Episode 15: Continually Remaining Flexible & Learning W/ Doug and Polly White

My guests on today’s podcast are Doug and Polly White, the owners of Gather Coworking Space, a regional coworking business that offers incredible office space for everyone from individuals to large teams across Virginia. What is unique about Doug and Polly is the story of how they came to run Gather- from both losing their separate jobs in 2008, to starting their own consulting firm for small businesses, and then creating business space for small businesses. In this episode we talk about flexibility and learning. They had to pivot their marketing of their consulting business after 4 months, 250 prospect meetings, and zero clients. They had to keep learning when they launched their first gather and it wasn’t profitable, and they had to get creative when covid hit and put small businesses out of business, or sent people home- away from their office, because you cannot “Gather” during a global pandemic. Doug and Polly have a wonderful marriage and they speak to the fact that in business and marriage, challenges will either move you closer together or push you a part and how they moved closer and closer over the years. And be sure to listen to the end as they highlight how they define success as the journey of their faith, their marriage, and their ability to give more money away. So with that introduction, I hope you enjoy this episode of the self-employment success podcast with Doug and Polly White.

Links

Gather
PeaceLink Financial Planning

TRANSCRIPT

Leland Gross CFP (00:01.494)

All right, welcome Doug and Polly to the Self-Employment Success podcast. Excited to have you here today. We're excited to be here. Yes, very much so. That's amazing. This is gonna be a great conversation. To jump in, tell us, the listeners, a little bit about you guys, what you do for a living, your business, and where it stands today. So Polly is an amazing woman. When I first met her, I guess you were in your late 20s.

No, mid-30s, but thank you love. But what I learned is she had, I think it was late in your 20s, decided that she was going to go back to school. So with a house to take care of and a young child, she enrolled in community college. She went two years there, then transferred to Averitt, which had an extension program, got her bachelor's degree in business, and then went off to

George Washington and got her master's degree in human resource development. During this entire time, the lowest grade that she made was an A-. So she is quite an incredible woman. She became the head of human resources and was the head of human resources at three different companies of increasing size. And then she decided to strike out on her own and launch a consulting business, consulting on HR.

She did a lot of teaching for Fortune 500 companies in the Richmond area. And that's Polly's background. Right, which just means I'm really good at talking at people, so maybe that'll be good here. So Doug has a very impressive pedigree. We'll just say a lot of engineering, physics, and a Harvard MBA top of his class. So he had a good education background. We met when he.

came in to be the president of the company I was working with at the time. Oh, wow. That's a little scandalous. Well, it actually wasn't because it was like eight years later that we got married and we had both been gone from that company for about five years when that happened. But it sounds good, doesn't it? Yeah, it's a great story. No, but he was my business mentor. So that's why he knows all of my education background because I was just finishing up my bachelor's degree when he became...

Leland Gross CFP (02:20.298)

my business mentor. But Doug ran a bunch of companies as president, CEO, COO, everything from small startups to he was a senior, senior executive at Capital One for several years. So this fantastic business background. And then we could go into this at some point, which is

during the recession of 08-09, we both found ourselves unemployed at the same time. Oh wow. Yes. That's stressful. It was very stressful because we still had one kid in college. One child was in college and Polly had this training business where she was training at Fortune 500 companies in the Richmond area. But when you go into a recession and the Fortune 500 companies are having layoffs,

the first one to go is the external trainer. That would have been me, yes. Oh wow. I had been doing turnarounds and I was actually doing a turnaround in Philadelphia and finished up the assignment. And we got together and said, okay, now neither of us have a job. And- That is like the worst case scenario. It was. It was not good. And I looked at her and said, you know, we're in a recession so I can find another company to turn around.

The problem is they're going to make us move. So I had turned around a company in Philadelphia where I'd commute up on Monday and come home on Thursday. Same with a company in Boston that I'd go up on Monday and come home on Thursday. I said, wherever this company is, they're going to say either you move here or there's three other guys just as good as you who will. And for personal reasons, we really didn't want to leave, Richard. No, so it was my suggestion that

we start a consulting business together and consulting to smaller firms. Because I thought I could handle the smaller firms. And frankly, after Harvard, Doug went to work for McKinsey, which is the blue chip consulting firm in the world, right? So he has a really strong consulting background. So I knew we could do the consulting work. I had been doing teaching and consulting for several years for smaller companies and Fortune 500s, depending on what the work was.

Leland Gross CFP (04:43.634)

And Doug had an extensive background. So I suggested we start our own firm. And of course, his immediate reaction was? I'm not so sure about this. He didn't think it would work. Well, what we did finally decided we were gonna do that. And it was very clear to us that we could help small businesses because we run small businesses, we've been involved in them for years. We had great educations, good background.

The only problem was we didn't actually know how to sell consulting services. Right. So this was really, really hard because we had all the tools, but we didn't know how to get to our target market at the time, which was small businesses. Interesting. Mm-hmm. And so do you want to? We signed up with a group, paid them way too much money. Yes, we did. Because they were going to teach us how to sell consulting services.

And what they said is you got to get your business cards printed up. You go to networking events, you hand out your business card, you get their business cards, you call them up and you say, let's get together for coffee. Right. And at that coffee meeting, then of course, what you're supposed to do is to present what you could do for them and of course, sell them your services. We went after this with a passion. In the fourth quarter of 2009, we had 250 such meetings. Oh my gosh.

That netted us precisely zero clients. Yes, zero. Not a single one. So we started basically the first day of September. So, right, so four months of doing this. And we get to about the 20th of December, so right before the Christmas holidays. And we said, it's really easy to count how successful we have been because we have zero clients. Yeah.

Yeah. Gosh. And it was then that we had actually over cheese, steak, and beer at lunch. Yes. We had what I describe as our penetrating thrust into the obvious. Wow. And that is not one of the people that we had met with owned a small business. No, not really. They were salesmen. So a lot of salesmen that were at these networking meetings. They were employees of sometimes small businesses. But the...

Leland Gross CFP (07:07.382)

owners of the small business unless it was a one-person shop that really was just getting started themselves. The owners weren't there. So everyone else is there doing the same thing you're doing. Right, which is trying to sell each other services. I know. And so we said, okay, so we've got to get in front of small business owners. People who are...

The thing is, I had done that for years. And I said, if a consultant called me up and said, hey, I'm a management consultant, I'd like to have lunch, I'd say, you know, I'm really very busy, I'm gonna have to pass on that. I wouldn't have taken the meeting because I don't wanna be sold. Right. So we started thinking, how can we get in front of small business owners? And Doug actually came up with this idea. Do you think if we were writing a book,

about how to run a successful small business, we could get in front of, interview the owners of small businesses. And I said, well, that could maybe work. We'll have to test it out. So you wrote a book? Oh, yes. Well, what we did is we went, what we found is you gotta get a warm introduction. So we had our assistant at the time make a few phone calls and we couldn't get any meetings, but we went to the head of the chamber. And said.

we're writing a book on how to run a successful small business. Who in the chamber should we interview for this? And, and they gave us about four names, I think. And we said, can we use your name when we call to ask for the interview? And they said, yes. And so that's what we did. And we, there's a, there's a little bit more to it. And we actually wrote a book on how to do this thing that we're talking about now. But anyway.

So over the next 10 months, we interviewed just a little more than 100 owners of small businesses in the Richmond area and Richmond and surrounding areas. And then we wrote this book. So these are people who would not have taken a meeting with us. Yeah, if you were just, I'm trying to sell my consulting service, they wouldn't want it. But to be in your book, definitely. Well, and the first meeting is never a sales call.

Leland Gross CFP (09:27.57)

because you've promised them that this is an interview. So you do not talk about what you do in that meeting. We've even had a couple of people who said, well, you're a consultant, maybe you could help with this. And we'd say, love to talk to you about that, but this is the interview, could we come back next Tuesday and discuss this? Yeah, let's set up another topic. Which innately makes you feel like now they're coming to you, not we're selling our service. There's a whole process that we developed.

over this 10 months of how to do this successfully. Let's just suffice to say that at the end of this, we were no longer these nobodies that were at the networking event that were trying to get coffee meetings with people. Now we were the consultants who were writing this book. And people were coming up to us asking about the book, asking who we had interviewed, asking about what was going to be in it, and suggesting people we should interview.

That is genius. Well, and in that, I'm assuming, you know, on the beginning side, you're going to all these networking events, you're handing out business cards, you have 250 meetings that have zero return on investment. Now you're writing this book, you're getting tons of interviews. And I'm sure the ROI on that was significantly higher because you're not so outright just, Hey, let's get coffee and talk about what I can do for you. Well, the book was successful.

And in fact, what we learned is, the second book actually is called Guaranteed Access, How to Get Clients Without Selling. What we learned is we weren't good at selling consulting services. But when somebody asked if we could help with a particular project, we were pretty good at saying yes. So we had to get people who would do that, who would actually say, could you come and help us? And so we became this couple who did this. So...

out of this book, which actually was pretty successful. It was an Amazon bestseller, and it actually won Best Business Book of 2011 from the NFIB. Wow, congratulations. What was the title of the book? Was that the Guaranteed Access, or was that the second book? No, the book that we wrote with 100 interviews that talks about how do you grow a successful small business is called Let Go To Grow. Wow, is that on audiobook?

Leland Gross CFP (11:50.758)

It is. It's on Audible. So both... I will be downloading that. Both Guaranteed Access and Let Go to Grow are both on Audible. But anyway, so from that, we received the opportunity to write the small business column for the Richmond Times Dispatch. And so we've written a weekly column for them for 13 years. Oh, you're still doing that. Like that is a continued effort. Yes. We wrote for Entrepreneur Magazine.

for four years after they had, I guess, Entrepreneur saw our blog and the Richmond Times Dispatch and so on. Entrepreneur approached us and asked us to write a weekly column for them. And we did that for more than four years, but then Gather was growing. So we had to stop with one of those. We just couldn't do everything. So can I back up just for a second? Sure. So.

Leland Gross CFP (12:46.55)

I've got a lot of questions. You guys are fascinating. I mean, there's so much here. So for those listening, Doug and Polly are the owners of Gather Coworking Space, which is where I record my podcasts, which is where my office is. And only until just now did Gather come into the story. So there's obviously so much more to your entrepreneurship journey than Gather itself. So.

I want to at some point get to when did that become a thing on the, when we're talking about consulting. Yes. But first, had you always wanted to write a book or was that, was the book purely out? Are you writers? Where did that come from? It's so creative and obviously worked, but it's kind of like we're, we're burning the midnight oil based on this other consultant who told us how to sell consulting services. And now we're just going to 182. We're writing a book.

Where did that jump come from? The beer. The beer and the cheese steaks. No, seriously, it was- Must have been a really great beer. It was a couple of pitchers, actually. So it really came out of what we're doing now is not working. And as an entrepreneur, one of the things you have to be able to tell yourself is this is not working and you have to be willing to pivot.

When you can look at this and you can say, the path that I'm going on, doing more of it and doing it harder is not going to get me anything better. I have to figure out a different way to get where I want to go. So it's time to 180 if you need to. Yeah. So that's what we did. And of course we began to see as we started this process, okay, now we're getting these meetings that we couldn't get before. A couple of them are turning into some

consulting work. So we got some positive feedback fairly early in the cycle. It became obvious that this was something that had a chance to work. Now the segue to gather is interesting because it turns out that we had a couple of clients, people that we had done some work for, that said we're thinking about buying an office building in downtown Richmond, would you like to join us? Yes. One of them was a property management firm. Okay. And the other

Leland Gross CFP (15:07.522)

to which were clients of ours, we had taken from residential to commercial construction, helped them with their business pivoting, how they were thinking about business and how they could move into commercial construction. And both of those clients had been growing fairly rapidly. In fact, so rapidly.

that they were growing out of the space they were in. They knew each other and they said, we could buy this office building, which would give us more room for our growing companies. Mm-hmm. So we did that. We did. We partnered with them. And one of our partners was gonna put his business on the top floor. Mm-hmm. And the other two partners were gonna put their business on the bottom floor. And we had this empty floor in the middle. And as it happened, Polly and I were with the Richmond Chamber of Commerce out in Denver. Once again, the Chamber of Commerce.

best deal for us ever. But we're- And we need to get involved. And so we're with our chamber out at what they call the inner city visit. They take, Richmond has the biggest inner city visit in the United States, which is really strange to think of Little Richmond. But we take 200 people from Richmond to a different city every year to learn what they're doing that's cool and then hopefully bring some ideas back to-

to the Richmond area. That's amazing. So we saw this thing called Galvanize. And Polly took about 45 photographs on her phone. We were there for about 45 minutes. This co-working space, because co-working is pretty new. Now we're in May of 2013, so 10 years ago. That was going to be one of my questions. And we got back to Richmond.

And actually, we spent that entire weekend. It turned out to be Cinco de Mayo weekend. Back to the alcohol again. So the first great idea was beer. The second great idea was over margaritas. It was. Yeah. So we worked out our business plan on Barn Adams. Seriously. I love that. And we went back to our partners, and Polly showed them all the pictures that she had. And they said, we think it's a great idea. Let's do it. And so Polly likes to say,

Leland Gross CFP (17:14.102)

with 45 minutes of market research, because that's how long we spent in Galvanize, Gather was launched. And then I have to follow up with, and we got it all wrong. Really? We did. So the first space we had was the 9,000 square feet of kind of extra space that wasn't being used by our partners. That middle floor. Yes, in this 21,000 square foot. So three floors, 7,000 square foot per floor. So we had all of the middle floor plus

a little bit of the bottom floor. And we did get it all wrong. We didn't have enough offices. We had too much coworking space. We didn't understand density, staffing models, anything. And coworking in 2013 was really, really new. Yeah, I feel like it's a whole new revolution to the business office model that's really only come about really popularly.

well, in my mind, since the pandemic almost, and I'd be interested, we're gonna get there in a minute, because I'm sure that's gonna be a fascinating piece to that, but okay, so it's 2013, we have so much space, we're not doing it right. We launched it in 2014, took us a little while to get the building built out. And our plan was to get this first base to profitability and then roll it out to other locations in Richmond.

Well, we got this first base to what I describe as sort of kind of almost not quite breakeven It was just I mean it was only a few thousand dollars a month negative, but it was negative Yeah, right. So the owners are having to put cash into the business to keep it going Yeah But we got it far enough that we could look at it and say but if we did this differently and that differently and that differently And this differently then it would work

And so we opened our second location, which was in Scott's addition. Right. And that one. So when you're building out something as large as a co-working space, you're talking about a year and a half to two years to really get everything. You have to identify where you're going, negotiate the lease, get all the permits and the contractors, get loans or raise the money and then build it out, which can take, you know.

Leland Gross CFP (19:33.458)

eight months to a year to build out. So the whole process is at least 18 months. So we opened our first location in April of 2014 after 11 months. And then we opened our second location in July of 2016. So just a little of two years later. But we learned a lot in the next year. As Doug says, it wasn't...

making enough money, but we were able to identify the things that we could do differently. And there again is another lesson. You have to keep learning as entrepreneurs, always. You go into something, we always tell people when they pitch us on their business plans, what you have to understand is whatever you've got in your business plan is not what you're going to end up with.

with. We can almost guarantee it. And it's going to take twice as long and cost twice as much as what you think. And so it's good to have plans, but you have to be able to shift as you're going along because it's not going to be that picture perfect thing that you imagined in the beginning. So we opened our second one in 16. And that was profitable.

very quickly. Yes. Because of the changes that you guys made. Yes. But we learned more. Oh so much more in that one. And we opened our third location. January of 18 so now just a year and a half later. Okay. Now you also have to understand during most of the, during all of this time up until now, Polly and I have been paying our bills with our consulting business. Gathers in existence but we are minority shareholders.

and we didn't work in the business because the business couldn't afford to pay us. Got it. By the time we got to opening our third location, first of all, we had the opportunity to buy out several of our partners, at least they're all still partners, but with smaller interests. So we now have controlling interest. That happened early in 2018. We began to transition from our consulting business to working in Gather because Gather now had enough cash flow to pay us.

Leland Gross CFP (21:48.686)

And by the end of 2018, we were pretty much out of consulting. She had a couple of little works she was doing. I was gone by the first quarter of 19. I was completely out of consulting. And when did that desire to leave consulting come in? So you've built this consulting business from the ground up of writing a book, interviewing people. Some of your clients that had come along are the ones that sort of pitched you on the...

corporate office space. Yes. Then you built Gather and now you're doing Gather and you've left the consulting. So the answer is, at least my desire to leave consulting happened when I understood that business was not scalable. And I say it was not scalable because if you're working with small businesses, there is a limit to how much they can pay. If you're McKinsey and you're working for General Motors,

you can charge them $6 million for a three month engagement. And they do. Wouldn't that be incredible? And if they balk at it, you say, OK, how much is on the table? What's the difference between getting this right and getting it wrong? And they say, oh, a couple of billion dollars. OK, so $6 million gets swamped. Is nothing. Right. It doesn't matter. What matters is getting this right. If you think we can help you get it right, hire us. And that's McKinsey Sales Bitch, and it works.

That's not what we could do because our clients were, you know, $10 million a year in revenue, not GM. And there's a limit to what they can pay. And what they should pay. And what they shouldn't pay. Right. Because the size of the problems they're working on are much smaller. So then it becomes a quantity game of now we need to have so many people to create revenue, which then creates capacity issues. In order to get people who could do the work we were doing, we would have had to pay them everything we could charge. There was no margin. Got it.

So as long as we were doing the work, and we were working 60, 80 hour weeks, we were making quite a nice living, even putting a little bit into savings, but it wasn't gonna generate any real wealth. And there was no way to like really build yourself out of the business properly. The only way to do it would have been to start working for larger companies. And then you can afford to charge a little more, now you can hire people with the skill sets that we have and still have a margin. And we thought about that.

Leland Gross CFP (24:08.122)

And other people do some different things. They monetize through podcasts and through, I mean, we were even approached at one point by A&E, by a casting person for A&E. You know, as they were thinking about a reality show where a husband and wife consulting firm came in and took care of husband and wife businesses, like family businesses. The chip and Joanna of small business consulting. Exactly, it didn't happen.

You know, we're not photo ready and we're too old. So it didn't happen, but there are other ways that people can take a small business like that and monetize it and scale it at a much greater level. But seriously, if what you're doing is consulting and you're charging by the hour for your time or by the engagement, there's really only so much you can make between the two of us. So at some point we had to say,

what else could we do? We were investing in some companies, we were investing in some real estate, doing certain things like that to try and build wealth. But then, Gather came along and we saw an opportunity. And we say it can be scaled, exactly. If you do it right, it can be scaled. Yes. So we had the three in 18 and Doug and I had controlling interest now and we said we're scaling this business. So we built

three more in 19 and two more in 20. Wow, so the first three were about 18 months to two years apiece and then you did five and essentially two years. Wow. And during COVID. Yeah, I'm thinking like 18, 19, these five just went live right when nobody can be together. And so I know that is a scary thing, isn't it? Yeah. That was the middle of March of 2020. Yes.

when the governor basically said, go home. Yeah. And people did. I will tell you, short pump at that time was our space that was the most full. It had about 250 people in it every day, plus another 50 to 75 people coming in to meet with those 250 every day. And the day after governor Northam said, go home, we had five people in the space. Oh my gosh. And we were paying two of them to be there. Yes.

Leland Gross CFP (26:32.918)

They're the community managers. The community managers, yes. So it was scary. We had just opened three, and in fact, Virginia Beach, where we're sitting right now, this location had started demo on March 3. Oh my gosh. So 10 days before we got shut down, basically. Wow. And we, at that time, Polly and our other partner is named James Crenshaw. And Polly and James and I sat down and made what maybe was the worst business decision.

We looked at our community managers and said, hey, we could easily lay half of them off because when you've only got three to five people coming into a space and there are no tours, one community manager is more than enough. We had competitors that had no community managers. They had a telephone number. They said if there's a problem, call this number. Somebody will come around and help. We made the decision to keep all of our community managers, all of our employees fully employed.

Wow, amazing. We didn't change their compensation, their hourly rate. We told them that they would get 40 hours a week. We said, please do not work 41. Yes. 40 hours a week. Yes. There's no reason to work 41. No overtime, please. And so were they still coming in to gather, all of them to work even if no one else was there? And there were a couple of our locations that I would tell you, like at Oart.

I'm pretty sure there were a couple of days where we had zero members come in. Wow. But yes, they came in. Now of course, we put them to work sanitizing things, making the place safe. We did all kinds of things. We rewrote all of our policies and procedure manuals. Oh, I'm sure. You know, we found things to do. The fun stuff. Yes. But the other thing we did is, because we've now got these community managers that have wiped tables down three times already today and they've got nothing to do. So.

We stepped back and said, what if we focused on making our sales process a little bit more robust and training people? Yes, and so Douglas took it upon himself to write our sales process. Which was really quite simple because she's the best salesperson we have, so all I did is write down what she does. And it was to write a book.

Leland Gross CFP (28:51.414)

An interview. So we wrote down our sales process and really codified it. Should we go with the close rates? Sure. OK. So we're sharing numbers, which you have to check with your business partner before you share numbers. Of course. So at Gather prior to working on our sales process, we had about a 40% close rate, which

Pretty good. Yeah, that's great. You know, so that means, you know, out of every 10 people that come in to take a tour, four of them are going to become Gather members. After we worked on our sales process and went through and taught it to everybody, and the way we did that is Douglas would sit down with them and teach each community manager the sales process. And then a few weeks later, he would have the community manager sit down with him.

and teach it back to him. And that was the most stressful time they ever gave that sales process. They got to have their sales process in front of them. It wasn't like it was an open book test. But after we went through that process and really started working on what do we do before somebody comes in to tour with us? What do we do during the tour? What do we do after the tour? And we emphasize things. Now I'll only just give you one example, but one of the things that we really emphasize with our folks.

is when you sit down with a prospective member, that member's interests come first. Always. They come before gatherers' interests, they come before your interests, you have got to take care of that member. Now, I don't mean that you say, well, it would be in the member's interest if they didn't have to pay anything for their office. No, we can't do that. But I'll give you an example of a situation where we did, Polly did something that was in the member's best interest. She interviewed somebody

on the interview and gave a tour to somebody in Norfolk who was in the home healthcare industry and we knew about the home healthcare industry because we've had clients that were in that industry when we consulted and Polly said so at what stage are you? She said well I'm just starting my application but because I'm starting my application I need an address and I need an office and it has to have a locking door and so on so forth.

Leland Gross CFP (31:14.518)

These are requirements of the state to be licensed in home health. You have to have a locking office and there's other requirements. And Polly said, um, you don't actually need an office right now. And the woman said, no, I've got to have an office because I've got to have an address. And, and she said, you know, they're going to come around and inspect me at some point, but I've got to have an office. Polly said, no, what we're going to do is we're going to sell you a mailbox. And instead of paying us, I'll get the number.

$500 a month for the office, you're going to pay us $50 a month for the mailbox. This was a while ago. And because the thing is, you don't actually need an office until they come to do the inspection. That'll take a couple of months. So let us sell you a mailbox while you don't have any revenue in your business for a couple of months. When they schedule the inspection, we'll sell you an office and your address will stay the same.

And then you'll have a locking door when they come to inspect you and you'll keep the office afterwards. It's not like they're going to only have it for one day. They needed to keep it once they become licensed. So we weren't really breaking any rules of the state. But it was just a you don't actually need the room itself yet. Exactly. Let me save you a thousand to fifteen hundred dollars because you don't have any revenue right now anyway. So again, the members

interests always come first together, including we're really going to try and figure out what do you need, not what you just want. Because sometimes our eyes get a little bigger than our stomachs kind of thing, where we see that beautiful six-person window office with the great views, when what you really need as a startup is maybe a co-working membership. So, you know, let's have that be your aspirational office. I'd be happy to sell it to you.

but I want you here for the long term. I don't want you here for three months. I want you to feel comfortable as you grow your business. We've been there, we've grown businesses. And so let's grow your office size along with your business. It's fun as a member of Gather to hear behind the curtains because I'm like, I went on that tour. And it was true, my eyes were bigger than- Oh, were they? And I, in my industry, we need a-

Leland Gross CFP (33:36.322)

filing cabinet that locks and a room that locks and a secure building. And so I had looked at other coworking spaces in the area but they were all purely coworking. There wasn't the private office option. And so I had a tour with Ellie and she walked me around to all the different options and I was like, I want this corner office with the windows. And she said the price and I was like, what other options do we have?

So then she worked it backwards and like, well, what's your budget? Let's figure that out so that you guys have the best space. And even since then, as my team has grown, I feel like they're always looking out for, okay, what do you need at this point in time? When do we make upgrades or transitions? And I mean, and so it's fun to hear that because that's been my experience. Right, and what we found is once we got everybody on board, doing the right things and doing the things in the right order,

our close rate, our sales close rate, went from about 40% into the mid 60s. Wow. Yes. That is a huge jump. It is. And we've been able to maintain that. And we've been able to maintain it, yeah. Wow. And so currently there's seven, eight? Seven gathers. And then you launched a partnership with another coworking business. All launch.

called Launch. Launch Workplaces, yes. And so that is somebody we met over the last few years who also has a small regional coworking network. So they are in Maryland, DC, one in Ohio, maybe one in Pennsylvania, something like that. But mostly Maryland and DC.

And our members were constantly asking us, when are you going to Northern Virginia? When are you going to DC? I need you to be up there. And I don't wanna go up there. Cause it would mean you'd have to drive in Northern Virginia and I don't like it up there. Yeah, the Richmond to DC 95 is actually the worst stretch ever. It is, it's almost as bad as Atlanta. So because of that, we partnered with Mike and that was a really

Leland Gross CFP (35:52.59)

good move for us. Amazing. Okay. So for you guys, what surprised you the most throughout your whole journey of where you have an incredible background? 2008, we both lose our jobs. So we start a consulting business. We write a book to be able to, we have to pivot our marketing. So we write a book that gets really successful leads to corporate real estate, which leads to gather. Yes. Throughout this whole journey, what

is something that surprised you. Hmm.

Leland Gross CFP (36:29.732)

I guess how...

Well, COVID surprised us. I was going to say, how quickly you can go from total prosperity with a strong cash flow and everything looking good to the point where you're not sure that you aren't going to go bankrupt. Wow. And you can't always see what's ahead. No one expected COVID. No one expected our governments to.

shut people down. And because of the choices that, you know, our people and our government made, it wasn't just Gather. I mean, Gather went through some really hard times. But our members, I was working with literally hundreds of our members during that first four, five, six months of the COVID.

because people lost their businesses. I'm a photographer. No one will let me come within six feet of them to photograph them. I have a training business. I'm a wedding planner. I got fired from my job because corporate decided we don't need salespeople that go out and visit people. So I had an office with you, but now I don't have a job. So there were all these disruptions within our gather community. And as you know,

we take our gather community pretty seriously. And so when the members started coming to us, we worked with them to help them as much as we could during that time. And nobody had seen this coming. And nobody knew really what to expect even going forward. No. Like when will we return? What is gonna happen? Yes, what is going to be normal and when is it going to come back? So I think that was probably

Leland Gross CFP (38:29.934)

biggest surprise and I'm good at the pivot. I'm good at saying this isn't working. Let's do something different. In fact, one of the things she did with our members when they would come and say my business has totally collapsed. I can't afford to pay you anymore but I've still got nine months left on my contract. She would say well let's talk about your business. Could you pivot and do this? And now we're back to small business consulting. It was. I went into consulting mode all the time.

We gave you two months where we didn't charge you anything. We'll tack those two months on the back end of your agreement, but we're gonna put you on pause for two months to give you a chance to pivot. Do you think maybe you'd be able to be generating enough revenue to pay us by then? Well, and then we worked with people, we did. So there was a lot of chatting about the different companies that we were working with, all of our members.

but a lot of our members did stick with us. People started coming back. Really, some people started coming back the next week. Everybody left the first day, pretty much. But within a week or two, we saw some people coming back. Within a couple of months, it was a lot more. And then we had to go through all of the different things that all businesses had to go through.

sanitizing and the masks and the social distancing and how do you have a business called gather? When you cannot, yeah the marketing on that is tough. It was, I said we used to have the business with the very best name in the whole country and now we have the worst. I mean in my experience of co-working there was a pivot somewhere along the way in the pandemic where people

wanted to go back to an office, they couldn't, they were like, I cannot get work done with my children around. Right. But a lot of these corporate offices were saying like, you can't come in here. And so a lot of my peers, that was when co-working really hit our radar of, hey, you know, my corporate office is no longer allowing us in here. I can't work from home. Great, I will go to a co-working space where I can have a private office or I can find some way to stay.

Leland Gross CFP (40:53.374)

sanitized. Right. And we did have that in Richmond, which is has a big Capital One contingency. They have about 10,000 employees, I think. We had what I called the Capital One refugees, you know, the folks that were coming to us because what if they lived outside of the Richmond area in a little bit more rural? Like it's rural real quickly when you drive outside of the Richmond. Yeah, it's not far. And they didn't have Wi-Fi, but yet they were supposed to be on Zoom meetings.

We found one woman who, well, she found us and she said, I have for the past eight months been sitting in front of the public library in my county. No way. Using their wifi. So she'd been working in her car every single day, sitting in front of the public library because it was the only place she could get enough bandwidth to have her Zoom meetings. And so when she found us, she said,

This is just so wonderful. I can come in here and just... I can only imagine what a refuge gatherer would have been to that woman. Yes, yes. Yeah, so... Ironically, the friends of mine who I was talking about who kind of put coworking on our radar, all a capital one. Oh, really? Yeah. Yes. So, it's been a journey. We are still sitting with our seven that we had during COVID because we didn't want to and didn't feel we could expand.

during that whole time. Now of course we've come out the other side, things are better, but I don't know what's next right now. Are we going to expand? Maybe if we find the right place. But we've got several challenges right now, one of which is commercial construction costs are through the roof. Yes. The last time I looked at the numbers I couldn't make

because what we were doing for $140 a foot was going to cost us $225 a foot. Wow. So things will level out. Yes. Over time we'll figure it out. And I would like to think that at some point we'll expand, but it probably won't be this year. No, no, not this year. Well, I'm thinking like if you're on an average of two years and you brought out five and a two-year window, you've got a couple more years before you.

Leland Gross CFP (43:17.898)

You've bought yourself some time. Right. So I'm intrigued at this answer because at the beginning of, before we started recording, I prompted them with, you know, what is the low point? And there was a big reaction. So tell us what was the low point for you guys on this journey? Well, I'll pick a very specific day. Okay. So I think I know which one you're going to pick. We have been in COVID for quite a while.

It was December of 2021. Oh, so we've been in it for a while. Yeah. Our revenues had been ramping up, but our costs were also ramping up because we had to start paying rent at these. When COVID hit, there were three locations that were open that we weren't yet paying rent at. Because you get a period of free rent usually. Yeah. When you negotiate the

and we had the free rent period there. But by the end of 2021, we were now paying rent pretty much everywhere. So our costs had been going up. Our revenue had been going up, but was below our costs. So we were cashflow negative every month. Polly and I had been putting money into the business, loaning the business money to keep it afloat, to pay our employees, to pay our rent, so on and so forth.

And we go for a walk most every morning. And it was on one of our morning walks early in December of 2021. And I said, we've got two months left. Oh, my gosh. And we're out of cash. And I had told him, tell me when it's time to because he manages the money. I manage the folks in the locations. And I said, the problem is we're not going to be cash flow positive in the next two months.

We're still growing, it's still getting better, our expenses have now leveled off, but we're not going to be cash flow positive.

Leland Gross CFP (45:23.054)

And I remember saying, I thought you were going to tell me, I didn't think it was going to happen this late in the process. But we had put in everything. We had been, we'd sold off our rental properties. We put it all in. You went all in on Gather. We did. We put it all in on Gather to make the company solvent.

And I remember sitting down after that and thinking, well, let's just do the best we can. But you're right, it was right before Christmas. It tends to be right before Christmas for you guys. It does. That was the low point. That was the point where I couldn't see with my business experience and my knowledge and my understanding of what was going on.

I had a few more tricks up my sleeve. There were some things we could have done, but we were at the end. Mm-hmm. Wow. And I will tell you, God worked a miracle. Mm-hmm. Because all of a sudden, we got a check that we had never expected. It was somebody that owed us money. We knew they owed us money. We had no idea that when they'd pay us back, if ever, and all of a sudden we got a check. Wow. And then the next day,

we got a call from a lender who had declined to lend us money earlier that said, we think we're ready to lend you money now. Would it be helpful if we could come up with X amount of money? Oh, and then remember we got the little bit of idle money that we got came through also in December. So it was like all of a sudden we got several hundred thousand dollars. Oh my gosh. Which was enough to get us through.

we went cashflow positive in April of 2022. And that bit of cash we got at the end was enough to get us there. You're welcome, I joined in April 2022, so. Well, there you are. There you go, that was perfect. And we've been cashflow positive since, and we're actually growing, so our spread is getting better. But you ask about the low point, that was the low point. That sounds like an incredibly low point. It was. It sounds stressful. And...

Leland Gross CFP (47:45.118)

you know, and you still have to go into work every day and put on a good face for your employees. And not let them know that you're stressed or what's going on. No, no. And we had let our employees know throughout COVID, not the exact numbers or anything, but that, you know, we were, we needed to be focused on

improving sales and retention and filling up our spaces and being mindful of expenses. So, I mean, they knew that where the focus was. It wasn't like we were hiding things from them, but we didn't give them exact numbers. They had no idea how much money we put in to keep the business going. No, you don't share things like that. So this is a podcast about success. And if you pulled anybody and gather,

If we went door to door and asked them, how do you define success? We'd probably get a different answer from each person. So for the two of you, how would you define success and how will you know when or if you've achieved it? So I don't think success is a destination. I think it's a journey. And I think that we have achieved success, but in order to continue to achieve success, we have to.

continue to grow and continue to move along that journey. What are the things that define success for me? Well, I'll just be blunt, our faith. And our faith was sorely tested during the difficult times. Our relationship with each other. And I think when a marriage goes through the stress that we went through, you either get closer together or you break apart. We got closer. If that's possible, I mean, because we were always Doug and Polly, you know. So.

And so, and of course, getting the business to the point that it's throwing off sufficient cash that we're comfortable. And in fact, getting to the point that we can start to increase our giving. We don't aspire to a lifestyle that is dramatically better than the lifestyle that we have. We're fine. We enjoy our lifestyle. We do aspire to be able to give more money away. That's amazing. Which is actually a lot of fun.

Leland Gross CFP (50:04.07)

You know, it is. And it doesn't even matter that you don't need your name attached to it. Most of our giving is anonymous. But it's a load of fun to give away money. I tell my clients that all the time of there's so many positive benefits to it. But from like scarcity to abundance mindset that when I meet with someone, I can pretty quickly tell will they have a scarcity mindset or abundance mindset by

if they talk about giving and if they're willing to give money away because that's innately an exercise of your heart that says, I'm okay, I'm going to be okay. And you're right. It's fun when you give it away and you get to see the benefit of it. I'm a huge proponent of giving. And it's so fun to hear you guys talk, A, about your marriage and your faith, but also just to see it, how every time I ask a question, you guys are talking about the other person.

Tell me about yourself. Polly immediately tells me about Doug and Doug tells me about Polly. And it's just a sweet, sweet thing to see. And you're right, with entrepreneurship in general, whether you're business partners together or just one of you owns a business, it's a marital thing. You both have to be in on that because it's so intense. We've written, so even before we started for writing for, or was it after? I can't remember. We've been writing for a long time and we have also written.

articles for Huffington Post and other places like that. We actually wrote a couple marriage column. They were in the wedding section of the Huffington Post. So if you just Google, Dug and Polly, Huffington Post, our articles will come up for that. So but we talked about the fact that in marriages, you have to have that kind of support for your partner.

Because you have to have the same level of, this is what I want. You can have, we called it the ambition factor. So you can have more ambition, less ambition, that's fine. Nobody says who should have what, but in a marriage or a business partnership, you have to have the same level of ambition. So if you're the person who's staying home,

Leland Gross CFP (52:26.414)

taking care of the household and the other person is working till 10 o'clock, you both have to have the mindset that I'm here at home working hard to keep things nice for the person who's working till 10 because we both want the same thing. We're just supporting each other in a different way. Yeah, my wife and I talk about it as, cause she stays at home with our son, but as like we're both equally contributing to the household. Exactly.

mine may be through my business making money so we can afford our lifestyle. She's at home taking care of our son and the house and that is a huge full-time job. She's equally contributing. She's not contributing less. Like you said, we're both running at the same ambition towards the life and the goal we are building together. Exactly. Amazing. So we work together.

and are with each other 24-7 and have done that since eight. Yeah, since we started consulting business. Dug and Polly, consultants, commercial real estate, business owners, amazing. Well, thank you so much for being on this episode. It has been so fun to have you guys here. Thanks for having us. Absolutely. Thank you.