The Anti-Adam Neumann – TechCrunch

According to earlier reports this week, Adam Neumann, the famously controversial co-founder of WeWork, is in the process of creating a vast network of residential real estate that—we assume—can be rented out on a very flexible basis to people who don’t want to be confined to one. place or rent, but to live as “citizens of the world”. That was the vision behind an earlier company Neumann founded, WeLive, a short-lived offshoot of his far better-known company, WeWork, and it’s an idea that, in the post-Covid-19 world of remote work, makes more sense than ever.

Here is Neumann in a conversation with The Guardian on the idea in 2016: “It will be a new way of life, day after day, week after week, month after month, year after year. You will be a global citizen of the world. If you’re a member of one, you’re a member of them all.

The idea is so timely that another serial entrepreneur might be even further along in his version—even if you’ve never heard of him before. He’s Bill Smith, the 36-year-old founder of the three-year-old, 600-member, flexible, furnished rental company Landing.

Smith, who prefers button-downs to graphic tees, is the anti-Neumann in many ways. While Neumann’s real drama with his investors became fodder for a television series, Smith, with little fanfare, made his backers a lot of money. After raising capital from friends and family for a Visa reloadable card company in his 20s, Smith sold the outfit to bank holding company Green Dot for what Forbes says it was tens of millions of dollars. His next startup Shipt, a same-day delivery company Smith founded in 2014. sold at Target in 2017 for $550 million.

Smith — unlike Neumann, who sold too much of WeWork to SoftBank to too unrealistic price — is also conservative when it comes to VCs. Shipt raised $65 million from venture firm Greycroft and others before it was sold, but Smith still owned half of the company. The result, which he now calls a “game changer,” gave him enough confidence and capital that he has now put at least $15 million of his own money into Landing, of which he owns a third. (According to Forbes, Landing has raised $237 million in venture funding to date at a $475 million valuation, including from Greycroft. Meanwhile, Neumann’s Flow, which has yet to launch, just raised $350 million in funding from Andreessen Horowitz at a reported valuation of 1 billion dollars.)

Such differences aside, both seem to be pursuing a very similar opportunity to create a platform that anyone willing to pay a small premium can join to lead a highly flexible lifestyle.

It’s a guessing game what Neumann might charge a member, though one imagines getting a SoHo-type aesthetic for the price, based on the look of most WeWork locations. In Landing’s case, the membership fee is $199 a year, and the rent is 30% to 40% above what Landing itself pays building owners to rent their space. But in exchange for at least a six-month commitment, a Landing member can live in a growing number of locations — including Tampa, Austin and Las Vegas — where the Landing has leased apartments. Members receive fully furnished rentals (Landing has its own innocuous furniture made in Vietnam and shipped to the US to keep costs down). And the longest a member should stay at one place? Only one month.

After reading (very well) Forbes piece on Business earlier this week, we asked Smith to walk us through some of our own questions, including what lessons, if any, he’s learned from watching Adam Neumann from afar. You can hear this conversation here. Except, edited for length, follow below.

You estimate that perhaps 10% of the 40 million Americans who live in apartments now could choose furnished, flexible homes to stay within a decade. How did you arrive at this rating?

When you think about all the other aspects of our lives in the last decade, the way we live has changed completely. But apartment living is usually an offline, pretty old school process. There is not much freedom, flexibility and convenience in the current model. . and much of the 40 million people they employ today are between the ages of 20 and 40 and want that flexibility.

You’re taking “flexibility” to the extreme. This is attractive as a consumer, but from a business perspective, how do you rationalize it?

We are not trying to create a holiday brand or travel business. The people who live with Landing are committed to this lifestyle and to the life of our platform, which allows us to deliver really high occupancy. And if you can ensure high occupancy, you can provide this product at a price that is affordable for a large number of people who stay for a long time.

How long do people tend to stay in one place?

Currently, people stay in one place for about six months on average.

Do you do any kind of home improvement? Before you started Landing, you were trying to build a home service-type marketplace.

We don’t. Home renovations are done by the companies that own the properties we are in. We offer cleaning and these types of services. You’re right though. The first company I created [after Shipt] was kind of a concierge home service for homeowners and we tested that for about a month and it was a very quick failure and we decided to move from that to what is now the Landing.

You use data to try to figure out how to lower your costs, including adjusting your prices based on location and season. Can you share a little more about the type of data you process and how you use it? Relatedly, how much can you collect from your customers once they are inside a unit?

We need to know where people want to live so we can have supply available and ready, so we look at what neighborhoods people are looking for; what time of year they want to live there; and how quickly they want to move, and we use that information to enhance our delivery efforts.

We also have distribution centers and our own last-mile delivery network, and we use data to determine where we make investments on that side of the business. Certain times of the year there can be high demand for moving in certain parts of Phoenix, while other parts of the year you see a spike in demand in Miami and we need to have physical items ready to ship in those areas so people can to move very quickly.

Your software lists an apartment before you even sign a lease with a landlord, then you find the tenant. Once that tenant has signed a lease with you, you sign the lease with the landlord and furnish the apartment. Is that how it goes?

Yeah, so what we’ve created is the first on-demand model for building supplies like this. An apartment community will list units on our site, then we built the technology and operational infrastructure to create a “Landing” in just a few days, which sounds super simple, but is incredibly complex when you think about everything you need to furnish and create an entire home from your sofa next to the silverware.

Is software development a big focus of yours?

There is a huge technology component to Landing. We built the entire platform that drives our business, everything you see on our site from discovering and booking a home to the experience once you check in, including how you enter the building and [ensuring all your needs are met] as long as you live there. These are also the apps that our field service teams use. It’s the technology that powers our distribution centers and our last-mile delivery network. So there’s a significant amount of technology that we’ve had to build to run this business. It’s not something you can just buy off the shelf.

Do you focus on buildings with public spaces at all? How people literally flow and come together was Adam Neumann’s focus and I guess it continues to be with his company Flow. In a world where fewer people are walking into offices, is this a consideration when looking at buildings?

We think about community more from a neighborhood level instead of just a property level. If you think about the typical housing community, there might be 250 units, so it’s not a large number of people and [they] will be a very diverse group with unique interests. So we’re thinking about it more at a neighborhood level and building community between people who have chosen to live that lifestyle in a certain part of Miami, for example.

You sign one-year leases with apartment owners. Why not lock up those spaces a little longer and hopefully lock in a better lease?

Of course, we could try to do multi-year deals, but I think it’s better to have very little lease liability in the company. We would be the antithesis of the WeWork model, where we have very few lease obligations. And we can be flexible as there are changes in the markets. [Also], over time we will partner with the owners to bring this product to their building and it really won’t be a Landing lease product; they will simply join the Landing platform. They’re going to operate using our technology and our standards, and it’s not going to be that model, Landing is leasing it and committing to that lease.

So will Landing become an enterprise SaaS company in some way?

Having a SaaS component is probably the best way to describe it, yes.

As a student of the space, are there other lessons from WeWork that you replicate or avoid?

WeWork and Landing really are such different businesses – office versus residential is just a completely different category. But what I’ve really learned, and not directly from WeWork, but in general, is that the unit economics of a business is critical. In the early days of any company, you’re trying to understand the economics of the unit. But on this one in particular, we had to master the unit economy very quickly. We didn’t have five or six years to prove it like a lot of other consumer businesses did, and I think that’s because people saw WeWork and saw all the challenges there.

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