Episode 6: Oscar Venhuis – How Coworking Works in Asia

June 18, 2019

Oscar co-founded theDesk, a coworking and events space with locations in Hong Kong and Shanghai. As a board director and Chief Creative Officer of theDesk, Oscar drives collaborative innovation from technology to brand strategy and talent acquisition to help theDesk establish sustainable business growth in a highly competitive space.

What’s covered in this episode:

  • Ways coworking spaces can differentiate themselves using community, partnerships, design, service and technology.
  • Coworking differences in Asia, specifically Hong Kong and Shanghai.
  • The future of coworking and spaces: moving from thinking about spaces to collaboration offline and online.

Podcast Transcription:

(This transcription has been redacted for readability.)

Alexander: Hi everyone, welcome to the Fullstack Marketing Ninja Podcast. I’m here in this lovely office in Admiralty, Hong Kong right now with a good friend and also the Chief Creative Officer of theDesk, Oscar Venhuis. Great chatting with you today. How are you doing?

Oscar: Hey man. Thanks for inviting me, it’s been awhile since I’ve seen you, maybe one or two years?

A: Yeah well, you know, whenever I’m in Hong Kong I think you’re definitely one of the people that I enjoy chatting with and probably having beers with, so glad we can maybe kill two birds with one stone today. Why I wanted to reach out to you is because you’re a pioneer of sorts in Hong Kong for the coworking space and experiences. When we first met, you had a small space out in Sheung Wan (Hong Kong). Now you’ve got how many spaces now?

O: Five in Hong Kong and one in Shanghai.

A: That’s all within a relatively short span of time. There are a couple of things that I think are very obvious that I want to talk to you about. First of all, coworking is something that I really believe in, especially now that I’m traveling around and always needing a space to work in and it’s something that’s for millennials or kind of the new age of working. I think a lot of larger corporations are moving toward that style. But it’s such a crazy, competitive business. So, I am glad I have a chance to talk to somebody that’s actually doing something in this space to understand how when you’re looking at a business like this when it can be so noisy and competitive how you keep everything working and then also what the competition and certain things as marketers or business people, what we can kind of pull from this experience.

So, I guess maybe you can give us a little bit about your background first? We’ll start there and then I’ll give you some questions.

O: Yeah I’ve got a bit of a colorful background. I guess no one starts with a lot of experience in coworking, so I had zero experience in coworking before 2016. So we started the business in 2016 but before that ,I was actually mostly involved in design and digital marketing. So I started my first job in 1997, born in Korea, in Seoul, raised in Holland, studied further in London and have been living here in Hong Kong on and off now for six years and now I travel between Shanghai and Hong Kong.

A: So theDesk which is the coworking space is mainly based in Shanghai and Hong Kong, right?

O: Yeah, well mostly. We started here in Hong Kong in 2016, so that’s our home base. So within, let’s say in three years – I thought we’ve been growing fairly slowly but – in fact we are the third largest coworking space in Hong Kong in terms of size. In Shanghai, we are basically opening the space as we speak, on the 14th of June. So it’s a brand new.

A: So maybe you can tell me a bit about how this idea started? Obviously, I think, you know if it was 2016, the WeWorks of the world and coworking giants of the world would have already been around. I think there were a couple spaces here in Hong Kong already. I don’t know about Shanghai, but how did you guys decide to come into this industry and what is the environment like in Shanghai right now? Tell me a little bit more about that.

O: Yeah. The way we started the business in 2016, we actually started as a very traditional coworking space. In 2016, WeWork came to Hong Kong as well, just a few months after we opened. And of course, the first question people asked me was, “okay, so what makes you so different?”

It’s a really simple question, but the answer was very complicated in order to get to the point of what makes us different. At the start, I don’t think we were actually so different. We just had space. But quickly, we had to pivot towards a model that made us different from the rest, especially with competitors entering the market.

I think the first difference that we were looking at was, how do we actually grow a community? If we just look at real estate, of course you can just build more and more buildings and sites, but the real value is really how can you scale trust and community? Those two things have been quite central to what we do. So, we’ve been looking at, okay, if you want to build and grow a community and you were to focus only on your own members – because they pay for it – then, in fact you only have a very small community and in business, you need scale. The one thing that we quickly noticed was that we could actually really leverage from neighboring businesses. For the members, it had a benefit because they were neighbors and vice versa, where our neighbors can benefit from all members in terms of doing business. That’s actually the start of our concept of [building an] inclusive community including not only just for members but in fact, everyone around you. Why should we exclude them? It doesn’t make sense for us. That’s actually sort of the concept of the inclusive community, versus an exclusive community that I would say most additional coworking spaces are looking at.

A: Right. You’re saying, let’s say we’re set up here in Admiralty, you’re actually out there engaging with local businesses? I guess, engaging whatever is in the vicinity and seeing how you can leverage those businesses to your members?

O: Yeah exactly, so, for us, I think the real value-add for what coworking should be about collaborative work. Of course, we have private offices here. But by engaging and building trust with neighbors, we offer more business opportunities. We create a larger network. So that’s how we actually grow our community by engaging the local businesses first and then building outwards. Now we have several –  it’s a bit of a bit like monopoly we have every [subway stop now with a coworking space. So once we get more and more coworking spaces, we can connect all those neighborhoods and communities together.

A: Are you comfortable with sharing a particular example of a partnership that has been really helpful for you guys?

O: We had we had a partnership with a hotel group. We’ve had partnerships – I think members as well that we’ve introduced… I think it’s not so much about us forming partnerships, it’s more that we give the members the opportunity to form a partnership with someone else. That’s where you really add value in terms of stickiness. Now, if it’s just an office, they can go anywhere and put a desk in a space – that’s not so unique. But the stickiness is really where we can add value in terms of business growth. Then of course, people will hopefully stay longer.

A: Yeah. Obviously you’ve spent a lot of time doing design and I think it shows when you look around this office here you can see it. (Oscar: I guess they can’t see it.) Maybe I can put up some pictures on the website, but the office has a very minimalist vibe, very European.

O: Oh really? What’s so European about it?

A: I don’t know, it’s kind of got this Scandinavian feel, you know everything looks very advanced but it’s also very minimalistic and I’m also not a designer, so that could be complete B.S…

O: You know you’re right. Actually, it’s a good point because that’s the first thing that people notice, it’s very, very minimal. Yeah. But we have a very good reason for that. I mean, when we were doing our research, if you look at interiors, people have an expectation of walking into, let’s say, a living room environment. Right. But when you work, for the first few weeks it’s really fun to meet people and drink coffee, but then after two or three weeks when you settle down, you start realizing “Holy F, I actually need to do some work.” And then everything becomes a distraction. The ping pong table, the beer taps, people talking around you… so we actually really created an environment where we stripped away everything that’s not necessary that can become a distraction.

A: You know, we had a pre-chat too and I didn’t really understand when you said, “our space is really built for doing work.” I was just like, “okay, well every coworking space is built for doing work….”

But I really do get that here – it’s really non distracting to the point where I think it’s tasteful, but if you pushed it any further, it’d kind of have a “max penitentiary” feel. I’m not saying this in a bad way! I would want to come here because I feel like I would get a lot of work done. I definitely see that and obviously, you’re the Chief Creative Officer, so a lot of your input has benefited…

O: It has benefitted in terms of strategic difference and growing our community in terms of increasing productivity.

A: Yeah definitely. And I think that was one of the things that when we spoke on the phone, because I’d never seen the space, I didn’t really understand until actually I actually came in here, so that’s really cool.

Can you tell me a little bit about how – obviously you’ve said that the Hong Kong is your headquarters and you’ve just expanded into Shanghai. And you know anyone that’s worked here in Hong Kong is that it’s China but it’s also, you know, a two-party system… I don’t want to get arrested or anything but it is different, obviously. What were some of the challenges of expanding to Shanghai?

O: Well there are a few things that are quite interesting. I did a presentation last week and I mentioned Shanghai has around five hundred coworking spaces… that’s a lot…

A: Did you say five hundred? Wow. I mean there’s a lot of people up there, but that’s a lot of spaces right?

O: The competition is just amazing. So the real challenge for us is how do we stand out there, with all those existing coworking spaces. I went to visit about 10 to 15 coworking spaces. One thing that we believe is that this is a good time for us to enter the market.

First of all, for businesses when the market is very uncertain, especially with the economy, the U.S. and China, bigger companies are looking to avoid risk. (A: De-risk) To de-risk. So they’re looking at more flexibility instead of the four-year lease that they were looking at, they say, “hey, we can get a coworking space with a few people in there and it’s just for a few months and we’ll see what happens.” So that the market is actually quite good for us for coworking. But the real difference that we try to compete on is that when I went to all the spaces, was that I noticed that the customer experience was something that didn’t really exist in China. People sell you the space, but they weren’t asking what my business was. No one actually asked me, “Oscar what do you do in Hong Kong?” Which I found really surprising because I would have told them theDesk.

A: Is that a service thing or is that a culture thing? Or both?

O: I think it’s both. Even in Hong Kong, that’s one point that we stand out for. And so the real the real question for us is how do we grow and scale the user experience? Because that’s what we are trying to focus on. Because ultimately, it’s just desks, chairs, private rooms and meeting rooms. So if we were to focus at that product level we would just not succeed in Shanghai.

A: Why did you decide [to open in] Shanghai and not maybe, the Greater Bay Area [of China] or areas where it seems like there would be an apparent fit? Not that Shanghai doesn’t have a lot of tech but…

O: Yeah, good question – it was just pure chance. We have a relationship with people in Shanghai and that was his first deal that came up and it was the right location. Location is quite relevant in Shanghai.

A: That’s awesome. You know obviously, this is a marketing-focused podcast and we haven’t talked too much about really marketing yet, because I think it’s just so interesting… it’s such an intense space so it’s really great to be able to hear some of your thoughts and maybe challenges about what it’s been like growing theDesk. Think back to 2016 when you are getting your first customers or even now – what are some of the ways that you get people through the door and how do you keep them here? So, I guess we’re talking about customer acquisition and retention.

O: Yeah I guess the first step is how do we acquire people. We actually make quite a few let’s say mistakes at the start. When we started the business, there was a lot of display advertising. It didn’t really work. Actually, we were spending quite a bit of money on this but we noticed that we were driving a lot of traffic and people were asking questions. But there was no there wasn’t no conversion to sales. So I kind of looked at the numbers and on paper the numbers looked really good. In terms of traffic. The one thing that identified this is that people search online to compare prices. People were going to the website but they were just comparing prices all the time. So we basically switched from display – as any startup may do – to a more content driven approach and the content was actually a little bit different. The focus that we had in terms of content was really about people and not actually selling the desk or coworking space but more about the story behind entrepreneurship or how they built their businesses and how they built partnerships. So really focusing on other people instead of trying to sell our space. We did a few tests, on Facebook we did a test with discount advertising and a story into lead generation and advertising in terms of discounts just didn’t work. Hardly any clicks.

A: What’s your hypothesis or why do you think people are more driven to that story-based approach?

O: Well, I mean if you look at yourself… if I look at myself, I never click on a discount. Well, there may be on a rare occasion where I’m specifically looking for something. But I would typically click more on a story about something that I’m really interested in, you know, like about entrepreneurship or accounting or how do you grow your business or a lot of subjects around technology and entrepreneurship. So that has far more reach than, “hey we have a 20 percent discount.”

A: I guess, obviously with SEO you would do a lot of keyword research and stuff like that. Do you find that people come to theDesk [online] for a certain reason or a piece of content that they really connect with? When I’m looking and doing my research or comparing, I might not care what discounts, but what is the real target messaging that you’re using to get people to come to theDesk?

O: I don’t think there’s a single message but I would say the difference sense of creating our content would be to move away from startups to entrepreneurship. That’s kind of a big shift because people automatically think coworking is just for startups only. But in fact, the biggest chunk of [people in] our space, they come from SMEs or established startups, MNCs. So we adjusted the content as well.

A: So you guys would be competing, with rather than then a WeWork, maybe like a Regus or something like that.

O: A little bit, yeah. We sit in between, where Regus is a serviced office, it’s just purely office space – they don’t really focus on community building. On the other side, you have coworking spaces that really focus on providing a different environment. I would say the majority is that they are focusing more on the lifestyle. We made it very clear this is about business, maybe it’s very serious…

A: Getting something done.

O: Yeah. Just get stuff done.

A: Not that that’s not what startups are doing but you know, like you said, it’s more of a lifestyle kind of angle rather than a productivity angle, which is something that you told me you care about.

O: Well, you know if it’s all about acquisition, an early startup will probably look for a different environment. If you’re an early startup, then you have no network. So you want to grow your network. So you want to meet a lot of people. That’s a different coworking environment. If you’re an SME and you have a large network already you don’t need to talk to everyone who doesn’t want to get your work done as efficiently as possible. And you of course look for business opportunities, but they’re not going to networking events everyday. So there’s a difference. We kind of design the content around that as well.

A: Right. So I guess that is you know if you’re an established business that kind of already helps with maybe the contracts in terms of retaining people. How do you keep people here from if you have a customer that’s long-standing – is it sort of a contractual obligation? How do you kind of keep people re-signing up for a contract?

O: Retention, yeah. That really comes down to customer service. And but also one of our strategies has been that we don’t give deep discounts. If you give really deep discounts what happens is that, yes, you fill up the space really quickly. But as a salesperson, you want to keep that deal as short as possible. You’re not going to give a 70 percent discount for a year. You’d be completely stupid. So, you give it for three months. So what’s going to happen after three months? You’re going to bump up the price and people leave. So that retention rate just drops. And it’s also creates a lot of uncertainty for the business, not only for the businesses that are considering coworking but also for our business. So we’ve been pretty straightforward with people, and say, “hey yes, we give maybe less discounts, but we’re going to be fairly transparent what’s going to happen afterwards.” We’re not suddenly increasing prices by whatever, say, 50 percent. So I think that has helped our retention rate, which I think is up to 80 percent in our space. I think it’s probably one of the highest in the industry.

A: Can you touch on customer service? So, when we’re looking at kind of coworking spaces what are some things that you can add on to create a better product, or, you know, customer service for people? What do you guys do differently in that regard?

O: Well, we are very careful with disrupting people. The one thing we did as well at the start was – give a lot of notifications for events activities: wine, beer, happy hour. And we noticed that it was just too much for people.

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Ultimately, they just want to get their work done. If they want to go for a beer, they go for a beer. So we really scaled down the announcements to control that. People will get fed up. After a while, people stop reading what you actually send around. So, I think that is one thing, that people feel that makes people think, “hey, I can actually work here.” And we proactively kind of, the front desk, but also the community managers here, they’re really trying to help. We have weekly meetings and informally, we talk to people to see how we can actually help them. And I think that they really feel that we try to reach out to them. It’s not just a space. We try to share our network that we have and make introductions to other businesses. I think that’s quite relevant. But again, it depends on if you talk to a business owner or if you talk to a staff member. A staff member employed by a boss is not necessarily looking for a business network. They probably look for more of a social environment. So there are different approaches depending on the person. We create a lot of personas in this journey and I think that seems to work.

A: I mean, this is a pretty capital intensive industry. What is the future of coworking and where do you see the businesses going that stay at the top? What do you think is the evolution of this industry and how do you stay competitive?

O: Well, staying competitive, is really hard, because you need to keep changing, so every few months we basically pivot. Well, of course it takes time to really come to a big pivot – I would say we have had two to three major pivots in our business.

A: When you say “pivot,” what exactly are you guys thinking or strategically doing that’s different?

O: Well, without giving you all the details, the one thing that we are looking at – if you look at coworking it’s really about collaborative innovation or collaborative work and working together. And that’s our real focus. So the physical space contributes to this, but technology is a really big element in this as well. So what we are looking at for our future is to really combine that. So how can we use technology to connect people which is not new in itself, but especially how do we bring them on and offline, because people switch back and forth not from technology to actually meeting from meeting back to technology. So that’s the model that we are looking at. We actually pivoting a little bit more towards technology and not so much focusing on real estate.

A: I guess that the second part of my question is, what is the evolution of…

O: Coworking? (A: Or just spaces in general.) Yeah. Well, I guess to give you some numbers so the market in 2016 was about I think in Hong Kong was around 3 percent. Now it’s up to 6 percent. By 2030 in 10 years, across Asia, they expect that the market needs in flexible coworking spaces to be around 30 percent. So we’re still talking about a 20% plus growth rate. So the evolution of coworking is that I believe there will be basic operators that will just operate space. When we take it to the next level, then I think any space can become a coworking space. It does not need to be a specific desk space where people work together. In fact, you can work in a cafe. So I see that it will go beyond the physical space itself.

A: That’s where you mentioned that it’s more, like you were saying, how do we enable people to collaborate when it’s not about the space, period right?

O: Yeah, exactly. I mean what makes us unique as people is that we can work together. And that’s something that is really simple that’s actually very complicated for animals. So I think if we can create an environment of coworking in the city where people can work together more, we can actually increase productivity which has actually decreased in the last decade.

A: Thanks for you time today Oscar. You kind of alluded on what your journey is going to look like in the foreseeable future for theDesk in terms of working on some of these more collaborative technologies rather than thinking about it from a physical space perspective. Is there anything you’d like to add to what people should know about that’s going on in your life or maybe with theDesk?

O: In my life, well there’s a lot happening, haha. At the business level, in terms of the industry, the one thing I strongly believe is that of course, coworking is here to stay. It’s not like a little buzz or hype. How will it evolve? No one knows, because no one can look into the future but collaboration. Working together. How do we build trust? Especially that trust bit, in terms of how we scale trust, will be the next step in terms of coworking.

A: Thanks for your time.

O: Thank you.

Podcast music by Ikson Music.

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