Ondřej Hubatka (Scott.Weber) Space limitations

Your founder set up his first co-working space in Prague in 2009, but requirements have moved on since then…are any of the early ones still open?
It hasn’t been a complete overhaul, though we did leave some locations like Budějovicka alej. We don’t switch locations every 2-3 years. We keep them as long as they fulfill our high standards. We opened The Park in April, Port7 in Holešovice in June and we’ll open DOCK at the beginning of next year.

From the outside, the business seems pretty simple…lease in a good location, make sure the coffee is good and the design is fresh. Yet we’ve seen recently that not all co-working providers survive.
Providing space, making great coffee, putting out a bowl of fruit and free newspapers—these are such elementary tasks that no one is surprised or impressed by them. What’s really hard is providing good services. Taking care of companies so they don’t have to focus on non-business-related things. Don’t forget, we’re also taking care of their employees, whose demands are very high now thanks to the overheated labor market. Companies struggle to attract and keep good talent. The younger generations are quite demanding about well-being, and about how they experience the spaces they work in. Companies have to meet those demands in order to keep their staff.

It’s not just about having nice furniture, nice design. It’s about engaging them and making people more interconnected. We have to put on a lot of informal and formal networking events. That’s why we hire professionals to focus on organizing activities for our clients.

Providing those services is crucial, but it demands a special set of skills, because it’s about fostering productivity, relaxing people and promoting physical and mental wellbeing. You’d be surprised how few people know how to do it properly.

At some point, I suppose the size of your company began to be an advantage as well.
It’s very difficult to make the business economically sustainable with just one, two or three locations because of the costs and the high demands on labor. Also, we’re in a period of high inflation, and this has an impact for planning the future of your business. The more locations you have, the more sustainable it is because you generate economies of scale. You have fixed costs on items like marketing, finance and HR. Those stay the same whether you have three locations or six.

To get the best locations, you also have win the confidence of landlords.
The approach of landlords towards flexible offices and coworking has changed over the last 10 years. Scott.Weber is now perceived as a strong brand that really know how to operate a  successful business. We’re the biggest player on the market with more than 30% of the Prague market. Landlords see us as an asset, not a risk, because we activate their buildings and make them more valuable.

What’s been happening recently is that big companies are asking us to create co-working workspace for them. They want to attract people to go back to the office, so they invest in really nice space, with new furniture and designs. But they still can’t win people back, so they come to us for help. They want to outsource this problem because they know we can deliver. Corporate demand is something where we see a huge opportunity.

People don’t want to be at the same desk for eight hours per day any more. They want to be at the computer for a while but then maybe do brainstorming with colleagues in an open space. You have introverts who want to go off on their own to focus rooms, or you get extroverts who want to play foosball or arcade games, all of which we can offer. It’s very individual and we want to provide comfortable space for all of their needs.

Is the current environment a good one for growth?
We’re looking for A class buildings, but there are no new ones under construction now. In the last three quarters no new buildings were started. That’s a bottleneck for us.

The biggest hurdle to growth for you isn’t demand, but the supply of space?
We feel confident about demand — we’re sure about it. All of the real estate consulting companies talk about how demand for flexible offices and coworking will grow. But we’re limited to new buildings and high standard offices, and the construction of new A-class buildings has stopped.

The second limitation is the workforce needed to operate such a large number of buildings. In order to provide good services you need to have high-quality people, real professionals for community management, events, for facility management, IT and so on. But the HR and IT markets are overheated so it’s hard to find enough good people to operate all of those locations.

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Reading time 4 min. Coworking is becoming increasingly popular with sole traders as well as small and large companies….

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