This printer saved my coworking space a lot of money and won my love

After starting a coworking space in Toronto with one of those big commercial printers that stand four feet tall and spits out 90 pages a minute I knew that’s not what I wanted for my second space, Creative Density. The big fancy printer was impressive but had complicated controls, needed a separate computer for wireless printing, required a maintenance man to fix really any problem, and was an electricity hog. Ew.

Plus, it’s not what my community needed. It was a selling point my partner thought we would get members with. Wrong.

The community wanted:

  • Easy to use
  • Wireless printing that worked most of the time
  • Scanning was easy enough
  • Quiet
  • Something they could trouble shoot themselves

I wanted:

  • Easy to explain to new members
  • Didn’t use too much expensive ink
  • Easy to maintain
  • Not too expensive to buy
  • Wish list: Affordable, large paper holder, lots of ways to print to the printer

 

I started off Creative Density in 2011 with a simple home use Epson 625 all-in-one for $175. It had wireless printing and traditional ink cartridges. As we grew over the years coworkers were printing more and the ink started to only last a few weeks costing me $60 to replace them every time.

 

Welcome the Epson ET-4550 EcoTank. It’s my latest technology love and money saver of Creative Density.

 

I learned about the Epson ET-4550 in a Wall Street Journal technology review describing how the company is flipping the formula around. Epson will actually charge $450ish for the printer and make money off the printer instead of the ink. Music to my ears. I bought it within a week and I haven’t fallen out of love with in after 6 months. It’s saved me probably $420 already in ink and I have another 15 months worth of ink left from the original purchase.

 

Besides the ink here are a few other things I have done with the printer to make it super awesome for our coworking community of 50 members.

Printing Options:

  • Set up wireless printing directly on the network
  • Wireless print through Google Cloud Print (you can set print limits with this solution)
  • Email to Print through Epson Cloud Print
  • USB cable plug in

Print Quality:

  • Good enough, not awesome but great

Scanning, this always seems to be harder then it needs to be:

  • USB to computer scan, this doesn’t always work.
  • Scan to email, this is a simple backup option through Epson Cloud

 

Things I don’t like:

  • Scanning is still hard
  • It doesn’t hold that much paper
  • AirPrint isn’t an option or at least easy to set up
  • It can be slow to print at times

 

The Epson EcoTank line so far as been the best solution for printing at our coworking space and I bet fits the needs of most coworking spaces under 10,000 sq. ft. Your community most likely aren’t heavy printers so ease of use is probably all you need. Pay the higher price of $450 up front and reap the return for years to come.

 

Russia’s Innovation E-Commerce Distribution Cause by Limitations

Constraints breed innovation. That was Oren’s first reaction when I was describing Russia’s small but growing e-commerce companies that I’m so fascinated with.

Russia’s constraint:

  • Very poor logistics and affordable distribution (No UPS or FedEx equivalents)
  • Low credit/debit card penetration (48% of Russians have bank accounts)
  • Vast country
  • Difficult for international businesses to enter
  • Only 1.5% of sales are online compared to 6.5% in Germany or 13% in the UK

Russia’s strengths:

  • Large population at 148 million
  • Large and growing middle class, most notably in cities
  • High internet penetration at over 66%
  • Largest e-commerce market in Europe
  • A go-do-it spirit of self-reliance
  • Onlines sales are growing 26% year-over-year with $36 billion expected in 2015

Russia is different than many Central and Western European countries beyond their obvious geopolitical differences. It’s a huge country and it has one of the worse wealth inequality disparities in the world with a cultural transformation that is difficult for many Americans to grasp as generations shift from central control to capitalism. All of these factors make Russia from a macro level difficult to understand but if you start to look at the specifics the opportunities and solutions businesses have come up with in Russia are exciting and can kick minds in high gear for innovative solutions.

Online retailing – Russians never give up on an opportunity

The constraints of Russia make it difficult for Westerns to think of a viable business model that is in their wheelhouse. Russians understand the set backs but see opportunity, and if the Soviets did one thing they made the people have an attitude of perseverance and creative spirit to overcome odds. In e-commerece you can see this come shinning through.

There isn’t a good way to get goods order online to customers? Ok. How many servers AND trucks do we need to buy.

Many don’t have a way to pay online? Oh well, cash is king.

The most unique company is LaModa which is an online fashion retailer that sells above average and higher end fashion with over 1.5 million customers. Lamoda has over 400 cars and over 700 sales associates that deliver clothes while providing fashion advice. The sales associates bring customers their order and gives them 15 minutes to try everything and acting as your favorite fashionista friend for a second opinion. The customer can keep items or return them and pay in cash or credit. It’s called Lamoda Express.

Can you image asking the UPS driver if this cut of jeans is going to be popular this fall?

Boom! Lamoda just solved most of the constraints from the West’s perspective. Don’t have a credit card? check. Don’t have UPS? check. All in one swoop. It’s a solution, albeit a costly one.

Lamoda adds customer value with the personal advice of the trained drivers and encourages people to order more by allowing them to refuse items. This increases the average ticket price and is a distinct differentiation from other online and physical retailer. It’s a solution that is costly but it doesn’t mean it’s not profitable.

According to some estimates Lamoda’s costs might be 25% of their total revenue on orders $100 or less. However, if you look at their site you realize that it would be difficult to have less than $100 order because of their product selection. Lamoda furthers keeps these costs down by only serving 25 high density cities like Moscow and Saint Petersburg so transportation costs are somewhat controlled. Since most of the transportation costs are, let’s say, ⅔ fixed and ⅓ variable as the site grows their margins will continue to grow and their sales associates make more efficient delivery drivers. They may or may not be profitable now not but they are a bright spot for their lead investors Rocket Internet.

Ulmart- straddling the line

Ulmart took a new approach to online retail – they built brick and mortar stores. With over 8% of Russia’s $14 billion e-commerce revenue they launched their website and later opened their doors to customers. Ulmart did what many in the US expect Amazon to eventually do but this Ulmart’s hybrid approach serves Russia unique delivery problem. Ulmart splits up inventory and distributes it to tiers of warehouse that also serve as stores and pick-up locations throughout Europea Russia. Customer can receive home delivery for an extra charge.

Ulmart’s distribution system

  • 5 national hubs at 129,000 sq. ft
  • Distribution only
  • 30 urban warehouses at ~27,000 sq. ft
  • Distribution and Pick-Up
  • 250 Outposts at ~1,100 sq. ft.
  • Distribution and Pick-Up
  • Home delivery for an extra charge

The chairman of Ulmart Dmitry Kostygin describes this tiered systems as the next generation of online distribution because of the cost benefit and perference for customers. In fact only 12% of goods are delivered directly to the customer with 68% pick uped at warehouses and 20% pick uped at urban outposts. These pick up centers serve over 165 cities and towns in Russia.

This all might sound strange to Americans where Amazon promises reliable 2 day delivery for $99 a year, but Kostygin says Russians prefer reliability and quality over price and the the current Russian postal systems can’t provide that. Kostygin describes that you can get many illegal and counterfeit items throughout Russia but knowing the product is high quality and that the company can provide convenience is a competitive advantage that is difficult to duplicate.

Several Russian e-commerce companies are developing their own delivery systems as the market continues to grow as a way to combat payment collection and logistics. Ulmart is the largest player with a hybrid approach that makes them adaptable to their customers needs. It’s also a smart logistical approach that lowers their overall costs in the long-term for companies that can’t rely on affordable distribution companies.

What can we learn?

The intnernet is pervasive and changing the way consumers shop but that doesn’t mean it changing every country in the same way. Some pieces are missing and business models can’t be easily moved from country to country. Russian companies see the opportunity in e-commerece and customer’s preferences are changing fast but entering into the market requires higher capital expenditur and much higher risks. However, if successful the barriers to entry are high and the returns can generous for a long time.

I believe a fashion retailers in the US could duplicate the Lamode model of having sales associates deliver goods and advice. It’s a unique customer service advantage that goes beyond the Zappos model of no hassle returns.

is growing with over 8%  Russia $14 billion e-commerce and 190 trucks delivering goods. They did what many expect Amazon to eventually do – build stores.

Sources: http://www.themoscowtimes.com/business/article/logistics-the-trump-card-in-e-commerce-video/494267.html

http://www.businessweek.com/articles/2014-02-27/russias-online-retail-leader-says-amazon-has-no-chance

http://www.businessweek.com/articles/2014-02-06/russian-web-retailer-lamoda-deploys-own-delivery-service

The Start of Starting A Coworking Community

It is often said that a coworking community is started before there is even a leased signed. That’s because coworking happens when a group of people working on a variety of projects come together to work, share ideas, and enjoy each other’s company. It’s when these people start getting together on a regular basis that someone suggest they should get their own space and make coworking a regular part of their work life. In the mid to late 2000s Jelly advocated such gatherings that eventually lead to the first large growth of the coworking movement around 2009.

So how does a coworking community often start?

The most popular beginning is the top two and it is highly discouraged to start a coworking space with the ‘build it and they will come’ philosophy.

  1. A group of friends that often work from home get together at coffee shop or at someones house to work. They start inviting their friends to the work group and the group continues to get bigger. This was the inspiration for Jelly and their Wiki pages.
  2. A small team or startup need space but want to be inspired by others and get an extra large building for others to join. They sign the long-term lease with the expectation to grow and invite others to cowork with them.
  3. A local entrepreneur starts a coworking space and brings people together.

Buddies and partners creating the community together.

According to Deskmag’s Global Coworking Survey, a coworking space commonly has between two to three founders – no matter the size of the coworking space. Since a coworking space is often a second job to many people the spread of responsibility and risks is an important consideration when opening a coworking community. It can also be important to have multiple founders as members because it signals that a group is personally involved in the local coworking movement and excited about its potential.

Plus, by opening with a group or existing company you know when the doors open that there will be a consistent group of friendly people filling the energy of the space. Since coworking is about people as much as it is about the space this can be an important element when starting a coworking community without many members.

A community is here, but who puts it together.

So the easy answer is to get the community involved: Get them talking. Let their voice be heard. Build the space together.

When starting Creative Density in Denver I created a survey so potential future members would have a voice in their new work clubhouse. Over 65 people voted on their favorite neighborhood, critical amenities, style of rooms they wanted, and let me know a bit about themselves. I got the community involved in the creation of the space and it was a fantastic experiment that offered invaluable insight. Other coworking spaces from Spain to San Francisco got the community involved in their expansion plan or initial design before unlocking the doors and had found that it made the commuter tighter and formed new relationships.

If your coworking dream does not have a group of enthusiastic people willing to paint and assemble furniture for beer and pizza, don’t worry. Study different workspaces, visit neighboring coworking facilities, imagine the type of culture you want, learn some interior design, and let it organically change and be flexible. You may also hire the design out. Several people have gone the build it and they will come approach and have succeeded – many have failed. Just know the sooner you can start to get people together, the easier it will be a sustainable businesses and the closer you are to fulfilling your vision.

Here are a few good articles: Designing Imperfect Coworking Spaces, Designing A Successful Coworking Space, Space Matters: Using Design To Build Community

Footing the bill is on you (and hopefully some members)

Do you have $54,000 to invest in your coworking dream? That’s the average price of starting a new coworking space, but I started Creative Density with under $20,000 so it can be done for much less.

Common ways to fund a new coworking space:

  1. Coworking owner invests their own money and rack up credit card debt
  2. Members pay months in advance to reduce initial startup cost
  3. Small business or startup becomes anchor tenant that covers most monthly expenses (common in scenario 2 of how a coworking spaces often starts)
  4. Ask for a round of donation or funding from Kickstarter, angels, and other forms of investors.

The most common method is for the founder to pay most of the expenses and offer discounts to members that months in advance. I favor this method because it guarantees that there is a larger group of people that believe in the coworking community and that they are willing to invest in the relationships and making the space their own. The operator must remember business 101 lessons and grow the community to keep the cash flow positive.

I funded Creative Density with a $10K business loan from family, personal savings of $10K, and I opened as many credit cards as possible to made a line of credit available that made around $25K more available. This made my total of available money for the business to be $45,000. I had plenty of room to breath and was able to be cash-flow positive within the first 12 months.

Some great articles: Indy Hall – By the Numbers

Overall, find a community of individuals that are having fun working together or a small company that wants to involve coworking in their space to fill it with energy and commit to creating a community. Start a coworking space with a buddy or a small group to have a built in friendly community and partners to keep everyone going while sharing the expenses. Lastly, ee willing to foot the bill or get the community involved to share initial cost.

When forming a coworking community the focus and energy can quickly turn to the business side of things, but don’t forgot the people. Get them involved along the way and your chances of creating a vibrant and successful community will be much higher.

Has coworking lost it’s meaning in Denver?

Denver is in a ‘coworking’ boom. It seems obvious as a new space or expansion is announced what seems to be every week. According to news reports, RiNo will have around 6 spaces, LoDo 4 or so, the 16th Street Mall will go from 0 to 4 or 5 in about twelve months, the Golden Triangle will rock 2, 1 in Capitol Hill, 1 in Uptown, and Stapleton might get 3. The new spaces are not small spaces either, but rather mammoths that range from 20,000 sq. ft to close to 100,000 sq. ft.

At this rate Denver will have more coworking spaces than pot dispensaries. I kidd, but really…

So does Denver really have 20+ coworking spaces? Not in my mind. We have around half a dozen coworking communities. It seems that there is the marketing term, noun and verb ‘coworking’. To me, coworking is something that you do with people by creating a community where people support each other and become friends with the intent of sharing ideas and laughs. It’s a community of people that happen to share a space (read coworking’s five values). Coworking is not just a space that individuals can share. It’s this difference that shrinks the number of spaces that market coworking from 20, to the 6 spaces that practice coworking.

Coworking Term Uses

Marketing: Coworking means we have a new workspace for individuals to teams. It probably has beer, some graffiti, and a TV. We’re cool, right?

Noun: Coworking is a place for people to sit at any desk available.

Verb: Coworking means working together with people with the intent to share ideas and get to know each other.

I understand why building developers and old executive suite brands are calling their spaces coworking, and it’s because they think coworking is just space and a trendy term to sell memberships. To them coworking is a checklist of chairs, desks, wifi, and possibly some free beer and a graffiti wall. It sounds easy when people think of it like that, doesn’t it?

Back in the mid-2000s coworking wasn’t dreamed up as a checklist of physical materials that could be purchased. Coworking was created as a cluster of relationships that could be concentrated because technology (wifi, laptops, online tools) allowed us to leave homes or isolated private offices. Coworking is a reaction to human’s natural desire to connect and be helpful. It’s something you do with people, and having a permanent space to congregate makes it practical.

The Denver coworking boom is real. The office and other forms of shared office boom is also real. I just ask that the term coworking is used and recognized as more than a marketing term, utilized properly, and that everyone that uses the term truly works on creating a community. If all of the spaces that call themselves ‘coworking’ create a vibrant community, then our city, our neighbors, and our economy will be stronger and happier.

How we conduct coworking feasibility studies

Is my city ready for another coworking space? How big should my community space be? Does it make business sense? How can our small town leverage coworking?

These are all questions I’ve been asked during the last few months as I have been working with a variety of teams on coworking feasibility studies for property developers, economic development groups, and entrepreneurs that are interested in joining the movement. It’s been a fun and interesting experience as I get to put back on my market researcher cap, and take an academic approach to discovering coworking viability in a market.

So what is a feasibility study?

A feasibility study is often performed because a group wants to learn more about an industry, what makes it successful, the competitive market, and gain an understanding of the business model. I learned that property developers use feasibility studies when planning new apartment buildings because it’s a fairly predictable industry based on demographics, population trends, and the local landscape of other apartment buildings. Economic development groups do feasibility studies because they often want to try something new for their town and want to look to see if there town’s SWOT is comparable to other towns that have failed or succeeded using a similar approach.

Coworking feasibility studies are basically asking if a certain location fits a mold of coworking that already exists, do the expense and business models work, or can coworking be an appropriate fit for a town’s culture. If the answer to any of these question is YES, then we start to build the community as the next phase.

Note: The next phase after the yes shouldn’t be going out and leasing space or building something new. The build-it-and-they-will-come philosophy is still setting someone up for likely failure.

With feasibility studies, groups are basically asking if it is a good idea to even pursue an idea. It is an affordable way to verify their gut instincts before spending a ton of money.

How a feasibility study is done for coworking:

  • Understand the location
    • What are the people like?
      1. Age
      2. Population
      3. Income
      4. Jobs
    • What is the urban landscape?
  1. Commute times
  2. Density of the city
  3. Household makeup
  4. Economy foundations
  5. Mode of transportation
  • What is the coworking scene like?
  1. How many spaces operate?
  2. How big is each space?
  3. What are the vibes of the spaces like?
  4. How are the current coworking spaces doing?
  5. Do the spaces work together?
  • What are the people like?
    1. Are they likely to be coworkers compared to national trends?
    2. Do they work remotely?
    3. Are they entrepreneurial?
    4. Is it in the culture to work together?
    5. …lots more
  • Business modeling
    1. Rental rates
    2. Price modeling
    3. Labor and operating expenses
    4. Forecasts for up to five years

It gets more detailed than this but this is a basic outline and we have figured out some indicators that correlate to a town’s culture and potential openness to the coworking model. The whole goal is help groups understand their city, the coworking environment, and answer whether or not this is an opportune time to start building a community and putting money behind it.  

As we get better at performing the feasibility studies for coworking, it will help us identify places that are ripe for coworking, reduce the risk for entrepreneurs or cities to start a coworking space, and help the movement expand into more towns and neighborhoods. A feasibility study is only the first step before building a community and building out a space.