Digital 52 3️⃣3️⃣ - On growing steadily, the ‘art’ of choosing new locations and building a coworking brand with partners: the story of Workshop17.

Today's story will transport you to South Africa, where you'll be introduced to Workshop17, a coworking brand that has experienced steady growth over the last decade. But as you're about to discover, their growth hasn't just resulted in more locations but has instead translated to more impact.

You can read the story of Workshop17 on page 48 of “Around The World in 250 Coworking Spaces”.

Growth is a topic we've explored in various Digital52 articles since our inception. However, every coworking space's growth journey is unique. Each space goes through a growth phase, from the day it opens to the day it reaches its golden number, that is, a good occupancy rate. However, for some spaces, growth entails expanding to new locations to expand their reach and impact. In our conversations with colleagues, we are frequently asked how other spaces' growth occurs: whether they plan for it from the beginning or if it arises from a “what now?” type of inquiry. This article will discuss it all. In this story, we introduce you to Workshop17, a coworking brand based in South Africa. While they began with a single location in one city, they have gradually grown, driven by a well-defined vision and purpose.

➡️ A little refresher

Who’s behind the featured space?

Meet Paul Keursten and Mark Seftel.

The duo met in 2010, in Maboneng a Johannesburg inner city redevelopment, where they opened their first location back in 2012, which was then called 'OPEN, collaborative city workspaces'.

➡️ Key Figures

• Opening year: 2012
• Size when they started: 1 space in 1 city
• Size today: 9 spaces in 4 cities across 2 countries.

➡️ A little tour around Workshop17

➡️ Behind-the-scenes

Things you didn't read in aw250cs

➡️ Workshop17 Today

We recently had a conversation with Paul Keursten, who is the Co-Founder and CEO of Workshop17, to discuss the current state of affairs. Our previous interaction with him was during an Instagram LIVE session, where he was on the verge of launching a new location on Mauritius Island - a new space in a new country. Our discussion naturally centered around the questions of why growth and how to grow. As mentioned earlier, the growth journey of coworking brands is unique to each one of them. The growth story of Workshop17 serves as another recipe that we can all learn from!

💫 Growing the right way: finding the right size, location and partners.

💬 I’d like to start by asking you: what’s new at Workshop17 since September 2021? (the month the book was released)

A lot has happened since then. Back in September 2021, we were still in the midst of the COVID pandemic. Despite that, we opened a new location then, and have since opened two more. One of our new locations is in Newlands, near Cape Town on the cricket field, and the other is in Mauritius, which is a small but important addition to our presence. In Mauritius, we have partnered with a local company because we believe it's important to understand the local situation and work with local people.

We don't just expand for the sake of it; we really try to integrate with the local ecosystem and culture.

Our growth has been significant, but we're running out of space, so we've had to turn down quite a few requests.

Flexible workspace and coworking have become much more mainstream, not just for the traditional coworking community, but also for corporates.

We have quite a few international companies coming to us now, looking for bigger spaces. We offer completely serviced solutions where the company doesn't have to pay for fit-out or find a local company to do it. Our services have become mainstream, and we're doing well.

In this sense, our current stress is very different from what we experienced in 2021. Then, we were focused on how to get through COVID and become profitable again.

Now, we're focused on how to keep up with demand without losing our soul and brand.

Lastly, we've put a lot of effort into linking everything we do to the sustainable development goals. We're not just focused on growth in terms of square meters and number of people; we're also focused on sustainability and adding value to our members. It's important to us to be more than just a business looking to make a profit.

💬 How did you grow awareness about Workshop17 locally when you started?

It was very different when we started in 2012 with our first location in Johannesburg. Although other coworking spaces existed in South Africa, they were still new and very niche, often resembling alternative spaces with small areas and amenities like ping pong tables. Our decision to open in a grungy part of Johannesburg's inner city added to the challenges we faced. We had a lot of educating to do and needed to finance everything ourselves since banks weren't interested in coworking spaces without leases for tenants.

To build awareness and understanding, we engaged with the local community, talked to the media, and shared our story in magazines and radio interviews. We didn't focus on selling Workshop17, but rather on creating a culture of entrepreneurship and innovation that was accessible to everyone. We wanted to bring together entrepreneurs who wanted to make a positive impact and help solve South Africa's problems.

One thing that set us apart was our willingness to host events and activities outside of the coworking space. This attracted corporates and networking organizations like Startup Grind and Hook Up Dinner, bringing in 250 starting entrepreneurs who could experience what an office could look like and interact with more established businesses. This helped us build a community and gain more exposure.

Since then, coworking has become more mainstream, and our growth has been rapid. We have expanded to other locations. We partner with local people and businesses to understand the local situation and ecosystem. We also offer flexible office and coworking spaces that cater to the needs of larger corporations and organizations. Moreover, and as I was starting to explain earlier, we have put in considerable effort to link our work with sustainable development goals, not just in terms of growth in square meters and the number of people but also in the way we build spaces and manage them.

💬 What’s the biggest change you’ve noticed about the way members ‘consume’ your spaces post-pandemic? What’re the most in demand?

The need for flexibility has increased significantly. We noticed this after Covid and the lockdowns, where people started coming in later after dropping their kids at school, but also leaving earlier. People realized that there's value in being at home when their kids are there and that the nine-to-five workday isn't always necessary. As a result, we've seen a rise in international customers, even during Covid.

For example, some were in Cape Town enjoying the summer when London and England went into lockdown, and they decided to stay for another two months. This has led to an increase in digital nomads, not just independent ones, but also those working for companies that allow them to work from abroad for a few months. We've also seen a lot of corporate companies enroll with us, and now have over four and a half thousand members.

However, we don't have enough space for all of them, so we've developed a proposition where these corporate companies can be flexible and use any space we own.

We have seven spaces in South Africa and will soon be opening more, allowing us to serve the national footprint. We've also developed new products that cater to this need for flexibility, such as parking and seating arrangements that can be used by multiple people. This change in rhythm and clients has forced us to become much more flexible.

💬 You grew from 1 space in 1 city, to 9 in 2 countries. What was the most challenging in growing?

In the beginning, it was challenging to secure the investments needed. Our spaces are high-end in terms of facilities and infrastructure, including air conditioning, heating, acoustics, and more. As an operating company, we don't own the buildings, so financing the fit-out of the space was difficult.

We needed to build partnerships with landlords who believed in our vision, especially since we didn't have a track record at the time. Investing in a space is a significant financial commitment, and we plan to operate in the same location for at least ten years.

Therefore, choosing the right location was crucial. We preferred locations that offered amenities like restaurants, shopping centers, and banks within walking distance.

As we built a track record over time and developed stronger relationships with landlords, finding suitable locations became easier.

However, it was not always straightforward, as some landlords wanted us to fill spaces that were difficult to rent. Nonetheless, we persevered and now offer multiple locations across South Africa.

💬 How do you choose a new location for Workshop17?

So, we consider both the building itself and the area it is located in. We aim to be situated in areas where people reside, which links back to what I mentioned earlier. We intend to establish a network of locations where most people can access Workshop17 relatively close to their homes, perhaps not within 15 minutes in a large country like ours, but within 30 minutes. Thus, we are looking for areas where our clients or the population generally reside. Additionally, we need the location to be easily accessible by transport, whether public or private, reducing any friction and making the journey from home to the office effortless.

Secondly, we aim to have amenities nearby that promote environmental sustainability. The location must be part of a precinct, and we prioritize the precinct over the building alone. Are there restaurants and grocery stores? Can you cycle or walk without taking a car? Can you do your shopping quickly before picking up your children from daycare? These are all factors that can reduce stress at the beginning and end of the day, so we consider them when selecting locations.

Facilities are also crucial. In a country like South Africa, where public transport is limited, we need to have ample parking facilities. We also focus on character when selecting buildings. Each Workshop17 location should be unique, with some kind of wow factor. We consider natural light, and we prefer spaces with windows that can open. In the past, office buildings were constructed without the option of opening windows, but after the pandemic, people prefer fresh air, so we prioritize buildings that allow for natural ventilation.

The location must be at least 2,000 square meters for us. We also consider potential partners in the building. For example, we partnered with a hotel, and they offer accommodation and workspaces. We also look for other facilities like apartments where people can live. In Cape Town, there are opportunities for digital nomads to live and work, and we consider all these factors when selecting a location.

Finally, we consider costs.

💬 You mentioned the size earlier, stating it should be at least 2,000 square meters. How did you arrive at that specific number?

Our approach requires a certain scale. It's not easy to create a comfortable environment in a space smaller than 2,000 square meters.

So we consider various options and the largest space we have is over 5,000 square meters. However, we avoid creating a space that feels too big and impersonal like large companies, which can drain energy.

We always strive to maintain a human scale. We want people to feel that Workshop17 is a place where interesting things are always happening and they will not have a boring day. This is the reason people choose to work here. We are currently having this conversation remotely, but why should we come to the office? What's the added value? We can do everything from our laptops and have our calls from home.

However, what we lack is the energy, inspiration, and action that come from being in a different environment. We aim to create places that inspire people and provide them with different experiences.

💬 You launched new solutions like Flexi Connect and Creative Connect what was the idea behind them?

Both Flexi Connect and Creative Connect are different initiatives, although they are both connected and came about during the Covid pandemic. People wanted to have more flexibility and avoid long-term commitments, and that's where Flexi Connect comes in. To put it simply, it's like buying airtime for your mobile phone - a prepaid system where you only pay for what you use. Our coworking spaces operate with a whole system that uses wallets and space credits. You can use these credits to book meeting rooms or hot desks, buy coffee or lunch, print documents, or even add parking credits and rental cars. The system is incredibly flexible, and you can buy credits online and use them whenever you like. With Flexi Connect, companies can buy a subscription for their teams. They can purchase several credits and book meeting rooms or spaces without having to pay out of their own pockets. The company can control who has access to the credits and who is authorized to make bookings, which provides complete control over the system. They can even subsidize their staff's coffee and lunch expenses with credits.

The Flexi Connect system is unique in that it's the only membership that's not individual. Rather, it's a company-based system where a single membership can be used for the entire team. This system is ideal for companies that no longer have an office or have flexible work arrangements. They can purchase a membership and use it whenever they need it without having to worry about paying for what they don't use.

On the other hand, Creative Connect is an initiative rather than a product. We believe that art and creativity play a crucial role in the workspace, not just as decoration but also as a source of inspiration. We want to bring art and creativity into the coworking space and support upcoming artists by giving them exposure to a wider audience. As a coworking space, we have a lot of walls that are perfect for displaying art, and we've noticed that many galleries have a surplus of art that doesn't see the light of day. By partnering with these galleries and artists, we're able to showcase their work and give them the exposure they deserve. Our Creative Connect initiative also supports entrepreneurship by giving artists a platform to build their careers. We feature both established and upcoming artists in our spaces, just like we do for our entrepreneur members.

💬 You have a strong network of partners, what do they bring to the community and how do they help you fulfill your vision?

Yes, they are very important. There are different types of partners we chose when we started. We don't want to compete with our members, so if TEDx is a member, we won't create events that compete with them. Instead, we think of our community as an ecosystem with partners like Entrepreneurs Organization, and TEDx who need workspace and meeting space. We often sponsor these partners, and they bring in activities for our members to participate in, extending our reach and connections.

Our goal is to increase the chances of accidental meetings that lead to opportunities. For example, we work with Amazon Web Services to provide our members with up to $6,000 in value. We also have partnerships with startup entrepreneurs, such as Sneaker Shack, which is a sneaker-cleaning company that supports a growing entrepreneur and provides a service to our members. Members receive discounts and can drop off their sneakers at our place.

Another partnership we have is with Munching Mongoose, which provides organic food to our members. This partnership supports the development of Agripeneurs, who sell their products to our clients at a better price than they would get by selling them to their unemployed neighbors in the township. These are just a few examples of partnerships that align with our vision.

💬 If you could do one thing differently in the journey of Workshop17 what would it be?

In hindsight, I believe I would have chosen a different location to start with. The location we selected was not fully developed, and the promises made to us were not fulfilled.

We invested our money in a place where there were too many external factors that we couldn't control. This ties in with your earlier question about how we choose locations. We may not have chosen the smallest location for our first space, but we invested all our money there. If we had chosen a location that was easier to access and activate, and not in an unsafe or difficult-to-park area, we could have created a more appealing space.

Instead, we ended up with a beautiful space that became somewhat isolated, and it cost us a lot of money.

➡️ Reflections on building Workshop17

💬 What has been your biggest learning out of bringing to life AND growing Workshop17?

Another significant shift we made was moving to the waterfront in Cape Town, which involved finding the right partners who shared our vision and were willing to help us take the next step. So, when looking for a space, it's important not only to consider the location but also who owns the space. Do they understand your goals and values, or are they just looking to rent out their property?

The landlord is not just the owner but also your partner, so finding the right fit is crucial.

During COVID, we transitioned from leases to management agreements, which was a big change for us. As a service-oriented business that provides expertise, systems, and design, we don't necessarily need to own the physical space to activate it. This makes us what people call 'asset-light.'

We sell our services and expertise, and the partner provides the space and pays for the fit-out, which is similar to how hotels operate. The industry is increasingly moving towards partnerships with landlords rather than traditional leasing models, and we're keeping up with this trend.

💬 Was it hard for you to convince landlords to go that route?

It wasn't easy because we needed to convert leases, which gave us guaranteed income, to a management agreement, which is more flexible. However, we were faced with this challenge during the pandemic. In a way, Covid actually helped us because we had to make a difficult choice - either liquidate or restructure. It was a make-or-break situation.

Fortunately, the landlord was also affected by the pandemic and realized that if they didn't make changes, they would also end up with an empty space. This alignment allowed us to make the best decision we've made so far.

💬 What would be your best advice to someone thinking about opening a coworking space?

Understanding what you're doing in this business is not easy. In the Netherlands, there is a program called “I'm Leaving,” where families give up their life and move to Southern France or Spain to set up a bed and breakfast in a charming old house.

However, they often run into trouble, which is why people view coworking differently in different countries. While there is a lot of sympathy for coworking and community, it is hard work and has many moving parts. Making enough turnover to keep it going requires a lot of transactions.

To succeed, you either need to grow or keep it very simple. We chose growth, but it comes with the challenge of developing the systems needed to handle everyday tasks and scale without going under. It's important to resist managing the community personally because you end up writing and selling invoices, chasing money, and dealing with problems like electricity outages. There's much more to it than that, and you need to organize the facility side and finance side to make it work. It's a fulfilling endeavor, but one that requires careful consideration before choosing it.

💬 If you could chat with coworking spaces now, what would you like to ask them?

💬 And if you could chat with members of coworking spaces?

What are you telling others about the space that you're in?

💬 Last but not least, where do you want to bring Workshop17 next?

And in the next two years, my goal is to double our number of spaces. This means creating a robust network of locations that people can easily access, as well as strengthening our partnerships both locally and across South Africa.

Join us on Discord to discuss the story of Workshop17!