With the emergence of more entrepreneurs in Malaysia, another trend is also slowly catching on in the market — the setting up of
Unlike serviced or virtual offices, which provide office space and administrative services, co-working spaces offer entrepreneurs and
startups a working space built around a collaborative environment.
Most people using co-working spaces do not work for the same organisation.
However, there are opportunities for collaborating, networking and mentoring with other independent professionals in these spaces.
Co-working spaces have flourished in other developed countries where entrepreneurs and freelancers are moving out of cafes for an environment that allows them to work with others.
In Malaysia, the co-working concept is relatively new.
Co-working locations first started appearing in Malaysia about four years back with Paper + Toast.
Since then, a handful of other available locations have also caught the attention of budding entrepreneurs and freelancers.
These include chic spaces like Nook, MakeSpace and Fluent Space, as well as the more traditional offices set-up such as White Space and the many government-funded incubators.
Space and more
Merlin Chong was looking for her own office space before The Entrepreneur’s Lab came about.
After a fruitless search, Chong decided to start her own.
She purchased an office and was looking at the option to sublease the rest of the space she did not need.
Over time, she explored and developed other ideas which led to the creation of a space that “stimulates creativity and promotes experimentation”.
Chong spent about RM300,000 to set up the co-working space, giving it a rustic, industrial feel with elements of fun and creativity, which she believes will appeal to young entrepreneurs.
The Entrepreneur’s Lab at Oval Damansara opened its doors on April 25.
“We don’t want to be a normal serviced office. Yes, we have the space, but we also have access to a network of services and it is a place to collaborate with other like-minded people. We are also looking at offering seminars and workshops that will benefit the entrepreneur community,” Chong said.
But having a place for entrepreneurs to gather and work is not all Chong hopes The Entrepreneur’s Lab will be.
“Ultimately, we want this to be a business incubator. Part of the business plan is to help entrepreneurs, which is something close to my heart. To me, it is a social business,” said the 29-year-old, who is herself an entrepreneur.
Likewise, The Nest, a co-working space started by the MGVD Group about six months ago, aims to be more than just a space provider.
The Nest also started out of necessity for MGVD as the team had previously moved from one co-working space to another before stumbling upon its current location, a 6,000sq ft bungalow nestled among other luxurious bungalows in Damansara Heights.
MGVD founder Adam Hirsch said The Nest currently hosts three established startups and about 100 co-workers every month.
Apart from just providing space for entrepreneurs, startups and freelancers, Hirsch said he sees The Nest as a hub for entrepreneurs to come together to tap into each others’ expertise and creative ideas.
“Here, we have a system that allows entrepreneurs to launch successfully. You can leverage the support network and shared resources that MGVD, as a venture builder, has to offer,” he said.
Building a model that works
Co-working spaces generally operate on a different business principle than most other companies.
They don’t hide their prices and some provide certain leisure facilities without charge.
Additionally, they don’t lock people into long-term contracts, which could mean a lack of steady revenue.
Co-working spaces earn the bulk of their revenue by renting out desks. Most also offer event space for rent.
Reports note that most co-working spaces turn a profit after two years. But there have been many who have also had to close down.
“Subleasing is always profitable. Providing space can be a profitable business. But what sets a serviced office business apart is the value it brings to the market. We don’t want to just focus on profit alone,” said Chong.
Hirsch commented that the real value for co-working space providers is not in the monetary gains but in the community it brings together.
“It could be a profitable business. But as a co-working space, rent alone is not a viable business.
“The Nest, for example, is more of a project for the MGVD group. It is not that profitable. The real value is in the connecting point, in bringing the community together. It makes sense to have a space if there is a community,” he said.
While there are quite a number of space providers in the market, particularly in places that have dedicated entrepreneur hubs such as in Cyberjaya, Hirsch noted that most of them are empty.
The issue, he added, was that these spaces were built before the community.
“Most start as shells and providers try to fill them. For us, our advantage is that we have a community of entrepreneurs, which we build a shell around.
“So, we are meeting a need rather than having to fill up a space.
“Our goal is to build as many successful entrepreneurs and companies as possible. We want people based in The Nest to be real entrepreneurs with real products,” Hirsch said.
Some of the challenges faced by co-working space providers is the lack of awareness on their services and local entrepreneurs generally still prefer to work out of cafes.
Then again, Hirsch points out that the community of entrepreneurs in Malaysia is not that big.
But Chong is certain that there will be more entrepreneurs coming into the market. She already has plans for another two branches of The Entrepreneur’s Lab in two years.
And while entrepreneurs will benefit from having a place to collaborate and bounce ideas off each other, co-working spaces will, likewise, benefit from the possible increase in tenancy.