State farm last year quietlyopened a storefront in Chicago's trendy Lincoln Park. There'snothing about the location to suggest insurance; a peek insidereveals a coffee bar, comfy furniture and young java drinkersworking on their laptops—just like any Starbucks.

But beneath the surface, Next Door is more than a bunch ofbaristas. Drop by the store's website (www.nextdoorchi.com), and youwon't find a lot of overt references to insurance. Tabs highlight“Coaching,” “Classes” and “Community”; and the Gallery sectionurges visitors to “Snag a Seat” and to “Connect & Chillax.”

Dig deeper and you'll see that the location offers meeting spacefor people in the neighborhood, as well as free financial-educationclasses on subjects as diverse as writing a business plan,burglar-proofing an apartment or doing taxes.

What's the thinking behind this? I spoke with Brett Myers, NextDoor's program director, about State Farm's strategy.

Myers made it clear that Next Door is emphatically not aninsurance-sales location. Although the people who moderate theclasses are trained financial coaches, they're not there to sellpolicies but to have conversations with young buyers—in groups orone on one—about what they need and want.

It's all about education, bothfor the Millennials and for State Farm. “This is a market thatneeds financial literacy and that struggles with some of theexisting mediums to do that,” says Myers. “We created Next Door asa way for us to understand the consumer rather than to sell. It's alearning lab for us to find out how to address Gen Yconsumers.”

Most of the people who use Next Door hear aboutit because they live in the neighborhood—and theneighborhood drives what Next Door does. Besides the StateFarm-scheduled financial workshops, a recent event hostedvolunteers collecting backpacks and school supplies for a localhigh school. Other events include a “business in the city”small-business mentoring program, a healthy-eating presentationand, yes, yoga classes—“all driven by the user base in thecommunity,” Myers says.

The location is so robust that it hosts 20 events in a slowmonth, 35 if things are hopping.

Does all this community engagement translate into something asprosaic as insurance leads or sales? Myers says that if someonetaking a class or seeking financial advice specifically asks aboutbuying insurance, they steer him or her to a local State Farmagent.

So far, State Farm agents are “generally positive” about theproject, Myers says. He meets regularly with agent groups, and themessage he conveys is that Next Door reinforces person-to-personinteraction for a demographic that primarily engages viatechnology.

“Next Door is proving that even with the younger generation,people want to talk to a person or connect with theirpeers in person,” Myers says. “There's a time, place andreason for a physical location and a person to help with certainquestions.”

In spite of what appears to be success, State Farm is in nohurry to roll out the Next Door concept to other cities, Myerssays: “Even though we've had a good first year, like any business,we're still trying to figure out how it works.”