When Headspace Group launched three years ago we were an early mover in the fledgling flexible workspace scene. We’ve now moved from being a disrupter to an established player in an increasingly competitive market. Dealing effectively with the challenges associated with these changes has, I believe, laid the foundations for the future success of the business.
Let’s start with the context. For years small businesses had to choose between home working, uninspiring serviced offices, or burdensome five year leases. Yet, off the back of a tech-led boom in young, entrepreneurial businesses, as well as notable rise in the so-called ‘gig economy’, London’s new breed of energetic and expansive tenants wanted a space that matched their brand whilst at the same time avoided the constraints of a five-year lease. And so emerged the flexible workspace market: influenced by Silicon Valley’s community-led approach and emphasis on creating beautiful and inspiring working environments, whilst also taking elements from both the serviced office market (short term, flexible leases) and the co-working movement (community and collaboration) these spaces have proved popular. The UK flexible workspace market grew 11% last year and we now have nearly 3,000 spaces across the country. Globally, this movement has even spawned the world’s highest value startup (US-based WeWork is now reportedly worth $15bn). Headspace has also grown in that time, expanding our London operations four-fold and recently announcing our plans to launch in Manchester.
Here are the key lessons I’ve taken from this process:
Build the right team: They say you’re only as good as the team and around you and getting the right one in place is certainly one of the biggest challenges. But it doesn’t stop with the recruitment process. Having clear lines of management, robust processes and encouraging an open and honest environment are all important. As an owner, it can be difficult to delegate, particularly so knowing when to let go and appreciate that someone else might do something differently to you. This is important. Also, know your own limitations – ensure your team are better than you in their particular fields and add complementary skills. Headspace is my first business and I’m always learning. No doubt I’ve made a few bad calls, but that’s inevitable. The trick is how you react to your mistakes!
Clearly define what your business stands for and make sure people know: brand values, marketing and PR are sometimes dismissed as fluffy concepts or discretionary spend but I have found them to play a crucial role in our business development, particularly as the market has become more competitive. Early on we brought in a brand consultant to help us clearly define what we were trying to do. I have to admit that I was a little cynical at first however if you’re able to think in detail about what you’re trying to achieve and distil that down to 5 words, it really does help you focus on what you offer and how that differs from your competitors. The values that we defined have now feed into all walks of the business, from recruitment to training. A proactive marketing and PR programme has allowed us to communicate these messages to potential clients.
Be prepared to adapt: Any entrepreneur will tell you to focus on your core product, however having the flexibility to adapt your model is also important and can allow you to differentiate yourself in a crowded market. For example, though our core offering is providing flexible workspace, our members – young and dynamic tech and creative business – are also highly focused on networking, socialising and being part of a vibrant community. Events form a part of everyday life in London’s tech and creative communities, so we decided to enter into a new market by developing and launching our own dedicated events space at our Farringdon site. It’s available to members – we now host regular seminars, yoga classes and product launches at the space – but also to external organisations that may want to host an event off-site. This means it supports our core offering whilst also allowing us to enter a completely new market. Revenue from events now makes up around a quarter of that generated by our Farringdon site.
Manage your growth: As we’ve grown from 1 to 3 buildings it’s no longer applicable to run the business in the way we did in the early days. We’ve had to re-design how we operate behind the scenes, from operating systems to how issues are reported as well as how we deal with our sales database. Ensuring these operational factors are well managed is crucial in making sure our customers continue to be well looked after as the business expands.
Jonny Rosenblatt, Founder of Headspace Group