Psychological Challenges Competing with WeWork

How did you deal with the psychological challenge competing with WeWork?

That’s actually a really good question because it sometimes felt like David and Goliath, quite frankly. In the past, I had been influenced by what’s going on around me. It’s very difficult to take… And everyone else—and it wasn’t just WeWork—every morning I keep reading about ‘this group’s raised 10 million, this group’s raised 50 million’. And I’m just doing the complete opposite, because in my mind, it made no sense to raise any capital and grow at a time when we should be more conservative in terms of growth, and I didn’t want to have a gun to my head in terms of having to pour that capital to grow just for the sake of growing.

And the only reason I knew that and I felt so strongly about it was because I had experienced that with Synergy. I had partners that were incredibly sharp, extremely aggressive, and they were growing their real estate portfolio like that through 2006, 2005, and it literally cost them the company when we had the recession. And it not only cost them the company, but I had to sell the coworking piece in a fireside sale. I made the same mistakes, because I felt I was between a rock and hard place because they wanted to grow and they didn’t care where we were in the cycle, and I couldn’t not because they had control of the company and this is what they wanted, and they didn’t want to hear the fact that it could be catastrophic.

So I had no choice in terms of growing, and we made that mistake, and I lost the company as a result of it. So going through that experience and I guess that gave me the confidence and the perseverance to say ‘in your gut, this is the right thing. Stay the course even regardless of what everyone else around you is doing’.

And sometimes you do second-guess yourself. Maybe there’s something they know that I don’t know. Or maybe times have changed. Maybe that was ten years ago. Maybe that’s not the case today. And you just have to follow your own. Go back to what your experience, what your gut’s telling you, and stay the course. As hard as it is, as an entrepreneur, the toughest thing is not growing, because they’re so used to building and creating. So just say no more than yes, when everybody else is going on a tear. That was a hard thing.

I can imagine, because you’ve got the employees that are questioning, ‘What are we doing? WeWork’s growing; could we do something similar?’ Capital flowing and being raised everywhere. It takes certain characteristics to be able to be alone in that time.

The other interesting thing is I’m looking at the groups that are going out and doing this and I’m thinking, ‘I could raise more, go bigger, go scale quicker’, and that’s the ego. That’s where you have to delineate between, this is a smart business decision, or this is your ego talking, because you’re sitting here watching these other groups with less experience doing this and you’re sitting there, on purpose holding back. And yes, it’s tricky.

I’ve even had people tell me, ‘well, if you’re going to grow the way you’re growing and you’re not open to raising any kind of VC or private equity money, you’re really not creating a real business. You just have a lifestyle company or a lifestyle business. And I’m like, ok - but I actually like my lifestyle and I’m ok with it.