Scenario A - Loan/Angel Investor

In Scenario A I am either looking for a friends/family loan or one or more angel investors to raise a total of $200,000.

This amount would allow us to rent a property and run all operations for 12-18 months with ample financial cushion to experiment and learn.

Scenario B - Real Estate Investor

In Scenario B I would partner with a real estate investor.

• You own the property, I manage it - I do not have the capital to purchase the property. You will purchase and own the property and I will manage it.
• I will upgrade the property - I will invest significant amounts of time/money into upgrading the property, which will increase the value of your investment.
• You will provide reduced rent - You will provide reduced rent to No Tribe—especially in the early stages—in exchange for the property management, the property upgrades, and perhaps an equity or revenue share agreement.

Scenario C - Something Else

While Scenarios A and B are the most common financing arrangements for ventures of this nature, I am open to other financing arrangements that make sense.

The Opportunity

This is an amazing opportunity for the right investor. As you will see, this is a great time to start this venture, and Mexico City is an ideal city to start it in.

All new ventures come with risk, but I am doing everything possible to maximize revenue, minimize costs, and to tilt the odds in our favor.

In addition to realizing a healthy return on your investment, you will also have the opportunity to be a part of something genuinely special that has the chance to make a real impact.

The vision outlined below is for the first Crossroads location. We need to establish the pilot location in order to experiment and learn. However, the long-term vision is to establish a network of Crossroads in major urban areas throughout the world.

No Tribe is addressing real problems that are becoming more urgent. There is no shortage of opportunity.

I want to build something truly great. I just need some help to get started.

Characteristics

• Location - Needs to be in a safe area that is accessible to our customers.
• Rooms - A mix of 3-7 smaller spaces with at least one larger space capable of hosting large events.
• Rooftop/Patio - Either a rooftop or outdoor patio area capable of hosting outdoor events.
• Sound Profile - It must have enough privacy or sound insulation to allow for the hosting of events without disturbing the neighbors.

The Numbers

• Size: 5,000 - 15,000 sqft
• Purchase Cost: Approx. $750,000 - $1,500,000 USD ($17,000,000 - $35,000,000 MXN)
• Monthly Rental Cost: Approx. $6,000 - $15,000 USD ($130,000 - $350,000 MXN)
• Zoning: Mixed or commercial zoning as is appropriate for use as a school/social club.

A Good Time to Invest

• Exchange Rate - 1 US Dollar is currently worth 22-25 Mexican Pesos (MXN). As recently as the end of 2008, 1 USD was worth 10 MXN. It is likely that the dollar is currently in a particularly strong period that will not persist.
• Recession - The Mexican economy was slipping into recession prior to the Covid-19 crisis, the crisis will amplify those difficulties and drive down real estate prices in the near term.
• Roma/Condesa Market - Furthermore, the Roma/Condesa area is saturated with the types of businesses that were hardest hit by the Covid-19 crisis (restaurants, bars, hospitality, schools). This will further drive down commercial real estate prices in these neighborhoods in the near term.
• Economic Recovery - While the Mexican economy will struggle in the near term, in the medium term it will gain a significant boost as US companies increasingly move their manufacturing from China to Mexico.
  
  

A Good Time to Invest

• Economic Recovery - While the Mexican economy will struggle in the near term, in the medium term it will gain a significant boost as US companies increasingly move their manufacturing from China to Mexico.

Ancient Instincts, Modern Values

The above quote is from a brilliant talk given by famed economist Friedrich Hayek. According to Hayek, all of us learn cultural rules which enable us to have a modern civilization, but which need to be learned because they are in direct conflict with our very strong natural instincts.

All of us have instincts that served us very well when we lived in small groups of hunter/gatherers, but these instincts have been actively suppressed as civilization has developed.

There is a fundamental mismatch between our ancient brains and our modern environment and learned values. And this mismatch is at the heart of a large percentage of all the problems that we see in the world today.

No Tribe Pillars

An important part of addressing a problem is understanding the system in which the problem arises. At No Tribe we understand the conflict between our ancient brains and modern environment, and the 3 pillars of No Tribe map directly on to our fundamental human needs.

In general, adults thrive when they have community, growth, and purpose. And they struggle when one or more of these are missing.

• Community - As humans we hunger to be part of a group that genuinely knows and cares about us, and this desire is very understandable. For our ancestors, being embraced by a tribe was the difference between survival (and a chance to have children) and death without offspring.
• Growth - Status within the tribe was also of vital importance to our ancestors, and status was largely determined by an individual's ability to contribute to the tribe. Our brains reward incremental, personal growth because this is how we increase our capacity to contribute to the group (and thus our status).
• Purpose - For our ancestors, survival—and having living descendants—was very much a team sport. The thriving of an individual meant very little if the tribe as a whole did not thrive. This is the origin of our instinct to contribute to something bigger than ourselves. The tribes that thrived were those with members that contributed to the common good.

The Problem of Community

Humans are designed to live in tribes or villages, small communities in which people know one another. The modern world of cities and suburbs is in direct conflict with the very real human need for close community, and when people are disconnected from this community they crave it.

Close community, especially for adults in the West, is on the decline. While depression, addiction, and loneliness are all on the rise.

The modern adult experience is 
filled with isolation, loose 
social connections, and lack of purpose. This trend is set to intensify as:

• Relationships are increasingly technology mediated rather than face-to-face
• Religious and social institution participation decline
• Marriage and family formation decline
• People move from smaller communities to large cities
• Remaining at home becomes steadily more comfortable and convenient
• More workers choose to work remotely

When a typical adult moves to a new urban environment, there is increasingly no easy way for them to find close community... to find their tribe.

Growing Inequality

The personal growth that No Tribe facilitates is growth through education. There are several trends that are increasing the need for the types of adult education that No Tribe will support.

Among the most important of these trends is the increase in the wealth gap. The gap between the haves and the have-nots is growing throughout the world.

The skills that are needed for the most desirable jobs are rapidly changing. More than ever, adults will need access to affordable education options throughout their career.

The Problem of Purpose

Humans have a strong desire to find a purpose, to contribute to a cause that is larger than ourselves. However, it is becoming more difficult for adults to find purpose because of:

• The decline in religious participation, which has traditionally been one of the most important sources of purpose
• The decline in participation in other community organizations
• An increased pressure to focus on building wealth. Primarily due to growing wealth inequality and status signaling on social media.

Target Market

1. Expatriates and adults that have moved to the city from other parts of Mexico
2. Organizations that offer any type of adult education
3. Social impact organizations
4. Clubs and organizations that need a physical space to meet

Market Conditions

• The city has a total population of over 20 million people, including about 1 million expatriates
• Of those, roughly 700,000 are from the United States
• A significant percentage of these expatriates are concentrated in the Condesa/Roma area of the city, where our pilot Crossroads will be located
• There are hundreds of adult education organizations in the city, many of which need additional physical space.

Maximizing Revenue

There are many educational institutions throughout Mexico City in beautiful, older homes. A large percentage of them receive all (or almost all) of their revenue from an in-person education experience. But the future of education will belong to organizations that use their physical space intelligently. Organizations that carefully consider when it makes sense to offer a course that's fully online, vs. hybrid, vs. face-to-face.

Rental expenses will be a large percentage of our total costs, and we will maximize our revenue per square foot in the following ways:

• Online/Hybrid Education - While we will rent our physical space to outside educational organizations, we will also develop educational offerings of our own. The majority of these offerings will either be 100% online, or will be hybrid courses that are a mixture of face-to-face and online.
• Evening Space Utilization - A large number of physical schools are underutilized in the evenings. Our facility will transform into a Social Club in the evenings.
• Weekend Space Utilization - Additionally, we will rent our space to organizations on the weekends for a variety of events.

If we handle these initiatives intelligently, our revenue per square foot could be 5x that of an equivalent school in Roma/Condesa.

Minimizing Costs

While this is a new concept and we don't have any 100% equivalent competitors, our costs—especially our labor costs—are minimal when compared to our competition.

• No Full-time Faculty - For courses that we offer ourselves, our teachers will teach courses on contract (perhaps with a revenue share agreement).
• No Administration Costs - We will not seek to become an accredited institution of any kind. This will eliminate all the administrative and overhead costs that are associated with operating as an accredited institution.
• Inexpensive Contract Workers - The cleaning and maintenance of the facility can be contracted out at very low cost in a city like Mexico City.
• Few Full-time Staff - Due to the nature of our operations, there is very little need for full-time staff. Only 1 or 2 would be required during the early stages of operation.

Example Monthly Costs/Revenue