Key Learnings From The Flexible Workspace Industry In 2020 (Part 3)

Robert Kropp shares conversations he has had with flexible workspace owners during the Covid-19 pandemic.
With workplace closures continuing to be felt into the new year, it is important to look back and learn from the experiences of 2020.
Part 3 includes insights from Impact Hub, Work.Life, and Spacemade, who share their experiences of adapting to the pandemic and plans for the future.

If you missed the first two articles in the series, check Part 1 and Part 2 out. Part 1 is focused primarily on neighborhood workspaces and Part 2 included a variety of operators in different locations. With Part 3, I continue to branch out into Spain and England.

With workplace closures continuing to be felt into the new year, it is important to look back on 2020, what we learned, how we evolved, and how we continue to support members, organizations, customers, and employees across the workspace industry. We can learn much from the past so that hopefully we can prepare for any potential or expected changes in the future.

With this article coming out in 2021 and a new lockdown under effect in many areas, I even have some additional updates that will continue to help us evolve with the changes.

In this article, I share discussions I have had with workspaces and organizations from Spain and England.

TLDR Highlights:

Build Team and Community Bonds while Remote
Develop Your Team
Provide More than a Workspace
Informal Communication Methods Can be More Important than Formal
Events: Less is More
Commodities vs Differentiation
Flexibility is the New Normal
Plenty More Growth from SMEs and Enterprises
Different Workspace Products in the Same Building

Here is what we learned and what’s next:

Impact Hub in Zaragoza, Spain

I had the pleasure to catch up with Felix Tena and Lucía Sanchez at the Impact Hub in Zaragoza, Spain.

Located about 2 hours from Barcelona, they first started to recognize the potential impacts of Covid-19 as soon as the 2020 Mobile World Conference in Barcelona was cancelled. That conference wouldn’t get cancelled unless there was a serious change coming.

In order to get in front of the challenges, they started stocking up on hand sanitizer and added precautions before mandated to make the space safer. Unfortunately, the inevitable lockdowns still closed their space for some time.

Impact Hub in Zaragoza focused on supporting their members during the pandemic and the inevitable lockdowns.

Key Learning During Lockdown: Focus on building bonds and community by bringing people together, albeit virtually, providing flexibility in memberships and supporting those that need it. There were events such as virtual cafes, virtual vermouths, or just an online space for people to get together whenever they wanted. They even lowered many memberships and some people volunteered to pay more so others could pay less.

The important building bonds and community between people doesn’t just apply to a workspace and its members. Whether you work alone, in a small team, or even a large one, it is important to learn and continue to maintain connections and collaborate even when we need to be at a distance.

Key Learning During Lockdown: Of course, the revenue went down during this time, however, they focused on opportunities that are present instead of just the challenges. Although the event business and coworking (people working in the space) became much more limited, they focused on developing their Programs and Initiatives which had a greater opportunity for revenue and growth in this time.

For example, their Programs service continues to support many businesses to organize, digitize, grow, innovate, and much more.

In addition, their Initiatives are focused on starting and developing startups. They even have 2 new startups that have just launched during 2020 which is exciting!

As always, there is a huge benefit to multiple revenue streams that will help to shield the workspace, its team, and members from some of the challenges that we are all facing.

Key Learning During Lockdown: Develop the team. Due to the economic challenges in many workspaces, countries, etc, many teams needed to shrink or have limited hours temporarily throughout much of 2020. This meant that many roles needed to be merged or shared across people. Each person needed to learn and change to work with the business lines that were generating revenue and not necessarily what they were initially hired to do. This is critical not only for the team member but the future of the space.

Gradually, summer came and the lockdowns eased. It was important to the team at Impact Hub Zaragoza to continue to tell members and the community that the space was open, every precaution had been made, and that when they are ready, the space and team is there for them.

Key Learning Post Lockdown: As with many other workspaces, they have changed the space layout, increased the space between desks, etc. The continuing challenge is that they still need to educate people about the benefits of workspaces outside the home and coworking as an industry along with relatively slow growth of people coming back to the space. “It has been going up, but slowly.”

Future: With their workspace slowly refilling, programs and initiatives growing, and the benefit of the network of Impact Hub, their goal for 2021 is to work more with businesses that further collaborate with members in the space, help attract or build new startups, support fundraising, and much more. Ultimately, they want to help more businesses thrive instead of focusing on just providing a workspace.

Work.Life in England

Next up, I had the pleasure to connect with Paul Dutnall, the Head of Operations & Coworking at Work.Life. He started with them in 2019 which at this point feels like ages ago.

Similar to other operators and locations, 2019 was generally a year of growth and general success across locations. The systems and processes were all working well and a new managed office solution, called Yours, was on the way. The team was scaled up and ready for 2020.

During lockdown, Work.Life’s primary focus was on supporting members with limited resources.

By the time the first lockdown hit in the beginning of 2020, they were experiencing a fantastic year. The lockdowns definitely reversed things a bit. After the shock phase, they got focused on what was needed in the short, medium and long term.

Of course, they focused on getting lean on costs. However, the primary focus was on how to support members using a limited team in the time of a pandemic. This included working with members who were struggling, making alternative contract arrangements, helping people work in the space if they needed to, and keeping people connected.

Key Learning During Lockdown: The right team is critical for making it through challenges. They shifted to a startup mindset to stay agile by identifying challenges quickly and reacting.

Key Learning During and After Lockdown: As we know, remote communication and remote management of the workspace became critical.

For the internal team, it was important to keep people all on the same page as well as find ways to have the formal moments but also decompress with informal ones. Remote work was a challenge for them at first which they needed to work through and put new processes and systems in place.

Also, for members, keeping them connected was a primary focus especially as many members might not be able to make it into the space. They first held events online like everyone else but found that everyone had video chat (Zoom) fatigue at some point. They also set up more informal communication methods like WhatsApp to just ask how people are doing. Just checking in with everyone about life (not billing or invoices), whether it is a team member or space member was absolutely critical.

Key Learning After Lockdown: Dan says that “online events and gatherings are still useful; however, the quality needs to be extremely high which meant that they reduced the number of events.” They listened to what people wanted and only found the best people and topics. Otherwise, they wouldn’t hold an event. 1 or 2 things a week across their spaces is enough for them.

In terms of demand, as can be expected, the demand definitely had highs and lows throughout 2020.

By August, after the initial lockdowns and summer, organizations and people were starting to commit to leases again. However, the pay as you go membership has remained incredibly popular since then especially while offices are still closed, and new lockdowns have been occurring in the fall of 2020.

By the end of 2020, some organizations were signing up, however, the lockdowns seemed to put a damper on decision making.

Future: Paul says that “Workspace isn’t a commodity. It is somewhere you can be productive, increase your output, and it even acts as a window to the world for some businesses… With increasing competition from hotels, landlords, and hybrid workspaces, differentiating and being absolutely clear on messaging and telling the right story will be even more critical.”

However, what is clear is that many people actually figured out they can work remotely. This has continued to increase the number of people and organizations requesting space for individuals, remote teams, and larger or even entire teams.

Future: Flexibility is key for being able to scale up and down as a business grows or shrinks. With the likelihood high that very few people will stay full time in a central office every day moving forward, workspaces need to provide everything when it is needed to reduce the risks for businesses, provide a positive and vibrant space for employee engagement, and increase social collisions to further build and grow businesses.

“Enterprise is starting to really think about it” and based on my discussions so far, execute on it.

As part of all of these upcoming opportunities, with the new year, they are also looking at possibly opening some new spaces and supporting the growth of flexibility needs for more enterprises and SMEs who want a fully branded and managed solution offering.

Spacemade in England

I had the pleasure to chat with Dan Silverman at Spacemade. Instead of only chatting with traditional workspace operators, I wanted to have more discussions with other businesses operating in the industry helping to solve problems for landlords, members, and businesses.

As a company, Spacemade focuses on helping building owners provide workspace options direct to their customers by setting up and running all the operational, sales, and marketing aspects. According to Dan, “the building owner keeps their relationship with the customer, know who is in the building, and whether they are growing.”

Similar to other organizations I have spoken with, they saw many challenges and opportunities this past year.

According to Dan, early in 2020 till mid-summer, most building owners, customers, occupiers, etc were in ‘shock mode’ where they primarily focused on ‘how do we make sure our business services continue?’ During this time, very little happened.

By mid-summer, “most people decided to make a plan of something.” With the pandemic being an accelerant, landlords who were already thinking about providing more flexible workspace solutions were focused on making it happen, especially when buildings were sitting empty.

During the last few months of 2020, Dan said they were “busier than ever” with interest from landlords and customers. They are working with building owners that want to add an element of flex space to a larger asset to activate the property and create amenity to investors that need to take control of an existing serviced space where the leased operator has gone into administration. He also said that every “micro market (of customers) is behaving differently.”

People and remote workers are looking for coworking spaces. This has led to increased demand in workspaces and small private offices in many local and suburban locations.
Future: For bigger company moves, Dan says that we haven’t really seen this shift yet, however, it is likely to come in 2021. With large agencies pushing for it, he expects to see a lot of growth from SMEs and enterprises.

Dan said that with the rapid current and upcoming changes in the market, “building owners need to compete.” Waiting for a 5 or 10 year lease while staying empty “isn’t really going to work” anymore.

Key Learning During and Post Lockdown: At the same time, workspaces are all about ‘individualism’ where each organization needs to find the right workspace(s) for their employees whether it is close to home, city center, or somewhere different.

With all of these changes, “the biggest question for the next spaces will be, what function is their office.”

Future: For Dan, the future is a world where flexibility is key and he expects to see the following:

Traditional lease agreements are going to continue to be much shorter and he expects a smaller fit out for companies while also cutting leases to under 20 pages.
Companies can work out of an excellent workspace and then say “they outsourced the running of a workspace. Outsourced workspace is different than a short lease.”
There will be “different products within the same building, allowing members to use the space by day, week, month. Private offices, mixtures of spaces, the right host, additional hospitality services will all be part of the network.”

Looking Ahead

Thank you to Impact Hub, Work.Life, and Spacemade for partaking in my series on key learnings from the flexible workspace industry during 2020 and beyond.

Although these organizations are quite different in mission, model, and location, it was interesting to see what they have experienced, and done similarly and differently during a time of massive change.

As more people and organizations than ever are looking at coworking, space as a service, and other flexible workspace options as actual options, it is important for us to be agile, learn, and adapt to these changes.

If you would like to chat about your workspace or organization’s experience this past year and outlook for the future, feel free to contact me directly.