Archive for November, 2018

Wework for the rest of the country

Posted on November 28, 2018. Filed under: startups, venture capital |

I just took a glance at Wework locations around the world, and it confirmed what I expected to see. Wework has almost 500 locations around the globe, and they are all in densely populated cities. This makes sense. Largest markets, expensive commercial real estate, large young workforces, etc…I get it. That said, i wish that this type of physical infrastructure for remote/independent work existed in some other parts of the country.

My wife and I regularly go to a small town in the Adirondacks with a population of 207. The larger surrounding area within say a 20 minute drive is about 10,000. Every time I go there, I think about the local community and economy and how one could improve it. There are countless stories of small town America dying, younger generations emigrating to larger cities for more opportunity, etc…The industries most prevalent in the region are not surprising. Construction, small retail, car dealerships, outdoor travel services, maybe an occasional bar or restaurant…and that’s kind of it. That’s not fair. I guess there is a lawyer and family counselor and of course school teachers, doctor, etc…but one thing there is not a lot of is connection to the digital and tech economy. Part of that is cultural, part of it is the relative recency of advances in distributed work, and part of it is exposure and what you see around you as your growing up in this environment.

As the wealth gap grows and that wealth concentrates in cities, I often think about how to bring dollars and jobs into these more rural areas. How many large, scaled companies both serve and employ rural communities? I often think of Walmart, which I know has it’s warts, as a hundreds of billions of dollars scaled commercial enterprise that systematically brought “outside dollars and jobs” into these smaller areas(and built something very valuable in the process.) How many other public companies are looking at the map of the United states and putting pins in 10,000 person geographies as a strategic roadmap? Not that many that I can think of.

So back to Wework. My inlaws recently purchased a (very inexpensive) plot of land on the Main Street in this Adirondack town with 2 restaurants and a supermarket. The discussion has been “what does the town need? what kind of businesses could we stand up here to both recoup our investment and contribute to the community?” My favorite idea, which might be dumb but is exciting to me, is to build out a coworking space, with really good internet, decent coffee, basic office infrastructure, and community gathering space. I love the idea of trying to provide some physical infrastructure to support entrepreneurship, remote work, SMB operations, and importantly connection to the rest of the economy. You have to squint to see it, but I think if you want these more digitally native career opportunities to make their way to the small towns in our country, it’s not enough to count on the internet alone to connect everyone. I think there’s some significant education, retraining, and vocational programming that would be required for such a future, and exposure is a big problem in getting that information to at least the one community I know. A physical presence of some form, I believe, is a requirement if you want to gain local exposure…so in some ways I view the “Wework for everywhere else” to be that. My hope would be that there is enough demand for monthly desk space to cover the cost of build out and land purchase/lease, and then with some smart programming alla General Assembly or an integrated Meetup/Wework, but relying much more heavily on video and telepresence, maybe you get a new revenue line item around education and training, and as you provide those services, demand grows for complimentary physical infrastructure, and some kind of virtuous cycle occurs.

Obviously, there are a lot of challenges here. First and foremost, I think, is town/community acceptance. There is definitely a hesitation about embracing outsiders and outside influence at least within the community we know. Getting buy-in and having a positive word of mouth as it ripples through town is hard. I’d imagine the effort is similar to how the Church might have approached such an endeavor decades before. It has to be good for the town. It has to be native to the community. It has to give more than it takes. And it has to be respectful and cognizant of the way things are in any given community. It would be so easy to drop in tone deaf, build out the thing because the model says it works, and have the pillars of the community ice you out of business. So it’s a big ground game effort, and that might be expensive…but maybe the local church or town boards, etc, if alignment is clear (and I think it is)…are a distribution channel to roll something like this out.

A second and real concern is “maybe there aren’t enough people doing this type of desk work to support the Wework model.” I built a chicken scratch model that wasn’t entirely implausible (less people, but remember real estate is cheap), but someone more intimately familiar with real estate and the coworking business model might eviscerate this claim. No idea.

I just think it’s weird that there is no physical infrastructure to support remote work in the communities that are definitionally remote. If it works, and if the local economy improves, not only could you build a profitable P&L, the underlying real estate asset in which you invested should theoretically appreciate. Feels like a win, win, win. I am far from an expert in these matters, please point me to people doing this or problems I’m not addressing, and if you’re building a startup in this vein, I’d love to support you as an Angel Investor: Jordan.cooper@gmail.com