A community in Need is a Community Indeed - COVID19 effect - (Part 1)

In this very old saying, "A  friend in need is a friend indeed", everyone truly believes. Nobody knew that at one point it will largely become a matter of community. A community that stands up during a crisis and helps the ones in need, is truly a Community worth applause. And we can say

A Community in NEED is a Community INDEED

I am from Startup, Education & Services Industry, and for me, the definition of Community is - "A community is a segment of people or entities working for the same cause" (Plz don't mix it with any religious community).

In this series of articles, I am going to discuss a few examples that are happening around me. Few Companies that proclaim to be helping towards sustaining the sinking ships (small businesses) or their community, which in my opinion, is a marketing stunt, is far from reality. I must leave it to you guys to decide - "whether or not their intent and efforts are for the welfare of the community".

Part 1 of this series - I am going to share with you is the ground reality of the Services Industry (Co-working Facilities), which unless you are from a start-up company would never ascertain. So, Please pay attention.

Services Industry - Co-working Facilities

Those who are not aware of the co-working concepts, it's a very well known concept amongst start-up community for many valid reasons. An entity owns a big space (between 1000sqFt to 10000sqFt or maybe more than that), they do a complete setup as similar to an office space (which includes seats, cabins, meeting rooms, AC, Internet, and other facilities), then rent that to startup business on "per seat" basis. It means if you have a team of two people, you don't need to own space - just pay rent for all facilities and move in. It's a win-win situation for everyone. It helps Startup a lot without worrying about the office space and its maintenance bit.

PRE-COVID19:- Things were good and Co-working was doing good business due to the rise in the number of start-up ventures. That resulted in more Co-working facilities setting their foot in India. Since the idea was novel and was benefitting all the parties involved, it got investors' attention which turned in to big investments. A brilliant idea grew into big business and everyone was making money out of this plan.

During COVID19 (Phase 1):- Lockdown and social distancing directly - indirectly began to impact the startup community. There were some startups who were majorly hit by the pandemic and came close to a shutdown. But startups are always run by people who have an undying passion to keep going, fix things no matter what, make changes, and even if it makes them take a big risk. So they tried every possible way to decrease their expenses. And the first thing that every small start-up would do is to decrease investment in rental space due to the current crisis situation. That's probably why they were paying high PRE-COVID19 rental cost so that, during a bad time, they get some kind of relief.

I am sure, by now you understood that it's going to impact the co-working industry. And it's true - it happened. First, three months in India (23rd March 2020, 23rd June 2020) - everyone managed a lot - Gov. set guidelines and few rules for everyone - Like not to ask for rent, not to cut salaries, relaxation in tax, contributed in EPF fund, etc. My point is, we all survived somehow these last three months.

During Covid19 (Phase 2):- This is the time when Gov. asks everyone to decide independently with certain precautions and guidelines.

This is the time when each & everyone in a Community is IN NEED. This is a real test for all of us.

Let me share a few things (a real-time scenario) - and then you decide what is right or wrong.

• A co-working company (A) claims that they do not have money to pay to their employees and hence opens up the space for use (as per the Govt directive after the lockdown was lifted).
• Company A asks their users | members (startup companies) to start paying the rental fee from the open date so that they can manage their costs.
• Startup companies - (user of that co-working space) - discuss internally and requests either not to open the office space as the majority will not turn up to the physical address due to the COVID-19 situation or simply give a discount on facilities that are not used.
• Company A - agrees on a 20% discount on a monthly invoice or to discontinue membership as per the agreement. Moreover, space will remain open to potential parties.

This was the time when questions raised on the "Community In Need" concept.

Startup companies ask the co-working owner & suggest a few options-

1. 20% discount on a monthly invoice when it is not in use, is it justified? Totally unreasonable and against the welfare of customers who are contributing to their business growth.
2. They suggest a waiver or relief for a couple of months instead, as many small businesses have not been generating enough revenues.
3. Suggest an 80% to a 100% refund of the security deposit in case of discontinuing membership which makes sense as facilities will not be used.

Now, Company A shares indirectly that they don't have security deposit money with them - because they have used it in Phase 1, so they cannot return that amount.

At this point also, start companies are trying to sort things out amicably so as to retain relationships. They request, not to raise invoices or terminate or discontinue the membership for a couple of months until things get back to normalcy. They are willing to take over space when the situation is favorable, in the meantime, if Company A, finds a replacement, their Security deposit should be refunded.

Unfortunately - Company A - does not agree with any of the cases.

It's the time you need to decide if any of their actions and policies prove, "The Community in NEED is a Community Indeed.

Last point - which helps you to make a decision very fast -

Company A raised a fund of Rs 50Cr* (Approx.) just a few days back from their Investor in the name of helping their members in such a difficult time and boost the Startup Community.

(Note - Nothing has changed on the member side even after this fundraising activity)

Note: * numbers have changed intentionally.

Closing this Article with few questions -

• Is Company A raising this money to boost the startup community or full-filling its own losses?
• Do Investors invest their money just based on Marketing Pitch or do any market survey or a reality check on any concept before investing?
• Is this an Eco-system we are talking about, where one takes advantage and others feel helpless? If yes - then what is the difference between the Eco-system and business?

Is this the real meaning of "The Community In NEED, is a Community Indeed"?

Please share your comment and thought process on this. Next week, we will come up with more such figures and facts.

#startup #coworking #covid19 #community

Written by -

Mr. Puneet Mittal & Prerna Bajpai