Rachel Young, co-founder of one of Toronto’s first coworking spaces and a driving force behind creating a coworking collective...
RocketSpace was launched in early 2011 by technology exec Duncan Logan, who was frustrated by his search for flexible office space at the time. In less than two years RocketSpace has blown up to be one of the hottest platforms for tech entrepreneurs who want to access a space that provides much more than just a desk and great coffee.
We connected with RocketSpace Founder and CEO Duncan Logan to hear how he turned a bootstrapped coworking space into a ‘Hit Factory‘ for tech startups. Here is the interview in its entirety:
The original idea was actually to build a business around the concept of “Office as a Service” following the model from SAAS or the Cloud.
There are great efficiencies in the collaborative consumption of resources in an office and my original belief is that small companies do not want to invest in office infrastructure until they have a significant business.
It was only when I saw the size of the demand for what we were offering did I decide to pivot across to an accelerator from the original concept.
As soon as we opened the doors we couldn’t cope with the demand.
That was really the luck in the timing of when we started rather than any good judgment. Because of that we decided to focus only on tech and within that sector on companies who had at least received a seed round of funding.
It wasn’t easy saying “NO” to over 60 companies a month but it differentiated us in the market and gradually built the ecosystem we were focused on.
RocketSpace is ALL challenges ;-)
We have bootstrapped the business from day 1 which has been tough.
We needed a building and had no money to secure it. We knew we would have to find a building ready to go (i.e. need no tenant improvement work) and a landlord prepared to do a revenue share model to help us get started.
Thanks to the reach of our brokers Jones Lang LaSalle we found that rare combination. We partnered with Turnstone on the furniture and I can’t remember how many nights I spent building furniture after working a full day.
If we had had the capital I think RocketSpace would have been 4x the size by now but only half as successful. Having a constant restriction on our growth made us focus on quality.
We still receive 3 to 4 applications a day and take in between 15 or so companies a month.
Many people who start Accelerators have a great network or high profile reputation which I imagine is an enormous help.
Unfortunately I didn’t and still don’t but slowly it is growing.
I think RocketSpace has picked up a good reputation because we said what we were focused on and stuck to it.
No matter how much money we were offered we were prepared to say “NO”.
It helps to love what you do: Startups and Tech is my hobby, my passion, my sport all rolled into one. I LOVE it and when you share and office with your customers every day I think they see it, you can’t fake it.
Most of our awareness has come from our customers.
At first VC’s and investors wouldn’t take our calls, but now many of the companies coming into RocketSpace are being referred to us by their VC because the feedback they are getting is positive.
They know we work hard for the companies, we can help with recruitment or corporate introductions. Ultimately we help their investments be more successful.
The founder always sets the tone.
From day one we were clear we didn’t want to be a “frat house” but we also didn’t want to be a stuffy library.
I love hanging out with really smart people and watching and listening to what they say and do. I learn more now than in any other environment in my life.
There is an incredible humbleness at RocketSpace.
I know the backstory of most companies, there are multi-millionaires sitting next to first time founders and you wouldn’t be able to spot the difference.
Everyone simply shares a passion, to build something incredible. We have asked people to leave who don’t fit in. We take the quality of environment very seriously.
Young companies are a product of their environment.
Fitting the companies into RocketSpace is like a giant game of Tetris.
Companies expand and contract and our job is to fit them all in. We have to be business like in our approach to companies but having started companies before I know how tough it can be.
Being fair is important without letting people take advantage of you.
Finally, email is a killer. The world and their dog want to partner, visit, sell too or meet with either RocketSpace or the companies in here. We get over 200 inbound emails a day and with a small team we quickly drown in requests.
I hate to ignore or say no but we often have to.
You cannot be awesome at everything or satisfy everyone so focus on a specific customer type.
We have 3 key pillars of support to the startups over and above the real estate.
Access to capital
Almost all of the startups in RocketSpace will raise a round of funding while in here. We make multiple introductions everyday always trying to help the startups whiles being respectful to the VC’s or Angels time.
Access to talent
It is key for our customers.. Great teams build great companies, period. We have networks running with a number of universities including Stanford, Harvard, HAAS, Kellogg and Wharton to bring interns or full time talent into startups.
Access to Customers is a real acceleration point.
Large corporates can turn a startup into success overnight. Likewise startups can innovate quicker, cheaper and often better that a large corporate.
Our Ambassador program brings in a constant stream of corporates to meet startups with over 60% of the introductions resulting in a relationship. It is an enormous amount of work and we have a whole team of people focused on it but it makes a difference.
Finally, being surrounded by other amazing entrepreneurs inspires greatness. If you are a product of your environment make sure and join an amazing environment.
I think there is an enormous gap in the market between commercial real estate supply and customer demand.
A growing section of modern companies don’t want the product commercial real estate is selling and as such shared workspaces are thriving.
Commercial real estate is inefficient and will be another industry that software disrupts to drive efficiency.
Collaborative consumption is an efficiency play whether it is Airbnb, ZipCar or Coworking, it is a growing not shrinking trend. Commercial real estate will take time to change.
A new capital class is needed to fund a new model for a modern client, that creates a large opportunity.