When Cary Chessick launched his startup, Butterfly, his co-founders agreed that they should work remotely to save money on rent. He tried to split his time between home, coffee shops and at the Merchandise Mart in Chicago. Home was busy and distracting, his family in and out, dogs barking, errands to run, and more. The local coffee shops were better, but Cary knew enough people near his home that there were too many coincidental meetings and the coffee shop was no place for conference calls. He needed a place that was very quiet, like a library, but also a place where he could freely take phone calls. And that is how Cary ended up working in the service department of the Lexus Dealer.
At first he thought of the co-working spaces like WeWork, 1871 and the others. I can't blame Cary, who doesn't like a sharing economy and free beer morning, noon, and night? But there were three costs associated with the co-working space that were very tough for him to absorb:
1) the actual cost of rent which we they had already decided they didn't want to pay
2) the commute time, and
3) other people and the distractions that come along with that.
Cary likes people and enjoys the chance encounter with that person that is a perfect fit to join the company or the ad hoc meeting with the mentor that introduces you to your next client, but he would have to sacrifice the benefits of those opportunities until he was willing to actually pay rent.
Here is how it started. Cary drove by the Lexus Dealer and on a whim decided to pull in instead of going to the coffee shop. He parked in the first visitor parking spot at the dealer, one that eventually became known to him as "my spot." The 3-minute commute from his house was pretty tolerable.
When I was talking with Cary I had assumed he was driving a Lexus, but nope, he drives a Toyota.
The first day Cary walked into the dealership with his backpack on and headphones so as to avoid being approached about the purchase of a car, and walked right into the service department. He had heard rave reviews about how beautiful the Lexus Dealer was, designed to cater to all the needs someone may have when waiting for service of their Lexus. Cary walked in and there it was, a beautiful row of workstations, a spot for his computer, free wifi, free Starbucks coffee, and warm Otis Spunkmeyer cookies on top of it all! This was absolutely perfect. Cary worked there for 4 hours the first time he tried this experiment. He was not approached by a single person. Not a single person knew him. There were no distractions and he was extremely productive.
He went back the next day. Nobody said a word. There were other people in the very expansive waiting area. Some people were reading the paper, some were watching TV, some were reading books. They were all minding their own business, just like he was. Nobody was bothering them either. Cary assumed everyone had their Lexus in for service, after all, why else would someone be waiting in the service department of the Lexus Dealer.
Cary thought of taking a conference call inside one of the cars if it ever got too busy, but he always seemed to find the space he needed to take care of business. He had many calls from the dealer. Nobody really asked or cared where he was calling from.
Would he get hungry? Well, of course, and so he found that there wasn't a shortage of places that would deliver to the Lexus Dealer. His options included Jimmy Johns, Freaky Fast, Grubhub, and DoorDash. Below is a funny picture Cary shared with me.
He went back to work at his "new office" again, and again, and again. Cary ended up working at the dealer for two years. During his time at the "office," not a single person approached him. They probably thought he was the guy with the "lemon" car that was always in for service.
Cary feels that he owes a lot to this dealer and produced a massive amount of work over the two year period. In the initial phase of Butterfly, while they were experimenting with product/market fit, they needed to preserve as much cash as we could. They were never short on ideas, but like all startups, time and money were finite. The end of the road was always in sight (no, that is not a car pun). Cary and his team wanted to make each dollar last to give them every opportunity for Butterfly to succeed.
There are a lot of startups out there. Startups are hard work. Inventing something new is not easy. Cary hoped that each day, as they enhanced our technology and brought the Butterfly to market, we would get closer to a growth phase of the company. They just needed as much runway as possible, knowing that every company has ups and downs, starts and stops.
Cary would think of it this way: if the monthly rent was $2,500 or $30,000 per year, how many customers would it take to generate enough revenue, and then enough gross profit and then enough net profit to pay for $30,000 worth of office space? For a startup, a lot. And that is why he worked in the service department of the Lexus Dealer.
Did he always enjoy working at the dealership? No. Did he want to get a cool office like some of the companies in the news? Of course, who doesn't? But as a startup entrepreneur, he chose increased runway over real estate.
Cary feels lucky to be surrounded by supportive and collaborative team members and investors. It took a long time to find the market fit for Butterfly. Just like it took a long time to negotiate contracts with partners in his space, big companies and small companies and at the same time make the unit economics of the business work. They are about to close a new round of funding as they are now ready to scale the business. Cary was lucky enough to do it all of that from the Lexus Dealer. With the new round of funding and entrance into the growth phase of the company, they are also about to enter a new chapter in the business and are getting a real office. Cary is looking forward to the collaborative advantages of working in one space.
Cary thinks of Lexus as a partner in his journey even they have no idea who he is and wants to thank them for their hospitality.
Fellow entrepreneurs, I shared Cary's crazy story with you as I understand and appreciate the road you are traveling.
Stay creative. Stay positive. Stay scrappy. Enjoy the ride.