Coworking spaces are community driven, often products of passion, but if you can’t market it or sell you can’t keep doing it. It is critical for any business to sustain growth. Mario Berta, described by some as a high-intensity sales monster, is the founder and CEO of Flyspaces. He spoke in a session titled ‘Sales and marketing make the world go round’ in CUAsia 2017.
Flyspaces is an aggregator that works with coworking spaces and other real estate partners across South East Asia. When building their space, they identified three main trends; they realized that the corporate working space strategy is changing and are taking fewer spaces. Since it is expensive, considered a liability and they want to promote mobility among workers. Second, as the economy is not doing so well, it has become impossible for SMEs (small and medium enterprises) in South East Asia to get office spaces for 5-6 people. They turn to coworking spaces that sublet office space. Third, coworking as a concept is a fast growing trend in commercial real estate prompting developers to look into building coworking spaces.
Mario Berta went against the traditional concept of coworking by stating, “When you build coworking space it is all about money, not community.” Flyspaces generate more than a million dollar revenue, they receive half a million dollars in funding and take a commission of 15-20% whenever they facilitate a connection between their members and clients. They operate in six cities and five countries and have served more than 500 customers. Mario mentions the three revenue model they use; one is the fee upon successful booking, second is ad revenue. The third technology which they are piloting in Manila is the passport; it is a subscription-based model – multinational companies buy from then to allow their employees to work from anywhere. For example, google using the passport product to access 6 or 7 of their coworking spaces in Manila.
They focus on SMEs and multinational companies, and currently, their clientele includes 400 merchants spread across Manila, Singapore, Kuala Lumpur and Jakarta. In the Asian megalopolis, the money is in SMEs and multinational companies. There are not enough startups in the south-east, for them to build their business model based on startups only. In Manila there are ten startups, Flyspace being one of them, so they have nine potential clients. As Singapore is more mature because of their financial system, there aren’t enough startups for all the coworking spaces opening up there. The office spaces make money; a sole entrepreneur would pay less for space than an SME, as they would book more seats under a contractual period, thus generating more revenue. Although being small is efficient, Mario points out that being big ensures that you never have to diminish your brand or limit yourself when it comes to delivering excellent customer experience.
Next, Mario mentioned some of the right ingredients needed to build a successful space which included location, customer target, the economy of scale (the bigger, the better), design and finally the team that helps operate the space. Digital marketing is mandatory, where you spend money to be better than other and also allow you to spread the word as to why you should be their number one choice. As brokers by default get short-term spaces, Flyspaces organizes broker event in Hong Kong every week. Mario claims, “Word of mouth is the most powerful tool to market your space.”
The first rule of ‘pure offices’ is foot traffic, and Mario had some helpful insights in that aspect. Rule number one, you need to bring people in your space, once they are in, you can unleash your community, facilities, events, and charm. You need to understand occupancy rate, Mario suggests offering a great startup 50% off of office space because having a great startup in your space will attract more startups. Although he warns against giving out too many offers, after all, you still want to operate a profitable business.
CheckBox live interaction is number one acquisition tool for Flyspaces. Most people looking for offices spaces are not accustomed to booking them, unlike hotel rooms. It allows meeting room management, whereby customers can book rooms without having to be physically present in the office space. Another management tool they use is Pipedrive; it is a sales CRM (customer relationship management) for your lease, priced at 12$ a month per user.
At the session, Marco addressed the reasons as to why developers are stepping into coworking spaces. The way he sees it is that developers monetize vacant spaces, Manila has the highest occupancy rate on earth right now for office spaces in CBD are 98%, there are still 2% available. Developers want to convert those idles space to coworking so that they can tap into your market. They realized that they could nurture relationships with SMEs. Picture this, if there are SMEs in one building, eventually some of them will graduate to a potential conventional occupier; this is a long-term lead generation play for developers. Some developers invest in Flyspaces because they want the first hand in their graduated companies.
Marco ended the session by revealing some of the marketing and sales tools used by Flyspaces. Content creation – they create thousands of articles and even have a printed magazine, all containing quality content derived from loads of research. Deliver real education information – when they talk to SMEs and multinational companies, they tell them not only do they get access to a community, they also save money. FlySpaces receives quotations from fit-out companies, telecom providers and put it all together to get an estimate with the business plan. The idea is to let their clients know what the cost would be to set up a typical office vs. coworking pace. Lastly, the power of data – They use Pipedrive to get a clear overview of statistics on the pipelines they have in their system. Every single lease that gets into flyspaces gets tagged with the geographical location. They look at the size of the company, the price per seat and manage to create thousands and thousands of data entry points to help them make a better investment decision. Marco’s last words to the captivated audience were, “If all of you open space, the differentiation comes from the community, marketing, events and the company you host in your space.”