The concept of co-working space in India is on the rise . How is the Indian audience responding to it? The Indian audience has been highly receptive to the idea of co-working spaces. Instead of being just shared spaces, co-working spaces provide our community with the opportunity to network with like-minded business leaders and professionals. The healthy exchange of ideas happening under a single roof benefits all stakeholders. The Indian audience has lapped up this concept — the proof lies in the fact that we were able to understand the demand and the latent potential of the market to grow our offerings to 2,600 seats within 18 months of starting operations. Our vision is to be the ‘Uber of offices’ with fully equipped plug-and-play office space offerings throughout the country that allow work in a curated and enabled environment.
How did you start out? What was the idea behind it? I have worked in the real estate industry for close to 20 years, delivering various solutions to some of the leading companies across the globe in areas of strategic planning, design management, workplace and business process improvement. During the course of these involvements, I realised that commercial real estate still operates in an archaic fashion, with long-term commitment and upfront deposits which makes it difficult for SMEs and startups to get a place of their own.
Our first centre at Vasant Kunj helped us to get a better perspective of customer requirements and aspirations. We leveraged our learnings in all our centres.
You have earlier said that you want to give ‘free seats in three years from now’. What is the company doing to build up that kind of ecosystem and bring in cost effectiveness? The idea is to transform this business from a space-delivery model to a service-delivery solution. We have already created a thriving ecosystem of some of the biggest brands in the industry that provide our members with ancillary services ranging from business modelling to development, financial, legal, taxation, accounting and HR services, technology and cloud computing solutions, etc. Awfis negotiates preferential rates for these services and makes it available to the community. This has made us cost competitive and magnified benefits for the community.
Co-working spaces today are not restricted to providing mere office spaces, they have become much more than that in terms of community development. Tell us more about that. As we grew in scale and started attracting customers from different industries and businesses, we realised that the average customer is on the look-out for a wide variety of service offerings. With startups and SMEs coming on board, we started curating partners and vendors with expertise. At the same time, we also created an ecosystem of VCs, investors, entrepreneurs, subject matter experts and event organisers who regularly host networking and knowledge-sharing sessions at our centres. The simultaneous sharing of space, knowledge and ideas has helped our community grow professionally.
Talking about partnerships and collaborations, apart from the existing ones, which are the other brands that you want to collaborate with? At present, we are in partnership with 50+ brands. After Diwali, the number would scale up to 200. In terms of big brands, we are in partnership with Yes bank, Grant Thornton, Amazon Web Services, Haldirams, etc. Ultimately, we want to be the Groupon for our own office community; like it goes out and gets deals from partners because it has a certain number of people who want the same thing.
Could you elaborate on the business model that your company or a co-work space firm generally works on? Our business models vary based on pricing, demographic research and supply side factors. On the supply side, we are essentially partnering with the landlords in what we call is the managed aggregate model. In a managed aggregate model, there are three different approaches that we adopt. First is manchise. It is similar to being like a hotel operator where the developer puts in all the money and we come in and manage the operations for a small fee. Second is what we call a waterfall model, where we put up the investment upfront with no minimum rent, no security deposit; we pay a minimum return to the landlord in a waterfall structure. Third is the asset-light model, where the landlord puts in all the investment and we give him minimum guarantee. Apart from these, we have our straight leases. These are the key differentiating models by market. In cities like Pune, we are only doing managed aggregation and not straight lease. So our business models vary from center to center.
Do you plan to scale up your business in the coming period, given the growing competition in this segment? We realise that we are only scratching the surface as far as market potential goes. So, we are working aggressively to scale our offerings to 5,000 seats by November 2016 across 19 pro-working centers, and this is only in the tier-I cities in India. Once we have covered that, we plan on moving to tier-II cities. We currently run at around 82 per cent of the occupancy, with a 2,200+ community across our centres. We would want to continue to maintain our leadership position of being South Asia’s largest co-working centre.
From business centers to coffee shops to co-working spaces to proworking spaces, and now ‘office on wheels’. Tell us more about this new innovative venture? Today if you look at an office worker, the average commute time is anywhere between 2-4 hours and it’s a global phenomena. With our mobile office, we make an employee’s time effective from the point he leaves home till he reaches office. The time saved in terms of productivity is invested back in the company and spent with family. We have established this one pilot van to understand the behaviour, the style of working, what kind of work surface will work, and the requirements of an average working person. This will give us the impetus to create multiple mobility solutions. At the moment, it is available to members only. By next week, it would be available to everyone on the app at an hourly rate.
Community feedback and innovation go hand in hand. What do you think? Community feedback helps us to innovate better. Our van was booked last week for a high court arbitration where the two parties sat in it with the arbitrator and the lawyers. To our surprise, we have been asked for our van again for other arbitrations. Similarly, a visa company approached us as a mobile visa collection center which we had never thought as a business solution when we started out this project. So the market is giving us the answers and we are very focused on getting the customer feedback.
naina@businessworld.in
BW Reporters
Naina Sood is a Economics graduate and has done her post graduation in International economics and Trade. She has deep interests in Indian economy and reforms
