Longform

Building a Better Nightclub

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How did someone so young become a multimillionaire in less than a decade? "I got bad grades in [public] high school," recalled Kofman, who grew up in Chicago. When his parents decided to send him to Marmion Abbey & Academy, a military academy, to gain some maturity, he knew better than to put up much of a fight. Today he counts his experience there as the foundation for his later successes. "[Military school] teaches you organization; it teaches you discipline," he said. "It teaches you a lot of things that help you become better at anything you do. It could be business, or it could be cooking an egg omelet." Nonetheless before his senior year he transferred back to a public high school, Glenbrook North. "[Marmion] is an all-boys school, so there wasn't a lot of social contact with girls," he explained, adding that he felt he wasn't learning enough social skills as a result. "It was unhealthy for me. I needed the daily contact."

In 1994, he enrolled at the University of Illinois at Chicago. Initially, he planned for a career in pharmaceutical research, but the more he looked into the field, the more he realized he'd have to earn several degrees and use industry connections to get a decent job. "What's the next best job?" he asked rhetorically. "Working the counter at Walgreens! And I can't do that." He dropped out of college after his sophomore year.

Not sure what his career path would be, Kofman had found the answer while still in college after a friend gave him a motivational tape. The tape, which was about long-distance and network marketing, explained how one could make money by selling long-distance telephone service: Sign up twenty people, and recruit three sales agents under you. When the agents sign up customers for you, you get a percentage of their sales. Concurrently when they enlist more employees, you get a percentage of the new agents' sales, too. Much like a telemarketing firm, the system creates a revenue base by cultivating, and profiting from, an ambitious staff. "It's a pyramid scheme, all the way down," said Kofman.

"I liked what the [tape] sold," he continued, noting that he was impressed by the potential of its concepts. "Sell electricity, sell gas, sell phone, cable. All that's a utility, meaning there's a month-to-month need for it. You always need it. It applies to every consumer."

So in 1995 when he was just nineteen, Kofman created Globcom Inc. in the Northbrook suburb of Chicago. Globcom is a telecommunications carrier that purchases the right to use MCI's phone lines and to sell local phone and DSL service directly to consumers. It targets suburban families looking for an alternative to the major phone companies. Today, Kofman estimates that his company is worth $50 million and operates in all 50 states. "The key to growth in any business is marketing," he said when asked how Globcom Inc. ballooned so quickly. "That's something I do well. I know niche markets."

Despite a few bumps in the road -- in 2003, the FCC fined Globcom several hundred thousand dollars for failing to pay enough back taxes -- Kofman's ride to the top has been fast and smooth, and he displays the confidence and near-cockiness one might expect to see in a guy who struck it rich before the tender age of 30.

"It's something I've never done," he said of his foray into the world of nightclub ownership. "It's completely outside telecommunications. But I believe I can open up any business. Nightclubs, clothing stores, restaurants -- they all have the same concept in mind, which is the business of accounting, marketing, and sales. How I approach it is, it's all about hiring the right people."

Here's how the idea for Nocturnal took shape: Kofman often vacationed in Miami, he said, and the city's vibrant nightlife led him to look for investment opportunities here. He honed in on the burgeoning Park West neighborhood in the downtown area, and the block between NE Eighth Street and NE Eleventh Street in particular. He also wanted to take advantage of the 24-hour liquor licenses the City of Miami has been offering to entrepreneurs who build nightclubs, supper clubs, and bars in Park West to help create a thriving entertainment district. Hopefully, said Kofman, Nocturnal will become the first piece in a patchwork of businesses he'll own throughout the area.

In July 2002, Kofman bought the warehouse at 50 NE Eleventh St., paying $910,000 for the property. In addition, he bought a stake in a second warehouse at 90 NE Eleventh St., with plans to convert it into a nightclub as well. (He later sold his interest in that property.)

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Mosi Reeves
Contact: Mosi Reeves