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Home Magazine April 2013 Sharing Spaces

Sharing Spaces

How many times you have desired to shirk your corporate office suit and office cubicles and instead work in your favourite shorts while sitting on that pretty bean bag. All that including hangout zone, coffee dispensers and video games are offered to start-ups in a co-working space. And of course, individual desks and meeting rooms to work and ideate as well. Co-working for start-ups has arrived in India!

BY Sandeep Soni | COMMENTS ( 0 ) |

How many times you have desired to shirk your corporate office suit and office cubicles and instead work in your favourite shorts while sitting on that pretty bean bag. All that including hangout zone, coffee dispensers and video games are offered to start-ups in a co-working space. And of course, individual desks and meeting rooms to work and ideate as well. Co-working for start-ups has arrived in India!

 

When Ramandeep Singh Bakshi, Founder and CEO of the mobile application strategy, design and development firm, Codecube.in, was looking for a low-cost new office space, he got to know about Moonlighting by one of his friends that offered shared office space at less than half of the cost of a rented business centre.

 

Apart from these cost benefits, what is making the growing trend of working from a shared office space, called co-working, tick with budding entrepreneurs is the networking opportunity that it offers with other similar brains in a casual yet professional atmosphere.

 

“I was not able to get the office space at the right place according to my budget (Rs 30,000-35,000). However, at Moonlighting, we have to pay only Rs 5,000 per seat. At this stage, I am saving 50 per cent of my cost,” says Bakshi. He started his business two years back and is operating with his five-people team from Moonlighting since July 2012, prior to which he was working from home. The charges in a co-working space typically vary from few hours to a day or month as well.

 

“I had a team that was working remotely from different cities and so it was difficult to manage them. So, I was in search of an office space, and working from Moonlighting certainly made more of a business sense,” adds Bakshi.

 

Value for Money

Apart from the rented desk or seat, a co-working space generally offers Internet connectivity, meeting rooms, etc. “A lounge, free tea and coffee, lunches, which are chargeable and prepared by our in-house cook, are available. Moreover, we have a fully equipped kitchen and open spaces from where you can work, read and think,” says Yatin K Thakur, Director, Moonlighting. According to him, Moonlighting is the oldest co-working space among few such spaces that only cater to co-working unlike others that also provides for services like incubation. The company currently has one centre in New Delhi and is planning to grow via franchising route.

 

All these facilities provide a huge cost differentiation between renting the shared space and setting up own business centre. “Around Rs 1 lakh is required for setting up a basic office space. You need to pay security amount, manage electricity, Internet and keep everything running. Combining all this is of value worth more than a lakh as compared to few thousands that one spends here with all facilities,” claims Apurv Agrawal, Founding Member, 91springboard, another co-working space based in New Delhi.

 

Critical Contacts

Operating from 91springboard, Madbooks.com, an online portal for buying and selling old books, was benefitted from likeminded individuals operating from the same space. The company was facing issues with building their market database. “When we joined 91springboard, we were facing problem in developing our market database. Fortunately, there was this fellow co-worker who was earlier the marketing head of a big firm. Since he knew much about e-commerce market and how others were dealing with their market databases, he told us exactly where we had to focus,” recalls Prince Goel, Co-founder, Madbooks.com.

 

Goel worked for five months from a dormitory before joining 91springboard with his friend as a co-founder. The cost of furnished office space was Rs 10,000 per month outside, but Goel had to pay only Rs 3,999 plus Rs 2,000 as security fee at 91springboard.

 

Growth From Within

Goel believes that the team that he has been able to build through co-working would have been difficult otherwise. “We have been able to build a very good team after joining 91springboard as we met many new people there. We have also doubled our website’s traction and the efficiency in achieving that has been because of the team we built. We would not have been able to scale that much had we been operating from our own space,” states Goel. He plans to leave the space once the size of the team expands further as then paying for every desk would be more expensive.Networking at Moonlighting with other entrepreneurs has paid-off hugely for Bakshi as he had found a business partner in the premises itself. This saved him a lot of time and effort. He reminisces, “There was an entrepreneur from Denmark living in India and doing consulting business in India and Denmark. He told me about his interest in mobile application world as he believed that there are lots of opportunities for that in Denmark. We partnered with each other and now he is helping my company grow in the European region.”

 

Business Opportunity & Cons Attached

By helping entrepreneurs to achieve growth, co-working has also provided a unique and simple business opportunity for budding entrepreneurs in this segment, primarily for those preferring real estate. “Co-working allows you to build a network, experiment new things, earn some profits out of the real estate and maintain your property at the lowest possible cost. There are no long-term contracts or commitments involved in this business, and hence it allows you to earn money without getting into too much of commitments,” states Thakur.

 

Apart from benefits, talking about the challenges involved in running a co-working space, Agrawal explains, “The challenge in running a co-working firm is that it cannot be a high profit making entity in general because the basic premise is that you cannot be too expensive in charging people. Moreover, you have to provide all services to them as well. So generally, co-working as a model has been difficult to crack.”Also, it is a real estate game as well since at the end of the day you are paying for the entire space, which calls for a big capital expenditure, he adds.

 

Opportunity for Real Estate

For real estate developers, co-working has created a simple and effective opportunity to mint money. Having a property in or nearby cities’ commercial areas coupled with the fact that co-working carries minimum risk and offers steady income, it has already caught attention of many real estate players.

 

“The demand for co-working has grown significantly as start-ups are looking at quality rented out space on time sharing basis. For example, there are lots of SMEs from Bangalore that serve clients in Pune. So, they require a sales office in Pune but not for a longer period and hence they go for a co-working space,” says Hrishekesh Manjerekar, Executive Director, Amar Builders.

 

While talking about the opportunity in co-working business, Manjerekar says, “The opportunity is at the nascent stage right now. Where you are located and what value is provided to entrepreneurs out of that space is important. A co-working space should be in the central business district area (commercial or business districts) of the cities, easily accessible by the people. The growth of co-working space will be proportional to the growth of start-ups and SMEs.”

 

“There is going to be tremendous growth in India especially in Tier 2 and 3 cities as the quality infrastructure and service offered internationally would be offered at a convenient price,” says Harshwardhan Singh Solanki, Director Sales India, The iPlex. Headquartered in San Francisco, the US, the company was started in 2011 and in the same year it began operations in India as well. Differentiating between India and foreign co-working spaces, Solanki adds that co-working environment in India is at an infancy stage especially in non-metros, while in the US co-working has already evolved as a practice.

 

The Road Ahead

The growth of co-working businesses in future is inevitable in India. As the start-up ecosystem evolves and more and more entrepreneurs come up, the concept of a cost efficient, stress free working environment offering great networking opportunity will also emerge which in turn will promote entrepreneurship.

 

“We will see an exponential growth in co-working culture over the coming years especially with the start-up culture growing at a very high rate in India. In order to achieve the target set by NASSCOM of initiating 10,000 start-ups in 10 years, we would need to bootstrap over 100,000 start-ups and at least 300,000 entrepreneurs to be created. Co-working would see its growth opportunity equally,” concludes Thakur.

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