In this episode of Jungle Connect, the CEO of Jungle Works is in conversation with Pranay Gupta, co-founder of 91SpringBoard; he’s someone who’s worked in the entrepreneurial and start-up space since he was a young graduate. Before establishing 91SpringBoard, he worked for the infamous Lehman Brothers, which declared bankruptcy in 2008 and was finally acquired by Nomura Holdings and Pranay went to work for them in Mumbai but because he was working with the stock market, this gave him a lot of free time during the evenings and he involved himself in the process of setting up a business incubator with IIM-A till one day, he was offered a full-time role as the CEO at the CIIE (Center for Innovation, Incubation, and Entrepreneurship) at IIM-Ahmedabad; Pranay recognized this as a good opportunity to interact and network with other entrepreneurs and learn from them and worked there for about four and a half years. Through the CIIE, he invested in and helped with the growth of 40+ start-ups. Pretty much after helping launch a scroll of start-ups, Pranay wanted to do something for himself and fully take on the role of an “entrepreneur”. And that’s when he bumped into Varun (Chawla) who had the idea of creating this space for all the start-ups to work together and create a community for start-ups. That space was then named 91SpringBoard; it’s been about seven years now and the space is present in 27 cities across India and it was the first co-working brand launched in India and the one most active in building communities.
What do you think is the future of the physical space of the office? What do you think is going to happen in two years’ time?
“A question about a topic that’s very close to my heart.” Pranay starts off with a smile. When it comes to the future of office spaces, everyone is guessing, there is no precedence, there is no date. There are rumors about everyone working from home now and/or remotely now and that might be the new normal, but Pranay feels like that behavior might be too far-fetched. The struggles of working from home is real, a person could face WiFi issues, electrical issues, if they have kids running around there could be a noise issue. But given the pandemic and the situations and consequences, the new normal will be a balance of what was and what is right now. One thing that might definitely change is the quality of hiring – just because the company is in Bangalore and the perfect candidate to work for the company is in Gurgaon and is not able to shift cities, it won’t be an obstacle anymore and companies will be a lot more comfortable with the team working from anywhere and rather than a work from home culture, there will be a rise of work from anywhere that we might see.
Samar agrees wholeheartedly with Pranay but only time can tell. The following question posed to Pranay is about what kind of business ideas may launch post the pandemic? What are some of the business ideas he’s expecting to see a lot of?
There might some good ideas that are sprouting up in both tech and non-tech fields. Much like whatsapp, when it began people didn’t trust it enough to exchange sensitive information on it but once people got used to that, it has led to people chatting with their doctors, buying things from whatsapp, a certain level of trust had to be created. And because of the pandemic, a lot of businesses depending on video and video interaction may take over. Initially, video calling was never our first go-to, it was voice calling but because of the pandemic, we have been forced to adapt to video services to attend meetings, consult with doctors, speak with their CAs all via video. We’ll see a lot of businesses emerging out of this period with adaptations. Pranay gives the example of a product that his brother is coming out with; nano coatings on surfaces to kill bacteria and germs. Though this is a Covid inspired business, it will obviously sell post the pandemic too because of the experiences we have learned from this year. Pranay adds, “the amount of opportunities in gig economy will be very high, with businesses, working with people remotely and especially thinking through KPIs (Key Performance Indicators) and systems,it just enables companies to work better with key workers. And I do think we will see a resurgence there.”
Samar jokes that this was not a planted comment as Jungleworks runs a gig economy platform. The next question is by one of the viewers, Yuvraj: do you guys see AirBnB work-spaces on exotic locations going forward?
“The idea of working from anywhere excites me.” Samar says and Pranay agrees. Globally, that trend had started up. Especially in Bali, they were targeting ‘digital nomads’, people can travel anywhere and work. This habit is slowly trickling into Goa so yes, this trend might very much pickup post the pandemic.
Another question by an audience member, a similar one: does the concept of workstations open up new business avenues?
The thing is, different jobs require different job atmosphere. There are only certain jobs which allow you to work from anywhere but there are also some jobs that require a formal office atmosphere. Both these kinds of set-ups can co-exist together.
How do you how would you differentiate your co-working space from other co working spaces?
Firstly, 91SpringBoard was the first one to ever start this co-working space in India and almost everyone else came in about two years later and that allowed the team to do a lot of mistakes and learn from them. Secondly, they didn’t get a lot of funding in the beginning so making sure that their space was efficiently used and the unit economics worked out was one of the first things the team did and that was kind of ingrained in all of them. Even for future fund-raisers, they have this skill ingrained into their blood as fail-proof working method to make profits. And the co-working space is not a “winner take all” kind of industry. It didn’t make sense for them to fill up their building with people and then increase the price, the start-ups could easily shift to the other building. So they set up their space rightfully and accordingly and didn’t overstretch themselves. These are not what differentiates them, this is what disciplines them and helped them grow as a company.
Did WoWorks shutdown help co-working spaces in India?
WeWork is the global creator of this industry. The company has not shut down, there was a failed IPO attempt but Pranay and his team only have immense respect for WeWork that started this community from Alberta (Canada). The one impact the failed IPO had was that alot of investors who were investing because of herd mentality, because of the shutdown, backed off. The benefit of this is the investors have become more prudent and open to people running the companies in one kind of way.
91SpringBoard was building a community app for people? Does it help in the pandemic situation?
“We didn’t plan for it.” Pranay replies. The thought was that a part of the community is created within the space and a bigger community is formed across our spaces and the app was created to get everyone in touch with each other and it has helped people during the pandemic situation.
Can a person from a small town realize his dream where this is no technical facility? What do you think?
Both the celebrated entrepreunuers agree that given the current situation, you can work from anywhere. But, Pranay adds, to not be rosy, an entrepreneur you need to know what resources are necessary to run your business: you can’t open a tech company in a place where you don’t get internet. But if you can hire good people and get the required resources, then a customer’s mindset around a good product can only come from a big city. If you are running a good business in a remote place, maybe what you’ll need is a showcase address in a bigger city to win your customer’s trust. But needless to say, you will have to work for it, whether you hail from a big city or a small town.
In the post pandemic world, people will be okay with working from anywhere which affects the demand of co-working spaces. What’s the logical next step in such scenarios?
Fundamentally, the “Work from Anywhere” culture works well with co-working spaces and in such uncertain, unpredictable signs people prefer working flexibly and co-working spaces provide flexibility so most of the co-working spaces are seeing good demand, and during CoVid times the number of people in a company has come down with no visibility on whether this will change or not. Such entreprenuers are visiting co-working spaces asking for an office space with flexible timings. Of course, co-working spaces did take a short term hit when offices and businesses were shut down during the lockdown but in the larger picture, most companies will require office space now with flexible timings and that’s where co-working spaces will be able to help them and allow co-working spaces make a come back much faster.
What would you define as success for your co working space? Or for any co working space? Is it profitability? Is it size? Is it growth?
For any private company, there’s a part of thinking through the KPIs and the focus, and then there’s a part of thinking through the vision you define. So, if your vision is community, how are you building community? Is it the measures you have for that and how you’re performing on that is one level of success. And the second is specific to co working industry, there is occupancy and financial success linked to that. So those two combination to me is what defines success.
What would you say that top three opportunities for Indian entrepreneurs are?
“Honestly, top three are very hard to say.” Pranay replies and decides to stick to what comes to his mind, immediately and not in relation to CoVid or post-Covid situations. In general, thinking about potential where businesses would focus on, agriculture and food supply chain linked opportunities are massive opportunities in India. Basic food processing, if you can do extensive RnD, there are great opportunities in that field. Healthcare post CoVid, there will be massive opporutnities in the vertical within healthcare. In general technology, modifying how people work, you may call it automation, and how certain SAS systems coming up for certain industry automation.
A two part question from an audience for both the CEOs: What is your views on the unit-economics of co-working space? And unit-evconomics of ride-sharing space? Specifically because both businesses have high fixed costs.
Pranay starts with definiing a unit in terms of a co-working space: a unit is your hub that you set up. Your initial upfront spend is CapEx (Capital Expenditure), typically in the industry, a lot of operators are getting the CapEx done by the landlord and your responsibility is that it runs smoothly and bring people to the building. So typically, the kind of figures that are like the KPIs that are tracked in Co-working spaces are: by When did you hit operating breakeven?When did you hit a breakeven on the CapEx that you’ve done? And what’s the average occupancy that you get after you’ve a certain period of time? And at that level, what are the kind of profits that you can generate? On an average, if you look at the better players in the co-working industry, they would maintain a profitability of anywhere from an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin of anywhere from about 20 odd percent to 35% on a steady state occupancy. And typically, at least Pre-CoVid, a lot of better players were able to run their hubs at 80 to 90%, steady state documents.
Samar goes on to talk about ride-sharing businesses; from our perspective, we never considered the cost of taxi as a constraint because we don’t believe that if you’re building supply, like an Ola and Uber do, then it’s not essentially a asset light model. if you’re an asset light company, then you should be a satellite company and try to give additional rides to drivers. So our thesis is very simple, the additional rides, we give are ‘X’, and we take 10% of it, But now we have evolved it because of situations in the world right now. And drivers are in trouble. So, we have said to your drivers that they can take a subscription from us for 300 to 700 rupees a month, depending upon region, dynamics of the place, and we’ll give you unlimited rides. So it becomes like a geo top up. You use it and you get business out of it.
How do you manage work and life balance?
Pranay laughs, “what an interesting question.” He brings up a good quote from Amazon’s Jeff Bezos, the moment you use the term, work-life balance you assume they are opposite to each other, more than a balance there should be a work-life harmony which Pranay absolutely agrees with it. A few things they’ve tried to do is create a environment where the team can naturally work better. Personally, Pranay makes sure he plans his day and keeps some time aside in the evening for his family.
Samar answers some of the other questions from their audience and wrap it up by ending their conversation. For the complete interview, you can watch it on our Youtube channel, and don’t forget to like and subscribe to the video for more updates from Jungle Works!