“When you’re using 123 Piccadilly Lane on your business card, it doesn’t really set the impression that you really have a real business.”

Interview by Mike Sullivan


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Mike:
Hey everyone, I’m Mike Sullivan. Thanks for joining us today. This is MO.com, where we feature small business owners and entrepreneurs to bring you, hints, tips, insights, and perspectives on what it takes to be successful. As business has become more virtual, so has the need for more virtual office support. Today, joining us is Bill Grodnik, of Davinci Virtual, to talk to us about that.

Bill, thanks for joining us today. Can you give me a bit about your background to start out here?

Bill:
My background is I grew up in Minnesota and it was way too cold. I moved to Arizona and it was way too hot. I actually spent 20 years in Arizona. I used to say most of my adult life was spent there, but now I’ve actually been 15 years up in Park City in Utah. So it’s no longer such a big difference anymore.

I graduated with a degree in business and I’ve always been kind of an entrepreneurial nature. I’ve started several businesses. I’ve bought several businesses. I’ve sold several businesses. Every time you think you get a little better at it and you learn a little something from the previous venture. So now I find myself in the virtual office business and I don’t know how . . .

Mike:
Before we jump right into the virtual office services, you have quite a diverse background, and you’ve been involved in a lot of different businesses and startups. Can you tell me, what are some of the industries you’ve been involved in?

Bill:
I’ve always had some real estate thread in most of the businesses I’ve started, whether I’ve been a real estate developer or a land developer or a syndicator of real estate. Most of them have had real estate threads in them. I did veer off the track quite drastically in one of my last ventures though. I actually brought traffic cameras to the U.S. Traffic cameras, you may know them as photo-radar or red light cameras. I was the first operator of speed and red light cameras in the U.S. It’s kind of a dubious honor because nobody really liked me very much when I was in that business. That was a business, it was like owning your own private toll booth.

We came up with this idea, that we were going to give the municipalities all the equipment, all the vehicles, expert witnesses, send out all the citations. I mean, we developed that whole concept. Then we would get paid on the fine revenue. So every person that paid a ticket, we would get a portion of that ticket. It was like owning your own private toll booth. It sounds good on paper, but you just never had any idea where the arrows were going to come from in the sky, and there were a lot of arrows coming at us at all times. I mean, we were pioneers in that industry. Today it’s a more established industry. You see red light cameras pretty established throughout the U.S. Speed cameras, not so much, but still they’re used in 700 countries around the world. But we were the first operators in the U.S. of those systems. So that’s pretty diverse from virtual offices.

Mike:
So explain to me what virtual office means, and specifically, what is your business model?

Bill:
Virtual offices are really an offshoot of the business center or executive office suite industry. Executive office suites or business centers are in every major city throughout the world. All of them always have had, for the last 20 years, kind of a local version of a virtual office where they had the business space, they had full-time clients, but they would let people use their address. They would answer their phones on a local level. So they would call those virtual clients. They’ve been called different terms, but now that’s the one that has kind of stuck and people seem to be using that more on a regular basis now, virtual offices.

My idea, my business model was to create a national, and then eventually a global, footprint for virtual offices, rather than just a local version. Because I didn’t have physical space in every city in the world, I wanted to come up with a way to offer that. The technologies five or six years ago really were getting to the point where I could create this business model, and that’s what we did. Basically, I assembled a team of people who were experts on call centers, on technology. I had the office suite background because I had owned these physical business centers. I was actually an operator for HQ Business Centers, which now has merged – maybe you don’t know – is a co-venture now with Regis and HQ. But I was a HQ operator at one time, probably 7 or 8 years ago. No, it was actually more than that. It was like 15 years ago.

So I’ve learned the physical office space business, and I learned about virtual offices. But my interest was always piqued by virtual offices because when you have the physical spaces, you can reach a level of fullness or you can reach 100% of occupancy. With virtual offices, you’re never full. There is no point where you won’t let somebody use your address or you can’t answer their phone. So I found it very intriguing. At that time, really nobody had developed this concept where they had gone global with a virtual office model.

So that was our vision. That’s the model we created. We’ve been in business now five years. We’re the largest operator of virtual offices in the world, especially in the U.S. In the U.S., we have over 650 locations, twice as many as our biggest competitor. Virtual offices have really become the rage. People have figured out with an iPad and with a smart phone, you don’t necessarily need the physical space anymore. You can rent the physical space or the meeting room when you need it. That’s the other business we’re in as well. We’re in the virtual office business and we’re in the meeting room space.

Mike:
Why does a small business owner or entrepreneur need virtual office space as opposed to working from their home, using their home address? What’s the benefit?

Bill:
Well, we tell people all the time, first impressions count. When you answer your own phone, you do yourself, we feel, a real disservice, because as soon as you answer your phone, the person on the other end, your potential client or whoever you’re doing business with thinks small time operator, doesn’t have a staff, probably isn’t doing exceptionally well. As opposed to having somebody professionally answer your phone and now you have, this guy has a staff, he’s doing well, and he obviously has means. So I think it’s the exact opposite first impression when you don’t answer your own phone. So we tell people all the time, “Quit answering your own cell phone.” To have somebody like Davinci answer your phone professionally, because of our economies of scale, it’s so affordable. Live answering starts at $99 a month, and most small businesses can afford that.

The other piece we tell people is take your home address off your business card. Again, first impressions count. When you’re using 123 Piccadilly Lane on your business card, it doesn’t really set the impression that you really have a real business. Our addresses are prime business addresses. Whether it’s 45 Rockefeller in New York or the Empire State building or Wilshire Boulevard in Beverley Hills, I mean they’re prime business addresses. They’re really great locations. So we think the combination of a live phone answering with a real prestigious business address gives a small business operator an opportunity to really compete against the bigger operator. It gives them a great first impression, and it gives them the tools we think they need to compete.

Mike:
How’s the market for virtual office been growing in the past couple of years? What have you seen?

Bill:
For us, it’s growing leaps and bounds. We were in the Inc. 500 last year. We’ve grown some 2500%. This year we’re growing tremendously. Last year, business has been very good. Our revenues, our top line is growing. More and more people are finding out about virtual office solutions. I still believe that eight or nine out of ten people still don’t even know what a virtual office is. So the market is virtually untapped at this point. But we think that as more and more people figure it out, they’re not going to want to have the expense of traditional office space. It doesn’t make sense anymore for a lot of small businesses.

Mike:
What’s one of the things, and I’m sure there are several factors, but what’s one of the things that you attribute your success to?

Bill:
We have a culture at our company that I think has really helped us succeed as well. It’s a happiness driven culture. I want to make my employees the happiest employees on earth because I know if they’re happy, then my clients are going to be happy, and we do not want any unhappy clients. So we do everything from monthly team buildings to garden clubs to doing Weight Watcher programs to bringing in healthy foods that we offer to all of our employees free. We must have 20 different initiatives we’re doing right now of things to create a happy, healthy environment at my place of work. I know from experience that by doing that they’re going to make sure that my clients are happy, and that’s how you grow a business. That’s how you grow a business. We’re growing exponentially. We’re adding employees and hiring every single month. Revenues are growing every month. I know the fact that I’ve got people behind me who are happy and healthy really is a big part of that push.