How we designed the most affordable co-working space in KL

The government just announced a full nationwide lockdown so I guess I'm going to be one of those fools who start a new co-working space in the middle of a lockdown.

Fuck... me

How did I get here? Well you see 6 months ago we had this brilliant idea to do a more affordable version of our luxurious co-working space brand Colony.

Doing something cheaper by merely offering a lower quality product isn't something I ever like doing. Instead I believe that the product must be just as good, but cheaper because it eliminates inefficiencies of the traditional co-working model. For that I studied co-working as a model and I looked at what were the things people really cared about. More importantly I looked at what people didn't care about.

I found that business owners and entrepreneurs really liked the idea of flexibility which co-working spaces offered but they weren't willing to pay the premium we were charging for that flexibility. They didn't care so much for community (especially post-Covid) but they did care about having a great location, super-fast internet and a comfortable office to work in. We eventually came up with a new-generation co-working space called Jerry.

Why Jerry? Well initially I wanted to name it Pollen, because we are meant to have many of these spread around KL like Pollen. Yes... I know that name is as interesting as watching the anatomy of plants on National Geographic. While coming up with the design of the website, we had a stickman to illustrate certain things. Then I had a thought. Why don't we just give that stickman a name and name the whole space after it. The name Jerry stuck in my mind because for some odd reason, whenever Fighter and Penny play pretend games, they named the character that Penny plays: Jerry.

As I'm writing this, Penny just called out to say "Daddy I think Jerry is a nice name for an office". So at least I got that right. Anyway I digress. Jerry is meant to be the person in us who isn't afraid to be brutally honest and hates overpaying for shit. Jerry is very matter-of-fact, non-emotional and kinda deadpan. He speaks his mind and spends absolutely no time looking for the fuck that he did not give -_-

We thought Jerry would be the perfect name for a co-working space that would cost literally a fraction of what existing co-working spaces cost and so flexible that you could leave anytime you want.

To do that, we had to create a model that eliminated all the inefficiencies of the old model. Here's how we did it.

1) We minimised inventory-holding costs by having smaller floor plates.

The belief in the traditional co-working model was that you had to have a space with a big floor plate so that you generate some economies of scale. The problem with that though is that big floor plates take longer to fill, incurring inventory holding costs in the mean time. While waiting for it to fill, co-working operators may feel the pressure to reduce rates so that they would fill faster. However once you reduce rates, it's hard to get people to pay a higher rate in the long run especially as the space gets older. This then affects the overall long term yield of the space which is why it's common to see co-working spaces that are losing money even with high-occupancy.

In the Jerry model, we went for 6,000 square feet spaces instead of the usual 20,000-35,000 square feet places that a Colony would occupy.

2) We automated the space

We found that another inefficient part of our model was having people on the ground conduct tours for anyone who wanted to rent a space. Out of every 10 tours, maybe 7 of them may not close. So if I could eliminate the time cost of that 7 tours, I could save cost. We did it with Jerry by automating everything. You book an office online like you would book a hotel room. You know how it looks like from the pictures, you know the layout and you can book it immediately. If you don't like it within a day you can move out the next day.

3) We made the space modular

Co-working spaces tend to have offices of different sizes for different teams. We instead primarily focused on 1,2 and 4 person offices just like how a hotel would focus on 1,2 or 4 person rooms. They don't go for 8 person rooms, if you want... book two rooms.

Sure it'll be nice if you can get a 10 person room for your 10 person team, but with Jerry you can break it up into rooms and the savings passed to you will be so much cheaper than having a 10 person room in a traditional co-working space.

There are many more things that go into the efficient running of Jerry but the end result is that while a traditional co-working space in a good area like TTDI costs RM1,000 per workstation per month. Jerry is priced at RM279 per workstation per month. It's so cheap it's even cheaper than getting your own office.

I'm often of the opinion that it's always better to copy a model than to invent one because with copying you just need to focus on execution whereas with inventing you run the risks of your thesis being wrong. I looked hard to find a low-cost model from overseas that I could copy but I couldn't find one. So here I am in the middle of a lockdown about to head in the unknown.

We are launching the first Jerry in June 2021 at TTDI and the second one in September 2021 at SS15, Subang Jaya. You can go to the website to book space in advance.

Will this work? I don't know. We're about to find out.

Will this cannibalize Colony? If it does... I'll be glad that I'm the one doing it rather than someone else.