An Entrepreneurial Leap Of Faith That Began in a Leap Year
About a year before I officially became an entrepreneur, I had an entrepreneurial epiphany that led to The Code Factory’s founding and opening. In early 2007, I was often bothered that arranging meetups and business meetings were more challenging than it should be. Most of us were meeting in our homes or coffee shops. Neither of those typical locations was ideal. One didn’t seem professional enough, and the other lacked the privacy needed for many confidential discussions. A lightbulb that had been flickering for months burned brighter.
For about a year before that semi-eureka moment, I had been heavily involved, along with others, organizing eleven editions of DemoCamp, a popular event that helped galvanize and unite the emerging web and mobile ecosystem for Ottawa. DemoCamp meetings always had a great vibe and energy. When I thought about the exciting atmosphere of DemoCamp meetings and the laid back ambience of many Ottawa coffee shops, the idea of TheCodeFactory suddenly took shape.
Before you knew it, I had signed a five-year lease on two floors at 246 Queen Street in downtown Ottawa, above a popular Thai restaurant called the Green Papaya. One of our floors was to become a shared space for workers during the day and meetups at night, and the other was for private offices and small businesses. I signed the lease on February 29, 2008, taking my leap of faith in a leap year and on a leap day.
When we opened TheCodeFactory on the evening of May 26, 2008, it was the first shared workspace in Ottawa, only one of a few in all of Canada and part of a worldwide shift in workspaces. I have great memories of that evening and a great deal of pride that TheCodeFactory was a trailblazer in Ottawa’s startup community.
Building a Community of Interest
An unexpected consequence of being the first coworking space in Ottawa was becoming the go-to gathering place for user groups looking for a place to host their meetings. In the first four years, we hosted over 1,000 events, playing a role in the growth of almost 30 open-source software and entrepreneurial user groups. Many of those groups are still going strong more than a decade later. I will be forever thankful to the organizers of Team Camp, CapCHI, Cocoaheads and many others for their dedication to sharing knowledge and insights with event attendees.
Our Budding Business Hits Its First Bumps in the Road
One of the early supporters of TheCodeFactory offered up one of the earliest pieces of advice, saying, “Ian, when you start a business, there are two years of darkness.” Little did I know that darkness would come in the fall of our very first year. It was to a double dose of darkness. First was the US’s recession, which had a ripple effect in Canada and around the world. Layoffs were plentiful in the local business community, and service companies, like TheCodeFactory, took a beating.
Then came the crippling bus strike of 2008, which made travelling downtown a time-consuming nightmare—bumper-to-bumper traffic and not nearly enough parking. People stayed away from the downtown core and TheCodeFactory in droves. These were rough times for a startup business, but we got through them with the Nietzsche quote echoing in our heads, “That what doesn’t kill us makes us stronger.”
Like so many small businesses, we found out who our friends were during the dark days and sleepless nights of 2008. I am still incredibly thankful to the customers who stuck with us and for the advisors and other supporters that helped out.
Growth in Business, Community and Competition
Over the next few years, the times were far less harrowing than the early days. Ottawa’s web and mobile ecosystem grew and prospered, and competition in the shared office space ramped up to serve the many startups that were popping on an almost daily business.
Building a Digital First Company
By 2014, we were knee-deep in intensive digital projects. We were rebuilding our digital presence (website, social media) and digital marketing capabilities (search engine optimization, paid campaigns and content strategy). We were also revamping our internal digital systems (finance and workflows). We enthusiastically embraced cloud-based technologies for accounting and Customer Relationship Management (CRM). Going digital-first was a year-long project that, frankly, temporarily took our collective eyes off of generating sales and revenue. That said, once we started using our digital infrastructure, we saw fast results, the first quarter of 2015 was the best in history. One of the great things about working at a startup is you get to see the full cycle from strategy to revenue. We learned a great deal about results, systems and workflows from our digital-first initiative.
Our First Difficult Dance With Change
Now four years old, TheCodeFactory was changing. We changed locations to an office tower on Gloucester Street in 2013 and shifted our focus from being a community of interest to building an excellent customer service organization.
Embracing open-source software, we began supporting a broader range of startups, small businesses and entrepreneurial organizations. Our space on Gloucester was significantly larger than our original location on Queen Street, and we were thrilled that most of our customers moved with us.
Changing, shifting focus and moving into a much larger space were significant challenges and accomplishments. Throughout this exciting time of growth and change for TheCodeFactory, I kept thinking of some sage advice I’ve received right out of college – always surround yourself with great people. We did, and it made a world of difference.
Welcome to the Subscription Revenue Rollercoaster
In 2016 we had a significant revenue dip in the middle of that year. There were two reasons. We had four of our largest clients grow and graduate from a shared space environment. Two we kept, and two moved out. The two that stayed with us moved into larger office space in our building. The two we lost moved out of the building. We anticipated two client changes while the other two came as a surprise. Ultimately, we had twice the amount of client churn as expected while expanding.
Luckily, we were able to fill the vacancies in a reasonably short time frame. The bad news was that the combination of “growth churn” and “loss churn” had a considerable impact on cash flow. It was a stressful few months that we got through and learned even more lessons. It was a huge light bulb moment into subscription business models and the impacts of churn.
Taking Advantage of the Exit Signs
When we signed our original 10-year lease on Gloucester Street, we had built-in a termination clause that became available to us around the five-year mark. Our industry sector of flexible or shared office space had changed dramatically in the first five years of our lease, which gave me pause. Our competition had ramped up considerably, driving advertising costs up and driving conversion rates down.
Changes Come Along Again.
Maintaining a viable business meant that changes were needed, with the biggest move being a renegotiation of our lease. Ultimately, we couldn’t make that happen and decided to terminate our lease in the spring of 2018. For the next two years, I continued to operate part of the business in the same location before selling to Ottawa’s largest flex office space provider.
Looking Back, Looking Forward and Always Learning.
The rollercoaster ride that has been TheCodeFactory has been both draining and invigorating. When I consider the business’s different phases (so far), I break them into three parts.
The Good Stuff – Content, Customers and Embracing Digital
Many of my favourite memories are our weekly team meetings, where we would plan content for the next week. Our primary method of acquiring new customers was content marketing. Not only was it a lot of fun, but it also generated real measurable results.
Our customers are also one of my favourite parts of the business. I genuinely enjoy working with startup founders and small business owners. There is something very inspiring about helping contribute to the success of a growing company.
Going digital-first was one of the best decisions and investments we made in the business. I know first hand how important and challenging digital is for small business and startups. Digital enables companies that focus on continuous improvement to thrive, even in competitive situations. COVID has undoubtedly cemented the importance of being a digital-first business.
The Better Stuff – Business Models and Aligning Mission, Vision and Values
Building a flex space while having a lease with a landlord is a very challenging business model. The margins are thin, and the flex space owner takes on most of the risk. I have learned a lot about implementing subscription business models, contracts and how the devil is definitely in the details. I am building back better based on the many lessons learned. Ensuring that your mission, vision and values align with your work every day is critically important and needs regular attention. Often. changing times call for revisiting your mission, vision and values.
The Best Stuff – Learning and Getting Comfortable with Discomfort
Starting, running and evolving TheCodeFactory so far has been a tremendous learning experience. The process regularly pushed me well outside my comfort zone. I know the knowledge gained and lessons learned will be of considerable value to startup founders and small business owners. I am genuinely excited at the prospect of guiding and teaching entrepreneurs. I also know from experience that I will be learning from the hard-working business owners I am working with along the way.