220. Tessa McLoughlin on how she went from being a musician and single mom to launching a 25,000 square foot work and culture club

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220. Tessa McLoughlin on how she went from being a musician and single mom to launching a 25,000 square foot work and culture club

00:00:01 Welcome to the everything coworking podcast, where you learn what you need to know about how the world wants to work. And now your host coworking space owner and trend expert, Jamie Russo. Welcome to the everything co-working podcast. This is your host, Jamie Rousseau. This show is for you, if you have, or are looking to create something that is in the category of coworking,

00:00:42 but that doesn't quite feel like it describes exactly the type of community and destination that you're trying to create. It's also for you, if you have a big fundraising goal and you're struggling to make that happen. Our guests today, I met in 2016 and at the time she had a lot of passion and a vision for a place called the quench that came with a big ticket build out and a big funding gap.

00:01:13 Since then she opened a 5,000 square foot beta space, redeveloped 25,000 square feet of an old rail house in Victoria, BC. And then moved into that new space five months before COVID hit. She has such an inspiring story. You're going to love to hear it. So without further ado, here is my guest today. Tessa, McGlaughlin welcome. I am here with Tessa McLaughlin.

00:01:43 She is founder and director of quench culture club. And I cannot wait to hear your story tests up. So the last time we, I think the last time we connected was in 2016. And so that is five years ago. It would have been random I'm in September. So our, that was my first GWA conference. So the first year I was the executive director,

00:02:14 maybe it was 20 17, 20 16, 27, 16, 16. Okay. Yep. So we hosted our conference in Las Vegas. We have not had quite such a fun conferences that our conferences are very fun, but people were getting thrown in the pool. There were like, you remember the census hosted the party and the smear disco party themed party people. So that was a fun time. And you were there,

00:02:46 you knew the keynote speaker and anybody listening who is there will probably remember Adam, Adam will actually, he was our closing keynote speaker. He had a schedule change, but he was so funny standing on the chair. Yeah. He's like a big Olympic ROAS. So he's like this massive guy full of energy. And he's like the rolling Ted lasso. So you were running a coworking space for someone else or just like you had this vision of something you wanted to create.

00:03:19 And So, yeah, so I guess so in 2012, what happened for me is my life took this sudden turn. I had a very sudden marriage breakup and I moved with my two kids from Whistler to Victoria. And I was still in quite a lot of shock and, and trying to sort of manage being in a new city. And one of my big things was I wanted to not be in a city where it snowed as like I hate scraping the snow off the windshield.

00:03:56 It's like my, so anyway, moved to Victoria and I was doing everything I could to maintain a sense of happiness, like, because things were so chaotic. So I was like going to the gym here, going to yoga there. I had my background as a musician and I pitched this idea for a festival. So I was working on this festival,

00:04:18 but I had nowhere to work. So I go to coffee shops and I'd go get printing done elsewhere. Then I'd, you know, meet people for meetings in a Starbucks and all these things. And at one point I was just like this, this trying to maintain this healthy life and happy life is just bombards you with busy-ness. And I was like,

00:04:40 and that's contributing to not having a happy life. And I was like, why is this all in just one place? Like, why can't I have all these courses and things in one place? And I was like, oh, I should build that. And so that's kind of what steps, I think this was in 2012 ish. Yeah. I started my first coworking space in Chicago in 2012.

00:05:03 Right. You could even in Chicago, there were Sam Rosen had a space. I mean, it was very new industries into their first location after I opened mine in 2012. I mean, it was just very new. You were ahead of me. You would totally ahead of me because for me, I hadn't even thought of the coworking aspect of it.

00:05:26 Oh, there was barely a name for it. Then I write, I remember like, I can't even remember what I Googled to find it probably you had the same thing. Like I had this sense of what I wanted, but I didn't yeah. Back in that. Yeah. Yeah. And for me, I was just like, ah, and so as I said,

00:05:44 my background as a musician and my sister went to a very prominent acting school in Australia and one of the things I would love, it was like fame, really, you know, the old fame movie, the new one, but you know, you'd walk in and there'd just be so much going on. It'd be opera there there'd be theater here, musical theater,

00:06:05 there'd be jazz. It'd be classical ballet in. And I just remember the buzz that, that feeling you got of having all those people with these different disciplines around you. And so that for me was like, well, that's what I want to create. And so I started working on what it looked like. And, and while I was working on it and trying to raise money,

00:06:28 I was then employed by another company to open up their coworking space. So I opened up, they own the real Estate or were they yet? And there were a company that they had, you know, the typical ones that still happen. Now they have a lease. They, their company has shrunk, but they're still got this five-year lease. So they need to do something with the rest of the space.

00:06:53 And I think they had actually, as a consulting company had done something with WIWORK helped them consult right in the beginning stages. And so then I was exposed to we work and I was like, oh, okay. So that's what this is. It's it's co-working. And anyway, so I opened up with them and that's where I met Adam Creek. And then I left there.

00:07:14 I said, I'd give them a year. And then, and then after a year I left and started working full-time on, on quench. And it was full on because I mean, I didn't have a business degree. I didn't know how it's going to build it, but you know, it's a hot industry because you need space. So you can't,

00:07:34 it's not like I'm an accountant. I can just work from home and, and sell you my services. It's like, no, the service is space. So you've got to have, it's a very, capital-intensive like, oh, I got to buy how many desks and chairs. And do you remember when you realized how much a chair costs Multiplied to your point,

00:07:58 right. With chairs and you're beautiful, you're we linked to your website in the, in the show notes, but your vision was not, you know, Ikea furniture, you had a high end. Well, so tell us, who did you want to serve? Who were you so did maybe your vision changed over time, but I mean, manifested,

00:08:23 isn't it beautiful? Hi. So yeah. Tell us who was going to come to this space and what your model kind of looks like For me, what I wanted it to be was I was like, I would pay for something that was a service. So for me it was all about it being, being a service. And so being like a hotel,

00:08:44 but in terms of space and culture. So I wanted to make sure it felt like it was, you know, a place that maybe you couldn't this in your own house and, but you, that you could reap the benefits of it here, but it was also something for me that was really clear was this some high-end coworking spaces that I feel very,

00:09:07 like, I like people to feel really comfortable when they come in and as if they don't have to like, you know, tip toe around and don't move that magazine because it's so perfectly placed or that's just not me. You need to have a sense of comfort in your space. So we are more high-end for sure, but where we call ourselves a full service work club.

00:09:29 So there's no fighting over who packs the dishwasher, you know, everything's clean all the time. It's not that sort of grassroots, coworking, which is, has a valid place. And we have many of them in, in Victoria and they're great. And I send people to them all the time. But if you want an elevated experience, then, then that's what we are.

00:09:51 So you see on your website, you offer fitness classes. How does that fit? Yes. So we have a studio that obviously, because of COVID, that hasn't happened so much in the last 18 months, but we have a studio that is a fitness studio, as well as we can have conferences and things in there. So after this I'll be going to a hit class and then we have yoga.

00:10:16 And then so people just at the moment, people are just coming as they, as they can. And yeah, we also have a dance classes. One of our members is used to be a flamenco teacher on cruise ships. So he's really into teaching everyone flamenco. So, So great. That's a good, you know, icebreaking event. Yeah. Yeah.

00:10:41 He always comes around doing these news. This is fabulous. So, so we're going to be doing that. We also have a meditation room and a library, which was completely selfishly built because I was like, I want to go into here and read a newspaper before I go home to the kids. And I've never done it once, but Aspirational. Right.

00:11:07 I love that point actually. Yeah. Right. And it's got little meditation prisoner and a fireplace. And then we have on what I'm in, which is our podcasting recording studio. And we we've got a massage room. We've also, well in our, our first location, we haven't set it up here yet because we were only open five months in our new location before COVID hit.

00:11:33 I know. So excuse me. So we have, we've had a hair salon too. Oh, wow. So good. Because you just book it, walk downstairs. Yeah. So Tell me how the hair salon model worked. So We basically someone rented an office, but it was a hair salon and then members could book off their time and go in and,

00:11:57 and get their hair done, you know, whenever they needed. The other thing we've built, which I didn't think I told you. So we had this space downstairs that I always wanted some kind of cafe or something, but we're kind of on the edge of town of Victoria. So it's a little bit more industrial here, but we've got an amazing views of the,

00:12:17 of the, of the water. But we had this space that was sitting vacant and no one wanted it during COVID. So we actually ended up opening up a cafe general store. And that has been a huge hit. So interesting. Even though your foot traffic is not sort of downtown, Not at all. No, but I mean, the members,

00:12:40 they come in, they get their Americana, they grab a, you know, whether they grab a muffin in the morning or a croissant or something, and then they come up and then at lunchtime, they can go down and get a healthy lunch. It also does catering for our, for our boardroom members. And then at the end of the day,

00:12:59 you can go down and do your groceries before you go home. So you can grab some milk, you can grab some eggs, you grab some veggies. And 98% of the product we have in this store locally, my brands. So do you operate that or did you partner to operate it? You operate it. Yes. That was like, we can do this right now.

00:13:20 I'm like, oh, that's a whole two new businesses cafe, Right? Yeah. Yeah. So you, is that staffed separately from, yeah. Yeah. So we have four staff down there, three permanent, and then another few that are casual. So we have four little times. Wow. Yes. And then, So it may be not turning a profit now,

00:13:48 but will it? Yeah, I think it will. It's mean it's very close. We opened in April and it, I think it will turn a profit. This, this past month we haven't actually looked Very COVID here. So yeah. I mean, we have passports that are implemented here right now. So, and because we have a bar upstairs as well for events and anyone afterwards can,

00:14:18 you don't have to work or during work, if they want, it can have a beer because of a liquor license we have to, we have to show passport proof of vaccine. Interesting. Okay. So you have a liquor license as well. So before we go into this detail, I want us, I want to just zoom out for a second.

00:14:36 So you're, I pulled up your website and I hadn't noticed this before, but I think sometimes it's hard. We, we encourage operators. You have to, you know, you have to be very clear about who you serve, who you are and you have to articulate that on your website. Right. So when they know that's for me, or that's not,

00:14:55 it's not that easy to do. Right. So, And now a website's not very good. So, But I will, what I noticed right on the homepage is just so first of all, club quench, right? So that's a different sort of connotation than quench co-working and you're kind of line on a website. You may feel like it needs to be improved,

00:15:16 but we are a full service work and culture club for creative, ambitious thinkers and doers more, and it doesn't get into the details of what, what does that mean? You know, how has that sort of manifested, but it's unique. The work in culture club, right? Has it, it implies something different than just coworking. And now you're telling me about the cafe and the bar and Yeah.

00:15:42 And that's interesting, Jamie, because when I started it, I knew that we weren't, co-working like an even, even now I don't really like when I'm describing it to people, if I can see they're not getting it all out in the word coworking. Yeah. The challenge is right. We're still teaching people. What coworking is when you don't. I had another guest recently who's they serve a creative audience and they said,

00:16:06 we didn't want to call it that, but it's hard to not call it that for marketing purposes. Well, and that's why I, cause I called it a culture club. That was my thing where a culture club. And of course everybody was like, you know, people would come in the front door when we were at out our first location while this was being built.

00:16:24 And they'd be like, what is this boy? George is in here, what's going on. Or, or other people I live in British Columbia. So other people would think it was a marijuana store coming in for the pot. So that's definitely being, that's being a task, but I feel I'm nearly there where I can take that work and culture club out of it.

00:16:47 And I can nearly flip it to the culture because honestly like when Ann, and as I say, I've say this all the time. There one coworking space work club, it's not a one fits one size fits all. You have to find the one that fits you and operators don't want you to be in this space if you're not a fit because it doesn't help with their vibe as well.

00:17:11 So I think for quench, one of the biggest comments we get is this how different it is when you come in that everybody's talking, everybody's like the amount of people that work together, the, you know, the comradery and the collaboration is massive. And that is the culture. You know, we set the tone, we set the tone for inclusivity.

00:17:34 We don't allow people in who are making racist or sexist comments, you know, and that's about, yeah, that's about setting the tone and that's what we do really well. Well in executing on sort of what you promise, because I think we're getting to this point in the industry where there are a lot of sort of buzz words around hospitality and, and the,

00:17:58 but there's a gap between those who talk about it and execute on it. So, you know, your point talking about being unique and the culture and the, you know, the sort of club environment you're executing on that and evolving, you know, adding the cafe and, and, and, but you're sort of, you're delivering on the promise, which is also not always the case.

00:18:24 It's sometimes easy to put words on websites and Yeah, absolutely Your experience when you walk in, you're like, well, but you know, I thought I was going to get this, but I, I don't get this. So that gap. Yeah. I read something the other day, cause I'm just in another fundraising time and I read something and it summed it up perfectly that that coworking has moved to another phase where it's not about quantity,

00:18:50 it's about quality. So, you know, what services are you giving? What, what are you allowing the individuals or the companies to come in here and have the ease of habit? You know, what are you, how are you removing that stress and anxiety from their lives and actually offering them a valuable service. So how do you attract your members?

00:19:14 You know, it's been pretty organic, obviously I'd started the other coworking space before. So I had a, sort of a group of people that were really keen on how I built that one. And then they moved to quench with me. One of the big things about the first location that quench was in was it was right on a main street. And I originally had lost my first investor because I was only in a one-year lease there while this was being built.

00:19:45 And, and to me, I was like, he's just like, I think that's a risk. And I thought, that's crazy. It's like a main street and we're on the ground floor. This is advertising like, you know, so that was really helpful. And That turns out to be a bonus. How big was that space? That Space was only 5,400 square feet.

00:20:04 This one's 25,000. Right. So where are you only in it for a year? Did it only take a year to Write This? This building here was an old BC riles building. And so it was an attic that I'd found and the attic had been an attic for 130 years. And you can kind of see, I mean, anyway, there's these big beams I'm going to tip my computer up for those people look like this.

00:20:35 We have, you know, full addicts. So wow. Like right in front of me, it's, it's dipping down like this. So we joined the two rooms together. It was two rooms. And then we just put a flat roof between them. So it took a lot longer than a year. It's still a little bit, But if I,

00:20:52 you know, 5,000 square feet is enough to sort of build, build out, although you wouldn't have had some of the level of, was it really a bit a beta space? It was about a space. We had the hair salon, we had a bit of massage and it was definitely frustrating. Cause you know, when you've got the vision and you can see it and,

00:21:13 and you think you're communicating it, but it's yeah, it's interesting. I really remember this one conversation that I had at, at the, the conference, which was so beneficial for me, I have to say like just to, to meet all of you and understand how everybody else works and how to frame what I was doing a bit better. Cause I didn't really know,

00:21:38 but I was talking to someone about what I was building and I just remember he stared at me and he's like, oh, and he was in industrious in New York. And he was just, no, you house my house. Anyway. He said to me, oh, you sound like you're building the third wave of coworking. And I was like, oh,

00:21:59 I took that because I was like, that's so great. You know what? I think this third wave is about more services. We have to provide more things to get people out of their house and into flexible space. So, but so I'd love to, so you started at 5,000 square feet. Now you have 25,000 square feet. What is your product mix look like in terms of private space,

00:22:20 open space? That's I actually don't know if I know though we probably have about half of the space would be open, but we have boardrooms scattered through there. We have about of the 20,000 square feet on the top. There maybe be 15 that's dedicated desks and then the perimeter offices. So I mean, if you want to get like how the, how the revenue works for me,

00:22:51 the basis that we work off is is that the offices, once the office is full, that needs to cover the operations. And then the stuff in the middle of the, of the Cub is the profit. And honestly, that stuff is, that's the culture, that's the energy, But right. If you're only selling open space and trying to create that,

00:23:12 it's challenging. So Challenging. Yeah. And I mean, one of the things, I don't know if you did this, cause I went to your Palo Alto space, but I'm sure other operators have this where you have a company that wants to come in, but then not the right fit or they want too much space. And so I remember, especially when I was in the fundraising stage and it was so stressful,

00:23:41 I've never done anything more stressful because no one wanted to give us a single woman entrepreneur. I was a single mom. I'd just been through a divorce. So I had very little assets. Everyone was just like, oh yes, keep going with your hobby darling. It was so upsetting. And, but I got there. That's another story, but what was going to say?

00:24:10 So when those big companies came in and said, well, we'll take up five of your offices. It was Like, if I got them signed, then I'd get the loan from the bank. But then I totally lost my whole company, you know? So yeah. Have you had those problems to where? Yeah, I think everyone does. I mean,

00:24:30 I really, and I try to coach people through, I feel like you, you sort of lose your ability to be rational in those like pre-sales days or, you know, the first few months when you're open and you're, you're trying to stick to what you want to create, but you also need cashflow. So it's so easy to say yes to things that you will later regret.

00:24:57 It's hard and become more everyone. Yeah, yeah, yeah. Yeah. Hey, I just wanted to jump in really quickly before we continue with our discussion. If you're working on opening a coworking space, I want to invite you to join me for my free masterclass three behind the scenes secrets to opening a coworking space. If you're working on opening a coworking space,

00:25:18 I want to share the three decisions that I've seen successful operators make when they're creating their coworking business. The masterclass is totally free. It's about an hour and includes some Q and a. If you'd like to join me, you can register at everything. coworking.com forward slash masterclass. If you already have a coworking space, I want to make sure you know,

00:25:41 about community manager, university, community manager, university is a training and development platform for community managers. And it can be for owner operators. It has content training resources, templates from day one to general manager. The platform includes many courses that cover the major buckets of the community manager role from community management, operations, sales, and marketing, finance, and leadership.

00:26:09 The content is laid out in a graduated learning path. So the community manager can identify what content is most relevant to them depending on their experience and kind of jump in from there. We provide a live brand new training every single month for the community manager group. We also host a live Q and a call every single month so that the community managers can work through any challenges that they're having or opportunities get ideas from other community managers build their own peer network.

00:26:40 We also have a private slack group for group. So if you're interested in learning more, you can go to everything co-working dot com forward slash community manager. So w we'll tell us a little bit about your fundraising story. Okay. It goes crying, crying. Who are you asking where you calling strangers? Friends and families. Yeah, it's a friends and family note.

00:27:06 I was just telling everyone I was meeting with everybody. I'm telling everyone what I wanted to do. I was new to that world too. I mean, I remember going for a meeting with an angel investor and him just talking about millions of dollars. Like it was nothing and my mind going like, wow, I've entered into a whole new demographic here.

00:27:28 And of course now to me, a million isn't very much. I'm like, oh, that wouldn't last me too long in my business. So it was very frustrating. It was definitely a time. Like I have this story, you know, going to the bank, you know, you, you fill out the forms at the bank and it's like,

00:27:45 and what does your spouse make? Right. And of course that's like the second question. And then you would like, what are your assets? And so the Canadian government bought out this, this support, female entrepreneurs, $1 billion fund, blah, blah, blah. And so I called the, the, the bank that was doing it. And I know I'd already talked to this guy and I was just like,

00:28:10 you know, I'm really excited. It, can you send me the applications? But this line he's like, well, Tessa, you you've already filled out the application. I said, no, no, I haven't fed the female fund. And he's like, well, it's the same application and excuse my language. No I've wanted, but I was just like,

00:28:27 are you kidding me? I was like, that is the stupidest thing I've ever heard. If you've noticed that women aren't getting the funding, then you've got to look at the reasons why they aren't. And he was like, oh, we'll text her. It's about equality. And I said, no, it's not. It's about equity. I'm, I'm a mother I've,

00:28:44 I've been at home with my kids for five years and gone through a divorce. I don't earn what a man can earn. I don't have the assets. What not a man can have. Like, so that was such an infuriating time to realizing all that inequity. And then I got to the point where I just had to be like, you know what,

00:29:01 Tessa, it's there, get over it and just work around it. So I then had a couple of investors and there were amazing, cause I'm actually all female funded at the moment. Oh wow. I'm fully female funded and female founded. So, which is pretty cool. So I did have two friends come in that I didn't know that they had the kind of money that I was asking for.

00:29:26 And then after I got them, they're amazing women. Then someone from the bank approached me and was just like, I just love what you're doing. It's amazing. And he's like, I want to try and get you money. And I was like, bye. I filled out that application Does not work. And he got it. He got it for me.

00:29:47 So I was half, we had to raise over a million and I got half of it through investors and half of it. And the more than the half through the bank. Yeah. So as long, How many, so how long have you been? Oh, you've been open. We serve 2017. We opened with a small location and then, you know,

00:30:12 something else I did that might be interesting for people too. And I'm sure you've had lots of I'm sure this is a common thing happening now. And I've heard it in your webinars is I worked out a deal with the, the owner of the building. So, because I couldn't find any investment at the time when I pitched him, my idea for his building,

00:30:36 I said to him, look, I'm not going to find investors who will put in the millions of dollars to renovate your building. I just won't, but I'm happy to pay you an extra amount per square foot to payback for all those, all those cha all the tenant improvements. And, and he agreed. So that was really, really lucky. So he essentially financed the tenant improvements that needed to be done.

00:31:04 Yeah. He totally financed it. And I mean, that took a massive leap of faith for him and, you know, a belief in a vision that I had for his building. Sorry. Yeah. So what's next? You've frozen. Oh, okay. What's next? So we've been looking in Vancouver, we were looking before COVID hit and we're still looking now.

00:31:34 So my hope is to open a 40,000 square foot space in Vancouver and then Vancouver will house the full vision of, of quench, which will have hopefully a a hundred person theater or maybe 50 actually person and live theater and some maker space, as well as everything that we have. He, so neighborly will come with us. Natalie's our cafe general store.

00:32:00 And we've had so much interest from Vancouver. And then, then that year, once we opened there, I really want to see how the clubs operate together as a network. I'm sure that's a whole different thing that I'd love to hear how some of your followers do that because especially with software is, you know, how do you, how do you get them operating together?

00:32:27 And then my hope is to go down the west coast of, of the states building in little clusters. Yeah. Yeah. I've been thinking Oakland in, in San Fran area. And then obviously Seattle's a very big commuter area for Victoria cause it's like right there. So we'd do sort of Seattle, Portland, Oakland. And then, then my hope is to be in Australia because I'd like to move home.

00:32:58 Wow. Okay. How will you, how will you raise for your expansion? So we're doing a small rise now that's to sort of get everything back out from COVID. Obviously we were really like all coworking spaces or events spaces. We were hard hit. And then, then the next rise will be just going, going out again, looking for the,

00:33:27 for the Vancouver rise. It it's certainly amazing how like, to anyone who's thinking of building it and people aren't getting your idea, just believe in once you've built it, they'll get it because yeah. As soon as I opened people that wouldn't even talk to me were coming in and going, oh, this is what you were building. I didn't realize this is what you're building.

00:33:49 I'm like, yeah. Cause you didn't sit down with me, you know? Wow. I also just think it's natural people if they don't want, they can't see it. Right. How many people can. So they say, you know, I'm reading actually I'm reading a book called monetizing innovation and it, it a little it's it's cha because I see what you're saying.

00:34:12 It's but it's basically arguing that you should have like consumer proof and willingness to pay for something for you build it. Like don't do the Steve jobs mentality, you know? And I live in Silicon valley. So the mentality here is like, well, people don't know what they want. Right. They didn't know they wanted, you know, the iPhone or whatever.

00:34:36 But I do understand what you're saying. There are investors who can't see it. Right. Or the bad, you don't have some analog, but it's like that. Right. Then they don't have the vision. So you have to really, really believe, which is You have to believe. Yeah. I'm curious about your pricing. Is it, are you premium priced because of all of your offerings or,

00:35:02 I mean, I don't think we are. We are in comparison to the other coworking spaces in Victoria, but our pricing is very similar to what a we work would be. Yeah, we, yeah. I mean, Victoria, I guess is a little bit we're, you know, we're an island, everything's a little bit slower here, but I mean in pace,

00:35:25 but it it's definitely been a hard, harder sell to Victoria is where people who come from Vancouver, just like, when, when are you moving here? Like just open up clean. So I'm really excited for that. But how different The real estate costs in Vancouver Like Vancouver is I think the second, most unaffordable, I think in Canada, I mean with close behind what San Francisco is,

00:35:52 it's, it's really hard. And Victoria, since the pandemic has hit that too, because now everyone's like, well, let's just move to Victoria. It's beautiful. It doesn't snow. Doesn't show as much. We're in a little bit of a rain cloud here, so we don't have to, is it ranked that? And it's called rain shadow. And so we don't get a lot of rain.

00:36:16 Yeah, yeah, yeah. So I think it will be different. And that is actually why I kind of have been looking at Seattle as well. And like, maybe Seattle's the first one, but I'd like, it I'd prefer if it was Vancouver, just a quick little jump across the pond. Yeah. At the 40,000 square feet. Is that so that you can,

00:36:35 you have space for the amenities that you want in the, I think that's the truth, your point, the starting with the 5,000 square feet is, and I remember you talking about what you wanted to create and knowing it was a big build out. It was a big, but it has to be to, you Know, yeah. To put everything in it that you wanted to provide.

00:36:58 It's like, you can't really beta that in 5,000 square feet. Yeah. No. And that's the culture. Like I always say, it's not the coworking that w that should drug. I want to be like this festival space. I want it to look like a Luminato festival or a, or Edinburgh festival. So people come here because of the culture and the people that attracts through its culture and to have an office as I oh yeah,

00:37:24 of course. I want to be around all those events and activities, but, you know, I think I, it don't, you find it really hard to be actually a profitable co-working space with 5,000 square feet. Yes, yes, yes. Preach. Yeah. Yeah. Yeah. I talk about that a lot, I think. And that's why I think you're a bit unusual in that you knew even without a business background,

00:37:48 you knew you had to get to scale partly to provide what you wanted the space to be. But so many people are fearful, right? They've never signed a commercial lease before. And so, you know, covering rent on 25,000 square feet every month is right. Heart attack inducing. When people get into it, they go small space, shorter term lease,

00:38:14 because that feels less scary, but it w it, most of the time won't get you. It depends on what your goals are. Right. Everybody, there are different goals for different reasons, but you probably found with the 5,000 square feet, it's like, it's hard to cover staff and have profit. You need the scale. Yeah. I mean,

00:38:32 I didn't get paid. So I opened up quench in 2017. So I went 2016 without any money when you pay. And then I didn't start getting paid until January, 2020, and then COVID hit. So that's a long time to go. I learned how to live very economically, but you've got to, yeah. On the 5,000, you just can't do it.

00:38:56 And you know, another thing, I'm curious about your thoughts on this too. For me, I don't like coworking spaces that are bigger than 40,000. Neither. I was curious what you were thinking about that too. Yeah. I think that is common. Some people will go, so Brad, who started hub Australia for the hub Australia. He has said that.

00:39:22 Cause I think when, you know, he started with like 5,000 square feet, his very first, you know, similar right space. Yeah. And then started to grow. And I think they've gotten to the point and they, you know, cater to enterprise users. I think he has 50,000 square feet, maybe 60,000 square feet in a couple of locations.

00:39:41 And he said, you know, it's, that's a lot of space. It's big. And you feel like you don't have your pulse on. Yeah. Yeah. It depends on what, you know, back to the, what are you trying to provide? What what's your culture, you know, but think about like a community manager who's trying to keep,

00:39:59 you know, or there's several at that, at that point, but you can, you know, everybody maybe not. And so that's a different model. Well, I use now pitch deck. I always use the Dunbar theory. So the Dunbar theory is the one where he says, you can only have 150 to 300 prints. So for me, I quench follows that to a T we go,

00:40:24 we only build space that has no more than 300 people. So we can only house max, like in this building, we can house 250. And so Vancouver will probably be around the same, but we'll just have more amenities, right? Yes. You'll have a diverse, a more diverse revenue. Exactly. Yeah. Yeah. It's interesting. It's an interesting one.

00:40:45 But once again, it depends what you're looking for. If you want to, like, I went to a, we work, which is the first time in ages a few months ago. And I, and I don't want to disk, we work at all, but I was amazed how I instantly felt like a lab rat. I was just like,

00:41:02 when you're going down these Kardos of glass and it was like, oh, where are we? Oh. And I really felt like I was elaborate. And I was like, wow. I wonder if I feel like, Right. So they've made a choice and said, we care about the economic model. We store the Dunbar theory or people are not going to know you.

00:41:23 Right. It's Nice. Yeah. And then the, so the people who are using that space, it's just a different right. Requirement them, they don't care about the things that you are trying to serve, which is funny. Maybe they do care. They just don't know there's other spaces. And also, yeah. I just think that they probably do care.

00:41:47 It's just that some of them don't have other choices or they don't have Perspective. Cause I do sometimes think like why would people pick or someone chooses for them? We were talking before we started our choice enterprise companies. It's very easy for them to choose. We work because of its network. And you know, one point of billing, it's harder to provide totally the ultimate choice.

00:42:10 And that's, you know, starting to change with like the, in the United States, the government just awarded contracts. Yeah. And so like the platforms will help sort of democratize that choice. Right. We worked out one of those contracts, but 50% of the contracts have to go to small businesses. So we work. Won't qualify for that. Yeah.

00:42:33 I've been sharing, but just a, Well, it did everyone. There's different things for everyone. Like honestly, when I read that in your newsletter, I've been showing that to everyone because Victoria is the capital of British Columbia. And we have so many government workers and the amount of times they come to me for advice on how to build their coworking space.

00:42:54 And I've finally, I'm just like, guys, I can not give you any more advice. Like you've got to consult me if you want me to do this or I've got a crazy idea. Why don't you just let people come here? Why Don't you support the local Business? Exactly. And especially support, you know, I mean, I think COVID was such a blinding realization of the security of government jobs.

00:43:21 It wasn't, it was like, oh, that's job security. You know? So it's like, okay, you've had jump screen. Nasta giving back to, so anyway, I think it's so great that the government's done it and it's so good that liquid space was able to work. The 50% thing into that. I think that's, I suspect the government worked that in,

00:43:40 but liquid space pass. Yeah. Will, will benefit from that. So I'm curious your, you know, kind of your, you're building out your offering, your general store, your fundraising, what is your role in the business look like today? Oh, Pretty much. Yeah. You know, you know, when you have to wear each hat,

00:44:03 right. Okay. Today I'm talking real estate or now I'm talking HR, we're hiring people. Oh. And now I've got to work with a member who's using something and now we're looking furniture, we're turning this room. It's, it's constant. It's all over the place. But yeah, that's what my role looks like. I mean, we're expanding our team and you know,

00:44:21 I'm really learning, cause I'm sure that many of your listeners have been through this. Like when you start it, you're it, You, You clean the toilets, You, you know, I mean, I remember coming in cleaning toilets and clearing out the fridge and dumped like that was, I didn't every fridge clean out. Right. That's The tablet,

00:44:42 you know what I get in the Tupperware? Just take your Tupperware Tupperware And don't take my forks, But not my forks. Yeah. But so I think it's really hard to sort of get to that point where you're like, you're giving people jobs and you'll go, okay, I don't do that anymore. And for me, I, I don't come from a lording over everybody.

00:45:10 And I'm the boss lady. Like we, we do everything evenly. So sometimes I have to Andre, cause you can't do your second space without I have to step back and not have my HR consultant who is one of our members. Should we watching me sometimes when I'm walking through the club with a toilet plunger. Right. So I think that I'm learning to step back a bit more and understand that,

00:45:38 that my value is better if I'm actually in more of the development. Yeah. And it's just in between phase where you're prepping that like fully funded to step into that CEO role. Have you read E-Myth revisited? I have, but I haven't got to the end, so maybe Yeah. But the whole like work on your business, not in your business,

00:46:04 but that you're totally. Yeah, yeah. Yeah. And I think that, that was a big thing during COVID too, you it's sort of reverted back really quickly to like in it. And then now I've got to really concentrate on, on, on it. And I think, you know, I really, really believe that this, this is the future that this way of working,

00:46:26 you know, we were talking before this autonomy to choose like trusting in people to make their own choices about where they live, where they work. And so these work clubs, because I do think it's going to evolve into offering more service to people. So this will be the way that, that people belong and feel like they're part of something, you know,

00:46:49 like you said, you're at CrossFit. So one of the things I love about CrossFit people is they love their CrossFit. Like they're, they're loyal today. Right? Exactly. Yes. Yeah. And so that's that thing that's going to happen with co-working spaces or work clubs as well? I think. Yeah. I think you're right. Tessa, thank you for taking the time.

00:47:11 You obviously have a lot going on to share your story. It was so fun for me to hear what's been happening since 2016. And please call me when you're ready to start your space in the bay area. Yeah. Thank you. And thank you so much for all your newsletters and all the web conferences that you do. I'm really, and how generous you were to me.

00:47:33 When I came to the bay area, I'm really grateful and it's great to see. Likewise. Thank you. Hey there, thanks for sticking with us through the end of the episode, don't forget to subscribe on your favorite podcast player. And if you were enjoying the podcast, please go leave us a review. It helps other folks find the podcast who are thinking about starting a coworking space or already operating a coworking space and are looking to stay up to speed on tips and trends.

00:48:06 And we started a YouTube channel. We'd love to have you catch us on video, can join us for podcast, videos, and Q and a videos and other things that we post to the channel. We'd love to see you there.

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