- In a Q&A with Cat Johnson for Allwork.Space, Hector Kolonas discusses how he came up with the idea for Included.co
- He found that by banding together, independent coworking spaces can leverage buying power and compete with big workspace brands
- He talks about his early entrepreneurial experiences and how an imploding economy led him to discover the power of coworking communities
Hector Kolonas’ “first touch with coworking” was not a good one. As he tells it, he “fell for the advertising” from one of the big office rental companies touting how amazing coworking is and how collaborative the space would be. The company offered him a good rate so he signed a 12 month contract. Then he showed up and found that he was the only person on an entire floor of the building.
A few months later, the Cypriot market imploded. Since most of Kolonas’ customers were located in Cyprus at the time, his company “kind of imploded with the rest of the banking infrastructure.” His customers included ad agencies that had, overnight, gone from dozens of employees to a mere handful of staffers, but they still had their offices and WiFi so Kolonas left his lonely office rental experience and got all the people who were laid off from the other agencies to come work in the advertising offices as freelancers.
In setting up these makeshift coworking spaces, Kolonas realized what coworking really was. People who were laid off unexpectedly on Monday morning were freelancing by Wednesday and by Friday they were doing business with each other.
Kolonas was bitten by the coworking bug but he knew he didn’t want to run coworking spaces. Instead, he wanted to help space operators and members harness their immense collective power. So in 2014 he launched Included.co, a platform connecting coworking space operators and members with B2B service providers.
Allwork.space chatted with Kolonas about the necessity of small spaces banding together, how space operators can harness their collective power in a number of ways, and how he hopes to make Included invisible by 2020.
Allwork.Space: How did the idea for Included grow out of your experience with the banking collapse and the coworking communities that emerged from it?
Hector Kolonas: After the collapse, other coworking spaces wanted us to advertise and fill their space as well, but I knew I didn’t want to run spaces. I wanted to help space operators, but helping them fill their space wasn’t enough. I wanted to make the industry 10 times better. I was looking for what I could bring to the coworking community that would make it 10 times more valuable.
Helping people find coworking spaces is important, and helping coworking spaces find members is important, but there are a lot of “Airbnb of coworking” platforms that are going to be coming out. I don’t think that this is where I can help create 10 times more value.
We looked at what the challenges are after someone joins a coworking space. One challenge is that people couldn’t find people in other coworking spaces if the spaces weren’t in the same brand. On the flip side, people in coworking spaces are all buying the same things: they’re buying laptops and software and microphones and using accountants and lawyers. It’s insane that we’re sharing office costs, but we’re not sharing the price of Macbooks and software. Why can’t we get nicely priced corporate gym memberships just because we’re small, independent operators?
That’s where everything really came together. I realized that if I can get enough people to congregate in their own communities and leverage that aggregated buying power, they can get everything they need cheaper and faster without sacrificing on quality.
Allwork.Space: What’s the alternative to Included? What happens if coworking space operators don’t leverage shared buying power?
If shared buying power doesn’t exist, spaces will end up getting played against each other. Business development people and sales people know that businesses are congregating in coworking spaces. They’re trying to use these goldmines to generate revenue, so they keep throwing deals at coworking space operators. The deals sometimes appear really good, but they’re meant to tie in long-term customers.
Another issue is that people are either searching for their own deals, using their own time and resources to find them, or community managers are being inundated with deals from car suppliers, leasing companies, printers, software developers, hardware developers. For many, it’s not their job to deal with that. Some spaces hire a person to deal with sponsorships but, if they don’t, their community manager has to take time away from the space and community to deal with it.
There’s a divide and conquer mentality. Providers can give one deal to the local coworking space and one deal to the big shiny space, and the big shiny space gets the better deal. Not everyone wants to be in a big coworking space — they may want to be in a smaller space, but the providers end up playing us against each other.
Allwork.Space: How does shared buying allow independent space operators to be competitive in that situation, with discounts and perks?
I don’t ever want us to get to the point where perks are a deciding factor in which coworking community someone joins. What we do want is to avoid a situation where if someone doesn’t join big shiny coworking corp, they won’t be able to get a good deal on gym membership or laptops.
If the independent spaces don’t quickly realize that they have to start sharing buying power, they’re going to get locked out of the market by the big players. We’ve seen examples of some of the bigger players locking perks into exclusive deals.
Allwork.Space: Can you give me an example of a small space getting locked out?
Say there’s a software company with a product for small businesses and freelancers and they can offer coworking spaces 15 percent off. A big player can distribute the deal to their members, but, because they’re big and recognizable, they can also say that the deal can’t be offered to other coworking spaces.
There’s also the issue of sponsorships. A lot of coworking spaces in Europe have sponsored services, such as sponsored accountants. But this ties the hands of the community manager because there’s a conflict of interest. They can’t tell you the best accountant for you because they have this sponsorship deal with an accountant that might not be the best for a particular member.
Allwork.Space: What Included success stories can you share?
Early on, we built an insurance policy for members of coworking spaces that covers laptops, data theft, data breach and more. It still exists everywhere except the U.S. One of my first tasks in the U.S. is to source or build a powerful insurance policy here. The difference is that in Europe we didn’t have to worry about healthcare. That wasn’t a concern, so we mainly focused on the business side of insurance.
One coworking space was broken into and all the computers were stolen. We got them replaced the next day and everyone was happy. Because we sell the iMacs, we were able to do the whole logistics chain and, within one business day, they were back running, with all new iMacs. They only lost one business day because we sorted out end-to-end logistics, which we can do for all small businesses. We’re also one of the only networks in the world that can give discounts on Macbooks because of some really interesting deals we’ve put together with our vendors.
Allwork.Space: What’s your big picture vision for Included? What would you like to see in the next few years?
Our big mission is to become invisible by 2020. We don’t want coworking members to know what Included is. We want to integrate with the coworking space management software and offer members perks directly through the platforms they already use — through the brand of the coworking space.
The brand of the coworking space should be first and foremost. They’re the brand that matters — they’re the brand that has the empathy and feel-good factor with all the members. We are insignificant in that. Our job is to get great deals and great prices and make sure products arrive on time.
Allwork.Space: Besides shared buying power, what other opportunities do you see for coworking space operators to work collectively?
I’m a big fan of alliances: regional alliances and theoretical alliances for example, of edtech coworking spaces. It’s very niche, but they can help each other by helping members collaborate and also sending members to work with each other.
At Included, we don’t ever want to get into the political side, but there is a big need for lobbying and things like that. In London, for example, there’s no formalized coworking alliance — it’s too competitive. But over the last three years, there was a change in tax rates and business rates and insurance. What that meant is that around 15 percent of the coworking spaces shut down, or considered doing so, because they couldn’t afford to operate anymore. If they had a lobbying arm, or some sort of political extension of an alliance, they could have fought that or lobbied for extensions.
Another opportunity is in marketing. There are enough spaces for every member to find where they are comfortable. Coworking spaces aren’t all competing for the same character of member. Any new member that comes into any space is good for all of us. Messaging that coworking is not, on one hand just a hippy thing where everyone is hugging and, on the other hand, not just cubicles but an entire sector — an entire way of life, can be done through coworking spaces working together.
What’s happening now is that the people with the biggest spending power are the ones dictating what coworking is. In the press you hear about the five or six biggest spaces in the world, not the small spaces.
Coworking is about collaboration. We have to lead through collaboration. We can’t drop the thing that we sell because we’re suddenly competing.
Allwork.Space: Thanks, Hector. Is there anything you’d like to add?
Resistance to collaborating is futile. As scary and dramatic as that sounds, if we don’t realize that collectively we are more powerful than the biggest brands, we’re screwed.