We’ve been covering the development of coworking spaces that cater to small companies and independent workers who need office space during a start-up phase. Or, as we’ve learned, some small business and indie workers just prefer it over traditional office space. Our expert contributor on this topic, Steve King (SmallBizLabs.com), a partner in the firm Emergent Research, examines how the largest traditional-model “office suite” company, Regus, is trying to respond to the new model of coworking space.
When it comes to the office-leasing segment of the commercial real estate business called “executive suites,” the 800-lb. gorilla is Regus. The publicly-traded company operates 3,000 business centers in 120 countries. Its office centers focus on privacy, security and their view of what a professional corporate office should look and feel like. The same is true for most other executive suites.
The Regus brand is similar to that of an upscale hotel chain catering to globe-trotting executives. From their size and scale, it’s obvious that there’s a large market for their approach.
However, Regus is a savvy company and has been watching and following the development of coworking spaces for years. But like most of the commercial real estate industry, they have only recently figured out coworking is a trend and not a fad.
Recognizing that the Regus brand does not fit well with the fast-growing coworking space marketplace, Regus has launched and acquired two brands that it is now using to compete in the new segment. Officing Today recently explored the Regus strategy with the brands ThinkKora and Spaces.
“Regus is well aware of the fact that young, cool, hip and creative people may not associate their aspirations with a corporate Regus environment.”
I agree. The Regus brand is not a good fit with the type of people flocking to coworking spaces, their physical spaces and the way they are configured don’t work for this segment.
Our research clearly shows that people in coworking spaces are looking for more than just a place to work. They’re also looking for enhanced social experience, networking, community support and opportunities to learn new skills.
Regus understands they can’t deliver this type of experience in their current spaces. So they are opening new spaces under these new brands.
Key quote from ThinkKora’s homepage:
Join a growing entrepreneurial community, connecting with Kora and Regus members and partners from the world’s of business and learning … Find the inspiration, knowledge, skills, services and people you need through our learning and network events and our local Kora directors and connectors.
That’s definitely coworking-like branding.
Regus is responding to the growth of companies like WeWork.
There’s little doubt rapid coworking space and membership growth—especially by the growth of WeWork—is driving this shift by Regus.
I think this move by Regus is a good idea.
But existing players often struggle responding to disruptive new entrants using new business models and business methods. It will be interesting to see if Regus can successfully execute on this plan.
This move by Regus is more proof that coworking has reached an inflection point and will continue its rapid growth.
(Photo: Mike Schinkel via Flickr, CC BY 2.0)