335. The 2x Founder Transforming Real Estate w/ Rajdeep Gahir | CoCreations

0:00I'm Rajdeep. I run CoCreations, founded it five years ago, and we're an advisory and venture building company focused on the operating real estate sector. So hotels, residential and new emerging asset classes.

0:16Amardeep Parmar:And how did you get into real estate in the first place, right? Because you've done quite a lot of different things there. Yeah, well, I would say I'm in the interesting part of real estate, which is operating businesses. So when you look at a hotel or a service department or a workspace, like that operational layer. And I didn't plan on getting into this sector. I had like a job when I was 16, 17 years old at a startup restaurant. And I got that job because I was watching the Great British Menu and saw this chef, like Atul Kocha, who was the first Indian Michelin starred chef. and he was opening a restaurant close to where my parents live, which is in the middle of nowhere.

0:57It's like a village in the south of England. And I just wanted to get work and make money when I was 16, 17. So I was like, I drove up to this restaurant every few days and saw if there was any movement. And yeah, one day I saw some people. I was like, oh, can you just hire me? Like, what will you do? I was like, anything. So they hired me as a waitress. But long story short, it was this really cool experience. I had to learn about like fine wine. It was on a vineyard and silver service, like Michelin star restaurant and just had the best time and didn't think much about it. I went to LSE, was very much focused on getting into finance, banking, did every single internship under the sun.

1:42So I interned at Goldman's, JP Morgan, Morgan Stanley, my summer internship at Barcap.

1:48Amardeep Parmar:And I just really didn't like it. Like every single one I was like, this just doesn't feel like me. And I remember sitting with the traders and being like, oh, I'm being paid like the most money I've ever seen just in the summer, but would then just be really miserable. So when I left uni, I really didn't know what to do. But I decided to spend all my money that I'd earned interning, traveling the world with a friend who was brave enough to say, yeah, let's do this. So we worked for about six months and then we traveled. And when I came back, I actually ended up going into tech. So got a job at eBay, spent a few years there, really liked it and got involved in the startup ecosystem.

2:31And a friend of mine who was in venture capital was like, OK, you've been at eBay for a few years. Great. Like go and join a really fast growing startup because I think you'll enjoy it. And eBay was really amazing experience to learn. but I was reading about like unicorns and how quickly you can grow and so through her introduction which I'm still forever grateful for she introduced me to this guy who was um who'd just left Uber and he'd been hired to head up all of international expansion at this company called WeWork who I'd not heard of before and there was no press about it and long story short I took the job because it was like 100 % travel we're building something super cool you're going to be on your feet.

3:14You're not going to be looking at a screen all day, which is what I didn't like with finance. And I was like, oh, I used to really enjoy my time working at that restaurant. And this seems like, you know, real estate, I'll be meeting people. So let me try it. And that was, yeah, a few years into my career, like over 10 years ago. And I would say the rest is history from then. But yeah, joined WeWork as their first European hire, spent, you know, six months training in New York, came back and grew the business in the European region and just had a huge amount of responsibility, grew very quickly.

3:49The company then ended up raising a huge amount of funding, became this crazy unicorn that everyone was talking about. And everything sort of came from that experience. And that's how I've stayed in the industry ever since.

4:01Amardeep Parmar:And obviously at WeWork, right? So the story's played out quite significantly since then, your time there. And when you're in that kind of environment right so it's obviously very different to the corporate banking kind of situation even eBay though it's a tech company but it was more established at that time yeah exactly working in a company that's fast growing like that how do you think you adapted to it and like was it what you wanted it to be or was how did you find that yeah I think you know I just found it so like thrilling and exciting so first I was pretty much living out of suitcase I was you know in the UK and because I had 100 % travel contract, there was some incredible perks.

4:40Like I was like, oh, well, then I have nowhere to live. So when I'm in London, the company has to sort me out. So I had a flat in like Covent Garden. This is, you know, 25 year old who hasn't seen, well, too much of the world, has come from a small village. And yeah, and then on Friday, you need to be in DC or you need to be in New York and help the team there. So I really enjoyed that, like adrenaline, the thrill, had no other responsibilities, could be seven days a week on work. And I think the thing that really determines if you do well in these environments is just being someone who gets stuff done.

5:15It doesn't come down to your credentials as much as it comes down to, there's a lot of uncertainty. You're faced with a lot of different decisions every hour. And how can you keep calm and make the best decision? And particularly for me, like I was leading our growth. And so my key ownership was like filling up all of our sites. And I remember there was a period in like the summer of 2015, where we were opening like six sites at the same time and like 5000 desks. And I had to sell 5000 desks in like three months. And if I didn't, I was really gonna, I got a lot of pressure from the US, like Adam Neumann and his entire team, Like we were really, it was a very pressured environment because when you raise VC, you have to hit your numbers.

6:05And if you don't, you're out. So hugely intense, but it tests you and it makes you grow. And I enjoyed it because it made me learn a lot about myself. I would say at school I was pretty shy. But when you have to go out and just sell like crazy and learn that skill early, I think it really sets you up.

6:27Amardeep Parmar:What would your sales pitch for them? Like, how did you convince people to take the desks? Well, I had, it depended on the size, right? So my sales pitch with like a two-person office was very different to my sales pitch with like Sky Scanner taking a 400-person office. With Sky Scanner, I would, you know, take them all to Sushi Samba and discuss the deal there. But I think ultimately, you know, any sales, it comes down to understanding what is the main pain point you're solving to someone. And for some, it was like, OK, we are setting up a new team or we're growing really quickly. So we need something quick and we're less price conscious.

7:09We just need it to be flexible. For others, it was, no, there's like we're very price conscious. So what can you do about that? And then you think, OK, how can we structure a deal that amortizes or gives some incentive? So everyone was different. But I think the art of like sales, I remember writing something for my team at the time. It's like the art of sales. It's all about understanding someone's psychology. And if you learn that, I think that's a key skill in business, just in general.

7:39Amardeep Parmar:And was it straight after WeWork where you started your own founding journey? My own? Yeah. Or you had a, was it BAML in between? Bank of America in between? been? So when I left, I had a lot of different offers to like from big real estate funds who are like, we want to set up our own effectively work, right? Like there's clearly money in doing operations, not just owning assets. That's traditionally in real estate, like you just own the assets. And for many years, and I'm sure everyone listening to this pod will also, you know, even in residential, for many years, if you look parents, parents, parents, generations, You could just buy property and it would go off in value.

8:18And that's how you make money. And the change has been in the last 15 years or so in particular, that strategy is no longer working as well. So then how do you make money? Well, you've got to focus on what goes on inside the asset. How do you maximize value? So there was a big movement from the investors who traditionally just like bought and hold to let's buy and now we need to invest in the operating business inside. So I had like private equity funds where like we want to do our own, like the likes of British land, all these big real estate owners who wanted to access that land. I had the expertise there.

8:53But I just morally founded, I was even out of my non-competence at this time. I didn't want to go and like do exactly the same thing for a competitor. Like we worked for such a big part of my life and I had, you know, huge affinity to the business. I was still a shareholder. So I just thought, OK, well, I don't want to go take a job. And none of these are quite as exciting. So let me just set up a consulting company and then I can help a few of these clients. And I ended up getting some really great names in the real estate industry in terms of P funds, institutional investors who I was working with.

9:30And then the craziest one was like I had an offer from Bank of America, Merrill Lynch at the time, to come in and consult them on setting up a new incubation space.

9:40Amardeep Parmar:I was like, oh, you know, I hated my time in finance, but wait, if I can just like fast track doing all that associate analyst stuff and just go in and help advise, that isn't too bad. And then that turned into like a two-year engagement, which was great. Got to see how the inner workings of a financial institution are, and then really just build like an innovation hub for them, help them access early stage investment. And then from that, I started working with a VC fund as well, specialized in the prop tech space. I worked with another venture fund in France who wanted to set up a UK operation.

10:22So I felt that, you know, I was lucky. This is the luck as well. Lucky to join a company that was super hot on every single cover and that built clout for then all these other people to come to me and be like, hey, can you help? And I said yes to like everything. So I was doing that and I was like, wow, this is great. Like you can earn really well through just helping others. But then did have this itch of like, oh, what about my own startup? Right. I drank the Kool-Aid and seen it happen. And so actually to start my business, Viva House, which I started in 2018, I took some of the consulting income I'd made to basically, that was my friends and family round is basically me taking my money that I'd earned from consulting to help launch my company.

11:13Amardeep Parmar:And then what was Viva House? Yeah, so Viva House was very much about how can I solve like a meaningful problem? And again, I had these like, you know, small town girl, big dreams coming to London. And one of them was, OK, I want to live. And I used to call it like the Blue Bridge, which is Tower Bridge. But when I was younger, I used to think it's like the Blue Bridge coming into London. And I really wanted to live there. And actually, when I was consulting and I had this contract and these contracts and one of the Bank of America in particular, I was able to buy myself a place in London Bridge.

11:54And that was without any support from anyone else. So it was a really big thing for me. But I was like, wow, actually, when I look around, housing is a really big issue for everyone else I can see who hasn't just gone into banking or don't have the bank of mum and dad. And I was in the industry from the workspace angle. We work had kind of democratized access to cool workspace in living. I was like, wow, there's so many structural issues. It's like, why does it take so many years to build housing? why is it so expensive why is like um the policy so outdated and this is surely like the biggest problem to solve and I just wanted to solve something that I thought would have a lot of impact on people's lives I think that's why I've always enjoyed hospitality it's because you interact with people you make their day a bit better and so yeah Viva House the big vision was how can we solve affordable housing?

12:58But you can't just start with like, let's just solve affordable housing. So we started with, okay, how can we solve affordability specifically for, say, you're someone who wants to come to a city like London for a few months or a city like San Francisco. Like I'd gone to San Francisco to fundraise and I was like, oh, I can't afford to stay here for like more than a week because it's so costly. And you look at hotel prices in London They're so high. Even service department price is so high. And we have this ethos. So I had a co-founder in the business. She was awesome. She's an architect, Dara Huang, by training, Harvard-trained architect.

13:37And she was really cool on, like, the product side. I was approaching it from a commercial side. But effectively, we were like, how can we create these, like, micro rooms by repurposing commercial space? Because there was a huge amount of commercial space. And I'd been in the office industry, so it's all this. So people can stay in cities for like literally less than, let's say, 2 ,000 a month on a short-term basis or like 70, 80 pounds a night versus

14:09Amardeep Parmar:a hotel, which is like 200 plus. And so Viva House was basically this. We set up three sites. And the way that we did this was we repurposed commercial space into like pop-up living units. by innovating on the product side. So we created this like sit panel system. So if anyone's into like modular construction, we're like going and working with modular factories, creating this panel-based system that you could then take into like a service elevator in a commercial building and then literally like click these panels together with an electrical conduit and have a compliant room and then have shared communal facilities.

14:50And so this is what we were doing. We had like off the charts demand because there was no product at this price point. And we set up our first site in Whiteley Shopping Mall in London, which was this like really historic shopping mall. It's like a hey industry, like look at this. And then another two sites, one of which was on like Tottenham Court Road, Oxford Street. And yeah, it was, that was Viewhouse basically.

15:19Amardeep Parmar:Hello, hello. I hope you've enjoyed the show so far. I'm Amarit Palma, co-founder of BayHQ and the host of this show. For those of you who don't know, BayHQ is the community for high growth Asian heritage founders and investors in the UK. Over 7 ,500 people have attended our events. 200 people have been for our impact programs. And obviously, there's been over 250 episodes of this podcast. If you want to join us and take part in the programs and come to the events, go to bayhq.com forward slash join. We also just released our first ever book called Startups for Outsiders, which you can get on Amazon now.

15:58Amardeep Parmar:And the link is in the bio. Hope to see you soon at our event. Hope you enjoy the rest of the episode. And then what happened with that? Like, what did you do then? Because then you created another company afterwards. What was that transition? Well, I, so I'd already kind of set up a consulting business. Viva House, so initially seeded it. I seeded it through co-creations. my co-founder she kind of seeded it through her architectural business and then we went out and raised some funding um when i look back we should have raised like way more funding to be honest um we raised funding from like angels who we'd both worked with and backed us and we set up three operating sites so we had people living here and this is like 2018-19 and demand was off the charts from a supply perspective what we didn't fully appreciate and this is like going into something like fully naive and like yeah let's just make this happen like let's set up like pods and buildings and how people live there was like regulation is really really tough on these things so the way that we would need to grow the business was purely through like buying property we couldn't do it asset light and and kind of creating this which takes many many years and a lot of capital.

17:16And I think for us, we opened these three sites. We then had the pandemic hit, which really was tough for us as a business. We found it really, really difficult to go out and raise further funding. And so we took a decision to take like an early strategic exit on the business because there was value in the product system we'd created, which was like the sit panel system, weirdly of all industries for the insurance industry, who like when there's a fire need like temporary accommodation to set up. Yeah, so it was a difficult decision because it was like, okay, we're trying to change the world. But now we've had this pandemic hit and we don't know when we can like really go back into this and no one's really investing in this asset class.

18:00But yeah, we took a strategic exit on the business. And then I really just got back into, I'd set up this consulting business. I was like, okay, now I know even more stuff. Now I know about you know hotels co-living and yeah have been working with a number of clients since and then is it aikido as well yeah so aikido um i kind of put under like the incubation side so as i mentioned like venture development uh side of things so in terms of the business model of co-creations we have like the advisory size we work purely with clients on a fee basis and then And the other side is like I'm constantly just thinking about with myself or with others, oh, are there any other problems to solve that we could try and finance sort of off balance sheet?

18:46A keto was through the pandemic. So I just, you know, closed the chapter on Viva House, was having a conversation with a few people. And the one thing I've always been good at and I, well, learned it is just always message people. Like, even if you don't know them, just, you know, what's up? Like, you're in a similar industry. What are you thinking about? And I did this a lot in the pandemic because I was quite bored, basically. And some of my ex kind of WeWork colleagues, like the chief product officer at the time, and also like the founder of Notel, who was one of our biggest competitors, were thinking, oh, let's like set up a financing business for CapEx.

19:31So again, when you set up an office space, say with this one, if you wanted to do any work to the floor or the walls, you'd have to fund that yourself up front. How can we amortize that spend effectively? That's the reason a lot of people go into serviced offices. And so we set up a CapEx financing business, but this was out of New York. and yeah I effectively co-founded the business from this side and yeah have a small equity position in it and yeah we went out and raised with their track record as well and this helps when you're like doing it for the second time. My first business it took us you know like six months to raise a few hundred thousand with this we basically raised like a five million seed round within a few months so yeah very different experience and journey.

20:23Amardeep Parmar:So obviously you've got all these different things going on at the moment right where do you head out now like what's your priority like what do you enjoy the most like what's the focus right now so i mean i think it's really um you know doing one intense startup after the other i mean some people do you read about all these entrepreneurs i actually think it's really really tough and i think for me personally it's like i've really got to be all in on an idea to be like this is it like this is what i'm doing So what I'm predominantly doing right now is just working with a few different clients on adding value in different ways.

21:02So it's like a US private equity fund and we're looking at some investment opportunities for them in the UK. They want to get into investing into platform businesses. I'm working with a startup that's sort of building agentic tools for large property companies like Build to Rent and Multifamily. And I'm really enjoying that. I think I'm staying on top of learning about how quickly the industry is changing. I did like quite a lot of self learning in AI last year and the start of this year as well. And I think I'm, yeah, working with these companies and also just on the lookout for what could be the next big thing.

21:45And I've had now, you know, over a decade in this industry. I think once you have spent a decade in an industry, you see everything really well, but you also become a little bit more cynical because you see everything that can go wrong. So I actually am now enjoying also just looking a little bit into industries like education and health care, which I think in the next 10 years, what is the world going to look like? OK, a lot of things are going to be automated. What is going to be most meaningful? And for me, it's always been about like people impact. And I think, yes, hospitality, you have quite a lot of people impact, which is great.

22:20You can make someone's nine to five a little brighter or their holiday a little better. But industries like education and health care have even more impact. And I've now married into a family of a lot of doctors. And so a lot of the chat is often about, you know, how was your day? And it's like, like, oh, this is what I did. And my father-in-law has done like three surgeries and saved three people's lives, you know. And so it has opened my mind to just how valuable these industries are. And I think often the best talent doesn't necessarily go in to solving some of the biggest issues. So, yes, I'm keeping eyes and ears out on these industries as well.

23:01Amardeep Parmar:So you've set me up for the next question there. So you said that you're thinking about what's going to happen in the next 10 years, right? And obviously with the experience you've had and the trends you're keeping an eye on, where do you think the world is going in 10 years' time? Like, where do you think those big opportunities are going to be for people who are building, people who are trying to think about what's, like, the world going to be in 10 years' time? Because, say, if we go from the VC perspective, right, you're investing with that kind of horizon. Yeah. But there's so much uncertainty right now.

23:27Amardeep Parmar:You're kind of taking a bet on what the world is going to be like when we get there. I feel like slightly contrarian view on this, but I think the one that you'll also agree on for sure is a lot more in-person connectivity. And I do see some VCs who are actually actively opting out of AI and investing more into in-person events, meetups, experiences, because I do think naturally a lot of work will be automated or you won't need to go out and meet people. but still like AI can't get a deal done. AI can't, you know, build trust. And they're in every industry, particularly in my industry, but it's hugely about that.

24:13So I think, you know, in-person events, meetups, connectivity, community groups, even the conferences industry are probably going to be booming for one. And with that, even hospitality, people will have a lot more leisure time. What do they want to do? maybe go on a mindfulness meditation retreat. I've been trying to find like an Ayurvedic retreat in the UK. There's nothing here. So I think all of these sectors will grow for sure. And I also do think there's still going to be space for just like excellence and people doing work in all the industries that we have today, like consultants, lawyers.

24:54I don't buy into like, there's no point in going into law because everything's going to be displaced. I just think you're going to have to really build core expertise. Sort of the generalist route is going to be less valuable because if you're sort of not incredible at something, maybe AI could do it better. But if you're like an expert in what you do, it's unlikely AI can do it better so yeah that's sort of how i see the world looking so i guess something that last one