Venkat,
I have to strongly disagree with one point in here, being: " I may perceive the experience to be worth, say, $3000 a month. You may build a business model around the idea of charging $500 a month. But all that won't matter if I can only afford $250 a month" If you trust your own judgement of worth, and by "worth" you mean how much value it would create within your business, then I would say that if it's worth $3,000 but you're not willing to pay $500 then the business in question needs examination. I guess the discussion is about the word "afford". I would argue that a business that is struggling for survival, when presented with a chance to generate a return of 6 times its investment on some spending, cannot afford NOT to undertake that spend. Starving the business of cash and turning away such great opportunities does not seem smart to me, and even loss making businesses should undertake that spending (as, if those numbers are corrent, their losses will be reduced by $2,500 a month). There is one exception, and maybe this is what you were thinking.. if a business has $200 cash in the bank and no money coming in, then spending $500 would see it go broke before it saw a return from that spend. I agree that in this case the business should not spend the money... but I also think that it should not continue in its current form as there are obviously problems with that business. I would say that either some money should be borrowed to make what has been decided is a value adding spend, or the if that sort of strategic spend cannot be justified then perhaps the business should be shut down. (I'm being deliberately strong in my words, and certainly not directing this at your business as I know nothing about it... it's just a general comment about a hypothetical business, and how businesses should think about spending money). Back to coworking, which is what this is all about. If a business (whether a coworking location or any business) can operate on the model of providing $3,000 of value to its clients/customers (and those clients can see the value) and only needs to charge them $500 to make a decent profit, then I would think they have a brilliant business model. To make a decision based on a small number of potential clients that can't afford to invest a few hundred dollars in their business would not make sense, and they should focus on the thousands of customers that can afford that and who would get a great outcome by using the service. BTW, if I missed something in your analysis I'm sorry... I just read that comment and thought I needed to add one of my own. I hope you don't mind. On Apr 26, 11:26 pm, Venkat <[email protected]> wrote: > Whoops, checking this thread again after quite a while, so I missed > this excellent response by Susan, sorry. For those who came in late, > sorry if this is obscure. > > Again, as with Dave's points, I don't have much to say about things > that can only be learned by participation, and I am willing to take > most of what you say on faith! A lot of what you say is probably > correct, especially on the accelerated serendipity front. If I were a > full-time field ethnographer on the future of work (as some of my > colleagues are), I'd like nothing better than to visit every 'future > of work' cauldron around and see this first hand. At the same time, I > am skeptical about the point of view that the "insider" point of view > is the only one, or even the most accurate one, for all questions. Or > that ethnographic data can change economic axioms or the basic > realities of any small-biz venture :) > > The one thing I'd probably be careful about is reading too much into > casual remarks and anecdotal evidence when it comes to hard pricing > questions. You quote your members saying things like “I don’t think > I’ve been this productive in years,” or “I feel like I’m on the > cutting edge here,” or "thanks for giving me a great reason to go to > work," or “It’s worth every penny – you guys aren’t charging enough > for this.” All that can be absolutely honestly said, and still not > matter. I wish perceived value and the price structure the market will > bear were always in sync, but they aren't. I may perceive the > experience to be worth, say, $3000 a month. You may build a business > model around the idea of charging $500 a month. But all that won't > matter if I can only afford $250 a month, and the local real-estate > market, at a given utilization and churn-rate, forces a minimum of > $1000 a month. There is a reason so many coffee shops (non > starbucks...) go out of business (9/10 is it??). > > But at any rate, thanks all for the excellent discussion and feedback. > I've definitely learned as much as possible without hauling my lazy > backside to actual locations. I'll probably eventually make it to > Baltimore sometime in the next year or two. > > On Apr 21, 2:15 pm, Susan Evans <[email protected]> wrote: > > > Whoops - in that second paragraph I meant to say "coworking," not > > "corking." :) I'll admit, I've never plunked down to get a sense of > > what corking is all about, either. UNcorking, now I've done plenty of > > that... > > > ;) > > > Susan > > __ > > Office Nomads > > officenomads.com > > > On Apr 21, 10:31 am, Susan Evans <[email protected]> wrote: > > > > I spent some time reviewing this article over the weekend and got hit > > > with a lot of thoughts. Thanks Venkat for writing up a thought- > > > provoking piece. > > > > That said, I am sitting here prepping my notes to respond to you (I > > > wrote down pages of them over the weekend), but I’m not sure if any of > > > the responses will resonate with you as you’ve never been to a > > > coworking space. As Dave said this is the critical piece of the > > > puzzle as far as those who participate in this listserv are likely > > > concerned. You may think it a trivial point – that you can still > > > review the model without seeing it in action. You CAN analyze it > > > academically and make a ton of great points about the benefits and the > > > pitfalls of the concept. But after a year and a half of owning and > > > running Office Nomads in Seattle, I’ve heard folks all too often say > > > things like "wow - working here went way beyond my expectations," or > > > “I don’t think I’ve been this productive in years,” or “I feel like > > > I’m on the cutting edge here,” or "thanks for giving me a great reason > > > to go to work," or “It’s worth every penny – you guys aren’t charging > > > enough for this.” None of this can truly resonate with you unless > > > you’ve plunked yourself down in one of the spaces around the country > > > and gotten a true sense of what corking is all about. > > > > Specifically, I think that visiting a coworking space would really > > > change your opinion about the value vs. cost analysis you went through > > > in your review, as well as the thought that you mentioned there at the > > > end about not being able to rely in the longterm on “economic-cultural > > > benefits” such as potential teaming and start-up creation out of > > > coworking spaces. Until you sat side-by-side with other workers and > > > got to really see the “accelerated serendipity” (yes, a woo-woo hippie- > > > like term, but when you see it you GET it) of coworking spaces. There > > > is value in the potential that coworking spaces bring to independent > > > workers. It is a risk to take to join a coworking space, but a > > > calculated one at that. You are taking a financial risk on a space > > > (only if you’re used to getting your space for “free” at cafes and at > > > home) but there is useful filter on that risk that I don’t think you > > > take enough into consideration. It’s like getting to pick the > > > customers who sit alongside you in the coffee shop – you get to put > > > yourself in a room full of potential collaborators. There is > > > incredible value in this. We see it nearly every day at Office Nomads > > > and I hear similar stories from other coworking spaces all the time. > > > This indicates that it is not an accidental, temporary outcome of > > > running a coworking space, but a vital component of the success of > > > these spaces in th efuture. > > > > I think you’d also see that coworking spaces aren’t painting > > > themselves into a corner by dissenting against mainstream office > > > spaces, but instead are part of a growing trend to make collaborative > > > workspaces which encourage people to work closer to home (as in ditch > > > their commute and spend more of that commute time doing more valuable > > > things like hanging out with friends and family. We're actually in > > > conversation about working with local transportation agencies to > > > spread the word about coworking locations in the Puget Sound so they > > > can share them with businesses who have commute trip reduction (CTR) > > > strategies). Coworking spaces are not the end-all, be-all of where > > > this new business model is heading. In fact, as you may have seen on > > > this list, we dialogue (almost too-)regularly about what coworking is > > > and what the model encompasses as it is put into action around the > > > world. At SXSWi this year, there was a ton of talk about what the > > > next step would be for coworking spaces. There is an infinite amount > > > of possibility – just sit down with Alex and Geoff and IndyHall for 5 > > > minutes and you’ll know what I’m talking about. They are the industry > > > leaders and are pioneering some incredible methods and tools that are > > > going to launch coworking into its next phase. > > > > What I DO think you do a great job of in your article is making us > > > coworking space owners think a bit. We mull over all of the points > > > you brought up daily, and I thank you for bringing many of them all > > > together in one place (with even bigger, more important thanks to the > > > authors of “I’m Outta Here!” for giving the book up for review in the > > > first place, of course. ☺). I agree with you that the value > > > proposition of coworking spaces has to be a serious one in this time > > > in order for independents to take the financial step towards joining a > > > space. It is similar to a gym in that respect – you know that > > > coworking will help the health of your worklife, but you have to take > > > the step to get in the space in order to get the value. These days > > > many independents are looking for ways to garner value from the > > > choices they make to move their business forward, and it is our > > > challenge to let them know that the value they can gain from a > > > coworking space is worth it. > > > > Again I have about a million more thoughts – but them’s the start. ☺ > > > > On Apr 16, 9:15 am, Venkat <[email protected]> wrote: > > > > > Dave: > > > > > Your moon metaphor is perhaps not the best one, since the greatest > > > > experts on the moon and how to get there and survive there are not/ > > > > were not the astronauts in the Apollo program :) To the extent that > > > > direct experience is relevant, I think I drew some fair conclusions > > > > based on my experience of similar setups like coops, visits to > > > > incubators/companies that try to foster similar atmospheres, and the > > > > like. But yes, some of my commentary on cultural elements is > > > > speculative, and I make full use of the bill of rights of book > > > > reviewers :). I'd be glad if some of my speculative inferences about > > > > the limited range of cultures on offer proved to be unfounded. > > > > > But there ARE a lot of elements in the coworking conversation that > > > > yield to armchair analysis. Economics and relation to other 'future of > > > > work' trends being among them, and I hope to hear some interesting > > > > conversations around those elements. > > > > > As for me personally, it is pretty darn clear I can't afford coworking > > > > on my current budget. But I am hoping something cheaper happens in > > > > Pentagon City or the Crystal City area once commercial real estate > > > > costs start coming down. I personally don't have the bandwidth to try > > > > and start anything, though I may try something simple in the common > > > > areas of the new apartment building I am moving to next month (nearish > > > > Crystal City, in Arlington, VA). > > > > > Venkat > > > > > On Apr 16, 8:36 am, Dave Troy <[email protected]> wrote: > > > > > > Venkat, > > > > > > You make some very interesting points, however, the most important > > > > > thing you state is this: > > > > > "Though I haven’t yet managed to visit an actual space..." > > > > > > In this > > ... > > read more » --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Coworking" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/coworking?hl=en -~----------~----~----~----~------~----~------~--~---
