When you can’t work from home, Part 7

Meet the Manhattan “work club” entrepreneur who started it all

Just when we thought “work clubs” were new, along comes John McGann. The former musician and producer-turned-software-programmer opened his work club five years ago and today is miles ahead of any starry-eyed entrepreneur looking to enter the market.

An eighth-generation New Yorker from Greenwich Village, McGann had spent years teaching and consulting and wanted to do something different — something in the realm of free agency. His starting point was recognizing that independent professionals needed a place to bring clients. 

“You don’t want to bring them to your living room or Starbucks,” McGann says. But more than that, McGann wanted to create community, a place where “non-corporate entrepreneurs” could collaborate and share knowledge.

To McGann, location is everything. He opened his space in 1999 and named it for the location: 116 West Houston. “You couldn’t pick a better place,” he says. “The neighborhood is anti-corporate — or rather, it lends itself to people who are looking for a less-corporate existence.”

The diversity of his clientele is also key. “If you did this with 50 architects it wouldn’t be interesting,” he says.

McGann’s customers are between 25 and 40 years old; 30% are service providers like consultants and graphic designers, 30% are start-ups, mostly in software, and 30% are non-profit organizations. Half are solo businesses, half are two-to-five-person businesses.

“It’s the community that brings value,” McGann says. “Not the resources or type of desk. It’s for a certain type of person, the creative class.”

116 West Houston is a 10,000-square-foot space on two wide-open floors – -no walls or cubicles, no separation.

“People are here to work. If you’re around 20 other people who are working, there’s a buzz, an energy that inspires you,” McGann says. “If you put up walls, there’s no point. Why are people in the same space?”

Most of McGann’s customers work at 116 West Houston full time. For $600 per month, services include everything — faxing, printing, copying, local and regional phone service. Of course, there’s a T-1 line and Wi-Fi, and McGann’s looking to add an Internet telephony service for low-cost long distance. Customers use McGann’s home-grown online reservation system to book conference rooms and individual spaces.

There are also half-time and quarter-time rates available, but McGann discourages drop ins.

McGann’s work club is at 90% capacity and has been profitable for more than a year. Plans include expanding to a third floor, and licensing the reservation software to folks like Neil Goldberg — who’s expressed an interest  — and to companies that have downsized and are subleasing space to other companies and need to share conference rooms.

McGann also plans to develop a business-referral network. “Free agents need affordable health insurance and someone else to market their services,” McGann says. His plan is to foster pools of independent agents and vendors needing their services. He’ll bid on RFPs for his independent-agent clients and take a 10% finder’s fee the first year, 15% the second, and in the third, back off and let the worker negotiate directly with the vendor.

“That’s far less than an agent would receive,” McGann says. “I’ll be the middleman, I’ll be doing all the marketing for the small companies, but since I’m not a crook, they’ll want to work with me, which means in turn, I’ll have a great pool of talents to offer the vendors.”