By Audrey Quinn
Posting in Energy
For the first time since the promising startup shuttered last fall, Loosecubes CEO Campbell McKellar talks about the company that changed the face of shared workspaces.
McKellar started the company just three years ago, helping launch an entirely new market: shared office spaces that connected mobile and freelance workers with empty desks and studios across the globe. Things were looking good as 2012 waned: Loosecubes disclosed $7.8 million in secured financing last summer and served 10,000 users in the company's final quarter.
We've met at a cafe near Loosecube's old headquarters beneath the Manhattan Bridge on the Brooklyn waterfront. McKellar orders a hot chocolate with whipped cream. The barista informs her they only offer marshmallows. “All the better,” McKellar assures her.
As we sit at a window table, McKellar looks out at the neighborhood. It's her first interview with a reporter since the company closed suddenly last November. First, she wants to talk about the good parts.
“We created this company because I wanted to work anywhere in the world, and meet other interesting people who also had that same desire,” she tells me. “My cofounder Anna Thomas and I both say, 'We joined the Internet with Loosecubes.' Neither one of us was on Twitter, both of us used Microsft Outlook on a PC, I'd never been to the Apple store.”
Although McKellar launched a business strategy firm for nonprofits at the tender age of 23, held a desk at Goldman Sachs and helped lead a real estate company, she was an outsider in the technology startup world.
“Cold turkey, at 33 years old, I went to a bunch of Meetups with people who were much younger and spoke a language I didn't understand.” McKellar jokes that she was just nice enough, or generous enough with drinks, that her new tech colleagues were likewise generous with advice. She also dove into tech blogs and how-to books for inspiration.
“I think a lot of people my age and older think, 'I can't start a Web company because it's all these young engineer guys," she says. “Especially being a woman in your 30's or 40's or 50's. But to totally learn this, it was doable. You can figure it out, these things aren't rocket science. And that was my takeaway.”
McKellar holds her hot chocolate in its bowl-like mug with two hands, remembering how hard she worked for Loosecubes' success. “It was riding on a new industry that was creating itself at that time. It wasn't like, 'Oh here's a better way to sell movie tickets.' It was like, 'Here's a better way to sell temporary office space, by the day, that you've never even considered doing.' ”
She pauses and begins again, describing how she kept herself one step ahead of the plan. “If you can picture yourself teaching a class in German,” she explains, “only you don't know German. So the night before, every night, you have to teach yourself a lesson, and then you have to go [teach the class]. So it's crazy. But you feel like what you're creating is so important and the people that are creating it with you are so important, that you do that.”
In its short life, Loosecubes acquired many fans, giving people who once worked at home alone an opportunity to join their own office community. Betabeat wrote, "It was the kind of company that even non-techies easily understood and appreciated."
McKellar never intended for Loosecubes to grow as large as it did. She started in 2010 with a $25,000 small-business loan. “I thought I was going to have a small-business loan, build a Web site, people would use it, and it was going to earn something like $10,000 a month.” Instead she found herself receiving offers from angel investors within a few months of starting.
“Three months after launch, we had $1.2 million in the bank. I shop at Target,” she laughs, “I was like, 'Oh my God, that's so much money!'” McKellar's “small business” quickly grew to represent more than 2,000 office sharing locations in 74 countries, employing 18 people at its height. The company counted New Enterprise Associates and Steve Case's Company Revolution Ventures as its largest funders.
McKellar removes a ribbon from around her wrist and uses it to tie back her hair. “When you take money from outside investors,” she tells me, “if you're not very, very careful, you no longer run the show. I created Loosecubes to run my own show, and I was no longer running it. And we had different views about what should happen.”
The board representing McKellar's investors began to disagree with her over where to take the company. McKellar implies contention over the business model of a subscription service for members, but says she can't disclose the exact nature of the disagreement.
Last June, Loosecubes offered members a month of free desk space, with the company's formal business model set to launch the next month. But the pay model never got started, and the investors' board prevented the company from moving forward.
A large part of that reported $7.8 million never actually came through. McKellar says that the investor syndicate, led by New Enterprise Associates, stopped funding the company. Faced with the decision of whether to operate on a severely amputated budget or to close down, she opted for the latter.
When I ask her how that felt, she gazes out the window for a long time before answering. “Everyone was so upset. Everybody had been like, 'This was my favorite job I've ever had.' It was definitely my favorite job I've ever had.”
In October, McKellar gave her team four weeks' notice, and on Nov. 16, the company abruptly ceased operations.
“I guess I should just say,” she says, sipping the last of her hot chocolate, “in my mind Loosecubes was a huge success. I employed  people, people made great friendships with the people they worked with, people in our community made great friends with each other and business contacts. But if all the stars aren't aligned, it's better to just move on than try to limp along.”
In addition to her final duties in shuttering Loosecubes, McKellar has spent her time since the closure working on a nonfiction novel about Silicon Alley. She's enjoying her newly adopted yellow Lab, and being, what she calls, “Campbell as a person.”
“I think the hardest thing,” she says, twisting her glasses around her finger, “is when you're a startup founder you have this identity as a Startup Founder. And when you're in between, and you're trying to figure out where next to place your energy, you don't have a title. I think my challenge right now is creating an identity for myself as a professional that's worn a lot of different hats, that's sort of between that one defining professional identity.”
When I ask about her future business plans she closes her eyes and covers her face with her hand. “I have so many different startup ideas. It's out of control.” Of one thing, she is certain. “I'm not going to pick a new industry again. I would do something like selling movie tickets in a unique way,” she smiles ruefully.
Feb 17, 2013
I read this article and it really hit home for me, since I've both worked at Goldman Sachs and am in between startups. You go to networking events and want to hand others a business card with your company logo on it, but now it's all such a story to tell. Clearly parts of the story were not told, but I wish nothing but success for Campbell.
You have not failed...your business was hijacked en route to its destination. You lost control and motherhood of your newborn. Your child was taken away from you by it's rich father(s). We know you have it in you to get on your 'bicycle' again and start pedaling. This time don't take off the training wheels before you feel confident that you can ride without wobbling too much. I think...'you will be back'! PS: Don't be afraid to jump back on the same idea again...after all you don't start looking for your skateboard when you fall off your bike...do you? You are an expert in that business now.
Campbell IS smart, lovely and kind. As her mother, I should know. She will continue to work to make the world a better place when the next best opportunity arises.
Its a short interview without all the details of course, but I'm left thinking that LooseCubes should have survived. Perhaps McKellar could have sold it instead of shutting a successful business down. Clearly the markets were there. Its also a bit strange that she found it difficult to face scaling back, when her original plan was so modest. But clearly, McKellar is dynamic business-person with an amazing future. This story reminds me of Henry Ford [recent PBS bio on him], whose first auto venture also died from investor/founder control issues. Ford and McKellar have learned pretty much the same lesson, I suspect. But I'd rather work for McKellar!
No, not from her failure -- from her ability to raise millions for a totally untried idea while knowing nothing about fund raising. Obviously she's a quick learn. Too bad she didn't learn fast enough that her company was doomed nearly from the git-go. But she's also resilient. With all those ideas bouncing around in her head that she will be able to get funding for, we should hear from her again soon. Hopefully - for her as well as those she employs with high expectations - any new venture will not implode like this one did. Somehow I don't think it will.
Not only is she attractive in a fresh, sunshine way, but after reading the interview, she is just as warm and genuine on the inside! The angel investor comment is right on as well-- avoid them if at all possible. It's their money, and they WILL take control. Ms. McKellar- thanks for this refreshing, vulnerable and genuine interview. Your strength of character comes through. Focus - and you'll go far.
Aloha, I believe there is still a future for office sharing. Although I think too many are trying to be the airbnb of office space which is unobtainable. But I like to reference to Ford, or I like McDonald's as a better analogy for what you do. Educate, Enhance, Enlighten.