Hello! Who are you and what business did you start?
Hi, I’m Alan Crowe, a native of Atlanta, and I launched a coworking space in 2020 called Room2work. If you have heard the term coworking, it's likely due to the woes of coworking behemoth WeWork, or you belong to a local shared office space.
For most of the last 20 years, coworking catered to digital nomads who could work anywhere as long as they had laptops and a strong WiFi signal.
Room2work is a little different and is considered niche coworking. The first specialty coworking spaces were for women only, but as the value proposition for shared office space grew, the number of audience-specific workspaces grew as well.
Today you can find coworking dedicated to real estate, legal professionals, food prep, contractors, and a few like Room2work that specialize in eCommerce.
Our first location is in Roswell, GA, just north of Atlanta. It’s 7,500 sqft that I refer to as the “Lab” and includes office space, meeting rooms, a video podcast studio, and a warehouse. I call it the lab because we’re testing every possible idea and taking a few lumps to find out the best way to scale Room2work.
Our revenue streams are also getting tested and refined. As of today, we’re generating $14K a month, but as coworking recovers from the pandemic, that number will level out at $20K to $22K/ month with one employee.
What's your backstory and how did you come up with the idea?
The initial idea for Room2work formed when I owned a sales and marketing firm. We were a ten-person team covering the southeastern US and worked with a large number of small contractors. Each company had a slightly different story, but many started as solopreneurs working from home and then struggled with early stages of growth.
After sixteen years on the road, I was researching self-storage space as a possible new business and uncovered an interesting statistic. Up to 35% of self-storage rentals are for small businesses. I realized that a storage space dedicated to contractors would be ideal for small contractors. I figured they used their truck as an office and only needed storage for equipment and supplies.
And I was wrong. I started interviewing my ideal customers and found out they wanted more than just a storage space. They wanted a conference room to meet with manufacturers, they wanted a training room for product demos, and they wanted a place to make sales calls.
About this same time, I signed up with a local coworking space for access to meeting rooms and hit on the idea of combining the coworking model with the self-storage model. The result was a shared office space for business owners that weren’t digital nomads. They were local businesses that needed space to operate. Not a lot of space, but it needed to offer a professional image, office, amenities, and storage.
After reworking the business model, I was encouraged by how easily people grasped what I was doing. Almost every conversation about Room2work ended with one or two friends that needed a space “just like that.”
There was no way to know if people would leave their free home offices and start paying for a coworking membership, but my personal experience and the lack of warehouse space below 2,000 sqft were good indicators. All I needed to do was create a space that became part of “how they ran their business” and not just “where they ran it.”
In 2017, after 16 years at my former company, I sold out to my business partner and went full-time on the Room2work business.
Take us through the process of designing, prototyping, and manufacturing your first product.
My product is highly flexible office space for small businesses, and my first step was getting a suitable combination of office and warehouse space.
Suitable can mean a lot of things and trying to launch a new version of coworking which was only about ten years old at the time, was a challenge. I needed a space large enough to be feasible, and I figured 10,000 sqft was the bare minimum size that would allow for common areas and enough billable areas to cover all my operational costs.
If I needed pure office space, that wouldn’t be a problem. If I needed pure warehouse space, it wouldn't be a problem. But, I needed flex space with both office and warehouse space. It also needed enough parking to function as a coworking space.
Parking turned out to be one of the hardest puzzle pieces to find. We finally found a place that was 15,000 sqft and hired an architect firm on the recommendation of my marketing company. I explained everything I wanted, and they created a beautiful and expensive set of plans.
As I was reviewing the plans, I noticed an “allotment” for $15,000. It was a placeholder for a reception desk. A single $15,000 desk and I knew we were off on the wrong track. They had three contractors bid on the job, and all of them submitted bids of around $500,000. I was also struggling with the landlord wanting $2mil in security for the lease.
Change of plans - I had a great commercial real estate agent who suggested we find a building to buy. The idea was that I could roll the commercial mortgage and the renovations into the loan and secure the loan with the building. Except I was outbid on both of the buildings I tried to buy.
We finally found a 6,000 sqft space managed by an owner that I knew from my previous company, and they took a chance on me and the Room2work idea. I found an architect that better understood designing for value and sent our drawings out for bid. In the end, I worked directly with several of the contractors and ended up with a completely renovated space that has been a hit with members.
Describe the process of launching the business.
We soft-opened in August of 2019, and I was betting that “If you build it, they will come.” I had over 20 years of personal experience with contractors, several dozen interviews with likely members, and surveys from over 150 small business owners. I was ready for launch and set an ambitious goal of “opening full” because I genuinely thought there was that much potential.
What I didn’t count on was that everyone already had a workable solution, and I was offering something completely new. I was selling something they didn’t even know existed, and if they were working from home, it was going to cost them money to switch. I realized that my competition wasn’t other workspaces - it was home offices.
From August till December of 2019, I gave free memberships free meeting space and spent a lot of money on Google ads. I used FOIA (freedom of information act) requests to get local business owner information and sent direct mail. I measured every result, and each month I slowly did more tours and got more leads. We opened for paying members in January 2020, just in time for the pandemic.
It’s not about forcing compliance but more about removing options in a way that makes the space easier to run without affecting the member experience.
Fortunately, we are a registered CMRA (commercial mail receiving agency) and were considered an essential business. That allowed us to stay open during the early days of the pandemic and our private offices filled up quickly. The warehouse space took a little longer, but by May, our dedicated office and warehouse spaces were full. We had a strict cleaning regime, social distance signs everywhere, and changed all of our air filters to hospital-grade ones.
Since launch, what has worked to attract and retain customers?
Attracting customers is getting easier, and Google sends us an email every month or so marking a new milestone we’ve hit for web traffic. We’ve switched away from broad-stroke advertising on Google ads and spent more time optimizing for local SEO. With a few exceptions, our member base is within ten miles of our location, and getting a spot in the Google “Map Pack” combined with a growing list of 5-star reviews helps draw in new members.
Since we launched, I’ve learned that we don’t pick our members. They pick us. The space was conceived for contractors and built for contractors, but we currently only have two using the space. We have become a hub for eCommerce and a surprising number of small software companies.
Keeping these members happy is based on a simple philosophy of making it easier for them to run their business. We’re a service, and as the owner, I have a lot of flexibility in the range of services we offer. It’s important to learn how members operate and their pain points, then figure out if we can help in a scaleable way. We don’t try to fix every problem, but something as simple as receiving a shipment means an owner doesn’t need to wait around for a truck to show up. It gives them control of their schedule.
How are you doing today and what does the future look like?
I would never recommend starting a shared workspace right before a global pandemic, but it forced us to be creative. I’ve set a goal of reaching $100K in gross profit out of our current space, and we’re still on track to do that. The key is optimizing for the services that have the greatest value for our members without granting exclusive use.
No matter what business you’re getting into you can do it with half the money. I promise.
One surprise in this area was virtual offices. They weren’t part of the original business plan, but there’s no limit on the number of virtual offices we can support. Members get a commercial address and a-la-cart access to the space for $49/mo, and mail for 100 companies typically takes about an hour a day.
We’ve also launched a new meeting room configured like a team office. It’s designed for the explosion of virtual teams that are working from home but want to get together once a week or once a month for collaboration and connecting.
Through starting the business, have you learned anything particularly helpful or advantageous?
People are messy when someone else is responsible for cleaning up. This led us to modify the design and automate systems to account for human nature. It’s not about forcing compliance but more about removing options in a way that makes the space easier to run without affecting the member experience.
Virtually anything can be the starting point for a business. We have close to sixty companies based out of our location, and several of them I would have never even thought to start. At this point, you could come in with an idea, and we’d simply ask, “how can we help.”
I love the variety of what we do. During any given day, I have conversations with members about software development, healthcare, event planning, what's hot on Amazon, injection molding, and a dozen other topics. Sometimes I learn from them, and other times, they get something useful from me. I’ve started working on a mentoring program so that we can help more and more entrepreneurs make it through the early-stage growth.
What platform/tools do you use for your business?
Finding a management system for a niche coworking space was going to be a problem. There were many systems available for traditional coworking, but I needed to manage a warehouse as well. Luckily we found Proximity Systems that was affordable and flexible enough to run the space, book meetings, and handle most payments without too many problems. It’s not perfect, but we’ve adapted to its format with a few manual workarounds.
Another system we use daily is Anytime Mailbox. Most of our members have their business mail service with us as well, and we use ATMB as the back end. It gives members an app where they can see all of their incoming mail and give us directions on how to process it.
Because we’re a local business and attract members from less than 10 miles away, we’re focused on local SEO and are using Moz. com to track and adjust our on-page SEO. Moz tracks our keywords and shows how we rank against two competitors each week.
What have been the most influential books, podcasts, or other resources
This seems like a good time to mention that I’m dyslexic. It’s a learning disability that affects reading, writing, and spelling. It’s the reason that most of the 100 plus books I’ve “read” during the development of Room2work have been Audible versions.
My first book advice would be to use books on tape to fill your driving, commuting, and waiting in carpool time with information that will help you. You can even skip the Audible version of popular books and use Libby or Hoopla free through your library. Save your Audible books for the titles you can’t get free.
My second book recommendation is Marketing Made Simple by Donald Miller. It’s a stripped-down look at marketing copy and will get you aligned with your customer motivation. I immediately revamped my entire website after reading it.
Finally, I got a lot out of Never Split the Difference. Author Chris Voss is a former hostage negotiator, and he’ll give you insight and confidence to negotiate over big and small things without being a jerk or leaving money on the table.
Advice for other entrepreneurs who want to get started or are just starting out?
I’m going to write a book called “Start with half.” No matter what business you’re getting into you can do it with half the money. I promise. I’ve watched myself and others spend money in their early days as it will never run out and then tighten their belt right when they’ve learned enough to scale.
So here is my advice. If you have $5k, $50K, or $500K, Take half of it and put it away somewhere. If you’re good with self-control, it can be a separate bank account. If you’re not so good with your spending, put it in a one-year CD.
You’ll buy a used computer or truck in place of a new one. You’ll buy less inventory or fewer tools, but you’ll learn what works on a small scale, and your mistakes will be smaller.
Once you have your hard-knock education and your customers have voted on your business, you’ll be ready to use the second half of your seed money to scale up quickly.
Are you looking to hire for certain positions right now?
I specifically wanted to create a business model that didn’t require a full-time staff. We’re membership only, so we don’t have “drop-in” coworkers. Every member has a key to the space. However, several jobs need to be done when you run a service-based company.
We’ve been through three cleaning companies as we worked to balance cost with a higher level of service, our network team is virtual, and most of our regular delivery people have their access to the space and don’t need us. We will be hiring a site manager this year as we start to offer more services on demand, like pick and ship for our eCommerce members.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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