The rise of co-working and what the future holds
The co-working space trend is growing at a phenomenal rate. Entrepreneurs are the key tenants of these spaces, but there has been a steady increase in larger, established businesses taking up desks within these spaces. We sat down with David Seinker, founder and CEO of The Business Exchange, to discuss the co-working market, its current trends and what the future of co-working could look like.
1. How can local players, such as The Business Exchange, keep themselves relevant when a big international player enters the market and tempts local entrepreneurs to switch to them?
In order to grow, entrepreneurs need to be in a business ecosystem that feeds into their passions. They need to be surrounded by like-minded people who have similar levels of ambition and drive if they want to get real business deals done. At The Business Exchange (TBE), we strive towards fostering good business relationships and providing real support to entrepreneurs who are members here. We are not a space that focuses on being funky or playful. We find these types of spaces to be disruptive and often lead to entrepreneurs falling short of their business goals.
2. How, in your opinion, has the co-working space matured over the past few years?
Most coworking companies have continued to focus on offering the freelancer a fun working environment, with free beer, cocktails and yoga classes. Only a select few have matured by offering more tangible real value, like a premium hospitality service or ones focused on business growth and, as a result offer networking sessions, business advice seminars and more.
3. Where do you think some co-working spaces are falling short in their offerings?
The big players are not focused on smaller companies and their actual business needs. They are eager to lease big properties and then fill them up as quickly as possible with as many people as possible. This creates a very noisy, distracting and cramped working environment, and this is why we are seeing a migration of businesses coming to companies such as TBE, where they prefer a more personalised and exclusive offering and an environment that is organised, professional and sophisticated office space.
4. Why, in your opinion, has the co-working space market grown so much in recent times?
Cost-cutting and flexibility will always be the main drivers in our industry. However, with so much competition in this day-and-age, people have woken up to the fact that the more you network and surround yourself around other businesses the greater the chance you have of succeeding. This is why the industry will continue to grow and, soon enough, where about 50% of office space will be co-working.
5. Co-working spaces are now becoming popular even among big companies and corporations. Why do you think this is?
Ten years ago, companies were fitting out their offices to allow for 20m2 per person, whereas today this has more than halved because wasted space equals higher costs. Companies now understand they can save up to 70% of their lease costs by choosing co-working spaces over traditional leases and this has created a surge in demand from big corporates. We recently signed up Expedia.com. They placed 50 of their staff at our Rosebank location. We purposefully fitted out and furnished the space for them, according to their requests, and they can now enjoy a fully serviced offering at TBE.
6. Is there room in the market for the level of competition and supply that’s available?
i.e. is it sustainable?
No, and I believe there will be a lot of consolidation in our sector. With WeWork’s mass market approach, many of the smaller operators are going to feel the pinch, and some already have. The problem is they are all positioned exactly the same, with the same offerings of free beer and free coffee. There is only so much beer and coffee one can drink in a day and, ultimately, businesses need to focus on what really matters, getting business deals done.
7. Where are you enjoying your most growth and why do you think that is?
We are growing across the continent, with five new locations currently under negotiation. Mauritius was successfully launched recently, where we are already at 70% occupancy. I attribute the success of this to the market being closely aligned to our design philosophy and market positioning. We are also at great levels of occupancy in South Africa, whereas others are struggling due to significantly increased competition.
8. What would you say your key to success is, as TBE?
We give our tenants an upmarket, personalised and exclusive offering and we are a brand all about business. To explain, we help our tenants grow, by offering regular events centred around sales, marketing and fundraising. We have a relationship with The Big Small Business Show, which is aired on Business Day TV, and through which TBE tenants are interviewed for TV and by extension invaluable exposure. TBE’s in-house marketing team creates marketing videos for our tenants, posts across our social media platforms, and we have investment pitching evenings to angel investors. These are a few of the ways we assist our clients in helping them grow their businesses.
9. What would you say is TBE’s signature?
Our art for sure. We have a world-renowned collection of artworks exhibited throughout all of our buildings. Research by Exeter University’s School of Psychology in the UK found that people who work in spaces that are decorated with art or plants are 17% more productive than
those who work in spaces that are bare and functional. Art provides a talking point within a room, affects the mood of a space and can reduce stress. As a result, we continue to partner with recognised local artists as well as up-and-coming artists. Currently, TBE has a number of high value art on its walls. This includes pieces from critically acclaimed artists such as Conrad Botes, William Kentridge, Kim Lieberman, and Willem Boshoff, as well as other artists from all over the world
10. How does TBE compare with its global peers?
We are unique, even on the global stage. I have visited the top co-working spaces, from London to Hong Kong, and the TBE value proposition is not easily found. However, it is even more exciting that we have the opportunity to be the leader in the African continent. By lead, I do not mean by total square meterage or “bums in seats”. We want to be the leader at creating real business growth for our clients.