By Jack Seymour
Rebecca Brian Pan is a 7-time serial entrepreneur, boasting ventures from graphic design to non-profit. Already with one successful co-working company, NextSpace, under her belt, Pan is currently the CEO of Covo, a family-run co-working group that’s putting the community—and the caffeine—back in the business model.
Covo’s San Francisco location occupies the entirety of 981 Mission Street, for three levels of space in a converted printing warehouse. Now with a second location in St. Louis, Pan tells about her plans for expansion and what Covo brings to the increasingly crowded world of co-working that customers said they weren’t getting elsewhere.
SEYMOUR. You’ve done a fantastic job of integrating hospitality into an office environment. What was the original rationale for this approach?
Pan. We started Covo because we felt like while the industry is doing really valuable things in terms of building community, optimizing innovation and helping people reach their potential, it’s a fragile business model that we believed we could overcome. Membership dues and the level of flexibility that we offer, means that there isn’t a lot of long-term stability. Everybody, if they wanted to, could leave within a month. I’ve been in the industry for almost a decade, and when we were thinking about how to continue to move the needle on experience for members while at the same time creating a more robust financial model, we felt like bringing in food and beverage—both uppers and downers (Coffee and alcohol)—addressed both those points. It allows us to use the same piece of real estate for more hours of the day and really activates the space, creating a more well utilized piece of property.
SEYMOUR. Who is behind Covo itself?
Pan. The team is my husband Jason, my brother Dan and myself. Dan is a lawyer, so that’s been immensely useful. Jason is an IT expert with a focus on co-working environments and has worked with me since NextSpace days. He really set the standard for what co-working infrastructure and IT security look like.
SEYMOUR. How does Covo differ from other co-working spaces?
Pan. One of the most valuable things about co-working across the board is the increase in community connections. It’s intended to keep you from being lonely. While the Reguses and the WeWorks of the co-working world market themselves as community oriented, they are driven more so by their ability to rent private offices. Which in and of itself is an isolating feature of their model. We looked at it a different way. We knew that you could be successful in this industry by scaling but then you lose the community feel, which is the reason co-working spaces are valuable. Once you hit that 150-person point, tribes tend to separate and become two tribes. If you have a space that is a lot bigger than that you are creating an environment where people feel isolated even though that was not the intention.
We worked hard to be successful without needing to resort to large scale. We did this so we can continue to provide that sense of closeness and community. Being a family-run business, we truly do see our members and staff as an extension of our family. There’s a lot of hugging that goes on here as part of the culture we have created.
SEYMOUR. How will Covo maintain that culture as you look to grow?
Pan. It’s in our DNA. One of the things that we are very intentional with when hiring and training our team, is that if you aren’t waking up every morning excited to help people and serve them, then this probably isn’t the right role for you. Everyone is trained with a specific hospitality-focused approach. Hospitality comes across in our coffee shop and bar, then extends itself into the community management and co-working element of the business.
SEYMOUR. Today we are seeing co-working groups as well as traditional, institutional landlords in an amenities race. What are Covo’s members asking for and responding to the most?
Pan. We recently implemented an augmented mail processing program. Some of our international partners, in order to qualify for a whole range of things, need to be a U.S-based, or even San Francisco-based, company with a physical address here. We just rolled out a virtual membership that allows us to receive mail/packages on a member’s behalf with real-time alerts that allow them to tell us whether they want us to store, shred, forward or scan the info.
A major one that I’d heard from my work in other spaces was for coffee shop and bar amenities. As you can see, we really took that one on-board.
SEYMOUR. Prior to opening your SOMA location, what were some of the search parameters you set with regards to location and the physical space?
Pan. There were a lot. We wanted to be on a street with foot traffic. We wanted ground-floor retail, but also with additional floors where we could house private offices and dedicated desks. We were looking for a space with great natural light, interesting architecture… The brick-and-timber look was perfect. Somewhere close to all types of public transit was very important, and all that needed to overlay on appropriate zoning. We used the exact same criteria in St Louis.
SEYMOUR. When it came time to build out this space, were you given a Tenant Improvement allowance, or were most of the improvements on you?
Pan. We were given a TI allowance, which got us about a third of the way there, the rest was on us. We were looking for somewhere that didn’t need a ton of work ideally. The space was in pretty good shape when we came along. Ownership had brought it up to code the year prior, so we didn’t end up having much of a Title-24-compliance issue at all. We built out the coffee shop and bar elements you see, as well as all the private offices and conference rooms. It took us right around ten months from signed lease to having the space ready to launch.
SEYMOUR. With two locations currently, does Covo have plans to expand and open new sites?
Pan. Yes. We want to take on slow, steady growth, as opposed to a land grab. We are making sure that both of our locations are successful, stable and safe. Once we decide we are there, we will do a [fundraising round] and expand from there.
SEYMOUR. What is the process you use when deciding where to launch next?
Pan. It was important for us to prove to ourselves and to potential future investors that our model could work anywhere. Hence our decision to open a St. Louis site. And we have proven that. We are fairly opportunistic though. When the right opportunity comes to us, whether it be a joint venture or a management partnership with a landlord, our interests are spiked by the fact that we don’t necessarily have to do a lot of fundraising.
SEYMOUR. What excites you the most about the future of Covo?
Pan. It’s been very exciting to prove that Covo’s model works in these two disparate types of cities. It tells us that the world is our oyster as far as future expansion. Also, the types of people that come to Covo are some of the most high-caliber, extraordinary field leaders that I have ever met, and being able to put them together in communities where they can do even better even faster is so exciting to me. Being able to bring that to more markets, regardless of where they are, is something that drives me.
Jack Seymour is a leasing associate at Transwestern’s San Francisco office, Jack’s primary role is to serve as an analyst and communicator on major projects working alongside the established office leasing team of Jeff Moeller, Peter Conte and Zac Monsees. He is also responsible for developing relationships with and serving the needs of local and/or national prospective clients as well as providing diverse marketing support for leasing services.