According to previous reports This week, Adam Neumann, the famously controversial co-founder of WeWork, is creating a vast network of residential real estate that – we suspect – can be rented out on a very flexible basis to people who don’t want to be limited to one location or to lease, but to live as ‘citizens of the world’. It was the vision behind an earlier company Neumann started, WeLive, a short-lived offshoot of his much more famous company, WeWork, and it’s an idea that makes more sense than ever in a post-Covid world where remote work is rampant.
Here is Neumann talk to The Guardian on the idea in 2016: “It will be a new way of living, from day to day, from week to week, from month to month, from year to year. You become a global citizen of the world. If you’re a member of one, you’re a member of all.”
The idea is so current that another serial entrepreneur may be even further along with his version of it — even if you’ve never heard of him. He is Bill Smith, the 36-year-old founder of the three-year-old, 600-person flexible, membership-only furnished rental company. To land.
Smith, who prefers button-downs to graphic T-shirts, is the anti-Neumann in many ways. While Neumann’s real-life drama with his investors became fodder for a long time television seriesSmith has, with little fanfare, made his own moneylenders a lot of money. After raising capital from friends and family for a top-up Visa card company in his twenties, Smith sold that outfit to bank holding company Green Dot for some money. Forbes says: was tens of millions of dollars. His next startup Shipt, a same-day delivery company that Smith founded in 2014, sold to Target in 2017 for $550 million.
Smith — unlike Neumann, who was famous for selling too much WeWork to SoftBank at an unrealistic price — has also been conservative when it comes to VC. Shipt raised $65 million from the venture firm Greycroft and others before it was sold, but Smith still owned half of the company. The outcome, which he now calls a “game changer,” gave him enough confidence and capital that he has now put at least $15 million of his own money into Landing, of which he owns a third. (According to Forbes, Landing has raised $237 million in venture capital to date at a valuation of $475 million, including from Greycroft. Meanwhile, Neumann’s Flow, which has yet to launch, has just raised $350 million in funding from Andreessen Horowitz at a reported valuation of $1 billion.)
Apart from such differences, both seem to be chasing a very similar opportunity to create a platform that anyone willing to pay a small premium can join to lead a very flexible lifestyle.
It’s a guessing game what Neumann might charge a member, though imagine getting a SoHo-esque aesthetic for the price based on the look of most WeWork locations. In the case of Landing, the membership fee is $199 per year and the rent is 30% to 40% above what Landing itself pays building owners to rent their space. But in exchange for a commitment of at least six months, a Landing member can live in a growing number of places — including Tampa, Austin and Las Vegas — where Landing has rented apartments. Members receive fully equipped rental accommodations (Landing made its own harmless furniture in Vietnam and shipped it to the US to keep costs down). And how long should a member stay in one location? Just a month.
After reading a (very good) Forbes piece About the company earlier this week, we asked Smith to walk us through some of our own questions, including what lessons, if any, he learned from watching Adam Neumann from a distance. You can hear that conversation here. Except, edited for length, follow below.
You estimate that perhaps 10% of the 40 million Americans living in apartments today could choose a furnished, flexible home within a decade. How did you arrive at that estimate?
If you think about all the other aspects of our lives over the past decade, the way we live has completely changed. But living in an apartment is generally an offline, quite old-fashioned process. There is not much freedom, flexibility and convenience in the current model. . and a large proportion of the 40 million people renting today are between the ages of 20 and 40 and they want this flexibility.
You push ‘flexible’ to the limit. That’s tempting as a consumer, but how do you rationalize that from a business point of view?
We are not trying to create a holiday brand or a travel company. People who live at Landing are committed to this lifestyle and to life on our platform, allowing us to deliver a really high occupancy rate. And if you can deliver a high occupancy rate, you can deliver this product at a price that is accessible to a large number of long-term people.
How long do people usually stay in one location?
People currently spend an average of six months in one location.
Do you carry out all types of home repairs? Before you launched Landing, you were trying to build a home services marketplace.
We do not. Home repairs are carried out by the companies that own the properties in which we are located. We provide cleaning and services like that. However, you are right. The first company I started [after Shipt] was a kind of concierge service for homeowners, and we tested that for about a month, and that was a very quick flop, and we decided to move from that to what is now Landing.
You use data to try to understand how to reduce your costs, such as adjusting your prices based on location and seasonality. Can you tell us a bit more about the type of data you search and how you use it? How much can you distract from your customers once they are in a unit?
We need to know where people want to live so that we have the offer ready for them, so we look at which neighborhoods people are looking for; what time of year do they want to live there; and how fast they want to move, and we use that information to power our resupply efforts.
We also have distribution centers and our own last mile delivery network and we use data to determine where we invest on that side of the business. Certain times of the year there can be a lot of demand to move to certain areas of Phoenix, while other parts of the year you will see a peak in demand in Miami, and we need to have physical items ready to move in those parts of Phoenix. are sent. areas so that people can move in quickly.
Your software lists an apartment before you even sign a lease with a landlord, then you find the tenant. Once that tenant has signed a lease with you, sign the lease with the landlord and set up the apartment. Is that how it works?
Yes, so what we’ve built is the first on-demand model to expand the offering in this way. An apartment community will place units on our site, then we built the technology and operational infrastructure to create a ‘Landing’ in just a few days, which sounds super simple, but is incredibly complex when you think about everything it takes to furnish and furnish an entire house, from your sofa to the cutlery.
Is software development a big focus of yours?
There is a huge technological component to Landing. We built the entire platform that runs our business, everything you see on our site, from discovering and booking a home, to the experience once you check in, including how you enter the building and [ensuring all your needs are met] once you live there. They are also the apps that our teams providing services use in the field. It’s the technology that runs our distribution centers and last-mile delivery network. So there’s a significant amount of technology that we’ve had to build to run this business. It’s not something you can just buy off the shelf.
Are you focused on buildings with common areas at all? How people literally flow and collect was a focus of Adam Neumann, and I suspect it still is with his company Flow. In a world where fewer people go into offices, is this a consideration when looking at buildings?
We think more about the community from a neighborhood level rather than just the real estate level. If you think about the typical apartment community, there are maybe 250 units, so it’s not a huge number of people and [they] will be a very diverse group with unique interests. So we’re thinking more about it at the neighborhood level and building a community between people who have chosen to live this lifestyle in a certain part of Miami, for example.
You enter into contracts for one year with apartment owners. Why not lock these spaces a little longer and hopefully lock in a better rent?
We could certainly try to get multi-year deals, but I think it’s better to have very few lease commitments in the business. We would be the antithesis of the WeWork model where we have very few lease commitments. And we can be flexible when there are changes in the markets. [Also], over time we will work with owners to bring this product to their premises, and it really won’t be a Landing lease product; they will just join the landing pad. They will work with our technology and our standards and it will not be this model of, Landing leases it and is committed to that lease.
So Landing is becoming a business SaaS business in some ways?
Having a SaaS component is probably the best way to describe it, yes.
As a student of space, are there any other lessons from WeWork that you replicate or avoid?
WeWork and Landing really are such different businesses – offices versus homes is just a completely different category. But what I’ve really learned, and not directly from WeWork, but just in general, is that the company’s unit economy is critical. In the early days of any business, you try to figure out the unit economy. But especially with this one, we had to master the unit economy very quickly. We didn’t have five or six years to prove that, like a lot of other consumer companies did, and I think that’s because people saw WeWork and saw all the challenges there.