A desk in the open loft space costs $300 a month, while the rent
for private offices can range from $700 to $3,900. Those prices
give entrepreneurs 24/7 access to lounges, private phone booths,
meditation rooms, kegs of beer, fair-trade organic coffee and all
the Pepsi they can drink. There are four to five events per week,
ranging from happy hours to seminars on seed funding and IPOs. A
comfortable lounge space looks plucked from a West Elm catalog,
with modern furniture, casually arranged throw pillows, a foosball
table and a pinball machine. A framed quote declaring, "When we're
together, we're cooler than everyone else," adorns one of the
walls. It is a community space in demand. The wait list has nearly
900 people.
"We have some people that we're never going to be able to get to
leave," Mr. Shampine joked. "But our goal is to help companies
outgrow our space as quickly as possible."
The average stay is about eight months, though some
entrepreneurs stay longer as they create different products. And
others boomerang back, upgrading to bigger offices after completing
accelerator programs such as those offered by DreamIt Ventures, NYC
Seed and ERA.
A group of entrepreneurs sitting around a table in a WeWork Labs
conference room is eager to get one point across: More brands need
to be doing what PepsiCo is doing. Yes, they admit, brands are
getting involved -- there are contests and competitions. There are
small pieces of business up for grabs, though it helps to have
connections. Kraft Foods, now home to PepsiCo alum Bonin Bough, was
described by the group as a company that "gets it." But, by and
large, companies are not getting down in the trenches. They are not
focused on developing long-term relationships.
"With Pepsi and with a company like ours that 's focused on CPG,
to be able to share [a product] with a brand early on and get
feedback and understand how they might use it, it's an opportunity
not usually available to a startup," said Ryan Charles, co-founder
of Consmr and a WeWork Labs tenant.
"There are a lot of companies that engage with startups," added
Chris Kobran, VP-brands and strategic partnerships at Kiip. "But
you've got to have a relationship. You've got to get to where you
can pick up the phone and say, "What do you think? ... Be
honest.'"
Owners of startups that work with PepsiCo paint a symbiotic
picture. They have access to the execs that influence big budgets,
and they interact with key marketers on brands such as Pepsi, Mtn
Dew and Brisk. They might not always like what those execs have to
say, but at least they get answers.
"We've made all these assumptions. The blue chip investors have
given us millions of dollars to prove those assumptions. And you
need blue chip clients to help you prove out those assumptions,"
said Mr. Kobran. "[The brands] have 1,000 people calling them
trying to do that , so it's really important, from our perspective,
to have that access to validation."
Added Josh Emert, co-founder of GoChime and another WeWork Labs
tenant: "As a startup, the most valuable thing you have is time.
You have to figure out what works fast. What Pepsi is doing is
really a shortcut to a decision maker where you can get quick
feedback."
Ms. Harrison says the team at PepsiCo has a vested interest in
providing plenty of feedback, given that they've already invested
the time and money. And, ultimately, PepsiCo's goal is to build
relationships with the startups, so if they hit it big, they're
inclined to remain loyal.
"They get bought by Google or become the next big thing, and
then they're in a position to give us an exclusive in the
category," Ms. Harrison said. "So instead of getting on a plane and
going down to Atlanta, [home of Coca-Cola], they stick with
us."
The plan, so far, seems to be working. Jamie Thompson, CEO of
Pongr, said he feels "incredibly loyal" to PepsiCo, so much so that
he's made it clear to his staff that only PepsiCo products are
acceptable thirst quenchers.
Still, it's clear that any startup must watch out for its own
interests. "You can get nudged and nudged. There can be a
divergence of interests," Mr. Thompson said. "What a big CPG
company wants is not always what the startup is dreaming of . You
have to ask yourself. Does it make sense? Is it scalable,
repeatable?"
Indeed, in an environment where agencies and brands are all
looking for the next big thing, it's easy to wonder whether this
whole startup environment isn't a bit of a fad -- a bubble that
will burst at some point in the not-so-distant future.
"It's easy to start a company. So, yes, the huge influx of
startup companies is a fad," said Ms. Harrison . "But the
opportunity for brands to keep ahead of the game, especially with
marketing and media, that 's not going anywhere."