In the span of a single year, WeWork went from being one of the most highly valued startups of all time to losing more than 75% of its valuation, leading to a failed IPO that showed the door to its superstar CEO, and finally pleading a mammoth cash bailout from its biggest investor, Softbank.
WeWork is one of the few companies that managed to garner too much money way too soon, but had no idea how to effectively spend it all. Does this denote the end of the co-working space industry? Heck, no!
WeWork’s USP is not just subletting commercial spaces, but to foster an environment that promotes healthy networking among young businesses.
So the key takeaway from this saga is simply that it’s not the product that’s overvalued, but the company itself. Co-working spaces have mushroomed so rapidly around the world on different scales. Its positive bankability has been proven by the likes of IWG and Servcorp.
Co-working spaces are here to stay and are strongly becoming millennials’ go-to work options. Even giants like Google India and Rolls-Royce rely on co-working spaces. While newer co-working ventures may have initially aspired for the WeWork magnitude of success, they may now simply fear the same downfall.
The trick is to simply re-calibrate fiscally. It’s unlikely that WeWork is ever going to let go of its alluring interiors or its Thank God It’s Monday breakfasts, but what it can do is figure out a way of stopping cash leakages.
If you’re a co-working space, your best case scenario is someone like Softbank walking into your office and dropping a pile of cash on your desk. But if you’re not WeWork, that obviously is super unlikely.
So what else can you do?
Increase your margins. Either lure in higher paying customers or vertically integrate.
Decrease expenses. Go through your balances and you’d notice that a huge chunk of money drains into utilities.
Option 1 is subjective to every company’s identity. Most of your clients spend about 8 hours at your workspace. To capitalize on the fact that your client is likely going to do more than just work. This could include food breaks (set up a canteen), recreational breaks (offer a leisure room) or even just stepping out for a moment to relax (arrange for sleep pods or dorms). Even if these facilities are offered at inclusive pricing, you can always collaborate with external companies and offer them advertising and marketing opportunities by allowing them to organize, say, events and programs at your venue.
On the other hand, option 2 is a growing need irrespective of your company’s fiscal performance. A lot of the tenants don’t necessarily care about your excessive energy usage. Lights will be left on in unused meeting rooms; AC ducts would be left running full-fledged even if only a quarter of your offices are filled; TVs will be left running even after presentations.
It is time for co-working spaces to authentically identify as tech companies and adapt to automating their utilities and services. By installing a simple automation controller, like Aura, the amount of power used can be adjusted to the number of customers on any given day.
The same automation hub can also collect data for you to analyze what facilities are being used more than the others. So a single automation unit can help enhance both options 1 and 2 at the same time; by helping understand your business better through analytics and simultaneously reducing energy wastage through utilities.
A simple use-case would be to imagine a connected workspace enabled using Aura. Occupancy sensors would regulate the usage of utilities (Lights & Temperature) based on the movement of employees within the workspace. Simultaneously, they’d contribute to the creation of a heatmap based on which advertising initiatives could be implemented for further revenue creation.
The onus eventually is to be able to offer an array of facilities without compromising on excessive spending. Besides, it doesn’t hurt that you’re concurrently saving the planet as well.
For further details on optimizing your workspace, do reach out to us at https://www.aura-smart.com