The coworking industry has been thrown into sharp relief amidst the COVID-19 pandemic, which has accelerated the adoption of remote working globally.
Serial entrepreneur Constant Tedder, co-founder of RuneScape developer Jagex and founder and CEO of the Hive, Asia Pacific’s largest coworking network, since 2012, shares his take on why these gargantuan shifts are leading to widespread acceptance of flexible working policies – and how WeWork’s highly publicized strategic mistakes will pave the way for emerging coworking and flexible work space operators to take the lead.
Tell us a bit about you and your background.
When I started my first proper company after leaving university back in London, aged 23, coworking spaces didn’t exist – I was working out of a garage. There weren’t any cool communal areas or events to make new connections. There wasn’t any place where new companies and like-minded people could come together to share a space and facilities.
When I came to Hong Kong in 2012, I was seeking a new business opportunity and I realized that there wasn’t really a nicely designed space for entrepreneurially minded people to go to, where they had all they needed to start and run successful companies.
This realization led to me visiting some other coworking spaces and I felt I could do something better. In the same week, The Economist ran an article on coworking in the States and it immediately made sense to me.
I used my early experiences as an entrepreneur to guide my thinking on how to create a coworking business, creating a space not only for startups, but for growing companies who want that energetic, friendly atmosphere combined with flexibility.
How would you say the Hive differentiates itself from its competitors?
Since our founding, we’ve really focused on delivering a great experience to our members every day and I think part of that comes from the fact that I’ve always been an entrepreneur myself. So a focus on the members, our community, service and vibe has always really been at the core of the Hive’s DNA.
Our interior design was calibrated to create purposeful spaces that felt like a second home for our members, creating a place where members and their teams love coming to work. The Hive design is intended to create a place that’s good for business and good for work. It has an atmosphere where work will get done, but doesn’t fall into the typical office design elements of strip lighting and very white colour schemes, which traditional offices do for utilitarian reasons.
What does the space offer its members?
Our spaces offer a strong sense of welcome where every member matters. We aim to give our members a great experience everyday from the smallest detail upwards.
The Hive has always made events a core element of our community with events that actively engage different cultural and business audiences in the cities we operate in. We do a wide range of events that support cultural industries like film-making, fashion, designing, as well as lifelong learning, networking and being entertained in the cities we love.
Any exciting developments in the pipeline?
We are continuing to develop the content side of our business, which is really aimed at raising awareness of our brand as a thought leader. We bring together all these exceptional, exciting stories in the business communities of the seven cities we operate in via the Hive Life magazine and on social media. And that’s something that’s really making fantastic progress.
We are super excited about our partnership with Asia Miles, which will be launching this month, enabling Hive members to earn Asia Miles and attracting new members with special Asia Miles promotions.
We are finally launching the Hivers Networking and Collaboration App, which will enable our members to connect with each other across our 20 locations. Members will be able to discover and post opportunities – and extend their business networks. And really excitingly, for the first time, companies outside of the Hive will be able to post their projects to be picked up by Hive members who are open to new work.
How do you maintain a healthy work-life balance?
As an entrepreneur, I think you see the work-life balance a bit differently. Traditionally, you can look at work and life outside work as being really black and white, but entrepreneurs don’t tend to look at work in the same way. I don’t really see it as a balance. It’s a happily blurring line!
One of the best things about being an entrepreneur is that you love what you’re doing so much. It’s just as exciting as wakeboarding on the weekend or a really challenging hike. Coming into the office gives you the same thrill, the same excitement and the same sense of satisfaction. The friendships you make as an entrepreneur with people you come across, especially if they are entrepreneurs themselves, are very special because you share an approach to life. Very often, entrepreneurs aren’t doing it just to make money. They’re doing it because they’re incredibly passionate about what they’re engaged in.
I’ve been very lucky with the Hive because we have focused on delivering a good experience to the members, the members are happy and they stay with us. And they tell their friends, which has enabled us to grow. Success for us is creating lively, busy places where great business happens everyday. So it’s a very positive business and it’s been a real joy to be in this industry.
What other projects are you working on at the moment?
I’ve always been very passionate about the environment. Before I came to Hong Kong, I started a tiny renewable energy company in the UK called Dawn Energy. The company has two operational wind farms and we are investing now in a bigger farm, so it’s exciting to see this coming back to growth.
More recently, via Honey Capital, I’ve invested in FlyFarm, an insect protein AgriTech company in Hong Kong and Australia. It’s a tremendously exciting ‘greenfield’ sector and it is a chance to be involved in insect farming, which has very strong sustainability goals.
Like many entrepreneurs, there’s a huge passion to make a difference in me. And whilst I definitely feel that part of the Hive’s mission is to make a difference to its members, I’ve also really wanted to do something on a wider scale in the environmental sphere. That’s why I started Earth.Org last year, which is a not-for-profit environmental news and data science organization based in Hong Kong. Earth.Org aims to bring attention to the nonsensical things we humans are doing to our unique home planet. We need to look after it. As the saying goes, there is no Planet B. When it comes to what humans have done historically, what is happening now and what the likely effects will be in our lifetimes, it may sound as though this is well covered by existing media, but humans have a problem calculating risks especially when it is outside their sphere of experience. Climate change and the risks this brings to human welfare are not nearly as properly and widely understood as they should be.
To put it bluntly, human economic development is just not well thought through. We have not yet developed the maturity to see beyond competitive growth at all costs, nor have we developed the institutions, rules and boundaries to make the game sustainable.
Earth.Org’s mission is to use data science to develop insights which can be visualised so they can be communicated in ways that are easy to understand.
How has the Hive adapted in response to COVID-19?
We’ve had to react very quickly – Hong Kong was one of the first places to be hit outside of China. We immediately introduced sanitisation measures and travel questionnaires and we changed our teams shifts to reduce travel at crowded times. A lot of our members chose to work from home. Some companies used the spaces very flexibly and, of course, that flexibility is what the Hive and coworking spaces are built for.
Depending on whether there was a complete lockdown versus a soft lockdown, that made a big difference as to how able companies were to continue to operate. I think the severe lockdowns in some cities really forced quite dramatic changes to the way businesses operated. We’ve had to adapt to local regulations in each of the seven markets – that’s certainly been challenging. But, by working with our members, our landlords, we’ve been able to retain good relationships.
As we’ve come out of the worst of COVID-19 in Hong Kong, we can see that businesses want to come straight back. They want to use the space; they need a place to run their companies from. Of course, some people working from home have also wanted to come out to work. We’re even seeing team members of corporate companies use coworking spaces as an alternative to going into their headquarters. They can use the Hive and our network to utilize the spaces while observing social distancing rules and maintaining a safe workplace environment for our members, visitors, and our team.
How has the coworking industry shifted, given WeWork’s highly publicized losses and now COVID-19?
It’s becoming even clearer that demand for flexible workspaces is absolutely here to stay. It’s been accelerated quite dramatically by the COVID-19 pandemic. Obviously SMEs can benefit from the flexibility that coworking offers, but mid-size and larger enterprises can also utilize coworking in cases where they want to have more remote teams or reduce their dependence on having large headquarters. This is where coworking spaces and flexible spaces can provide those services. So what we’re seeing is demand increasing.
I think what everyone can recognize now is that WeWork’s mistakes were really strategic. It was the way in which they went about their business expansion, which was almost bound to lead to the crunch they had. I’ve certainly seen this before during the Dot-com boom where there was too much money put into certain companies and they lost sight of what they needed to do to create a sustainable business. They overexpanded and they burnt up. Similarly, at the beginning of e-commerce, Pets.com completely blew up and Amazon survived and went on to become the largest company in the world. In the same way, you can see parallels in this industry as well.
Do you think bigger players will emerge on the coworking scene?
We’re seeing a period where scale does matter. It’s good to be a broad-based operator. The Hive’s really benefited because we’re not overly dependent on one particular city or market. We’re in seven markets and that’s really helped us to survive this crisis period.
Right now, we’re having some very interesting conversations with some of our best competitors with a view to potentially merging with three or four of the strongest and creating a really strong new regional player with the best operations in each of these markets. And growing this way, I think it’s gonna make a lot of sense during this period. We’re going to play a leading part in this consolidation and if you’re a strong, profitable operator, I invite you to come and speak to us.
When it comes to operators with just two or three locations, however, I think they’ll find it increasingly difficult to stay occupied and to survive in what’s going to be a very tough couple of years.
Right now, we’re going through the world’s biggest work-at-home experiment. What do you think remote working will look like in the future?
What we’ve seen during the crisis is that work-from-home can also mean work-from-coworking. Given company compliance with local regulations, people were very, very keen to come out from home and use our spaces. And we were very happy to be here for them and all of those companies who chose to work flexibly during that period.
Twitter has said that they’ll be allowing their team to work from home flexibly forever. Facebook’s also made a similar announcement and I think a lot of companies will realize that remote working can be good for morale and productivity. Online collaboration tools such as Slack mean that there can be a lot of very good communication between remote teams. But, I think teams do need to come together on occasion – that’s a very important part of the team dynamic, especially for brainstorming and solving complex problems. On occasion it’s very good to get in the same room, but most of the rest of the time, do you need to all be in one place? These past few months have shown that you do not.
For normal day-to-day operations, teams can operate just as effectively when they’re remote. That’s really been proved now, especially to larger enterprises, which were previously skeptical. SMEs have always understood that, but larger enterprises have been very locked into that thinking of using their office space – they’ve paid for all this office space, they want to use it and I think now, that’s changed dramatically.
We see coworking as also being a provider of flexible working arrangement services to large enterprises, maybe offering passes to larger enterprises where they can take 100 or 200 passes from us and their employees can use our spaces across our network of seven countries. That’s potentially a very exciting area of growth for us.
What do you think the future of coworking will look like in 5 to 10 years?
I think there’ll be coworking spaces everywhere. There’ll be Mom and Pop operations, a little like the heartland hotel industry, with just a single, very local location. You’ll get small boutique chains, perhaps within a city. Then you’ll get regional chains and different tiers of players, perhaps with slightly different offerings and price points, all the way up to more corporate serviced offices that the largest operators have. It’ll just become very, very normal for people to rent workspace as a service.
At the beginning, eight, or arguably ten, years ago, coworking was sort of funky and exotic. It’s been fast-growing. We’ve had the whole WeWork debacle. The right strategies have proved they work. I think it’s proving its worth today. Everyone can now see that it’s here to stay. Coworking’s flexibility is incredibly helpful to businesses, helping them through the ups and downs, and it really plays a critical part in that fast-growth enterprise segment of the economy.
What do you wish you’d known before you founded the Hive?
Well, we have certainly had some pretty challenging times building and opening 20 locations across 7 countries – that is not easy! But, on the other hand, that pain has put us in a fantastic position now, especially during the crisis when some of our markets were hardly affected and that’s really helped the whole group.
Secondly, we will also be in a very good position post-COVID-19 to grow from those footholds that we’ve established quite painfully and establish significant operations in each of those markets. That’s very much part of our strategy. That’s been my biggest lesson over the years – doing difficult things and overcoming them sets you up for greater opportunities!
