Michael Bleby, Australian Financial Review
RedBalloon founder Naomi Simson has taken up digs as entrepreneur-in-residence at Gravity Coworking, a flexible office space provider in Sydney, Melbourne and Brisbane.
The Sharktank AU judge moved the 12 staff of her RedBalloon spin-off Redii, a staff rewards program, to Gravity’s Sydney digs one day in October, after the ceiling fell in at their existing Kent Street office due to a burst water heater the floor above.
Ms Simson, who spends about two days a week with Redii staff, agreed to speak at events for Gravity users and to take on a role informally mentoring and advising other start-ups and entrepreneurs using the space after a discussion with Gravity founder Jacqui Esdaile.
There was no payment in kind – Redii pays full rent – but it was a good move for her business, Ms Simson said.
“With Redii we are serving small businesses, with small teams, up to 100,” Ms Simson said. “It’s like we’ve got our test markets in front of us. If it doesn’t make sense to them, it’s not going to make sense to anyone.”
The business of co-working is growing. The amount of space occupied by co-working hubs in Melbourne has risen 750 per cent in the past three years and more than tenfold in central Sydney over the past five years, Knight Frank figures show.
Entrepreneurs in residence aren’t new. Start-up incubators and accelerators such as Bluechilli have in-house advisers. But as co-working becomes a sector that draws in large local landlords such as Dexus Property Group, The GPT Group and foreign competitors such as WeWork, smaller independent businesses have to take steps to differentiate their offering and secure their market niche. For a business such as Gravity, which targets higher-end businesses willing to pay up to $700 per desk per month, it is not just about providing space, but business connections and mentoring.
That’s what underpinned the tie-up with Ms Simson, Gravity’s Ms Esdaile said.
“This is just the start of a really important differentiation,” she said. “The entrepreneur-in-residence program is something that even once Naomi is no longer that particular entrepreneur-in-residence, I’ll be looking for the next one, and the next one.”
Co-working only works up to a certain size as cost and other factors made a private office necessary, Ms Simson said.
“Really once you get past a dozen people, it’s really hard to justify it,” she said. “There’s a point where you do need your own space, for privacy or security or what have you, but … it depends on the business really. Trying to find space for 15 people in Sydney is absolutely no fun.”
Ms Simson, who expects the sector to grow further, said she looked at WeWork’s “massive” space in Sydney’s Pyrmont.
“It was tiny, tiny little workspaces,” she said. “That was my feeling of it. It wasn’t full when we looked. And I thought, if this was full of people, it would be so noisy.”
Noise doesn’t work for co-working spaces, she said.
“You can’t have music, you can’t have people yelling across the office. You have to be aware of your personal space and it needs to be respectful. I didn’t want to be a battery hen.”