109: Frank Cottle discusses Creating A Flexible, Yet Productive Team.

Are you thinking about how to grow your business with near and offshore staffing? But you're also wanting to make sure that it's reliable, cost effective and really well done. I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have Talk to Docs of Talent and you won't be disappointed. Go to docsatant.com Bill G. Again, that's doxataalent.com Bill G. One more time. Doxatalent.com Bill G. Check it out. Today people are working in all kinds of new ways. Home offices, flex time, remote offices, virtual workers. Today's show is all about the different ways that you can still create team and place for your business in a flexible fashion that's responsive to the needs of your workforce and your challenges, but also financially. I hope you get a out of it. Listen in. Hello and welcome again to the Scaling Up Business podcast. I'm your host and growth coach, Bill Gallagher. So on the show with me today is founder and CEO of a business center network, the Alliance Business Center Network. It's a kind of a solution for virtual officer. So if you are like many of us locating your business or running teams all over the world instantly and you don't want to have a lease, you want to use co working, that kind of that whole world. Frank Cottle is the founder and CEO of businessnet. He has a long history in this world. He's going to talk to us about teams going mobile and virtual and working in unusual ways. How do we get flexibility in the places we work, still remain connected and work together. So that's what we're going to explore today on the show. Welcome to the show, Frank.

Hey Bill, thank you very much. Glad to be here.

And you're down in Orange county right now. Are you working from home or in one of these spaces?

Actually today I just came back from the gym before going to a meeting. So I'm working from home right now. I'm in Newport Beach.

Well, so I have a recording studio at home now as well and it's actually quieter and better than my office, my formal office space for recording where we used to do the early shows. We had a lot more background noise from the freeway and stuff like that. So often I do about I'll probably do 120, 120 flights this year. And I think I figured that I would spend more than 180 days in hotel rooms, right, visiting clients this year and speaking at conferences and things like that. But not only am I on the road and then I come back and I just want to stay near home for a few days. And so a home office is really critical to me, but I find myself on the road working with clients and so I always want to get them out of their offices so they have distractions, so they're creative. So we're always looking for a different place. And increasingly we work with teams that are establishing branch offices and you know, they've got developers here and a UI team there and a sales team there and people are getting more and more. It's not really virtual, right? Because they're real. It's. They're not meeting up. I mean they are meeting with online tools, but they're actually in physical offices somewhere. But connecting in places in the office allows them to be professional, to be collaborative. Right? I work at home only when I want to be at home. Yesterday I was doing our own company planning session. We were in the office with a mixture of on site team plus remote team dialing in from other locations.

No, I think that's very common today. The future of work is nothing but change, as we know. And today, using your example and applying it to myself, I work from one of about three offices here in Orange county as well as my home. And like yourself, I travel a bit, not quite as much as you do, thank goodness, and certainly not that many flights. I'm a long haul flyer, not a hopscotch flyer. So having a place to work, having a way to connect that's consistent is really what's most important to me. Quiet connection, good communications, all of those things matter.

Right. Well, so. And then the flexibility, right. I've been in my same office, my regular office I've been in for about, about 20 years now and I moved suites and personal offices in that like two or three times over the years. But I'm in the same building, right, with the same landlord. And yet the way we work today is increasingly, and I have three different teams in the one office that, that we share today. So it's, it's evolved quite a bit. So before we get into the evolution of your business and, and all that, and that this co core idea, which I think is increasingly important for all of our companies, scaling up and giving them some flexibility. Tell us about your background. Did you start getting interested in real estate and business as a Kid or like, give us a little bit of your history.

Well, I come from an old California family of ranchers and farmers. We've been here since about the 1830s, and I don't think there's anybody more entrepreneurial than ranchers and farmers. You've got to solve every problem and you've got to figure out how to solve it yourself. So I grew up in a family of entrepreneurs, not just my father, but uncles, cousins, grandfathers, the whole mix. It was really. There was no other way to think. And when I got to college, I realized that I was being trained to work for others, and I didn't like that. So I was not the best. I was a good student, but I wasn't the best college attendance record. And I just have always felt that the only security I had was working for myself. And so that's the path I've chosen. And I've honestly. I started my work effort in about 1969, and I think it was 1997 or so. It's the first time I ever actually got a paycheck from another. From another company. I took a. A partnership with Deloitte for a couple of years on a special project, and I was so proud of myself. I came home and showed my wife. Look, honey, we've been married for 25 years and I finally got a job. So it's been a long, long entrepreneurial cast for me.

So. And at some point along, you. You started to develop office spaces?

That's correct. I spent the first 12 or 13 years of my career in the marine industries, first as a commercial diver, thereafter racing yachts and building a yacht brokerage. And I sold that company, or I sold my. Got rid of my interest in that company in 79, 80, call it 1980, because I decided that as long as I was a broker, I'd never be an owner. And I had had an interest in real estate as a family, and I had purchased quite a number of residential income units while I was in the brokerage business. But I decided I didn't like that part of the business. I wanted to go commercial. And coming from my background, land was always important. So I decided I would enter the commercial real estate industry as a land banker, basically acquiring a piece of land in a path of progress, holding that land for a period of time and then reselling it for a higher purpose. I think that's a pretty common plan for a lot of companies. The difference was I didn't want to buy land far out and hold it for 30 years. I wanted to buy Land on the edge of large master plan developments, projects you'd be familiar with. Up in your area would be some of the projects like Walnut Creek, around the Metro station, the BART station, Dublin, there's a big master plan project. Pleasanton, there's a big master plan project. Richmond, there's a big master plan project. I built buildings in all of those projects with partners the likes of Prudential Land, Mobile Land, Chevron Land, et cetera. And the smallest amount of bricks and mortar that I could put on the biggest piece of dirt was these funny little things that were just beginning to pop up in the late 70s and early 80s called executive suites. So we built purpose built buildings to host and house executive suite complexes or executive suites facilities that we then operated ourselves as the primary tenant in our own buildings. And we did that across California, Arizona and Texas for 10 years. At the end of 10 years, we sold the portfolio successfully and then started. We had learned how to run business centers, as they were called through the transition. And myself and two other partners built a large national business center operating company. We were the largest private company in the world at that time. And we built a 195 centers across North America. Not on owning the buildings, but by leasing space within a building, much the way most of the industry does and then subdividing that space and reletting it to our business and to our clients.

Now let me compare and contrast because I think people have different familiarity from this where they work in one now, have worked in one in the past, visited them, use them like that. But there were these executive suite things and now we have things that are. We call them coworking. They have some very specific similarities from a technical and utility standpoint, but the experience is wholly different. So I think the old executive suites and in the. One of the business groups I belong to has a automatic membership in Regis. And it was always a place like where certain attorneys and your CPA or certain professions, solo practitioners would house their business. When you walk into one of those style places, there's a lot of closed door offices, a couple common conference rooms, maybe a little open break room area. So you've got some conference rooms, a break room and then a lot of private things. And you generally don't have any idea who's in there, what they're doing or anything like that. They're sort of very quiet places. But when you go into a wework or some of the other coworking spaces today, they're vibrant and open. They feel more like a Starbucks or a Cafe than anything else. There's people collaborating. They're open, small teams do them. They have a profoundly different feel to them.

Yes, they do. Yes, they do. I think it's easiest to see our industry. Let's make it analogous to the automotive industry for a minute.

Yeah.

In the automotive industry, we would say that anything that has an engine, a steering wheel and moves people around from place to place is a car.

Exactly.

Okay. But we would also say, you know, there's luxury cars and there's sports cars and there's SUVs and there's family wagons, minivans, et cetera. And each of those different models have a different brand of promise. The sports car makes you smile. The luxury car makes you kind of puff up a little bit. The family van lets you move everybody around. It's a brand of promise that comes with the car. In our industry, to answer your question, our industry combines people place and technology into a single bundled product that's delivered with a highly flexible service agreement. So everybody that takes people place in technology and provides it with a service agreement that's highly flexible is part of the serviced office co working industry. But a classic business center like Regis or like we had built originally has a brand promise of people place and technology with a professional image and services. A co working center has that same people place in technology, but has a brand promise of business growth through a collaborative community. An incubator, same thing. People place in technology, but adds mentoring. You should belong in incubators. You know, an accelerator adds capital to an incubator, access to capital to an incubator. Then there are media centers, logistics centers, culinary centers, all variety of that people place and technology mix. And that is the future of the way people are working by needing it. And if you look at your own advisory structure and your own clients, I would surmise that there are three core things that every one of them needs. Clients, access to capital and flexibility. And through using our industry, you can access capital easier because you have lower capital expenses in your own operation and you have more flexibility. So our, our industry really is driving and is a major driver to a lot of the growth behind other industries in high tech in particular. And it's not simply the professions, legal, accounting, financial service professionals that you alluded to earlier as being core to our industry. That's a big part of it. About 20% of our total industry's customer base. But our biggest two groups are actually government and the global Fortune 1000. Larger companies are changing their business models radically through hiring practices. If you were to you're from the Bay Area. So if you were to look across the bay at Cisco and look at their annual report five years ago, it probably said they made a certain amount of revenue and had a certain amount of profit and they had about 300,000 employees. If you looked at that same annual report today, they'd say the same thing about revenue and profits, but they'd say they had a workforce of 300,000. Because about 20 or 25% of their what were previous employees are now contractors. And most of those contractors are on a one to three year contract. And Cisco and every other major corporation in the world wants to match their liabilities for space with their contracts, primarily their employment contracts. And that is a huge impact. And it's one of the reasons we're having such high valuations on corporations today and the market is doing well is because corporations are taking billions and billions of dollars out of their balance sheet in the form of leasehold debt that they're shedding through the combination of contracting and short term leases through our industry.

Well, if you. So some of our folks have read exponential organizations, but from Selim Ismail or are familiar with the ideas of working teams in a more flexible, remote, digital, nomadic collaborative style that includes not only digital tools but also ideas like coworking or flexible space options. And I think increasingly like as companies think about growing up and scaling. One of our previous shows, Tim Danley, a graduate of our work, if you will, an alumni who applied the work in a couple prior companies. And then when he went to start up the latest company, his first decision was, okay, I'm not going to base the company in the same city that I live because then I'll find myself going in the office too much. I'll be too close to it. So the first thing he did was put it in another state, another city. The second thing he did is they as a team, they decided that the vast majority of people working with them would be independent people. So they would license and contract with people to do the work. And so they. I don't know what the current numbers are, but it's probably something like four employees that they have in the business. But it's several hundred million dollar business because they have worked in a novel flexible fashion like this. And I think this real estate piece of it that you're talking about lets folks begin to do that. So just as you're using contractors and remote folks better, then you want to think about how do you organize where you house people, how do you get them out of their pajamas into some real clothes and into a professional or let them collaborate. Look, working from home is really great. I do it maybe a week, a month, and it's a pleasure to be home. But there's other times when I need to work with other people, collaborate, connect, and then I'm either in our office, in our primary office, or on the road at some meeting venue or something like this, right?

Yeah. Well, you really need about three ways to work. I think in today's world, you need access to a classic office environment for all the purposes that you've just said regarding teams, you also should be able to. Able to do focus projects independently on your own. And then you need a technology infrastructure in your company that allows people to be connected because people do travel and move around and all of that has to work seamlessly. In your colleagues and your friend's example, he merely has to have a structure that allows that and allows him to manage all of that and still create a corporate culture that shares his vision.

Yeah. And the physical space, as we see, dramatically changes the way the space is used and organized, changes the feel of the vibe. And that'll have relevance to the kind of business that you're in, the kind of work that you do, the kind of team that you have. Right. There are some teams that would be. Actually we just helped our son pick a new office space and we helped him think about it and so on and organize and select because he's young, but he has a team that he works with and they were looking for office space for their. I think they have five or six people in the team now. And so at first we thought, oh, he should go get one of those things. But he went and he looked at all the co working spaces. He said for the kind of work that they do, which is more like a think tank and less like their creating an app or something. They. It was that that open, noisy environment was not suitable for the kind of work they were doing. Interviewing and deliberate meetings. It was, it was intrusive. So they ended up subletting space from a foundation that created. So they did a short, short term sublet on a place, but they spent a lot of time looking at a variety of. Of more traditional coworking kinds of things. And they had to find that vibe. Right?

Yeah. Co working is actually going through its own interesting evolution. In 2006, 7, 8, 9 period, when it sort of emerged, it was primarily a place for millennials coming out of college to gather together and try and figure out what they were going to do and to Actually co work. Hey, I'm a programmer, you're a designer. Let's build an app. Okay. It was a place where people actually cross referenced each other's skill sets and did that. Well, you know, in 2018, most of those millennials are married, have kids and they built their app. So they actually need team space because companies don't cowork. Companies need team space. Individuals like to cowork, they like the environment. So there is a shift going on and more and more of the co working Centers you mentioned WeWork as an example. When you walk into WeWork, you see this open expansive space and this and that as you described. But what you don't see necessarily unless you're a resident there is the other four floors that are mostly private offices and team rooms.

Right.

If you look at the doing an analysis of the square footage and you referenced regis as well, WeWork and Regis have close to the same, same number of square footage in private offices, private workspaces, conference rooms and open space. Yeah, Just the scale of a WeWork allows for that 1 out of 3 or 1 out of 5 floors that they're 20% or so, 25% of open space to be large, where the typical Regis center is in the 25 to 35,000 foot range, usually a single or a two, two floor facility. And so you don't see the scale and that's really the only difference.

Well, I think there's one other style difference and that's like the use of glass walled offices to create an open, a busier kind of an environment.

Right, that's true. But I will end it just as an FYI. The biggest single complaint that WeWork has is from its own tenants regarding those glass offices because they lose privacy. Anybody can see what's on their computer and it creates a very noisy environment.

Yes. Yeah.

So even WeWork is trying to figure out how to maintain the vibe but still deal with that real life need that clients have. And Regis would say, well, we're just co working but with privacy.

Right.

So because they both, they both have a community, it's just communities of a little different sort of.

I think quite a few coffee shops, not the least of which is Starbucks also has a very significant working environment. We see students in them doing work, but we also see early stage entrepreneurs and freelancers trying to do work. They might be editing a document or working on a design or doing something like that in those environments, but they're working in something whose primary thing is a coffee shop.

Exactly. At Starbucks actually calls those people Coffee campers. Coffee campers because they come in and order one cup of coffee and then sit at the table for three hours.

Right.

So they're not real popular with the coffee selling people, even though it's an effective way to do things. And we've all stopped into a Starbucks, pulled out our laptop or our mobile and caught up on stuff for a few minutes. I think that's a great thing. But it is not a substitute for a real office.

Well, some people seem to not only love it and some coffee shops seem to really focus on it, like try to. Personally, I hate that.

But yep, some shops have tried to create that community culture and there's actually restaurants that have entered our industry that say, hey, we're only open for dinner. So we're going to open the facility up from 8 in the morning until 5 for co working.

Right.

That's not a big trend, but that's something that we see on a spotty pill basis all over the world.

Yeah, I've seen a couple of those around that where they try to make some use of their space and they'll.

Try to use a wasting asset, which.

Is our coffee or something. Here's my pro tip, here's my favorite. So for those of you who are like me, who might find yourself on the road a bunch, I truly hate the idea of working in a coffee shop, but I love hotel lobbies. An upscale hotel lobby is a fantastic place. All you have to do is look like you belong and behave yourself, be appropriate to the environment and they'll have lovely service. It's a little more expensive, but the environment is great. The Internet's usually fine.

It's funny Bill, because I travel a fair amount internationally and that's my quick fix too. I'll walk right past a Starbucks or the European equivalent and into the first five star hotel. I can move into the lobby or the bar, hook up to the wi fi and work for an hour and I find that it's very effective. So maybe we need four places to work, not three. Right.

Well you just need to look like. And not only that, but it's a great place for a meeting. I have certain hotels in, in the cities that I work with that are fantastic places for meetings and easier than a private club or that kind of thing.

In those every meeting has its proper venue and you know, if you have to pull computers out and spread papers around or use AV equipment, well then that's not the right environment.

Can you imagine trying to set up your projector in, in the four season?

Yeah, I can imagine that. And it doesn't look pretty, but no, see we all need that. And I think that begs to the comment I made about what all companies need and that's, you know, access to capital, customers and flexibility. And all people within companies also need that flexibility. And management needs to understand that and understand that people are much more self directed. And I think our next generation, our Gen Z that's coming up very rapidly, faster than the millennial generation did for sure is going to be the most self directed business generation that we've ever seen and is going to have a whole new pioneering aspect to everything we do with office.

Well, I think when you're. So we deal with companies that are scaling up and working on growth and a variety of stages, they might be very early stage or they might be scaling significantly around the world. But in either case, when you go to open an office in a new establish some foothold in a new area and you're going to locate someone there, if you've got one person there, well, they can probably work from home. But if you've got a person there who's going to have meetings with other people or you're going to have more than one person in that city who need to work together, then starting to look at some kind of an environment, some flexible space that lets you add more people, move around. That's right. For your finance makes a great deal of sense.

Well, it really does. And you know, it's funny, we deal with a lot of private equity companies and venture capital companies not just as clients. We deal with their branch offices as clients usually and project offices, but. But with their portfolio. And imagine if you and I were going to go in and pitch a venture capitalist today and I walked in and said that I was going to, I needed a million dollars for this brilliant idea. And the VC asked me, well, what's your use of funds? And I said, well, I'm going to rent an office and I got to get some furniture and buy some computers and some copiers and hire a secretary and get some programmers. And then you walked in and said what? And he said the same question to you. And you said, well, I gotta go into an alliance or a Regis or a wework. I'm going to go into a serviced office environment and I'm going to hire programmers. Who's he going to give the money to?

Yeah, well, the more flexible reduced cost. Right. We want to be lean wherever possible.

Well, and it's not just lean, but it's have the flexibility for growth and the flexibility for change because you know in scaling companies those are the you're trying to affect growth and that requires constant IT change would change a lot.

So I think we've given people a ton of things to think about and open some eyes, maybe got some people thinking about what their needs are. Let me tell if they want to see the work that you guys do, you've got a solution that that networks a whole bunch of offices. Are you 700 now?

Today about 700 office locations in 54 countries. But we we both within our own network group and across the industry at large. So I would say we can access almost 28,000 locations if we want to.

So we've mentioned endlessly Regis and we work on this thing. But go check out alliancevirtualoffices.com and see this very large network of possibilities for your expansions and check out what Frank and his team have to offer for you. AllianceVirtualOffices.com will be in the show notes as well. I want to thank our listeners for downloading, for tuning in as they say in the traditional radio world and joining us. Every week we host a show like this where we talk about things related to the scale and growth of the company. And if you want to find out, check us out again next week or just go to scalingupbusiness.com and you will see all our past shows next kind of thing linked there as well as tools, free tools and the techniques for beginning the scaling up process of framework for your business. So again alliancevirtualoffices.com and scalingupbusiness.com thanks again Frank for being on the show with us today.

Oh it's my pleasure Bill. Really happy to be able to contribute.

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