David Kirshenbaum said the company he leads, Emagispace, flips the old recognizable “Field of Dreams” quote on its head.
“You’ve heard, ‘If you build it they will come’?” Kirshenbaum said. “Here, when they come, we will build it to their liking.”
Kirshenbaum began as CEO of Emagispace, a Palmer Lake-based building technology company, in July. Emagispace creates Lego-like building blocks that can be deployed across a variety of industries, as well as movable privacy pods that can take the place of large, stationary offices.
The operation began less than four years ago, and in the past two years it’s expanded its workforce from four people to 30 and secured $9 million in financing.
Kirshenbaum sat down with the Business Journal this week and discussed his background, securing venture capital and leaving his startup years behind.
Where are you from?
I was born in New Jersey but I’m from Illinois and I live in Illinois. I’m commuting. Today I broke my record where I got here, door-to-door, in just under six hours, which is good.
I’ve always wanted to move to Colorado though. When I was looking for a job in the last year, it all came together — the job I wanted in the place I wanted. It worked really well and I plan to move to Colorado in December or January.
Talk about your professional career.
I was a transactional real estate attorney at what is now the biggest law firm in the world — DLA Piper. I did not love being an attorney. I wanted to be on the other side of the table. I went to business school, which was my version of ‘The Shawshank Redemption’ — every class was a handful of dirt on the way out [of law].
What happened after business school?
I started about a 20-some-odd-year career in real estate development and worked with two large real estate development firms in the Chicago area who were regional and somewhat national. Typically I was the chief operating officer or the president and had a wide range of responsibilities. … I got a lot of different experiences — hiring, managing, real estate construction, leasing, development — all sorts of things. Along the way I worked with all sorts of different businesses: retail, residential, office, student housing, self-storage … all basically the same but with different flavors. So if you’re adaptable and can roll up your sleeves and figure things out, then you can survive.
For the last 6½ years I … became a business development expert and a relationship management expert. I went from operations to pure business development where I developed relationships with really large industrial companies, banks, private equity firms — companies that had excess real estate. One day it was operations and the next six years were sales. I ultimately concluded that sales in and of itself was fun and I was good at it, but I wanted to deploy a wider array of skills and sought out a position that would have the best of both worlds. Thus, I sought out and was able to procure a position really to my liking.
Talk about Emagispace.
Emagispace is relatively young, just out of the startup phase. It’s a venture capital-backed early stage modular building product and construction business. We outsource our manufacturing.
The company was founded by two brothers, Clark and Noel Maxam. Clark lives close by. Noel, who was the idea guy, lives in Los Angeles.
Noel was an Emmy-winning daytime TV director and did a bunch of other jobs. He’s a really talented and creative television executive. He produced something like 3,500 hours of daytime TV — ‘Days of Our Lives,’ ‘The Young and the Restless,’ ‘General Hospital.’
When ‘Days of Our Lives’ was a billion dollar business everything was great. But when the world changed and people stopped watching, budgets shrank and decisions had to be made. Noel was looking at sets as a major cost. They would build them and throw them in the garbage. He asked, ‘Why are we doing that?’ and he came up with this idea.
The first rendition of the company was going to be selling these products to Hollywood. We have Sony as a client among others. … Noel was going to take the concept to drama departments of high schools and colleges. At that point our venture capital partner came into the picture and … said this really could be applicable [to many things]. That’s the point where the company decided it was both a technology platform as well as a company that could deliver a product that’s very disruptive.
Explain the product.
They’re blocks of wood with pieces of plastic — a Lego-type product that offers flexibility, modularity and dexterity. We’re displacing hundreds of years of both real estate development and the way real estate is run which is, ‘That’s the way we always do it’ — building an office and when the next guy comes to lease it and doesn’t like the layout, he rips it apart, throws it in a landfill and pays to have it built again.
With us, depending on the product, you can build it, unscrew it and put it back together again. It’s greener, cheaper, faster, more effective and sustainable.
What industries are you working with?
Right now there are 12,000 co-working locations around the country. I’ve read a statistic that said by 2020, 20 percent of offices will be that way and in 2030, 30 percent of offices will be that way. If you’re in that world, then you need privacy. … A lot of those co-working spaces are in need of a place to go, so there’s an industry exploding right now around privacy pods, privacy rooms, basically products that are kitted. We have a privacy pod that’s effectively made out of eight pieces. … It goes together, depending on the person, in 20 to 40 minutes. … In my last job, I was working with big companies that had massive office footprints. The trend started on the West Coast, but it’s growing across the country. Big Fortune 500 companies are moving away from traditional [office structures] to co-working space where no one has an office or desk of their own.
That’s in the office area. Then look at the world of retail, an industry I worked in in my last two jobs. The world of retail is vastly changing as a function of Amazon and a lot of factors. We’re in the process now of creating a kitted retail kiosk. It can be 8-by-8 [feet] with one podium, one closet and one TV stand. Or you can do 16-by-16 [feet] with three closets, four podiums and three TV stands. … If you find your sales are better with the closet facing a different direction, you can rearrange it.
How did you secure venture capital?
It’s not what you know but who you know. … Our main venture capital firm is called Alpha Edison in Los Angeles. The principal of Alpha Edison and Noel both have children who go to the same school. It was more of a Los Angeles connection. The bulk of our investors are on the coasts — New York, L.A., San Francisco.
Any VC advice for startups without those connections?
Part of it is tapping into the world of venture capital. It may be your best hope is in Denver. … In all likelihood, we’ll try and raise money in the future. I’m trying to position us to get in front of investors and part of it is a numbers game — getting yourself not in front of one fish, but a school of fish.
How important is timing when selecting a CEO?
We’re at an inflection point in terms of where the company is. To the credit of the founders, they did a phenomenal job taking it from Point A to Point B. … The founders and the venture capital investors were interested in effectively putting more accountability, more discipline, more structure into the business.
My experience included operationally working in the maelstrom that is a fast-growing early-stage company. My first real estate company grew from 15 to 150 [employees] in four years. We went from three flats to skyscrapers and I oversaw all the hiring, systems and accounting. To Noel and Clark’s credit, they had the vision to say ‘We can come up with this wall product.’ That’s not me, but I can partner with visionaries as I have in the past and if they can dream it, I’ll make it happen. In this case, they’re dreaming big growth. … I’m hoping to take us now from Point B to Point C, wherever that may be.
What does the future look like?
In the short run the future is fleshing out our pod universe and growing it into a room universe while continuing to compete heavily in the office and co-working spaces. At the same time we are developing our retail product, which we’d like to roll out as soon as the fourth quarter of this year.
That, in effect, is another business. That’s one of the beauties of Emagispace. When you take these blocks and deploy them into different industries, it creates a whole new company.
We’re also gearing up to deal with a potential international expansion. Our technology and kitted products have drawn the interest of overseas investors who want to take our products, all of them, to the [United Kingdom] and [European Union]. I’m overseeing that and we’re very excited by it. Part of the trick is going from Imperial to Metric [measurement systems], which is easily done. We’re planning on exhibiting our product in two European countries in the next couple months.
Are emerging technologies like 3D printers a threat to your business model?
I think we’re trying to disrupt the built product. I’ve seen 3D printing and I think it’s a wonderful time to be in this place. If anything [that technology] helps us because it also disrupts. … Ultimately, though, I think we’ll be more cost effective, nimble and I also think we’ll be more creative.