How Capsity Brings Coworking and Social Good to Sacramento

Capsity, a coworking space in Sacramento, California, was a coworking community before the members even knew what coworking was. Launched in 2008 by Jeff Louie, the space was there during the early days of the coworking movement and helped inspire a thriving coworking scene in the capital city.

Not just a shared workspace, Capsity is a B Corp (a Benefit Corporation) with a commitment to a triple bottom-line: social, environmental and financial. The space is a hotbed for social good organizations, nonprofits, and business owners that want to do well by doing good.

I chatted with Louie and Capsity Co-CEO Mai Linh Tompkins about how they’ve built a coworking community around social responsibility, how they’re transforming underutilized spaces into community hubs—including a just announced second location at Sacramento’s historic MLK and Broadway, and the connection between coworking and breakfast pizza.

Cat Johnson: Let’s start at the beginning: What inspired Capsity?

Jeff Louie: We actually didn’t know we were doing coworking. A buddy of mine and I just sort of started doing shared resources. It started as a virtual office out of a real estate office space we had moved into. We had open space and thought it would be nice to start sharing with people in different networking groups and friends that wanted to use the space.

I have a background in nonprofit work and this just made a lot of sense to me. I thought, “I have a printer, why do we need 50 printers when we can just have 49 other people use this printer?”

Someone visiting the space asked if we had heard of Sandbox Suites. I hadn’t, so I looked them up and said, “Oh, we’re a coworking space.”

We didn’t sell coworking as a model, it was just part of our culture. We were already doing it. When we researched coworking in Sacramento, we found that there were no physical locations. There were people who were looking into it, but a lot of it was coworking culture in a coffee shop, like the Jellies that were happening.

How did you take what you were doing with nonprofit work and make that part of the culture of Capsity?

Our first mission statement was just to make people smile. We happened to offer office space, but we really just wanted you to leave with a smile. What I found was that people were just stressed out from business. We decided to create a space where people feel supported and that they can find resources. We were just trying to build supportive connections and that culture stayed important to us. It was important to make sure people in the space had that same mindset.

We learned a lot in those first couple of years. People would think they just needed office space, but you’d find that they really needed more. But in terms of what was offered, with the typical business center or virtual office, it was just a business service. We wanted to be the uncorporate—the uncola of office spaces. That’s how we tried to position ourselves.

How did you get to the place where you bought your own building?

In 2011, we didn’t own the building and we didn’t know it was upside down. We drove up one day and there was a for sale sign. Of course, that freaked out our entire community. We didn’t know if we needed to move. We realized as a group that we can’t ever have that happen—to have one person disrupt an entire community.

Long story short, we had the opportunity to buy a building, so we bought one in 2012. We bought it and shut it down to do renovations. I was running Capsity out of my two-bedroom apartment for a while. My wife would go to work, and I’d have a couple of people come over and cowork. We did what we needed to to survive and get through the transition while the construction was happening for seven months. We relaunched on October 11, 2012 and we’ve been at the current building since then.

In the early years, people didn’t know about coworking, so you had to introduce it conceptually, as well as find people who were interested in more than workspace. How did you go about finding people who were a good fit for Capsity?

One of the things that really helped was the coffee culture that was happening in Sacramento. You had the freelancers—and more of them because companies were downsizing—and at the same time you had the coffee culture, which was getting people to mix and mingle and realize they needed different spaces.

For Capsity, it was really the people who were transitioning out of executive office suites or their actual offices spaces. That’s where we picked up our community. I reached out to all the existing business organizations and we would hold a lot of events. We had as many mixers as possible so people could see the physical space, see the culture, see what we were trying to do. Then we had a couple of articles written about us, and we started reaching out to anyone who was doing research about coworking. That’s what really got it going.

It’s nice that we were able to lead the charge of coworking spaces in Sacramento. Now we’re getting spaces that are 10,000 square feet or bigger. For a while, there were really only three coworking spaces in Sacramento. In the last three years, we’re seeing that explosion of coworking spaces. I believe there are 10 spaces in Sacramento now.

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Mai Linh, it sounds like you came into the space with the culture already well-established and the space expanding. What was your experience coming in and what are you working on now?

Mai Linh Tompkins: I’m a product of all that is awesome about Capsity. When I came in, I was recovering from a mid-life crisis, so to speak, having just lost my dad, and leaving my nonprofit life, and coming back from world travels and soul-searching. I checked in at Capsity and never checked out.

It was exactly the support I needed at that point in my life. I had started a business, but wasn’t sure if it was the right thing. By coming in and connecting with this curated community of entrepreneurs, I found my support network—I found my tribe. Finally.

Louie: We did have a culture, but we were going through what I call a phoenix stage, at that time. It was time to create a transition and Mai Linh came in at the right time. It was really important that there was a transition of, not just power, but culture, and being open to it. There was a transition period that was happening.

Tompkins: I have my MBA, but I’m not on the corporate track. They were grooming us for Fortune 500s, but I was like, “What about the people? How do you reconcile that?” But there were frustrations in the nonprofit world, as well. I was trying to find that overlap of heart and work and here was Capsity using business as a force for good. Here it was in practice.

It’s become a micro-economic/social experiment with us to bring in organizations and add that social thread, not only through our Benefits Corporation mission, which is adding the positive social impact into our bottom line, but also teaching all the businesses that come through our door to do the same and helping them do the same by helping them grow and thrive. We can actually do well by doing good.

How do you support the member organizations and businesses?

Tompkins: We formed a fellowship program and we’ve helped several nonprofits usher through and get their 501(c)(3) and become more sustainable organizations, along with adding that triple-bottom line value to whatever business it is.

It’s been a natural, organic curation process, as far as our culture and community. A lot of what I see has been through referral, but something about us being us is that we’re a magnet for really amazing people.

Louie: People laugh sometimes about our coworking model. One of the things we’ve done is, we bought a pizza restaurant. The idea is that coworking is more than just space—it’s about energy and food, and pizza is just one of those easy things, so we serve breakfast pizza.

Wait, what? You bought a pizza company and now you’re partners with them? What does that look like?

Tompkins: We’re committed to becoming more civil and engaged in our own little micro-community and the greater one around us. This restaurant was a 20 year-old pizza restaurant, just a few doors down, that was on its way out.

We struck up a deal and ushered the old owner into his retirement and were able to take over his legacy and bring it to new life. We were able to bring our consulting experience to the restaurant industry to touch on urban agriculture and food, as well as bringing the employees we kept on up to the living wage.

You can see the Benefit Corporation and the social good fabric weave through all the projects we have. The beauty of the pizza project is it’s mutually beneficial. We’re a community, and we have events, and we like to eat, so why not? We order from ourselves and play with new recipes. We have our own little focus group built into our community. We have vegan cheese now.

Louie: The building we bought [for the coworking space] was a former post office. The only reason we were able to buy it was because the former owner/operator wanted a way out, similar to the pizza restaurant owner. We went in, took on all of the building’s monthly debts, simultaneously made an offer to buy the building, and successfully navigated the purchase process.

Recently, we helped our neighbor, a nonprofit, negotiate on their space and they were able to buy their building. We’ve also helped an ice cream shop. We find something that’s there, and help resurrect it.

Coworking has notoriously low profit margins. Are you financing all of this through Capsity?

Louie: Yes, everything is based on our own sweat equity. It’s all us, except for buying the building, which was an SBA loan. In just the last seven months, we’ve started pulling in investor money and getting the right legal structures in-place to start taking in more. We can’t grow fast enough when we don’t have the cash. That’s why diversifying has been important to us, to go into different types of revenue sources.

We built Capsity as a Benefit Corporation and it was never about just the bottom-line return. Our goal is not to be the next WeWork, our goal is to be who we are. The reason that’s important is that we want that same culture for our members. One of our members said, “I like coming to Capsity, because who you are is enough.”

How did you decide on Satellite Deskworks to run Capsity and how does the software fit into your larger vision?

Tompkins: We’re a dynamic and agile company and we’re always trying to work smarter in place of harder—we already work hard enough. Too many precious hours were being spent trying to invoice and and do this, and collect all of that. When we found Satellite Deskworks, it was wonderful to have a platform that could take all of that off our plates and make it a more seamless process. We could connect with our members and feel like a safe and secure financial transaction happened while maintaining a good, high-touch relationship.

Ilene Combs, who is our operations guru, found Satellite Deskworks and implemented it and we’ve been very pleased. We’ve made suggestions, which have been well-received and implemented, to make it even better and more useful for our space and hopefully other coworking spaces that are using the product.

How would you advise another shared workspace operator who is considering going with Deskworks?

Tompkins: Do it. It will make your life easier.

Louie: Consider the things that can take off a lot of hats. A lot of times in a coworking space, the community manager is the person doing everything. Look at how much time you can save by having certain things be automated. Look for things that are going to take those hats off and let you focus on what you do best, which are the relationship-driven things versus transactional ones. Deskworks lets you automate the transactional things so you’re not bogged down by them.

What’s next for Capsity?

Tompkins: We’re gearing up for some exponential growth. We’re revitalizing a previously-neglected and historic community here in Sacramento in Oak Park. We purchased our second location last year and I’m going to escrow today to sign for our fourth location.

This is right along the lines of us resurrecting things in our community and making them better. One of our taglines is, “Do good better.” By doing this, we’re revitalizing an old bank, we’re taking buildings that haven’t been cared for, and bringing new life to them and our neighborhoods. This new economy is coming, and Capsity is quietly leading the way.

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