Why the HUB Brussels is no more

Initially posted on January 11, 2013 by anisb

The Brussels HUB community has been shaken by sudden news a few weeks ago: HUB Brussels is declaring bankruptcy and closing down.

HUB Brussels was the first coworking space to open in Belgium and has been an inspiration to many others opening in Belgium, France, the Netherlands and beyond who came to visit the HUB Brussels, ask questions and get inspired by this innovative space. We need to be thankful to those who started this adventure and to those who carried it from an idea to a running business. My thoughts go to the cofounders (Simone, Eric, Jason and Alex), the hosts who nurtured the community, the careholders who supported the cooperative and the community of HUB Brussels members without whom the HUB Brussels would be a hollow space.

The past weeks played host to various conversations in the community and among the people involved in the management of the HUB organisation. Emotions and opinions were expressed, but the main question asked was “why?”. Now that we are a few weeks away from the painful news, I felt the urge to write down my personal assessment on the factors that led to the HUB closer, with a clear head and away from emotions. Obviously these are my own opinions and are subject to discussion, I am happy to exchange point of views in the comment section in this post or around a drink.

My approach is driven by a will to start a conversation, an assessment that will be beneficial to future businesses similar to the HUB and also to answer a few comments that I have heard following the HUB Brussels closure that might be harmful to social entrepreneurship in general and to Coworking in particular. These comments challenge the business model of the HUB and ultimately the Coworking model while claiming that this model cannot survive without public funding.

I have been involved in HUB Brussels for the past three years as a careholder first (member of the cooperative) then as a a staff member (as a contractor) and have witnessed the HUB Brussels and the international network evolve on a daily basis. I was introduced to the HUB organization by my friend Simone Poutnik (one of the 4 cofounders) and immediately liked the spark of energy and inspiration it brings. I was myself searching for a direction, looking to leave the corporate world and exploring more entrepreneurial ventures. I became a careholder and got involved in the community. Eventually I got more involved in the activity of the hub when I got approached by Simon Ulvund, the general manager back then, to provide feedback on a revenue model based on events, and ended up taking over the events activity of HUB Brussels when the position became vacant.

Like any other business, the HUB has had its strengths and flaws that ultimately led to a financial situation that couldn’t be sustained anymore. From my position, I firmly believe that the main issues that led to the closure of HUB Brussels are not related to the business model, but are mainly operational and linked to the organisational culture. Some elements are tangible like management, execution and operational decisions affecting the everyday life at the HUB while some are intangible like the organizational culture. Here are the main points according to me:

HUB Brussels is not a Coworking space:

Personally I consider this point as probably the most important point that led to the failure of the HUB experience in Brussels. When you talk with various people involved in the HUB governance and management about the activity of the HUB, they will tell you that the HUB is not a coworking space, it is much more. You would get the same feeling on the website, there is no clear mention of Coworking. This is a voluntary position the HUB has taken in Brussels and on a global level (HUB World) where many influential individuals consider Coworking spaces as simply “tables and chairs” that have no social impact or a will to have one while the HUB is about building a community and facilitating a social impact. I think this was the biggest mistake HUB Brussels has done, and the HUB global is continuing to do so, why ?

I have been involved in the organization of the Coworking Europe Conference 2011 and 2012, where managers of coworking spaces and community managers from all over the world meet to discuss relevant issues to their businesses and communities. As a matter of fact, the words that are the most used in these gathering are community and social impact. There is no coworking without a strong community sharing the same modern values such as sustainability, collaboration, innovation, entrepreneurship, social responsibility and openness… These values are the drivers of most founders of Coworking spaces and communities who live by them on a daily basis. The social impact of many coworking spaces I have seen is undeniable, they impact their community and shine on their environment and all their stakeholders.

The number of coworking spaces is doubling in number every year, by choosing to stay outside of this phenomenon, HUBs are not taking advantage of the evangelization process done by the coworking movement to boost a change of paradigms in the way we work through encouraging people to abandon their isolation if they are working from home, and motivating businesses to experience getting out of their classical working spaces to meet new people and ideas in innovation fertile environments, aka coworking spaces.

On the other hand, when choosing to stay away from coworking, the focus of the HUB shifted from a focus on work to a focus on social relations.

HUB Brussels is not an ideal space to work:

HUB Brussels is a great place to meet people, to have a chat, share a bite at the weekly “sexy salad” but it is not an optimal place to work. A member once told me “I feel that the HUB is a good place for the soul, but I doubt it is the right place for my company”, I personally think that this situation is the result of two elements: First, the design of the space then the hosting. HUB Brussels is an open space without a separation between the social areas and the working areas. I wonder if it was just an oversight, or if it was thought this way in the beginning to facilitate connections between people. Would the design have been done differently if it was clear that the HUB Brussels should be a space where people get together to WORK on their projects, and that it is undeniably a coworking space ?

As a matter of fact, HUB Brussels was quite noisy, especially at lunch time, which is quite a large time bracket. Moreover, there are no sound control elements aside from the Honeycomb structure that covers only a part of the space. A lot of members have difficulties to concentrate and have been quite often disturbed by noise while doing their work, which led ultimately to their departure. Close to a hundred members cancelled their membership in 2011 alone, a key statistic to consider. A careholder once said, “among the HUB Brussels membership, those who work and create leave, the others, stay”.

While hosting is the cornerstone of a community based business like the HUB, I believe that it has been sometimes a factor in encouraging disruptions rather than quiet.

Communication: A confusing message
By refusing to be linked to the booming phenomenon that coworking is, the HUB (on a global level) is not only missing on quite a substantial opportunity for visibility, but it is also delivering a confusing message on what to expect from the local HUBs. A number of people kept on asking me what the HUB was all about despite visiting the website and being aware of some of the HUB’s activities. additionally, the focus on “social entrepreneurs” created some kind of a wall between HUB Brussels and a number of interesting individuals who do not necessarily identify themselves as social entrepreneurs.

This segregation in language and in practice created some kind of a blur in the identity of the community, who is welcome and who is not. If the intent with the HUB Brussels was to create a space for social innovators, it is legitimate to ask ourselves: how many in the community were indeed social innovators?

Instead of focusing too much on language, the HUB as an organization needs to act upon its values not only to attract like minded people but also to positively influence all the stakeholders who are not initially social innovators through an active leadership and a sustainable, responsible and innovative management style. A Coworking space is an eco system composed of various talents and it has to be open to all those who find value in the space and in being involved in the community. The identity of the community takes shape in how the hosts of the community act upon their values.

It is very interesting to take Hub Melbourne as a counterexample to illustrate my point above. Hub Melbourne started in March 2011 and today is a community of 700 members. This is how its founder Brad Krauskopf explained it during the Coworking Europe Conference 2012 The HUB Melbourne clearly states that IT IS a coworking space and that it is built around Coworking, learning and connecting. For the record, Brad was the only person involved in an existing hub to be present at this year’s Coworking Europe conference, besides myself…

The bottom line: Out of sight out of mind
Alex, one of the HUB cofounders said at the end of the careholders meeting where the decision to close HUB Brussels has been taken that “the founding members should not probably have created a cooperative company but rather an association”. He added that HUB Brussels was never really considered (and managed as) a company while it had the constraints of a company without the facilities that an association may have. I believe this statement is very close to reality, since I felt there was a misalignment between the financial and economical reality of the HUB and what the organization was offering and at what cost. There was a confusion between the concept of a social enterprise that needs to be financially sustainable and a community managed space that is supported by external funding (donations, public funding) like a hackerspace (or a library) is.

The founders/managers kept looking for flexibility at all prices for a long time while loosing focus on the bottom line. When I joined in january 2011 I was struck by the number of free services available, especially for external space renters. No markup was made on catering, coffee breaks were free and the room rental prices were quite low. By making some adjustments on the pricing model and the offering (among other things) the yearly income of the events activity has doubled.

On the membership side, there were too many membership types to choose from. A common pattern I observed among members, was taking quite a high membership level, then decreasing it every month until reaching a HUB connection level (no desk hours) then quitting completely. Another very important statistic to take into account is the number of members per membership type, most of the members of the community were connection members or have a low number of working hours type of membership. Moreover, this model makes it hard to have a stable community since people come and go but do not strengthen the core of the community and do not generate a power of attraction on doers: people who need a space to work and who do generate projects and thus collaboration opportunities.

Governance and leadership: Who wants the hot potato?
One of the main issues on the management level was the disconnection between the decision makers and the everyday reality of HUB Brussels. Management decisions (strategic and day to day decisions…) were in between the board and the management team leaving cavities in the management process that ultimately led to energy leakage. HUB Brussels was often referred to by board members and team members with the term “energy drainer”. We knew that the main reason was the disconnection between the power of decision making and the responsibility linked to it, but no reliable solution for this problem could be found on time.

A business like the HUB needs to be carried on by the same people who believe in the necessity of its existence, its impact and its values. They need to get their hands dirty to fix things on a day to day basis in addition to nurturing the community. In the case of HUB Brussels, the cofounders stepped out of the daily management and found themselves without energy and motivation to carry the HUB forward, or have moved out of Brussels/Belgium. When the decision was taken to do something about this situation by transferring leadership and decision making to a new co-founding team, the financial hole was too big to close. The process to identify a new team, was shaky, long (a year) and left too many people involved hurt on the side, instead of using this process as an opportunity to strengthen the core of the community.

Everyday management: The struggle

During long periods of time HUB Brussels found itself without a general manager, or with general managers focusing on other issues outside of HUB Brussels at times or with managers without power to make decisions, mainly on the financial side, at other times. Since the HUB Brussels management was left without much freedom to handle money (there wasn’t much of it anyway), simple management tasks were simply not done: HUB Brussels was left for a long period of time with a broken WiFi, a broken phone system (No fixed phone for most of 2012 and full time members with no dedicated phone lines). No marketing campaigns could be carried out, except through emailing to a limited database. HUB Brussels had no flyers or brochures to promote the coworking activity nor the events one (only electronic PDF in the latter case).

Without a reliable internet connection or phones, many members had no choice but to leave since they couldn’t do what they were at the HUB for: WORK. despite this situation, most of them were gutted to have to leave.

Community: The HUB needs Doers not talkers
As a direct result of what I explained above, many of the people who are regulars at HUB Brussels did not join because they needed a space to work but rather because they were looking for a social circle of like minded individuals. As a matter of fact, the HUB Brussels community had quite a large number of coaches, facilitators and people looking for the next challenge in their life. Do not get me wrong, I have nothing against coaches, facilitators and I have a lot of respect for people who take a moment to reflect on what they really want to do with their lives. However, you need initiatives to facilitate, entrepreneurs to coach and success stories to inspire others. Entrepreneurs need to be the drivers of the community not the other way around. A community needs to be built with entrepreneurs at its core, people with ideas allowing an eco system to emerge around the projects they are creating and therefore attracting more members to the community.

Conclusion

HUB Brussels lost around a 100 members per year, due to the factors listed above.

Would the HUB Brusels have closed down should these members have been retained? I don’t think so. Despite all the issues HUB Brussels had on the date of closure, the HUB had around 140 paying members.

It is a pity to see HUB Brussels close down, its leadership and inspiration is already missed. We need however to learn form the HUB Brussels legacy and from the mistakes made, in order to create socially responsible organisations which can do well while doing good as they have a positive impact on society while being financially sustainable. So far, the time has not been taken to analyse the reasons behind the failure of HUB Brussels which has left the community with a sense of frustration and misunderstanding. I have the feeling that the circle has not been closed yet, hopefully these few lines can start a conversation, positive and constructive….

I can’t finish off this long post without thanking the community of HUB brussels past and present for being part of my life for the last three years, for all the learning and for all the good times…

Having had the habit to finish blog posts with a song, this is the one I have in mind right now… Must the show go on ?

A.