Not only young companies, even some established players are opting to function out of co-working spaces with an aim to quickly scale up their services. Sangeeta Tanwar reports.
Operating out of a co-working space is becoming the norm rather than an exception for India Inc, particularly start-ups and small businesses. A majority of the companies and individuals opt for shared workplaces for the benefits they offer in terms of access to cost-effective infrastructure, easy mobility and flexible work timings, ability to scale up and scale down head count, and access to diverse talent pool and mentorship.
Interestingly, not only young companies but also some established players are opting to function out of co-working spaces with an aim to quickly scale up their services.
What are the key benefits that drive different companies to work out of a co-working space and the levels of cost savings resulting from it?
Moving to a co-working space has allowed Paytm to quickly ramp up its team in Bengaluru, saving the company the time to build a new office and avoid the hassle of facility management thereafter. More than 100 of its employees work from the co-working space at Innov8 Bengaluru.
According to Abhishek Rajan, vice-president, Paytm, the Bengaluru team is tasked with designing products within tight deadlines.
The core teams need a collaborative and high-energy work environment to ensure maximum productivity. And working at a co-working place has helped Paytm to further its open and collaborative culture.
In addition, the prime location of Innov8 has helped the company to attract top talent from the industry.
For a number of businesses, the major driving factor for opting for a co-working space is significant savings that come in the form of building up and maintaining infrastructure costs.
Online marketplace OLX works out of co-working spaces in cities such as Chennai, Bengaluru and Hyderabad. This turns out to be cost-effective as the company does not have to bear infrastructure costs, says Krishna Kishore Mallina, zonal sales manager, OLX.
Had OLX opted for a rented space of its own in a city like Mumbai, it would have to incur a monthly rental expenditure of about ₹150,000. However, by opting to work out of a shared workplace, the company is able to register cost savings to the tune of 50 per cent.
Nihal Kashinath, CEO, Applied Singularity, says that his company offers clients technology solutions, including Internet of Things and artificial intelligence. The company requires a lot of hardware support to cater to clients. All this calls for installation of expensive equipment and tools and this is not feasible for a firm like his that works on a project basis with freelancers.
Therefore, Applied Singularity needs a space that would provide a flexible work environment along with hardware support.
For example, it would cost almost ₹200,000 to buy a 3D printer. Additionally, the company would have to incur maintenance and manpower costs to run the printer. However, since his team works out of a co-working space, the team would end up spending barely ₹5,000 on an occasional 3D-led task.
Essentially, co-working spaces offer entrepreneurs the option to launch their business without locking in a significant amount of working capital, giving them the much needed leeway to scale up the enterprise by investing in the product or service on offer.
Shehnaz Bapooji, chief marketing officer, Shopmatic, concurs and points out that co-working spaces allow the flexibility of expanding on one's own terms rather than being bogged down by fixed costs.
Apart from infrastructure-led cost savings, the need to be a part of a particular ecosystem also drives businesses to opt for co-working spaces.
F6S, a networking platform for founders, is a case in point. Basing itself at a co-working space gives the company an opportunity to be in touch with the ecosystem all the time.
"Working out of Creator's Gurukul helps the team to be as close to start-ups as possible. Hence, we get to know what founders are thinking, what they need and their culture. All this helps in understanding the requirements of start-ups and enables us to come up with relevant solutions to help address their issues," explains Nitin Bajaj, country head, India, F6S.
Mentorship and networking opportunities are the other two key factors that drive relatively new businesses to opt for co-working spaces. Networking is an advantage that comes along co-working spaces.
"The ecosystem of people, companies and industries is incredibly diverse. You never know who you'll meet and how you might be able to collaborate," says Rashi Menda, founder, Zapyle. Her company is part of a co-working space called Co-works.
Pooja Bhayana, co-founder, Let's Barter India, admits as much. She says in the early stages her business was able to meet marketing targets as it benefited immensely from word of mouth, public relations support and business collaboration from the community at the co-working space of Innov8 Bengaluru.
For Meghna Saraogi, founder, StyleDotMe, coming to Delhi from a small place like Indore and working out of a shared workplace has opened up immense opportunity for networking with people hailing from diverse backgrounds.
And with successful entrepreneurs dropping in for special sessions, events turn out to be a great learning opportunity and source of value addition.
Most importantly, start-ups also get a lot of assistance in areas such as technology and design from co-working spaces at no extra cost.
For many, co-working spaces are not merely a collection of companies but a close-knit, strong community that are ever ready to share their material resources and provide mentorship through experienced leaders in group meets, special sessions and industry events.