359. From Investment Banking to Coworking: Mark Fornasiero's Secrets to Suburban Success
Resources Mentioned in this Episode:
Everything Coworking Featured Resources:
Masterclass: 3 Behind-the-Scenes Secrets to Opening a Coworking Space
TRANSCRIPTION
359. From Investment Banking to Coworking: Mark Fornasiero's Secrets to Suburban Success
00:00:00,"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 you confidently stay on top of what's important and what you can apply to your own role in the co working industry."
00:00:44,"Hey there. Before we dive into this episode, I want to share with you something that you may know. If you're a longtime listener to the podcast, virtual mailbox services are really taking off and your coworking space is in the perfect position to benefit. If you are ready to kickstart or level up your virtual mailbox service and add a reliable revenue stream that grows and compounds to your business, we've got just the thing for you."
00:01:12,"We're excited to open up the mailbox moneymaker challenge again. Starting on September 16, we'll spend about ten weeks guiding you through the entire process, step by step. We'll cover everything from setting up with the post office to finding clients, pricing strategies, marketing your virtual services on your coworking website, and more. You'll get everything you need, the forms, the templates, the sops that you need to keep things running smoothly."
00:01:40,"The best part? You could have your virtual mail service up and running by November. Registration starts on September 3, but you could get on the waitlist right now@mailboxchallenge.com. dot last time, one of our challenge members secured nine leads in just one week. Get on the waitlist@mailboxchallenge.com. dot welcome. I have with me a special guest, a canadian outside of Toronto, Mark Forniciro. He is the co founder at Ace co working in Oakville, and Mark, we've never met before, so this will be fun."
00:02:16,"I'm very curious about your background. You are a recovering investment banker somehow turned co working space owner, assuming your LinkedIn profile is up to date. You're a certified mindful meditation teacher and you've been practicing meditation for over twelve years and have spent several months on silent retreats. So I feel like there must have been some sort of turning point in your life where you're like, okay, I'm done here."
00:02:46,"So I just love to hear your story and a little bit about your professional background. Your coworking moment, how did that happen? And sort of, yeah, where you're at today, and you're doing some really interesting work. So tell us about it. Thanks, Jamie. I did spend a little over 20 years in the investment banking world, capital markets particularly. So that's those big trading floors that you would see pictures of in the news or movies or something like that."
00:03:14,"And spent my whole career in places like that, primarily in New York, in the tri state area, in New York and Connecticut began and ended my career in Toronto, which is where I'm from originally, but the bulk of my career was in the States. You kind of age out of that industry at a certain point. 2012, I was in my late forties and had definitely been done everything I could possibly do in those roles."
00:03:38,"And the bank I was working for at the time in Canada, we kind of decided to part ways, and I was like, this is. I'm just done with this. And really resisted the urge to get back on the interview train back on Bay street, which is the canadian version of Wall street, and said, I'll just take some time here to sort of reassess and see what I want to do with the rest of my life."
00:03:59,"That was 2012. I was 47. So I. I felt like I had a whole nother working life ahead of me. Had the good fortune to be able to take the time to see what that was gonna look like. And to cut to the chase, I ended up working with a couple of partners in a consulting business that targeted small and medium sized businesses and helping them develop strategy, particularly around exits and things like that."
00:04:23,"So it had a lot to do with valuation, and I was very comfortable with numbers and just the business side of things. And so we kind of built this business together for about eight years, and then continued to do that on my own. But somewhere along that line, around 2015 ish, I found myself talking to a founder of a coworking space in Toronto. Didn't know much about coworking, loved what he was telling me, loved the space, and had been working three, four years on my own, just as you do from home, coffee shops, whatever."
00:04:55,"And I was back on the train back out to Oakville, which is where I live, which is a western suburb of Toronto. And I thought, man, we need one of these things in Oakville. And so I sat down and talked to my wife, Nancy, who was doing a lot of writing at the time. That's kind of her background, and she's really the brains behind ace. But I said, I was in this place."
00:05:14,"It looked really cool. We should open something. We should do one. Yeah. It started out with, I should do this. And then it kind of got morphed into we should do this. And she had actually just written a bunch of articles on the industry and she's like, yeah, no, I know all about it. Interesting. That was like, 2015. We didn't really do anything with it for about a year, and then we started to just think about it a bit more deeply and investigate local sites and things like that."
00:05:41,"And as we kind of uncovered really what the industry is about, that it's really about. It's not so much about the physical space. Great physical space is just like table stakes. But to really build a good environment and community and all the things that we're interested in, I was like, this is in your wheelhouse. Like, this is. You can really shine in this thing. Now, she had never done anything sort of businessy before."
00:06:03,"Yeah, but, you know, great instincts around it. And I said, like, I'll help you with all that part. But as far as, like, relationships and building a culture and a community, I got the spreadsheet. You get the community. Even though we're married and marriage and business partnerships don't always mix. But this one has found a local place, local site, partnered with the landlord to build it out and launched that in 2019."
00:06:32,"And at the time, we were the only game in town. Oakville is about 200,000 people. It's not a small place, but the greater Toronto area, the GTA, is, like, well over 4 million. And at the time, we were the only co working option. There was a Regis out here, but that was about it. And now we have three other competitors, including a staple studio and then all the office landlords who have kind of morphed into this since the pandemic."
00:06:56,"I wonder if Canada is slightly or maybe Toronto was slightly ahead on the landlords, like, kind of doing it themselves. Do you know Kane Wilmot? Have you met Kane? Yeah, he does some work with landlords and he's a great operator. The landlords don't generally do the community piece. Right. But they have space on flexible terms and we don't see that it's not going quite as fast here, maybe in markets like, man, I mean, Toronto is clearly."
00:07:27,"It's a major international city, so, yeah, yeah, it's very haphazard. Like, they. There's no strategy around it, they just. They're bleeding and they have empty offices and so they'll. They'll just throw anything out there and anything's better than zero, which is what they're getting. In a lot of instances, it's hard to compete with that, because we. We can't offer zero. The pricing. Exactly. That's what Kane talks about."
00:07:50,"It's like they're right, so we just kind of have to ride that out, I think, like, that's not a long term solution for them, but nonetheless, that's a competitive stress in our market. So, yeah, so we launched Ace. It was. We got off to a flying start. It was going all gangbusters through 2019 and the first part of 2020, we managed to navigate our way through that. And actually, in 2022, while we were still under lockdowns up here, we launched our second site, which is really two blocks away from our existing site, and it's focused entirely on private offices."
00:08:23,"At Ace Robinson, which is where I'm calling you from now, we have a full suite of co working desks and dedicated desk meeting rooms and stuff like that. 14 private offices here. But at Ace Trafalgar, which is around the corner, we just wanted to offer offices because that's where all the demand seemed to be coming from. So, yeah, we took another location with 23, 24 offices there and boardroom meeting and."
00:08:47,"Yeah, launch that. So now we basically have these two sites that are very close to each other. We try to run it as sort of one. Homogeneous. Yeah, I've seen. So is the office locations fully staffed or do you kind of float somebody? Yeah. So we have. There's always somebody at both locations. Yeah. Okay, got it. Was the second location purely a response to the pandemic or were you already feeling like we need some more private office supply?"
00:09:15,"Yeah, no, we were. We had been looking for more office to open another site. We didn't know another location. We didn't know where that was going to be. We kind of know what we're good at. So we weren't going to go to. We looked at a couple of opportunities in Toronto downtown. That's not our jam. Like, we know how to run co working in a suburban environment. And so we shied away from those, but we were continuing to look to expand in this stretch along Lake Ontario, which, speaking of, you're like, two blocks from the lake."
00:09:45,"So our opportunities that we were looking for were going to be in that, along that stretch. And we found this one that was, like, around the corner. It had already been carved up, for the most part, into offices. It was an old banking private wealth office that we hadn't been touched in, like, 30 years. So again, we found a willing landlord who invested in the property with us to help do the build out."
00:10:07,"Yeah. Yeah. So both locations are leased yes. Yeah. How many square feet in each one? About 5500. In the initial location, Robinson and Ace Trafalgar is about 7000. So it's over. It's close to 13,000 sqft. Yeah, it's a great size and in combination. Okay, so we'll come back to co working in a second, but tell us about the investment banking consulting exits strategy for small businesses. Then co working."
00:10:39,"Did the. Yeah. And then. So at some point in here, the mindfulness meditation certification came in. Can you tell us a little bit about that? Sure. So during this little epiphany I had in 2012 of like, wow, I can do anything I want. With the second half of my life, I started opening up some, just learning, like more about sort of everything. So there's this whole personal development culture now of books and courses and podcasts and writers and leading thinkers and things like that."
00:11:12,"That was all new to me and it was seemed a little less fleshed out 1012 years ago than it is now. But in any event, I started tapping into this, into this sort of zeitgeist and stumbled across a Tim Ferriss podcast. And he was interviewing someone, all high achiever, person of sense of. Tim was asking, I'm like, so what do these high achievers you coach or facilitate with?"
00:11:36,"Like, what do they have in common? And this guy said, well, three things. I don't remember what the first two were, but the third one was meditation. And I was like, oh, that's interesting. To me, it was just a word. I didn't have a clue. And I thought, hmm, well, I want to be a high achiever. Let me look into this thing. I bought a book by Pema Chodron."
00:11:55,"It's a small little book that's called how to meditate. And I just started observing my breath and just noticing things and gain this daily meditation. Then I listened to a podcast with Andy Petticoan, the founder of Headspace. I thought, oh, wow, he's a cool guy and that's a cool story. Let me try this headspace out went down the rabbit hole of headspace for like three years, then found some other thought leaders of Jack Kornfield and Tara Brock and others that are sort of giants of the north american mindfulness meditation genre."
00:12:28,"And then it kept coming at me again. I would meet people who had gone on silent Vipassana retreats, which are these ten day silent retreats where you just practice and learn and work with teachers. And in the course of like two months, I met three people that had gone on these retreats and I thought, oh, that's, that sounds like a real challenge, and that's a real chance for me to deepen my practice."
00:12:49,"So I went on one of these ten day retreats. Incredible experience, deep in my practice, deepen my commitment to it. And this was all running in parallel to my consulting work. So I kind of had these two things going on. The consulting work, which is what I did at this point, Ace was up and running. That was primarily Nancy's baby, but I was dissipating in that and then just continuing to research and practice and work on this mindfulness piece."
00:13:14,"And I, at some point along the line, was offered a chance to take this mindfulness two year training program with Jack Hornfield and Tara Brockley and others. And I thought, well, I don't necessarily know that I want to teach anybody this, but I think it is a chance for me to deepen my understanding. I came to the realization that I thought the consulting work had kind of run its course."
00:13:34,"I was dealing with a lot of founders and owners, c suite, who could use some meditation, who could definitely use a lot of self awareness and meditation. And I just found the work I was doing with them was it would just be left hanging, do a lot of strategy development, and then squirrel, and then it would just go away. And they make a big investment of time and effort and money."
00:13:56,"And then the change wasn't happening. And I got really interested in, like, why isn't, why aren't they changing their behavior? Why aren't they changing? And I didn't want to do that work anymore if it wasn't going to result in something really impactful. So I kind of left that commercial coaching and consulting to the side, and I developed this program called the Clear Insight program that sort of took the best part of the commercial frameworks, the decision making frameworks, and all this mindfulness training that I developed and kind of mashed it together into like a one on one coaching program, which is the way I prefer to work with people now and just get to spend some time getting quiet and just understanding."
00:14:35,"Like my belief at least, that in order to have meaningful change in your life, deep, deep change happens when people decide that, number one, that they want it to be different. And that conversation can get expedited if they're really clear about the values that are important to them. So going back to my founders and CEO clients, they hadn't had a conversation with themselves about money, control, identity. A lot of them, their names were on the building."
00:15:02,"So we're talking about pushing. I'll be talking to them about pushing responsibility down. You can't do it all. Like, you have to let go. And their whole identity was wrapped up in this business, so they weren't having these, like, more meaningful, deeper conversations in order to facilitate change. And that's what I'm interested in doing and down that path. It's not for everybody. Feel. The mindset that lays the foundation for those types of conversations is rooted in the mindfulness practice."
00:15:28,"So that's where that whole thing came together. So I kind of get the best of both worlds because I am a commercial person. I do like small and medium sized business. I spent time in institutional. This sort of SME world is really interesting. There's always new opportunity and people, my energy. So, yeah, I get to do both. So the profile of the person that you do the one on one work with, do they tend to still be business owners or."
00:15:56,"Not necessarily. It's more about the desire to change. Yeah, I do get corporate people coming to me who are just like, is this it? And like I said, those companies in those people have responsibilities. I get all that. But you can broaden your expectations and your experience of life. I live in the world more of entrepreneurs and owners and CEO's. You know, I see more people like that."
00:16:23,"How do your clients find you? Mostly by referral and word of mouth. I don't have, like, a social media presence. I think people who are certified in mindful meditation probably don't spend a lot of time on social media. So that makes sense. As little as I need to. I have my LinkedIn page and my websites for my offerings, but that's about it. Yeah. So it's mostly referral. It's interesting."
00:16:50,"You mentioned in my early days, coming out of the banking world, it's like steering an aircraft carrier. Everyone just thought of me as the banker. I mean, this is the question I keep thinking, like, what do your banking friends think about what you're doing now? I mean, I have an MBA. I went to business school, and I saw, yeah, I wanted nothing to do with that. I mean, I was never going to go into banking, but I dated a Canadian, actually, who was a banker, and I said, that's a."
00:17:20,"That's it. I'm not going to do that. We're moving to New York and then we're going to live in Greenwich and we're going to. It's a lifestyle thing. And I grew up on a farm in upstate New York, so I like money, but you get into it. It's such a specific world. The change that you made is really incredible. The fact that you could tell yourself, like, okay, I have a choice, right?"
00:17:42,"Like, what do I want to do with the second part of my life? What you do when you're a banker might have been sort of hard to grapple with a little bit. Not so much from the judgment from other people, because most of the bankers I knew at that stage of my life, if you had offered them a way out, they would have taken. They would have. Yeah."
00:17:59,"If I said, here's a guaranteed way out with a 25% pay cut, most of them would have taken it. There were 50% pay cut, probably more than 90% pay cut that I took. Self inflicted. But most of them, it's just, it just is what it is. Like, I just find those few people climb are the ladder climbing types that will do the politics and all type of stuff."
00:18:20,"And it's fine. We have a lot of financial success there, but it just wasn't for me. Okay, so I have to ask, when wework. Got it, I can't even remember how many billion, what the valuation was in the billions in 2019 or something. Yeah. What were you thinking? I was like, wow, man, Wall street strikes again. I'm like, they are going to convince people that this thing is worth $37 billion."
00:18:48,"I mean, anybody could have put money into that deal. People sent me the offer sheet. I was like, this is outrageous, man. There's no way this thing is. Because at that point, you knew what a pro forma looked like. I mean, you were early in the business, so you knew. You were like, well, there's. We haven't gotten there yet, but you knew, like, and your banking, like, valuation."
00:19:09,"Yeah. Why did that happen? I mean, anybody who'd ever seen a pro forma was like, that's like, how could. Did they not call anyone, like, the due diligence? I always just think, like, did they just not do it? Were they just, like, totally enamored by Adam Newman and SoftBank and just, okay, we're not. I mean, yeah, a lot of that, I mean, that deal actually did fall through, right?"
00:19:35,"Like, when they went to go public, like, they finally said, hey, the emperor has no clothes. So people finally woke up. But, you know, many years leading up to that, it was compelling. That was an era where you didn't need to show profitability. You just needed to show top line growth. You just needed growth at any cost. Right? Money was free. The Softbank founder just kept re upping and re upping, and he took Alibaba and whatever all those other winners are."
00:19:58,"So vc private equity world is like, well, they're in. I'm in a. Because everyone's smart money until they're not. But they don't wanna miss it. Right? You hear about all the fomo. Yeah, yeah, fomo. And all the investors who are like, he was an early investor in Facebook, and she was an early investor in, like, everyone's a winner, but for everyone who said yes to renting out other people's couches or hopping in the back of a stranger's car, that stuff sounded crazy."
00:20:26,"Totally crazy. And way more people said no. Smart money, private equity people, way more people said no to that, then said yes. And then they're looking back like, oh, my God, could have been in there, like, in the first round, the a round, the b round, whatever, the seed round. And I said no. And here's another high flyer. I don't want to miss that. So on, on they get, and it becomes a self fulfilling prophecy, right?"
00:20:48,"So every new round is a higher valuation. Higher valuation, until you just reach too far. And then it was this culmination of, you reach too far. There's no profitability. And, oh, by the way, the story's changed. It's not about growth at any cost. It's about, do you make any money doing this? And so they timing half of life. It's timing, I guess. Bad timing. Yeah, I know. Yes."
00:21:14,"Timing is. So do you listen to. There's a podcast called how I built this? Yeah. And he always asks, like, is it luck or is it hard work? And it's like, you think about all those stories and how meaningful their timing is, and you do realize, like, well, there's a lot of smart people out there, and sometimes they just. Right. Right place, right time. I get a lot of calls from people who want to sell this business."
00:21:40,"And it's. There's. It's a tricky business to value because it's so based on the lease. Right? Like, your lease is really everything in that deal and what's left on it. And there's not a lot of value in your furniture like, that you have to give away if you want to get rid of it. And certainly people have this debate about valuing the business based on a multiple of revenue or a multiple of EBITDA."
00:22:12,"And I would love for you to just confirm, like, nobody's getting valuations on revenue these days, especially, like, a local physical, lease based rent arbitrage kind of business. Do you have any sort of advice you'd give to somebody who's looking to value this type of business, like all small businesses, we were launched to sell. As I would always advise my CEO clients, you're going to have an exit one way or the other, can be on your terms or someone else."
00:22:44,"We have no idea when this exit is going to show up. It could be this methodical approach that you think is going to happen in 15 years. The buyer may show up next week, something may happen in your life that's positive or negative that forces your hand. So exit is always on the table and to be ready for that. So to answer your question, valuation. Yeah. I don't think our company would be valued on a revenue basis."
00:23:07,"We did the work early with my financial analytical hat. We said no to a lot of locations and a lot of leases because the numbers just didn't work. Regardless of whether it was an appropriate location or nothing. I have like a spreadsheet that we know hard to do. You're like, we're listening to the numbers, not fall in love with anything. And you can, at this point, having been in this for, whatever, seven years, like, you can just eyeball a place and figure out this yes, no, or when we go into competitors, locations, whatever, it's just like, I don't think they're making any money."
00:23:41,"They must own this building because. But I love that you said that because I hate saying it, but I often say to people, like, do not walk into your favorite looking co working space and just say, I'm just going to reverse engineer what they're doing. Because when you don't really understand the model, it's very possible, almost likely, that they're not profitable, especially if it's exceptionally good looking and they've spent too much on the build out."
00:24:08,"Yeah, yeah, totally. I mean, we bootstrapped this whole thing ourselves, so we don't have any outside investors. Like I said, in both instances, we found buildings that were a little tired, but had a lot of potential where the landlord was amenable to co investing with us. And then we just cranked these numbers out and we're like, what do we need to succeed? Like, what do we need to."
00:24:30,"In the first location, it was like we only had four offices to start. We thought we were launching like a pure co working business with lots of desk space and things like that, which we did, and we modeled everything out and we made an assumption around meeting room time and usage and four full offices, which was all we had at the time. We have 40 now, but, you know, we had it down to a number."
00:24:51,"The business was going to rise or fall on whether we could sell 35 hot desks. I remember that number until my dying days. And we'd be halfway through the build and writing checks like crazy. And Nancy, and I'd be lying in bed, she's like, what's the number again? I'm like, 35. 35 hot desks. We sell 35 hot desks. We're not going to bleed. And we got there really quick, so it was great."
00:25:15,"We became profitable within, like, a handful of months. Cash flow positive within a handful of months. But we knew exactly what we needed to do and what our costs were going to be. And because it's our business and we're self financing, we didn't have the 80 inch smart tv, you know what I mean? Like, all the beautiful bells and whistles that you see when you go into some co working spaces and things like that."
00:25:37,"$20,000 investment, right? Yep. I know what meeting rooms cost in this town. I don't know how you're making that back. Yeah. Anyway, unless it's your model. I mean, like, IQ Kane will tell me sometimes what he spends on some of his furniture. But their model is really unique. They're serving, like, enterprise, high end. They're getting the price point. But to your point, and I also love you. You knew that it was 35 and you believed it."
00:26:08,"You said, okay, it's 35, and we believe we can do that. You still wait, lay awake at night and get. I still. I mean, I opened in Chicago in 2012. I can still, like, feel that feeling of, like, anxiety of like, what am I doing? Is this. Is this going to work? But you knew it. And I say that to people who are working on spaces. It's like, here's the number, and you have to believe it."
00:26:31,"Like, I can't tell you if it's right. I can tell you if it's reasonable, but you really have to believe it to do this. Yeah, 100%. And I do think it comes into what's a multiple of cash flow, because there's. We do generate respectable amount of cash flow, so someone will pay a multiple for that. Yeah. And what we've tried to really focus on, one thing I really emphasize with Nancy as she was building up the operational side of the business, and that's really her."
00:26:59,"She's the operational community person, is a system that's scalable. So when we. And by systems, I don't necessarily mean, like, just our technology. Like we use exodus. Like, I guess some number of people do in the industry. Like, it's not just that. It's like, how do we onboard? How do we off board? How do we orientate people to the space? Everything is written down. We have a wealth playbook manual."
00:27:22,"Playbook. Anybody could parachute into this business and in six weeks be up and running. Like, not to the extent we are, but can get up and running fast. And they could take that playbook and do it as many times as they like. They could leverage it again. So in my mind, that would be the pitch to a buyer. This is a good business. We have a really powerful brand locally."
00:27:44,"I had the local chamber of commerce take six offices in our space. That is my favorite. I will often say to people, can you go talk to the chamber or the economic development we have? I don't know. Canada has that. The economic development center, like, having them in your space, if you really want to be ingrained in the community, is fantastic because then you just become this hub and it's really like, it just becomes this ecosystem when you're trying to support local business."
00:28:15,"So that was a big win. Nancy fostered that relation. Took five years for that to happen. They had existing office space, model change, pandemic. That was one of the businesses felt the pinch of the slowdown and things like that during the pandemic. Of course, chamber of commerce memberships are going to be the first thing to go. One of the first things to go. But they're back and flourishing and they wanted to be."
00:28:38,"We're in a downtown location. They were a little in the suburban area of our suburb. They have a young team. We have a vibrant downtown, as you mentioned, with two blocks from the lake. Like, it's a very attractive location. But that took five years to build that relationship, have them trust us. And it's a huge testament, I think, to our brand that Nancy's built that we're able to attract a member like that."
00:28:59,"And the longer term thinking, because, right. You go down to the chamber and they're like, well, we have a five year lease. And you just, okay, check those, cross them off the list. It's like, nope. Now you got to stay in front of them for the next four years so that they are thinking about it right. When they're. Yeah, it's hard to do, especially, I mean, as business owners, like, you're so focused on next month or the quarter, and what can I do now to grow versus the longer term?"
00:29:29,"I think that's a really hard focus. It is. And that's the challenge of really successful businesses. Like everybody, entrepreneurs work hard. It's never because they're not working hard. They'll pedal like crazy to keep the lights on. Yeah, feed the family and feed themselves. But to take the time to be strategic about the next six to twelve months and 18 months, that's where you separate the high performance companies from the nice little cottage industry."
00:29:57,"Congratulations. You can pay yourself, but you're not going to get paid for it on the way out. You need to have that other piece. And we were fortunate enough to put that expectation on ourselves at the beginning. And as we built the business, we've always had a strong eye towards building systems, being strategic about how we want to grow the business, building our brand, the types of businesses we partner with, the not for profits."
00:30:21,"We support everything. It's just trying to build a story just takes time. Does Nancy still write? No. So much to her chagrin. I mean, that's her someday. We both have our some days. When we're done with this and whatever the third part of our life is, she'll definitely go back to that. She's a really gifted writer and turns out a really good business person, too. Sounds like kind of a good yin and yang."
00:30:49,"So do you office in the space? I don't have an office, per se. Neither of us do. We work in the space. This was one of the things that I noticed when we went to meet a local operator who had the best corner office in their space. I'm taking the storage closet. Yep. You took this office, huh? Yeah. Okay, so number one, we want to monetize every square inch that we can, but secondly, we want to be."
00:31:17,"I don't want to be in an office. My people are out in the hot desking area or in the lounge, and I want to connect and I want to put people together and, yeah, so we're out there. What's kind of changed since the pandemic? And I know Canada was, I mean, it just took forever. To anybody with a physical business, it's amazing that you made it through that."
00:31:42,"Did you? I mean, yeah, we won't go. I mean, I feel like it was yesterday. It's so long ago now. I'm sort of like, we should stop talking about it. So long ago. But meeting room business, what are some of the things that are maybe different now? Yeah, so some of the echoes of that period with meeting rooms, I mean, certainly now teams are much more disparate. So for the companies that have decided to go fully remote, they still want to get together from time to time."
00:32:10,"So we do see more business in our, like, all day meeting room, like boardroom strategy sessions and things like that where we're located is we're kind of halfway between, like this town called Hamilton, the Niagara Peninsula, which is west of us, and then we're only half an hour from downtown Toronto. People who live in both directions. Opel is like right in the middle and we hear that a lot."
00:32:31,"They're like, this is really convenient for us because I can bring my team in from the surrounding area and we just meet downtown. It's great. So we see more of that. The demand for private office space surprised us. I don't know if that was coming anyway or if it happened because of the pandemic. There was a way for us to ab test that. But like I said, we started this business with four offices and now we have 40."
00:32:53,"They're not awful, but 80%. I think people who are no longer working in offices, but spent their whole career working in offices and want to work closer to home, want a door. We sell a lot of offices to people who look at and think, well, you could save yourself. So the demand for office space was a little bit of a surprise. On the downside, I think we've done some permanent damage to people and their psyches."
00:33:15,"They're very comfortable working for. They'll tell you how comfortable they are working for home, and then next breath, tell you how lonely they are. And so we really try to, in our branding and in our messaging, just like gently talk about that. They just want to be around other heartbeats. They're so happy to be in a room with other people in it that they don't have to feel obligated to talk to the way you do in an formal office setting."
00:33:39,"They're just around and there's heartbeats. And I'm not by myself, but those are the people who come here. There's a big segment of the working population that's still working from home. They think that they're happy in it, but they will tell you. Part of our pitch when we're doing the tour is like, half of our members have nicer offices in their houses than they do here, but they're here because they want to be around other people."
00:34:04,"And so we get to attract those types of people. Our hot desk area at Robinson street, which is where we do all the hot desking and day passers and flex desk memberships and things like that. Month to month membership, we used to have room for 40 people in there. Well, we still have room for 40 people in there, but during the pandemic, we had to take half the seating out and that room has never rebound."
00:34:27,"We've never rebounded. I don't know that we'll ever see the month to month flex desk appetite the way we did. And that room used to be full in 2019, we would have 37 people in there had to do that. And then we pulled the seating out, half the seating out, and we've never put it back in the way. Our desks are completed, they're in pods. So you could have four people in a pod, and now we have two people in a pod, they have a six foot workspace, and we're like, well, I guess someday we'll put the seating back when."
00:34:58,"But I don't. Yeah, to that extent, that would be the downside of that. But we do have this other engine offices and much more meaningful utilization. So you added offices after you were open to the original space? Yes. Yeah. So we had our original footprint that had four offices in it and a 600 square foot event space that was just this big, empty room that we finished out the way we did the rest of the space and thought, oh, we can have seminars and workshops and, you know, book launches and all this type of stuff."
00:35:30,"And we did. We also learned that that's a business unto its own. Like, keeping that room full. I always tell people, like, look, you can add a nice revenue stream, but you gotta work for it. And that requires probably additional staff. Like, it's its own little p and l. Totally, you know, 600 sqft. So I don't. Yeah, make that work. Generate from that. It wouldn't make any sense."
00:35:54,"We did run events in there. We used it as spillover space from our hot desk when you were full. Yeah. And then there was, in our building on the second floor, there was another unit that our landlord had that was empty, that was maybe another 1200 square feet that we took on, I think, in year two. And we put seven offices up there because we were starting to feel this demand for more offices."
00:36:17,"So we added seven up there, and then we had a corner of the existing space that was like an extra lounge area to our other lounges that we thought, that's not smart. So we added two offices there. The event space, we added four offices in. So we went from four to six to eleven to 14 offices within our existing footprint, and then this additional unit that we took upstairs."
00:36:43,"And even in that point, we would just be turning people away because people said, you have an office. We would say no, and we could never accommodate a team. Like, someone would come to us and say, I need four offices. That's not really. Yeah, but like, the chamber, for example. Yeah, yeah. So the chamber ended up taking that whole upstairs unit. So that's nice. That's like six offices up there, which is."
00:37:02,"We were going to actually let that go, to be frank, because it was like, this is like half full. It's just the leases were not concurrent. The lease was not recurrent with our existing footprint lease. And I thought, was this really worth it? Let's just scale down the. Scale down the capacity a little bit of. We already brought on a second location and then they came up and showed up and had this appetite to move in."
00:37:28,"So, like. Okay, solves that. And we were able to accommodate that conversation. There's no way we would need to do that. Yeah. This additional capacity, I'm guessing in your market, most of your leads are organic, like SEO. People find you, you're not running ads. No, we've never, I don't think we've actually ever paid any money for advertising. We do in kind. So we have like one of our numbers, has one of the local magazines that circulates through the stores and stuff like that."
00:37:58,"Yeah. Super glossy, really nice. And they, we do a trade of in kind with them. We've done similar things in magazines in this market. It's a pretty affluent market, so high end real estate agents and retailers will have their own magazines that they'll always pitch you and say, we don't do that type of thing. But then they'll use us for a photo shoot. They'll use our space for a photo shoot and they'll say, okay, well, how about you use your space and we'll give you like a half page ad or a full page ad."
00:38:26,"Sometimes they write articles about us and stuff like that, but we've never bought Google Ads or anything like that. Just the sort of drum beat of Instagram and Google. I find in this market, like, this conversation comes up a lot because we meet a lot of marketing people and a lot of SEO people, digital marketing people, a lot of them are our members. And I love what they do and they're great at it when they are always kind of perplexed about why we don't invest in that."
00:38:54,"I just don't think this is a product or service that you can't push it to people. I can't sell this the way I sell a set of steak knives when the need arises, when people feel this, when they google, I can't take it anymore or whatever, or whatever. And they google, right, office space, downtown Oakville. You need to be there. Yeah. So we're the first organic hit. Most of the time we have, like I said, we have a great reputation in the business."
00:39:22,"We've had people be members leave and come back. Like, some people are on their third tour of duty with us. Yeah. It's like they go through seasons and you just like, yep, they come in, they come out. Yeah. So I think that speaks to our brand and our reputation in the local market, and that's. That's kind of what we lean on. I mean, we struggle with it, because when you hit these air pockets of no tours and no whatever, it's like, man, does this run its court?"
00:39:49,"Like, is this tactical strategy? And then you don't have the lever to pull to your point, like, okay, turn on the ads and just get in front of more people in some markets. Yeah, you have to run the ads. Cause you have to show up in the first three in your market. But it's harder because you can't just throw money at the problem or you just have to kind of ride it out sometimes and know that you have that long term strategy in place."
00:40:13,"Yeah. And invariably, when we hit one of those air pockets and then we start questioning ourselves, then it comes again in another way of interest. It's just like, I don't know what I did different this week than last week, other than we keep doing the same thing, but here they are. We remain confident in that, but we say to ourselves all the time, let's not believe our own b's here."
00:40:34,"We may need to switch, we may need to do something different. Let's not fool ourselves into thinking the same thing's going to work. All with that. I almost kind of appreciate the husband wife because you both understand the business model. I think operators, you hit an air pocket and you're a little stressed. It's hard to work through that with the spouse. And probably, like lots of small businesses, your revenue fluctuates, right?"
00:41:01,"And so your mindset and all those things, it's hard. I love the term air pocket, by the way. I might have to borrow that. Fortunately, with my business partner is we don't seem to hit the energetic lull at the same time. So when she's like, oh, my God, this is it. It's over. I'm like, we've got, like, this five things happening, and then two months from now, I'm like, oh, jeez, this is."
00:41:23,"She's like, no, it's not. We have this thing, and so we don't seem to hit the lull at the same time. So, yeah, I like waves we kind of cancel each other. Yeah, no, I love that. Well, so kind of on that line. I've scheduled you for 45. We've already gone over. I love your background's really interesting. A couple of parting words can be either mindset or business wise, a couple of pieces of advice that you would give to somebody who's just starting out or maybe thinking about the next step."
00:41:54,"Yeah, sure. Business context. Honestly, the thing I would recommend to anybody who's starting to contemplate a new business beyond just like, what do I do? Like, if you have an idea and you're starting to do your homework, so many times people just. They're not honest with themselves about the financial metrics of what it is they're scoping out. Like, we just see it. Even just in small businesses along our main street here, which is called Lake Shore roads, these retail businesses come and go, coffee shops and burger joints and stuff like that."
00:42:25,"And it's extremely expensive real estate. What were they ever thinking? That they were going to sell enough $3.50 copies to justify even just the rent? So just to be. Just run. If you don't know how to run numbers on a business, just spend the money to find someone who does. And be brutally honest with yourself about the assumptions you're making in terms of revenue, costs and things like that."
00:42:50,"Again, if you don't know how to do that, plan someone do that. I guess why people don't do that is because most of the time the answer is no. Like, we said no to 20 locations before we said yes to Ace Trafalgar, the second location. And you want to do things, but it's like, this is just not going to fly, or it only flies on these terms. And this landlord or investor or person, they're not there, so be it."
00:43:13,"No judgment, just everybody does their own thing. So, yeah, financially means test your opportunity, and then you can do all the fun stuff about building and connecting. It never gets fun if you do the wrong deal, right? Yeah. Yeah. Then you're just underwater. And I say this all the time to my coaching clients. I'm like, when you put your head on the pillow, those conversations that are just racing through your mind, like, you're not alone in that."
00:43:39,"But, you know, what can we do to address those things? And so if those conversations are the result of you not having a done your homework, that's avoidable, that's unnecessary suffering, as we like to say. Pain is unavoidable. Suffering is a choice. And so if you put yourself back yourself into that corner, that's something that didn't necessarily need to happen. So that would be my number one business recommendation to people."
00:44:01,"It doesn't matter what you do, still working or something else. And on the mindfulness front, the practice, the path that I'm on in this meditation practice is much simpler than people think it is, and it's just about a different way of being. There's really less to do when you're practicing mindfulness and meditation in particular. In the way that I practice it and I've been taught it, there's just really less to do."
00:44:26,"But that is not easy for people. My recommendation to people in the early days of setting up a practice is there's actually less to do here than you think, but that's harder than you think. And what we're going to learn is just how to be like, how to just kind of roll moment to moment. Living in the world we need to live in the world we need to, as Ram Das said, remember two things, the law of impermanence and pay your taxes."
00:44:49,"So we need to be regular people, but we can do it in a mindful way. And that's a different way of being than you're used to. But it's, I think it's a happier way of it. Okay, those are excellent parting thoughts. Thank you for taking the time to do that. It was great to get to know you and your story. I appreciate you doing this. Remember, registration for our next mailbox moneymaker challenge opens up September 3, step by step live training for ten weeks to start generating revenue via virtual mail service at your co working space."
00:45:24,"Get on the waitlist and find all the info@mailboxchallenge.com. dot 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. If you'd like to learn more about our education and coaching programs, head over to everythingcoworking.com. we'll see you next week."
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