WEBVTT
00:00:00.180 --> 00:00:11.545
Like so many people that are running their businesses, you need the flexibility of locations where you want to do work, but you don't want to maybe have the cost and the expense of renting an office full time.
00:00:11.545 --> 00:00:16.400
My guest today has been a pioneer in the flexible workspace for over 40 years.
00:00:16.400 --> 00:00:31.312
He manages over 1,500 locations around the world and he has an amazing offer that I would love for you to hear about, because he's going to solve a huge number of problems for you and me and everybody that needs a place to be.
00:00:31.312 --> 00:00:39.424
Frank Cuddle is the founder and CEO of Alliance Virtual Officers, joining us from his home, actually in Fort Worth in Texas.
00:00:39.424 --> 00:00:40.969
Frank, welcome to the show.
00:00:41.619 --> 00:00:42.201
Thank you, Jim.
00:00:42.201 --> 00:00:43.003
Great to be here.
00:00:43.003 --> 00:00:45.070
Great to be here Welcome to the show.
00:00:45.091 --> 00:00:46.094
Thank you, jim.
00:00:46.094 --> 00:00:46.716
Great to be here.
00:00:46.716 --> 00:00:47.819
Great to be here.
00:00:47.819 --> 00:01:03.253
Frank, you solve a problem and you've been doing this for nearly 40 years which is to give business owners and enterprises a place to work when they're growing, when they're expanding, without some of the commitments of fixed tenancies and so on.
00:01:03.253 --> 00:01:06.781
So you really give them freedom to grow at a variable cost.
00:01:06.781 --> 00:01:12.614
Tell us about the origin of the business and which kind of entrepreneurs you serve and where.
00:01:13.879 --> 00:01:13.959
Gosh.
00:01:13.959 --> 00:01:18.135
Well, we started actually as a property company back in 1979, 80.
00:01:18.135 --> 00:01:26.159
And we were building buildings that were purpose-built at that time to host and house what were then called executive suites.
00:01:26.159 --> 00:01:36.828
And the purpose of the executive suite was the original pre-business center, pre-serviced office, pre-coworking brand from an industry point of view.
00:01:36.828 --> 00:01:38.992
That provided flexible workspace.
00:01:38.992 --> 00:01:43.569
And our purpose in building buildings was really land banking.
00:01:43.569 --> 00:01:52.915
We wanted to put the smallest building on the biggest piece of dirt possible, but with entitlement to go up eight or ten times.
00:01:52.915 --> 00:02:04.055
So that was our theory and these funny little things called executive suites generated the most revenue per square foot of any commercial real estate we could figure out.
00:02:04.055 --> 00:02:05.585
So it was just a gamble.
00:02:05.585 --> 00:02:07.546
Honestly, it was just a gamble.
00:02:07.546 --> 00:02:22.301
It was a lot of fun and we built buildings and did management contracts with other developers for about 10 years and then we started building our own projects on a leasehold basis, just like IWG, regus, many others do, that you're all familiar with.
00:02:22.462 --> 00:02:44.149
We decided by the time we'd done that and gotten fairly large, we decided that it was not a good business model, that the balance sheet of keeping continuing to add the long-term liability of the leasehold debt was destroying the corporate valuation of the company or holding it back, I should say.
00:02:44.149 --> 00:02:51.802
So we said well, there's these funny companies called Expedia this is in the mid late 90s, you know Travelocity different things.
00:02:51.802 --> 00:02:55.400
We said we actually want to own the customer instead of the facilities.
00:02:55.400 --> 00:02:57.344
We don't want to own facilities anymore.
00:02:57.344 --> 00:03:05.776
So we sold all of our facilities and we built a technology and an inventory platform that today that was pre-Airbnb days.
00:03:05.776 --> 00:03:12.413
Today we service over 200,000 corporate clients on a global basis and it's proven to be quite good for everybody.
00:03:12.413 --> 00:03:37.794
We are location or facility agnostic in that we have certain standards, very high quality service standards, that we require, sort of a best hotels of the world approach, rather than an anybody and everybody approach, and that has kept us to have very low turnover churn rates by comparison to others.
00:03:39.162 --> 00:03:40.647
And it's really it's all about the customer.
00:03:40.647 --> 00:03:43.308
It's just about service and flexibility.
00:03:43.308 --> 00:03:49.901
About the customer.
00:03:49.901 --> 00:03:50.983
It's just about service and flexibility.
00:03:50.983 --> 00:03:53.649
If you were to think on your own for a second, you know, go back a few years.
00:03:53.649 --> 00:03:54.632
Let's just go back pre-pandemic.
00:03:54.632 --> 00:03:55.353
Make it simple.
00:03:55.353 --> 00:04:03.472
All companies needed two things Needed a great product and access to capital so they can scale it.
00:04:03.472 --> 00:04:05.055
Boom, pandemic hit.
00:04:05.055 --> 00:04:07.544
What do they need now?
00:04:07.544 --> 00:04:08.969
Flexibility.
00:04:08.969 --> 00:04:22.432
A company without flexibility today is not going to last very long, so you have to have the capacity to manage a workplace that's distributed more effectively.
00:04:23.132 --> 00:04:24.074
That is global.
00:04:24.074 --> 00:04:27.718
That's distributed more effectively, that is global.
00:04:30.740 --> 00:04:41.189
You're always going to have an employee or a partner or a financial source or a customer that's not in your own backyard today, and you've got to be able to do it quickly and you have to be able to do it with short-term commitment.
00:04:41.189 --> 00:05:22.389
Hence Alliance Virtual Offices does that for a broad cross-section of customers entrepreneurs, startups, branch offices of regional companies, primarily media and tech in that regard, the legal, accounting and financial services professions, big part of our business, that whole sector is going more and more flexible Corporates, the Global Fortune 1000, and even government, even the US federal government in that regard, uses products and services from a company, from our company, and it's all about flex.
00:05:22.389 --> 00:05:25.589
It's really quite simple and it's all about flex.
00:05:26.031 --> 00:05:26.935
It's really quite simple.
00:05:26.935 --> 00:05:35.891
Yeah, well, it is, though, as you say, the underlying economics of it are that people have, I guess, shorter and shorter windows.
00:05:35.891 --> 00:05:43.831
I mean, when we started work back in the early 90s, people would plan annually, right, and then they started to do quarterly reporting, and then now things turn on a dime, don't they reporting?
00:05:43.831 --> 00:05:45.536
And then now things turn on a dime, don't they?
00:05:45.536 --> 00:05:57.254
You say COVID, but also stock prices come and go so quickly that locking yourself into a lease is well, probably for me as an entrepreneur in Singapore, was one of the largest commitments.
00:05:57.254 --> 00:06:04.990
It's a marriage to a property that you don't know whether your business is going to grow to the same amount or outsize that property.
00:06:06.120 --> 00:06:07.865
No, and a lease is a debt instrument.
00:06:10.011 --> 00:06:17.432
It's a debt, it's an obligation that you have to pay and that you're legally obligated to pay.
00:06:17.639 --> 00:06:35.853
So if you sign a 10-year lease, the first 12 months is an expense, but the next nine years goes on to your balance sheet as debt, and that restricts your growth, that restricts your ability to raise capital overall.
00:06:36.434 --> 00:06:42.709
And no one knows I don't know what's going to happen five years from now, three years from now, let alone nine.
00:06:42.709 --> 00:06:59.213
So I don't want to be like JP Morgan with hundreds and hundreds of thousands of unused square feet of leasehold space in Manhattan, telling everybody they have to go back to their office to save the corporate culture.
00:06:59.213 --> 00:07:07.274
You know, I don't think they have a culture to begin with if they have to be in an office to deal with it, but that's a personal opinion.
00:07:07.274 --> 00:07:15.574
So we don't know the future, except that you're going to have to be capable of change.
00:07:15.574 --> 00:07:18.769
So why lock yourself in?
00:07:18.769 --> 00:07:46.410
It's really quite simple problem that we solved, and the fact that we're servicing a wide variety of customers in a huge cross section of industries and different sizes of customers demonstrates that we're not so particularly clever as a company, but that there is an actual need for the product that we produce.
00:07:48.040 --> 00:07:58.891
And on the website, which is alliancevirtualofficiescom, you'll see Frank's global reach and his office is in established centers like New York, for example, isn't it, frank?
00:07:58.891 --> 00:08:05.826
But also, you've got Bristol close to home, where I am, and you've got Singapore Bristol close to home, where I am, and you've got Singapore.
00:08:05.826 --> 00:08:09.528
So an entrepreneur or a mid-sized company could sign up in one location.
00:08:09.528 --> 00:08:12.651
Could they then go and travel to those other offices?
00:08:12.651 --> 00:08:16.954
Are you giving them that freedom and flexibility to travel within the network?
00:08:17.735 --> 00:08:18.776
Not on a free basis.
00:08:18.776 --> 00:08:19.377
It's not free.
00:08:20.459 --> 00:08:24.711
I wasn't expecting it to be free, but you don't have to try and look for an office every time you travel.
00:08:24.790 --> 00:08:27.206
presumably we have a reservation system.
00:08:29.021 --> 00:08:38.355
You mentioned, frank, that you're serving multinationals, some also some governments and so on, and also the entrepreneur class.
00:08:38.355 --> 00:08:39.826
How are they different?
00:08:39.826 --> 00:08:41.245
Do they sit side by side?
00:08:41.245 --> 00:08:44.386
Are there different offerings for those two groups?
00:08:45.149 --> 00:08:46.370
Yes, Excuse me?
00:08:46.370 --> 00:08:47.013
Yes, there can be.
00:08:47.013 --> 00:08:50.470
Some clients require very specific technology issues.
00:08:50.470 --> 00:08:59.154
They require a customized network of locations that has very specific technology, primarily around security for communications, etc.
00:08:59.154 --> 00:09:04.131
Some entrepreneurial clients are really just concerned with efficiency and cost.
00:09:04.131 --> 00:09:07.784
Entrepreneurial clients are really just concerned with efficiency and cost.
00:09:07.784 --> 00:09:12.501
Legal accounting professionals financial services professionals are very concerned with caliber of front desk service.
00:09:12.501 --> 00:09:16.883
They're dealing with their clients and you know the receptionist isn't there to make our client happy.
00:09:16.883 --> 00:09:19.514
They're there to make our client's client happy.
00:09:19.514 --> 00:09:22.783
So there's a differentiation on the user types.
00:09:22.783 --> 00:09:51.292
But the overarching need is flexibility that combines clerical, secretarial, administrative support, live reception support, telephony systems and services, live receptionists in terms of telephony and answering machines or answering support, meeting and conference room, av support really whatever you need to manage and run a business on an hourly, daily, weekly, monthly or annual contract.
00:09:52.080 --> 00:09:54.966
So really, you do get to be that granular, don't you?
00:09:54.966 --> 00:10:04.360
If you're allowing people to have an hourly, weekly, monthly, quarterly, annual, then I guess your ethos is around this flexibility, isn't it?
00:10:04.360 --> 00:10:15.410
That you're liberating the cash for the entrepreneur, the business, to use to grow the company, rather than lock it into giving the landlord, which is really what that was about before.
00:10:15.919 --> 00:10:17.586
Well, let's use an entrepreneur as an example.
00:10:17.586 --> 00:10:19.125
Give you a good, a simple example.
00:10:19.125 --> 00:10:22.249
Jim, you're an entrepreneur, I'm an entrepreneur.
00:10:22.249 --> 00:10:25.350
We're going to go pitch a venture capitalist together.
00:10:26.721 --> 00:10:26.961
Okay.
00:10:26.980 --> 00:10:27.761
Let's do it.
00:10:27.761 --> 00:10:31.249
Yeah, we each have our own company, we each need a million dollars.
00:10:31.249 --> 00:10:34.816
And I go in first, I'm brave.
00:10:34.816 --> 00:10:40.879
So I go in first and I throw my pitch deck down on the VC's desk and I say, hey, here's my idea.
00:10:40.879 --> 00:10:42.667
The VC says, yeah, it's a really great idea.
00:10:42.667 --> 00:10:43.951
What are you going to do with the money?
00:10:43.951 --> 00:10:51.615
I said, oh, I'm going to get an office, I'm going to hire a receptionist and a secretary and I've got to get some imaging equipment and some furniture.
00:10:51.615 --> 00:10:54.018
And then I'm going to hire some engineers and build this product.
00:10:54.018 --> 00:10:59.065
And you walk in and he says, hey, james, love Jim, I love your product, love this.
00:10:59.085 --> 00:11:00.166
What are you going to do with the money?
00:11:00.166 --> 00:11:03.980
Say, oh, I'm going to go take a flexible workspace, hire some engineers and build the product.
00:11:03.980 --> 00:11:06.272
Who's going to get the money?
00:11:06.272 --> 00:11:09.918
You are Not me.
00:11:09.918 --> 00:11:25.041
In today's world, mitigation of risk at the investment level so that you can start a company is one of the biggest factors that isn't always considered Focused on the product.
00:11:25.041 --> 00:11:27.211
They're focused on how to launch their product.
00:11:27.211 --> 00:11:45.003
They aren't thinking about how to run the company necessarily, but how you run your company basically defines how you can manage your capital that you receive and that will determine the risk factor, and the risk factor will determine the investment.
00:11:45.710 --> 00:12:03.065
Well, and also, frank, if you were raising money, as I did back in 98 in Singapore, and you have a certain amount of money goes into office refurb and rental, you have to take more cash which, in effect, is very expensive because you're diluting your equity just to get money to give to the landlord to refurb.
00:12:03.570 --> 00:12:05.960
Right, you dilute your own equity when you do that.
00:12:05.960 --> 00:12:20.251
If you're an entrepreneur and you need more cash that you have to give to somebody else and so if you can preserve that, you can basically create a debt-free cashflow management company at a higher level of efficiency.
00:12:20.251 --> 00:12:22.817
And what companies are realizing today?
00:12:22.817 --> 00:12:28.897
Large companies and they realized an awful lot of it was happening just pre-pandemic.
00:12:28.897 --> 00:12:35.879
During pandemic, a lot of people said you know, we don't really need all this space, we don't need it all.
00:12:35.879 --> 00:12:41.519
Some companies are locked in for 10 or 15 years or they own their own buildings and it's not easy to flex.
00:12:41.519 --> 00:13:02.461
But a lot of them said well, our next generation of model is going to be quite different and we're seeing that evolution on the corporate side today and one of the solutions that the flexible workspace industry not just us, but other larger companies as well we create custom networks of facilities for single customers.
00:13:02.461 --> 00:13:06.731
My largest customer has 117 facilities.
00:13:06.731 --> 00:13:13.573
I think it is right now inside of a custom design network with a specific product just for that company.
00:13:15.198 --> 00:13:15.981
Take us through that, frank.
00:13:15.981 --> 00:13:19.413
Does that mean like branded space, because maybe they want corporate?
00:13:19.494 --> 00:13:20.216
identity.
00:13:20.216 --> 00:13:32.134
No, not branded space we don't brand space for others but fully service space on a contracted basis, and that's not the amount of space they use but the facility structure.
00:13:32.134 --> 00:13:55.494
That's a multi-year contract, so secure for us, flexible for them, and it's just an ongoing model that has changed and the amount of debt they're able to shed or not take on in leasehold debt allows them and their investors to create more access to capital and the company's just growing magically.
00:13:56.099 --> 00:14:04.894
And suppose it a parallel might be with contract manufacturer, isn't it that you don't necessarily own the manufacturing process, like apple?
00:14:05.657 --> 00:14:09.624
it really comes down to the just-in-time inventory and intermodal system.
00:14:09.624 --> 00:14:12.111
You know that started in the early 90s.
00:14:12.111 --> 00:14:23.763
So this is just-in-time real estate, if you will, or just-in-time real estate, if you will, or just-in-time officing, and we don't think of the activity of officing as being a real estate issue.
00:14:23.763 --> 00:14:25.264
It's a service issue.
00:14:25.264 --> 00:14:36.450
It really is a service issue Because you don't rent in a flexible workspace facility or in a virtual officing structure like we promote.
00:14:36.450 --> 00:14:46.067
You don't rent square footage, you contract for services almost on a cubic footage basis.
00:14:46.067 --> 00:14:53.128
It's everything between the carpet and the ceiling, including the people, the equipment, the furniture, etc.
00:14:53.128 --> 00:14:55.494
Everything necessary to run a business.
00:14:55.494 --> 00:14:59.302
So it's not a terribly new theory.
00:14:59.302 --> 00:15:05.971
We've been doing this since 79, 80, but it's one that is continuously evolving and it's quite exciting actually.
00:15:06.432 --> 00:15:17.163
It is, and when you look at it in terms of just-in-time real estate, just-in-time property, it really makes it seem so logical, frank, and why anyone was renting and refurbing.
00:15:17.163 --> 00:15:25.642
I guess there's the idea of owning and having your name on the door, but you can also help entrepreneurs, for example, to register their company in that location.
00:15:25.642 --> 00:15:35.543
That's maybe one of the differences with, for example, some of these co-sharing workspaces that are really kind of almost like they're almost a Starbucks, but with more privacy, aren't they?
00:15:35.543 --> 00:15:44.635
With Alliance, you actually give people the opportunity to register their company, have mail sent there and so on, which is, I think, yes, the registered agent.
00:15:44.696 --> 00:15:55.655
We service on behalf of other entity formation companies probably 150,000 entities someplace in that range right now and it grows every month.
00:15:55.655 --> 00:16:00.917
So it just is an ongoing process that part of the business grows based on.
00:16:00.917 --> 00:16:13.533
If you look at the little tidbit of facts here, if you look at entity formations, entity formations almost parallel grow with the growth of a national economy.
00:16:13.533 --> 00:16:30.481
So if the UK economy or the US economy is growing at 2%, then the number of entities formed year over year will grow at about 2% and the life cycle of an entity is around six and a half seven years and that sounds like wait.
00:16:30.481 --> 00:16:31.283
They should be longer.
00:16:31.649 --> 00:16:43.898
But when you think of all the startups that don't really they form an entity and they don't really do anything and then two years later they've disappeared, it's a very high churn rate at the front end and a very long life cycle at the back end.
00:16:43.898 --> 00:16:46.163
It's about six seven years.
00:16:46.163 --> 00:17:01.625
So if you look at that as a stability say, I can grow a company that services this group based on the growth of the economies of the nations that I'm serving within and I've got about a seven-year life cycle on the customers on that growth.
00:17:01.625 --> 00:17:17.416
And in the US right now there are around 37, 38 million entities, so your churn rate on new customer prospects is around 6, 7 million new prospects every year and it grows at about 3%.
00:17:17.873 --> 00:17:22.819
Right and they're coming in and registering new companies and getting from you that flexible workspace.
00:17:22.819 --> 00:17:24.977
And I was looking in terms of pricing.
00:17:24.977 --> 00:17:32.681
It was like in London about $100, 70 pounds a month for a Northwest one, for a Cavendish address, which is great, right.
00:17:32.681 --> 00:17:37.310
So central London at a very low rent and then you can go in and use those services.
00:17:37.310 --> 00:18:00.358
Just so that you know me and others can listen and say listed companies, the professions, legal accounting the financial services branch offices.
00:18:00.599 --> 00:18:04.973
You might be in London but need an office in Edinburgh for branch office services.
00:18:04.973 --> 00:18:12.051
And then entrepreneurs and the individual ratio of those changes market by market.
00:18:12.051 --> 00:18:31.298
So in the United States we have more larger and government-related companies in state capitals where they need something, a representation, or in our national capital, in Washington DC, there's a concentration of that type of company.
00:18:31.298 --> 00:18:41.365
If you look at large corporates, you would think they'd be concentrated in places like New York or Chicago or Dallas or LA.
00:18:41.365 --> 00:18:44.118
They really aren't, because that's where their corporate headquarters is.
00:18:44.118 --> 00:18:54.765
So when you look at where their branch offices, where their regional branch offices or service offices are, that's where they concentrate the use of flexible officing etc.
00:18:54.765 --> 00:18:58.788
So each group is a little bit different.
00:18:59.829 --> 00:19:10.402
And I think the point that I was getting when I looked at your website is that people can move in quickly with a minimum fixed fee and no hefty lease to exit.
00:19:10.402 --> 00:19:17.521
Frank, what happens for the entrepreneur that doesn't go down the path of flexing when it comes to office space?
00:19:17.521 --> 00:19:24.277
Where do you see that happening when entrepreneurs say thanks, frank, but you know it's not for me what goes wrong for those people?
00:19:24.518 --> 00:19:35.339
I'm going to say it's the same thing that goes wrong for anybody that doesn't keep their mind open to new opportunities or or new, new ways of doing things.
00:19:35.339 --> 00:19:50.012
So you might use the term, they're a business Luddite, where they're refusing to recognize the need for something and the use of something that's actually beneficial to them.
00:19:50.012 --> 00:19:56.273
I hope I don't say that in an insulting way, because it doesn't just relate to our product, it relates to everything.
00:19:56.273 --> 00:20:03.290
How many people in business today can say AI will never work, I'm not going to pay any attention to AI?
00:20:03.290 --> 00:20:08.180
How many manufacturers say, no, don't want any robots, I just want wrench turners?
00:20:08.180 --> 00:20:16.882
You can't say that things that create flexibility or new business models you're going to ignore them.
00:20:16.882 --> 00:20:18.284
You can be choosy.
00:20:18.284 --> 00:20:22.863
You can wait to see them proven while you're doing research.
00:20:22.863 --> 00:20:27.300
You can be selective, you should be selective, but you shouldn't ignore them.
00:20:27.300 --> 00:20:27.602
Yeah.
00:20:27.622 --> 00:20:32.821
I'd agree with you and I think you know you and I grew up with paper and pen and the fax machine.
00:20:32.821 --> 00:20:36.113
In fact, my first job was to shipping cakes from Europe.
00:20:36.113 --> 00:20:37.516
We had the Telex machine.
00:20:37.516 --> 00:20:44.336
We had to go down every morning and see what the orders were from Amsterdam and only one person had that information.
00:20:44.336 --> 00:20:49.973
And then fast forward clients said they didn't need websites, they only wanted brochures.
00:20:49.973 --> 00:21:03.882
So this idea that you need to move with the times, and I think the logic of what you've got in terms of not having the financial commitment of a lease but getting the flexibility of this just-in-time space, makes a lot of sense.
00:21:03.882 --> 00:21:13.898
Frank, let's just ask you about your history, because a lot of us, as entrepreneurs, build solutions to the problems that we face.
00:21:13.898 --> 00:21:16.037
What's your story?
00:21:16.037 --> 00:21:20.858
I mean, you're working from home and you have 1,500, 1,600 offices to choose from.
00:21:20.858 --> 00:21:21.942
What's going on?
00:21:22.549 --> 00:21:23.673
Well, number one I'm lazy.
00:21:23.673 --> 00:21:24.635
I don't like commuting.
00:21:24.635 --> 00:21:26.661
I think it's a waste of my time.
00:21:26.661 --> 00:21:34.003
Even though you can hold a video meeting on your phone in your car, you're not paying attention.
00:21:34.003 --> 00:21:36.253
So I don't like commuting.
00:21:36.253 --> 00:21:37.036
Never have.
00:21:37.036 --> 00:21:37.837
So I've always.
00:21:38.519 --> 00:21:50.398
If I had an office, it's always been within five or 10 minutes of my home, hopefully walking distance or rowing distance if I was on the bay, which I was in Newport Beach or I just moved from.
00:21:50.398 --> 00:21:54.269
So you know that's my primary thing.
00:21:54.269 --> 00:21:59.512
The other thing is I'm very happy working in solitude.
00:21:59.512 --> 00:22:03.109
I'm one of those people that actually enjoys quiet.
00:22:03.109 --> 00:22:18.401
I don't need a lot of energy around me, and I think, as you build a company that is remote first which we've been doing for 45 years in many respects your selection of your team is critically important.
00:22:18.401 --> 00:22:36.086
You need to select people that are, if they're going to be working remotely or they're going to be working on a hybrid basis, that are really their values are aligned with that on a family basis and on an individual basis.
00:22:36.086 --> 00:22:39.874
We shouldn't force people to work in an office or out of an office or anything.
00:22:39.874 --> 00:22:51.106
We should find people that are happy doing the model that you've got, and that's what they're seeking also, and that they're obviously productive at doing so, and that's very, very important.
00:22:52.759 --> 00:23:05.738
So you've really taken your own personal preferences and made that possible for anybody else that feels that way about wanting to work as and when and wherever they want to work.
00:23:05.738 --> 00:23:18.394
With that flexibility, you've created an infrastructure for literally tens of thousands of people to exercise that choice right to be local or global or regional.
00:23:18.394 --> 00:23:20.756
Frank right Over 45 years?
00:23:21.160 --> 00:23:22.923
Yeah, I think if you look at.
00:23:22.923 --> 00:23:59.432
I read an article the other day on the next billion dollar company, the next unicorn company, and what they did is they went back in time and they said well, the first billion dollar company had x number of employees, and then the second one, the third one, the fourth one, the most recent billion dollar launch company that was a unicorn, had 16 employees and the next one may have as few as three yeah, I was reading that as well, that there's a question with a capacity to work flexibly, to to use technology, et cetera.
00:24:00.214 --> 00:24:09.029
That is growing and we are scaling our individual capabilities and we shouldn't limit ourselves purely to place.
00:24:09.029 --> 00:24:20.144
If I could only build a billion-dollar company by living in Manhattan, trust me, I don't care to build a billion-dollar company because I do not want to live in Manhattan.
00:24:20.925 --> 00:24:38.151
Well, and Frank, yeah, and I think the other thing that's really, or the other dimension of this, is really powerful, is that for young people who are priced out of real estate, what you're offering and what we're talking about is really liberating, that actually they don't have to be in large offices to build wealth.
00:24:38.151 --> 00:24:44.030
They can actually be anywhere in one of your offices and build really a substantial business.
00:24:44.751 --> 00:24:47.001
Well, they can, and whether they're.
00:24:47.001 --> 00:24:56.712
Honestly, in today's world, with technology as it is and creative capability as it is, whether they're in one of our facilities or not, they can do that and good.
00:24:56.712 --> 00:24:58.827
That is so wonderful, so exciting.
00:24:58.827 --> 00:25:06.230
It doesn't matter where you are, as long as you're in your head and as long as what's in your head you're actually executing.
00:25:06.230 --> 00:25:09.247
That's what matters.
00:25:10.241 --> 00:25:26.426
Well, frank I mean Frank Cottle I was going to come on to that actually as sort of a final question about a piece of advice, because you've built this company, you've got the alliance virtual offices, you've also got the all work dot space, which is a another venture that you're running.
00:25:26.426 --> 00:25:39.627
What would be a piece of advice that you'd give me as an entrepreneur, because you've built a global business on your own terms, which is really something that many of us aspire to?
00:25:41.060 --> 00:25:42.686
Boy, don't listen to old men.
00:25:42.686 --> 00:25:43.288
How's that?
00:25:43.900 --> 00:25:47.048
Well, luckily you're young Frank, so I'm okay to ask you.
00:25:51.444 --> 00:25:54.332
You know it always depends on the individual.
00:25:54.332 --> 00:25:57.028
What does that person need for advice?
00:25:57.028 --> 00:26:00.269
There is no uniform thing that you can say.
00:26:00.269 --> 00:26:07.788
If I were to go back on anything, I would just say just focus on learning something new every day, every single day.
00:26:07.788 --> 00:26:09.905
Seek out something new.
00:26:09.905 --> 00:26:20.906
It doesn't matter the source your own decision-making of what's good, bad and ugly should grow by exposure, and everybody struggles through that.
00:26:20.906 --> 00:26:29.453
I know I have and you have to become the best student of your chosen industry.
00:26:29.453 --> 00:26:34.446
If you're not just like at school, somebody else will be.
00:26:34.446 --> 00:26:39.453
That's great, frank, be that best student, Frank Cuddle.
00:26:40.095 --> 00:26:40.434
thank you.
00:26:40.434 --> 00:26:41.416
Just like at school, somebody else will be.
00:26:41.416 --> 00:26:42.278
That's great, Frank.
00:26:42.278 --> 00:26:43.359
Be that student, Frank Cuddle.
00:26:43.359 --> 00:26:43.559
Thank you.
00:26:43.559 --> 00:26:48.750
If there's a book, podcast, newspaper, source of information that you go with your curious mind, where is it?
00:26:50.142 --> 00:26:56.066
I'm going to be selfish in this regard and say I'm going to go to my own podcast, the Future of Work podcast.
00:26:56.066 --> 00:27:14.027
Over at allworkspace, we have amazing guests that know infinitely more than I do about their subject matter, and that's one of my favorite places and a place that I actually go back to often when I'm trying to do research on things and pull ideas out myself.
00:27:14.027 --> 00:27:17.213
What did that guy as a head of Miller Knowles say?
00:27:17.213 --> 00:27:19.463
What did that guy over at Cisco say?
00:27:19.463 --> 00:27:26.163
I try and pull out their knowledge and that's one of my own favorite resources actually.
00:27:26.845 --> 00:27:28.749
Frank, we'll put that in the show notes.
00:27:28.749 --> 00:27:30.093
That's allworkspace.
00:27:30.093 --> 00:27:32.685
And isn't that the joy of podcasting?
00:27:32.685 --> 00:27:39.522
That we get to be guests and hosts with interesting people from around the world and learn.
00:27:39.522 --> 00:27:43.902
That's the great joy for me of running this show and it's been a joy for me to meet you, frank.
00:27:43.902 --> 00:27:45.045
Thank you for coming on the show.
00:27:45.045 --> 00:27:50.630
If you want to find out more about you and have the chance to have a conversation, maybe with you, where can they find you?
00:27:51.740 --> 00:27:52.201
Well, it's easy.
00:27:52.201 --> 00:27:58.788
You can just go to alliancevirtualofficescom and I'm right there on the management team, easy to get to.
00:27:58.788 --> 00:28:01.413
Or, you know, I'm just on LinkedIn like everybody else.
00:28:01.413 --> 00:28:04.135
Just reach out, I'm happy to connect.
00:28:04.859 --> 00:28:05.220
That's great.
00:28:05.220 --> 00:28:11.428
It's Frank Cottle C-O-T-T-L-E, by the way, in Fort Worth, Frank, thank you for joining me today.
00:28:11.448 --> 00:28:12.609
My pleasure day my pleasure.
00:28:13.550 --> 00:28:27.348
Well, we've been talking about virtual offices, but Frank and I are both at home and in a way, that's the story that we have the freedom and the flexibility now to work from where we want to, when we want to and where it suits our business to grow.
00:28:27.348 --> 00:28:30.801
But we do need our businesses to have.
00:28:30.801 --> 00:28:56.950
Often, the established credibility of a location somewhere, maybe in a metropolitan area, provides a way for us to have privacy and some sort of establishment for our business, but also, if you're growing, the flexibility to go to different places, different cities and different countries and to meet your clients and your customers and potential employees from a position which is a wonderful, professional, well-managed office space.
00:28:56.950 --> 00:29:05.605
I'm going to put a link to the virtual offices in the show notes and also on my magazine at theunnoticedentrepreneurcom.
00:29:05.605 --> 00:29:13.412
I've also written an article and give you some write-up of some options that you can choose from and a link as well to the Alliance virtual offices.
00:29:14.039 --> 00:29:14.781
My name is Jim James.
00:29:14.781 --> 00:29:17.027
If you've enjoyed this show, don't review it.
00:29:17.027 --> 00:29:18.450
That's not what I'm interested in.
00:29:18.450 --> 00:29:30.172
I'm actually interested in you sharing this with a fellow unnoticed entrepreneur, because that's really what matters, not what you think of me, but that someone else gets to know what you just learned and, in the meantime, I just encourage you to keep on communicating.
00:00:00.180 --> 00:00:11.545
Like so many people that are running their businesses, you need the flexibility of locations where you want to do work, but you don't want to maybe have the cost and the expense of renting an office full time.
00:00:11.545 --> 00:00:16.400
My guest today has been a pioneer in the flexible workspace for over 40 years.
00:00:16.400 --> 00:00:31.312
He manages over 1,500 locations around the world and he has an amazing offer that I would love for you to hear about, because he's going to solve a huge number of problems for you and me and everybody that needs a place to be.
00:00:31.312 --> 00:00:39.424
Frank Cuddle is the founder and CEO of Alliance Virtual Officers, joining us from his home, actually in Fort Worth in Texas.
00:00:39.424 --> 00:00:40.969
Frank, welcome to the show.
00:00:41.619 --> 00:00:42.201
Thank you, Jim.
00:00:42.201 --> 00:00:43.003
Great to be here.
00:00:43.003 --> 00:00:45.070
Great to be here Welcome to the show.
00:00:45.091 --> 00:00:46.094
Thank you, jim.
00:00:46.094 --> 00:00:46.716
Great to be here.
00:00:46.716 --> 00:00:47.819
Great to be here.
00:00:47.819 --> 00:01:03.253
Frank, you solve a problem and you've been doing this for nearly 40 years which is to give business owners and enterprises a place to work when they're growing, when they're expanding, without some of the commitments of fixed tenancies and so on.
00:01:03.253 --> 00:01:06.781
So you really give them freedom to grow at a variable cost.
00:01:06.781 --> 00:01:12.614
Tell us about the origin of the business and which kind of entrepreneurs you serve and where.
00:01:13.879 --> 00:01:13.959
Gosh.
00:01:13.959 --> 00:01:18.135
Well, we started actually as a property company back in 1979, 80.
00:01:18.135 --> 00:01:26.159
And we were building buildings that were purpose-built at that time to host and house what were then called executive suites.
00:01:26.159 --> 00:01:36.828
And the purpose of the executive suite was the original pre-business center, pre-serviced office, pre-coworking brand from an industry point of view.
00:01:36.828 --> 00:01:38.992
That provided flexible workspace.
00:01:38.992 --> 00:01:43.569
And our purpose in building buildings was really land banking.
00:01:43.569 --> 00:01:52.915
We wanted to put the smallest building on the biggest piece of dirt possible, but with entitlement to go up eight or ten times.
00:01:52.915 --> 00:02:04.055
So that was our theory and these funny little things called executive suites generated the most revenue per square foot of any commercial real estate we could figure out.
00:02:04.055 --> 00:02:05.585
So it was just a gamble.
00:02:05.585 --> 00:02:07.546
Honestly, it was just a gamble.
00:02:07.546 --> 00:02:22.301
It was a lot of fun and we built buildings and did management contracts with other developers for about 10 years and then we started building our own projects on a leasehold basis, just like IWG, regus, many others do, that you're all familiar with.
00:02:22.462 --> 00:02:44.149
We decided by the time we'd done that and gotten fairly large, we decided that it was not a good business model, that the balance sheet of keeping continuing to add the long-term liability of the leasehold debt was destroying the corporate valuation of the company or holding it back, I should say.
00:02:44.149 --> 00:02:51.802
So we said well, there's these funny companies called Expedia this is in the mid late 90s, you know Travelocity different things.
00:02:51.802 --> 00:02:55.400
We said we actually want to own the customer instead of the facilities.
00:02:55.400 --> 00:02:57.344
We don't want to own facilities anymore.
00:02:57.344 --> 00:03:05.776
So we sold all of our facilities and we built a technology and an inventory platform that today that was pre-Airbnb days.
00:03:05.776 --> 00:03:12.413
Today we service over 200,000 corporate clients on a global basis and it's proven to be quite good for everybody.
00:03:12.413 --> 00:03:37.794
We are location or facility agnostic in that we have certain standards, very high quality service standards, that we require, sort of a best hotels of the world approach, rather than an anybody and everybody approach, and that has kept us to have very low turnover churn rates by comparison to others.
00:03:39.162 --> 00:03:40.647
And it's really it's all about the customer.
00:03:40.647 --> 00:03:43.308
It's just about service and flexibility.
00:03:43.308 --> 00:03:49.901
About the customer.
00:03:49.901 --> 00:03:50.983
It's just about service and flexibility.
00:03:50.983 --> 00:03:53.649
If you were to think on your own for a second, you know, go back a few years.
00:03:53.649 --> 00:03:54.632
Let's just go back pre-pandemic.
00:03:54.632 --> 00:03:55.353
Make it simple.
00:03:55.353 --> 00:04:03.472
All companies needed two things Needed a great product and access to capital so they can scale it.
00:04:03.472 --> 00:04:05.055
Boom, pandemic hit.
00:04:05.055 --> 00:04:07.544
What do they need now?
00:04:07.544 --> 00:04:08.969
Flexibility.
00:04:08.969 --> 00:04:22.432
A company without flexibility today is not going to last very long, so you have to have the capacity to manage a workplace that's distributed more effectively.
00:04:23.132 --> 00:04:24.074
That is global.
00:04:24.074 --> 00:04:27.718
That's distributed more effectively, that is global.
00:04:30.740 --> 00:04:41.189
You're always going to have an employee or a partner or a financial source or a customer that's not in your own backyard today, and you've got to be able to do it quickly and you have to be able to do it with short-term commitment.
00:04:41.189 --> 00:05:22.389
Hence Alliance Virtual Offices does that for a broad cross-section of customers entrepreneurs, startups, branch offices of regional companies, primarily media and tech in that regard, the legal, accounting and financial services professions, big part of our business, that whole sector is going more and more flexible Corporates, the Global Fortune 1000, and even government, even the US federal government in that regard, uses products and services from a company, from our company, and it's all about flex.
00:05:22.389 --> 00:05:25.589
It's really quite simple and it's all about flex.
00:05:26.031 --> 00:05:26.935
It's really quite simple.
00:05:26.935 --> 00:05:35.891
Yeah, well, it is, though, as you say, the underlying economics of it are that people have, I guess, shorter and shorter windows.
00:05:35.891 --> 00:05:43.831
I mean, when we started work back in the early 90s, people would plan annually, right, and then they started to do quarterly reporting, and then now things turn on a dime, don't they reporting?
00:05:43.831 --> 00:05:45.536
And then now things turn on a dime, don't they?
00:05:45.536 --> 00:05:57.254
You say COVID, but also stock prices come and go so quickly that locking yourself into a lease is well, probably for me as an entrepreneur in Singapore, was one of the largest commitments.
00:05:57.254 --> 00:06:04.990
It's a marriage to a property that you don't know whether your business is going to grow to the same amount or outsize that property.
00:06:06.120 --> 00:06:07.865
No, and a lease is a debt instrument.
00:06:10.011 --> 00:06:17.432
It's a debt, it's an obligation that you have to pay and that you're legally obligated to pay.
00:06:17.639 --> 00:06:35.853
So if you sign a 10-year lease, the first 12 months is an expense, but the next nine years goes on to your balance sheet as debt, and that restricts your growth, that restricts your ability to raise capital overall.
00:06:36.434 --> 00:06:42.709
And no one knows I don't know what's going to happen five years from now, three years from now, let alone nine.
00:06:42.709 --> 00:06:59.213
So I don't want to be like JP Morgan with hundreds and hundreds of thousands of unused square feet of leasehold space in Manhattan, telling everybody they have to go back to their office to save the corporate culture.
00:06:59.213 --> 00:07:07.274
You know, I don't think they have a culture to begin with if they have to be in an office to deal with it, but that's a personal opinion.
00:07:07.274 --> 00:07:15.574
So we don't know the future, except that you're going to have to be capable of change.
00:07:15.574 --> 00:07:18.769
So why lock yourself in?
00:07:18.769 --> 00:07:46.410
It's really quite simple problem that we solved, and the fact that we're servicing a wide variety of customers in a huge cross section of industries and different sizes of customers demonstrates that we're not so particularly clever as a company, but that there is an actual need for the product that we produce.
00:07:48.040 --> 00:07:58.891
And on the website, which is alliancevirtualofficiescom, you'll see Frank's global reach and his office is in established centers like New York, for example, isn't it, frank?
00:07:58.891 --> 00:08:05.826
But also, you've got Bristol close to home, where I am, and you've got Singapore Bristol close to home, where I am, and you've got Singapore.
00:08:05.826 --> 00:08:09.528
So an entrepreneur or a mid-sized company could sign up in one location.
00:08:09.528 --> 00:08:12.651
Could they then go and travel to those other offices?
00:08:12.651 --> 00:08:16.954
Are you giving them that freedom and flexibility to travel within the network?
00:08:17.735 --> 00:08:18.776
Not on a free basis.
00:08:18.776 --> 00:08:19.377
It's not free.
00:08:20.459 --> 00:08:24.711
I wasn't expecting it to be free, but you don't have to try and look for an office every time you travel.
00:08:24.790 --> 00:08:27.206
presumably we have a reservation system.
00:08:29.021 --> 00:08:38.355
You mentioned, frank, that you're serving multinationals, some also some governments and so on, and also the entrepreneur class.
00:08:38.355 --> 00:08:39.826
How are they different?
00:08:39.826 --> 00:08:41.245
Do they sit side by side?
00:08:41.245 --> 00:08:44.386
Are there different offerings for those two groups?
00:08:45.149 --> 00:08:46.370
Yes, Excuse me?
00:08:46.370 --> 00:08:47.013
Yes, there can be.
00:08:47.013 --> 00:08:50.470
Some clients require very specific technology issues.
00:08:50.470 --> 00:08:59.154
They require a customized network of locations that has very specific technology, primarily around security for communications, etc.
00:08:59.154 --> 00:09:04.131
Some entrepreneurial clients are really just concerned with efficiency and cost.
00:09:04.131 --> 00:09:07.784
Entrepreneurial clients are really just concerned with efficiency and cost.
00:09:07.784 --> 00:09:12.501
Legal accounting professionals financial services professionals are very concerned with caliber of front desk service.
00:09:12.501 --> 00:09:16.883
They're dealing with their clients and you know the receptionist isn't there to make our client happy.
00:09:16.883 --> 00:09:19.514
They're there to make our client's client happy.
00:09:19.514 --> 00:09:22.783
So there's a differentiation on the user types.
00:09:22.783 --> 00:09:51.292
But the overarching need is flexibility that combines clerical, secretarial, administrative support, live reception support, telephony systems and services, live receptionists in terms of telephony and answering machines or answering support, meeting and conference room, av support really whatever you need to manage and run a business on an hourly, daily, weekly, monthly or annual contract.
00:09:52.080 --> 00:09:54.966
So really, you do get to be that granular, don't you?
00:09:54.966 --> 00:10:04.360
If you're allowing people to have an hourly, weekly, monthly, quarterly, annual, then I guess your ethos is around this flexibility, isn't it?
00:10:04.360 --> 00:10:15.410
That you're liberating the cash for the entrepreneur, the business, to use to grow the company, rather than lock it into giving the landlord, which is really what that was about before.
00:10:15.919 --> 00:10:17.586
Well, let's use an entrepreneur as an example.
00:10:17.586 --> 00:10:19.125
Give you a good, a simple example.
00:10:19.125 --> 00:10:22.249
Jim, you're an entrepreneur, I'm an entrepreneur.
00:10:22.249 --> 00:10:25.350
We're going to go pitch a venture capitalist together.
00:10:26.721 --> 00:10:26.961
Okay.
00:10:26.980 --> 00:10:27.761
Let's do it.
00:10:27.761 --> 00:10:31.249
Yeah, we each have our own company, we each need a million dollars.
00:10:31.249 --> 00:10:34.816
And I go in first, I'm brave.
00:10:34.816 --> 00:10:40.879
So I go in first and I throw my pitch deck down on the VC's desk and I say, hey, here's my idea.
00:10:40.879 --> 00:10:42.667
The VC says, yeah, it's a really great idea.
00:10:42.667 --> 00:10:43.951
What are you going to do with the money?
00:10:43.951 --> 00:10:51.615
I said, oh, I'm going to get an office, I'm going to hire a receptionist and a secretary and I've got to get some imaging equipment and some furniture.
00:10:51.615 --> 00:10:54.018
And then I'm going to hire some engineers and build this product.
00:10:54.018 --> 00:10:59.065
And you walk in and he says, hey, james, love Jim, I love your product, love this.
00:10:59.085 --> 00:11:00.166
What are you going to do with the money?
00:11:00.166 --> 00:11:03.980
Say, oh, I'm going to go take a flexible workspace, hire some engineers and build the product.
00:11:03.980 --> 00:11:06.272
Who's going to get the money?
00:11:06.272 --> 00:11:09.918
You are Not me.
00:11:09.918 --> 00:11:25.041
In today's world, mitigation of risk at the investment level so that you can start a company is one of the biggest factors that isn't always considered Focused on the product.
00:11:25.041 --> 00:11:27.211
They're focused on how to launch their product.
00:11:27.211 --> 00:11:45.003
They aren't thinking about how to run the company necessarily, but how you run your company basically defines how you can manage your capital that you receive and that will determine the risk factor, and the risk factor will determine the investment.
00:11:45.710 --> 00:12:03.065
Well, and also, frank, if you were raising money, as I did back in 98 in Singapore, and you have a certain amount of money goes into office refurb and rental, you have to take more cash which, in effect, is very expensive because you're diluting your equity just to get money to give to the landlord to refurb.
00:12:03.570 --> 00:12:05.960
Right, you dilute your own equity when you do that.
00:12:05.960 --> 00:12:20.251
If you're an entrepreneur and you need more cash that you have to give to somebody else and so if you can preserve that, you can basically create a debt-free cashflow management company at a higher level of efficiency.
00:12:20.251 --> 00:12:22.817
And what companies are realizing today?
00:12:22.817 --> 00:12:28.897
Large companies and they realized an awful lot of it was happening just pre-pandemic.
00:12:28.897 --> 00:12:35.879
During pandemic, a lot of people said you know, we don't really need all this space, we don't need it all.
00:12:35.879 --> 00:12:41.519
Some companies are locked in for 10 or 15 years or they own their own buildings and it's not easy to flex.
00:12:41.519 --> 00:13:02.461
But a lot of them said well, our next generation of model is going to be quite different and we're seeing that evolution on the corporate side today and one of the solutions that the flexible workspace industry not just us, but other larger companies as well we create custom networks of facilities for single customers.
00:13:02.461 --> 00:13:06.731
My largest customer has 117 facilities.
00:13:06.731 --> 00:13:13.573
I think it is right now inside of a custom design network with a specific product just for that company.
00:13:15.198 --> 00:13:15.981
Take us through that, frank.
00:13:15.981 --> 00:13:19.413
Does that mean like branded space, because maybe they want corporate?
00:13:19.494 --> 00:13:20.216
identity.
00:13:20.216 --> 00:13:32.134
No, not branded space we don't brand space for others but fully service space on a contracted basis, and that's not the amount of space they use but the facility structure.
00:13:32.134 --> 00:13:55.494
That's a multi-year contract, so secure for us, flexible for them, and it's just an ongoing model that has changed and the amount of debt they're able to shed or not take on in leasehold debt allows them and their investors to create more access to capital and the company's just growing magically.
00:13:56.099 --> 00:14:04.894
And suppose it a parallel might be with contract manufacturer, isn't it that you don't necessarily own the manufacturing process, like apple?
00:14:05.657 --> 00:14:09.624
it really comes down to the just-in-time inventory and intermodal system.
00:14:09.624 --> 00:14:12.111
You know that started in the early 90s.
00:14:12.111 --> 00:14:23.763
So this is just-in-time real estate, if you will, or just-in-time real estate, if you will, or just-in-time officing, and we don't think of the activity of officing as being a real estate issue.
00:14:23.763 --> 00:14:25.264
It's a service issue.
00:14:25.264 --> 00:14:36.450
It really is a service issue Because you don't rent in a flexible workspace facility or in a virtual officing structure like we promote.
00:14:36.450 --> 00:14:46.067
You don't rent square footage, you contract for services almost on a cubic footage basis.
00:14:46.067 --> 00:14:53.128
It's everything between the carpet and the ceiling, including the people, the equipment, the furniture, etc.
00:14:53.128 --> 00:14:55.494
Everything necessary to run a business.
00:14:55.494 --> 00:14:59.302
So it's not a terribly new theory.
00:14:59.302 --> 00:15:05.971
We've been doing this since 79, 80, but it's one that is continuously evolving and it's quite exciting actually.
00:15:06.432 --> 00:15:17.163
It is, and when you look at it in terms of just-in-time real estate, just-in-time property, it really makes it seem so logical, frank, and why anyone was renting and refurbing.
00:15:17.163 --> 00:15:25.642
I guess there's the idea of owning and having your name on the door, but you can also help entrepreneurs, for example, to register their company in that location.
00:15:25.642 --> 00:15:35.543
That's maybe one of the differences with, for example, some of these co-sharing workspaces that are really kind of almost like they're almost a Starbucks, but with more privacy, aren't they?
00:15:35.543 --> 00:15:44.635
With Alliance, you actually give people the opportunity to register their company, have mail sent there and so on, which is, I think, yes, the registered agent.
00:15:44.696 --> 00:15:55.655
We service on behalf of other entity formation companies probably 150,000 entities someplace in that range right now and it grows every month.
00:15:55.655 --> 00:16:00.917
So it just is an ongoing process that part of the business grows based on.
00:16:00.917 --> 00:16:13.533
If you look at the little tidbit of facts here, if you look at entity formations, entity formations almost parallel grow with the growth of a national economy.
00:16:13.533 --> 00:16:30.481
So if the UK economy or the US economy is growing at 2%, then the number of entities formed year over year will grow at about 2% and the life cycle of an entity is around six and a half seven years and that sounds like wait.
00:16:30.481 --> 00:16:31.283
They should be longer.
00:16:31.649 --> 00:16:43.898
But when you think of all the startups that don't really they form an entity and they don't really do anything and then two years later they've disappeared, it's a very high churn rate at the front end and a very long life cycle at the back end.
00:16:43.898 --> 00:16:46.163
It's about six seven years.
00:16:46.163 --> 00:17:01.625
So if you look at that as a stability say, I can grow a company that services this group based on the growth of the economies of the nations that I'm serving within and I've got about a seven-year life cycle on the customers on that growth.
00:17:01.625 --> 00:17:17.416
And in the US right now there are around 37, 38 million entities, so your churn rate on new customer prospects is around 6, 7 million new prospects every year and it grows at about 3%.
00:17:17.873 --> 00:17:22.819
Right and they're coming in and registering new companies and getting from you that flexible workspace.
00:17:22.819 --> 00:17:24.977
And I was looking in terms of pricing.
00:17:24.977 --> 00:17:32.681
It was like in London about $100, 70 pounds a month for a Northwest one, for a Cavendish address, which is great, right.
00:17:32.681 --> 00:17:37.310
So central London at a very low rent and then you can go in and use those services.
00:17:37.310 --> 00:18:00.358
Just so that you know me and others can listen and say listed companies, the professions, legal accounting the financial services branch offices.
00:18:00.599 --> 00:18:04.973
You might be in London but need an office in Edinburgh for branch office services.
00:18:04.973 --> 00:18:12.051
And then entrepreneurs and the individual ratio of those changes market by market.
00:18:12.051 --> 00:18:31.298
So in the United States we have more larger and government-related companies in state capitals where they need something, a representation, or in our national capital, in Washington DC, there's a concentration of that type of company.
00:18:31.298 --> 00:18:41.365
If you look at large corporates, you would think they'd be concentrated in places like New York or Chicago or Dallas or LA.
00:18:41.365 --> 00:18:44.118
They really aren't, because that's where their corporate headquarters is.
00:18:44.118 --> 00:18:54.765
So when you look at where their branch offices, where their regional branch offices or service offices are, that's where they concentrate the use of flexible officing etc.
00:18:54.765 --> 00:18:58.788
So each group is a little bit different.
00:18:59.829 --> 00:19:10.402
And I think the point that I was getting when I looked at your website is that people can move in quickly with a minimum fixed fee and no hefty lease to exit.
00:19:10.402 --> 00:19:17.521
Frank, what happens for the entrepreneur that doesn't go down the path of flexing when it comes to office space?
00:19:17.521 --> 00:19:24.277
Where do you see that happening when entrepreneurs say thanks, frank, but you know it's not for me what goes wrong for those people?
00:19:24.518 --> 00:19:35.339
I'm going to say it's the same thing that goes wrong for anybody that doesn't keep their mind open to new opportunities or or new, new ways of doing things.
00:19:35.339 --> 00:19:50.012
So you might use the term, they're a business Luddite, where they're refusing to recognize the need for something and the use of something that's actually beneficial to them.
00:19:50.012 --> 00:19:56.273
I hope I don't say that in an insulting way, because it doesn't just relate to our product, it relates to everything.
00:19:56.273 --> 00:20:03.290
How many people in business today can say AI will never work, I'm not going to pay any attention to AI?
00:20:03.290 --> 00:20:08.180
How many manufacturers say, no, don't want any robots, I just want wrench turners?
00:20:08.180 --> 00:20:16.882
You can't say that things that create flexibility or new business models you're going to ignore them.
00:20:16.882 --> 00:20:18.284
You can be choosy.
00:20:18.284 --> 00:20:22.863
You can wait to see them proven while you're doing research.
00:20:22.863 --> 00:20:27.300
You can be selective, you should be selective, but you shouldn't ignore them.
00:20:27.300 --> 00:20:27.602
Yeah.
00:20:27.622 --> 00:20:32.821
I'd agree with you and I think you know you and I grew up with paper and pen and the fax machine.
00:20:32.821 --> 00:20:36.113
In fact, my first job was to shipping cakes from Europe.
00:20:36.113 --> 00:20:37.516
We had the Telex machine.
00:20:37.516 --> 00:20:44.336
We had to go down every morning and see what the orders were from Amsterdam and only one person had that information.
00:20:44.336 --> 00:20:49.973
And then fast forward clients said they didn't need websites, they only wanted brochures.
00:20:49.973 --> 00:21:03.882
So this idea that you need to move with the times, and I think the logic of what you've got in terms of not having the financial commitment of a lease but getting the flexibility of this just-in-time space, makes a lot of sense.
00:21:03.882 --> 00:21:13.898
Frank, let's just ask you about your history, because a lot of us, as entrepreneurs, build solutions to the problems that we face.
00:21:13.898 --> 00:21:16.037
What's your story?
00:21:16.037 --> 00:21:20.858
I mean, you're working from home and you have 1,500, 1,600 offices to choose from.
00:21:20.858 --> 00:21:21.942
What's going on?
00:21:22.549 --> 00:21:23.673
Well, number one I'm lazy.
00:21:23.673 --> 00:21:24.635
I don't like commuting.
00:21:24.635 --> 00:21:26.661
I think it's a waste of my time.
00:21:26.661 --> 00:21:34.003
Even though you can hold a video meeting on your phone in your car, you're not paying attention.
00:21:34.003 --> 00:21:36.253
So I don't like commuting.
00:21:36.253 --> 00:21:37.036
Never have.
00:21:37.036 --> 00:21:37.837
So I've always.
00:21:38.519 --> 00:21:50.398
If I had an office, it's always been within five or 10 minutes of my home, hopefully walking distance or rowing distance if I was on the bay, which I was in Newport Beach or I just moved from.
00:21:50.398 --> 00:21:54.269
So you know that's my primary thing.
00:21:54.269 --> 00:21:59.512
The other thing is I'm very happy working in solitude.
00:21:59.512 --> 00:22:03.109
I'm one of those people that actually enjoys quiet.
00:22:03.109 --> 00:22:18.401
I don't need a lot of energy around me, and I think, as you build a company that is remote first which we've been doing for 45 years in many respects your selection of your team is critically important.
00:22:18.401 --> 00:22:36.086
You need to select people that are, if they're going to be working remotely or they're going to be working on a hybrid basis, that are really their values are aligned with that on a family basis and on an individual basis.
00:22:36.086 --> 00:22:39.874
We shouldn't force people to work in an office or out of an office or anything.
00:22:39.874 --> 00:22:51.106
We should find people that are happy doing the model that you've got, and that's what they're seeking also, and that they're obviously productive at doing so, and that's very, very important.
00:22:52.759 --> 00:23:05.738
So you've really taken your own personal preferences and made that possible for anybody else that feels that way about wanting to work as and when and wherever they want to work.
00:23:05.738 --> 00:23:18.394
With that flexibility, you've created an infrastructure for literally tens of thousands of people to exercise that choice right to be local or global or regional.
00:23:18.394 --> 00:23:20.756
Frank right Over 45 years?
00:23:21.160 --> 00:23:22.923
Yeah, I think if you look at.
00:23:22.923 --> 00:23:59.432
I read an article the other day on the next billion dollar company, the next unicorn company, and what they did is they went back in time and they said well, the first billion dollar company had x number of employees, and then the second one, the third one, the fourth one, the most recent billion dollar launch company that was a unicorn, had 16 employees and the next one may have as few as three yeah, I was reading that as well, that there's a question with a capacity to work flexibly, to to use technology, et cetera.
00:24:00.214 --> 00:24:09.029
That is growing and we are scaling our individual capabilities and we shouldn't limit ourselves purely to place.
00:24:09.029 --> 00:24:20.144
If I could only build a billion-dollar company by living in Manhattan, trust me, I don't care to build a billion-dollar company because I do not want to live in Manhattan.
00:24:20.925 --> 00:24:38.151
Well, and Frank, yeah, and I think the other thing that's really, or the other dimension of this, is really powerful, is that for young people who are priced out of real estate, what you're offering and what we're talking about is really liberating, that actually they don't have to be in large offices to build wealth.
00:24:38.151 --> 00:24:44.030
They can actually be anywhere in one of your offices and build really a substantial business.
00:24:44.751 --> 00:24:47.001
Well, they can, and whether they're.
00:24:47.001 --> 00:24:56.712
Honestly, in today's world, with technology as it is and creative capability as it is, whether they're in one of our facilities or not, they can do that and good.
00:24:56.712 --> 00:24:58.827
That is so wonderful, so exciting.
00:24:58.827 --> 00:25:06.230
It doesn't matter where you are, as long as you're in your head and as long as what's in your head you're actually executing.
00:25:06.230 --> 00:25:09.247
That's what matters.
00:25:10.241 --> 00:25:26.426
Well, frank I mean Frank Cottle I was going to come on to that actually as sort of a final question about a piece of advice, because you've built this company, you've got the alliance virtual offices, you've also got the all work dot space, which is a another venture that you're running.
00:25:26.426 --> 00:25:39.627
What would be a piece of advice that you'd give me as an entrepreneur, because you've built a global business on your own terms, which is really something that many of us aspire to?
00:25:41.060 --> 00:25:42.686
Boy, don't listen to old men.
00:25:42.686 --> 00:25:43.288
How's that?
00:25:43.900 --> 00:25:47.048
Well, luckily you're young Frank, so I'm okay to ask you.
00:25:51.444 --> 00:25:54.332
You know it always depends on the individual.
00:25:54.332 --> 00:25:57.028
What does that person need for advice?
00:25:57.028 --> 00:26:00.269
There is no uniform thing that you can say.
00:26:00.269 --> 00:26:07.788
If I were to go back on anything, I would just say just focus on learning something new every day, every single day.
00:26:07.788 --> 00:26:09.905
Seek out something new.
00:26:09.905 --> 00:26:20.906
It doesn't matter the source your own decision-making of what's good, bad and ugly should grow by exposure, and everybody struggles through that.
00:26:20.906 --> 00:26:29.453
I know I have and you have to become the best student of your chosen industry.
00:26:29.453 --> 00:26:34.446
If you're not just like at school, somebody else will be.
00:26:34.446 --> 00:26:39.453
That's great, frank, be that best student, Frank Cuddle.
00:26:40.095 --> 00:26:40.434
thank you.
00:26:40.434 --> 00:26:41.416
Just like at school, somebody else will be.
00:26:41.416 --> 00:26:42.278
That's great, Frank.
00:26:42.278 --> 00:26:43.359
Be that student, Frank Cuddle.
00:26:43.359 --> 00:26:43.559
Thank you.
00:26:43.559 --> 00:26:48.750
If there's a book, podcast, newspaper, source of information that you go with your curious mind, where is it?
00:26:50.142 --> 00:26:56.066
I'm going to be selfish in this regard and say I'm going to go to my own podcast, the Future of Work podcast.
00:26:56.066 --> 00:27:14.027
Over at allworkspace, we have amazing guests that know infinitely more than I do about their subject matter, and that's one of my favorite places and a place that I actually go back to often when I'm trying to do research on things and pull ideas out myself.
00:27:14.027 --> 00:27:17.213
What did that guy as a head of Miller Knowles say?
00:27:17.213 --> 00:27:19.463
What did that guy over at Cisco say?
00:27:19.463 --> 00:27:26.163
I try and pull out their knowledge and that's one of my own favorite resources actually.
00:27:26.845 --> 00:27:28.749
Frank, we'll put that in the show notes.
00:27:28.749 --> 00:27:30.093
That's allworkspace.
00:27:30.093 --> 00:27:32.685
And isn't that the joy of podcasting?
00:27:32.685 --> 00:27:39.522
That we get to be guests and hosts with interesting people from around the world and learn.
00:27:39.522 --> 00:27:43.902
That's the great joy for me of running this show and it's been a joy for me to meet you, frank.
00:27:43.902 --> 00:27:45.045
Thank you for coming on the show.
00:27:45.045 --> 00:27:50.630
If you want to find out more about you and have the chance to have a conversation, maybe with you, where can they find you?
00:27:51.740 --> 00:27:52.201
Well, it's easy.
00:27:52.201 --> 00:27:58.788
You can just go to alliancevirtualofficescom and I'm right there on the management team, easy to get to.
00:27:58.788 --> 00:28:01.413
Or, you know, I'm just on LinkedIn like everybody else.
00:28:01.413 --> 00:28:04.135
Just reach out, I'm happy to connect.
00:28:04.859 --> 00:28:05.220
That's great.
00:28:05.220 --> 00:28:11.428
It's Frank Cottle C-O-T-T-L-E, by the way, in Fort Worth, Frank, thank you for joining me today.
00:28:11.448 --> 00:28:12.609
My pleasure day my pleasure.
00:28:13.550 --> 00:28:27.348
Well, we've been talking about virtual offices, but Frank and I are both at home and in a way, that's the story that we have the freedom and the flexibility now to work from where we want to, when we want to and where it suits our business to grow.
00:28:27.348 --> 00:28:30.801
But we do need our businesses to have.
00:28:30.801 --> 00:28:56.950
Often, the established credibility of a location somewhere, maybe in a metropolitan area, provides a way for us to have privacy and some sort of establishment for our business, but also, if you're growing, the flexibility to go to different places, different cities and different countries and to meet your clients and your customers and potential employees from a position which is a wonderful, professional, well-managed office space.
00:28:56.950 --> 00:29:05.605
I'm going to put a link to the virtual offices in the show notes and also on my magazine at theunnoticedentrepreneurcom.
00:29:05.605 --> 00:29:13.412
I've also written an article and give you some write-up of some options that you can choose from and a link as well to the Alliance virtual offices.
00:29:14.039 --> 00:29:14.781
My name is Jim James.
00:29:14.781 --> 00:29:17.027
If you've enjoyed this show, don't review it.
00:29:17.027 --> 00:29:18.450
That's not what I'm interested in.
00:29:18.450 --> 00:29:30.172
I'm actually interested in you sharing this with a fellow unnoticed entrepreneur, because that's really what matters, not what you think of me, but that someone else gets to know what you just learned and, in the meantime, I just encourage you to keep on communicating.
