Exploring all the touch points of coworking movement including designing, branding and community building, the opening day of GCUC USA 2017 held a session emphasizing the significance of well-founded address in setting up businesses. The speaker of the session was Frank Cottle, the Founder of Alliance Business Centers Network (ABCN). It is the leading network of independently owned and operated Serviced Office Centers. He is also the Chairman and Founder of Alliance Virtual Office. The discussion was moderated by Felena Hanson, the Founder of Hera Hub (a shared workspace for female entrepreneurs).
“What makes you an expert at this conversation around the address being more or as important as the community, the foundation of coworking spaces?”
In all sectors of the industry, including coworking spaces, there is a mass number of customers. The concepts of community and building relationships are talked about most of the time. However, the significant purpose of coworking spaces is to help their customers (members) grow their businesses. “Any business that isn’t properly managing on behalf of their clients, the use of the address or maximizing the utilization of the address, is not meeting the core mission of helping their customers grow. A thousand centers down the road, in the last 38 years, this is what I’ve learned,” said Frank Cottle.
Address Vs. Community
“How would you differentiate address from the society and convince thousands of us who put the community at the forefront when we say ‘community first, space second’?”
The way we are addressing companies today has changed a lot from previous approaches. Mr. Cottle shared, “A community is just a product.” The element used to create the total product is a combination of people, place, and technology and he recommended to perceive community as an element of what coworking spaces do. He also suggested to think of addresses not just as a place, but to use the address to create the products. Helping the community to have more operating environment is also an essential element of a coworking space.
Importance of Addresses
“At Hera Hub, a tiny percentage of members, even use the business address, it is something we barely monetize. Could you please explain what kind of money are we talking about and what are the opportunities here?”
Mr. Cottle answered, “15% of Regus’s revenue comes from virtual offices that are realizing the addresses is a core part of their product. The numbers equate Regus’s value at 450 million dollars.” He then mentioned that, when you use the rent to measure your business model, it’s value will be less compared to the one weighted towards services. There are a lot of things in that regard that makes quite a bit of difference. An entity created to raise capital needs to have an address.
As a coworking space operator, if you want to help a company to grow its business in your center, you need to pay a lot of attention to their addresses. After all, the company needs a legitimate address to get the license and corporate credit with the banks. The registered business address is also required to be in the zone where the license is active.
Department of Homeland Security is now operating the United States Postal Service (USPS). An address makes an enormous contribution to your bottom line and to the strength of your community; therefore, your center’s core product which is the place has to be equally strong. Otherwise, you have not served your community well. So, understanding how to use your address both effectively and economically, to sustain your community makes it a significant contribution to your business model.
“How do you keep out the crazies? Sometimes, people come and end up doing things which they shouldn’t do. So, how do you mitigate that?
Mr. Cottle responded jokingly, yet pointed out “There’s no way to stop it. Otherwise, we wouldn’t have enforcement laws. However, there are ways to mitigate it.” For example, at Alliance, they highly notarize every client that comes into their system through an automated video system. When they run the numbers of the IDs, they know 50 different data points about the customer. They operate within this system in 53 countries and the United States is one of the easiest places to do this. In France, if you want to open a business center office or get a virtual office, you have to have your company address registered with the chamber of commerce. To do that, you have to have a bank account in that particular district, and then you get approved by the city. Moreover, the authority will identify every director of your company with their IDs. Therefore, comparatively, it is straightforward in the US. He pointed out,”Having the best location does not necessarily do it. It is more about getting the right people and having the technical skill, speed, and convenience”
Q&A Session with the Audience
“What is your take on Google’s tracking down on virtual offices to make sure that people have a feasible address to verify?”
There are some regulatory agencies doing that nowadays, including Google. They are investigating to determine the long regulated companies. The criterion is different though; they drop the ranking of a company’s address that refers to many other companies. At Alliance, they deal with different clients and create and register unique addresses for each of them. To get the address one has to meet the requirements of USPS’s Addressing Department. It will provide you a postal point delivery code to register. The process takes about three weeks, once completed, you are hundred percent secured. Mr. Cottle advised, “If you are setting up a new coworking space and you are looking at protecting your clients, you might think about registering each office as an address.”
“As a coworking space owner, how do I protect my address and keep the ranking up on Google?”
To which Mr. Cottle responded, “Consulting one of Google’s service centers may solve the issue. However, you will not face any problem, if you are the primary leaseholder and a service provider.”
That concluded the spirited discussion between two impressive individuals; resulting from the know-how Mr. Cottle developed during his years in the Office Business Center industry.