This 30 Year Old Created A $850 Million Co-Living Empire To Take On WeWork
Reza Merchant is trying to bring us back together with engaging new housing solutions. His startup The Collective has already raised almost $1 billion on its mission to expand around the globe, and he’s learned a lot about entrepreneurship in the process. Reza Merchant recently appeared on as a guest on the DealMakers podcast. During his exclusive interview, Reza shared his journey as an entrepreneur, what drove him to try and disrupt how we live, the fundraising process, and the huge leaps he has made to bring his dream to life. Travel & The Entrepreneurial Spirit Reza’s parents immigrated to the UK, where he was born and raised. He grew up in a household with that very valuable immigrant spirit we see in so many hyper-successful entrepreneurs. His father set up his own business and worked incredibly hard to provide them with a good life. Seeing that hard work and seeing that he would work early mornings, late nights and take risks to provide, really shaped Reza at a young age. He saw that there is no shortcut. Hard work and persistent dedication through all the ups and downs is critical because as an entrepreneur, the world doesn't wait for you. He says, “No matter what happens, you've got to keep on going and keep on persisting.” He went on to study at the London School of Economics and then in the summer took off traveling to Thailand for three weeks. An experience which really woke him up. He returned, realizing he wanted to do something that would challenge him, fulfill him, and enable him to experience life to the max. He found there were so much more than being in London, doing a regular 9 to 5, and saw how unfulfilling that would be. For anyone that is at a crossroads, Reza says “I always encourage them to go traveling on their own to really understand what it is that's going to make them tick in the next phase of their journey.” The Path Less Travelled Reza began to see most of his colleagues from the London School of Economics go either into banking or consulting. He and a couple of friends decided they wanted to do something about access to accommodation, and good accommodation. They had experienced first hand how challenging it was to find a place to live. Then, even when they did, at how terrible those places were, and how much of a pain it was to get basics like utilities connected. Inspired by his trip to Thailand, Reza realized how lonely most people are in today’s cities and wanted to find a way to change that. They started out as a couple of 21-year-olds with no real business experience. They took $2,000 overdraft from the bank and set up their own real estate brokerage. They tried to improve on the experience they had received in the past, though realized lack of supply and excessive demand were the real challenges. They figured out they needed to create their own product. They began on a small scale in May 2011. A year after initially starting their business, they offered their own four to six bedroom houses. They would put some nice furniture in, add some nice artwork, and rent them by the room in an all-inclusive package. They experienced incredible demand, and within days, they'd have these houses fully leased up to really good people. That summer they took on about 20 houses in the same way. Then they moved up to 20 to 50-unit projects, all in the space of a few months. At the end of 2011, they signed a deal on a derelict hostel in Camden, London. The roof was hanging off. There had been a fire there five years before. No one had touched it. It was a huge jump from what they had been doing. They had a vision. Reza took a loan against his family home at 18% to make that happen. In 2012, they finished that 50-unit project in Camden and entered a new chapter for The Collective. Co-Living Ultimately, The Collective is creating co-living spaces. Some projections estimate that by 2050, 70% of the world’s population will be living in cities. Yet, for all the benefits of urbanization and technology, many people are feeling even more isolated than ever. The Collective’s properties are trying to solve this with well-designed and compact private living spaces, where you have all the conveniences and basics like furniture. Though life is really lived in the shared spaces; gyms, cinema rooms, game rooms, swimming pools, night clubs, co-working spaces, artist studios, etc. Since 2013, The Collective started to acquire pieces of land to develop from the ground up. The first one of these projects was launched in May 2016. The Collective Old Oak in Northwest London, with 546 units and around 40,000 sq. ft. of shared space. In the last 12 months, they've set up offices in Berlin and in New York. They're now approaching 9,000 units which are up and running or under development. They now have over 200 people employees. To date, they’ve raised $850 million. Listen in to the full podcast or check out the transcript to learn more about:
Morning routines of successful entrepreneurs · How to keep growing as a leader to keep up with your startup · The 6 traits Reza looks for when hiring · His one top piece of advice for new startup founders
