The modern world is constantly changing. Work no longer means the “place where people work”, but refers to “the tasks they perform”.
COVID-19 has made remote work much more common. Now it’s totally normal and even recommended, to avoid crowded offices. The world will never be the same.
Just in the United States, there are 44% of employees started working remotely during COVID-19, compared to 17% during pre-coronavirus times.
The spaces-as-a-service also changed the game. In its early days, WeWork began with a single office space in the SoHo neighborhood of New York City. Nowadays, the company has nearly 800 office locations and operates in 124 cities around the world.
Space-as-a-Service companies are gaining popularity now. So, let’s get familiar with SPaaS business model. Also, we’ll find out how you can build Space-as-a-Service software, and what you should do to avoid the pitfalls such projects usually face. We will tell you!
How Does WeWork Make Money: Space-as-a-Service Business Model?
WeWork’s Space-as-a-Service (SPaaS) business model is not the regular one.
First, the company purchases the corporate real estate space. Usually, it is an office building space that can easily be transformed into a coworking space that is comfortable for both groups and individuals.
Second, WeWork transforms this space into smaller offices and common areas. They make renovations and add all the needed furniture and commodities, creating a fully stocked office.
Third, the company rents space to individuals or groups.
At this point, WeWork offers seven rental opportunities for customers:
Standard Private Office
Allows access to the private office space along with the premium amenities and conference rooms. The price for this option, for example, in New York, will vary from $1.900 to $3.700 a month.
HotDesk is one of the most popular WeWork rental opportunities. The clients get access to shared workspace and conference rooms. The price for this option varies from $400 to $800 a month.
Dedicated Desk option allows using a pace in a lockable office. Along with this, the customers can have 24/7 access to premium amenities and conference rooms. The price for this option varies from $300 to $800 a month.
The space option is dedicated to early-stage start-ups. This option provides a start-up community with all the assets like desk space, education, and even mentoring. To use this opportunity, the customers should join WeWork’s global community of early-stage start-ups.
WeWork All Access
This is the type of membership that allows customers to access the desired workplace wherever they are. The customers should fill out the form to start using the WeWork All Access membership.
We Membership allows the customers to purchase the workspace of the global WeWork locations network at any convenient time. The prices for We Membership are starting from $45/month.
The membership option is designed for events of all kinds. To book an event, the customers are asked to fill out the form. For this option, no membership is required.
Summing up, WeWork rents out office spaces for fixed monthly prices that depend on the location and provides its customers with the opportunity to purchase a membership that starts from $45 a month.
Building Space-As-A-Service Business Like WeWork: Step-by-Step Guide
Any product development starts with the Discovery stage, and WeWork-like projects aren’t an exception. Discovery has to comprise the market analysis, competitors’ research, and target audience discovery.
At Sloboda Studio, we pay particular attention to preliminary research. We always offer our clients to start with a product discovery phase to analyze the project idea and its target audience. It helps us to effectively plan the project stages, define space-as-a-service software platform requirements, choose the features, and the best possible tech solutions to implement them.
UX/UI Concept Creation
Once the discovery stage is over, it’s time to create a UX concept – the first tangible visualization of a product idea
UX concept comprises: :
- Wireframes and prototypes. Wireframes show how the future product will look, while the prototypes are interactive to show the product functionality.
- User Interface is the stage that goes right after the wireframes and prototypes creation. The designers choose the right look, forms, and colors for the product.
Choosing the Tech Stack
The tech stack always depends on the type of product. It is required to analyze the functionality and concept in order to choose the technologies that can help to implement the product ideas faster, cheaper, and more efficiently.
When Building SPaaS software, it is worth remembering one more thing: the product complexity. Smaller projects can be developed with almost any technology, but if the product is going to be gradually expanded, we’d recommend considering scalable technologies like Ruby, Ruby on Rails, or Python. The cost of development of each technology is also taken into account.
The cost estimation helps to analyze the needed resources and thus use them efficiently. Precise estimates help to avoid such a common startup problem when it is incorrectly monetized and runs out of money in the middle of the space-as-a-service software development.
As a result, the scope estimation stage helps to define how much time and budget this should take to develop a SPaaS website like WeWork architecture. It’s time to create the scope of work, prioritize the tasks, and do the roadmap compilation.
At Sloboda Studio, we start estimating the project by discussing the available budgets with our clients. In this way, we can find the perfect functionality for an MVP within the client’s requirements and resources. The functionality should include both must-have and unique product features. Our team is especially attentive to this stage and works on estimates together with our project manager, business analyst, software developers, and CTO.
Seeking external investments is the most popular way of funding startups. According to Statista research, only in the United States in the 1st quarter of 2021, venture capital investment wasn’t the biggest in such industries as the Internet and Software.
Before the investment seeking process starts, it’s worth to make sure that founders:
- Have a unique market idea
- Solve the essential problems of the target audience
- Has a clear vision of the future product
- Have a clear business and development plans with estimated scopes of work
At Sloboda Studio, we also recommend using the business model canvas to create a clear presentation of the product, especially when it comes to the investments seeking stage.
Any product development process starts with MVP: an initial stage of the product that consists of the key features and basic functionality. Starting with a minimal version helps to deliver the product that requires less time and budget resources, get the first market feedback, and, later on, be upgraded to a fully-featured product.
As usual, the product development process consists of three core stages:
The standard Startup Development Process includes:
- Discovery phase
- Creating Product Prototypes and wireframes
- Assembling a team
- Developing an MVP
- Getting market feedback
- MVP refinements
- Developing a Fully Featured Product
- Maintenance and Support
At Sloboda Studio, we recommend using an Agile methodology to develop products fast and efficiently. Working in sprints allows developing space-as-a-service software step by step, analyzing each task’s results, fixing issues, and discussing results with the customers.
Ideally, the marketing activities should start along with the development process.
Starting the marketing campaign along with the development stage allows gathering the target audience right by the moment of the product delivery.
A successful marketing campaign consists of goal definition, target audience analysis and segmentation, budget setting, and competitors’ campaign analysis. After this, it’s time to make a creative campaign and check its’ success using the core marketing metrics.
Going to create a space-as-a-service software?
Real Estate CRM
Our client is a leading regional residential real estate agency that helps customers with buying and selling residential properties. The client’s company has grown. As a result, there was a need for centralized data management software. Our client wanted to organize all the data and create a CRM tailored to the company’s business processes.
As a solution, we created a real-estate CRM from scratch. It included the following features:
- Communication Page
- Contact Groups
- Visual boards with the existing deals
As a result, Sloboda Studio helped to automate the work processes. Since the Real Estate CRM launch, the client’s sales conversion and productivity increased.
9 Essential Features of Space-As-A-Service Software
At the homepage, WeWork shares the idea of their project and offers its visitors to find the first workspace to rent.
Besides this, there a few other features:
- Locations – shows the locations that were reviewed by the customers recently or, in case of the first search, ) the closest coworking locations.
- Workspace – showcases the recommended workspace solutions for companies of all sizes.
- Enterprise – large business and enterprise solutions.
- Ideas – the section that consists of posts and latest WeWork news and ideas, including such topics as growth and innovation, office design and space, city guides, work-life, and brokers.
- Saved – shows the list of the “favorites”.
- Contact Us – leads customers to the feedback form that allows contacting with the WeWork support.
- Log In – log-in/sign up feature.
Sign-Up and Sign-In
WeWork has a pretty standard Sign-Up/Sign-In system that consists of such features as:
- Ability to Sign In to an existing account
- Ability to Sign-Up by creating a profile on the coworking website
- Social networks login, through Google Mail, Twitter, Facebook, etc.
- Password recovery option
The user profile feature allows customers to join the service. The users are able to create a profile, change their personal settings, save the coworking places as a favorite, check out the search, and booking history.
Each digital product needs an admin panel to manage the platform and handle all the possible issues.
Basically, an admin panel is a feature that allows controlling everything that is going on at the space-as-a-service website. Thus an admin panel allows to:
- Manage the platform activities
- Observe all the platform users
- Control and manage all the booking
- Manage the booking cancellations
The search system helps users to start an interaction with a platform.
The WeWork search system offers three core filters: location, number of people, and move-in dates.
Once users specify all the three aspects, the system responds with the list of the spaces-to-rent in the chosen areas along with the prices. Along with the list, the users are able to use a map search.
WeWork Search System
WeWork Search System: a map
After choosing one of the offices, users are redirected to their pages.
The WeWork office pages provide such information:
- Office address
- Available dates and location
- Pictures of all the office areas
- Available workspaces list that allows customers to choose office type (private office, HotDesk, etc.) and details (floor, view, lockable space, etc.)
- List of amenities
- Map and nearby transport details
- Booking option
WeWork Available Workspace Description
Once the customers find an appropriate office to rent, they proceed to book the space. To book an office, customers need to add location, capacity, and move-in dates.
Then users check out the view of available workspaces and choose the floor and the particular office if the office offers several options.
Once a workplace is chosen, the system redirects customers to the booking confirmation and payment page.
WeWork Booking System
The last stage of the booking confirmation is a payment. In most cases, the customers are required to pay some additional taxes and rental fees.
Nowadays integrating payment gateways is one of the best ways to enable an online payment system. Among the leading payment gateway systems, we can name Stripe, Braintree, Mangopay, and other payment providers.
At Sloboda Studio we help our clients to integrate both such World-known payment systems like Stripe and niche providers like PayFort that are used in the countries where Stripe and other well-known systems are prohibited.
On the example of Stripe integration, let’s have a lot at the basic stages of implementing a payment gateway:
- Creation of the Stripe account
- Configuration of the Stripe account and sandbox env
- Connecting the Stripe account to other profiles
- Enabling automatic refunds in case of the cancellations
Feedback and Ratings
The feedback feature makes it easier to choose the desired office space. The other visitors can what they like and do not like about the particular office. Moreover, the availability of reviews makes people more likely to book an office.
And, of course, the customers’ feedback provides vendors with valuable insights to improve the customer experience.
Space-As-A-Service: The Future of the Real Estate Industry
The general number of coworking spaces worldwide is projected to double from 2021 to 2024, reaching 5 million people. Moreover, the Space-as-a-Service market is forecasted to grow at a CAGR of approx 4.5% during 2022-2028 globally. But what are the reasons for such rapid growth in the shared space industry?
Ability to work remotely
In the modern world, remote work became normal. During COVID-19 times, more and more workers left offices and understood that their work can be done remotely – easy, faster, and safer. According to World Economic Forum research, 98% of people would like the option to work remotely even after COVID-19. At the same time, Global Workplace Analytics research states that up to 30% of the workforce is estimated to continue working remotely multiple days a week by the end of 2021.
That’s why coworking culture is as relevant as ever – our world will never be the same, and some people will prefer to have an opportunity to work from home or a rented office even after the quarantine.
The leading enterprise companies give us a culture of fully-featured offices with everything an employee needs: comfort desks, rooms where coworkers can have some rest, fitness centers, recreational games, parking, and bike storage. Some companies equip their offices with swimming pools, showers, outdoor space, and even karaoke rooms. Such offices seem to be extremely comfortable, reduce staff turnover, and increase productivity.
That’s why smaller companies strive to create conditions that are as convenient as their market competitors.
A space-as-a-service website like WeWork allows even the smallest businesses to provide their employees with the most comfortable working conditions.
Opportunity to save more
Employers do not need to invest in the equipment they should purchase for their own office if they can simply rent it out. Renting appears to be a much more effective strategy for a wide variety of companies, especially in their early stages.
Want to build SPaaS software?
SPaaS is flexible: people can change the dates, time, or even a coworking itself almost a. If there are some doubts, it is possible to book an office for a short time and then, if everyone’s happy with the place, change that booking option for the long term.
We live in a golden era of startups. And space-as-a-service businesses help startups to optimize their resources.
Small companies who just started their business journey may not have lots of employees, moreover, they couldn’t know how fast their team could grow. The young businesses simply don’t know what their headcount and space requirements could be the next year. That’s why renting out a long-term office may be inefficient for them. On a contrary, choosing a coworking space for the first several months or even years is often a perfect choice.
WeWork Story: Rise and Fall
WeWork’s space-as-a-service business grew fast: the idea of common office spaces for rent turned out to be what the world needed.
However, later on, the company received heavy criticism for its leadership and expensive business model. Eventually, those factors led to heavy losses, and rumors about WeWork’s failure still continue to spread.
Let’s check out the core milestones on the WeWork road:
- 2008-2010. Before Adam Neumann and Miguel McKelvey established WeWork, they both worked in the same building, which was partially vacant. Neumann and McKelvey got the idea to use that space to create a coworking place for other people. That idea resulted in the creation of the Green Desk, which eventually became WeWork.
- 2016. WeWork raised $969 million in funding at a $10 billion valuation and became the 11th most valuable startup in the world.
- 2019. In April
- 2020. McKelvey, the WeWork co-founder, pointed out that the company has a new strategy: to slow down in order to save the business. Later this year, in September, WeWork’s valuation had reportedly fallen 89% since 2019.
What is Space-as-a-Service?
Space-as-a-Service, or SPaaS, is a space that is procured on demand. Simply put, it is a space that can be used as a coworking workplace for individuals and corporate clients.
WeWork is an example of a Space-as-a-Service project that is dedicated to temporary or flexible office space rentals.
SPaaS can be called a byproduct of structural changes that have occurred in the commercial real estate industry that was triggered by the technology shift. Technology is paving the way for fundamental changes to how businesses operate, how people work and live, and where they do it. This transformation is made possible by the exponential growth of high-speed connectivity, the pervasive use of smartphones, the proliferation of cloud computing, and the adoption of AI. Combined together, all these technologies are changing the way we use and occupy space.
Well, let’s check out the most common business benefits of SPaaS model:
- Better employee experience. It allows companies to provide employees with a better working experience.
- Cost-effectiveness. For workplace leaders, it’s an opportunity to reduce expenses for long-term rent, office renovations, equipment, and maintenance.
- Time economy. It makes it possible for people to work from the nearest coworking space and reduces the time they spend driving and in traffic.
- Flexibility. The modern world is moving and changing quickly. And large companies prefer doing business fast. Using a shared office space allows employees to have more flexibility and choose the place where they want to work.
- Premium property access. Buying a cool office space may be a difficult task, as the prices for a good property can be huge. Naturally, renting out an office space is less expensive and gives companies the possibility to have an office even in the most prestigious neighborhoods.
- Activity-based working. Shared offices allow companies to create a dynamic workplace as employees aren’t restricted to a single room. Such an approach helps to increase productivity and allows the company to grow.
Space-as-a-service products can be promising. But they can also be risky. Before starting to build a website like WeWork, it is required to get ready in several steps.
- Step 1 – Discovery. This process includes researching competitors, business analysis, core features, and technology stack determination. A good discovery helps with a better understanding of the product, its target audience, and estimations.
- Step 2 – Development. Choose flexible technologies and a dedicated team. At Sloboda Studio, we recommend using Agile principles, so the team can get feedback right after the task is completed, and the client can track the progress and make changes if they are needed.
- Step 3 – Maintenance and upgrades. After a successful MVP launch, we’d recommend getting feedback from the customers and making the required upgrades and renovations in accordance with the product’s target audience’s needs.
Any other questions? We’ve been developing and supporting businesses for 10 years. And Sloboda Studio’s team is here ready to help. Book a consultation with us.