In today’s world, you don’t have to be a professional to start making a living. Companies are realizing the benefits of mobilizing the workforce, so you can work remotely instead of going to an office far away from your home. Employee hiring is slowly moving towards a contract based model. Most people still spend more time commuting and at the office then homes. Work is something that will consume the majority of the time in your life and thus the need for community in the workspace is greater than it’s ever been.
Automation is taking over the enterprise and manufacturing world. There are more opportunities available than ever before. So people have all the more incentive and motivation to start their own ventures.
As the real estate prices continue to rise, more and more companies are realizing the need of having a more efficient square footage cost of an office and thinking of joining or starting a coworking space.
It’s evident that the future of coworking has never been brighter! Shared office spaces are the future.
Coworking spaces are essentially shared workspaces. But today, coworking means shared-everything.
Coworking Space Business Model Canvas (Coming Soon)
Coworking Space Financial Model (Coming Soon)
Problem Coworking Spaces solve:
- Wastage of unused space and thereby money
- Scalability of office space as the team grows
- Diverse Community to bounce ideas off and take feedback (and maybe find your first customers)
- Overheads of office maintenance
- Reduce upfront costs of setting up an office
- Home is for procrastination. Alternate to home offices.
Who uses Coworking Spaces:
- Full-time freelancers
- Professional who work after hours on side projects
- Remote employees
Types of Coworking Spaces:
- Pure Real Estate: Workplace as a Service model (BHive, BoldKiln)
- Educational: Office + Courses (Galvanize)
- Equity — Accelerators/Incubators
- Sector specific. Dedicated coworking for a vertical (Campfire)
- Co-working for large enterprise/Business Centers (Regus, Vatika)
- Co-working Aggregators (Breather, Qdesk, PivotDesk, Kowrk)
- Co-working Marketplaces (PeerSpace)
- Cafes/Restaurant/Pubs as coworking spaces (MyHQ, Coworkyard,)
- Co-living spaces (CoHo)
- Co-working for community. eg: women (The wing)
Important attributes for a successful Coworking Space:
- Location: Be in the ecosystem of the market you are targeting. Or target a location where demand is high but supply is very less. Be located near areas where public transportation is readily available.
- Partner/Platform credits (Eg: AWS, GSuite etc)
- Community: It is super essential to building an online and offline community to keep the users engaged.
- Cafeteria/Pantry with coffee, snacks, food & beverages
- Conference rooms, Meeting rooms
- Events: Events help keep the existing customers engaged and bring in new leads to your space(free advertising)
- Top complaints: Poor internet connections, noise levels and lack of privacy has to be taken care of
- Plans and Pricing: identify the target market and make fixed/flexible plans suitable for them
- Mentor and investor network: Mentorship and investment are the top challenges Startups face.
- Facilities: People look for a positive and productive work ambience. They would also prefer recreation areas in the coworking space.
Buy side issues:
- 24/7 space: many localities do not allow an office to be open 24/7 which your consumers might require. You can also double sell the space as day shifts and night shifts to make extra profits.
- Rent/Security: Security deposit to rented spaces and rent themselves are very high and paid in advance.
- Transportation: Commute is a major deciding factor for anyone to choose a coworking space
- Cost of construction/renovation
- Misc: Parking space, electricity, water, office boys etc
Threats to an Independent Co-working Spaces:
- Big co-working spaces: Awfis (raised $20 M from Sequoia India) and Innov8(raised at a rumored valuation of $2 M) have raised massive funding from VC’s and are opening a chain of coworking spaces and expanding into a franchise model.
- Already established coworking spaces like 91springboard are quickly expanding into a chain of coworking spaces with facilities like work from any office.
- Global giants like WeWork(raised over $4.6 B) are soon entering India.
- More and more Incubators/Accelerators are setting up and offering free co-working spaces
- Joint venture Real estate firms, landlords, and corporations are starting to bring the coworking experience to their buildings as an amenity and hiring coworking space operators to professionally manage them.
- Lot’s of co-working aggregators are popping up. Tie up to generate leads.
- Tier 2 and Tier 3 cities: Untapped market with lots of professionals willing to stay and work from
- Sector specific coworking spaces — Eg: only for freelancers, only for artists.
- Service marketplaces for entrepreneurs eg: Inhouse design, development, testing, marketing teams
- Coworking space management platforms. Dedicated CRM systems to manage the co-working space(s)
- Green areas in coworking spaces — More and more people are demanding green atmosphere in the coworking space and they don’t mind paying a little extra for it.
- Investor matchmaking: If your prime target is Startups, they are always looking for investors. Build a relationship with investors and help them raise funds.
- Coworking space for females: Women-centric coworking spaces that make them feel safe and cater to their unique needs.
- Long term and short term plans: As the workforce goes mobile, many people are looking for short-term spaces to work out of.
- Invitation only coworking spaces: Make them feel like the ‘Chosen one’. Build an elite class of people working out of your space.
- Crowdfunding to purchase/rent buildings (Canadian model) and turning them into coworking spaces. Surplus money, high demand.
- Co-working Reviews: Reviews from people who are or have worked out of coworking spaces.
- Co-working visa programs, international travelers, Entrepreneur tour programs like Entripreneurs and HackerParadise.
- Overbook. Unit economics are better that way. Always keep floating desks. (It’s like how gyms make money. people sign up but seldom do they show up.)
- Start Prebooking the space 1–2 months in advance to launch with maximum capacity
- Charge for Conference room and meeting rooms
- Target remote employees of organizations based in the developer world
- Host Mentor Sessions and Connect startups with investors
- Unexplored/niche categories to target: Musicians, sports people, Artists, Gamers
- Do not assume that “If you build it, they will come”. Spend on community building and marketing.
- Members attract more members. Focus on keeping them happy.
- Try working out of several coworking spaces before you start one (they do offer day passes and free trials)
- Pricing vs Amenities: Do not overprice or undercut your competitors massively.
- Legal and Financial fundamentals are very important. But beyond the scope of this post.
- Try to avoid paying for the Brokerage. Find the space yourself.
- Furniture and Fixtures: If the owner is not furnishing the pace, you can get really good stuff in the second-hand market. Buy, don’t rent.
- Coffee etc could be really really expensive. Get a Coffe Machine! You can also rent it which is generally a lot cheaper and pay per use.
Working in such a diverse environment provides opportunities to network, make friends, save money, learn from others and maintain focus on your core business. Possibilities are truly endless.
Coworking spaces aren’t just a fad. They are here to stay!