The Sharing Economy – The future of business
06th, January 2019 - Guest blog
The power of sharing economy
I’ve been part of the shared spaces industry almost from the time it started in this country. Initially the value proposition and value delivery was about economic and flexible spaces that did not impose the burden of capital outlay and administrative hassles on companies that were better off just being able to focus on building and growing their businesses. This was an industry spawned by the fact that the economics made sense due to smaller team sizes, agility and flexibility of quantum of space, duration of use and the ability to increase or decrease at short notice without massive upheavals that accompanied space shifts till then.
Then the value proposition in the shared space was the space itself. Over the last decade though, the industry has undergone a huge paradigm change.
There were start-ups even earlier, but the spawning of aspirations and the mushrooming of young companies setting out to conquer the world, led to fundamental shifts in how space, it’s ownership and it’s utility was viewed. Earlier businesses grew a little more slowly, they walked a mile and consolidated, they built for requirements with greater visibility. Now they can grow explosively, visibility and time spans are shorter, and the needs from space have become far more location and infrastructure centric, even as definitions of location and infrastructure have morphed.
For younger businesses today, location has more to do with local ecosystem constructs than with being in central business districts. Can I have easy access to the right kind of partners and services, can I work unimpeded beyond normal business hours without astronomical attached costs are the key questions. The infrastructure question has also evolved beyond what might have been imagined a few years ago. The availability of transport and commute mechanisms, ease of access, power, water, elevators, new age buildings, facades are all fast becoming passé thanks to how quickly these are now being made available almost everywhere. The questions regarding locations that have proximity to client sets and larger companies are quickly being obviated due to the super fast adoption of digital communication media. This is no longer the age where video conferencing took days to arrange and cost an arm and a leg, Skype and Webex have made sure of that.
What we thought of as infrastructure a few years ago has become a locational construct, while the infrastructure now sought has assumed very different dimensions and has come to mean a robust and diversified ecosystem that ensures the accessibility and availability of those who can service, those who can collaborate and those who can draw the vendors of modern infrastructure. A space with a thriving tech start ups for instance pulls AWS, Google and Microsoft, it also ensures that someone spends the cash on laying cables and providing bandwidth, because that is business for the larger companies and ease of business for their smaller customers. A well developed cluster pulls in the food guys and they bring the hyperlocal and delivery guys with them. The same goes for legal and compliance professionals, finance and accounting companies, logistics companies and the logic of business converts and outlier into a business district.
For a few years towards the beginning of this revolution these things happened by themselves, but in the brave new world of today, entire business segments are being reimagined every day. Thus entered the co-working entrepreneurs – the people who reimagined business district and business cluster development. Why, they asked, should this pulling together of the required wherewithal for young businesses be left to chance and providence? Why not project the need, and pull it together as a paying business that simultaneously creates a valuable ecosystem for young companies to operate from.
Today we have a much larger pool looking for small office solutions than we do large groups looking for an entire building or an entire floor. As large corporations downsize and entrepreneurs become more bold, that trend will pick up pace. According to Sande Golgart of Regus, the social aspect of coworking is the biggest draw “Some even prefer to work around other people, they find it inspiring, they find it more cost effective and they find that they’re able to be very productive in that environment because of technology.” Regus has been one of the pioneers of the shared space business and possibly still the largest player in terms of sheer geographical presence, and they too have had to work hard just trying to keep pace with the space.
Coworking spaces are not serviced offices and no longer simply about economical space. The value construct itself has changed to viable and aesthetic space simply being the start point, the backbone for the organism as it were. Shared spaces when they began, charged fabulous premiums for the necessity of phone landlines and wired or wifi internet connections; now the internet is free and landlines – what are those? If you work you need coffee right? Well coffee and tea and beverages and snacks are fast getting built into the same system. When I set up my first shared space, I remember secretarial and receptionist and call answering services were a must, now quite often they may not even be on the menu.
What a prospective customer will definitely ask though is who else works here? How many tech development companies do you have, how many can you put us in touch with. How many mentors and investors regularly come to engage with companies in this space, how many good lawyers and SaaS firms and data analytics firms can we access if we choose to work from here?
I have been hearing prophets of doom declare the demise of the ‘Sharing economy’ for the past seven years, even as the Sharing Economy has exploded and grown beyond their comprehension and imagination. Sharing too has a new meaning. It doesn’t mean the ability to rent out your power tools and your expensive snowboarding equipment; it probably never did, though that is where the term has its genesis. Sharing has gone far deeper into the business ecosystem and now means sharing spaces, capabilities, expertise and infrastructure.
Even as the distinctions between shared spaces, serviced spaces, co-working spaces, business incubators, and accelerators blur at mind boggling speed, the innovation hasn’t even begun to slow. Business models are being tweaked on a near daily basis. Having the ability to offer greater value at smaller outlay while developing a series of small revenue streams that merge to form a logical and viable business is the mantra for this space. But one thing is clear, the sharing economy is far from defunct, it’s still moving towards achieving its youth. This revolution is here to stay .
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