Interview with Dale Cook from 11SquareFeet
Dale Cook had an interesting business idea that started from a current need in the downsizing economy. It’s called 11SquareFeet and even if he just started up a few weeks ago, I was happy to get his interview:
Cristian: Hi Dale, welcome on entrepreneur interviews. Tell us a few words about yourself.
Dale: Thanks for having me Cristian. Well, I’m originally from Australia, I moved here about 13 years ago because I was very attracted to the way Americans think about business. Over the years I’ve started a few companies, some more successful than others, so I know what it’s like to be on both sides of the fence. Other than that I’m just a regular guy, I like hiking around the beautiful Bay Area, and I’m an avid art collector with an emphasis on up and coming photographic artists.
Cristian: Right now it seems that everybody shuts down, and leaves home waiting for the crisis to pass. You’re one of the entrepreneurs that saw an opportunity in the crisis and found a niche you could explore. Tell us about this.
Dale: A lot of start-ups really rely on venture capital to sustain them. I actually believe that this can be very problematic when things go south, and things do go south fairly often. I’m not very impressed by someone getting X millions in VC funding. I am impressed by people who can start, grow and profit from a business without taking unnecessary investment. I really believe that the best companies emerge when funding is tight or non-existent. It makes them get their business models in place sooner rather than later. Just because things are going bad doesn’t mean that there isn’t opportunity, a true entrepreneur knows that there’s always opportunity.
Cristian: Ok, so basically renting only a portion of the office space should work for new companies or for older companies that want to cut cost as well?
Dale: Absolutely. From the side of companies wanting to cut costs it’s a no-brainer. Unused space is a huge resource waiting to be tapped. Letting it lie idle not only wastes money but affects moral, no one wants to come into a half empty office. Much better to fill it with people who are working on things that excite them, you can image what this does to the energy levels of an office. This applies to small and large businesses alike.
From the side of small companies or solo-professionals this is also a great opportunity. When you need space there’s no need to get locked into a lease that’s going to be too small in six months or take on two much space, and too much cost, just so you’ll have space to grow into. You can go month to month and move on when you need more. Couple that with the fact that there are a lot of costs associated with renting office space, not just the lease. Utilities, phones, internet, etc. What if you could just walk into a situation where this was already taken care of. It cuts your start-up costs and it keeps your ongoing costs manageable.
Cristian: How did you come up with the idea?
Dale: Actually I didn’t start 11SquareFeet to take advantage of this current market situation, it came from the rather frustrating experience of trying to find this kind of space for another venture. I had a hard time finding what I wanted on classified sites like CraigsList (and others). Too many incorrect listings and I just didn’t have the time to sort through them all. Real estate brokers weren’t much help since the size of the space I wanted was really small. Most of them just couldn’t be bothered, and I can understand that. Anyway, the more I talked about this experience with others in my situation, the more I heard about similar experiences. I just saw a need. The fact that this company is benefited by the current market conditions is certainly good news for us though.
Cristian: I know you have started only a few weeks ago, any announcements so far?
Dale: Well, we’re constantly trying for more listings and we’ve just started our advertising program so I’m looking forward to some announcements about the increasing number of our new listing sign-ups really soon.
Cristian: I think starting a commercial announcement service should be quite un-expensive. What investments you made?
Dale: Sure the software development wasn’t expensive – I did it myself to save money – but getting new users is expensive in terms of both time and money. It this business you can’t be successful until you have users placing listings, and you need a lot, but it’s hard to attract them without a lot of users looking for spaces. It’s a real chicken and egg problem. To solve it you need money for advertising and time for a lot of hand holding and meetings with perspective customers. You can’t just throw up some software and expect people to use it. I think this is why many of these types of ventures have failed in the past. We’re lucky that we’re a niche site so we’re focused on one particular area, it makes our job that much easier.
Cristian:$4.99 per announcement doesn’t seem much. Any plans to develop this later?
Dale: We actually have lower rates for users who want to do bulk listings with us, and we’re not planning on raising these any time soon. I really believe this is a fair price to ask and wait until you see some of tools we have planned for landlords, it’ll make this an even bigger bargain.
Cristian: You had a server crash a while ago. How can such a thing affect a small business like yours?
Dale: Oh, man, was that a bad day. Fortunately we only had a small number of listings at the time and we got in contact with everyone who was affected, and we recovered and moved on. We have new procedures in place and this won’t happen again. My best advice is that data is fragile and that you need to be very protective of it. I understand that small businesses sometimes think that it won’t happen to them or that it’s too expensive, but to lose it can be devastating. Imagine if you lost all your business contacts, all the time and effort put into building them, gone because you didn’t spend $10 per month backing them up. Backup, backup, backup and then backup some more. Finally have a plan in place if something does go wrong. How you deal with these things is often a good sign of whether you’ll survive this kind of ordeal.
Cristian: Any word of advice for people willing to start a business now?
Dale: Now is the best time to start. Bad market conditions mean that competition drops off, and those companies that are already used to a certain degree of cash flow, whether from revenues or investment, will find it a lot harder to cut back than someone who’s just starting out who is already lean. Stay lean as long as you can, be faster and more agile that the competition and don’t be afraid to ask for help. If you can build a company when market conditions are bad, image what you’ll be able to do when they get better. The true sign of an entrepreneur is someone who can make success while all around is ruin and despair, everyone else is just looking for a hand out.
Cristian: Thanks Dale for the interview, and good luck with your new business!