Biz SpaceTogether

Justin Knapp is CEO of SpaceTogether, a commercial real estate sharing platform. Knapp is also the pastor of Pulse church. Thursday, July 25, 2019. (Photo by Jerilee Bennett, The Gazette)

His childhood, Justin Knapp says, is "the normal poor kid story."

His dad was sent to prison when Knapp was 4. With his mom working to support the family, he was largely raised by his grandmother — an amazing woman, he says, but also an alcoholic. Drugs became a constant in his life. "I didn't know how to live life," he says, "without smoking weed."

At age 14, he was at a friend's house; they were stoned on some particularly potent weed and making faces in a mirror.

"I jumped up and saw myself," he says, and in the mirror, somehow, he was sober. Then he heard a voice asking him, "What are you doing?"

"Not this big 'What are you doing!?,' but like if my son ran into the kitchen with underwear on his head, and I asked him, 'What are you doing?'"

At that moment, he says, "I knew that must mean there was another option." Though his family wasn't religious, that night he said a prayer.

That moment started him on a path that brought him to Colorado Springs, where he leads Pulse church with his wife and is CEO of SpaceTogether, a commercial real estate sharing service. Think of it as a sort of Match.com for those who have underutilized or unused space and those who need space — but not all the time.

It's a business that was born out of Knapp's search for space for his church. And a business, he says, "that is growing every single day."

Journey to the Springs

The journey is one Knapp, 30, never could have imagined during those hardscrabble days in Texas. But that other option, that different path, was suggested by a co-worker at Whole Foods during Knapp's senior year in high school. The man, a fellow believer, told Knapp he should move to Colorado Springs to attend Charis Bible College and train to be a preacher. (The co-worker, as Knapp found out later, was a graduate of Charis and a founding director of the Dallas Charis location.)

"That sounded so ridiculous," Knapp says. He was working to take care of his mother and younger brother. He didn't have a car to get to the Springs. And if he did make his way there, he wouldn't have a job.

Then his Spanish teacher told him of a recurring dream she'd had.

In her dream, Knapp says, "I was standing in this corner, and I was saying, 'How am I going to get there, how am I going to pay for it, how am I going to go?' And in the dream, she was just screaming, 'Just go, and everything will be OK.' She was like, 'If you were planning to take a trip or moving or something, just go. Everything will work out.'"

So he started telling people of his plan. Within two months or so, a position opened at Whole Foods in Colorado Springs. Then his aunt bought him a car. Another relative offered to pay for his schooling. "So I went from 'no way this can happen' to better than I was."

It was at Charis that he met his wife-to-be, Katherine; they've been married nearly six years. Also at Charis, Knapp met Dan Funkhouser, an instructor who took on the role of mentor. Back in Texas, Knapp had been a hard-charging jock, "a high-testosterone bull in a china shop." Funkhouser, who had been a high school athlete as well, says he saw tremendous potential in Knapp. But he also saw a young man who needed to develop some humility, who could benefit from "some really strong discipline."

And so Funkhouser took Knapp under his wing. Except for six months of mission work in Thailand after graduating in 2011, Knapp would spend the next several years working with Funkhouser, building a ministry inside his Heartbeat Ministries that would become Pulse.

It was Funkhouser's idea for Knapp to return to school, this time to Charis Business School.

"I felt that was the next step," Funkhouser says. "As far as loyalty, as far as hard work, commitment, he had all of that, but he was just lacking in the area of financial knowledge."

So Knapp went through a condensed, nine-month MBA program at Charis. "It was like drinking out of a fire hose all the time," he says.

After that, it was time to leave the nest; Funkhouser told Knapp he needed to establish Pulse as its own entity in its own building.

"I knew that he had to go out and prove himself to himself," Funkhouser says. "So I sat him down and said it was the right time for him to go out and move beyond me and discover who he is and what he can do."

It was while searching for a home for Pulse that the seeds for SpaceTogether were planted.

A search for space

Knapp ended up connecting with a woman with a small church building and cafe who wanted out of her lease. The plan at first was to simply rent the facility for one night a week for services, but he ended up going all in and signing a five-year lease for the building.

He did a modest remodel but realized he was paying for a building that, outside of Saturday night services and a few other times, would be empty — a situation other churches faced as well. He had figured in his initial search that there would be an online platform for sharing commercial space, but he found only limited instances, such as office space.

So he turned to Craigslist and, within three months, 65 percent of his overhead was being paid by other churches using the space.

"Then I started thinking, 'Who else needs this?'" He had trained in Mixed Martial Arts (MMA) for many years and knew coaches who had their facilities, complete with equipment, sitting empty much of the time. Other industries likely were in the same boat, he realized.

He figured there had to be a better way for property owners and potential users to connect than Craigslist. And to vet those renting spaces to avoid issues such as late payments or damage.

Enter Brett Farrow, a fellow classmate from Charis who had gone into a career in technology. He reconnected with Knapp when attending services at Pulse; at the time, he was working remotely in Colorado Springs for an e-commerce company in Texas.

Farrow, upon hearing of Knapp's idea, was convinced — just as Knapp had been — that such a platform must already exist. An online search, though,  showed otherwise.

"I spent some time Googling different space-sharing companies and couldn't find anything that served the same customers," Farrow says. "I had been a part of nonprofits and businesses when they searched for space, and only office space was easy to find for medium- to long-term shared rentals. Every other type of business had to resort to classified ads. Since commercial real estate is so valuable, I saw that even serving a small piece of the market could be a very large business idea."

So Farrow jumped in as a partner. They started in areas where they had experienced the need and opportunity in shared space, such as churches, MMA gyms and warehouses.

"Over time," Farrow says, "that grew to include commercial kitchens and offices, and now our customers have posted spaces we never even dreamed of on the platform, such as wedding venues and event centers. And now we're in 23 states and have over 5,000 users across the country."

Still, even with that growth, not much revenue was coming in. SpaceTogether was charging a service fee for payment processing whenever a booking was made through its platform. But since it didn't cost anything for two parties to be matched on the platform, they could then wander off and make their own arrangements without going through SpaceTogether.

"The one thing that people wanted was the connection, and we were giving that away free," Knapp says. So this past spring, the revenue model was changed, with SpaceTogether charging providers a $25 posting fee when they begin advertising their space on the site.

"Then," Farrow says, "when a renter finds a space they're interested in, they can apply for the space from their phone or computer. The provider can see what activity the renter wants to use the space for, when it will be used, and what the renter's budget is. The provider can reject the lead, or they can accept it and pay a $35 lead generation fee to see all the renter's contact info and begin getting in touch with them."

Revenue has soared since that change, Knapp says, and there are plans to expand to major metropolitan areas such as New York and Washington, D.C. There's also a potential global market for SpaceTogether's services, he notes.

And if a major player takes notice, all the better. "It behooves us to find someone who is bigger and be acquired, be absorbed," Knapp says.

Farrow, SpaceTogether's chief technology officer, is happy for Knapp to lead the way.

"Justin is one of the most unique leaders I've met," he says. "With his charisma, he could be at the center of every conversation. But he prefers to listen and learn from other perspectives. Perhaps because of that, he has a knack for seeing where the company needs to go well in advance of me or anyone else on the team. Fortunately, he's also very good at not saying 'I told you so,' even when he could."

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