January 2020 – David Seinker, CEO and founder of co-working space company, The Business Exchange (TBE), firmly believes that the challenges presented by a tough business year in 2019 are opportunities for young business professionals to develop confidence and resilience.
Using the co-working space as an example, these are three lessons that Seinker believes entrepreneurs can use to their advantage.
- Bigger doesn’t mean that you will do better
The USA-based corporate giant WeWork entered the South African market earlier in 2019 and used aggressive marketing tactics aimed at tearing away a significant share of the shared office space market from current operators in the country. But then, WeWork foundered spectacularly.
According to Seinker, there are several lessons to be learnt from WeWork’s failure; the first relates to client loyalty: “When WeWork first arrived, it shook things up, but at the end of the day we didn’t lose a single client, because our tenants see the value in our business model and value proposition.”
The second lesson has to do with having a firm vision of how to attract business, steadily growing your company and having a team that shares and works towards that vision: “In the five years we’ve been in operation, we signed up our biggest corporate clients during 2019, companies that already have relationships overseas with competitor companies that operate both here and abroad. “We just found that they preferred not only our physical offering – but our personalised approach in terms of how our staff handle their relationships with our clients.”
Thirdly, it was a big company that failed. “I’m sure I can speak for all the other operators in South Africa, with whom we share a rather friendly competitive environment when I say that we were all initially quite nervous about WeWork. However, they were the ones that took the big knock this year. Not the smaller companies.”
- Look for opportunities in challenging times
Seinker believes that when an economy is doing well, and business is thriving, opportunities are much harder to come by than in a challenging market environment such as 2019 was.
“When you’re going through a hard time in the market, entrepreneurs and investors alike get nervous. However, this nervousness can bring opportunities to more easily find businesses in which to invest. For TBE, for example, the possibility of securing new property deals on far more favourable terms has been much better than what we experienced five years ago.
It also encourages out-of-the-box thinking and forces entrepreneurs to look for new opportunities further afield and even beyond borders.
For Seinker, this meant looking at expansion into other African countries, with TBE opening offices in Mauritius in 2019 and selling out its entire floor space in just six months. The company is now looking at opening office space in other African countries, including Kenya, Ghana and Nigeria.
“These countries also have business communities looking for space to work from, but without huge overheads on the one side, and an oversupply of long-term office space on the other. Flexibility is key to businesses surviving in tough times and initiatives such as co-working spaces perform very well in providing this flexibility.”
- The more you listen, the more you learn
Challenging market conditions provide the perfect opportunity for entrepreneurs to review the smaller opportunities that they wouldn’t usually consider when business is going well, and also to look for unique ways to cut costs.
“Suddenly, you’re analysing costs that you wouldn’t be analysing in healthy market, and you can learn a great deal through that process, so that when things turn upwards again, you’ve made your business so much more resilient and, in turn, more valuable through what you’ve learnt during the hard times,” says Seinker.
Seinker also believes this is the perfect time to listen to your mentors: “The more you listen to people who have been through good and bad times, the better entrepreneur you will become and the more successful you will be.”
In short, Seinker says that you should never stop learning – no matter how long you have been in business.
