Category: Business Operations

Aticco is one of those interesting coworking growth stories which tells us that there is place for independent big players aside of WeWork or Spaces. Aticco is a born and raised coworking firm in Barcelona; a 3 years old brand that has managed to open 6 coworking spaces, around 25.000 m2 all together and without VC investment. We have interviewed Franz Pallerés, the Co-founder and Chief Operations Officer of Aticco, to find out more about its story of success and his future plans. Franz Pallerés will also be speaking at Coworking Europe 2019 in Warsaw on November 13-15th.

Hi. Can you tell us about the story behind Aticco ? What is your positioning?

Aticco was born precisely in another coworking space. I was the space manager and my two partners were clients there. Having both points of view, we realized that if we focused on customer service and excellence in the management needed, it was an improved model. From there we began to imagine the space we wanted to create. We found an incredible attic in downtown Barcelona and we found it to be the perfect place to start this adventure. The support and confidence of the first coworkers were essential for us to move forward. Three years later we look around and we are very proud of what we have built. Aticco are not just working areas. Together we have generated an innovative ecosystem where we collaborate, learn, and grow.

The support and confidence of the first coworkers were essential for us to move forward.

We’ve read that the Coworking offering in Barcelona grew by 23% just in the last 6 months of 2019. How do you explain the boom? 

Barcelona has established itself as a business and investment hub in Europe. The arrival in the city of large multinationals proves it. It has everything a company (startups and corporates) wants: qualified employees, investors, fertility for growth, quality of life (climate, gastronomy, environment…), and good connections with the rest of the world. As a result, the demand grew in the last year and forecasts indicate that it will continue to do so. And on the other hand, coworking spaces are perfect to house these companies. Faced with the traditional real estate offer, we offer flexibility of growth without permanent conditions and take care of all efforts, design training activities, organize meetings between entrepreneurs and mentors, celebrate events to have fun and connect with other people… And all that helps companies focus 100% on their project, have more opportunities for growth because of the connections that are created and strengthen the bond of their workers and their motivation. That is why there is an increasing demand for flexible spaces in the market.

Are you accommodating startups and freelancers, mainly, or other tenants profiles?

We have always believed that the combination of companies of different sizes and structures benefits fertility and environmental connections. The diversity of business models increases opportunities for collaboration. For example, freelancers or small businesses exchange services with each other, and learn the financing and investment processes of startups; early startups see the development of those that are already in a high growth phase and can sense the following challenges that they will have to face; large structures need to inspire and retain the talent of their team and they get it through contact with other profiles that complement them.

In recent months we have had an increase in large corporations that are committed to entering flexible spaces. And it is not just for the ease of management and the options to continue growing without rigid conditions. But because of the enrichment that gives them at the level of human resources and brand value, being within an innovative ecosystem.

Freelancers or small businesses exchange services with each other, and learn the financing and investment processes of startups; early startups see the development of those that are already in a high growth phase.

You grew from 1.000 m2 a few year ago up to 25.000 m2 and six buildings today. Did you simply benefit of the strengthening of the market demand or has it to do with a home-designed approach you had?

When we started, our initial plan was 1,000 m2 and we dreamed of expanding to 2,000 m2 after a year. But the levels of occupation that we achieved within a few months indicated that there was a high demand and that the community also liked what we offered and the atmosphere of closeness and family there was. Our coworkers have been the best ambassadors of the brand. This added to the fact that the big operators had not yet arrived in the city, made us enjoy a certain advantage. And we bet on the constant growth although that made us assume many risks. It has been a mix of being in the right place, at the right time, offering quality service and constantly evolving according to market needs.

Our coworkers have been the best ambassadors of the brand.

You compete nowadays at the same levels in terms of size and number of members as the big international brands like WeWork or Spaces, who have locations in Barcelona. Your thoughts on that?

In the current context of Barcelona, that statement is a reality. Knowing that in terms of financing we are infinitely smaller, on a daily basis we compete with them in all fields. Both in target, as in the search for new locations, the commercialization of leads, the processes of HR… The resources we have are smaller but the end result, after much effort and dedication, is that we fight to convince the same audience and offer the same level of demand in our spaces. We have to be creative and resourceful to get it. And I think that makes us value more every lead that transforms into a new coworker. We are David vs. Goliath of the flexible spaces of Barcelona!

The resources we have are smaller. We have to be creative and resourceful to get it.

How about the funding. You didn’t raise VC money nor have you a big international company behind you, do you?

3 years ago we raised 110 k of friends and family, and 1 year ago we raised 700 k in a small round led by different family offices in Barcelona, we don’t have VC money nor we are backed/owned by a real state company, we had profits since we opened 3 years ago and it helped us grow organically and maintaining control of our company.

Would you say that independent brands can play on the same ground as the big international coworking names in any city?

I personally think that the big brands are slower and therein lies the opportunity of the smaller operators. For example we have seen it in negotiations with buildings or potential customers. Our decision making is faster and allows us to take better advantage of the situation. Another important point is flexibility. Big brands work almost like franchises, where the same model that has worked in other cities is incorporated. That on the one hand is good, because the whole system is very automated, but on the other hand, changes or adaptation to the environment is worse.

The local operator always has an advantage because of the knowledge of the environment. But you have to know how to use it. And finally I think that the commitment of the workers, loyalty and motivation with the project, are easier to maintain in not so systematized structures.

Our decision making is faster and allows us to take better advantage of the situation. Another important point is flexibility.

What about your plans for the rest of Spain?

We plan to open very soon our flagship in Madrid, it’s scheduled for Q1, 2020.

Do you have any projects regarding the opening of new locations in Europe?

Yes, we had Lisbon in our scope for a while, so soon you will find us there. We are still looking for new places where our community can grow. Smart cities committed to change, welcoming innovation hubs that will challenge the future.

In 2019 Nextdoor became Wojo, accelerating its development and creating the ambition to become the leading European coworking network. Two years before, Accor Group, one of the biggest international hotel companies on the planet (operating brands such as Ibis, Mercure, Sofitel, etc.) had taken a 50% share in Nextdoor, by then 100% owned by the real estate company Bouygues Immobilier. We have interviewed Stéphane Bensimon, CEO of Wojo, in order to find out more about the project Wojo and its present and future plans in Europe. Wojo’s CEO will be a speaker at the upcoming Coworking Europe conference taking take place in Warsaw on November 13-15, 2019.

Hello Yoann. A few years ago Accor Group joined Bouygues in the Nextdoor network to develop coworking offerings. Why was this move needed for both players at the time?

A 50/50 joint venture was signed in July 2017. Insofar as Accor hotels were already endowed with shared spaces conducive to meetings and interaction, the idea of offering a place to work (as well as to network) dedicated to clients and local entrepreneurs came to mind naturally. Bouygues Immobilier aims at offering its clients an opportunity to plan shared workspaces (bars, coworking spaces, lounge areas, meeting rooms, carparks) from its design stage and hence help them optimize their business costs. So the fit between both companies was clear.

Nextdoor has become Wojo. Why was a change of brand needed? Is Accor more in the driving seat now?

Nextdoor became Wojo to help its international roll out. Wojo is a spirit – the combination of Work and Mojo. Once Accor took shares in the company’s capital we truly worked hand in hand with Accor’s Innovation Lab’ to define together the future of coworking; true teamwork followed. When the idea of a typology of spaces (“Spots” and “Corners” linked to Nextdoor sites) came about, it seemed clear that we had to reinvent ourselves in order to fulfill  peoples new ambition of working internationally, of working at most ten minutes from where one is living, etc. And no, Accor is not specifically the one in charge. We designed Wojo together and since then we have been standing on our own two feet with its support.

You want to become one of the biggest coworking providers in Europe by 2022. Why are hotel professionals well positioned to serve the flexible workplace industry would you say?

This is because the Accor staff is unrivalled in terms of reception and hospitality and we feel those to be key elements. A friendly dimension is at the core of Wojo’s offering. We welcome our new members through a shared moment, making sure that their days go by perfectly well. Accor has already got hotels ready to welcome clients all over Europe. This makes things easier for us in terms of networking. In the long run, we would like everyone to find a place to work less than 10 minutes from where he/she is located (whether a nomad or sedentary worker).

Workers are forever expecting more services (catering, fitness rooms, concierge services) at their workplace with which hotels are already endowed. According to an Inkidata study conducted in February 2019 for Wojo (results of the study, in french), 48% of French workers would like to benefit from spaces linked to sport or relaxation at the workplace. This is because it is the best way to offer business travellers an opportunity to make up a local network by offering a service that facilitates networking.

48% of French workers would like to benefit from spaces linked to sport or relaxation at the workplace.

Will Wojo’s expansion occur only through the Accor Group properties and hotels network or could we see Wojo spaces in third-party buildings?

By the year 2022 we expect to open 1.200 locations all over France and Europe within Accor hotels. Yet, Wojo Spots and Wojo Corners have been designed to be set up in any third-party location so long as it fulfils a certain number of requirements (high-quality and safe Wi-Fi, furniture quality, acoustics, good working conditions, etc.). In the long run they will be made available in train stations, airports, shopping centres, cafés, etc.

Today, for example, there is a Wojo Spot in LA.SALLE.DE.SPORT with a Reebok concept store and a social club in the very heart of Paris. Not to miss out on anything, the locations that are already open can be viewed on our web app.

Nowadays hotel chains are entering the coworking field in bigger numbers. What does it tell us about the changes in the hotel business on the one hand and the evolving coworking market on the other hand?

Demand, which is directly linked to the revolution coming about in working conditions, is huge and the offerings are equally so. However, quantity does not rhyme with quality. It may appear to be easy to open up a coworking space. Yet in reality one must be in a position to offer a true experience including reception, a secure wi-fi connection, a quiet location, networking possibilities, the right atmosphere, services, etc. Small things (in reality not that small) make the difference. As for hotels: they have been disrupted by Airbnb. They are now in search of something new. By definition, a hotel is equipped as a minimum with a lobby, breakfast room, etc. in which it is tempting to improvise a coworking experience. In the long run we can imagine a client choosing a hotel no longer by pictures of the room or by how clean the spa is, but by the quality of its coworking facility.

As for hotels, they have been disrupted by Airbnb. They are now in search of something new. By definition, a hotel is equipped with a lobby, breakfast room, etc. in which it is tempting to improvise a coworking experience.

Seen from the outside, Nextdoor has positioned itself more in the corporate segment of demand for coworking with spaces located in higher-end business districts. Will Wojo keep positioning itself in that slice of the market?

We understand your interpretation, as Wojos origin comes from an intrapreneurial project on the part of Bouygues Immobilier. The first buildings meeting the conditions for such projects were naturally found in Greater Paris. Yet, from the outset, Nextdoor has had a true willingness to bring together companies of different sizes at one location to encourage open innovation. As a result of its positioning and more concretely speaking its price policy, its community has always been comprised of a host of different profiles. Wojo follows along these lines with its Wojo Spot offer of 9,90 Euros per month with no commitment. We are open to students as well as key accounts. Remote work now concerns all of us and we have at heart to see different sectors of activity, ages, trades come together, truly valuable.

Remote work now concerns all of us, and we have at heart to see different sectors of activity, ages, trades come together, truly valuable.

Wojo Spots, Wojo Corners… Is the Wojo offering targeting only nomad workers or longer-term resident workers? How different will Wojos be in Ibis or Mercure from Wojos in Sofitel for instance? What is your approach to segmentation?

There must be no ambiguousness here. Wojos are open to all those who wish to work. It is neither a service reserved for hotel clients nor a service delivered exceptionally to nomad workers. Our aim is to enable travellers and/or nomad workers to meet “locals” and be given an opportunity to network. We are therefore addressing the district’s inhabitants or professionals who are invited to come there to work, near to where they are situated! Nearly all brands are eligible, except for ultra-economical ranges such as Ibis Budget or Hotel F1 or ultra-luxurious ones (such as Orient Express Raffles). The criteria imposed, such as a secure wi-fi connection, reception, reduction on beverages and snacks… are the same for everyone. At this stage we have begun to roll out Spots in France in an economy/mid-range: Ibis Styles, Ibis, Mercure, Novotel, etc. and some are about to open in the high-end/luxury range within Pullman, MGallery and Sofitel. As for Corners, this concerns the same range of brands as Spots.

Hospitality is the number one value proposition offered by hotels. How comfortable are you with the notion of community  as an important factor in the coworking experience?

As mentioned above, one of our strengths lies in the conviviality and good atmosphere that reigns in all Wojos. Furthermore, Wojo does not exist without its community! In addition to shared office spaces Wojo stands on a team of passionate people.

We thus offer a wide range of business and festive activities in each space throughout the month so as to enable each person to meet others, exchange and learn as well as relax. Community Days for example are held every week in a different space. They enable members to pitch their propositions,  propose a workshop, meet our partners invited for the occasion, invite their clients, attend a conference, etc. Our community also interacts on our digital platform. Discussion and support groups are set up where a program of physical activities is available.

Some experts predict that coworking will represent 20 to 30% of the whole office market by the end of the coming decade. Would you agree with that prediction?

Yes, I believe that is correct. It is more than just a trend. It answers to a need on the part of employees and companies alike, even if for different reasons. Of course we would like to keep up the pace. We plan to open 50 Wojo buildings, 100 Corners and 1 000+ Spots in France and Europe so that members never have to worry about where to set up to work again, hence giving them a guarantee to stay forever connected with their community via our digital platform.

What are Europe’s specific challenges in the field of workplace expectations as opposed to other parts of the world?

There is no specific challenge in Europe compared to other continents. New ways of working are growing everywhere. For example, we see the same trend in Asia with coworking representing more than 3% of office stock in Hong Kong or Singapore. I’m personally convinced that Africa could be a strong coworking market in the coming years. We decided to start Wojo within Europe because of our field knowledge and needs expressed by our current members.

SocialWorkplaces.com, organizer of the Coworking Europe conference, was invited by Mipim PropTech Europe 2019 to organize a unconference during this month conference in Paris. During two sessions of 1 hour each, we organized discussions with close to 40 participants.

Prior to the event, delegates had the opportunity to suggest topics they wanted to be discussed. Participants proposed to cover areas such as community management, members flow data analysis, profitability or the integration of new IoT devices or software, in order to optimize space operations.

One very hot topic among others was about coworking expansion and internationalisation. In the conversation group, representatives from a major Italian multi-location coworking brand, from a Spanish Fintech ecosystem, from a Paris based design studio, from a very influential German Real Property company, from a IoT startup, as well as an architect and a space manager from Turkey, to list a few.

Here are some of the inputs and takeaways shared by the participants during this animated Unconference conversations at Mipim PropTech Europe 2019 :

How about replicating a similar coworking model in different cities and countries?

• “Some big international brands behave like McDonalds. However, in coworking, you need to adapt your positioning and service to the local taste and realities. It’s not always one size fits all.”
• “The way you design a space is influenced by the culture of the the country you are in.” 
• “You need to know local markets. For instance, we made an important move to the Benelux, a few years ago, where we opened a coworking location. It was quite hard. The brand wasn’t known and we have been through a number of cultural differences that we had to learn and deal with. (…) Nowadays, our strategy is to make our position stronger, first, in our home country before moving abroad.”
• “As a coworking space, you have to strike local partnerships. Outside of our home city, in other Italy regions, we hire local people. You have to deal with differences in approaches, tastes, even accents, according to where in the country you are based.”
• “Wherever you are located, you have to give back to the local community”
• “Address local markets with specific approaches is also a matter of legal differences. Lease contracts are different in Belgium, France, or other European countries. The legislation on virtual offices differs too.”

Local coworking operators vs big international brands expanding everywhere. Who wins?

• “International expansion has to be driven by a strong, articulated, strategy. You see some well funded coworking players opening new locations regularly without a clear understanding of how to deliver value out of it. They are spreading out in different countries without a clear location and development strategy. They open up in San Francisco, in Germany, everywhere without a clear logic aside of being in some well reputated metros. From our Real Estate owner perspective, we prefer to deal with strong, well established local players.”
• “Another issue is that big international real estate brokerage firms are publishing nice reports about coworking. However, their local brokers have no idea about local coworking markets. This makes things more difficult for coworking players when they want to develop their multi-location strategy in a specific country.”
• “From the customer perspective, things might differ a bit. A small company will look for a small local coworking operator, in the beginning. Things might change once the company starts to grow. They might then start to look for a stronger coworking partner”

You see some well funded coworking players spreading out in different countries without a clear location and development strategy. They open up in San Francisco, in Germany, everywhere without a clear logic aside of being in some well reputated metros.

Thinking  beyond “Instagram friendly” space layout and design?

• “How do you keep your ability to refresh you design without killing the costs? (…) Some famous international coworking brands invest most of their efforts in designing their “Instagram” friendly common areas, where everybody comes in and out. The offices itself is very much more standardized and less cozy, with much more classical furniture. (…) You can re-do all your lobby every 4-5 years. You can hold more than 10 years with the same outfit in the private offices. “

Coworking differenciation and specialization?

• “The differentiating factor will be the ecosystem you are in, and how you specialize yourself in it. Google Campus, in London, for instance, was among the first important coworking space to open in the UK capital, in the beginning of the decade. There were a lot of startups, there. But they were doing a lot of different things, and one rapidly acknowledged the lack of specialization which had an impact on the attractiveness of the space after a while for startup members.”
• “In our space, we focus a lot on drawing players coming from the FinTech industry. We developed a leveling approach (…) We did the same with a bank in Italy”
• “Big international coworking brands, nowadays, strike deals with Headquarters of major companies located in the Silicon Valley. The goal is to create partnership on the global level, and promote their international network of locations”
• “There is room to propose different levels of offering depending on the different life cycles of companies.”
• “Big companies now look more about the facility management dimension those companies can provide them with. That being said, the situation is not always rosy. Some of them are frustrated to see that major coworking brands let real estate and facility management issues be handled by community manager who have no technical expertise or know nothing about real estate and building management matters.”
• “Small coworking spaces can’t alway afford to have in-house real estate and facility manager experts. So, big ones might have an advantage from that perspective.”

External growth vs organic growth strategy for flexible workplace operators ?

• “Some international players tend to grow through acquisitions of local players.”
• “Acquisition can be a hard way to go, because branding is critical in the coworking world. Switching to a new brand, a new image, a new approach, and paste a more standardized service and set of value on a local level out of the existing operation of a local coworking space is something very tricky and risky. External growth in coworking is sometimes closer to shaping up a conglomerate than to develop a seamless international service for standardized demands. True, the real agenda can also be to kill the local market, and expand later with a oligopoly service. However, this can turn into a dangerous strategy, because buying coworking spaces locally is not as simple as just buying local market shares… You are bringing in specificities, values, flavor, style…”
• “WeWork, on the other hand, rather grow organically, and is supported by a network of partners. Data collection and management has become an part of what they do.”

External growth in coworking is sometimes closer to shaping up a conglomerate than to develop a seamless international service for standardized demands.

 

 

 

 

 

 

Josh Fine is the COO of Focus Property Group, a real estate operator that not only builds and owns their buildings but operate the businesses that are contained within the building as well, including coworking. We have interviewed Josh Fine to learn more about his experience and knowledge on real estate and his way to understand the coworking and hospitality sector. An interview full of insights and vision on #futureofwork! Josh will also be a speaker at Coworking Europe 2019 this fall.

Hi Josh. Can you introduce the Focus Property Group?

Focus Property Group has been investing in commercial real estate, primarily in downtown Denver, Colorado (USA), for the past three decades. We acquire, assemble and entitle development parcels, and we develop a wide variety of commercial real estate asset types, including office and coworking, retail centers, hotels, senior housing communities, industrial buildings, and self-storage facilities.

We are long term holders of real estate, meaning that once we develop and lease out our real estate, we continue to manage and own the assets. One unique aspect of our business model is our willingness to create, own and manage operating businesses within our real estate.

In other words, most real estate companies will build and own the buildings but not operate the businesses that are contained within the building. However, we enjoy the entrepreneurial aspect of operating companies. Therefore, rather than build, for example, a self storage facility and then hire a self storage management company to run the business, we created our own self storage brand, hire our own employees and run that business ourselves. It is the same with coworking. We created the Enterprise Coworking brand and all of the Enterprise Coworking employees are on our payroll.

You have been involved pretty early in the coworking wave while investing in hotel industry as well. To what extend are the lines between those “hospitality” driven activities blurring?

I am constantly telling our coworking staff that we are in the hospitality business. It has become a mantra of our company. Office space is not new. The innovation of coworking is that it introduces a hospitality or guest services aspect to office space. Our members don’t just want a convenient space to work. They want experiences that will enrich their lives and careers. They want concierge services to help them with all of the challenges that arise during the day so they can focus on what it is they came into the office to do. When a member approaches one of our community managers with an issue, I tell our team to imagine you are at the front desk of the Four Seasons Hotel. Hotel guests are often in disorienting, foreign environments and the hotels that truly shine are the ones where the team makes the guests feel welcome, at ease, and excited to dive in to all of the great things that brought the guest to that city in the first place. It is the same with coworking.

The hotels that truly shine are the ones where the team makes the guests feel welcome, at ease, and excited to dive in to all of the great things that brought the guest to that city in the first place. It is the same with coworking

The spaces that will separate themselves from the competition will have a guest services oriented staff that makes members feel welcome, well cared for, and excited to dive into the projects that brought them into their workspace. Because the service offering is so similar, it is true that lines are blurring between hospitality and coworking. For one, the skill sets overlap so much that many of our best hires come from hospitality. And you see hotels are increasingly getting into the coworking space. Pioneering hotels like the Ace Hotel in New York City, the Hotel Eaton in Washington DC, the Zoku Hotel in Amsterdam, and many others have full fledged coworking spaces and welcome the coworking public to consider the hotel as their living room or office, with free wifi, free-flowing (if not free) coffee and beer and other coworking-like amenities. Business is becoming increasingly nomadic and I predict that we will see more and more joint hotels & coworking spaces that co-locate, share amenities and staff, and synergistically energize each other’s vibes.

The spaces that will separate themselves from the competition will have a guest services oriented staff that makes members feel welcome, well cared for, and excited to dive into the projects that brought them into their workspace

Why does it make sense for a buildings owner company to operate coworking space itself ? Why not partner up with third parties operators?

It certainly doesn’t make sense for every building owner. Coworking is a complex operating business and many landlords simply don’t have the bandwidth or aptitude to run such an intensive operating business. However, the explosive growth of coworking has resulted in a spillover effect where traditional office tenants have come to expect more coworking-like amenities in their office buildings, and office building owners will need to more and more inch toward the type of offering that users can find in coworking spaces. Since office building owners will need to increase service offerings anyway to stay competitive, those who can figure out how to jump into the coworking business will be at an advantage and will also be able to benefit from two profit centers: the rent that the coworking operator pays to the landlord and the operating profit that the coworking operator earns from the members.

Those who can figure out how to jump into the coworking business will be at an advantage and will also be able to benefit from two profit centers: the rent that the coworking operator pays to the landlord and the operating profit that the coworking operator earns from the members.

A building owner who reserves part of their building for coworking will likely also benefit from higher overall occupancy. Companies in the building who “graduate” from coworking and want their own space may be able to rent another office space in the same building. And when tenants leave the building, the landlord always has the possibility of expanding the coworking space into the former tenant’s space and thereby gobble up any vacancy immediately. Once a landlord has a successful track record as a coworking operator, it makes it easier for a landlord to acquire or develop additional buildings, because the landlord will have a tenant in their “back pocket” (the coworking space) that can immediately occupy part of a new building.

From the operator’s side, the reason to own rather then rent space is very compelling. In traditional office leasing, there is generally an equilibrium of power between landlord and tenant. Office leases tend to be for shorter periods than retail leases. When it comes time for renewal, the landlord will need to be reasonable and will have to closely reflect market conditions because the tenant can move to a new office building if the landlord tries to increase rent too dramatically. It is certainly a hassle for a company to move, but a CEO can decide to do it and all of the employees will have to follow suit.

But coworking spaces are more like retail users – they are much more tied to their buildings. Just as it is difficult and much more risky for a retailer to move (because there is no guarantee that its customers will all move with it to the new location) so too it is extremely risky for a coworking space to move. The coworking operator can sign a new lease in a new building, but there is no guarantee that the members will follow suit. If the members do not follow, the operator will be starting to build the business all over again. Therefore while building ownership certainly comes with significant risks of its own, it mitigates a major risk of the coworking model.

Coworking spaces are more like retail users – they are much more tied to their buildings. Just as it is difficult and much more risky for a retailer to move, so too it is extremely risky for a coworking space to move.

Do you see a difference in the way coworking spaces are operated between the stand-alone supported-by-a-property-owner-company and franchised/brand coworking spaces? 

We compete head-on with franchised coworking spaces and large brands and I do not believe that members in our space are looking for anything dramatically different. Most members are looking for a vibe that meshes well with their personality and work style, for a convenient location, for robust amenities and for a welcoming and engaging community. One difference I have noticed is that when you own your building there is no passing the buck. Any issue with the building becomes your issue. You cannot blame the building management, for example, if the temperature is too cold or if an elevator is out-of-service.

However, an advantage we have is that when you own the building, anything is possible in terms of dealing with a member issue. Sometimes a member complains about something that the coworking operator cannot control because it is the purview of the building owner and manager. For example, many office buildings have communal restrooms that are maintained by the building management. They may have a snack bar or coffee shop in the lobby. They may have a parking facility used by the tenants. If a member has an issue with any of these things, all the coworking operator can do is complain to their landlord to fix the problem. When you own the building, the buck stops with you. This is both a blessing and a curse. We have the power to fix any problem and can control more completely how our members experience our space. On the other hand, when there is a difficult issue we cannot look to others to address it.

If a member has an issue with any of these things, all the coworking operator can do is complain to their landlord to fix the problem. When you own the building, the buck stops with you. This is both a blessing and a curse.

In the short future, coworking growth is expected to be fueled by Small and Medium size businesses, not only by freelancers and startups. Do you see this evolution coming in Denver? 

Absolutely. The bulk of our membership is small companies with teams of 4-12 people. Freelancers are increasingly becoming a smaller and smaller minority of our membership base. There has been talk for the last several years of enterprise-level companies (with much larger teams of 50+ people) abandoning traditional office leases and moving into coworking. I don’t think we are there quite yet, although there have been some notable examples of large companies moving into coworking spaces in Denver. At our space, we do have some large companies, with our largest company topping out at about 80 employees. However, we have also seen companies move out of our space when they get to 20 or 25 people.

The bulk of our membership is small companies with teams of 4-12 people.

I think it very much depends on the personality of the company. Some companies will always want their own space and will move out of coworking once they reach a certain size. So I think there will always be a market for traditional office space and the obituaries of traditional office space are a bit premature. However, a few companies have grown to love coworking and will stay in a coworking space for as long as they can be accommodated. Spaces like ours that can accommodate large teams will be able to find companies that want to move in. Nonetheless, I think the bulk of the demand comes from small companies, and we are building out new spaces with a heavy emphasis on private suites for teams of 4-12 people.

Companies have grown to love coworking and will stay in a coworking space for as long as they can be accommodated.

In-house Gym, cafés,… We see a race to provide the most exciting, robust and unique amenities in order to distinguish from the competition. How far will it go?

Our flagship location in the RiNo neighborhood of Denver has both an in-house café and espresso bar as well as a fitness center. The types of amenities you need can depend largely on your location. If you have a trendy espresso bar next door, you may not need to offer one in your coworking space. I think the best way to choose which amenities to offer is to make sure there is a diversity of “types” of spaces.

There should be a quiet space for heads-down work where you won’t be disturbed. There should be a buzzing, social space. There should be a networking space that is conducive to impromptu meetings and making connections. In our flagship space, these needs are filled, respectively, by our library, our pub and game room (that we call the “rathskeller”), and our espresso shop. However, other coworking spaces can fulfill these needs with amenities that may be less space- and operationally-intensive.

Shall all those amenities be provided by the same operators? 

I mentioned earlier how coworking spaces and hotels are beginning to “blur” their boundaries and I think that coworking operators to remain competitive will need to learn to operate the same type of amenities as hotels. Just as a hotel doesn’t just need to know how to rent out hotel rooms, but also how to operate a restaurant, coffee shop, gym, pool, event space or conference center, so too will coworking operators needs to establish these competencies. I think that co-locating – especially hotels and coworking – could be a great solution to this operational challenge.

There is a huge overlap between the type of amenities that hotel guests and coworking members want. Shrewd coworking operators will partner with hotels – or join forces and completely merge their businesses – and thus have the scale to offer more robust amenities than either could on their own. Regarding the price, I think a hotel analogy is apt here as well. There is a huge diversity in hotels. You can stay at a one- or two-star motel that gives you very little other than a place to sleep, or a five-star resort that provides a slew of services, like multiple dining venues and bars, a spa and pool, and dramatic public spaces. Of course a guest will expect to pay a lot more for the latter. There will need to be similar differentiation in coworking spaces. However, an operator who wants to charge top-of-the-market pricing will need to offer five-star amenities to retain members.

Just as a hotel doesn’t just need to know how to rent out hotel rooms, but also how to operate a restaurant, coffee shop, gym, pool, event space or conference center, so too will coworking operators needs to establish these competencies.

Would you say it is US specific or are those trends reaching all continents from what you see?

We live in a global village and I am not even sure the trends I described originated in the United States. I just stayed at a hotel in Herzliya, Israel, which was connected to a vibrant coworking space. In the basement was a huge fitness center (much bigger and more elaborate than you would typically find in a small hotel) complete with a dry sauna and steam room. I went down to the fitness center in the morning and it was packed in equal parts by hotel guests and coworking members (as well as people in the community who simply bought a gym membership). This is the type of co-locating and amenity sharing concept that I think will become more commonplace as all of these businesses try to supersize their amenities in an increasingly competitive market.