Most service providers won’t be able to keep up – This article is designed for coworking operators.
Written by Laurent Dhollande, CEO of Pacific Workplaces and outgoing CEO of CloudVO.
There are two major marketing platforms that we see emerging in our industry, with a large group of service providers that will likely be squeezed in the middle. This is one of the reasons Why CloudVO Sold To Yardi and why Pacific Workplaces is carefully reviewing its relationships with service providers. With the caveat that our crystal ball has proven not to always be right, we are sharing our views on the service provider landscape to stimulate exchanges with operators, as we have done recently with CloudVO partners.
1) The Instant Group
Instant, after receiving a substantial capital infusion from IWG (Regus parent company), was able to acquire last year several aggregators and resellers (DaVinci, EasyOffices, Rovva, Coworker.com, etc.), some of which were leaders in their niche market. On paper, the sum of these acquisitions gives the Instant Group a comprehensive position, enabling them to touch on many facets of the coworking market, combining their original strength as web brokers with the absorption of aggregators and resellers with ecommerce and online transactional capabilities. For this to make sense, Instant is faced with the formidable challenge of integrating these various sites into one single platform that delivers the coworking products end-users want, while integrating with the various software tools operators use for meeting room bookings, ecommerce, invoicing, and space management, to mention a few. The difficulties of the job should not be underestimated, especially for Instant who comes from the brokerage world, and still has much to learn about technology. Making complicated software work well is difficult. A measure of progress will be to see if they come up with an integrated platform or continue to live with individual pieces that require operators to enter and monitor the same information multiple times on the various sites owned by the Instant Group. The value of the combined platform must be greater than the sum of the parts, or else, what’s the point?
2) The Yardi Platform
Yardi is a software company that learned to be a formidable digital marketing force with dominant listing sites in the markets they previously served. Yardi’s early success started as a property management software company to support multi-family and apartment building owners. They then developed online apartment listing sites, like RentCafé, and quickly became one of the prominent online forces to match apartment seekers with the supply of apartments for rent. In parallel, Yardi brought their property management software and online marketing expertise to commercial real estate building owners, where they are now a dominant software provider and dominant lead generator for traditional office space.
In the mid 2010s, Anant Yardi, the company founder and CEO, understood that coworking was going to be a critical element in the future of work and in 2017 Yardi acquired WUN/KUBE. After having re-written the KUBE code, they improved the software and fully integrated KUBE into the Yardi platform. Yardi is now the leading software provider to the coworking industry. And like they did in the apartment and traditional office space, they have developed powerful online marketing capabilities to benefit coworking operators, and they are now a dominant player with more than 3 million monthly visitors on their office-related Internet Listing Sites and 30,000+ monthly leads, approximately 15% of which are specific to coworking (and growing fast). These listing sites include CommercialCafé, PropertyShark, and CoworkingCafé, among others.
More recently, Yardi acquired CloudVO to gain better insights on what coworking operators need. They are bringing their successful recipe developed in the multi-family and traditional office spaces to coworking. Although any operator can list on CoworkingCafé, whether they use Yardi as their operating technology platform or not, Yardi’s ability to integrate lead generation, e-commerce, leads management and bookings in their coworking management program, which includes contract management, CRM, space management, data management, invoicing, and financial reporting -all critical functions for running any coworking operation- provides a formidable value proposition to our coworking word. That is why Pacific Workplaces embraced the platform, including listing on CoworkingCafé, way before, and independently from selling CloudVO.
3) Aggregators & Marketplace Providers
Aggregators and marketplace providers, whose creativity have helped our industry a great deal, are in danger of being squeezed out by these two major players. Most are small and, everyday, it seems that a new start-up is joining the fray. It will be difficult for them to garner the resources to compete with Yardi or the Instant platforms. It is the main reason why CloudVO decided that it could not compete alone and joined Yardi (see forthcoming blog post by Laurent to explain why CloudVO was sold to Yardi). Like it is the case in many exploding industries, one or two of the smaller players will surprise us and explode to the scene. After all, Google came late to the search business and quickly disrupted all legacy players like Yahoo! and a few others, so anything is possible. Liquidspace may have the best chance to thrive, because of their well thought out technology platform and the corporate account capabilities they have developed with some success. Beyond Yardi listing sites, Instant, and Liquidspace, Pacific Workplaces will continue to list with a couple of the smaller players, because of history and friendships, or because they may surprise us with their creativity, but we will stay away from listing with more than a handful. Listing with too many can become a waste of time and encourage the provider to compete for attention on Google with us, either via SEO optimization or Pay-Per-Click campaigns that raise our own PPC cost. Our business addresses are very valuable and we share them with care.
Please see Laurent’s blog post on “Why We Sold CloudVO to Yardi” to be released on July 6, 2023.