Worktopia creatr John Arena
you saw the site (previous photo); now here's the guy who built the company.
Founder John Arenas previously started another office-space company, called Stratis Business Centers, back in 1997. In the 80’s he had started off working for Turner Construction and then for Citigroup’s workout loan group, so he had a good understanding of real estate, and specifically of office space, from a practical and a financial/valuation point of view. His initial idea was to create a network of office space facilities that would license short-term space (hourly, monthly and annually) to customers nationwide as an alternative to conventional long-term lease commitments. In order to grow without much capital (since such an ambitious idea was tough to fund), he created a franchise network. And in order to offer something special, Stratis developed the technology to control the office space and equipment centrally, including interfaces with Nortel phone systems, Pitney Bowes meters and Konica copiers as well as aits own proprietary meeting room reservation system. He ended up selling Stratis to Regus, the temporary-space giant, and left to start Worktopia in early 2004.
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In essence, just as eBay allowed people to turn stuff collecting dust in attics into valuable inventory , Worktopia is allowing not just unused office space, but the chunks of time that any particular piece of office space is unused, to be turned into valuable inventory. Industries such as airlines – notably! – and hotels, where fixed costs were higher, got into this early on; they couldn’t afford to hold airplane seats or rooms and not use them. Whereas most companies treat real estate as an unoptimized asset, and only recently started thinking about it strategically. How can we get revenue out of that fancy training center the chairman ordered, but that we use only a few times a year? What about the fourth floor, that we have been going to expand into every year since 2001? Or alternatively, should we really lease that new building, when we can place our salespeople in a temporary office and adjust the space to match our pace?
Despite his familiarity with the market, Arenas commissioned a study to figure out exactly how people procure short-term space and how they want to. In short, says Arenas, “They want a sense of control. They want real-time information to compare alternatives, from a trusted, unbiased source. Typically, they’re buying with a leadtime of weeks – not two years like for a convention – and they don’t have time to do a lot of research.” Until now, there was no marketplace where they could find this. Many of them resort to calling hotels directly – hardly an unbiased source – or rely on local colleagues.
Enter Worktopia – which opened to the public last June. So far it is handling about 12,00 searches – resulting in $1 million in transactions – per month. Its revenues include 8 to 10 percent commissions on temporary office space (payable by the supplier). Hotels and other meeting-room marketers can also subscribe for $2000 to $4500 per hotel per year for a meeting room marketing service, which allows the hotels to offer the rooms commission-free (and overcomes the touchy issue that hotels make much of their money not on the meeting rooms but on the ancillary services and accommodations).
Its users are grateful; much of the challenge is at the other hand. Even among big suppliers such as hotel chains, only Hyatt and Hilton have central databases of availability. Worktopia is currently developing a variety of analytical tools for its users, along with hosted services powered by Worktopia for big providers of office space and ultimately other kinds of short-term business resources.
Finding the long tail of customers is relatively easy compared with finding the long tail of suppliers – and certifying quality. For now, Worktopia is building out a supplier base through industry contacts, but eventually it will probably use customer feedback to create a reputation system, following the lead of many other marketplaces.
Worktopia creatr John Arena
you saw the site (previous photo); now here's the guy who built the company.
Founder John Arenas previously started another office-space company, called Stratis Business Centers, back in 1997. In the 80’s he had started off working for Turner Construction and then for Citigroup’s workout loan group, so he had a good understanding of real estate, and specifically of office space, from a practical and a financial/valuation point of view. His initial idea was to create a network of office space facilities that would license short-term space (hourly, monthly and annually) to customers nationwide as an alternative to conventional long-term lease commitments. In order to grow without much capital (since such an ambitious idea was tough to fund), he created a franchise network. And in order to offer something special, Stratis developed the technology to control the office space and equipment centrally, including interfaces with Nortel phone systems, Pitney Bowes meters and Konica copiers as well as aits own proprietary meeting room reservation system. He ended up selling Stratis to Regus, the temporary-space giant, and left to start Worktopia in early 2004.
....
In essence, just as eBay allowed people to turn stuff collecting dust in attics into valuable inventory , Worktopia is allowing not just unused office space, but the chunks of time that any particular piece of office space is unused, to be turned into valuable inventory. Industries such as airlines – notably! – and hotels, where fixed costs were higher, got into this early on; they couldn’t afford to hold airplane seats or rooms and not use them. Whereas most companies treat real estate as an unoptimized asset, and only recently started thinking about it strategically. How can we get revenue out of that fancy training center the chairman ordered, but that we use only a few times a year? What about the fourth floor, that we have been going to expand into every year since 2001? Or alternatively, should we really lease that new building, when we can place our salespeople in a temporary office and adjust the space to match our pace?
Despite his familiarity with the market, Arenas commissioned a study to figure out exactly how people procure short-term space and how they want to. In short, says Arenas, “They want a sense of control. They want real-time information to compare alternatives, from a trusted, unbiased source. Typically, they’re buying with a leadtime of weeks – not two years like for a convention – and they don’t have time to do a lot of research.” Until now, there was no marketplace where they could find this. Many of them resort to calling hotels directly – hardly an unbiased source – or rely on local colleagues.
Enter Worktopia – which opened to the public last June. So far it is handling about 12,00 searches – resulting in $1 million in transactions – per month. Its revenues include 8 to 10 percent commissions on temporary office space (payable by the supplier). Hotels and other meeting-room marketers can also subscribe for $2000 to $4500 per hotel per year for a meeting room marketing service, which allows the hotels to offer the rooms commission-free (and overcomes the touchy issue that hotels make much of their money not on the meeting rooms but on the ancillary services and accommodations).
Its users are grateful; much of the challenge is at the other hand. Even among big suppliers such as hotel chains, only Hyatt and Hilton have central databases of availability. Worktopia is currently developing a variety of analytical tools for its users, along with hosted services powered by Worktopia for big providers of office space and ultimately other kinds of short-term business resources.
Finding the long tail of customers is relatively easy compared with finding the long tail of suppliers – and certifying quality. For now, Worktopia is building out a supplier base through industry contacts, but eventually it will probably use customer feedback to create a reputation system, following the lead of many other marketplaces.