Most startups have modest beginnings. There is always a story of an amazing founder who started the company in his house or a café, found a great team, and went on to take over the world. In the initial stages of a startup, working from home or a café is fine. However, there will always come a time when a change becomes necessary. Client meetings cannot be taken care of by cafés. Similarly, productivity can be hampered by distractions at home.
All such problems and distractions can be avoided by moving to a coworking space. Coworking spaces have become popular and a huge number of such spaces are mushrooming all over the country. While this is not a new trend, coworking spaces are becoming more affordable and flexible, providing the perfect environment for startups to flourish.
Most coworking spaces are now providing numerous business solutions, flexible membership packages and options, as per the needs of their members, without burning a hole in their pockets. More and more startups and small and medium-sized enterprises (SMEs) are switching to coworking spaces due to various economic and flexibility benefits.
It was found that more that 1.1 million people went to work, at a total of 13,800 coworking spaces globally, according to the Global Coworking Survey 2017. To put the industry numbers into perspective, if each coworking space was owned by one enterprise, it would have more locations globally than Walmart.
Coworking memberships have enjoyed steady growth since their beginning. As the nature of work evolves, and the demand for better technology increases, the coworking industry would look much different in 2020.
The coworking trend in India has become increasingly popular, with two major metro cities—Mumbai and Bengaluru—holding almost half of the coworking market size in the country. It is projected to grow immensely in the next five years. In a report, Knight Frank had mentioned that coworking spaces took up about 1.8 million square feet of commercial real estate space in 2017. But, the increasing demand has led the industry to take up more that 2 million square feet of commercial real estate space in the first quarter of 2018 alone.
There are numerous factors involved in driving this demand, a major concern being affordability and flexibility of use of the space. As the world moves towards a shared economy, most of the business models we see are based on shared consumption. In the same manner, coworking also works on the model of shared use of resources. Amenities and equipment procured singularly would always be more expensive than when the burden is distributed among a larger group of members for shared usage.
Coworking spaces come with adequate office infrastructure, hence minimising the fixed cost as there is no need to invest in any office infrastructure. Most coworking spaces, now, have superior network and IT infrastructure as well. Moreover, members can also look forward to zero lock-in periods of deposit payments, making the entire process a whole lot economical and affordable.
Versatility and pocket-friendly memberships are the major expectations of the entire demand chain for the coworking segment in India. Coworking space providers are devoting as much attention towards the pricing component of their business model as to the facilities provided. India being a price-sensitive market, it needs every growing and emerging business segment to come up with affordable pricing and innovative facilities.
If viewed in terms of numbers, the monthly rent and operational costs of a 500sqft semi-furnished office space in a metro city would cost approximately Rs 70,000, whereas a team room in a coworking space would cost only around Rs 35,000. This means saving 50 per cent of expenses.
Coworking is proving to be one of the most ideal workspace solutions for all kinds of businesses, ranging from freelancers to large corporations. With the multitude of services and community-driven ecosystem at affordable pricing and flexibility, coworking spaces have given the service industry a whole new approach. From the looks of it, coworking space is here to stay and set a base for the future of work.
Mehta is founder, Vorq Space.