Transcript: Co-Working with Wendy Spreenberg Part III

Hello, I'm Brittany Campbell Turner and this is the Constructor Podcast, session number 13. Hello and welcome to this episode of Constructor. And this podcast is dedicated to helping property owners have certainty in their decisions about construction projects. I want to help property owners foster trusting relationships with your project teams, help you lower risk, be under budget and on schedule in your construction projects and exceed your end users desires. Thank you everyone for joining me today.

If you haven't done so already, don't forget to subscribe for weekly email from me at constructor.com, letting you know every week when a podcast is released. Thank you for listening already, but your subscription is truly an encouragement, letting me know that there are consistent listeners out there wanting to hear more about continuously improving construction methods. For the last two weeks, I have been interviewing Wendy Springberg about co-working and the content is useful to anyone who is trying to start a co-working community. Because this topic is so trendy right now, I thought it might be relevant to anyone who needs work space and may one day have the desire to start a co-working space community.

In constructor.com, episode 11, it's constructor.com slash 11, it talks, we talk about the characteristics that a co-working host must have and how a host should think about impact in their community. In the second part, we talked about what the community needs are and how that impacts the space to make sure that it's functional. In this last part, part three, Wendy and I talk about making sure the business model is sustainable. And we talk a little bit about software, we talk about hiring your designers and construction team, making sure to do it the right way.

So without further ado, here is part three of my interview with Wendy Springberg. Business models. How does one ensure that their business model is successful when they decide to build out a co-working space? Part of what you want to do is, we'd certainly love to help in that process, but that's not what this podcast is about. is really investigate, do you have the ability to really run with zero member revenue for 18 months?

So from a financial sustainability standpoint, we clearly know based on helping our clients that you're not going to be empty for 18 months, but the ability to anticipate the vagaries of the marketplace, the changes in potentially financial conditions or the overall US economy and how those things fluctuate and how that may affect your ability to fill your space. So that financial side is super important from a business plan standpoint. And then remembering too that you're going to have constant flow in and out of members. Your business plan should definitely include a percentage of office space.

It's like any real estate principle and that you need anchor tenants to sustain your business. So even though you may only have, I'm tossing out a number, in 12,000 square feet, you might have 20 offices. Those are particularly critical to your business plan overall. And then your memberships should be that piece that's sort of more flexible, that you reach a certain percentage of occupancy of your seats and we have a way of calculating that. And that over the long haul, we know that that works like a health club membership.

So how many times can you sell that seat? And we have again, calculations and tools to enable someone to understand what may work best in their particular model. So from a business plan standpoint, it's really that financial sustainability and giving yourself enough runway, as they say, to make sure that you're protected. And that's our role too, is that we're here to protect you and make sure that your financial investment is as soundly planned as possible. That makes a lot of sense.

I mean, you may start any business, you need to start an amount of capital to sustain it as you're ramping up. Makes a lot of sense. When you decide to work with a design and construction team, or when your clients do rather, how do you think it, what do you think is the best approach? There's so many ways you can get a designer and contractor involved. I'm just curious as to what you found is the best approach to take.

Well, part of what we do is we have established relationships with architects and designers who are not only familiar with this topic, but have actually designed functioning and sustainable workspaces. So we have a pool of resources at our disposal that we simply bring to bear as a client can select from these resources. And so that's the relationship that we recommend with our client bases to have these certain questions clearly that you want to ask of the designer architect, but also that the designer architect seems to have a holistic approach to designing for that user experience in a really collaborative workplace where this isn't a single client that is asking for this design mode.

This is a potential client that will have multiple companies using the space and not one particular brand will be dominant and not one particular, again, work mode will be dominant. So do they understand what that means when the community manager and community leader is designing something for multiple corporation business brand use? So that's what we wind up recommending to our clients when we're going down this path together. Okay, that makes a lot of sense. You mentioned a little bit earlier that during the research process, that's when you're designing.

And obviously that as you learn your potential community, there are a lot of design changes. How does your pool of architects or how do they best manage that change? I'm kind of thinking, obviously, this is something that I think through a lot. Change management is huge. I'm just curious as to how that's managed here.

What we wind up doing, it's not unlike a traditional office tenant and working with an architect design firm. It's not completely different, but we try to get to that spot earlier in the process as we're looking for space with our prospective client who's going to be taking on the coworking space. If we can get involved early enough on in the process with the coworking leader, we can then help inform that process of we'll do the meetups first, start to build the community first, have an understanding about what your end user is looking for while simultaneously looking for the right space and matching you with the right designer.

So it's that juggling act that we have to do. But from the designer standpoint, working with this community leader, I think they also have to have that really strong ear of listening to what the potential community leader and coworking operator is going to want to incorporate and complement that with their own design experience and as the expert in what, to some degree, what human beings actually use the space for to really share those experiences with this potential client in the coworking space ownership and operation. Because that's what the coworking operator owner is looking for is, yeah, we think we know X, Y, and Z, but ABC may be off our radar.

And that's where the rest of this team from our services to the designer services come into play and say, why don't we guide you in this direction and share feedback and then let's come up with the best solution together. That's where you get into making sure that you have the right people around you that have the expertise that can really contribute to the best design possible for your community. Exactly. Good point. Great.

And that's another thing I really do try to raise as a topic here while podcasting and interviewing people, that value and expertise that people have studied these things for years and years and they really do know the topic and they can really contribute and make the best type of space and build the best type of space. Is there a pool of contractors that you guys also utilize? You know, we do not because we rely on the landlord and the architect to provide that referral resource of people that they've worked with because it's just outside our level of expertise.

So we want to be very clear that there are certain things that we have absolute strong expertise in and things we need to leave to the other professionals, which is a wonderful thing. We'd love to work on these types of teams and again, the most successful co-working operations that we've seen bring all of these experts to bear on the project. Okay. The reason why I ask is because the more and more I'm in the industry, the more and more I see highly collaborative teams and the contractor is involved in the design process more so.

During pre-construction they can help budget out certain items, doing a budgeting exercise or even contributing to what the, maybe what a more constructive, flexible design element might be that might be more cost effective. So I was curious as to whether that involvement of the construction team takes place. It absolutely does in a different level, Brittany. So I should correct my statement by saying we do incorporate their expert opinion as part of the overall business plan and financial plan that we work through with our client. So once they get the information both from a design aspect from the architect and then the actual capital expenditure for all of those construction costs from the construction expert, then we incorporate those pieces back into the financial plan to say, here's where your pricing should be and here's how we bring all of these pieces to bear in creating your product list, product pricing, anticipate

what your ramp up should be and all of the other ancillary services that go into creating the space as a whole. So we do rely on those contractors and construction experts in order to inform the rest of the project that we manage moving forward. Okay, very cool. No, that's really great to know. I mean, when you're wanting to explore the sustainability of a business model, you want to be looking at those aspects and it sounds like you have the history and the approach to make sure that it is done that way.

So that makes a lot of sense. Yeah. We love those guys because they give us all the data we need to go to the next step. And their expertise is just in terms of the project moving forward, it's just in terms of the project moving forward is invaluable. This is kind of looking also from the business side.

I did want to ask a question about the software that community leaders might choose to use depending on whether it's a platform, that people actually sign up to be part of the co-working space, submit their applications, even maybe set up a profile so that other people can know who they are. I don't know very much about it, but I'm just kind of surmising that this might exist. Well, your instinct is right on board and completely, completely, completely, completely on point as well. So let me share with you is that there has been an evolution in this industry and specific to this type of office hoteling, it has evolved so dramatically based on the demand that is out there for a tool like this.

So there is brand new software and we'll be happy to share with you our resource folks for that, that is being developed that takes someone literally from your website where someone can inquire about a particular product either a membership level or an office or just meeting rooms or event space. They can take a look at the co-working owner's website, reserve space online, as well as inquire about availability of space and then it takes them into this CRM function and from that CRM function as the relationship evolves with the prospect in the co-working space, it then can allow someone to sign an agreement for membership.

It allows us to, as the co-working operator, it allows the co-working operator to then furnish the office or create the membership profile that needs to be established based on what has been contracted for. It then takes someone into the billing, it forms the billing process. So there's fewer points of potential error because there are fewer points of data entry and keyboarding that's required and then it creates that internal client portal so that again you can actually create community within the space so that member to member they can put up a profile just as they might on Facebook or LinkedIn and it creates that community profile and through the client portal the client, each member can make a relationship internally.

They can go online and view their bill, they can go online and reserve conference room time, create a catering menu for that meeting that they might be having. So there's really this tool out there. It is incredibly valuable, it is incredibly seamless and it is branded to the co-working person's co-working brand as opposed to that particular developer's software piece. So it's a seamless operation and it's really cool stuff. It is amazing stuff that allows the co-working location to operate at its most effective and efficient manner as well as saving personnel cost because you don't have to have, it's certainly not paper driven, it's in the cloud and so it's not paper driven, it's technology driven, it's efficient, effective and manages all of those relationships including software that enables someone to open the front door if you wind up getting locked out and it's Saturday morning and you want to work.

So there's incredible software and platforms out there for co-working operators to deploy that just makes their lives much easier and their member experience much more memorable. So it almost sounds like a white label software. Absolutely. That's all functional including your CRM, your reserving capability, whatever, yeah, like if you want to reserve it similar to your outlook, determining all the needs you need in that space, whether it's catering or what have you. You have your LinkedIn profile, you have everything.

It sounds really, it makes it seem like it's very easy to run a co-working space when you have all those tools available to you. Much more easy, much more easy. Yeah. Very nice. Yeah.

Thanks for asking. It's a great tool. It's literally been in development in the UK and has been deployed in the UK and they brought it over to North America and they're in the development stages right now but it's being deployed effective, very timely, September 1st. Oh wow. Yeah.

Alright, so those of you who are listening to this episode after September 1st, 2016, you know that it will already be available and when it does become available, maybe what I can do is add it to the show notes. Sure. Or at least how they can learn more about it to the show notes. Right. So we can make it accessible to the listeners here.

Absolutely. Okay, great, great. So I am really excited. I think we've had an awesome conversation about co-working. I hope that this is valuable to all the listeners here.

It's definitely a different way to think about work space and it's certainly trending and I think we've spoken to the right person about the trends and so thank you very much, Wendy. Oh, thank you. It's absolutely an exciting time in this industry. It has really taken off. It's really, really fun and it's serving my own passion to help people try to do this.

And thank you for having me join you today. I appreciate it. Yeah, I'm definitely honored to have you on. I do want to ask if anyone wants to get in touch with you, how would they reach you? Well, I'd love to have a conversation over the phone if someone is desirous to do that.

That can be via [phone number removed]. You reach me directly at that number. But my email address is wendy.siteresolutions.com. Thanks. Awesome.

Thank you, Wendy. And you have a wonderful rest of your day. You too. Thanks, Brittany. Thanks, Wendy.

I hope you enjoyed this interview as well as the entire three-part series as much as I did. Wendy was such a wealth of knowledge and a pleasure to interview. Find the show notes at constructor.com slash 13 and don't forget to subscribe. Find parts one and two in episodes 11 and 12. Talk to you soon.