Understanding Free Access

[Mike Schinkel]

Hi all:

I'm hearing that a lot of you are allowing people to use the coworking
spaces for free. In trying to plan a facility I've run the numbers and I
don't see how that is possible. First I don't see how you can get people to
pay for what you are giving for free and second I don't see how you can make
the density work.

I understand that coworking is all about providing an open environment and
letting people use it w/o signing up is in the spirit of things but in order
for us to pull this off it needs to be profitable, i.e. not operating at a
loss.

Could anyone speak to this please? Thanks in advance.

-Mike Schinkel
President; NewClarity LLC
Organizer: Atlanta Web Entrepreneurs
http://www.linkedin.com/in/mikeschinkel
http://mikeschinkel.com
http://atlanta-web.org

[Tijs Teulings]

At Nomadz we simply tell people they can come by a few times for free
and have to pay when they want to drop in regularly. For the
CoworkerPassport i don't expect people to stick around for very long
either so it basically works itself out. Think of it as a free 3 day
trial.

Tijs

--
Tijs Teulings
tel: +31645004824
http://tijs.org

[Alex Hillman]

Think of "free use" as a marketing tool. It varies space to space.

For instance, we don't have a "free dropin" policy like some, but some of our signup rates include free days. Also, consider Jelly (http://workatjelly.com/) as a market growing technique. I know there are already multiple Atlanta Jelly groups.

Bottom line, though, is if you want to be a sustainable business, include memberships that a) work for your members and b) work for you.

-Alex

--
-----
--
-----
Alex Hillman
im always developing something
digital: al...@weknowhtml.com
visual: www.dangerouslyawesome.com
local: www.indyhall.org

[Darrell Silver]

Alex is exactly on target with how dropins fit into the business model.  We have seen many times that spaces need a few months to grow into full capacity.  During this crucial phase, free dropins provide excellent advertising for people who are new to the concept.  

The same applies to holding Jelly events.  They are a great way to get the word out, especially early on.

As an aside, have you thought of calling the non-full time memberships 'part-time' instead of 'floaters'? 

D

---------------------------------------

dar...@darrellsilver.com

(917) 841-4079

New York, NY

[Julie]

We offer "one free trial day" cards. We also have daily drop in rates
of $25 (used to be $10/hr, but walk/drop-in was, and has been since
the rate reduction, an EXTREMELY negligible part of our business).
One needs to run the numbers as to whether or not it makes sense,
particularly because some kind of "staffing" is required for drop-
ins. I think it's great when you first open to have bodies around
(for free - friends are good), but really, monthly memberships will be
what sustain you.

Do keep in mind that location will make a difference to your drop-in
traffic. Busy part of town with lots of professionals vs. being
tucked further away, esp. from public transportation.

Wish you the best of luck.

Julie Duryea
owner, souk
322 nw 6th avenue, suite 200
portland, oregon 97209
p | 503.517.6900
f | 503.517.6901
skype julieduryea
http://www.soukllc.com
tweet soukportland

On Oct 3, 7:58 am, Darrell Silver <darr...@darrellsilver.com> wrote:
> Alex is exactly on target with how dropins fit into the business
> model. We have seen many times that spaces need a few months to grow
> into full capacity. During this crucial phase, free dropins provide
> excellent advertising for people who are new to the concept.
>
> The same applies to holding Jelly events. They are a great way to
> get the word out, especially early on.
>
> As an aside, have you thought of calling the non-full time
> memberships 'part-time' instead of 'floaters'?
>
> D
>
> ---------------------------------------

> darr...@darrellsilver.com

> (917) 841-4079
> New York, NY
>
> On Oct 2, 2008, at 4:09 PM, Alex Hillman wrote:
>
> > Think of "free use" as a marketing tool. It varies space to space.
>
> > For instance, we don't have a "free dropin" policy like some, but
> > some of our signup rates include free days. Also, consider Jelly
> > (http://workatjelly.com/) as a market growing technique. I know
> > there are already multiple Atlanta Jelly groups.
>
> > Bottom line, though, is if you want to be a sustainable business,
> > include memberships that a) work for your members and b) work for you.
>
> > -Alex
>
> > --
> > -----
> > --
> > -----
> > Alex Hillman
> > im always developing something

> > digital: a...@weknowhtml.com

[Stephanie Frasco]

The E.Factor offers access to co-working spaces around the world when they sign up for Premium Membership.  http://www.efactor.com - http://www.efactor.com/p/premium

We are currently looking for more spaces, if you are interested in a joint profitable deal please contact me.  I am looking forward to meeting all of you one day.

Stephanie Frasco
step...@efactor.com
www.twitter.com/askfrasco

--
Stephanie Frasco
Special Operations

http://www.efactor.com

[Stephanie Frasco]

Hey everyone,
Sorry if that last email came off too sales-y...I forgot to turn off biz mode.  With regard to free access, there is no such thing as a free lunch.  If you want to survive you have to get paid.  I think Membership is the best way to go or ZipOffices which is something I want to develop the technology on.  Rent it by the hour, sign up online.  Done and Done.  any thoughts on that?

[Darrell Silver]

I guess I disagree..

I really think that free daily rates is part of a successful business model for most spaces.  If you have extra capacity, there is zero cost to giving away usage of desks to free drop ins, and lots of benefit in free advertising and community.  As you mature and fill the space with paying tenants, you simply reduce the supply of free dropins.  

As Alex said, think of this 'free' as a marketing tool.

D

---------------------------------------

dar...@darrellsilver.com

(917) 841-4079

New York, NY

[Tara Hunt]

We have free dropins because:

1. We don't have 'regular' hours - what kind of business says, "Well,
MAYBE we'll be around to serve?"
2. The costs of the space are covered by the deskowners and a few keyholders
3. We've never had CS in the two years it's been around - and it's a
popular, buzzing space - be too busy for more dropins or for the rent
payers (although if it did...the dropins would be asked to skedaddle)
4. It's always created more tenants for us
5. I don't want to deal with the paperwork around it - I'm too busy for that
6. CS isn't a business, it's a service - we look at coworking as a
service to the community, not a business venture
7. It makes for good energy in the space to have people and not have
to be transactional at the get go - we use the gift economy, "You use
the space for the day for free, or even while you are in town for the
week for free, then you need to pay it forward and do something nice
for someone else"
8. We've had only 1 incident in hundreds of drop-ins because of the free thing.
9. When we were originally conceiving coworking, we knew we were
competing with coffee shops and people's dining rooms/home offices
which are free to sit in (well, maybe cup of coffee bought), so we
assumed that getting them out of their houses and into coworking would
require a similar deal. It kinda works that way.
10. It brings me karma

--
--
tara 'missrogue' hunt

Book: The Whuffie Factor: Using the Power of Social Networks to Build
Your Business (http://www.amazon.com/Whuffie-Factor-Capital-Winning-Communities/dp/0307409503?ie=UTF8)
Company: Citizen Agency (http://www.citizenagency.com)
Blog: HorsePigCow: Marketing Uncommon (http://www.horsepigcow.com)
Twitter: http://www.twitter.com/missrogue
phone: 415-694-1951
fax: 415-727-5335

[NancyTWS]

It seems to me that the "free day use" topic and the "drama" of the
lurker/chronic free visitor problem above can be linked. While I
understand each space figures what works best for them, I would think
that charging a nominal rate for a day use (whether $10, $15 or $25,
depending on your market, your "amenities" and the like) would
actually serve to keep away the unwanted elements who, for whatever
sad reason, have created a safety concern in the space by taking
advantage of your space and your welcoming style.

Of course, there still could be a "free trial offer" of whatever type
one chooses (one time, three times to get them hooked!). Also, while I
know that there have been discussions of a "passport" of some type,
any space could choose to "welcome" members from other spaces for free
use of the space x number of times, if they are visiting from out of
state, whatever parameters you choose.

You guys make the rules that work for your space. Set daily rates, or
not, that serve your purposes not only from a financial perspective,
but also from the perspective of the non-financial resulting
consequences. Ultimately, if your members begin to feel uneasy in the
space, there could be a financial consequence. For example, while you
may not lose current members, they may be less likely to recommend it
to others, or may mention the downside of the "lurker" and not realize
that story would be enough to keep someone from becoming a member who
might have been considering a membership.

[Tara Hunt]

RE: "It seems to me that the "free day use" topic and the "drama" of the

> lurker/chronic free visitor problem above can be linked."

I don't know. One bad actor after over 800 people have worked out of
Citizen Space over the past few years doesn't mean that our free
dropin policy is bad. In fact, he's now hanging out at PariSoma where
- I believe - they charge for dropins and he used to hang out at The
Hat Factory where - I believe - there is also a charge for dropins and
he was threatened with calling the police there, too).

T

--

[Tijs Teulings]

I just wanted to mention that all our free dropins have converted to
paying members. 100%. Were still a baby cowork location but that's a
nice stat to remember when your thinking about limiting dropins.

Tijs

Sent from my iPhone

[NancyTWS]

Great numbers supporting the free access Tara and Tijs. Interesting,
too, that the 'bad actor' is around those places that charge for drop
ins.

Nancy

[patrick...@gmail.com]

Unless you are creating a huge space and/or really running it like a
business where it can feel like a cafe or open space, it will usually
feel more like a private space/club/office and thus won't draw 30
students looking for free wifi or bring in bums or whatever. In the
eight months we've been open we are already at our third rate plan
setup and ended up with exactly the same thing as Citizen Space and
Indy Hall (minus the daily rate Alex offers). A few things we keep
repeating ourselves or have discovered :

1. This is not a café, it's usually a community, by the way it works
and by the way you find your members (unless you have a massive ad
campaign or great street level visibility) so A LOT of the "what ifs"
that come up in terms of abuse and needs have to be ignored. Largely
you will have a bunch of kindred souls in there, people you can trust
to at least be respectful of the space and not abuse what you are
offering. The honor system is the best thing to rely on, not adding
rules / pricing / plans, etc.

2. What people say they will like (and even what some pay for) and
what they actually use are two different things. A bunch of people
saying they would love to pay by the hour or even have the chance to
drop by free doesn't mean they'll do it much.

3. The one huge flexibility people want is to access the space at any
time. Other than the fact it just wasn't worth it to maintain the over
head of our points/hourly system(s) this is why we changed, people
want to be able to have a day that's from 3pm to 11pm or a week that
includes the weekend but not monday to wednesday or... We now have
fewer members but all have keys (some with reserved desks some
without). That's the BIG point for your "how do I get people to pay
for something that's free?" question, people might not pay for the
same thing that's free (although you'd be surprised at how many pay in
large part because they want the place to exist) but just having the
flexibility of staying later or coming on a saturday does make it
worth paying.

4. Unless you are running it as a business and making money out of it,
do not underestimate how annoying it can get to have to be there to
open the space. People with a stake (monthly fee) in it get into the
habit of using it, people with much lower stakes don't and you endup
showing up for not very much at all. Now that mostly everyone has a
key, I can go back to the "freelance lifestyle" of working the hours I
want and enjoying the space like all our members.

We do now (november actually, when the points system is completely
phased out) offer (mostly) free dropins but it's not because we see
huge demands, it's because we and our members want to have more people
coming by, a larger community, more activity and more diversity, even
if it ends up being very occasional, it's new life in the place. What
we've seen in terms of use at a pretty nominal $3/hour doesn't make us
think we'll be swamped with dropins and, as Tara mentioned, now that
our hours will be more random (ie when someone happens to be there) we
couldn't charge for that anyway. It is also, as was already mentioned,
a way to have people try the space / vibe and then signup for a paying
membership. Finally, we get a lot more people from out of town
dropping in for a few hours in the afternoon now that the system is
simpler.


Patrick
station-c.com

[axon]

I tend to think that free access for select drop-ins is not an
expense; it's added value. Random, presumably creative and nomadic,
independent workers appear to contribute perspective, new eyes, and
zero politics to the collaborative process. And you don't have to pay
them.

Our plan is to price a day pass at $9.95. We plan to give away a lot
of them.

--Ax

[Dawn Hayes]

Kudos, Tara.

Personally, I am down for free drop ins. I know some of the folks in NYC accept donations for such and it seems to me that when a service is perceived as providing real value, folks are willing to do what they can to support it. We see the same happen in the open source software arena, even if everyone does not contributes financially and if from time to time, abusers, show up (Wikipedia comes to mind).

Mike, given that Co-working remains in its early stages, there is room for more than a few approaches on the profit-focused side of matters if that is indeed a CW venture's goal. It isn't for everyone, or at least not the primary focus. So speaking to that side of things, we'll see what normally happens over time as various business models are tested: shakeout, folds and consolidation. I wouldn't underestimate the power of regional culture. What works and can be easily absorbed in NYC doesn't necessarily hold for Austin or Atlanta.

My personal hope and vision is that Co-working evolves as a flexible culture, effort, whatever- that takes into account balance between providing a service that has social as well as economic value.
Surely there is room for a diverse array of interpretations until the market signals otherwise.

I am developing an offering in which members can opt to not be charged at all, but are sponsored in exchange for spending a portion of their time in the space collaboratively engaging in entrepreneurial innovations in their communities. So, a mixed space of paid and sponsored desks is the model I am focusing upon. Feel free to connect with me off list on this.

In the end everyone has the ability and right to exercise their discretion in terms of how they want to drive the bus. Some folks are going to look for a space that operates under a "strictly business" culture and others will probably favor something that goes beyond it.

Those that use our spaces are just as diverse in terms of tastes, expectations, preferences, willingness and ability to consume as we are. So, in terms of how it translates into dollars, that really plays into intentional strategic planning and keeping one's ear to the ground with what those using the space are expecting and willing to consume.

Cheers,

Dawn

--


"We are not human beings having a spiritual experience, but we are spiritual beings having a human experience."--Pierre Teilhard de Chardin

[Julie]

Dawn,

Your model of giving time back to the community for payment was
pioneered (according to my limited research and contact with) by The
Hub in London. The mind bank concept is very interesting and I look
forward to your updates on it.

Julie Duryea
owner, souk
322 nw 6th avenue, suite 200
portland, oregon 97209
p | 503.517.6900
f | 503.517.6901
skype julieduryea
http://www.soukllc.com
tweet soukportland

> > > darr...@darrellsilver.com
> > > (917) 841-4079
> > > New York, NY
>

> > > On Oct 3, 2008, at 11:47 AM, Stephanie Frasco wrote:
>
> > > Hey everyone,
> > > Sorry if that last email came off too sales-y...I forgot to turn off biz
> > > mode. With regard to free access, there is no such thing as a free
> > lunch.
> > > If you want to survive you have to get paid. I think Membership is the
> > best
> > > way to go or ZipOffices which is something I want to develop the
> > technology
> > > on. Rent it by the hour, sign up online. Done and Done. any thoughts
> > on
> > > that?
>
> > > On Fri, Oct 3, 2008 at 11:29 AM, Stephanie Frasco
> > > <stephaniefra...@gmail.com> wrote:
>
> > >> The E.Factor offers access to co-working spaces around the world when
> > they
> > >> sign up for Premium Membership. http://www.efactor.com-
> > >>http://www.efactor.com/p/premium
>
> > >> We are currently looking for more spaces, if you are interested in a
> > joint
> > >> profitable deal please contact me. I am looking forward to meeting all
> > of
> > >> you one day.
>
> > >> Stephanie Frasco

> > >> stepha...@efactor.com
> > >>www.twitter.com/askfrasco

> >http://www.amazon.com/Whuffie-Factor-Capital-Winning-Communities/dp/0...
> > )

> > Company: Citizen Agency (http://www.citizenagency.com)
> > Blog: HorsePigCow: Marketing
>

> ...
>
> read more »

[HeatherO]

I'm trying to get ours going, so I don't have experience to speak from other than there is no way we can make the numbers work if everyone w/o an assigned desk gets to come in for free.
Philosophically I have always found that people do not value or respect that which costs them nothing...
just my opinion:)

At Your Service,

HeatherO'

Heather O'Sullivan Canney, RP, Broker/Partner
Heather O' Real Estate, Inc.
Real Living Partners Triangle, LLC

(919)427-7770
104B N. Salem St. Apex NC 27502
www.HeatherO.com
www.ApexGoodLiving.com

[Matthew Wettergreen]

We structured our business model to include free drop-ins. Based on
rent owed for your space, it might not work for everyone though.
Because we view ourselves as a community service we want everyone to
be able to come in and utilize our services whenever need be. This was
especially important following Ike when many people were without power
or internet.

Matthew
carolinecollective.cc

On Oct 6, 1:16 pm, HeatherO <Heath...@HeatherO.com> wrote:
> I'm trying to get ours going, so I don't have experience to speak from other
> than there is no way we can make the numbers work if everyone w/o an
> assigned desk gets to come in for free.
> Philosophically I have always found that people do not value or respect that
> which costs them nothing...
> just my opinion:)
>

> [image: Click Here] <http://1unv.com/ujuo00/c.map>

>
> At Your Service,
>
> HeatherO'
>
> Heather O'Sullivan Canney, RP, Broker/Partner
> Heather O' Real Estate, Inc.
> Real Living Partners Triangle, LLC
>
> (919)427-7770
> 104B N. Salem St. Apex NC 27502www.HeatherO.comwww.ApexGoodLiving.com
>

[Dawn Hayes]

Julie,

A friend and colleague had mentioned something similar about The Hub, so I'll be sure to investigate further. Thanks for the heads up.

Souk looks inviting. I have a friend or two in Portland; I'll be sure to let them know about your offering and I'll plan a visit to your space when I am out that way.

I'll keep you posted. Connect anytime.

Cheers,

d