This article is a guest contribution for Optix written by David Bensoussan from Starthub Coworking.
Exponential growth is something all businesses hope to achieve. For our Miami, Florida based coworking space, Starthub, that’s exactly what we did, with 900% membership growth in one year! Here’s how we did it and how we are continuing to drive growth in the future.
The competitive landscape and seizing market opportunities
Achieving this level of growth takes a lot of hard work and dedication, but it also takes a little bit of luck. Understanding where the ‘luck’ (or opportunities) are, and seizing upon them, is critical to success.
As mentioned, Starthub Coworking is located in Miami, Florida. So, let’s set the stage for why Miami was poised for a huge opportunity in the coworking sector.
Influx of new startups and entrepreneurs
Miami has seen tremendous growth in its number of startups and entrepreneurs in recent years. Most people know Miami as a tourist or vacation destination, with beautiful beaches, luxurious hotels, and parties. However, Miami is also a very attractive city for businesses due in part to its unique tax benefits and proximity to Latin America. As a result, Miami has become home for thousands of new companies every year.
The competition ramps up
Miami has also enjoyed significant real estate opportunities. After the subprime crisis back in 2007, individual owners could purchase office buildings at a fraction of the cost. This is also when coworking became a trend, so a lot of these owners invested money to turn their offices into coworking spaces. As a result, Miami rapidly became the largest concentration of shared office space in the country, according to this study of coworking leases in 20 major markets. The study found that 2.7% of the metro’s 50.5 million square feet of space was occupied by a coworking space. That beats out New York City, with Manhattan coming in second at 1.7%.
Within our first 3 years of operations, we became surrounded by workspaces. There are more than 30 within a mile of our space, including giants like WeWork who have 4 spaces in Miami. Many of these competitors were bigger, with deeper pockets and greater reach nationally.
As a founder, I needed to figure out a strategy to stay competitive and keep the flow of customers coming to us.
Expanding locations isn’t always the answer
The main question that every coworking owner asks themselves is: Should I start looking for more locations?
And subsequent questions are then:
- Will investors follow me when there are already tons of spaces around with better reasons to invest in them?
- Will I need to start from scratch again?
- Where to open?
I self-funded Starthub, and instead of leasing the space, we opted to finance the purchase of the office. There was a strong desire to really leverage the space and generate as many opportunities within it as possible. Based on this, I decided to look for other options to generate more income opportunities within our space before jumping into a new market and all of the new costs and challenges that come with it.
The question of “Should I expand locations” then changed to: “Can we expand our services and coworking experience at this location to more companies?”
Virtual office became the name of the game!
The idea of taking what we do best and repackaging it into a completely virtual option quickly became the answer. This was the opportunity we were able to seize to generate more revenue with our existing location. With any product or service, companies should first ensure they are leveraging line extension opportunities based on their core competencies versus getting into entirely new products or services (e.g. new market locations). That’s just what we did at Starthub!
We created our Virtual Office Services. Business customers throughout the country, and even the world, had the opportunity to establish a business address right here at our Miami location. They could also leverage our local mail, phone, and receptionist services. But, we gave them more than just that.
The Optix environment
Optix was already helping us to centralize our coworking space member management and billing in one place. They also provided the amazing opportunity to create a virtual experience for each member, whether they were full-time active members, or simply using the space for conference room bookings. Because we already had a virtual environment through Optix that was available to our coworking customers, we were able to expand that to our new virtual office customers. The added value was that we offered a virtual community to both coworking and virtual office customers.
Aggressive marketing to drive growth
We knew we had a great service to offer, but we needed to aggressively market this to drive rapid growth in membership.
We put a great pricing strategy in place that offered new customers amazing value, without a high premium price. These were services we were already providing to our current coworking members, so we were able to pass on great value to a new customer segment.
There was minimal initial investment in developing the new virtual office service, so we were able to put an investment into marketing. The assumption was that it wouldn’t get much return, but at least maybe some people would know more about our brand and be interested in desks or private offices. That said, our main focus was virtual clients; people looking for a mailing address only, or at most, a couple of hours of access to our workspace.
From 40 to 400 clients
Over the past year, we were able to go from 40 coworking members to 400+ clients and we continue to grow every week. In January, we broke our record with the highest number of new member signups in one week yet.
As our community became larger, and virtual networking grew, we realized that these virtual members were also qualified leads for our coworking space. We were pretty much generating a full occupancy of the physical space as the virtual office was growing. Optix really allowed us to provide more than a virtual address or a PO box. They allowed us to replicate our branded coworking experience at a virtual level, with a virtual community, virtual chat support, and access to office, desk, and conference room booking.
The next step?
We are now looking to expand our locations, virtually! And we are looking for other spaces like us to partner with. Partnerships are mutually beneficial as they mean our partners don’t have to figure it out on their own or put in a full year of work and financial investment. They immediately benefit from that momentum we created and we benefit by immediately offering new virtual office addresses in other major cities. It’s a win-win!
To learn more about Starthub, visit their website: https://starthubcenters.com.
About the Author: David Bensoussan
David is the Founder and Managing Director of Starthub Coworking, a coworking space in Miami, Florida. To learn more about Starthub, visit their website: https://starthubcenters.com.