Marc Navarro is the Content Director for Coworking Spain. Coworking Spain is the go-to coworking conference for the Spanish coworking scene, though it also attracts space founders from the surrounding regions, including Portugal.
Marc and I first met at Coworking Europe 2017 in Dublin, and I’m glad we were able to sit down for this conversation at Coworking Spain 2018 in Madrid. Marc has an incredible grasp on the growing Spanish coworking market which he dives into in this interview. He also talks about identifying and communicating with potential partners and shifting one’s effort to focus on coworking space profitability.
Marc knows that values, or "soul" as he calls it, are an essential part of building a coworking brand. But he's seen many spaces fail due to a lack of proper funding.
There’s an incredible need to focus on profitability from day one. It’s critical to treat your bottom line with as much importance as the values of your coworking brand.
"We are in a business, and we all have bills to pay, so we must make money. Yes, this is a business with soul, but nobody feels it's strange that a doctor or a nurse gets money to help people. But we also help people, in many different ways, but we must earn money because we are human beings [in a capitalist system] and have to pay the bills."
The notion of profitability might sound like a non-issue to some, but historically it has been a touchy subject for the Spanish coworking world. And I've heard the same story in other markets. For some reason, many space founders feel they are betraying their values if they focus too much on the money side of things.
The problem is that too many spaces focus too little on money as well. And this is why we see statistics that only about 40% of coworking spaces are profitable.
Marc urges spaces to think more like a business instead of a charity or hobby. After all, nobody will be served by your values if your space goes under.
Coworking spaces find partners for all sorts of reasons, though most often it’s for funding purposes.
And one of the worst things a coworking space founder can do when wooing a potential partner is to act big when they're not. Investors see through this instantly, and the back and forth communication with this type of posturing wastes everybody's time.
Additionally, coworking spaces should search for partners that are a good fit for their size. Substantial real estate investment firms aren't likely to look at a 500 or even 1,000 square meter coworking space. Actually, I don't know many investors at all who would look at investing in a project that small at all.
For smaller spaces, it’s likely better to raise money through friends and family. Another alternative would be to raise funds through the community that the space intends to serve through pre-sales or a crowdfunding campaign.
On the other hand, if you’re going big, your project might be too big for your funding partners to handle.
The one sure way to know if your project is a good fit for your potential partners is to look into and understand the past investments they’ve made. And always act your size!
Just because you’ve got a potential partner on the line doesn’t guarantee success. Marc says you need to speak the same language as your partners, and he doesn’t mean Spanish or English.
If you're a designer, which Marc is, it's likely you'll want to talk about the furnishings, the finish of the space, and the lighting conditions during the morning hours. But most investors, unless they were designers in a previous life, don't speak that language. They talk in recurring revenue, fit out costs, marketing strategy, competitive analysis, and the like. So learn to speak their language or bring somebody onboard who can.
A while ago I wrote a piece called ‘The Big Merge’ about how corporate real estate, serviced offices, and coworking were no longer separate. And then I followed up on the subject with ‘Corporate Coworking Done Right’. It’s a subject we think about a lot at Habu and it’s truer now than it has ever been.
And Marc knows it too. His advice to coworking founders that have an issue with this: “Get over it!”
Too many coworking founders, veterans of the industry especially, spend an awful lot of time ragging on the coworking behemoths that have entered the room. But they fail to see the positive upside. We’re finally getting taken seriously as an industry. More people are aware of coworking than ever before in history.
Besides that, there's no use resisting the momentum. It's here. The Big Merge has happened. The question now, is what are you going to do about it?
Instead of wasting time complaining, it’s time to get creative, to care more our communities and members, and to create new services. It’s time to be better.
I hope you enjoyed this conversation with Marc and I recommend you attend the next Coworking Spain Conference in 2019. It’s sure to be amazing!
Marketing Director, founder at Coworking Insights, coworking maven, digital nomad, lover of wine & tacos.