In 2016, Sidharth Menda started CoWrks, a shared working space platform which today has one million sq ft area across nine centres.
For millennials in India structured workplaces are passé. Men in suits and corner offices are no longer aspirational; rolled-up sleeves, diversity and a shared workplace are the new-age symbols. In 2016, Sidharth Menda started CoWrks, a shared working space platform which today has one million sq ft area across nine centres. During an interview with Manisha Singhal, Menda, the company CEO, said his office spaces are 20-25% cheaper in cities such as Mumbai and adds that in the next five years, 7-8 million people will be working out of co-working spaces.
As a concept, how & why did the idea of co-working spaces come about?
When we started in 2016, we found the disconnect between the millennial generation and workplace designs. They haven’t evolved in the last two generations. The millennial generation has entered the workforce with smartphones and values being connected. Also, entrepreneurship in the last 10 years has started to proliferate across the world and we thought of creating an ecosystem to bring all these businesses together where there is diversity. So, suppose there is an SME of 10 people, they join this ecosystem of shared workspace with 900 people. Collective knowledge to solve any problem expands to 900 minds, that is what is a community and CoWrks is.
What is the format and how do you generate revenues?
We lease all our properties from different landlords and offer three basic membership packages. The most affordable is flexible desks or hot desks at about Rs 14,000 per desk per month where you just come in and start working. Then there are dedicated desks at about Rs 18,000 per desk per month, and we also have private studios. They are all glass private offices with configurations ranging from four desks in this location (Mumbai) all the way up to 40 at others. In Bengaluru, we have from one desk all the way up to 200 in a private office. At a location like Mumbai it starts at about `39,000 per desk per month.
How cheaper is CoWrks than the conventional offices?
It is about 20-25% cheaper and that number varies from location to location. So, in Mumbai, it is about 20% cheaper, in Bengaluru it’s as much as 30 % cheaper. If you add up all the costs of running your own office, you are saving that much. Businesses come in here not only because it is cheaper but also because the time can be used to focus on the business rather than on running our own office.
Are conventional businesses gravitating towards your kind of model?
Half of our businesses are large enterprises. In fact, the majority of them are Fortune 500 companies as well like a Boston Consulting Group, Alibaba or an EY. Some of them are more traditional in nature, while others are technology companies. A lot of them are coming to us and saying that we are going to get to this point where 30% of our total employees in India are sitting out of a co-working space and 70% are in traditional space — it is to work alongside disruptive innovative businesses.
What are your plans to scale up?
At present we have a million sq ft across the country already operational across nine centres in four cities. But we are going to 25 centres by 2018-end and that will be from one million to 2.5 million sq ft across Bengaluru, Chennai, Mumbai, Hyderabad, Pune and Delhi, adding Hyderabad and Pune. In Bengaluru we have four, we think we can easily do another 50 there. In Mumbai, we can easily get to 20 in all over the next four to five years. But in this year alone in Mumbai, which is an extremely important market for us, we think we can do another six locations.
In terms of workforce addition, do you have a number as to how many informal employees can be added and what will the strength be in a few years?
In India the workforce is about 700 million and 51% of our workforce qualifies itself as an independent workforce. And independent isn’t necessarily only freelancers, it could also be people in very small businesses that deem themselves independent. There are also enterprises like SME, mid-size companies, moving into co-working. A business that moves into a co-working space sends a message to their employees that they are open minded and forward thinking.
In a very simplistic assumption, will you be able to convert those independent workforces to use CoWrks?
India is the largest market for co-working. Conservatively, in the next five years, you are going to see about 7-8 million people working out of co-working spaces because of the strong demand you are seeing which far outgoes supply. People cannot scale up fast enough. Another thing driving this is that a lot of their business which is in co-working spaces is growing at a very rapid rate. They are hiring new employees as well. So, there is growth within companies and when you go into new locations, new companies come in. The ecosystem and community has started to grow.