Gain valuable tips and strategies for running a coworking business in Asia. Meet Ron Yang, Vice President of MY WORKSPACE in Seoul, South Korea, overseeing three vibrant coworking spaces with a fourth on the horizon. Discover how MY WORKSPACE eliminates the hassles of traditional office setups, and delve into the special partnership with Spacebring. Join us as Ron shares the story behind this historic meetup during the Spacebring team retreat in Lviv, Western Ukraine.
1. Could you share the story of how your coworking space came to be?
In August 2015, while running a web agency, I needed an office in Gangnam, Seoul's prestigious business district, to impress potential clients. As I realized the importance of location in Korea's business culture, I secured a space in Gangnam. Initially, it was just three desks for my team, but I quickly saw an opportunity. I added more desks, posted availability online, and soon had five tenants. One of them requested a meeting room, which I promptly built, elevating our space's professionalism. I expanded further, renting an adjacent office, and within a year, I had to quit my web agency to focus on managing the growing coworking space. It was then, in August 2016, when WeWork opened in Korea, that I discovered the term "coworking space" and embraced its potential.
2. What obstacles did you encounter along your journey to success, and how did you overcome them?
I believe there are two critical factors for the success of coworking spaces: a prime business location with easy accessibility and a competitive pricing structure for the space. In Korea, the most sought-after working area is near Gangnam-gu district's 'Teheran-ro,' which has been the hub of thriving startups for the past two decades. Being the capital city with a population of 10 million and an additional 10 million nearby, Seoul presented a clear opportunity. However, the high rental costs posed a significant challenge. By negotiating favorable terms with landlords and offering competitive prices to our tenants, we overcame these obstacles and paved the way for our achievements thus far.
3. How does MY WORKSPACE differentiate itself from its competitors in the market?
Without a doubt, our competitive advantage lies in our pricing strategy. At MY WORKSPACE, we take pride in offering a high-quality workspace at an affordable price. This is something our customers truly value about us. Additionally, our prime location in the prestigious business area of Seoul sets us apart from our competitors. I was fortunate enough to negotiate a favorable deal with the landlord, enabling our tenants to enjoy the benefits of a luxury location at a reasonable cost.
However, our vision extends beyond merely running a coworking space as a rental business. We aspire to be a trusted friend and partner for startups. Our goal is to leverage our extensive channels and networks to actively support their businesses. This involves facilitating connections with potential partners, investors, and key customers.
In Korea, where people can be somewhat reserved, building a community can be a challenge. Many entrepreneurs who come to our coworking space desire meaningful connections but may struggle to initiate conversations on their own. That's where we step in as a bridge, introducing like-minded individuals and enabling fruitful communication
We are committed to helping freelancers avoid the awkwardness of initial meetings and small talk by fostering genuine friendships within our community.
Looking ahead, our future plans include transitioning into a startup accelerator. Rather than focusing on significantly expanding the number of locations, we aim to transform our existing spaces into startup-friendly zones. Our vision is to create an all-encompassing ecosystem that caters to the diverse needs of startups. This will involve establishing a large-scale facility with various amenities such as stores, a gym, showers, and lounge rooms. In addition, we will launch a comprehensive startup acceleration program, connecting partners, investors, and entrepreneurs. Educational events, including classes, training sessions, and workshops, will be a core component. Our seminar rooms, designed to accommodate different group sizes, will host business growth seminars featuring esteemed teachers and coaches.
In essence, our goal is to provide startups with everything they require under one roof, eliminating the need to seek resources elsewhere. By offering a supportive environment that covers all basic needs, we aim to empower startups to thrive and succeed.
4. What unique amenities does MY WORKSPACE offer in its coworking spaces?
At MY WORKSPACE, we offer a range of amenities to enhance the coworking experience and differentiate ourselves from other providers. Along with the standard offerings like coffee, tea, and water (both hot and cold), we provide some unique touches that our members appreciate.
One special amenity we have introduced is our all-day cereal bar. Members can enjoy a selection of cereals with fresh milk, allowing them to fuel up and stay energized throughout the day. Additionally, we offer complimentary toasts with jam, providing a convenient and satisfying snack option.
To make our members feel welcomed and valued, we have created a welcome package that includes branded items. Currently, the package consists of five branded pens in different colors, a business card case, and an umbrella adorned with the MY WORKSPACE logo. While we initially sell this package at a discounted price, our plan is to offer it for free to new members as a gesture of appreciation.
As part of our marketing strategy, we are working on consolidating all the items into a comprehensive box, making it easier for members to access and enjoy these goodies. We believe that these small gestures help create a positive and engaging environment for our community.
While amenities are not the primary focus for Korean freelancers, we understand the importance of cost efficiency and business opportunities. Therefore, our main emphasis lies in providing a productive workspace at an affordable price and fostering a supportive ecosystem for professional growth.
In terms of facility amenities, we ensure that members have everything they need to work comfortably. From desks and chairs to projectors and monitors, we strive to provide a fully equipped workspace. For teams utilizing our meeting rooms, we offer complimentary use of projectors. We also address specific needs such as providing hangers or additional fans/heaters to maintain a pleasant working environment.
Furthermore, we understand that personalization is essential, and members may desire decorations or green plants to create a more natural ambiance. We purchase a variety of plants and offer them to our members, allowing them to personalize their workspace according to their preferences.
Ultimately, our goal is to create a supportive and hassle-free environment for our members. If there are any additional requirements or requests, we make every effort to accommodate them and ensure that our members can work without any hindrances.
5. Is coworking space management software essential for all coworking spaces? How do you personally utilize such software in your operations?
Having a background in computer science, I understand the significance of coworking space management software. It plays a crucial role in optimizing our resources, particularly our human capital. In our coworking space, we rely on Spacebring, a top-quality product that has been exceptionally well-implemented. One feature that I personally love is the meeting room display functionality provided by Spacebring. It conveniently shows the availability of meeting rooms on tablets placed in front of each workspace, greatly benefiting our residents.
One of the primary advantages of leveraging IT technologies in the coworking industry is the ability to employ robust solutions for managing our infrastructure. Spacebring, for instance, offers streamlined features for meeting room bookings, payments, and more. This automation significantly reduces the administrative burden associated with interacting with customers.
MY WORKSPACE app developed by Spacebring
Before implementing Spacebring, we struggled with unfair usage of meeting rooms. To address this issue, we introduced a coupon-based system, with the number of coupons allocated based on company size. While this approach aimed to promote economic fairness, it had its limitations and required considerable effort on the part of our managers.
Managing the distribution of coupons on a monthly basis proved to be a labor-intensive task for our staff. On the other hand, relying solely on Google Calendar for meeting room registrations brought its own set of challenges. We experienced disruptions and outages when Google Calendar underwent updates or encountered API issues. This inconsistency was unprofessional and caused significant disruptions within our coworking space.
Previously, members would approach the information desks, and our managers would manually handle the process of booking meeting rooms. This consumed a significant amount of their time and resources. However, with the implementation of Spacebring, we have been able to save countless hours for our managers.
In Korea, where the cost of a coworking space manager's working hour is around $10, these time savings translate to substantial monetary savings. If our managers spend 100 hours on such tasks, it equates to a monthly salary of $1000!
Furthermore, Spacebring has allowed us to expand our revenue streams beyond our tenant base. Even individuals who are not our tenants can now utilize our meeting rooms and make payments through Spacebring using credits or credit card transactions. This feature has streamlined the entire process and saved us even more valuable time. Ultimately, investing in Spacebring has proven to be a wise decision, as it offers significant returns in terms of efficiency and cost savings.
Generate recurring revenue and offer exceptional customer experience at your shared or coworking space
6. How does your choice of coworking space management software impact the member experience in your space?
Utilizing an app for meeting room bookings has significantly enhanced the efficiency and convenience of the process in our coworking space. Our members no longer need to physically visit the manager's desk or worry about obtaining and managing coupons.
In the past, distributing coupons posed challenges, especially for organizations with multiple team members. There were instances where individuals forgot about their coupons or took them on business trips, causing inconvenience for their teammates who required meeting room bookings. These situations often led to negotiations and requests for alternative arrangements, requiring us to maintain a separate Google Sheet to keep track of these records. This additional administrative effort could be avoided with the implementation of coworking space management software.
By embracing such software, we prioritize efficiency for both the administrators and the customers. Members now have the freedom to book meeting rooms from anywhere in the world simply by opening the app. It's a seamless process. In cases where they do not have enough credits, Spacebring allows them to conveniently make payment using their credit cards. This streamlined experience makes booking a meeting room incredibly easy.
In Korea, where efficiency is highly valued, it's crucial to offer solutions that cater to people's on-the-go lifestyles. With Spacebring, everything is designed to be quick and hassle-free. Whether it's the booking process or the payment options, the software ensures that our members can swiftly access the services they need. This emphasis on efficiency has been well-received by our members and contributes to an overall positive experience at our coworking space.
7. How do you foster a sense of community at MY WORKSPACE? Do you organize specific events, classes, or training programs?
Building a strong sense of community at MY WORKSPACE has been a continuous endeavor, and while we have faced challenges, we are actively exploring different approaches, especially with regards to Korean-style community building. Admittedly, we have not achieved the desired level of success thus far. It is evident that there is a unique way to build a community with Korean people, but we are still in the process of discovering it.
Through conversations with other coworking space owners, I have come to realize that they encounter similar challenges. Korean individuals tend to be more reserved and hesitant to speak up or engage in extensive discussions. Their social dynamics differ from those of Americans or Europeans. In our experience, it has been essential to have a community manager who acts as a bridge, actively encouraging interactions and connecting like-minded individuals. In the early stages of our coworking space, when we had a smaller tenant base, I took on this role and found it relatively easier to foster connections among our members since I personally knew everyone.
However, as our coworking space expanded, particularly with the opening of our third location, we grew significantly, now accommodating around 250 members. While I still maintain personal connections with approximately 30% of our tenants, I am unfamiliar with the majority of them. Our managers, on the other hand, are familiar with all the members but lack the skills to effectively facilitate connections. This is an area we are actively working on improving.
To enhance the community experience, we celebrate holidays such as New Year, Halloween, and Korean national holidays by decorating the coworking space and providing traditional food. However, we do not overburden our managers with frequent celebrations, as their well-being and happiness are of utmost importance to me. I strive to ensure that our team remains stress-free and content.
In Korea, there is a growing emphasis on work-life balance among entrepreneurs. They no longer wish to work excessively long hours, as was common in the past. Family happiness and personal well-being have become significant priorities. However, time is still a concern, particularly for startups with limited budgets. They are driven to bring their products to the market as quickly as possible.
While we continue to search for the most effective methods to foster a thriving community, we remain dedicated to addressing the unique needs and dynamics of our Korean members. It is a journey of discovery, and we are committed to adapting and evolving our community-building strategies to ensure a vibrant and supportive environment at MY WORKSPACE.
8. Do you have any plans to expand and scale up your business in the foreseeable future?
Absolutely, we have definite plans to scale up our business. Our next milestone is the opening of our fourth location, scheduled for May next year. This new space will span an impressive 3500 square meters. I strongly believe that a larger space offers numerous advantages.
From an operational standpoint, it is more cost-efficient to manage a bigger coworking space. We need to hire managers regardless of the space size. In my view, each location should have a minimum of three managers. Two managers would work consistently, while the third would provide backup support during vacations or absences. Even with a smaller coworking space of around 500 square meters, hiring three managers is necessary. Therefore, considering the human resource aspect, it is definitely more cost-efficient to opt for a larger space and begin with three managers right from the start.
We envision creating a pleasant resting area with a spacious lounge and other amenities. However, if you only have 500 square meters to work with, the resting area ends up being quite small, lacking a truly relaxed atmosphere for our members. On the other hand, with 3500 square meters of space, it becomes an entirely different ball game. A resting area of 500 square meters would only account for 12-13% of the entire space, allowing us to create a luxurious and spacious environment for relaxation. This is precisely why we are determined to launch a large coworking space.
At present, I do not have immediate plans to open additional locations. One significant location is sufficient for my focus. Instead, I am keen on developing and enhancing our startup accelerator program. In Korea, the coworking space industry is poised for substantial growth, with new players entering the market. It is becoming a competitive business landscape.
However, we hold ourselves to high standards, ensuring that every aspect of our brand and space is of exceptional quality. Consequently, even with increasing competition, we are confident that we will remain highly competitive. My personal objective lies in working closely with promising startups and becoming a key contributor to the startup ecosystem. That's where I aspire to position our coworking space. With one prominent and expansive location, we will have ample opportunities to achieve our goals and make a significant impact.
9. What marketing strategies have been most effective in increasing revenue for your coworking space?
I'm glad you asked about our successful recipe for increasing business revenue. One strategy that has worked exceptionally well for us is leveraging the cost advantage we have when it comes to renting our coworking space in Korea. Many coworking spaces in Korea receive government support, enabling them to offer their spaces at incredibly low or even free rates. However, these spaces often suffer from less desirable locations. While the interior ambiance and cleanliness are commendable, accessibility becomes a significant challenge.
With this in mind, I devised a unique approach to provide coworking space in Seoul at a more affordable price compared to the average market rates. This decision initially meant taking a loss on our end. However, I aimed to offset this loss by offering a virtual office service.
Through our virtual office service, entrepreneurs can register their businesses at our prestigious address and receive all mail correspondence for a nominal fee of around $70 per month. We take prompt action upon receiving mail for our clients, immediately notifying them. This comprehensive service has proven to be highly beneficial for business professionals. By incorporating the virtual office offering, we were able to lower the overall price for our coworking space, even below the average rates of non-government-supported spaces in Korea's most expensive areas.
This innovative strategy allowed us to strike a balance between affordability for our residents and maintaining profitability for our coworking space. By diversifying our services and incorporating the virtual office component, we have attracted a broader clientele while still providing a cost-effective solution for entrepreneurs and businesses.
The success of this approach has reinforced our commitment to finding unique ways to meet the needs of our target market and differentiate ourselves within the competitive coworking industry.
10. As a business consultant, what are your top recommendations for a coworking startup to build a profitable and successful business?
If I were working as a business consultant, I would provide some valuable recommendations to a coworking startup. Firstly, I would emphasize that the coworking industry in Korea is highly competitive. While it may appear easy to enter the market initially, it is crucial to recognize that coworking is essentially a real estate or hospitality business, akin to running a hotel.
Considering the current scenario where demand exceeds supply, the coworking business is thriving in Korea, as well as globally. However, it's important to anticipate that as more players enter the market, the competition will intensify. Eventually, the demand may decline, leading to price competition and making the coworking space industry even more challenging. These market dynamics should be carefully considered by anyone venturing into the coworking business.
Nevertheless, if an individual already possesses experience in the rental business and seeks to diversify their portfolio by incorporating a coworking space, it could be a viable option. This is particularly applicable if they have expertise in acquiring land at lower prices and selecting properties that are likely to appreciate in value over time.
Suppose one has successfully purchased a building and aims to make their investment profitable by operating a coworking space. In that case, it can significantly enhance the property's value. To further enhance revenue potential, combining coworking with a hotel or hospitality business and offering co-living services could be a winning strategy. Co-living is a popular concept in Korea and is likely to garner success.
It's important to note that the ratio of coworking to co-living will vary depending on the location. Urban areas of Seoul, where people predominantly reside, present great potential for co-living ventures. In such cases, incorporating a smaller coworking space within the co-living facilities, such as a lounge area, would be ideal. For example, 80% focus on co-living and 20% on coworking.
If one has acquired an entire building, there are opportunities to maximize revenue by incorporating various amenities such as stores, a gym, a café, and more. Designing a spacious coworking area with meeting rooms, lounges, and open spaces, alongside co-living facilities offering breathtaking city views, can create an attractive value proposition.
As an operator, I recognize the significance of tenant retention, as it provides opportunities for additional sales. By having stores within the building, I can sell various items such as snacks, office supplies, scissors, paper, and other essentials, thereby creating additional revenue streams. Additionally, creating facilities like a sauna with a relaxing chill-out room can be monetized on an hourly basis, generating supplementary income.
When starting a business, it is crucial to meticulously assess every potential opportunity for monetization. With the upcoming launch of our fourth location, I am eager to explore these possibilities. Although success is not guaranteed, I approach it as an opportunity for growth and learning. As an entrepreneur, I embrace challenges and strive to capitalize on opportunities. Even if there are setbacks, the experience gained will be invaluable, and successful ventures can pave the way for expansion and collaboration with like-minded individuals in the future.
Wind-up
Thank you for taking the time to read this interview. I trust that it has been inspiring and informative, shedding light on various aspects of MY WORKSPACE's success in the coworking industry. If you're interested in delving deeper into their journey, I encourage you to read their captivating success story about achieving 100% self-service meeting room booking.
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