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CoCo Minneapolis

CoCo Minneapolis

When startups outgrow their co-working space

We follow three ventures as they find just the right spot for growth after starting in CoCo, a popular co-working venue

By Caitlin Hill
01-21-2015

As we’ve highlighted in these pages before, some nimble ventures get their start in a co-working space offered by CoCo, which has three locations in the Twin Cities and one in Fargo. In exchange for membership dues, entrepreneurs get access to office resources, amenities, events, and networking opportunities. 

But what happens when a budding venture outgrows a co-working space, whether it’s offered by CoCo or one of its competitors? 

“We don’t try to keep growing companies at CoCo forever,” says CoCo co-founder Don Ball. “Rather, we’re set up to support them from inception up to the point where they hit high growth mode and clearly need their own space.”

Following, the experiences of three Minnesota ventures that moved out of a CoCo location and into a new space. Their experiences don’t represent every possibility of life after a co-working stint, but for entrepreneurs pondering real estate, they should prove illuminating.

11 Wells Spirits

Bob McManus at 11 Wells Distillery 

With plans to open his own distillery, Bob McManus knew all along that his time spent in co-working spaces would be limited. He started using the Twin Cities CoCo spaces in December 2012. They helped him focus and were a welcome change from working at his kitchen table.

“CoCo is an inspiring space and puts a lot of different people together, gets them out of their living rooms, and lets them collaborate and network, and get customers and ideas,” McManus explains. “It’s a fantastic place to get started.”

Meeting new people at CoCo who were knowledgeable about certain topics was another advantage to using the shared space, he adds.

McManus used CoCo facilities over the course of a year before deciding it was time to find a permanent home for his company, 11 Wells Spirits. He and business partner Lee Egbert looked for a special-purpose industrial building. They knew they didn’t want a rental space, especially since they would be installing a number of expensive improvements to create an operable distillery. The winning candidate was one of the first locations McManus looked at. “I just knew it was the right space,” he says.

When starting the search, he called the St. Paul Economic Development Authority and shared his plans to develop a distillery. The organization helped him find the Hamm’s Brewery location, which his company now calls home. “It hadn’t been occupied for 17 years — it was a mess,” he says. “It was a historic building and I knew it was the spot for me.”

Additionally, the building was already zoned industrial, so McManus didn’t have to look for a variance to operate his distillery. And since there were no close neighbors, he knew he wouldn’t bother anyone.

McManus started construction in September 2013. The name 11 Wells is indicative of the 11 wells on-site at the old brewery, the 11th of which is the water source for the company’s spirits.

The new space serves as both an office and distillery. From it, McManus and Egbert launched their first product, Minnesota 13 White Whiskey, along with a rum, bourbon whiskey, and rye whiskey. The latter, they say, is the first rye whiskey to be launched in Minnesota since Prohibition.

They’re still improving and adding to the space, which already includes a laboratory, fermentation area, and distilling room, with oak barrels of aging whiskey spread throughout. One upcoming improvement? A tasting room in what was once a blacksmith shop.

LeadPages

Doug Storbeck at LeadPages

LeadPages launched in December 2012 under the supervision of CEO Clay Collins. The idea for it surfaced about five years ago, when Collins started a blog focused on marketing consulting and training services. On it, he discussed landing pages he’d helped build for clients and proceeded to create videos about how they worked and performed. LeadPages was born from there. Today the rapidly growing tech company provides lead generation and landing-page platforms, has more than 90 employees, and supports more than 30,000 customers. 

The company moved into the CoCo St. Paul office in January 2014, when it had only a handful of employees. By the time the company left for its own space at the end of 2014, it had 68 employees working out of CoCo. “LeadPages was a unique situation in that they were able to grow so fast and so big at our St. Paul location,” says CoCo’s Ball.  

Because of its rapid growth, LeadPages needed to find its own space. “For the most part, we’ve been a virtual company,” says director of operations Doug Storbeck. “As we continued to grow and add employees, we needed office infrastructure to bring the remote employees under one roof.” 

The company’s leadership also hoped that the availability and accessibility of a new space would drive a deeper sense of community among employees. 

The company wanted to headquarter in Minneapolis and had set up at CoCo’s St. Paul location only because the others lacked sufficient room. So, when seeking a new space, LeadPages focused its search on where it had originally wanted to be. It also looked for a warehouse-type environment with some character, as well as an open, flexible concept, Storbeck says. In July 2014, it signed a lease on its new headquarters, an approximately 17,000-square-foot space in the Warehouse District neighborhood of Minneapolis.

It worked with Burton Real Estate Advisors to find the location. That firm’s president, Tom Burton, “helped us identify the opportunity, the areas, and the properties,” Storbeck says. “We quickly narrowed it down to a short list and got the one that we really liked and thought would be a good fit.” 

The biggest challenge during the search was finding a space big enough not only for current employees, but for future ones as well. “I’m confident that we got it right,” Storbeck says. “And because of how we’ve built out the space, we’ll be taken care of for the foreseeable future.”

Kidizen

Mary Fallon and Dori Graff (right) at Kidizen

Mary Fallon and Dori Graff launched the idea for Minneapolis-based Kidizen in 2010 — then under the name Itizen. With backgrounds in advertising and branding, Fallon and Graff came up with the idea for Kidizen after dealing with the accumulation of stuff that comes with having kids. In December 2013, the duo officially launched Kidizen, a marketplace for parents to buy and sell children’s goods. The main product is clothing, though the marketplace also features toys and accessories. 

“We’ve been growing very rapidly ever since [the launch], and that has been part of the reason for our need to change offices,” Graff says.

Graff and Fallon started using CoCo facilities in 2013. At the time, it was the perfect situation. “We were trying to get a startup off the ground but didn’t have a ton of resources,” Graff says. “It provided us with the support and resources we needed. And we got to hear all of the stories and experiences of other [entrepreneurs] while we were going through a lot of different changes ourselves, which was helpful.” 

Graff refers to CoCo as an “entrepreneurial epicenter” — a place with an immense amount of energy and excitement that provides numerous resources and networking opportunities for those creating a new business. 

As Kidizen gained more traction, the team realized they needed their own space to focus on building out the products. In September 2014, they relocated to the second floor of a duplex in Uptown. Owned by Kidizen CEO Dug Nichols, it was an easy and convenient move. 

“We wanted a space to make our own,” Graff explains. “That was a very critical part of developing our company and our brand. We also had a need for a certain amount of space for photographing and [accommodating] all of the product.” 

But the duplex didn’t work for long, as the company soon outgrew it. “We realized with the startup world, you don’t know how fast you’ll grow,” Graff says.  “And with all those unknowns, we needed a space that was more flexible.”

The solution was Startup Venture Loft in the North Loop neighborhood of Minneapolis, a new 8,500-square-foot co-working space for technology startups that officially opened in November 2014. An anchor tenant, Kidizen has its own dedicated space and works alongside three other companies that are at roughly the same stage in their fund-raising and team growth. 

Says Graff of the new space: “It provides us with the perfect mix of collaboration and accidental collision of thoughts and ideas and resources.”

Even if Kidizen grows two or three times larger, Startup Venture Loft can accommodate it. And such growth could easily occur: At the end of 2014, Kidizen secured new funding, bumping up total investments in the company to more than $500,000.

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