Serendipity Labs’ John Arenas Shares What It Takes For Coworking To Work For Enterprise Clients

• Serendipity Labs is a coworking brand that was created and designed to cater to enterprise clients both in urban and suburban areas
• During Serendipity Labs’ recent opening of their first New York City location, Allwork.Space spoke with John Arenas about the brand’s business model
• Arenas dives into what it means to deliver on experience and how the company goes about finding and selling to enterprise clients

As coworking matures, the market becomes increasingly segmented with products designed to cater to clearly defined niches.

Founded in 2011, Serendipity Labs targets the corporate and enterprise segment with a hospitality-focused offering of work, meeting, and event space. Serendipity Labs was created to meet corporate-level standards of security, technology, design, and comfort in a network of urban and suburban locations.

Allwork.Space spoke with John Arenas, Founder and CEO of Serendipity Labs, during the opening of Serendipity Labs’ first ever New York City location, which spans 35,000 square feet in Manhattan’s Financial District, to learn more about the company’s unique model and what it takes to make coworking work for enterprise clients.

Comments have been edited for space and clarity.

Allwork.Space: What makes Serendipity different?

John Arenas: Our labs themselves are designed to support more than just room rental; we design our facilities with three distinct businesses elements that work together for the corporate user: workspace, club, and event space.

From the very beginning we’ve designed our business model — not just the space, but the design, our network of urban and suburban locations, the kinds of spaces we have within our facility, and how we deliver that as a hospitality business — to serve enterprise.

Allwork.Space: What comprises your workspace?

Our workspace is an extension of the way the corporate world already does real estate. We provide spaces to work, meet, collaborate and socialize.

Within the workspace, about 60 to 70% are dedicated desks, private offices, and team rooms. So between a third to 40% of the space is dedicated to high-trust meeting environments, collaboration studios, and social areas.

We design our business in a way that we’re trying to generate the same revenue per square foot, no matter what that square foot is used for, whether it’s a meeting room, a social area, or an office.

Allwork.Space: Tell us more about the event side of Serendipity Labs.

Our events business is an onsite service designed to support a mobile workforce by providing a high trust, high hospitality meeting experience.

When you’re doing an offsite meeting, you want it to go well. You want to be taken care of. You want to focus on getting results.

We do a recurring business with many enterprise customers that use us just for meetings and events, and regular planning sessions. We host generative meetings to do research, ideation, innovation, strategic planning, and product launch strategy.

For these companies, it’s an opportunity to get teams out the office to idealize, visualize, and collaborate.

Allwork.Space: How do you design your work and meeting space for your client base?

Our design standard is on par with the corporate enterprise standard. Our furniture is carefully selected based on research on behavior in the workplace. We aim to deliver an experience that makes people feel comfortable with plants, furniture, local artwork, and amenities.

Allwork.Space: Sound and privacy are among the top complaints in today’s office. What are some ways you mitigate that?

We have sound-absorbent privacy panels between offices, we also have phone booths that offer privacy and limit the vision field. We also have hallways that are 6-feet wide and our team rooms have acoustic ceilings and drywall between offices so voices dissipate.

Allwork.Space: You mentioned Serendipity Labs is hospitality-focused. Hospitality relies a lot on human resource, so how do you go about hiring the “right” people?

We think coworking is the next hotel industry, so most of our staff has hospitality experience.

We built our brand around the concept of hospitality, and most of our executive teams, our locations, and many of our franchisees either operated or are currently operating hotels. Almost all of our lab managers and experience coordinators have a hotel or restaurant background and bring very extensive hospitality training and culture to the workplace business.

I’ll give you an example. Maximum Hospitality, our Memphis-based franchisee, built up three hotels with 600 rooms in aggregate last year: a W, a Westin and a Le Méridian. He also built the Serendipity Labs in downtown Nashville. He’s using the same management team to operate all the hotels and the Serendipity Lab. He gets that we’re delivering on experience, not just renting rooms.

Allwork.Space: Speaking about franchisees, how does your franchise model work?

We have two kinds of franchise locations. One is where it’s a hotel operator who wants to operate a Serendipity Labs within an office building. The other type is where a landlord wants to have a Serendipity Labs in their building and wants to participate in the economics, but doesn’t want to run it. They become the franchisee and we operate for them.

Allwork.Space: What is your location strategy and how does it support enterprise and corporate businesses?

We have a mix of urban and suburban locations. So the idea is that if you’re in, say Ridgewood, New Jersey, you can come to the city, or you can be close to home, but not at home.

For example, in Dallas, we have a downtown location and a franchise location opening in the suburbs. In Atlanta, we have a corporate-owned facility in Buckhead.  Based on networks of city center hubs and suburban spokes, we can actually serve Enterprise who want to support mobility and attract and retain top talent who are looking for flexibility.

Our secondary markets coverage is really important to us, but it’s more important to our enterprise customers. Any large enterprise customer is already in New York, L.A, San Francisco, Dallas. Where they need you is in Indianapolis and Columbus and Nashville.

That’s where they need you because they’re growing in those places. Or, they have a short-term project for two years in that place and they don’t want to sign a lease.

Allwork.Space: Has it always been the same model or have you tweaked it over time?

I opened my first shared workplace in 1992. We had the idea of improving the quality of life of our members by giving better choices about how to work.

But the design itself was so very 90s. It was very focused on emulating the corporate workplace that at the time was more Mad Men-like. It’s just a different world today; real estate and the way we occupy it has changed. The product has evolved away from a room rental business into a lifestyle hospitality brand.

I launched Serendipity Labs on the idea that we were going to put workplace and hospitality together.

That really had almost nothing to do with coworking. It just came up organically in a different way. Because at that time, coworking in 2011 was a very gritty, collectivist camp approach for people to huddle together. It’s evolved into a much more sophisticated business.

Allwork.Space: So, who do you serve now?

About half of our members work for an established enterprise company; about a third work for established SMEs or small-medium-size enterprises. These are oftentimes even licensed professionals, architects, engineers, lawyers, accountants, and marketing advertising shops. They’re established, but they’re small. The thing about that group is they very often have big customers who have compliance requirements.  And then we have about 20% fast-moving companies.

Allwork.Space: Can you tell us about how you sell to enterprises? How do you find them and how do they find you?

A lot of coworking operators rely first on digital marketing, events and being part of an industry cohort to drive their business. It’s all very localized.

All of our locations have a local ground game of marketing including business meetings and events; demand aggregators like Liquid Space and Instant Offices that make referrals and earn a commission; and good relationships with the brokerage community.

But that is just part of the mix. We also have a broader relationship with our real estate services partner which is JLL.

Additionally, we have regional marketing from the city center and in the suburban ring around that. We create market communications to reach that entire region. When you have multiple locations in the market, you can spend your marketing dollars and effort much more effectively and efficiently. 

Allwork.Space: How does the broker partnership with JLL work?

JLL is really a marketing partner, and very close working partner. In the business we call them an agency assignment. They market but they also interact with brokerage community which we’ve found to be very productive. 

Allwork.Space: They’ll bring in other brokers who are representing clients?

Exactly. When a broker has an interest in that particular location, we make sure they work with our broker partner and sales person who are a team. Our agency broker interfaces with other brokers and our sales person does all the other works. It’s actually kind of innovative. No one else is really doing that. 

A lot of people say they pay the broker 10%. What we say is, we pay 10%, but we also have an agent we’re going to put out there with you, so they get half the commission in addition to the commission we pay. In a way we pay 15%.  

Allwork.Space: So you leverage the fact that the brokers all talk to each other.

They know the deals that are in the market. If you were a third-party broker, you might say, “Hey, I’ve got this group of 20 people, they’re in the technology industry, and they need to be out by May.”  Our director of sales probably doesn’t have any clue who that is, but I think our broker partner does, because they probably have seen that deal floating around, and maybe they showed them conventional space for a different landlord.  

It is paying more but it is actually working. It’s giving up some, but it’s getting more. 

Allwork.Space: So you’re getting better access and better visibility.

Right. Which is especially important when we’re opening a 30,000-square-foot location and have lots of inventory. Brokers tend to have larger requirements, and we can satisfy those.

Allwork.Space: What types of specialized services for enterprise members do you offer?

We offer split billing, so the corporation can pay for the base membership, and the member can pay for an upgrade that might be above corporate policy

Say, you like to order lunch every day. You can put it all on your Lab bill and we can bill by category. So food and beverages goes on your bill, but the membership itself is the only thing that goes on the company bill.

Our systems are all cloud-based and everything is centralized. A company can have memberships in multiple cities across the country, but receive a single bill from us. 

Then there are visibility and compliance measurements to make sure that not only technology systems meet certain requirements for security, but also the business processes behind them.  For example, password change control. You’re an operator and you have a really nice setup for internet, with redundant security, but you only have one person who knows the password, or the vendor holds the password. You can change control on password, change control on security. Who has access to the IT rooms? Is the IT room secure? Is there anything else stored in the IT room? That’s business process. 

Having a very sophisticated business process allows you to meet standards of international services, professional services industry, or healthcare standards.  

If you’re a healthcare company going into coworking space that does not have compliant security processes, you’re doing that at your own peril. Because if you’re not compliant, it’s not just a regulation, it’s the law. 

There’s a lot to what we have done that doesn’t necessarily meet the eye. If you walk into a Serendipity Labs, you can say, “Hey, that’s a friendly staff who looks like I can trust with my business, and a pretty impressive design, and there are lots of nice events going on.” But that’s just the beginning.