When Joseph Kenney moved his digital marketing agency, 316 Strategy Group, into Elevator’s Omaha co-warehousing space, he expected more elbow room and a professional setting for client meetings. What he didn’t anticipate was the business accelerant hiding in plain sight: his neighbors.
“Within sixty days of moving in, we’d closed nearly $150,000 in new business just from connections made in the building,” Kenney explains. “We designed a trade show booth for a landscaping company for a unit on the fourth floor, built several websites for e-commerce businesses down the hall, took over the marketing efforts for an essential oils company, and helped a mortgage company repair their closed Google Business Profile. All these clients were fellow Elevator members we met simply by showing up to work. That’s the real magic happening in these spaces.”
Co-warehousing—the shared workspace model designed specifically for product-based businesses—has exploded across America’s entrepreneurial landscape. Industry analysts project the flexible warehouse market will expand by 23% annually through 2028. But as the model matures, a more profound pattern is emerging: these communities aren’t just solving space problems; they’re fundamentally transforming how businesses grow.
The Network Effect in Physical Form
Shannon Lerda, co-founder and president of Elevator, the company pioneering co-warehousing across the Midwest, has watched this phenomenon unfold firsthand since launching their flagship Omaha location in 2021.
“We initially focused on solving the physical space problem—giving growing e-commerce businesses a place to store inventory without five-year leases,” Lerda explains. “But we quickly realized the most valuable asset wasn’t the square footage. It was the connections forming between our members.”
This “multiplier effect” manifests in several measurable ways:
Revenue acceleration through in-house partnerships. Businesses inside co-warehousing spaces frequently become each other’s customers, vendors, and strategic partners.
Resource sharing that slashes operational costs. From collective shipping negotiations to shared equipment and staff, proximity breeds efficiency.
Knowledge transfer that bypasses costly mistakes. When entrepreneurs can tap the wisdom of others who’ve already solved similar problems, innovation accelerates.
Collaborative problem-solving that creates novel solutions. Casual conversations at the coffee station regularly transform into transformative business ideas.
“We’re essentially creating business ecosystems in miniature,” says Emiliano Lerda, Elevator’s CEO. “When you concentrate 100+ entrepreneurs in a space designed for interaction, the outcomes are exponentially greater than the sum of individual businesses.”
From Patent to Production: The Tholi Story
Perhaps no company better illustrates this multiplier effect than Tholi, an essential oils business with a patented concept: shoes that administer essential oils through the heel throughout the day.
When Tholi joined Elevator’s Omaha location in late 2023, they occupied a single small unit. Within four months, they had expanded to six units. Six months later, they purchased their own manufacturing facility in Kansas City.
“Tholi didn’t just use our physical space,” explains Levi Cermak, Elevator’s Vice President of Revenue. “They leveraged access to capital through our CDFI partnerships, implemented marketing strategies learned from other members, and secured introductions to investors through our network.”
This comprehensive approach to growth—spanning physical infrastructure, knowledge acquisition, and relationship building—represents the true value proposition of modern co-warehousing. It’s no longer just about walls and loading docks; it’s about immersion in a growth-accelerating environment.
The Unexpected Collaborations
Walk through any co-warehousing facility, and you’ll witness unexpected partnerships forming in real time.
At Elevator’s Omaha headquarters, a sustainable packaging company founded by a former environmental engineer struck up a conversation with a subscription box owner struggling with excessive shipping waste. Within three months, they had co-developed a compostable insert system that reduced packaging costs by 22% while enhancing the unboxing experience.
In another corner, a photographer who specializes in product photography noticed a jewelry maker struggling with DIY images for her e-commerce site. A bartered arrangement emerged: professional photos in exchange for custom corporate gifts for the photographer’s high-end clients.
“These collaborations aren’t accidents,” emphasizes Shannon Lerda. “We design our spaces and community programming specifically to facilitate them. From shared dining areas to educational events and informal happy hours, every aspect of the experience encourages meaningful interaction.”
The data supports this intentional approach. According to surveys of co-warehousing members across multiple facilities, businesses report:
- 65% have formed at least one formal partnership with another member
- 82% regularly exchange advice and best practices with neighbors
- 73% have made changes to their operations based on ideas gleaned from community interactions
- 58% report finding new suppliers or service providers from within their location
Beyond Basic Incubation
Traditional business incubators have long promised similar benefits. But co-warehousing communities differ in crucial ways that amplify the multiplier effect.
Unlike cohort-based accelerators that group businesses at similar stages, co-warehousing spaces bring together companies across the growth spectrum—from pre-revenue startups to established businesses doing millions in annual sales.
“This diversity creates perfect conditions for symbiotic relationships,” explains Emiliano Lerda. “A two-person startup with innovative ideas but limited resources can connect with a growth-stage company that has capacity but needs fresh thinking. A seasonal business can share staff with a counterpart whose busy period falls during their slow season.”
The physical arrangement of these spaces plays a crucial role too. At Elevator’s facilities, private warehouse units open onto shared corridors, with common areas strategically positioned to maximize spontaneous interaction. Loading docks, fulfillment stations, and coffee bars become natural gathering points where business owners connect while going about their daily operations.
“We’ve learned that operational proximity matters tremendously,” Shannon notes. “When entrepreneurs physically see how others solve logistics challenges, it sparks immediate improvements. One member might notice another’s efficient packing station setup or inventory tracking system and immediately adapt it for their own operation.”
The Psychological Advantage
Beyond tangible business benefits, the co-warehousing model addresses a less discussed challenge facing product entrepreneurs: isolation.
“Before finding this community, I was making decisions in a vacuum,” explains Jennifer Carlson, who crafts natural soaps from her 200-square-foot unit in Omaha. “Working alone in my basement for three years, I had no sounding board, no reality check, no one to celebrate wins or troubleshoot problems with.”
This psychological aspect of entrepreneurship—particularly for those handling physical products—represents a hidden cost of the home-based business model. When surrounded by peers facing similar challenges, decision-making improves and resilience increases.
“We’ve seen members help each other through supply chain disruptions, shipping crises, and seasonal cash flow challenges,” says Levi Cermak. “There’s an emotional support system that forms naturally, creating a foundation for better business decisions.”
Regional Amplification
The multiplier effect extends beyond individual businesses to reshape entire regional economies. In cities like Omaha, Des Moines, and Kansas City—all named among America’s top co-warehousing markets in a recent analysis by Best Cities For—these communities are becoming anchors for product-based entrepreneurship.
“Kansas City entrepreneurs have outgrown their home-based setups, but traditional warehouse leases are too risky in today’s economic climate,” explains Emiliano Lerda. “We’ve found that product-based businesses are actively looking for flexible warehousing solutions that better fit their needs.”
As Elevator prepares to open its Kansas City location in the second half of 2025 (following its Des Moines launch in April), local ecosystem builders are anticipating the wider impact.
Adam Arredondo, a serial entrepreneur who’s spent years building Kansas City’s startup community, sees Elevator’s arrival as more than just another real estate offering: “I believe they fill an obvious void in the market. Also, after meeting their team, it’s clear they are community builders that will help energize and connect the ecosystem.”
This ecosystem-building approach distinguishes leading co-warehousing providers from traditional real estate operators. Companies like Elevator don’t just lease space—they actively cultivate connections through programming, introductions, and community management.
“We host two lunch-and-learns every month,” explains Cermak. “We bring in experts on everything from TikTok marketing to efficient pick-and-pack systems. We organize e-commerce meetups where successful founders share their journeys. All of this creates a knowledge transfer mechanism that accelerates everyone’s growth.”
Measuring the Multiplier
Quantifying the precise impact of the co-warehousing multiplier effect presents challenges, but several metrics offer insight:
Revenue growth rate comparison. Across multiple locations, businesses within co-warehousing communities report growth rates averaging 32% higher than similar companies operating from isolated facilities.
New business relationship formation. The typical member forms 4-6 significant business relationships within their first year in the community.
Problem-solving velocity. When surveyed, 78% of members report solving operational challenges faster due to community resources and knowledge sharing.
Innovation metrics. Product-based businesses in co-warehousing spaces launch new offerings 40% more frequently than counterparts outside these communities.
Joseph Kenney of 316 Strategy Group articulates this advantage succinctly: “The velocity of improvement is what stands out. Problems that might have taken us months to solve on our own get resolved in days or weeks because someone down the hall has already figured it out.”
Designing for Multiplication
As co-warehousing continues its rapid expansion, providers are increasingly focusing on design elements that maximize these multiplier effects.
Elevator’s approach includes several key components:
Strategic layout planning. Traffic patterns are engineered to create natural collision points where members interact during routine activities.
Intentional community curation. While maintaining diversity, membership teams seek complementary businesses that might benefit from proximity.
Programmatic connection points. Beyond space, regular events and activities create structured opportunities for relationship building.
Resource partnerships. Relationships with capital providers, service professionals, and industry experts extend the community’s value beyond its walls.
“We’re not just landlords,” emphasizes Shannon Lerda. “We’re growth facilitators. Every aspect of our model—from flexible lease terms to community programming—is designed to remove barriers and accelerate business development.”
This commitment to facilitation represents the evolution of co-warehousing from a real estate solution to a comprehensive business development platform. As the model matures, the multiplier effect will likely become an increasingly central part of its value proposition.
The Future Is Collaborative
Looking ahead, industry analysts project the co-warehousing multiplier effect will strengthen as these communities reach critical mass in more markets.
“We’re only beginning to understand the full potential of these collaborative environments,” says Emiliano Lerda. “As our communities mature and members develop deeper relationships, we’re seeing second and third-order effects—businesses co-developing products, sharing distribution channels, and even making joint investments.”
For entrepreneurs considering the co-warehousing model, this expanded value proposition suggests a new calculation. Beyond solving immediate space needs, these environments offer access to an acceleration ecosystem that can fundamentally alter a business’s growth trajectory.
As Tholi demonstrated by growing from one unit to their own manufacturing facility in under a year, the compounding advantages of community, resources, and knowledge can transform business outcomes.
“Co-warehousing isn’t just a transitional solution—it’s a fundamental rethinking of how businesses manage physical space in the e-commerce era,” concludes Shannon Lerda. “The traditional warehouse lease is becoming increasingly impractical for today’s agile businesses.”
For the thousands of product entrepreneurs currently navigating growth from overstuffed homes and inadequate facilities, this evolution offers not just space relief but a potential business accelerant. The walls that contain their inventory might just be the least valuable part of what they’re buying.
For more information about Elevator’s co-warehousing communities in Omaha, Des Moines (opening April 2025), and Kansas City (opening second half of 2025), visit elevatorspaces.com.
