From Tap Beer On Site to Pool Tables is Co working A Confused Terminology Or A Real Estate Bubble Soon to Burst
Are we looking at Co working places to be apt for start ups , entrepreneurs, business networking individuals ? Do start ups really need the fancy set ups and ease of operating out of a hip place to perch themselves with laptops and start working in a space with Brazilian coffee or network over running beer right from the tap all bundled up and available at a low no really low price point ?
90% start ups fail and the ones which grow all of us know work day in and out compromising on the infrastructure and fancy aids to be able to sustain their costs yet keeping a steady watch on investing in their team, and working towards fund raising.
With my really long association of almost 15 years with the serviced office industry and understanding the needs of the ever evolving corporates , I do very clearly understand that Co working is all about a valuation game than a self sustaining profitable model. Are we saying that with the ever increasing real estate rentals specially in Grade A locations and buildings , one can provide low cost rentals without compromising on quality / service and can sustain the business for years to come without having the developer to share the burden or letting business bleed.
The deal structuring of such Co working places is mostly zero security deposits and rent free months to be able to offer hip and trendy fit out and a rate to lure the end user which means burden on the developer/ or a price correction on the real estate offering.
Most of these Co working spaces are either in buildings which were non functional or where rentals will be low, a compromised location , layout , less natural light areas or a distress property.
A Co working set up in CBD more like the well known set ups will not be a co working offering but more like a space leased out to one Multinational/ or Corporate who are primarily having the budget and wanting a spill over or project space , which as per my understanding isn’t a co working facility but a net space end use.
How many matured start ups with funding or Companies and MNCs would like to be a part of a Co working set up , where they will have an issue on creating their own brand identity or culture being set up in their own team, forget the closed cubicles / private offices which one would clearly look at to maintain confidentiality of business.
Who would want to be a part of a set up which cannot offer confidentiality / business ethics/ secured VLAN set ups still required by the ever growing demands of such corporates to secure their IT infrastructure.
I rather would feel that a Co working which works like an accelerator for business, an incubator, or the one which provides mentor ship on the likes of Silicon Valley are still to be holding the test of times than the ones only concentrating on ping pong tables, beer and coffee with colour full interiors .
An end user ready to pay will also not like to compromise on security, noise pollution, chatter, or rubbing shoulders with anyone and everyone .
With so many Co working facilities opening every day how many will stand the test of times or sustain business growth is doubtful to say.
Founder and CEO