A year ago, I was working from home and StartupsHK was just a group of startup founders that met up every other week at Habitu. Step forward to now, StartupsHK is a community of startups that numbers in the hundreds of members and I’m working from BootHK on my projects. We are coming up on the third month anniversary of BootHK’s first site being open, and there have been many amazing things that happened in that time and while setting things up.
To get BootHK open, we needed around $200,000 (USD $25,000) in total so that we could set it up and have about 3-6 months operating float. The reality is that we did it with around $120,000 (USD $15,000), which covered getting things set up, but did not allow for any float. At this point, I’m happy to say that it looks like we are running at a break even revenues and it is anticipated that we will be able to grow that so that we can start repaying some of the up-front investment that was put in.
- Until you have cash in hand, don’t count funding that has been promised.
- It will take longer to finalize funding than you plan on.
- Sometimes support will come from unexpected places.
BootHK started as Hackerspace Hong Kong, but it morphed over time to focus on the coworking aspect. The reason for this was just pure and simple business. We built up a model that looked at both a primarily informal use and a primarily working use, and saw that with Hong Kong real estate costs, the informal use would just not be viable financially without several hundred members. Initially, we had between 50-100 people that had various levels of input into what they were interested in, and what we saw was that there was a critical mass of people that would use the space for working in some form or another and that they were interested in paying enough to make it possible to be self-sustaining with only perhaps 30 active members, a much more manageable number as well as just realistic.
The other side, the people, that has also been a changing situation from conception until now. When we made the decision to create the coworking space, we immediately lost quite a few people that had an interest in the Hackerspace usage. It is always difficult to make that kind of decision, but it looks like it was the right one. Another related topic is the kinds of communities we have here. Initially I wanted to set up BootHK so that it is run and managed by an association of people. It ended up being more driven by myself than I had originally wanted, but I think this also worked out, and a different kind of community is steadily building within the space that is not so much about the operation of the space, but is more about a self-supportive community that has a home here.
Moving forward, it looks like the right fit will be to set up a not for profit company that is responsible for running the BootHK spaces. Technically, this could be a non-profit entity, but I think we’ve got almost enough seed to bootstrap it into existence.
- Just start where the demand is, you can always expand it later when you build a strong foundation.
- Take help where it is given, but keep things moving.
- Iterate and give people what they need.
Here in Hong Kong, real estate is both pricey and varies a lot for what you get from any given space. We looked at probably close to two dozen spaces and ended up at one that we are on good terms with the landlord. There were a few false starts on spaces, but this one is really a great combination of usable space, location, and cost. One particular point that is interesting in the local market is the usable yield of a space can vary a lot. When you see a 1000 square foot place, that may range anywhere between 800-500 actual usable square feet of space, as you include in things like the lift lobby and the wall thicknesses. We got lucky.
- Location is really key, if we were 5 minutes further from major transportation we would have a much lower usage rate.
- Finding a sympathetic land lord really makes everything easier.
Skipping ahead to now, we currently have around 20 active members, but we are trending towards a higher average membership level than we originally expected. In this coming month, we will be creating some more fixed desk space, which will fill a growing demand for this kind of seating. This will potentially create a situation where most of the monthly expenses are covered by this usage.
If we continue to grow, and can afford to open an additional space, having about a 50% ratio of fixed desk space to hot desk seating seems to be pretty much what the demand is. Especially if we were able to open a larger space, I think we would include several office pods for small companies to use and also look at some private single person work seats for when someone needs to spend the morning talking on the phone or whatever. Right now we have a general rule for people to use the conference room for calls, but I think as we grow, it will become more likely that the conference room is occupied.
- We have gotten more interest in usage from established companies wanting a satellite desk or just flexible workspace and they like the feel better than more traditional options.
- When bringing in new people, have a very low friction trial process: it will either be a good match for them or not.
Bonus lesson learned:
Most of our growth has come from hosting meetups, both the publicity that it generates as well as just getting people in to see the space. The additional side effect is that we’ve seen at least an initial trend that making the space available for people gives the groups some motivation to be more active.
The flip side of this is that we also have random amazing people coming through.
Many thanks to everyone that has been involved in making BootHK possible and to the members for coming in to make it a place that people want to come to.