The early stages of starting a business are always the most exciting and uncertain. While some entrepreneurs will be inspired by a clear vision, others will have an idea and the excitement is in the journey.
In the early throws of building a business, entrepreneurs must make decisions that will have huge ramifications on the direction of the business and its potential success. Understanding your customers should be a given, yet customers rarely fall into homogeneous groups and we can be forced to make decisions about whom we concentrate our finite resource on.
Should you build your revenue now by picking up low hanging fruit, even if it’s not where you want to be long term? Or stay true to your concept and what you hope will be a bigger prize even if those customers don’t appear immediately forthcoming?
In the early days of Techspace, I faced a dilemma when we had to choose whether to remain focused on only servicing technology businesses or offer space to anyone and everyone regardless of industry.
Many of you will now be familiar with numerous coworking providers, – the industry has been growing at an average annual rate of 23% since 2010, according to JLL Global Market Perspective Report – but six years ago coworking didn’t exist as a term. Techspace’s vision was to mirror the unique environment and camaraderie that comes from working in a growing technology business and make desk space the product. Knowing that London’s tech sector was growing past it’s infant stages, our idea was to support technology teams as they scaled. These types of companies want space to grow, reliable connectivity and locations that appeal to the best talent, but at the time, we didn’t know whether coworking was going to be successful.
In 2012, we filled our first location on Old Street and invested in a second location. Our second space was twice the size and took longer to fill than we expected. We had a very specific target customer group and a relatively unknown proposition – a problem that many entrepreneurs will be familiar with. But empty space is the death of any property business and we just couldn’t bring the right companies through the door as quickly as we needed to.
What we did have, however, was plenty of interest from recruitment companies, digital agencies and customers who would have helped us pay the bills, but would have compromised our original vision, and ultimately the experience and culture that our existing members had bought into. With just £2,000 in available funds, big overheads, bills to pay, and a deep overdraft, we had a very difficult decision to make; hold firm and keep the integrity of our vision or protect the business from falling over as well as our livelihoods.
At the time, either option could have been justified. But we decided to hold firm and thankfully it paid off. Staying true to the original concept kept our proposition clear and ensured we were held in higher esteem by the customers we actually wanted. Growing technology companies started coming to us because we were defining a service that they didn’t know they needed, until they did. While we may’ve had a successful coworking business, Techspace wouldn’t be Techspace if it wasn’t filled with companies going through shared experiences.
Since that moment, coworking has grown significantly in popularity and there are now companies offering the service to evermore specific customers. I now know that if we had compromised on our premise the business wouldn’t be defensible from new competitors offering a more defined service.
Luck played its part for us, but I would always advise young founders to stick to your guns. Sticking to your strategy, and focusing on a core value means your product can’t be for everyone, but instead it will be valued more by those you intend to serve. Of course, this is made tougher when you have partners, shareholders and investors involved, who will all rightly be concerned about keeping the company afloat, but if you believe in your vision and its potential for creating a successful business, you can bring people around to your way of thinking.
The beauty of that early decision to stay firm now defines the community proposition we believe in, and has helped us develop a platform that is curated specifically to our core customer base.