149. Is this a good time to open a coworking space?

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149. Is this a good time to open a coworking space?

00:00:01 Welcome to the everything coworking podcast. This is Jamie Russo. Thank you for joining me today. Okay, I am recording this on Cinco de Mayo May 5th taco Tuesday. We are having tacos for dinner for sure. Um, ironically I feel like I've been ordering out more. I'm super into healthy eating so I don't usually order,

00:00:49 but I think I've been even busier during this time than usual. So the gift of not cooking at the end of the day is very tempting. And my favorite coffee shop, which is also a shared commercial kitchen, so like artisinal bakers and product creators make their food and this kitchen, it's like coworking for kitchen space. It's awesome. And they have a cafe in front, they cannot have people in obviously. And so they've kind of pivoted to doing curbside pickup. They started with just Saturdays and doing,

00:01:29 they do a lot of bakery stuff. Chicken I try to stay away from, but super tempting. They make the best baguettes I have ever, ever had. And um, if they don't put it in the trunk, if they put it next to me in the car, bad news on the way home, cause I always pick them up after my Saturday workout, which is more intense than usual. And I'm always very hungry because I was saving room for the croissants that I picked up. Um, so they started doing meals,

00:01:56 which is awesome because they have this whole commercial kitchen sitting there. And so they just, they started putting together these fantastic meals and some of them are pretty healthy and so we've been picking them up and they do some light grocery items from their producers. So we've been grabbing them, but they expanded into Tuesday. And I know the owner, we talked about doing a coworking space, uh, near the cafe one time and I would have loved to have done it, but the math did not work. Um,

00:02:26 he said they're trying to scale it and see what they can do. Cause in California we're going to be a little while, um, before we can get back to normal restaurants. Are, I don't, I'm not, I'm getting lost on what phases we're in, but we're in some slow moving, reopening phases. But he is like, he's just one of those guys that's like, we're gonna figure it out. We're gonna roll, we're gonna pay that rent. And he's got a staff there, you know,

00:02:52 doing the curbside deliveries. And so it's nice to say hi to them, but it's a great example of someone looking for the opportunity. And I almost think when things go back to normal, why would they stop doing this meal service? Because I think their customers love it. And a couple of things that they did. And then I'm going to get in today's podcast, which has nothing to do with taco Tuesday or a curbside delivery, but, um, I get really inspired by seeing people, you know,

00:03:21 dive into this challenge and figure out a way out of it. And I know that it's not always that straightforward and it can be really hard. And I'm sure some of you are in that. This is really hard. I'm struggling seat. Um, so I totally get that. But, um, I am one of those personalities that loves a challenge. And I love change. I was talking to, um, Mariel who is the co founder of disrupt CRE last week. And I told her that she's like,

00:03:50 that's so crazy. I'm that way too. And we can make people crazy. I'm very challenging to be married to if you're wondering, uh, cause I'd love to change things all the time and my husband is like, finance guy likes to for things to be the same forever. So, um, that's a balance. But I look at times like this and think like, you know, where, what, what should we be doing? What should be new? And I just get energized by problem solving.

00:04:23 So, um, I love to see people who are diving in and figuring out how can I pivot my business and make things different. And I think when you have that attitude, miraculous things can show up. So one, I just love their attitude of like, well, can we figure out what can we sell our customers who love us and miss us? I used to go in there all the time. Like, literally, if you look at my bank account, it's KitchenTown kitchen, kitchen town,

00:04:47 avocado, toast, cappuccino, avocado toast, Kevin Chino. They make the most amazing avocado toast on the planet. Um, so they also had a customer list. So most restaurants, if they use, um, square, you know, you get customer emails automatically, but they send newsletters and they told stories about their art is in makers and they told stories about the staff and they launched new products over email. And so they're already engaging with people online. And so when they decided they were going to do curbside pickup,

00:05:22 boom, hit the email list and people are, you know, rolling in, when I show up Saturday morning, there's a line, you know, so this is going really well. And they just popped, you know, they, they popped into that new mode really quickly because they had a customer list and they had engaged with them in that medium before. So, um, I don't know if any of you follow Donald Miller, I've talked about him on the podcast before. He wrote StoryBrand and he has a brand called business made simple and they are,

00:05:52 he's amazing. If you have not read StoryBrand, go out and get it right now. It's the time. If your space is closed and you have to update your website, you can do nothing better for yourself than going and buying that book. I mean there are probably some other bigger picture things you need to figure out, but in terms of telling your story and messaging to your customers when they are ready to return. So good. So good. I'm sure they're there. My flight group students love that book.

00:06:22 I'm trying to think of, Oh, I heard it on a podcast but I've been obsessed with his work. He also has a podcast. It's good. It's kind of generic business more than like really diving into his book. Um, he also has always done an in person workshop and this thing's like $3,000 in Nashville. He only does it in person because you get like small group coaching on your website and your messaging and he's just an in person guy right onstage, like great speaker and his team, you know,

00:06:54 needs to be in the same place. Well, they couldn't do that for the last two. And so they did a digital version and it was much less expensive. I think it was a thousand dollars and they sold out both times are really fast and they figured out, you know, how to make a similar experience for their customers and think of all the customers that we're not going to quite get to the $3,000 to do it in person but are doing a thousand dollars to do it online. So he's another one,

00:07:26 like just kind of making things work and figuring it out. But one of the things he always talks about, he's a small business guy. Like you know, coworking is right in the heart of who he serves. And he's always saying like, you need an email list, you need to engage with people online so that if you need to sell them something new or communicate them with them or pivot in some way, you have them, you know, you, you can get into their email inboxes and lots of retail folks and you know,

00:07:56 small business folks, they just don't do that. So if that's something you're not doing, start thinking about how you're going to grow that list when you go back, not just your member list but prospects and people in the community who are interested. I will mention if you're listening to this on a Wednesday, we're almost done. I'm enrolling people in a virtual membership program, but you can still jump into our Facebook group, which is coworking goes digital. So jump into Facebook group. This is really for conversations about creating digital memberships,

00:08:32 not the kind that we've been doing where we're kind of throwing some pasta at the wall to see what sticks and we're trying to sort of keep people busy and distracted, uh, and keep them paying us while they can't come into the space. But a really sustainable monetized double revenue stream. Jess Bommarito was on the podcast a couple of sessions below and so sorry, a couple of sessions ago and we've been doing this together and helping people think through what's possible. And we are supporting a program called tribe and we talk about that in the Facebook group.

00:09:07 The enrollment for that ends on Thursday, but we're going to keep the group going and it's something we really want to support operators in thinking about is what's possible digitally to support, um, our physical layer because we found there can be challenges with the physical layer. So that brings me to today's topic. Wait, two more announcements before I jump in. Sorry. I've done, you know, I've had a couple of interviews. I feel like this is like a crazy time. I have a lot to say.

00:09:37 We're going to talk today about, I'm going to do a SWOT analysis of the coworking industry right now and talk about why I think this is a great time to be working on opening a coworking space. So to that end, I have some folks on the waiting list for both programs and I'm going to open it up because, um, I still have the last cohort going strong in my coworking startup school. Amazing cohort. They're moving and they're just making a lot of creative decisions based on what's happening out there and being really thoughtful and innovative.

00:10:10 So I'm going to open up the coworking startup school and to Mae community manager university. Um, also end of may. So if you're interested in either of those programs and you've heard me talk about them before, you can get more details. I have detailed landing pages up for both of them, coworking startup, school.com. If you are starting a coworking space and want to invest in getting peer support in a highly facilitated environment, step-by-step framework to get you going, you can read the details online@wwdotcoworkingstartupschool.com. If you're interested in either one of these,

00:10:45 put your email on the list so that I can let you know when it's open and you can enroll if you're interested. Uh, and community manager university is a professional training and development platform for community managers, certifies them by level and gives them community support, peer support. We have a very active Slack channel. Um, they're supporting each other through this, you know, kind of crazy time sharing tips, sharing resources, sharing their protocols, et cetera. You can get more information there at everything. coworking.com

00:11:20 forward slash community managers. Okay. Let's dive into our topic for today. I just closed my graphics.

00:11:31 So we're going to talk about a SWOT analysis for the coworking industry. So I created this last week.

00:11:40 Um, I did an interview with Mariel from disrupt CRE and we just kinda talked about what's happening in the flexible office space and um,

00:11:53 I put this together just as a framework to think about it. So for those of you who are not familiar with a SWOT analysis,

00:12:02 my graphic designer, I made like this really ugly version. I was like, can you figure out how to make this look better in canvas?

00:12:07 So I will throw this in the show notes. Everything's in the show notes by the way, the links to coworking startup school,

00:12:13 community man, community manager university are there. And then I'm going to put this graphic in there. You'll see it on social too if you're following along on LinkedIn or Facebook or Instagram.

00:12:25 Essentially it's strengths, weaknesses, opportunities and threats. So the strengths and weaknesses are internal. So things that sort of you can control,

00:12:37 that are internal to your business opportunities and threats are things that are happening sort of in the industry that are external forces that you are responding to and not,

00:12:47 um, you know, don't have sort of direct control over. So it's often helpful to use this framework when you're sort of trying to make a decision or looking at a business opportunity.

00:12:58 Um, just to give you a way to sort of think through, it's sorta like doing a pros and cons list or you know,

00:13:05 pluses and minuses, but it gives you a way to think through what's happening. Um, and do you think that you have enough strength to outshine your weaknesses or what are your weaknesses that you need to address?

00:13:19 And then externally, which is what's happening now, right? Lots of external factors that we are responding to that we don't have control over.

00:13:28 Are the threats higher than the opportunities or vice versa? And then how do you want to proceed based on that?

00:13:35 So let me just walk you through the way I'm looking at this and this is not the end all.

00:13:41 Be all, it's just kind of how I've been thinking about it and I've had lots of conversations with folks in the industry about what's coming down the pipeline in terms of demand.

00:13:53 Um, and we, uh, one more announcement. The GWA is hosting a virtual conference June 3rd and forth.

00:14:02 You can go to the GWA site under events, you'll find the length. There's also a big banner for it on the homepage.

00:14:08 I think it's conference.global workspace.org and the, I should know that, sorry. Uh, tickets are on sale.

00:14:16 Virtual event tickets are super reasonable because we want you to be there and it's all things re-entry focused with a huge focus on the voice of the customer because we all loved to sit around and drink our coworking Kool-Aid and talk about how amazing we think the industry is going to,

00:14:36 you know, is now or, well, not right now, but is in general and how we think there should be lots of demand for it,

00:14:41 uh, as we reenter, but we are not the customer. And so big focus on hearing the customer voice and sort of how we're responding to that.

00:14:51 So don't miss that. Okay. Strengths. So coworking spaces, a couple of things that we have that I think are really positive.

00:15:00 We have a lean ownership and staff typically with an ability to adjust and train quickly. And I think this is a big deal because customers,

00:15:13 so coworking Koolaid, but this is, you know, some things we're assuming we're going to have, when I say customers,

00:15:20 you know, ranges from freelancers to corporate users, small business owners, whoever uses your space, everybody's at home.

00:15:29 We're starting to reenter in some States, right? Starting to reopen slowly. People are nervous, right?

00:15:35 They bend at home in their safe place and now they need to venture out and they need to figure out what makes them comfortable and what signals they need to see,

00:15:46 what protocols they need to have in place. And I suspect that if you work in the Salesforce tower in San Francisco,

00:15:54 I don't know how many floors, that thing has a lot, maybe less comfortable going into that space.

00:16:01 Then a retail level space with no elevator in a suburban area near your home. Right? Totally different.

00:16:09 And so of course, you may have a coworking space that's in Manhattan and people have to take public transportation to get to you.

00:16:16 And that comfort level either may take more time or maybe your members in Manhattan just roll with it faster,

00:16:23 right? Cause you're used to it. Uh, and so that may be a different scenario, but I think in general,

00:16:30 we can be very member focused, very present, very visible in our actions, very close to the people,

00:16:39 our members that we're communicating with. We can communicate very directly. We can send emails from us, our name,

00:16:46 uh, not just, you know, email from CEO of Salesforce who has sales, you know, towers all over the country.

00:16:52 And that's an extreme example. But I think when you contrast those environments to are very, you know,

00:16:59 smaller controlled environments. And when I say smaller, some of us, you know, operate 30,000 feet,

00:17:05 40,000 feet. Um, but even that compared to, you know, a corporate campus or a class,

00:17:12 a building downtown with many, many floors and, you know, a large floor plate, it's just different,

00:17:18 right? It's a more comfortable, yeah. Cozy feeling. Um, and we can control that environment and we can adjust that environment pretty quickly and we can train our staff to align with the protocols that we need to use to make our members feel comfortable.

00:17:33 So I think that's a big strength for our model size of coworking spaces. Like, so sorry, I,

00:17:40 I kind of already covered my second bullet, which is we can have a close relationship with members. It's easier to communicate with them and make them feel safe.

00:17:48 You know, operators, not all, I mean, but many of us will know. Many of our members or our staff does,

00:17:54 right? So they're having, you know, that one-to-one communication again versus getting an email from the CEO or from the building owner.

00:18:03 It's just a different, um, you know, it's a different feeling. And certainly for those folks who are stuck at home who are not,

00:18:11 you know, don't, are associated with, uh, a corporate office building somewhere. They're, you know,

00:18:18 making a shift from home where they probably have spouses and dogs and roommates and kids and lots of lots of scenarios that they're looking forward to escaping.

00:18:30 And they're not making a leap to going into, you know, a large sort of uncomfortable environment or the local coffee shop where,

00:18:38 you know, probably I don't, who knows what that looks like. Right. Will people be able to sit and work at coffee shops?

00:18:43 Don't know. Maybe that's another thing for awhile so we can support our members, you know, in,

00:18:49 in our close relationship and the way we can communicate and make sure you do, you know, make sure that uh,

00:18:56 Megan, our GWA director of operations mentioned that her coworking spaces open, but she said they've really not been communicating and she said what they,

00:19:07 the communication they've sent is fairly vague. She said that she literally had to follow up with them and say,

00:19:13 I'm unclear. Am I on the list of folks that can come in or not? Um, so she said they're just not doing a great job of being clear and making people feel welcome or being clear that folks don't need to stay at home and you know,

00:19:28 what the protocols are, et cetera. So make sure you're just being super, super transparent upfront and clear.

00:19:34 And lots of operators are doing surveys to their members to understand, you know, where their head is at and how they're feeling and assessing,

00:19:45 you know, how they can sort of meet their members where they're at before they come in. And then they're also being proactive and sending out really clear communication to make sure that members know exactly,

00:19:57 um, you know, what to expect when they come back into the space. So that was, we started with the coworking Koolaid.

00:20:06 Let's move into the weaknesses column. So remember these are internal, some of them are sort of externally driven a little bit.

00:20:14 So there's a some gray lines on the, uh, the grid here. But weaknesses are days of high density open space are over.

00:20:25 So if your model is predicated on overselling tight space in open common areas, we're taking a break from that and we may never go back to that.

00:20:37 So that is a weakness of our model. If that's part of your model. Now I think there are spaces like this,

00:20:46 I think they're probably in urban core areas where population densities are higher and you know, oftentimes we'll see spaces,

00:20:55 open spaces that are um, with dense seating. And yet you're not typically going to see that those seats fall.

00:21:05 You know, people will sit down, put their bag down next to them, kind of stretch out,

00:21:09 give themselves some space. So if you have six seats at a table, maybe only three of them were being used anyway.

00:21:15 So I suspect that for some of us, this is not going to be such a dramatic shift once we get past,

00:21:25 you know, the six foot rule. I think the six foot rule, one of my coworking startup school students posted who's already opened,

00:21:32 she posted today their conference room and it was a sad state of affairs. They have a large meeting room,

00:21:38 um, where like training events. And that kind of thing can be held. And she had her chairs laid out according to their local regulations and it was not pretty.

00:21:46 So for the, for the short time term time for the short time being that you know it's going to be a little bit challenging and if you are mostly open space and that's where your revenue comes from,

00:22:00 you could continue to have a tough time. So one quick thing I'll idea, I'll share, there was a woman in our everything coworking Facebook group,

00:22:11 if you're not in there, definitely jump in. She mentioned in the group, uh, and I've been on a couple of calls with her.

00:22:18 She's in France and she said they're reopening. She's a lot of members that are not coming back and she's been communicating with them very directly and they've had a virtual membership that's running that's running well for them.

00:22:34 Uh, she is going to look for local businesses that need to de densify their own space and no longer have room for all of their employees for some period of time until those restrictions are changed and offer them space in order to utilize her space.

00:22:53 So I was coaching her a little bit to make sure that she um, you know, charges them a price that is appropriate because they are in need.

00:23:02 And many times, you know, companies have the budget to handle our memberships. Plus, so certainly corporate offices are spending a lot more per person than it costs to have somebody in a coworking space.

00:23:16 So as they reduce their real estate assets, our coworking budgets will be perfectly aligned for them. Now,

00:23:25 a small business of, you know, 40 people who can now only fit 20 people in the office may not have lots of reserves for extra real estate,

00:23:33 but they will need it. And so I was coaching her to make sure she's charging prices that continue to allow her to pay rent and pay herself and,

00:23:42 and pay the people that need to be paid so that she's not losing money just out of desperation to cover the space.

00:23:49 I think that's a pretty creative solution and a situation many folks will be in where local governments are providing guidelines that say,

00:23:58 you know, the, the six foot rule is, is in place and you know, this is how many people you can have in a given space.

00:24:05 She had those guidelines and I didn't do the math but it was challenging. So, um, just an idea around the density piece,

00:24:14 back to the weaknesses. So our days in high density open space area are over. So I think if you're starting a new space,

00:24:21 this is time to think carefully about how you design your floor plan. Now will we be, we will not be in a six foot,

00:24:30 um, uh, social distancing requirement forever. And so if you are just in front of opening a space,

00:24:39 you know, you're probably a year out unless you take second generation space that comes on the market over the next few months and you can move in quickly.

00:24:48 I still would manage that timeline as you work through those deals, uh, to push yourself out as long as you can.

00:24:56 Many suspect we're going to have a second wave of this in the winter. So, you know, just know that's coming.

00:25:01 But I think future focus will be on flexible private spaces, right? That we can identify as we need to,

00:25:09 uh, make you know, micro offices that are designed for one person. I think those are going to be really popular.

00:25:16 So while we currently have some internal weaknesses, I think there is opportunity if you are in front of this and can design accordingly.

00:25:26 So a couple of other, you know, internal weaknesses I think, um, costs again, costs for to build out private spaces is more expensive and so many folks,

00:25:40 right or you know, live in this tradeoff world of looking for the higher revenue generating private space but managing a startup budget.

00:25:50 So there's always some tension around that when you're designing your coworking business. So I think, you know,

00:25:57 part of the opportunity that we'll talk about is knowing that the demand is there and I think another opportunity is around there being second generation space available that will help with these startup costs.

00:26:10 But back to our weaknesses. I keep getting distracted by the coworking Koolaid. So sorry about that. Weaknesses,

00:26:16 higher cleaning costs, higher staff costs potentially. So, um, we, you know, the high touch strength of being able to manage our space carefully may put some strain on our team and may require some extra hands.

00:26:39 Our current staff may have trouble keeping up with the extra cleaning that we need to do in the conference rooms and in common areas and the short term approaches we may be taken taking to avoid having folks make their own coffee.

00:26:56 You know, lots of folks are talking about going barista style with a coffee bar where the community manager serves coffee,

00:27:03 uh, during certain slots during the day. So that's going to be, you know, an operational challenge to figure out in the short term.

00:27:12 And we may need some extra hands, which may add some extra costs to a model that, um,

00:27:17 is struggling in the short term with sort of, um, capacity and ability to have folks in the,

00:27:25 you know, that are revenue generating. So we'll see how that goes. Other folks are, you know,

00:27:32 having the coffee bar out somebody to brewing the coffee and they're using the, you know, the pastry papers to let people serve their half and half and going with,

00:27:41 you know, paper products for coffee mugs so that there aren't, you know, Jeremy mugs going into the dishwasher and that kind of thing.

00:27:48 And sitting around in the sinks, we know how that goes. No dirty dishes with germs in the sink happening here.

00:27:55 So I think that's a weakness. And then, you know, training members on key safety behaviors. We can train our staff and they,

00:28:04 the staff really wants this to work and is going to to, you know, be totally on the team,

00:28:12 but our members just may have a different feelings about what's happening right now. You know, we're already seeing in our neighborhoods.

00:28:20 So I'm in California, super conservative, moving slowly and uh, we're seeing rule breakers, we're seeing people who just have,

00:28:28 you know, are mentally exhausted by all the restrictions and they're kind of given up. We're seeing driveway parties and you know,

00:28:35 kids that are too close to each other and all those things. And we're still in full shelter in place.

00:28:40 Not much as open, not supposed to be doing that. And we're seeing people do it. And so will you have,

00:28:45 you know, you got to train your members to take the right approaches, disinfect their seating. Um,

00:28:51 you know Mara Houser's going to be on the podcast next week and talking about her back to business guide.

00:28:55 I cannot wait. It is a do not miss episode. She's been really thoughtful about all of this.

00:29:01 Mara has been on the podcast a few times. She um, I think she was episode 100 and maybe 80.

00:29:09 Um, I have to go back and look. So she's going to be episode one 50 next week and she's going to share.

00:29:14 So she runs 25 North coworking. She's a CEO, they have three locations and then she is also the principal of an interior design firms.

00:29:23 So kind of the best of both worlds worlds when it comes to figuring out how to approach situations like this.

00:29:29 And you know, she's thinking, you know, per gym model where we're training members to kind of do their part wiped down surfaces when they're done with them,

00:29:38 you know, phone booth wiped down so that they can sort of help out with the staff and make it sustainable.

00:29:45 But we'll have to get members, you know, trained and help them understand what their role is and hope that they play along.

00:29:52 Okay. So let's switch back to the coworking Koolaid. So now we're going to talk about opportunities that are more external based on what's happening in our environment.

00:30:01 And then we'll talk about the threats. So coworking, Kool-Aid and full, full force. When you look at my grid,

00:30:06 you will see that the opportunities column is the fullest. So here's what I think is happening out there and why I think it's a great time to be thinking about opening a coworking space.

00:30:17 So I'm sorry for those who are listening who are struggling, uh, I'm in that camp. We have sort of a double whammy happening of coven 19 and our lease,

00:30:27 which is now at seven years. Our rent is doubling. So, uh, we have some changes coming up at the end of may,

00:30:36 which we'll talk about at some point, but challenging time for many of us. So I am not,

00:30:43 um, I don't want to downplay the hard times that many of us are having, but I think if you are in the place of not having to manage through these few months and you're looking at opening a coworking space,

00:30:55 there are a lot of opportunities out there right now. Lots of folks think we're going to start to see some good real estate deals,

00:31:02 retail space, office space, folks that have, you know, downsized their real estate needs, close their offices for various reasons.

00:31:10 There will be some good second generation space that's open. And if you are new or thinking about expanding,

00:31:17 you need to know that if one of the success factors, it depends on your model and what your objectives are,

00:31:23 but it can often be really beneficial to move into second generation space. Think about moving into a space that was occupied by a startup.

00:31:34 There are a number of meeting rooms and team spaces, private space and awesome kitchen. Some open space,

00:31:42 some you know, maybe not. Maybe you won't be lucky enough to get some booths. I would love some booths in my second generation space.

00:31:49 But think about somebody who's designed for a collaborative environment for a startup. The kind of space probably looks a lot like a coworking space and it's all built out and the walls are there and the HVAC is there and the electrical is there.

00:32:04 When you start from scratch on those items, it's expensive and as we were talking about sort of one of the weaknesses,

00:32:11 you know the demand for high density open space is going to be greatly reduced for a long time, maybe forever,

00:32:19 not all open space but dense open space and so private space is going to be a real benefit if you can build that in.

00:32:26 And so the fact that there'll be open real estate out there potentially with some good second generation space that is like plugin play for you.

00:32:34 You move in, you paint, you update, you buy your own furniture and you make it yours.

00:32:40 That is a huge benefit to the model. Your startup costs are so much lower. Your return on investment on the project overall is just so much higher because your startup costs are so much lower and you can get in,

00:32:54 you know more quickly. But again I would be careful about managing that timeline you don't want to get into quickly.

00:32:59 Um, potentially for those of you who are looking to expand and have one successful business, even if you've had a hard time through this period,

00:33:10 if you can get through this period, I think we'll see landlords more open to management agreements. That is not my opinion alone.

00:33:18 Lots of folks are talking about the fact and we may have some landlords who are listening, thinking about doing some private space,

00:33:25 sorry, some coworking space and flex space and that will come in all sorts of shapes and sizes. You know when we talk about co,

00:33:31 I tend to use the word coworking really generically. That means flexible, shorter term space that you can move into really quickly.

00:33:40 And landlords will be interested in how they can provide that because the consumer will be, the customer will be demanding that and they need to figure out kind of how to offer it and maybe looking for partners.

00:33:53 So if you've been interested in fit in working on that model and doing a management agreement, this may be the time landlords may be more open to doing that.

00:34:04 And I think if you can depend on the profile of the landlord and you know what their needs are,

00:34:09 if they need ongoing income, then you then they need to fill their space, right? If they're a larger read or it's a super longterm,

00:34:21 you know, family held asset, then they may not be so desperate to refill it quickly. But for the folks that really need that ongoing income,

00:34:31 they may be willing to do some creative deals with you to get some butts in seats. So to say,

00:34:36 a work from home has been proven and accelerated. So, you know, people sort of refer to this as this massive work from home experiment that,

00:34:47 you know, lots of companies resisted for so long, big and small. And here we are. It has happened,

00:34:54 um, you know, from corporate companies to you, my husband works for a hundred person biotech company and they,

00:35:01 that's not part of their culture working from home and now everybody's doing it. And they would prefer to be together because they're in startup mode and they just feel like it's better to work,

00:35:11 you know, in the same place. And they have lots of science things that are happening and things that have to happen in labs that are somewhat still happening.

00:35:18 But you know, you name it, folks have proven that they can work away from the office. And a lot of folks,

00:35:26 I just, I see this, I've sat through lots of webinars. I've had my community manager, Kristen,

00:35:31 who's amazing. I sent her webinar upon webinar to, to hang out and take notes on, um,

00:35:37 and she's creating kind of a, uh, a summary takeaway guide for us to produce. Um, so that'll go out on our email list.

00:35:45 Uh, you can visit the website and get on the email list if you're not on it yet. But the general consensus is lots and lots of working from home will continue because employees have said,

00:35:57 look, I, you know, can make it work. Certainly conditions may not have been ideal right now,

00:36:03 but it spouses go back to work and kids go back to school. You know, that real challenges of working from home will be lessened.

00:36:11 And folks will say, either I love working from home or I am okay working from home. I'd prefer to work someplace nearby home and I'm not at the corporate office and I'm not going to commute and I don't need to be in a,

00:36:25 in a big office. So it's astounding. The organizations that were so resistant to that approach, um,

00:36:34 all of the reports that are coming out, all the brokerages are issuing reports. The did I read the financial times,

00:36:40 I think had a great writeup the other day. It's just, it's everywhere. It's like ubiquitous, this feeling of wow,

00:36:49 things are going to change much faster than we thought. And so now employees feel entitled to avoid the office.

00:36:57 Employers are going to need to be supportive. And again, this is, you know, a little bit of coworking Kool-Aid and like I said,

00:37:03 the GWA conference has really focused on hearing the customer voice. But if you read the reports, there are a lot of customer quotes saying,

00:37:11 yeah, we're rethinking our real estate strategy. And so we expect demand for flex space to outstrip supply in the short term.

00:37:21 Um, and another opportunity kind of related to all of this get real estate deals, um, and in high demand is I think you'll find some investors that are looking for opportunities and you'll be able to sell them on the opportunity maybe more easily than you could even before.

00:37:39 I think the, we worked distraction, the IPO fiasco is kind of behind us and I think there's so much discussion about what's happening with commercial real estate and how it's going to shift that a,

00:37:54 it's just inevitable that flex space is going to be more in demand. So I think those are all real opportunities.

00:38:02 Okay. So threats, external threats. I think we'll see a very high level of sensitivity to safety and protocols.

00:38:11 So figuring out how you are going to communicate a dress and just very visibly be adhering to protocols and not,

00:38:20 you know, sort of getting lazy I think. I don't mean lazy in a bad way, but just,

00:38:25 you know, sometimes we get into things feel sort of less urgent once we get used to them. We need to sort of continue to be on our game.

00:38:33 We think that, you know, folks that have not used flex space before, especially if a real estate department is paying for their membership,

00:38:41 they're going to come with a checklist and they're going to be looking for certain safety protocols to make sure that you're following them.

00:38:47 And we're trying to uncover these in our GWA conference. But I think be ready for a very sensitive shopper.

00:38:55 Be ready to message. You know, I mentioned at the beginning of the podcast the um, Donald Miller,

00:39:00 uh, book StoryBrand. Like how do you, um, show your customer, he calls the customer the hero that you are the guide.

00:39:09 You are the Yoda who can show them a place to be a part of a community and a safe,

00:39:16 productive place to work. Um, how do you message out? How do you show them? How do you make them feel comfortable?

00:39:22 So I think that will be sort of an outside threat is we may have folks moving more slowly back into optional workplaces because they need to get comfortable with all of that.

00:39:33 So the threat probably is we have to have all those things in place. We have to be totally on our game about.

00:39:38 Um, that's what I'm looking for, showing them this gang late, my vocabulary's struggling here. And then I think,

00:39:47 you know, the other piece is, you know, a lot of small businesses, this has been a total shift.

00:39:53 So, you know, the environment is challenging for many, many, many types of businesses. We may have members who are now struggling financially and so they may not be using coworking spaces.

00:40:04 Maybe they have gone out of business. Uh, so I think the threat is that our, some of our,

00:40:10 you know, our customer base will change. And I talked about that in a few episodes ago about thinking through like,

00:40:19 this is the time to reevaluate your target customer. You know, who is your target customer, who will have the means and the need for your space as we reenter and who do you want to serve and who can you serve,

00:40:34 you know, sort of with the joy and profitably and sustainably. So go back and listen to that episode if you missed that one.

00:40:42 So just to kind of wrap it up here, I think that there's a lot of external opportunity in what looks like a pretty challenging time.

00:40:51 Um, I talked to an operator and he may be listening, I won't say his name, but we had a great conversation.

00:40:57 He's, you know, going through managing through some challenges in his own space portfolio right now. But I said,

00:41:04 you know, we were kind of chatting. He said, well, the thing I'm really worried about is missing opportunity like that.

00:41:08 I'm not seeing the opportunities that I should be seeing because in a time like this, there are really hard things to work through.

00:41:16 And then there are really big opportunities for those that can take advantage. So I think that this is a great time to be getting into offering flexible space.

00:41:26 If you're a landlord, if you're an operator, because you're far enough in front of the process that you can take advantage real estate deals and then be there when the demand swings up.

00:41:36 So if that is you, I'll just mention one more time. I'm going to open my coworking startup school in may,

00:41:43 so make sure you're on the list, coworking startup, school.com put your name on the list of that.

00:41:47 You get the emails with the details when it opens. So we'd love to hear your perspective always, you know,

00:41:53 jump into the Facebook, share your thoughts and me an email. Hope you are all safe and well and managing through this the best we can.

00:42:02 And as I've said today, I think there are some bright opportunities in front of us as we get through this.

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