The RookInterviews done before class: 131 total (14 this week)

Carrie Denning Veronica Stamats Elisa TagliacozzoVirginia Calkins

A membership-model network of physical spaces for heads-down focus and like-minded

buzz.

The Rookies

Carrie, MBA, urban planning, hustler + networker + optimist +

extremely naïve member of the team + financial error monkey

Veronica, Junior, architecture major, hacker, the devil’s advocate +

enemy of the People’s Republic of San Francisco

Virginia, MBA, architect/FBI agent, hustler + visionary + Chief Realistic

Officer + Financial Architect

Elisa, CEE master’s, entrepreneurial wizard, hacker + hustler + boss

3

Original HypothesesThere are existing problems with the real estate in which people work/focus/meet beyond their office,

and we have a solution for it – The Rook

4

Original BMC

5

Lively

Buzz

Sanctuary

• functional work spaces for a gradient of needs → quiet, buzz,

meeting/event space

• Excellent food and beverage

• Membership provides free wifi, printing, coffee, tea, and water

Meeting space

energy from the street

First MVPs – We started broad, but with a big vision

6

First MVPs – We started broad, but with a big vision

7

The Spectrum: Love to Hate

Love Meh

Dumbest

thing I’ve

ever heardMaybe!

“I don’t want to walk more

than 20 minutes to use the

space”

“This is a godsend”

“my dreamspace”

“I’d pay $150 a

week for this”

Didn’t care until he realized

the travelling perks we would

offer.

“Her ideal

workspace would

be free and she

would be very

cautious to pay for

a space that she

could have at

home”

"I am already a member of

the Battery which serves

my needs for business

meetings and last minute

food reservations”

"yeah, i think i'd pay $100

bucks for that – for an

environment where id be

going for meeting people

not working space"

“working from home is

insanely lonely. This

would have been a

total lifesaver.” ‘Transitioning’ people in

between jobs would be

hesitant to take out a

membership because

they don’t know for how

long they are going to be

freelancing or searching

for a job and would

therefore not commit.

I would come for

ergonomic chairs.

Good lighting. Good

desk height. These

issues are important.

Cabin Fever is a big

issue. I have to get

out.

"really interesting, compelling" would pay $25-$50/hr.

Hypothesis Change

"You need more

than just the

absence of a pain"

I'm also not sure

people using the

space for such

different

purposes would

respect each

other enough to

make it work.

“I would be turned off if this

were viewed as exclusive.”

Nellie says she would never

pay for the rook since at

home she already pays for

internet, food and privacy

so there’s no added value.

"this is exactly what I would have looked for"

“what is your differentiator?”

“Intel wouldn't pay for this.”

8

Week 5 BMC

?

?

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Week 1 – The whole

universe (our TAM was

$225b!!!!)

Week 3: Removed students,

streamlined, but what do we

offer? Can these groups mix?

Week 5: Bye bye businesses

?

Who are our customers????

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So we’ve learned

a lot… but… we’re

spinning in

circles. How do

we test this???

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Prototypes – Physical space prototype????

WEEK OF PANICYou have too much going on

and need to test this.

How the *$&#*# are we going

to do this???!!!

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Prototype #1 – Container. Go Time.

1. Ikea + Home Depot

2. Borrow roommates boyfriend’s

car. Use MBA skillz to fit giant red

chairs in car

2. Make biz cards,

staple chocolate to

them. Note for future:

Don’t leave chocolate

in sun. Biz cars

smeared in chocolate.

4. Pop up shop at

the container →

our first

customer. A

bicycle delivery

guy!

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Lesson 1: You learn more with real user experiences

than just user speculation.

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Prototype #2 –There is demand, but hard to measure w/ a 4

hr. pop up. / Next step: longer pop up → Mechanics’

Our first $$$!

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Feedback from real customers for first 2 pop ups: WTP exists, we need to understand how to segment our market

Seni: “Free coffee would actually entice me to pay $5

for a coworking session. I'm currently looking at drop in

day rates of $15-25 at coworking joints plus I generally

pay $2 for coffee anyway, so $5 seems reasonable to

me.”

“Drop in fee I think you could charge 25-30 for the

entire day”

“It would be great to have a place like this in SOMA (or

maybe Mission) area which is far from my office but a

hub for a lot of activity so I often have meetings there.

That way I'd have a reliable quiet/comfortable place to

go between meetings or host meetings and I'd be able

to take calls there. A Pac Heights/Cow Hollow location

could be cool too as a better alternative to working from

home for the morning (and if I start commuting to Palo

Alto, that could be even more awesome!)”

I think a tiered fee would be really cool where I

pay $75 - 100/month which gives access to

events and maybe [20 hours] using the space.

Then if I use it more it goes onto a variable

basis. That way people don't get scared by too

high price but also end up paying more if they

use it every day.

would pay but would want to reserve a seat,

how to expense? Can this be tax

deductible?

“I like how this doesn’t feel like an office, it’s beautiful”

“Terrible location! Too far away.”

Learnings:

1. People like non-office settings

2. Locate in a place with more foot

traffic

3. $25 drop in rate

4. Tier pricing

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Lesson 2: Simplify who the customer is. Find 1 thing

and do it well. Customer discovery never ends.

Week 1 – The whole

universe (our TAM was

$225b!!!!)

Week 3: Removed students,

streamlined, but what do we

offer? Can these groups mix?

Week 5: Bye bye businesses

Week 6-now: Kept these three

groups. Need to hone further.

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Prototype #3 – The Mechanics’**

**Finally!!

Lesson 3: You are not selling. You are learning.

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Prototype #3 – PEOPLE!! (60+!!!!!) – revenue in triple digits!!

**Finally!!

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Feedback from real customers

• “I loved it, great music, cool people, friendly vibe.”

• “The classical music was kind of over the top “

• “it is nice to meet people and learn about other industries”

• “I love the idea of a clean, comfortable place to work that

isn't as stuffy as an office.”

• “For as long as my team is small and it's more

affordable/convenient to use a coworking space, I'd use

something like the Rook”.

• “Personally, I'd like a vibe that was a little more "fun" and

funky -- with different types of seating areas”

The Rook Our Job: Provide a cross-functional third space with a true community

Key Partners:

Existing Clubs in

other cities: Reciprocal

membership

Underutilized space:

galleries, pop up space

Suppliers:

F&B (Food and

Beverage), cleaning,

property management

Partner w/ Companies

Brokers

Landlords

City Planning depts

Pop Upsters/Storefront

Mechanics

Key Activities:

Design/Construction:

a physical space

Operations: warm and

friendly staff; reliable,

great F&B; clean,

functional website

Key Resources:

Human: familial staff

Physical: space,

rotating exhibits/art,

F&B, library, louder

space, bar, meeting

rooms, phone nooks

Financial: CapEx

construction costs, rent,

operating costs

Value Propositions:

Networking of interesting

people, sense of

community (but not

advertised)

Social + Productive

Quiet work

Meeting space

Phone call

Free, unlimited wifi

Free coffee, tea, water

Access to day care

Customer

Relationships:

Attract community

influencers initially

WOM, brand mktg

Acquire HR depts

City development

groups

Channels:

A network of physical

locations

A website to publicize

substitute offerings in

different cities

Companies

Landlords

Customer Segments:

The Wealthy Well-

Educated Wifi Worker

Social Seekers

Business Expensers

Cost Structure

Rent of the building ($2-5/sqft), construction costs ($200/sqft

materials and labor), soft/operational costs, F&B COGS, labor

costs for staff (4 staff, $20/hr), HR, legal (permitting) broker

fees, free coffee/tea/wifi

Revenue Streams

Short-term: tiered monthly/yearly membership fee ($100

and premium $300), mail services, F&B revenue, daily passes,

rental fee for larger spaces

Long-term: increased monthly membership fee, partner with

credit card companies/rewards programs/companies, day

care

BMC Now

Financials

Lesson 4: Be realistic +

segment

Monthly Perspective:

Expenses:

Rent $12,500

Labor $19,327

SGA $9,575

Marketing $7,500

Amortization (5 yrs) $22,696

Total Expenses $71,598

Revenue:

Basic Membership (200 members) $150

Premium Membership (100 members) $300

Mail Revenue (100 members) $60

Total Member Revenue $66,000

Visitors Rate (150 ppl/month) $25/day

Visitor Revenue $3,750

Meeting Rooms (200 hr/month) $150/hr

Meeting Room Revenue $30,000

Library (5 events/month) $1,500

Library Revenue $7,500

Event revenue $3,000

(reflects 6 events per month, $25 tickets, 20 outside attendees)

F&B Rent $1,250

Total Revenue $111,500

Profit $39,902

(56% margin)

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• Lesson 1: You learn more with real user experiences than just user speculation

• Lesson 2: Find our what custSimplify who the customer is. Find 1 thing and do it well.

Customer discovery never ends.

• Lesson 3: YOU’RE NOT SELLING YOU ARE LEARNING

• Lesson 4: Be realistic. Segment.

KEY LESSON LEARNED

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• Maybe!

• We launched our Founding Members program and 1 person did pay!

• Next steps:

–Testing Partnerships:

•Passion Company

•The Information

• Liquid Space, Storefront

– Week long event: more central, small meeting rooms available, charge drop-in

rate/weekly rate and rate for food

Are we doing this?