170. Madison Maidment, COO of Coworker.com, Provides a Global Coworking Market Update

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170. Madison Maidment, COO of Coworker.com, Provides a Global Coworking Market Update

00:00:01 Welcome to the everything Coworking podcast, where you learn, You need to know about how the world wants to work. And now your host coworking space owner and trend expert. Jamie Russo, Welcome to the everything coworking podcast, episode number 170. Here's why I think you're going to enjoy this episode as individual operators. You likely don't have access to data on market recovery.

00:00:41 You can only see what you're experiencing in your own market, unless you're a member of my flight group. And then once a month, you get to touch base with operators from all over the world. But coworker.com is a coworking marketplace. With over 15,000 members spaces across 172 countries, they have a macro view of the industry trends that can help you get a line of sight on what to expect over the next months.

00:01:09 Madison, the COO joins me on this episode to share their data and perspective on the recovery trends for coworking spaces. So before we dive into our conversation, I have a couple of opportunities I want to share with you today. First, if you're working on opening a coworking space, I want to invite you to join me for my free masterclass three behind the scenes secrets to opening a coworking space.

00:01:33 If you're working on starting a coworking space, I want to share three decisions that successful operators make when they're creating their coworking business. This masterclass is totally free. It's about an hour, which includes Q and a time. If you'd like to join me, please register at www dot everything, coworking.com forward slash masterclass. And then for those of you who already operate a coworking space and are starting to look ahead to 2021,

00:02:01 and you're wondering how the heck to plan for such an unknown. We're going to tackle that together. We will not have the same planning focus coming out of a global pandemic as we would in normal years. So we're going to do this together. We're going to take a nine-step approach to get it getting ready to thrive in 2021. What does it mean to thrive?

00:02:26 Well, surviving means to continue to live or exist, especially in spite of danger or hardship. So that's what many of us have been doing in 2020 thrive means to prosper, to be fortunate or successful and to grow or develop vigorously to flourish. Now you may not see be able to see the ability for your business to truly thrive, especially financially until we really see a turn in demand.

00:02:58 But you as a person, as a business owner, need to have a plan and thrive as a human so that your business can be prepared. So we can't predict what 2020 will mean for our business, but by planning in advance, how we will approach the year, we can be intentional and in control and find opportunities to grow and to thrive. So I want you to prepare for 2021 confidently so that you have both the mindset and the business that is ready to compete for incoming post COVID demand.

00:03:35 Many operators today are feeling uncertain, burned out, unsure of what to do next and not sure if they can survive. They're scared. They don't feel in control. They feel unfocused and stuck. If you feel even a little that way, you're not alone, but those feelings are not good for you or for your business. So with an intentional plan for how you and your team will approach 2021,

00:03:59 you will feel happier, more positive, less stressed at work and at home. And you'll be prepared to focus on the right things and to see new opportunities. If you'd like to design your business to thrive in 2021, please join me for the 2021 planning workshop. Get more details at www dot everything. coworking.com forward slash thrive. 21 2021, sorry,

00:04:26 everything coworking.com forward slash thrive 2021. And now for my conversation with Madison, from coworker.com, I am here with Madison made meant she is the CEO of coworker.com. She's in Winnipeg, Canada, and other. She lives in Toronto typically. So she's staying with family and managing through COVID. As many of us are today, I'll let Madison dive in with the details,

00:04:59 but coworker.com is a marketplace of coworking spaces with over 15,000 listings, across 172 countries. So I know I'm excited to hear Madison's perspective because you have a truly sort of macro view of what's happening, kind of the trends that are happening and global. So we love to touch your folks like you because you know, individual operators are kind of in their little bubbles and they're so desperate to hear what's happening out there.

00:05:30 What are the indicators? So thank you for joining us today and yeah. Tell us a little bit more about your background and coworker.com for those that aren't familiar and then we'll dive in. Yeah. So I think you gave a good overview of who we are. As Jamie mentioned, we are a global marketplace for finding coworking spaces worldwide. We were founded in 2015 actually because my colleague Sam,

00:05:55 he was in Hong Kong on business and He was looking for a professional workspace to work from in between meetings. And at the time there was no marketplace for coworking spaces. So it was like a couple of days process. The payment process was really frustrating. And so it just kind of turned into why doesn't this exist. I'm going to build it. So Sam created it in 2015 and coincidentally in 2015,

00:06:22 I was traveling just on vacation in Indonesia. And I stumbled upon a coworking space in Bali. And I never heard of the concept before first coworking space was in Bali. I just kind of like, I was walking to the beach and I just was like, what is this place? And there's just people on their laptops. And it was more of like the digital nomad kind of vibe,

00:06:43 but still, I just thought it was cool that you could work wherever you wanted to because I was going back home and I've only ever worked at a traditional office space. So I kind of started obsessing about this future of work and these coworking spaces and flexible office. And I thought of it from the terms of, you know, a remote employee or a freelance worker who can work in Bali.

00:07:05 But I also was looking at why would any company pay for a 10 year lease when their company might grow or shrink or want to move into new markets? So I just became obsessed with that. This was going to be the future of work. So I went home. It was September. At that point, there was no online marketplace. So I started building my own business plan for what kind of like what coworker is today.

00:07:28 And three months into market research, I found coworker.com and it was just their beta site. They said coming soon. And I was kind of sitting there like, well, I have no tech background, right? Student loans. Like I do not have the means to start a company like this. So why don't I just join a team of people who are so passionate about this as well?

00:07:50 So I emailed them and they politely refused to hire me. They're like, we're not hiring. And I was like, anything I can do. And I just started sending them like all of my product roadmaps and strategy plans, like, and I was basically working for them for like a year when they didn't really want me to be until finally I just said,

00:08:08 look, what I'm doing for you. Like, this is what I'm doing outside of my full time job, which was like insane already. And it was so fun. But you said, imagine if I was working for you full time, like imagine what I could do for you give me 90 days. And if it doesn't work out, like we can part ways,

00:08:25 cordially like no hard feelings, but if it does, like this would be so fun. So, I mean, that's, the rest is history. I've been with the company officially for over three years now, I've grown from kind of a hybrid partnerships role. We were merged into product and now I run operations and I have an amazing team. We're all distributed globally with headquarters in Barcelona and Toronto.

00:08:48 And we all work from coworking spaces and love it. And it's fantastic. So that is such a great story. A, I find so many people, I that's, one of my favorite questions to ask at the beginning of an interview is what's your coworking story? Because so many people were like, and it, you know, it just opened so many possibilities and the word obsessed often goes along with that,

00:09:12 like they became upset. Like I need this for my community or yours was, I need people to be able to find these places. And I love that your first one was in, in Bali and you know, the, and we won't go here quite yet. But the interesting thing about the Bali example is, you know, to your point years ago,

00:09:30 it wasn't that many people who were going to go to Bali and work. And today, you know, there are a lot of challenges with what we've been going through, but also some silver linings. I hear these great stories. A friend of mine was just sharing. She has three friends that are renting Airbnbs and sort of every quarter they're deciding like,

00:09:51 where do they want to go next? And they just kind of live wherever and that's maybe not, everybody's going to Bali, but you know, it's such an interesting time where people have so much choice. So, so anyway, that's a great story. I also, that shows a lot of commitment. I love it that you like, Oh my gosh,

00:10:10 everyone thought I was insane. My parents like stop doing this, like focus on your other job. And I was, I was doing a great job at my other job, but I just was like, I don't have kids. I'm not driving anyone to soccer practice. So I'm gonna work on this company on the street, Your side hustle, if that was like,

00:10:27 not really condone, but it's worth, it pays off. I know, but you know that, and that's what it takes often when I worked for startups and I love the environment, but it's so intense. I mean, you're the perfect personality that just like drive and commitment. So I love it. Sam is lucky to have you, so is Sam he's the founder?

00:10:47 Is he in Barcelona? Currently? He's actually in the us just because of COVID and restrictions and whatnot, but he's in the process of moving to Barcelona. So yeah, he's a place there. They're just doing renovations through COVID and we have a couple of other team members that are there and I love, I'm excited to go back to, I stayed there for a month last year and I was dipping back and forth pre travel restrictions.

00:11:13 So yeah, I'll be back. They have some incredible spaces there though. Like some of, I think the coolest ones I've ever seen, so I'm excited to go. Good. Okay. So I'd love to talk. So again, so, well, let's just really quickly around your platform, who is the user of your platform, like who goes to your site and looks for space and you,

00:11:39 you mentioned partnerships and I'd be curious, kind of your efforts to help small businesses and enterprise clients, you know, sort of navigate this world of opportunity with flexible office. Yeah. So I would say five years ago, or four years ago, the Target market that we're getting more just organic market that was coming to our site was more of that freelance remote worker entrepreneurs.

00:12:01 And over the past five years, it's really shifted more towards small teams, enterprise clients, or what we're seeing a lot of now is actually individuals that work for large enterprises that are looking for workspace that is close to them or in their city. So like we've had people from, you know, HelloFresh and Pfizer and Facebook and Google, like all using our platform in the past.

00:12:25 I mean, that was in the past month, to be honest, that we've, that's been kind of the trend over the past couple of years where we're getting more of that interest, but we still, obviously you're going to have your startup teams and your, your freelancers coming in there. But the shift is definitely been more towards dedicated spaces and private offices,

00:12:41 especially in it's COVID so yeah, I would say those would be our, we kind of serve all sides of the market. It's really fun and interesting, but nice to see The shift. Yeah. It's really interesting. I think this is, you know, some of that usage that you're describing is what we're all sort of waiting for for that demand shift to come it's like,

00:13:03 when are all of those people who are now working at home, going to come out and either when is their company going to support it? Because I would love for Facebook to call you and say, you know, we need a platform, you know, or, or when, because I think the, the longer play is helping all those folks even know that it's a possibility.

00:13:23 Right, right. Because they're newer to the solution in general. Yeah. And the way that I see it, which I think is beautiful, just takes a little bit of patience is that during this whole time, a lot of companies have been putting all of their efforts into going remote. How do I manage my remote workforce? What tools are we using?

00:13:40 Are people being productive? Can I have a headquarters in New York, but can my employees travel every quarter to somewhere new and just work remotely? Where, where during this time spaces have been preparing to be COVID proof in the sense of what protocols are we putting in place? How do we make sure our members are safe? You know, how many people can sit at a desk at one time?

00:14:00 How often do we have to sanitize? So that once the actual companies start looking at reopening their offices, I truly do believe that coworking is going to be an even more attractive option because they don't have to navigate how far their employees are sitting apart. The coworking space will dictate that. I kinda think like making sure that your coffee machine is fully stocked in your office is kind of a perk,

00:14:23 but making sure your office is a safe place for your workforce to conduct business is a necessity. And I think coworking spaces are going to be able to, to Excel in that area, providing that as a service. And you know, I'm in San Francisco and everybody here, like with many major markets is all of a sudden like, Oh yeah, we're not commuting anymore.

00:14:46 You know, one hour plus each way we're done with that. So that, And I mean, so like, cause I'm in Toronto and there, what is it? 2.7, 4 million people commute into Toronto every day. And there can be times range between 60 minutes to 90 minutes. So even in downtown going from one side of the city, totally.

00:15:08 Right. So it's not even a matter of when can we safely open our office so that a hundred people can go in the same office building and use elevators. It's how do 2.7, 4 million people go in and out of a city because you can't use public transportation in the same way. So that's why I think that super trendy term that we're seeing everywhere now,

00:15:27 the hub and spoke, right. It's going to be a huge, a huge influencing factor in the future. And a lot of companies are gonna use that. And you know, maybe you go downtown once a month to meet with your team, but otherwise you can stay in the saga or wherever other small town. And it's perfect. We had just,

00:15:44 I was reading the San Francisco business times yesterday had their kind of feature on coworking. And one of the articles that came up with it is there's like a, I don't even know what the commission is. It's like a climate control group that issued this sort of mandate that said by 2035, they're going to require that 60% of Bay area employees work from home.

00:16:12 Wow. Which is technically not legal. The article goes on to say like, can they do that? No, I can't say can't actually enforce that. But it's an interesting, you know, they're saying like for climate reasons and, and you know, emission reduction and all of that, like that's what they, that's their solution. Like you want us to solve this?

00:16:31 Well, here's our answer. Even like taxing people. Like if you live outside of city limits, you can't, that's interesting. I need to find that article As they might be sort of looking at the current environment and saying, well, you know, everybody's doing it now. Let's just say, this is what we're mostly going to keep doing. And,

00:16:49 but the hub and spoke model, I think makes a lot of sense. So I'm super curious in terms of the data that you're seeing on your platform, what does demand look like? Like are you seeing globally or in some markets at least like some recovery of demand. I'm happy to share that since April's Lowe's April's loads were hard to hit. It was,

00:17:15 it was tough to see, but we were with 50% across the board and that doesn't even account for all of the, you know, it's devastating to see something that you have so much hope in and you just kind of go down. But since April, we've actually seen growth month over month, it's been steady. We haven't had any other dips. And so even,

00:17:38 Oh, since September we're up early September's numbers were up 15% from August. We're actually near our highs in terms of search volume and people visiting the site in of, I would say meaningful recovery, Hong Kong, Singapore and Australia have been the strongest to recover in terms of we're seeing some major deals closing. And so we're hopeful that's going to continue moving West.

00:18:02 But the interest in the West is also, there just seems to be more exploratory. There are deals closing. It's just not the same where you're like, man, this market's on fire. But I, I feel like because we are almost at our peak, we're going to surpass last year's highs by December. If you stay on track, which fingers crossed.

00:18:22 No, you know, I love it. And I love hearing data. I was on a call last week and said, somebody was like, so, you know, people are predicting a turnaround in like January, where's that coming from? And I was like, Oh, we're all just telling people that so that they have some Ray of hope because no one really knows,

00:18:42 you know? And so I love that. I mean, it's interesting to hear your trend data, that that is what you're seeing. And if things continue that way, you also have confirmed a lot of anecdotal discussion. I've heard that people are getting two words and there's like pipeline activity, but the people aren't committing yet. And, and I just wonder,

00:19:06 I feel like I sound like a broken record to my audience, but I think it's a matter, a little bit of like normalizing for people. So there are markets like yours and mine where we're not allowed like Toronto. I don't know what the status is in Toronto, but in San Francisco, we're really not supposed to go to offices yet. And so,

00:19:25 you know, even my husband today, I was like, it's podcast day. And he's like kind of refuses to go to the office because he's not supposed to do. And so there's this normalizing a sort of having local markets say, it's okay to go back. And then people feeling really feeling comfortable, even though I think space operators feel like, how could you not feel comfortable?

00:19:46 We're doing all the things come on in. Let's go. Yeah. And that's kind of what I predict that people, as they feel safe to leave their house, that's when markets are going to recover, start recovering and it might not be on a, even a national level. It could be on a state basis where maybe if you live outside of New York city,

00:20:04 you might start going into the office at the first, second you can. But if you live in Manhattan, maybe the, you might wait a little bit. Yeah. And then the other, the education piece, cause a lot of people have never used a coworking space before. So you have these people who've never worked from home before. I mean,

00:20:22 Mike myself personally, I'm going into a coworking every day because I want to pre COVID not because someone's telling me my half too. But now when someone tells you have to work at home, I mean, there's been so many studies about the mental effects of it and, you know, isolation and loneliness and just lack of productivity and, and whatnot. So just to have that option,

00:20:41 I think is great. I think with, with companies, what you're going to see is kind of like three different models that are going to be used. So one is going to be companies getting rid of their, their longterm leases altogether and going and shifting their operations into coworking space. I think we're going to see that hub and spoke model really come to life.

00:20:59 And then I also think we're going to see like flexible work is a benefit. So offering employees days to coworking spaces in their area or wherever they are just to help them get out of their house if they need That's my prediction. I'm curious, are you seeing evidence of the hub and spoke model in terms of like maybe search volume in non urban cores?

00:21:24 And I don't know if we've had enough time for this yet, but more spaces coming onto your platform that are not in sort of core markets. Yeah. I mean, well, that's the one thing through COVID we had over a hundred new cities onboard onto the platform, which I think is Evans. I can't prove that this one space is a suburb and this is a smaller town,

00:21:45 but they're not your metropolitan cores that we were seeing beforehand. And we're still having spaces at every single day to the platform, which is also promising in terms of inquiries. We're kind of getting it all across the board. We're getting a lot of employees who are reaching out kind of on behalf of themselves. But then we're having companies that are saying, we need a solution for our team.

00:22:06 Our headquarters was in this town, but we need to allow our employees to work from all of the surrounding towns that they're located in. Can you provide a solution for us? So we're working strategically with partners and with those teams to provide them a solution, whether that's looking for office space in a hub and spoke capacity, or maybe the hub and spoke is the hub is in the city that their headquarters were.

00:22:27 And then the spoke model is kind of those flex memberships passes. So coworker has one it's called global paths be similar to something like desk pass or, or something like that. But yeah, so we have a as a global solution and that's what we've been having a lot of conversations with, with companies on yeah, it's just about catering it to what the market needs.

00:22:49 And I think that everyone's still trying to figure that out. So it's about being flexible. Can you talk a little bit more about global pass? I had seen that come up and I think this is the piece. I mean the marketplaces like coworker.com, you know, have the opportunity to do so much heavy lifting right now, because if you're having those conversations with the enterprise users,

00:23:13 you will sort of filter that demand down to local folks because local independent operators have no really no way to access that demand unless you get the hello fresh employee. Who's like I'm done being at home and they, you know, go to Google or Yelp or whatever, and search for a space on their own. But the challenge, the logistical challenge for the big companies is a central point of billing,

00:23:38 right? They don't want, they don't want 3000 receipts for coworking spaces for The number one thing, they consolidated billing and a global solution. So it's, it's tricky. Cause I mean, you really it's up to the whole network of coworking spaces to work together and to try to come to a, you know, a common, common outcome there in goal.

00:24:01 But yeah, global passes a global coworking membership that grants remote workers, it was catered towards business travelers, pre COVID. I'm sure it'll go back to business travelers in the future and just to have remote employees, frictionless access to coworking spaces around the world. So our network currently is 2000 spaces in 110 countries. And that list grows every day, which is really nice because we just use our current relationships with coworking spaces,

00:24:31 new spaces, onboarding, and then we also work with our enterprise clients. So if they say, you know, we really need access to spaces in this town. I see you have locations on coworker, then we'll reach out to those spaces and say, would you be interested in opting in? And I think it's really great for those coworking spaces. Cause global pass is not meant to replace your longterm membership.

00:24:51 It is not our intend to say, okay, Madison is on global past, she's going to go to your coworking space every day of the month at a discounted rate. It's no Madison can pop in two or three times in a month. And if she loves it, she can sign up for a full time membership or while she's there on global paths,

00:25:07 maybe she's going to need to have a meeting room to record a podcast. So you get to upsell on, on some of those other lucrative, I guess, space rentals within, and then just referring. Like, I mean, obviously I love coworking, so I tell everyone about it, but I like telling my family and friends like go into a space like don't yeah.

00:25:28 If you need to get stuff done and there's too many distractions. So I think those pass options are really great for just introducing new people into your space, Which I think is so critical right now. I love what you said kind of earlier about people not knowing how to use a coworking space, which for those of us who've been doing it for a while and it seems so natural or maybe came out of sort of the startup world where like walking into a room and introducing yourself to strangers is just like what you do to network.

00:25:57 And that's totally foreign to so many people and you know, this idea of sharing workspace. And so I, you know, I love the power that the past can introduce them to that solution and just kind of get the momentum going and get people out of the house. But, and, but also, you know, tap into demand that otherwise may not come to an independent space.

00:26:20 So the space ops into the past, and then is there like a monthly payout when somebody uses the space or signs on to the, Yeah, we pay out the spaces monthly and it's not a subscription, which is also nice because I mean, with COVID we also felt like flexibility is key and people don't want to necessarily commit to anything. So it's just important to give a really flexible.

00:26:43 So we kind of do a, you pre-purchase credits and then as you need more, you can ultimately, you know, subscription would be great if you're using it that much, but we don't want to force that on anyone you don't ever want your business model to be banking that people don't use your product enough, like the gym. Yeah, exactly. Yeah.

00:27:05 Although yeah, this, this, you know, Uber flexibility right now, I think is so challenging for operators because those that offered so much flexibility, pre COVID, you know, emptied out because people leave and now, you know, I feel people sort of like wanting to tighten the reigns on, like, I don't want to sign one month agreements,

00:27:26 you know, I only want to do six month agreements, but to your point, it's so hard because the end user is still so uncertain and wants that flexibility. So it's like, you know, really trying to find that middle ground, that, that will work for both and, you know, keep people in business. Have you seen spaces fall off of the network?

00:27:48 Like, can you, do you have a sense of spaces closing? Actually, I don't have the statistic prepared, but it, we are seeing quite a few closures. Unfortunately we have quite a few that are still just temporarily closed, but yeah, it's hard to see, but I mean the coworking industry is tough, running a coworking space. It is challenging financially and especially kind of to your point where I think a lot of what we've seen over the past couple of years are people saying that,

00:28:19 you know, the most lucrative spaces in a coworking space are the private offices. And so if you're banking that all of your members are in private offices and then they just all leave that can, that can take you really quickly if you don't put other things in place. But I think that the coworking industry was so resilient. As soon as things started shutting down,

00:28:37 you started seeing all these like virtual events, virtual offices, so many different support systems. I think I even saw someone in the woman who Coworks group saying they were doing like drive by coffee thing at one point, which I, I saw a lot of people doing this. Yeah. And printing and yeah, I had a woman on the podcast who's in,

00:28:58 I think she's outside of Kansas. No st. Louis she's outside of st. Louis. And they had like a mobile coffee. They had coworking and they had the coffee and they just kind of really flipped over, you know, and went all in on the drive by coffee, which was such a hit during COVID and people doing like pop-up retail, but people are having to get,

00:29:17 and not everybody, you know, is, is sort of that fluid. But I think right folks are real or have a space that's fluid enough to, you know, do a pop up retail space or there's a place in Manhattan. I saw there, I think they're offering offices for like independent workout spaces. I just, there's a company in Toronto.

00:29:38 That's reaching out to coworking spaces to rent private offices for that reason. Interesting idea. I thought, well, for people who are really committed to working out and for whatever reason, don't do it at home, but they don't want to go to the gym, I guess. Yeah. Their gyms are closed. Like it's yeah. It's, it's all about yeah.

00:29:55 Being creative. And I know, I think you said something in one of your past podcasts, it's like, we're not selling workspace for selling like transformation transformation of space that it creates for the members. And I think that's just so true as a coworking space owner operator. I think it's so important to create a unique experience, to educate people of all the possibilities that your coworking space can offer.

00:30:18 So maybe it is just a safe and sanitized place to work, but maybe it is a new community. Maybe it's a way that you can grow business. Cause I know people are, are hurting like in sales specifically right now. Like you don't have those networking events to go to bounce ideas off of. So I think there's so many great opportunities. It's just about thinking outside of the box,

00:30:38 even, even with types of inquiries, we're seeing, I keep seeing this and I'm like, did they mean to do that? And I read, I read the message and they are, the people are requesting private offices for like two days or for an hour for a meeting room instead of booking a meeting room. They're just requesting private offices. I don't know if it's like the perception that it's private,

00:30:58 they're going to be the only ones in it for the day. So they feel safer about it or they just prefer it. But I feel like if a coworking space has a surplus of empty offices, maybe they do shorter term rentals for, for it. Let, let people test them out, maybe at a higher rate. And then, And does your platform support sort of that really short,

00:31:17 like the day use or We do, but it's all towards the traditional short term stuff. So short term inventory. So it'd be meeting rooms and talk desks, private office. We never fought to put in an hour rate for a private office. So in some ways we're working through, Yeah. I've heard a lot of that as well. Like people sort of recognizing it and maybe it's right.

00:31:42 Individuals who don't feel like they need the meeting room, but they want the walls and the private space to work. And I think some spaces that are heavier on offices I've so he's been on the podcast before Kane Wilma, and he has spaces in he's IQ office suite. So I don't know if you've come across him. He's got faces all over Canada and they've been,

00:32:05 he's always, yes, they've lovely spaces. I think they're on King street in Toronto and their model is core CBD, which is hard right now, but he, you know, they have a lot of enterprise clients and he's seen a lot of that demand and he's, you know, talked about kind of flipping the model of like, well, you kind of have to meet them where they are in terms of,

00:32:28 if that's how they want to use this space, he's trying to sell it more on the subscription model. It's like, okay, because the other piece of demand change, I think is like, so you used to have private office members and the dedicated desk members, or you're like, they come in every day, it's the hot desk. People who don't come in every day.

00:32:45 Right. But like lots of office members, like this is what they do every day. And now it's like, well, people have kids at home and you know, the every day piece, at least for now has changed. And so people don't want to pay for something there. They know they can't use every day. Right. And so, and it's even more than,

00:33:04 you know, sort of before. I think it's like sort of the gym model where you recognize like, okay, I'm going to pay for this space and no, I'm not going to be there for every day. But most of the time Yeah. Convenience you're paying. Yeah. Right. And to have like the dedicated use space. And so, you know,

00:33:20 came said, they're even experimenting with like best available spaces and more short term options and right. Cleaning crew goes through when you leave. And you know, there's lots of signals that everything's clean. And again, I think the, the very short term flexibility is hard for the operator. Cause it feels so uncertain in terms of your, you know, your monthly revenue,

00:33:40 but it may be where people are right now. Yeah. The other exciting opportunity with that and using private offices, just making sure that your, your pay you're getting that revenue coming in. It's I think there's such a great opportunity to go out to companies in your community and to say, Hey, like you have 50 employees, they're all working from home.

00:34:03 You might not want to get a coworking space membership for all 50 of them, but we have a great six person office and you can make it available so that people can check into that six person office. They just have to reserve it before. Cause obviously it can accommodate 10 or if you have 10 people wanting to use it, maybe you get a couple of offices,

00:34:20 but you do like office sharing within a company within a coworking space. I think there's so many cool things you can do to, to market that. And yeah, It's, it's great. I, I'm still so hopeful for the industry Not to, right. I feel like we're preaching to the choir, but I like hearing that, you know, you're seeing some of that demand and activity and it's a matter of educating people on what's possible.

00:34:45 Cause you're like, you could do this and you can, you know, do that. And it's just, it's it's though the users, the end users recognizing or learning the possibility. And I think, I mean, I, you know, I love that marketplaces like yours are committed to that education piece. And I think even, you know, local operators would just have to get scrappier than ever in terms of our willingness to just get in front of everybody.

00:35:09 We can, it's not maybe a traditional user, like what you just described and just, you know, keep it, keep at it and, you know, teach people what's possible. I'm curious about pricing and I don't know kind of how much data you have on this. But the, I hear a lot of folks, I, you know, I think it's a little bit of a knee jerk reaction and a little bit of a different user.

00:35:39 Like the students, for example, who come in and are like, no, I'm not going to pay $3,000 for that office, but I'll pay like $75 a month. And so I have a lot of discussions with operators who are feeling pricing pressure, but they're nervous because you know, a, they need to pay their expenses every month. Right. And there's value in what they're providing.

00:36:02 Look at this, you know, you showed me kind of the space you're in today. It's gorgeous, you know, And it's not very full right now. Now I was here first thing in the morning until I hope people typically roll in a little bit later. Well, they're just not there at eight 30 in the morning on the dot, but yeah,

00:36:20 But the space you're in look, you know, for example, looks like a premium space. It's a beautiful, build-out really thoughtful high end design. And so when there's less demand, I think people have this reaction of, Oh, I should lower the price and I've seen, and I think it was your data talking about kind of some downward pressure on open desk seating,

00:36:42 pre COVID. Anyway, I would love to hear kind of any perspective you have on, on, you know, different types of products. And maybe if you were going to give some advice, like how you would, how would you tell people to think about pricing? Yeah. I mean, I would say do not lower your price. Like if you opened a space and you've done the economics for how much your services are worth,

00:37:04 like it's worth that and you should stay true to that because if you just keep dropping it, you're going to put downward pressure on other people too. You're not going to make good money. You're not gonna be able to provide the same caliber of experience to your customers. And people are willing to pay for that experience. And for that service, our global desk price index report did,

00:37:24 did show that the global desk price average for hot desks dropped from adult $187 us to 183 us. But you have to keep in mind that it's globally. So there's been this huge shift from all coworking spaces, kind of opening up in, in bigger cities and metropolitan areas. And now it's all shifting to more of the suburban areas, smaller towns, maybe you're not in the heart of financial district.

00:37:51 And we're also seeing so many coworking spaces opening up in emerging markets, which is wonderful. It's just, it's truly a global phenomenon and people are, are using it in so many different capacities. So when you're seeing a price drop, it's not because you can get a coworking space cheaper this year in New York than you could last year. It's because there's coworking spaces that have opened up in smaller towns that might be three hours away from the city center or,

00:38:17 or other markets. So, Okay. That's an important insight when you're interpreting the data for sure. Yep. Absolutely. I said we've, we've expanded, we've had over a hundred new cities that have opened up and I mean, I can pick a couple of them out because I mean, they're really beautiful towns in countries that I love, but there's none that I'm like,

00:38:34 Oh, Madrid, like it's, it's, there's no more cities like that that are joining the platform in a new capacity. So I would just say that kind of going back to just thinking about how you can add extra value for your members. So don't drop your pricing, but maybe you say you get a guest pass once a month. You can bring someone in that's an excellent way also to,

00:38:55 to help bring in new customers to, if you look at any kind of gym promo, I think it's an excellent kind of comparison. Or you can do those, you know, like maybe an intro pack. I've seen lots of those where maybe your desk, your hot desk, sorry, not hot desk. Maybe your day pass price is $30 a drop in or $50 a drop and maybe you drop it.

00:39:16 So it's $10 for your first three CP prepay 30. And if you still love it, then you sign up for a longterm membership. And I have seen lots of spaces that have done student pricing, which I think is great too, because it's really nice to be able to introduce kind of a younger student demographic into coworking. It's great for networking on both sides.

00:39:35 Mentorship kind of happens organically. So I think that's a great kind of idea. If you want the students, you can just make their own package. We don't have to give everyone student pricing. Right. Exactly. And I've recommended, you know, maybe the student packages are sort of a limited time so that you can revisit. Cause I've heard some folks say like,

00:39:55 I feel like students are gonna take over the space and that's not what you know, why I started the business. And so being in this sort of flexible time where you're offering things that can, you can adjust as the demand starts to come in, right? So maybe your student maybe limit the number of student packages to 10, you know, random number,

00:40:17 but so that it's some portion of your membership, but it can't be sort of outsized. And then you have that space available for when, when people come in, I like, you know, kind of what you were suggesting about, make it accessible for people to try the space, but then, you know, try to maintain your value and anything that you're doing in terms of price breaks,

00:40:37 make it a temporary things. So that people know this is a, you know, a covert thing we're sort of recognizing what's happening, but not kind of decreasing your longterm value. I've seen people do partner passes, which is kind of another thing like we wouldn't traditionally do like share a dedicated desk with your spouse or your partner, you know, but now people are kind of letting that happen because,

00:41:01 you know, folks that have kids at home that are homeschool, you know, virtual learning, you know, both parents can't leave and pay full time for a space. So know getting, getting hurt, Family membership. It is actually just like, if you look at the gym industry, it's, There's a lot of very similar things are happening. Yup.

00:41:19 The other reason I really want people to maintain pricing is because those corporate users, you know, that are coming in and creating that demand are not so price sensitive. Right. Especially if the paying and so we need to make sure list prices are not, you know, bargain basement for the folks that are gonna come in and they recognize the expense of a seat and all that goes into that and their numbers,

00:41:46 you know, the way they price employee seeds is much higher than what we would charge at a coworking space. So Exactly. And the, and that's totally right. And that's what no enterprise comes to saying, Oh, like what's your cheapest space? Or like, they want to say, what's going to be the best space for my workforce and is gonna,

00:42:05 you know, coincide with our culture. And they're looking at the spaces that are giving them a premium service. And if you're not charging for it or you can't afford to provide that, then that's when you're actually at risk of not getting those customers. So it's just, yeah, hold your ground. I know, I feel like that's like my, my cheerleader,

00:42:25 like just hang in there, you know, but it's, it's great to hear you indicating that there's data that shows, you know, there's sort of a shallow recovery, but that we're getting there and you're seeing the demand at least globally. And so to your point, markets will vary and it's hard to predict what's happening. You know, market-wise, I'm trying to think of what else I wanted to make sure we covered.

00:42:49 Is there any, anything else that you wanted to share that you're seeing happening that, you know, you think is an important perspective? I feel like we might've covered most of it. The only, the only staff that I didn't share was that like private offices are now, maybe I did. It's 50% opposed to pre COVID. It was 30%. Oh no,

00:43:13 you didn't share that. That's helpful. Pre COVID in February private offices worried about 30% of our inquiries and then come April and consistently since April, it's been over 50%. So there's still is yeah. A lot of interest there. The hot desk dropped in April, basically in half and they are starting to pick up, which I think is just, again,

00:43:37 people feeling more comfortable about working in a hot desk area and knowing what that means. I don't know if you go to an enterprise and you say, Oh, the hot desk versus a dedicated desk. If that kind of, I guess, definition if they enter some, what that means at this point, but it's all about us educating. But yeah.

00:43:54 Now when you're sitting at a hot desk, you're no longer sitting at a table with six people now you're, you're having a table to yourself. So I think that's kind of also why those numbers are starting to go up a little bit again, I think that's helpful to know, because Even, you know, people with existing spaces trying to understand what demand will look like and people starting new spaces are often like,

00:44:15 should I have no open seating? You know? And I've always like, people are still buying. It's just, you know, right. The demand has shifted. I think the mix is still really important from an experience perspective. I mean, even what you just showed, you know, your, your very brief tour of, of kind of the,

00:44:35 the lounge area where you are like part of the experience that you pay for in a space is that variety of environments. So I want to be careful about the mix. And I would guess we'll continue to see those trends for awhile where private spaces are selling faster. I think enterprise right, probably will buy private spaces or spaces that are kind of assigned to their group,

00:44:58 right. So they're not coming in. And so kind of recognizing that people want to sort of identified space, but hot desking won't die. Do you think that? I don't think so. I love hot desking, even when, even when we have offices, I'm usually in the hot desking area. And before having an office, I would be in the hot desk area and people from the private offices would always come out and chat.

00:45:22 And I think it's a really important part of the space because not everyone can go and congregate around the coffee machine or in the, in the little kitchenette. So don't get rid of your hot desk areas please. Cause that's something I look for in a space. And there is, you know, we have to think about market segments too, right? So you may have a space and you're very clear about who your end user is and they only use offices,

00:45:46 but there's this huge segment of people like you are not renting an office every day, all day. Like you don't, you know, that's not your standard sort of, I rent an office at a coworking space cause you're kind of mobile and you know, you might be in Barcelona for a month, you know, when we get back to normal. So,

00:46:04 you know, there is a whole segment of people who don't want an office don't need an office or you know, are not going to, and therefore will not pay for an office. And so I think we still need it if we're going to serve folks like you or the freelancers, or, you know, the writers who for certainly the people who were on the phone all day,

00:46:23 you know, they're happy to have an office and probably pay for it, but there's a segment of folks who just, you know, don't need it, don't want it and won't value it. And so we want to serve them with open space. That's safe and distanced and whatnot. Yeah, absolutely. I think it's just all about the ratios. Right.

00:46:39 And if you're opening up a space, I don't, I don't know if you recommend any, any particular ratio, but I think I've heard 40% private office. W Oh, is it 20% dedicated desk, 10% hot desk, 10% meeting room, something like that, head here. I would usually flip it and say 60% private and then 40% open dedicated,

00:47:07 you know, cafe space, whatnot, depending on the market you're in. But the, the private space right. Moves faster sales faster helps you fill up faster. But that 40% of kind of mixed space makes the space feel and kind of act how you, you know, you want it to, in terms of collaboration, just, yeah, definitely.

00:47:29 And I also feel like, I mean, yeah, there's always been like a shift for meeting rooms, meeting rooms, serve a purpose. Absolutely. You definitely need the you're like 5%, 10% meeting rooms for people. But a lot of the time I find that there's people like myself right now, I'm sitting in a four person meeting room and I'm by myself.

00:47:45 Like I could be in a phone booth and they have phone booths here. I just, this is available and it's perfect for podcasts. So that's great. But otherwise, I mean, I think phone booths are really a fantastic thing to add into a space and it doesn't take up that much room either. Yup. Absolutely. To kind of serve that need.

00:48:04 Perfect. So w we didn't specifically reference the research that you did. So we'll put the link in the show notes. Do you want to kind of talk about that a little bit, and then if folks want to list on coworker.com, I'll put the link. I mean, it's easy, you have a very memorable, easy URL, but you know,

00:48:25 if we want to kind of learn more research, check out your blog, get listed, just kept kind of tell us a little bit more about how to find your resources. Yeah. So we have coworker.com, which is our marketplace and our blog. There is coworker.com for it's slash Meg, and that's really more community centric. We post a lot of fun features there.

00:48:47 We also have a online publication called coworking insights, which is dedicated to insights, trends, data. So we published quite a few reports there as well. So we'll make sure to put that in the show notes, but it's coworking insights.com. So there, you can see our growth report. We have desk price index reports from the past a few years.

00:49:08 I think we have a capacity and size report. So, yeah. And of course, if there's any ever, ever, any data or information that you or your listeners are interested in, I mean, we love diving into it. So if there's a demand, please let us know and we'd be happy to be put up. We'd be happy to put out something,

00:49:26 Right. And with 15,000 workspaces globally, it you're a great source of data because you can access trends and an input from, from feet on the ground easily. Exactly. Yes. Perfect. Madison, thank you for joining me today and for giving us your perspective on what's happening out there. And I hope that we could reconnect next year and you could tell us like the trends have gone through the roof and everybody's full and you know,

00:49:54 enterprises out and about. I do believe it it's going to happen. It's going to be explosive growth once, especially once there's a vaccine. I'm sure it's so stay patient. Yeah. Thank you so much for having me on the podcast. This was a lot of fun, always great to talk to other people who love coworking and the mission as much as I do.

00:50:15 And yeah, I just can't wait to, to see the recovery continue. Thanks Madison. Thanks.

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