About 2-3 years ago, we started noticing an entirely new cancellation reason showing up when people left Indy Hall.
For 5+ years, the majority of the people who left did so because they were moving away, or because they took a job. Of course people left because it wasn’t the right fit for them, too, but the vast majority of the people who found us stayed. Then, people started saying something we hadn’t heard before: “I’m not using it enough”. Which sounds pretty similar to what I’m hearing from you guys. So….what changed so suddenly from the first 5 years to the most recent few? I had to talk to a lot of members, with a lot of focus on relatively new members as well as the folks who joined and left, but two VERY consistent patterns showed up: 1 - Prior to this new cancellation reason showing up, most people who joined found out about Indy Hall first – usually through our existing community members who told them “you’ve gotta join, this has helped me in so many ways..." – and then once they got here they discovered that it was this thing called coworking. After the shift, we had more people first seeking this thing called “coworking", then finding us as an option, and choosing us. They’d heard about coworking in the newspapers, etc, and heard it was a cheap and flexible way to rent a desk. Those two categories of people had very different expectations of what the value of Indy Hall was. The problem is that while it might be easier to recruit this kind of person as a full time member: a) more full time members means that the culture starts to feel a LOT like a regular old office, which people who join are actively avoiding. (see this comment for just one example: http://www.reddit.com/r/CoWorking/comments/2udb90/why_did_you_leave_reasons_you_stopped_going_to_a/co7rv3k) b) from a purely financial perspective, a full time desk can only generate so much membership revenue. On average, a flex desk represents at LEAST 4x the revenue potential as a single full time desk ...in some coworking spaces I’ve worked with, that ratio is even higher. c) This kind of full time member (the one who comes in specifically to rent their own desk among other desks) tend to be more territorial than flex members. They contribute far less, and are inconvenienced by the smallest things. They’re just generally bad citizens. Once I realized that, we were able to tailor our tours and communication to the desk rental folks to help them see that yeah, there’s a place to work but the desk is barely scratching the surface of what they can get from their membership. We didn’t “correct” them, so much as showed them how to be better citizens, reminding them that yeah…this place was big but the way it ran most smoothly is when they were an active part of the community. Which actually led me to realize something a bit more subtle: 2 - Indy Hall had gotten BIG. When we were just a couple thousand square feet, it was easy to tell people that our community was the primary “feature”, not the workspace. But 5 years later, with multiple floors and a physically massive presence, I think that people had a harder time believing us when we said the same thing. And I don’t blame them! So we made some focused changes: We focused on new member education, especially during our tours and new member onboarding, to really helping people make smarter decisions about choosing a membership with us. (note: we’re still working on this today. we never stop working on this) We put more effort into developing our Tummling practice. We rebalanced our full time membership, which had grown to nearly 40% of our total membership, back to ~20%. We got even more intentional with our events, making sure that they weren’t simply “activities” but things that helped members build relationships. We did a lot of work with our online community, turning it into an equally vibrant gathering place as our workspace so that the members who weren’t physically in the room could still get value. Cuz here’s the mistake you make by letting yourself turn into a lazy landlord: you bind your business to your square footage and the number of desks you can fit. The only way to get past that ceiling is to add more space. And worse, you continue to reinforce the idea that the only way for people to get value from their coworking membership is to use a desk. If the only time your members derive value is when they park a computer at a desk in your space, I have bad news for you: you’re just renting desks. For the results of our work, some cold hard figures: - Our overall revenue grew in 2014 over 2013 by 49%. - Over 25% of our revenue comes from our Basic and Community memberships. - Those memberships are growing the fastest. Community membership, which includes ZERO coworking days, grew by nearly 20% in January alone. We’re also putting a lot of work into our more nuanced churn patterns. I finally have the data to back an intuition that people who join in “peak new member” months like January and August tend to churn out 2x faster than people who join in normal months. That’s helped us do some more digging, find out why they leave. It’s because those busy months are the hardest to get to know people, because so many new faces are overwhelming. We could have been like a gym or a landlord, happily taking their money in January knowing that we wouldn’t see them again by March. ¯\_(ツ)_/¯ But instead, we focused on increasing the value of the community to them so it’s not reduced to the value of a desk. And now we’re able to predictably improve our retention for people who join in those seasonal bursts. As someone who’s added more square footage to Indy Hall 4x in 8 years to make room for our waiting lists, I’ve paid very close attention to the growth patterns. The biggest one is that when adding more square footage for the sake of adding more people, the returns are diminishing. That’s not how this kind of business scales, or protects itself for the future. Adding more square footage to accommodate for more people is MOST valuable when each of those people are contributing to the value that every other member is able to get as a member. Because that’s the biggest value of a coworking membership: the other people in the community, not the desk. -Alex ------------------ The #1 mistake in community building is doing it by yourself. Join the list: http://coworkingweekly.com Listen to the podcast: http://listen.coworkingweekly.com On Fri, Feb 6, 2015 at 6:41 PM, Andy Soell <aso...@gmail.com> wrote: > Our membership breakdown is pretty symmetrical: > Full Time: 30% > 3 day/week: 20% > 1 day/week: 20% > 1 day/month: 30% > The skew comes in when you look at cancellations. Of our history of > cancellations, they’ve come from: > Full Time: 15% > 3 day/week: 5% > 1 day/week: 40% > 1 day/month: 40% > It’s worth noting that our overall churn rate is actually decent: 5% > month-over-month average last year. But the pattern is still there: Weekly > members stop coming around and either a) cancel or b) downgrade to monthly > memberships, stick around for a while, then cancel. I’m curious if anybody > else has seen this and what they’ve done to curtail it. > -----Original Message----- > From: Glen Ferguson <g...@coworkfrederick.com> > Reply: coworking@googlegroups.com <coworking@googlegroups.com>> > Date: February 6, 2015 at 6:23:09 PM > To: coworking@googlegroups.com <coworking@googlegroups.com>> > Subject: Re: [Coworking] My morbid curiosity with Coworking Space Closings >> > >> > *> Looking at our own membership levels (we have full time, 3 days/week, 1 >> > day/week, 1 day/month), far and away the highest churn rates are in that 1 >> > day/week level. 40% of all cancelations we’ve had are from that level. * >> > 1 day a week churns *more* than 1 day a month. That’s a pretty HUGE clue >> > about what the problem is. >> >> >> I'm curious what percentage of your membership is on that 1 day/week plan. >> When we opened, we didn't have that level, but people wanted to join at >> that level, so we created it. We've consistently had between 40-50% of >> members on our 5 days/month level (it's easier to bill as days per month, >> and more flexible for the member). I'd expect the percentage of churn to >> reflect the percentage of membership, but now you're giving me homework to >> do this weekend and further break down my churn stats by membership tier to >> see if that holds true. >> >> --- >> Glen Ferguson >> Cowork Frederick >> 122 E Patrick St >> Frederick, MD 21701-5630 >> +1 (301) 732-5165 >> www.coworkfrederick.com >> @CoworkFrederick >> >> On Fri, Feb 6, 2015 at 4:58 PM, Alex Hillman >> wrote: >> >> > *> Looking at our own membership levels (we have full time, 3 days/week, 1 >> > day/week, 1 day/month), far and away the highest churn rates are in that 1 >> > day/week level. 40% of all cancelations we’ve had are from that level. * >> > >> > 1 day a week churns *more* than 1 day a month. That’s a pretty HUGE clue >> > about what the problem is. >> > >> > -Alex >> > >> > ------------------ >> > *The #1 mistake in community building is doing it by yourself.* >> > Join the list: http://coworkingweekly.com >> > Listen to the podcast: http://listen.coworkingweekly.com >> > >> > >> > >> > On Fri, Feb 6, 2015 at 4:29 PM, Andy Soell wrote: >> > >> >> I think there's a great deal of truth here, and I'm really curious about >> >> other space's approaches to different membership levels (we're getting way >> >> off topic here, but whatever). I think Jerome is absolutely right that >> >> it's >> >> much harder to keep a part timer on board, probably due to their lack of >> >> commitment and the fact that they just by nature of their membership >> >> aren't >> >> around very much. At the same time, I also completely believe that a good >> >> community is a diverse community, and that includes an even distribution >> >> of >> >> people across different membership levels. >> >> >> >> Looking at our own membership levels (we have full time, 3 days/week, 1 >> >> day/week, 1 day/month), far and away the highest churn rates are in that 1 >> >> day/week level. 40% of all cancelations we've had are from that level. I'm >> >> not sure what—if anything—is to be done about it, but I'm curious what >> >> people have found useful in keeping people coming back who aren't coming >> >> every day. I like offering once-a-week memberships, because I really think >> >> everyone needs to get out of the house at least once a week, but it seems >> >> like that's the level at which people eventually forget about the >> >> coworking >> >> space and just drop off the face of the earth. >> >> >> >> On Friday, January 30, 2015 at 11:18:22 AM UTC-5, Jerome wrote: >> >>> >> >>> I think the below typically applies to smaller coworking spaces. >> >>> Well, let me rephrase: >> >>> the below is required for smaller spaces >> >>> larger spaces does not need to follow the below rule; BUT, should >> >>> they, yes, I agree that the below would be ideal. >> >>> >> >>> That said, from my experience of being in the trenches for now, 7 years, >> >>> I can comfortably say that recruiting full-timers is MUCH easier than >> >>> part-timers. >> >>> Part-timers have to me, seem only part-ly motivated to join, whether due >> >>> to >> >>> (1) they don’t want to spend $; >> >>> (2) they’re so attached with their status quo of their home office; >> >>> (3) their interest is so 50/50 fickle, any little thing can wane their >> >>> interest. >> >>> Also, if you were to spend, say, 1 hour per new part-timer member, >> >>> between the tour, follow-up(s), onboarding…to yield $100, and your goal >> >>> is >> >>> 10 members, then you’ll spend 10 hours for those “sales”. >> >>> If you were to spend, say, the same 1 hour per new full-timer to yield >> >>> $300, then you’d only need to spend a little over 3 hours for those >> >>> “sales”. >> >>> The spread worsens if you seek $10k, or $20k. The very same many >> >>> DIY/automated billing and other admin procedures you’ve focused to >> >>> minimize, is being offset by exponentially more labor time to sell, or >> >>> “cost of sales”. >> >>> >> >>> Is that the reason why exec suites probably only ‘rent’ full-time office >> >>> spaces? Yes. Same efforts that yield way more $ revenue. >> >>> Is there a better mix between the below strategy and exec suites? Yes. >> >>> And that will depend upon how you operate, your demographics, your size >> >>> space, etc. >> >>> >> >>> >> >>> *JEROME CHANG* >> >>> >> >>> *WEST: Santa Monica* >> >>> 1450 2nd Street (@Broadway) | Santa Monica CA 90401 >> >>> ph: (310) 526-2255 >> >>> >> >>> *CENTRAL: Mid-Wilshire* >> >>> 5405 Wilshire Blvd (2 blocks west of La Brea) | Los Angeles CA 90036 >> >>> ph: (323) 330-9505 >> >>> >> >>> *EAST: Downtown* >> >>> 529 S. Broadway, Suite 4000 (@Pershing Square) | Los Angeles CA 90013 >> >>> ph: (213) 550-2235 >> >>> >> >>> >> >>> >> >>> >> >>> >> >>> >> >>> >> >>> >> >>> >> >>> On Jan 30, 2015, at 6:11 AM, rachel young wrote: >> >>> >> >>> I'll add another item to Jonathan\s list: >> >>> >> >>> 4 - Less diversity. 100 members with a flex or part time membership is >> >>> 3x as many different occupations, passions, life experiences, and hobbies >> >>> than 35 members with a full time membership, so the mix of people that >> >>> members interact with will be much less with full time people packed in, >> >>> but you can cap the number of full time members and ensure there are more >> >>> part time or flex to make that diversity even more apparent and >> >>> effective. >> >>> >> >>> We have three membership levels: lite, part time, and full time. I >> >>> always aim for a mix of approximately 30%, 50%, 20%, respectively, with >> >>> no >> >>> cap on daypass users or non-space usage memberships (virtual/non-space >> >>> usage network membership only). >> >>> r. >> >>> >> >>> >> >>> >> >>> >> >>> *____________________rachel young*rac...@camaraderie.ca >> >>> >> >>> *We're located at 2241 Dundas St W, 3rd floor* >> >>> *(between Bloor and Roncesvalles)* >> >>> >> >>> *Chat with me *via 10KCoffees >> >>> >> >>> >> >>> *Find us online:* >> >>> Website/blog >> >>> >> >>> and Newsletter >> >>> >> >>> , Twitter >> >>> >> >>> , >> >>> Facebook >> >>> >> >>> , Google+ >> >>> >> >>> , Yelp >> >>> , >> >>> and LinkedIn >> >>> >> >>> >> >>> We're a proud member of CoworkingToronto >> >>> >> >>> , >> >>> CoworkingOntario >> >>> , >> >>> and CoworkingCanada >> >>> >> >>> ! >> >>> >> >>> >> >>> On 30 January 2015 at 05:42, wrote: >> >>> >> >>>> Many full-time members with permanent desks is absolutely a problem. >> >>>> >> >>>> We limit to a maximum of 40% of desks for full-timers. If you go too >> >>>> far above that there are at least three common problems: >> >>>> 1) Part-time / flexible members don't feel like they have a significant >> >>>> sense of ownership of the space. They are more inclined to feel like >> >>>> second >> >>>> class citizens using spare desks. They then don't participate in the >> >>>> community as much and that magnifies all sorts of other problems. >> >>>> 2) Revenue becomes less predictable. I'd rather have 100 people paying >> >>>> $100 per month than 35 people paying $300. >> >>>> 3) The space becomes less flexible. It's much more difficult moving a >> >>>> permanent member's desk for a weekend or evening community activity. >> >>>> >> >>>> Hope that helps, >> >>>> >> >>>> Jon >> >>>> >> >>>> — >> >>>> Jonathan Markwell >> >>>> >> >>>> Follow my adventures in space, time and code: >> >>>> http://jot.is/sustainablyindy >> >>>> >> >>>> The Skiff: Brighton Coworking Community http://jot.is/sharing-space >> >>>> Coder Founders: Digital Product Consultancy >> >>>> http://jot.is/investing-time >> >>>> CoGrid: Meeting Room Booking Software http://jot.is/writing-code >> >>>> >> >>>> +44 (0)7766 021 485 >> >>>> skype: jlmarkwell | twitter: http://twitter.com/jot >> >>>> >> >>>> >> >>>> On Fri, Jan 30, 2015 at 10:05 AM, Marius Amado-Alves < >> >>>> amado...@gmail.com> wrote: >> >>>> >> >>>>> "Too many full time members, not enough flex (or some variation on >> >>>>> flex)." >> >>>>> >> >>>>> Er... many fulltimers is a *problem*?!?!? >> >>>>> >> >>>>> >> >>>>> -- >> >>>>> Visit this forum on the web at http://discuss.coworking.com >> >>>>> --- >> >>>>> You received this message because you are subscribed to the Google >> >>>>> Groups "Coworking" group. >> >>>>> To unsubscribe from this group and stop receiving emails from it, send >> >>>>> an email to coworking+...@googlegroups.com. >> >>>>> For more options, visit https://groups.google.com/d/optout. >> >>>>> >> >>>> >> >>>> >> >>>> -- >> >>>> Visit this forum on the web at http://discuss.coworking.com >> >>>> --- >> >>>> You received this message because you are subscribed to the Google >> >>>> Groups "Coworking" group. >> >>>> To unsubscribe from this group and stop receiving emails from it, send >> >>>> an email to coworking+...@googlegroups.com. >> >>>> For more options, visit https://groups.google.com/d/optout. >> >>>> >> >>> >> >>> >> >>> -- >> >>> Visit this forum on the web at http://discuss.coworking.com >> >>> --- >> >>> You received this message because you are subscribed to the Google >> >>> Groups "Coworking" group. >> >>> To unsubscribe from this group and stop receiving emails from it, send >> >>> an email to coworking+...@googlegroups.com. >> >>> For more options, visit https://groups.google.com/d/optout. >> >>> >> >>> >> >>> -- >> >> Visit this forum on the web at http://discuss.coworking.com >> >> --- >> >> You received this message because you are subscribed to the Google Groups >> >> "Coworking" group. >> >> To unsubscribe from this group and stop receiving emails from it, send an >> >> email to coworking+unsubscr...@googlegroups.com. >> >> For more options, visit https://groups.google.com/d/optout. >> >> >> > >> > -- >> > Visit this forum on the web at http://discuss.coworking.com >> > --- >> > You received this message because you are subscribed to the Google Groups >> > "Coworking" group. >> > To unsubscribe from this group and stop receiving emails from it, send an >> > email to coworking+unsubscr...@googlegroups.com. >> > For more options, visit https://groups.google.com/d/optout. >> > >> >> -- >> Visit this forum on the web at http://discuss.coworking.com >> --- >> You received this message because you are subscribed to a topic in the >> Google Groups "Coworking" >> group. >> To unsubscribe from this topic, visit >> https://groups.google.com/d/topic/coworking/0DllB_CWXyw/unsubscribe. >> To unsubscribe from this group and all its topics, send an email to >> coworking+unsubscr...@googlegroups.com. >> For more options, visit https://groups.google.com/d/optout. >> > -- > Visit this forum on the web at http://discuss.coworking.com > --- > You received this message because you are subscribed to the Google Groups > "Coworking" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to coworking+unsubscr...@googlegroups.com. > For more options, visit https://groups.google.com/d/optout. -- Visit this forum on the web at http://discuss.coworking.com --- You received this message because you are subscribed to the Google Groups "Coworking" group. 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