I really dig what you have to say, and at Epicentral we're working toward the same model: we don't sell desks and high speed internet. We provide community.
My question would be...how did you do it? How did you create that vibrant online component to your community in Philly? Right now, our members likely view our various online tools as "added value", rather than the thing they're signing up for. Was it clever marketing that attracted the sort of membership who would utilize/value resources like that, or do you do something special to keep it active? On Monday, March 28, 2016 at 11:15:24 AM UTC-6, Alex Hillman wrote: > > I've done quite a bit of research on "overbooking" - and we've thought a > lot about how it factors into our model: > > When gyms, hotels, and airlines overbook they're specifically factoring in > a % of cancellations and abandonment. For the most part, they're commodity > services where MOST people simply buy the cheapest or most convenient. > > They also have a pretty "binary" idea of usage: a hotel room is either > occupied or not. Same with an airline seat. If someone isn't using a seat > or a room, they're not getting value out of it either...or they need to be > tricked into *thinking *they're getting value. There's a Planet Money > episode that talks about the psychology between how people use the low-cost > gyms and their business models. > > In the show, they even contrast how much a gym would cost if everyone > actually came 5 days a week - in fact, there are gyms that are > specifically designed for this, to the point that they kick you out if you > don't come to make room for other people who actually want to be there. > > *Commodity businesses* (where the value trends towards zero) get > consolidated or driven out of the market. People (eventually) *cancel > services* they aren't using. > > Add into the mix that coworking is essentially a luxury product (the > majority of the audience has the alternative of working elsewhere for > free), and I think a lot of coworking space failures start to make sense :) > > Our model has flipped that reality on its head by actively avoiding the > commodity position, and focusing on member lifetime value instead of > maximizing immediate utilization. > > Said another way - Indy Hall runs more like a professional association > that *happens* to also have a workspace that members can use. Our full > time members represent a little less than half of our physical workspace, > but more importantly, they represent ~17% (and shrinking) of our total > membership. Another ~20% of our members are here 1-3 days per week. > > What about the remaining 63%? Well, they use a desk...almost never. > > *Does that mean they're not using their membership? *Are we tricking them > into thinking that they're getting value from their membership? > > Not even close :) That 60% is often MORE engaged than some of our full > time members (that's not a knock on our FT peeps, either). Our online > community is a vibrant, always-on and in-your-pocket connection to the > network. Our "almost never use a desk" members generate and often lead > educational programming, social activities, events, and outings. This is > the "professional association" part of our model at work, and since our > association also provides a level of diversity that most industry-specific > professional associations can't, we beat out the commodity market once > again. > > Most models that are tied to usage of space, where *more members -> less > available space. * > > Our model focuses less on the value of space and more on the value of the > network. The majority of the value that a member of our community doesn't > come from our staff or our space, it comes from the other members. In this > way, *each additional member -> additional available value. * > > Mind you, a room full of people who don't talk to each other isn't much > different from it's commodity counterpart, working at the cafe for free. > This model depends on there being a community where people actually > interact and contribute > <http://dangerouslyawesome.com/2014/04/community-management-tummling-a-tale-of-two-mindsets/>. > > > > I say all of this because unlike gyms that bank on people not showing up, > we've designed our business to make sure our members can get lots of value > beyond the desk *even when they're not at a desk at all*. > > -Alex > > ------------------ > *The #1 mistake in community building is doing it by yourself.* > Join the list: http://coworkingweekly.com > Listen to the podcast: http://dangerouslyawesome.com/podcast > *Where will you be on April 21st <http://peopleatworksummit.com>?* > > On Thu, Mar 24, 2016 at 6:50 PM, Bernhard Mehl <[email protected] > <javascript:>> wrote: > >> Tom, >> >> Didn't see your calculator, if you are open to share with dummy data, >> would be super interesting to compare. >> >> The 5x overbooking you guys do is pretty interesting. That means you only >> have hot-desks correct? I think that's a very similar approach to what >> gyms, hotels and airlines do. >> >> >> >> >> On Wednesday, March 23, 2016 at 9:25:41 AM UTC-4, Tom Lewis wrote: >>> >>> Nice calc, thanks! The one I built before I opened this space was >>> pretty similar, but it also accounted for our various price plans, the time >>> allocation of each (ie a flex member would only be pay for 30 hours a >>> month), and a modifier based on the fact that not everyone would use all of >>> their time every month. Was pretty much spot on, just as well now we have >>> 150 members and only have room for 30 to be here at any one time. They >>> could all turn up at once, but it has never happened! >>> >>> On Tuesday, 22 March 2016 23:09:11 UTC, Bernhard Mehl wrote: >>>> >>>> Hi guys, >>>> >>>> Many of our (especially new space) customers and friends frequently ask >>>> us how to ramp up members to make their space profitable. >>>> We always tell them first you have to make a model how fast you think >>>> you can grow members, then you can decide how you get X number of members >>>> / >>>> month. >>>> Usually you sit on a lot of upfront cost so the break-even point is >>>> critical when calculating your cash burn and we came up with a simple >>>> model >>>> to visualize member growth. >>>> >>>> But I assume many of you here in the group know this already that's why >>>> I'm posting our model for some feedback. >>>> >>>> https://docs.google.com/spreadsheets/d/1isPTJuLmQOfaOVN2uL0D5e-jnd6VmepjjnQvdPoU7jw/edit?usp=sharing >>>> >>>> It has a couple of flaws: >>>> - If you are a new space with 0 occupied desks, you'd have to input at >>>> least 1 member and a extremely high growth rate like 120x for it to make >>>> sense >>>> - The model assumes break even after 12 months and shows you how many >>>> members you need to add each month. But some spaces might be breaking even >>>> faster, like in 6 months. Currently you manually have to search for the >>>> month where your member revenue exceeds your operating cost. >>>> >>>> What do you think about this way of visualizing member growth in >>>> general? I think it's most valuable for spaces who have been open for 2 >>>> months, not so much for spaces in planning or already existing spaces >>>> +12months. >>>> >>>> >>>> >>>> >>>> -- >> Visit this forum on the web at http://discuss.coworking.com >> --- >> You received this message because you are subscribed to the Google Groups >> "Coworking" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to [email protected] <javascript:>. >> For more options, visit https://groups.google.com/d/optout. >> > > -- Visit this forum on the web at http://discuss.coworking.com --- You received this message because you are subscribed to the Google Groups "Coworking" group. 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