"Yes. And explore. So how else can I solve this problem that I'm having? Yeah, exactly. We're 60% occupied right now and one of the exciting, we have a lot of minority and woman-owned businesses. Actually 70% of our companies here are minority or woman-owned Yeah. Companies. That's amazing. Which in Omaha, Nebraska might not be the most diverse place."

00:23:04,"Yep. So I think that speaks volumes to the type of businesses and the type of entrepreneurs that are needing the flexible option. Yeah, that's very purpose was always very important to us. I worked in a nonprofit for almost 10 years and just doing a business just to make money, it wouldn't be exciting and it wouldn't be something that we would be passionate about,"

00:23:24,"but this is really, it's a business with a purpose. And I would say too that this is something, another barrier we don't, if you are going to look for your own warehouse, you're gonna be looking at a fixed amount of square seat or at least three to five years, you're gonna make a Lund term commitment and you're gonna have to be creative worthy because most any landlord will wanna know that you have the whereabouts to be able to fulfill your obligation."

00:23:51,"We take all of that away for you. So taking barriers away and so small businesses that may not have the credit worthiness can sign a month-to-month membership and if they want to sign a multi-month membership, we can do that up to a year and we would do that with a discount. Yeah, geo and I were just talking about that because we have some folks looking for space and having to really prepare them for the financial conversation with the landlord."

00:24:21,"And I think there's maybe this perception that landlords are desperate today and don't care as much about credit worthiness or the fact that you're a Startup and in fact they care a lot because they're struggling and so they don't wanna make the mistake of paying for a build out for a company that can't, you know, so it's just like the bar is pretty high to get into commercial space."

00:24:45,"So taking that off the table for people who have, you know, side hustles or smaller businesses that they hope to grow is sometimes that's a total deal breaker. Like they just can't find that solution otherwise. Coworking is similar but it's like Coworking, you can do it at home and this is one of those things at some point it's just really hard to do it at home."

00:25:08,"Yeah. Are there any other services that you provide on top of the space and delivering items to the warehouse? We have on-demand labor, but it hasn't gotten, we're also learning, so it hasn't gotten utilized as much as we anticipated that it would. And we're also surveying our members and asking them what did they need? What would they find value in?"

00:25:36,"So we're focused on space, the community and logistics supports milliano And Feedback. The feedback that we are we're getting is that the programming that we're offering, whether it's legal expertise on how to set up your business or accounting or IT or web development, we have even members that are offering other members free five hours of consultation to assess your business needs. So there's a lot of cross pollination and a lot of people helping each other."

00:26:11,"And back to your earlier point, a lot of the businesses here, more than 70% of them are e have an e-commerce component. So there's some commonalities and some camaraderie and how to help you build and grow your business. We had one more than one actually member, but one member went from one office, one warehouse unit. Now they have four units,"

00:26:32,"they have an office and three warehouse units and they're looking at their fifth unit maybe in the next month or two. So you can see how people, and they don't have to make that long-term commitment before they need it. And that flexibility to expand or to reduce how much square footage you're paying for is very helpful. Yeah, it's interesting because it's not exactly a niche,"

00:26:58,"but to your point, the entrepreneurs have a lot of their business businesses have a lot in common. So I could see like a lot of excitement about the ability to connect with each other, which is not even always the case in a Coworking space. Yeah, it, I'm sure that's something that's like really valuable to see. And it sounds like you've identified some ways like to actually help with programming because they,"

00:27:24,"there are real needs sometimes even in Coworking it's really hard to figure out like what does an attorney need or, but growing e-commerce or whatever kinds of businesses. Okay. What are a couple of examples of the businesses? What are some of the, I don't know, what's an, what are a couple of unusual ones that are in this space? Unusual?"

00:27:47,"Can I start as I have to say this one? Yes, go ahead. Do cpr. Do cpr. We have a CPR company, so I'll tell you the unusuals. So do CPR is a, is a CPR training company and they use our training room to the trainings, but they need a space to put their dummies, right? That's, that's not,"

00:28:03,"and so that's one. The other one that is unusual is, is fun. And we were not expecting, and it is a lawn and care company that rented one of our units by a window to over winter their tropical plants, which in passed, they were actually disposing of them and they were not in a position to have their own greenhouse. There we go."

00:28:25,"So they stored the tropical plants over the winter. Yes. Yeah. And we figured out how we figured out a way to get them water, they didn't need drainage. So those are two examples of unusual ones I would say that we were not necessarily expecting when we were sitting out to do this. That's great. Yeah. But there's also really every business and the people behind the business are so inspiring and so diverse is actually,"

00:28:51,"you get a lot of energy when you come and hang out with people like that. Yeah. Shannon, you wanna share a few other members Examples? Yeah, that's say the consistent feedback we get is that we have great vibes, like the good energy, the excitement of people doing what they are passionate about. A couple of the other notable members, I the wallflower does event decor,"

00:29:16,"so big balloon arches and wow weddings and birthday parties. And she came out of her living room, so she was in her house doing all this and GT is, does digital secure access, like lock locking systems. So they, they've been a great member as well. We have computer refurbishing, we have a state sales company Sale. That's fun. Okay."

00:29:45,"Yeah. Sales candle maker, several lines selling companies and a coffee, coffee beans. Ooh. It's really a little bit of everything. It sounds, it is very eclectic mix of really cool entrepreneurs. Okay, so four story building, 50,000 square feet. What is your real estate structure? Do you lease buy investors? What's So we're thanks to you by the way and because I know Shannon did the training,"

00:30:15,"but I learned a lot by osmosis. Yeah. Because I was, I was in the car when Yeah, In the car. Yeah, Right. So yeah, on our long trips I, I really learned a lot and I knew that from, I was on the landlord spot, right? With a family s yeah. Where I was working. So I negotiated leases,"

00:30:34,"I, I, I was, I troubleshooted leases lower in pro hidden difficulties and I knew a lot about lease, different lease structures and levers that you can pull to make a lease work for both the landlord and the user. And then I became very familiar, thanks to you and Shannon about the management agreements, how that works or Coworking. So I was very aware of that."

00:31:03,"Now we decided to do a lease. So where we have a a straight lease here because we feel like it's a breakeven point is really low, 62% occupancy for the unit and we were comfortable taking that risk. Looking at the macroeconomics too and the trends towards e-commerce and people, the great resignation and people doing more and more commerce over and then also the local vendors and local makers are getting a lot of premium,"

00:31:35,"I would say attention. And people are quitting their jobs to their passion. So looking at all those strengths, we said well we're willing to take the risk and we don't feel like the risk is outsized. That doesn't mean that our model will not work with the management agreement and be opened both to straight lease or our management agreement. I can see that in the future,"

00:31:55,"maybe a combination of those depending on who the partner on the other side is because you're really partnering with them and now you have to have a meeting of the minds and really have has, I would say congruent congruency in your vision. But right now, this is a straight lease. We have our investors that invested in the business in our, okay. In,"

00:32:19,"we did an initial round through a convertible note. This is something that is often, it's a tool that is often used to finance high growth companies and it's typically used in tech companies. Okay. But because of our plans and our vision, this is the tool we use for the initial round one, 1.7 million on the initial round. And now we're investors,"

00:32:41,"two of our investors that were our biggest investors in the operating companies through the convertible note, they bought the building and they leased it to us. So we have a relationship with the landlord. And so we were able to, I would say negotiate what I would call that they're certain terms that are really helpful to have and if you have alignment on in of interest,"

00:33:03,"it becomes truly critical. So that's the way we structure this one. Now going forward, that may be a mix of management agreements with straight leases, but we will not own the real estate, the asset. Got it. Okay. I thought you, there was something creative you did and you both have like real estate related background, so you're comfortable thinking about the creative ways to do it and what that can look like,"

00:33:27,"which most, you know, a lot of operators don't come from that background and really have no idea where to start. Super interesting. Okay, let me, I gotta look at my long list of questions here. Okay. Talk about being just quickly downtown. Is that a model that, is that like part of your brand or is was this like this makes sense here and now and that may not be something that you replicate?"

00:34:00,"Shannon? I think you, yeah, go. No, I think it's interesting you ask this question, not Jamie because I think our thinking is evolving. By the way I will say this, we were so early, they're Totally new. So yes, We're, yeah. And we're touring give You the ability to change your answers in a year. Thank you."

00:34:17,"Whatever. Reserve the right, I reserve the right. So basically we're, we have reviewed now more than 150 buildings in 20 different metropolitan areas across the country. And Shannon and I have personally tour buildings in three different metropolitan areas outside of Omaha. And what I would say is that yes, initially we thought this is our niche, this is our brand."

00:34:42,"It is urban core and either whether it's in the urban core or near a downtown in the suburbs, but it has to be close to amenities. Yeah. We believe, we still believe that's true. What, what has evolved for me is that we don't have to have one product line and it doesn't have, because every city is different and this is who are in different cities,"

00:35:04,"you start to realize that there are certain dynamics that are very local. So you can't really cookie cutter that this is true for every city. And so as you start to new downtown areas and new urban course, you're like, not every urban course is the same. And so in some cities there might be an opportunity that is more in the suburbs or is in the outskirts and it's probably the right deal."

00:35:27,"Yeah. And so we're going to probably, I think the ultimate driving force is getting the right building in the right location at the right price, in the right condition. And if you can take your time and basically cast a wide enough net in this market, you can definitely find the right deal basically. And deal, when I say deal is a motivated landlord that understands the vision,"

00:35:54,"that is friendly to the vision and it has the capacity and the sophistication to work through a more, I would say complex lease agreement with you. Wait, sorry Shannon, Really quickly, you mentioned a couple, you mentioned there's certain terms that you need to make these work is a lot of free rent upfront, one of those for you. Yeah. But if you've done leases before,"

00:36:21,"it's not just getting nine months of rent abatement, it's also about when does the clock start ticking? Yeah. Because if you're doing tenant improvements, when does the clock start ticking and that that can make a huge difference. Yep. Especially when you're trying to get to occupancy. If it takes, so it didn't take you that long, six months, seven months to get to your 60% which you mentioned is breakeven."

00:36:48,"That is, you know, almost lightning speed for a lot of models. Sometimes it can happen, right. Sometimes take a lot longer. So to your point, if it took you six months to do the tenant improvements and that was your free rent and the clock started ticking when you day one, then you're out of it And then you're pay, you're paying full expenses and trying to ramp up."

00:37:09,"It's a challenging model and really challenging to negotiate. Which is why I think knowing what you need and tr like you truly believed what you needed to the core. Right. You probably weren't willing to do still without it cuz you knew. You knew it. Like really you've seen the numbers, you've lived those numbers for a long time. I think that the big advantage to know it so deeply,"

00:37:30,"that's what you're gonna negotiate on. Cuz the deal is everything. Right? The deal, yes. The mo the model matters, but like you can fix the model, you can, there's things you can change after the fact, but if you get that initial deal wrong, you're starting behind. Yeah, That's right. I think there's so many variables to look at at the right deal by the way is so the lease structure,"

00:37:53,"but then there's also the building efficiency. And frankly when we first looked at this building, one of our concerns was this is an old building has a lot of stairwells and STA pieces and common areas and that makes it a little less efficient. Meaning also the 56,000 square feet, what percentage of those square seat can you actually monetize? And yeah, so you're looking at everything and then how much does it take to get the building up to what the standards are for you to open,"

00:38:21,"which generally speaking for warehousing is different than for Coworking. We tour with you, I'm not sure if you were in our cohort, but we toured a lot of Coworking spaces in Chicago and Yeah, they're amazing. And my mind Was just going immediately that's Expensive And Somebody has to, somebody has to Pay for it. Yeah. I'm like, Or that's a lot of UNM monetized space."

00:38:45,"Yeah. The efficiency, I think the efficiency is one of the trickiest things for new operators to understand and then the balance that you strike even within the space once you open, right. Like you need it to feel good and yet you need the model to work. I think it's not easy. Exactly. Yeah. No. What size are your, is there,"

00:39:07,"is there a, what's like a consistent size of the warehouse spaces and then you just take more as you need more or do they vary? We have a wide variety of sizes. Right. And they, the smallest ones in this building are 80 square feet. Okay. Eight by 10 are nine by nine. Yeah. And the largest unit in this building is 1300 the square feet."

00:39:35,"And so we could, it gives a lot of flexibility for you to start small and then grow or add on additional units as you need them. But we would've gone a little bit larger. But the building layout just didn't, wasn't conducive to anything larger than 1,313. Yeah, it sounds like it made sense and you got what people are are looking for."

00:40:04,"Okay. I'm also curious about technology. Is there any unique technology that that's different from what a typical, I'm sure you have some of the typical Coworking, some door access. What do you use to ma Is, what platform do you u Do you use a different platform for your offices for payments and Content? It's all under one. It's all warehouses,"

00:40:27,"it's all space. So we're, we are using our office r and d with, we found out about through this group and we, we are using for managing Ments in the software called Envoy. Okay. And Strive for payments and it's, it's very much tech enabled and very similar to what Coworking spaces need Exactly. To operate. Yep. Yeah. Yeah."

00:40:56,"That was very, so that all that was very helpful. The part of the Yeah. Coworking. Startup. School. Got it. Okay. Yeah, I'm looking for my, okay, I wanna talk about BI building awareness. So it sounds like new to your market but you're at 60% occupancy already. How do people find you? They do. They do."

00:41:21,"They don't know the word. I think that's one of the biggest challenges that's maybe happening in our industry right now. And this was a big topic of discussion at Juicy, is these like evolving different models around how to to use space, which I think is really interesting but hard. And somebody in the Facebook group, Shannon, I know you're in the Facebook group,"

00:41:40,"had said, oh, Jamie had this podcast about different models, what do you call it? And I was like, oh my god. Yeah. This is really hard because you have to call it something people understand and ideally something people are searching for but people don't know all of these new terms. People barely even know Coworking. So yeah. Talk about your customer acquisition."

00:42:01,"Like what works, what are you, yeah, what are you experimenting with? What are you finding? We've done a lot of analysis about this. We do paid ads on Google, Facebook, Instagram, and then we are very active on social media and we have a great mark marketing manager who knows all about that stuff. And then we also look at,"

00:42:29,"we've done a even a bus bench because we found out that there's people who aren't on social media and so they, we have to somehow capture them. We're like, okay, we're gonna, we're gonna try this out. Yeah. So we're trying a lot of different things. I will say that 40% of our members are inbound members, meaning that they found us through either word of mouth or an event or social media."

00:42:53,"And, but 60% of our members are outbound. Meaning that we found them, that we reached out to them directly to make initial contact. And we do that through going to vendor shows and cold calling. We will we'll find, we'll create lead lists and call people up and tell them, Hey, this is co warehousing. We love your business and we think you would be a great sit for elevator."

00:43:20,"And it takes, it's a long process of courting but that 60% of our members are from us reaching out. Milliano, Can I add that it's absolutely critical to understand that you're building a culture of hospitality with your staff. And that goes a long ways because a lot of our existing members have tour people, have rec recruited people, it brought other members with them."

00:43:46,"We recently had our grand opening, we had more than 400 people so we waited. Okay. So it was a delayed grand opening because we wanted to have critical mass. Yeah. Making Grand. I know, I love it. But we with, we had it on Thursday night and by Sunday we had signed up nine new members. And by the way,"

00:44:05,"the 400 people that came, Shannon and I very involved in the community here in Omaha. We know a lot of people but we only knew five or 10 people in of the 400. So most of the 400 were people that knew other members, people that were invited by other members, but people that were invited by our staff. And so being able to like also let go and it's not about you,"

00:44:26,"it's not about me, it's not about Shannon, it's about the community. And the more that you share that and then give a spotlight to the members you put a bus light on, on on the staff, then that generates that kinda attraction of, it's a flywheel effect basically. Yeah. Super interesting. And you made me think about, so members that have team members,"

00:44:47,"they're also really happy to have them be in your space. Right. Versus like a more amenitized professional safe environment that's compelling to go to, which is probably a differentiator from other types of space that they could rent. That's interesting. 400 people. Wow. Or other people were here. Shannon mentioned we have 56 different businesses in terms of humans we have about 6 160 more or less."

00:45:16,"Yeah. Humans that come to work on a regular basis. Yeah. So I'm curious about like occupant or not occupancy but utilization. Do they show up to the space a lot? Like coworkings always like Yeah, Mondays and Fridays are quiet and Yes. Challenges. Is that true of your business as well or? Yeah, I would think so. It's when people are given the choice that if they don't have to come to work every day Monday through Friday,"

00:45:46,"they don't. Yeah. So Mondays and Fridays are quiet. We do have members who are only here on nights and weekends. So our members get 24 7 access to the space. And so some of them have full-time jobs and they're here only on nights and weekends. But yeah, it's, I would say of those 160 individual members and 56 businesses, a third of them might come in and during the day."

00:46:16,"Yeah. So Yeah. Typical On a busy day. Yeah, exactly. So I'm curious, the outbound lead gen is really interesting and probably slightly easier for the co-work housing model cuz you can pretty cleanly identify or maybe more companies With physical goods Yeah. In the space and they had, maybe you can tell that they have a real active business versus people leading office space,"

00:46:44,"business licenses and things. So who knows not a lot of Coworking spaces do any outbound, is that someone on your team? How do you manage that? We have, so we have a, yeah, the top in the sales funnel, the top part of the sales funnel is handle, but what we call our hq and we have a team that is,"

00:47:06,"is young, but it's really, I would say both smart and passionate about like blowing it out of the water and delivering results. And so they're very good about delivering new lead generations and then calling call calling. We have self sprints so that we, we provide incentives to not just our staff but also other members. So there's a lot of ways to keep that."

00:47:31,"Like the sales I think is something that cannot be underestimated. I think a lot of people saying you build it, people will come and yeah, that's not true. Not the case. You have to show people, especially something That people may not you, so you said you get some leads, 40% total are inbound. Some from Google, some Facebook and Instagram is probably more educating,"

00:47:53,"Hey, this is what this is, you might be a fit. Yeah. When you, you have a unique model, you can't just build it and hope they come. Yeah. Our conversion ratio from tour, the from tour, the member is like 30 to 50% and it's, it's a, when somebody comes here for a tour, it's a big deal."

00:48:11,"And so we need to make sure that we make it very personable that it's very, it is a good, good experience from the moment before you even get here to the moment that you, after you leave here, it has to be a, an amazing experience. And then do you have a Community Manager on site that does the, like what does that,"

00:48:32,"because you have some workspace, some Coworking space. Yeah. Did try to think about what does that role look like? Yeah. We have two full-time staff. Community director Nazi who I, she's in your Community Manager program. N Hardge, yes. Yes. Is our, is our community director. She's amazing. Amazing. And then LA was hired I think two months ago for Community Manager and also amazing the two of them,"

00:48:58,"the two of them work great together and they have the, they run a tight ship. So sales closing, giving tours and keeping members happy and addressing building maintenance issues. It's, they have a lot on their plates. Yeah. It's important for us to be involved at the beginning to kinda set the right tone and of course ultimately that's the culture that we're building."

00:49:23,"But we have been intentional about building the independence Yeah. Of the local team. Because our key for us to grow is to be able to be replicable and in a way that is not solely dependent on us. So we have been very the, we use traction the EOS system. Yeah. Full. We're fully s system about it. Love it. Ok."

00:49:45,"Before we even opened the doors, we had finished our entire like two full day sessions. And so no, we take that seriously and I learned that in my previous job is culture is extremely important and it's gonna make your break you and process and systems. Even though I'm a vision person, I'm a big idea kind of person. I value process and systems because I know good power."

00:50:08,"Yeah. The, yeah, the power of actually being focused and being able to say yes to what matters most and no to everything else. And the focus on what matters. And so all those principles, they all come into play because it's important to retain the right talent, attract and retain the right talent and then it's contagious. And when Shannon was talking about the good vibes,"

00:50:28,"that's part of the good vibes, right? I Think it's, and so yeah, we have those two fulltime, those are running the Lo Omaha location and then Yep. We have a headquarters team and their headquarters team, we, Milano and I, and we have a VP of operation and some sales and operations support, part-time staff That are poised to scale."

00:50:52,"Yeah. Everyone's really excited and I did not be more grateful for our staff. Like their commitment, their enthusiasm and their dedication is just, it's really inspiring. We still really lucky. I was gonna say, I think E os can be challenging to implement when you're new and have a smaller team, but it can also inspire kind of confidence from your team because you're recruiting people to true Startup,"

00:51:20,"which can be really messy sometimes. Right. And for a team that can be hard to feel like, oh the founders are all over the place and one day they ask us to do this and the next day they ask us to do that, even less further. Businesses that are further along can operate like that and that can just be really hard for staff."

00:51:41,"So I suspect that also helps your team and helps them to do their best work too, cuz they know what they're pointed at. Yeah. Very likely. Our staff come from, they come from Startup, like they love the ecosystem. They are passionate about that first and foremost. So they came onto elevator eyes wide open knowing what they're getting into. And I think they're enjoying the experience and the ride."

00:52:05,"It's chaotic Sometimes. I think we're not messy. We're not messy enough. Messy that some of them Yeah. And they're like, Hey, we were expecting to stay up until three or four in the morning. I'm like, this is not a sprint, this is a marathon. Hey. And so organizations and everything. Absolutely. Yeah. Totally. Yeah."

00:52:21,"Yeah. Okay. So I wanna talk about what's next. But tell me a couple of things that you've learned along the way in your short, I know the full journey has been longer than six months, but you've been open for six or seven months. Yeah. Tell me a couple of things that you've learned that would be useful for somebody who's listening,"

00:52:40,"who's thinking about not just co warehousing but the, a similar model And the two things that we always talk about that stand out that we learned was in our, I would say our first two months of opening was being intentional about sales. Cuz we were giving a lot of tours but we weren't closing a lot of units. And so we had to be like,"

00:53:06,"okay, what's, what are we missing here? And so it was teaching this, teaching the staff on how to close and the art of closing and some strategies when you hear objections and how to counter those objections. So the training around closing and then also realizing that we are a hospitality first company because member experience we could, might close a unit but if they're not having a great experience,"

00:53:35,"they're not gonna stay. And so it's, there's the hospitality component that we did realize at the beginning was so important. And now that is our, one of our main focuses is that every single day we're we need to convince our members that this is where they need to be. I love that. Okay. Anything else that you'd add Ano? Anything you wanna jump in with?"

00:54:01,"No, I think Shannon covered that very nicely, the sales. And I also think that the team growing with us and setting the right culture. So that is contagious. I think that communicates volumes to the businesses that are choosing to locate with us. Yeah. Okay. So what's the long term vision? What's next? I'm glad you asked because we are really excited about what's coming and basically over the next 12 to 18 months we want to open two in,"

00:54:41,"if possible, even three new locations. And then we are looking at a goal that is five to seven years from now, being 15 to 25 locations across the country. Our 10 year goal, because we are EOS fully, we have a 10 year goal. Our 10 year goal is 101 locations. 101. Okay. I love it. Exactly. I love those Like the price is Right."

00:55:07,"Totally. I love those nier because they are ambitious and yet sound real. Sometimes we'll get get juicy. I don't know if you listened to Venture X and Yeah, they're like racing each other with Lake House a thousand and aye, I don't know, it was something crazy that Jason then 1,001 and it's just numbers. Like realistically you can't even get that number of deals done that quickly."

00:55:36,"It just takes time. So, And the build out and the build out, it takes time to negotiate a lease and negotiate, build everything. It's just, I heard other operators say big numbers and I go, that's not even humanly popular and you know this, but anyway, They know it and they say it anyway and it's just, they know it."

00:55:54,"But it's funny that they, yeah. Say it out loud and have that never in their brain. Maybe that's how some people work. But yeah, I like the e o s, let's make a stretch goal and let's Yeah. Point everybody at that and see if it works. Yeah. And also Jamie, I would say that our hope is that the 15 to 25 locations over the five to seven years,"

00:56:14,"that's organic, that's binding the building and getting it up and running. But the reason you go from 2015 to 25 to a hundred by year 10 is because once you have 15 to 25 in your portfolio, you're probably strong enough to consider strategic acquisitions of other operators. So that's also part of the plan is not just organic growth but you have organic growth with the strategic acquisitions."

00:56:41,"Yeah. What do you see are the biggest market drivers to making that growth possible? Or challenges what little Real estate is in, it's at the heart of, of our business, right? Yeah. And the macroeconomics should not be underestimated because for us, if you're a rapidly growing company, fundraising on a speed round series A, series B macroeconomics mean a lot."

00:57:09,"So Silicon Bank, valley Bank going under, yeah, it may not affect our members and our ability to lease up, but it will affect our fundraising abilities, right? So you have to pay attention to those factors in the macro economy and take that into account. And I think what we have that is exciting is that it's a very flexible model that works with more than one specific type of asset that what we talked about before,"

00:57:36,"that it can be in the urban core in a class B or C warehouse, or it can be in a class A warehouse. That's fine, it's adaptable. And so we can actually be opportunistic as to finding the right real estate deal with the right owner landmark. So that's part of what the advantage that we have. But I, I'm, we're very well aware that we can't operate in a vacuum and some of the challenges are gonna come from probably factors that we can't control,"

00:58:05,"like the macro economic situation that we're living in right now or the real estate situation. But right now is favoring it. I'll say the real estate situation, we having landlords that have to either refinance their building Yep. Or they have to lease it up. Yeah. Like you said, they're not gonna give everything away, but they're more motivated than they were in our ability to take even an all office building and convert it into warehousing gives,"

00:58:31,"gives us a lot of options. Yeah. Yeah. Interesting. Okay. I wanted to hear your sort of level of optimism. There were some days when I wake up and I'm like, I don't know. It's A measure, it's a measure level of optimism. And I think I still go back to what I said earlier in terms of the need for our coal warehousing concept."

00:58:52,"I see that only increasing and I think there's gonna be more operators, which like I said before, that's great. People that we may acquire or they may acquire that. So it's okay. It's okay. There's room for more than one offering and there's gonna be different products that appeal to different people. Some are gonna be more industrial than others, some are gonna be more Coworking like Yeah."

00:59:15,"And more amenities filled. But yeah, there's gonna be a lot of probably operators cuz I do think that more and more people are moving towards e-commerce and they're doing their own business and they're finding new ways to make a living and actually have a better life. Life in general or work life balance, right? Yeah. Yeah. I still think in this industry it's hard to give secrets away because it's a simple model."

00:59:44,"Somebody could listen to this and think that sounds pretty easy if it's not right. You guys know that. Like the things you're figuring out, there's a, there is a lot of secret sauce in your sales process and actually the things that you're accomplishing are not easy at all. It takes a lot of little wins across the board to pull that all together and to create the right offering and the right vibe."

01:00:08,"As Sharon said, as Shannon said, that not everybody can execute on that. I think most people cannot actually. So I still think it's unusual to walk into a profitable, really well run shared office space or we'll extend that to co warehousing. So I think, yeah, I'm excited to watch your journey and see how this goes. So we'll have to have you back on."

01:00:34,"Thank you. Got more than six months under your bell. I can't wait to see. Yeah, you know where you are. Thank you. Yours? Yeah, thanks for taking the time to do this. I really appreciate. I'm sure you've got a lot going on and make no small plans, so thank you for sharing your story. Yeah, we appreciate,"

01:00:51,"we appreciate it. We appreciate the office, the things you offer and the resources that you provide as well. That's been invaluable. Good. Glad we keep absolutely away. Awesome. Thanks guys. Thank you. All right, thanks Jamie. Thank you for listening to today's episode. If you like what you heard, tell a friend, hit that subscribe button and leave us a rating and review."

01:01:18,"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."

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