September 1, 2021
Back in March, we wrote about how coworking would become the new normal of working.
Never before have remote- and hybrid-work models been adopted on such a broad scale as today: tech companies are doubling down, going beyond engineering to include most other functions; many corporations are keen to keep it in some form or another; even government agencies and courts had to find ways to do business while people stayed home.
And while no one would say it was easy, we believe this is the tipping point. We’re leaving behind coworking as a niche concept geared toward digital natives, and moving to a stage where all kinds of teams will be adopting some version of a remote- or hybrid-workplace model. And they’ll be looking for flexible and collaborative offices with a lower overhead to do it.
It’s the moment we’ve been long on since we started out more than 12 years ago: ”Coworking” will simply become a part of how we all live and work.
However, the last 12 months have been more challenging than the last 12 years for betahaus. As a business heavily invested in real estate and reliant on large events and the community that physical space provides, the pandemic was a killer. We took a big hit and learned some of our hardest lessons ever in 2020.
In early 2019 we had just opened a new location in Neukölln and doubled our capacity to 800 seats and roughly 6000 sqm. We were convinced that Neukölln was the next frontier - after all, we had helped put Moritzplatz on the map back in 2009 - and we wanted to have an even bigger impact with more capacity.
That meant getting a space bigger than anything we’d ever operated before full, and we were on track to reach our goal by early 2020. Yet with COVID cases spreading rapidly by February 2020, Germany moved into its first lockdown in March. Virtually overnight, we experienced a 75% reduction in bookings, while we were forced to cancel and refund all of our events in Neukölln for the summer of 2020.
After the initial shock, our team recalibrated. We learned how to operate a coworking space amid a constantly-changing environment of new rules and regulations. (Want to know more about this? We wrote a full article on how to run a coworking space in the age of social distancing).
We sent some of our staff into hibernation with Kurzarbeit, kept the lights on at our Kreuzberg and Neukölln locations with a dedicated staff on a mission to keep our work environments safe, and we began to seek alternative income and renegotiate rental terms with property owners.
By the beginning of 2021 things were looking up! Bookings were increasing again and we began offering new services such as Space as a Service. That said, we continued to lose money each month of operation due to the event restrictions and assembly limitations due to social distancing measures.
We also did not qualify for some crucial forms of state aid. Because the Neukölln location wasn’t operating at full-capacity yet, we couldn’t get the necessary liquidity to bridge the gap. So debts that built up over the lockdown months were kicked down the road but never neutralized.
Today, with increasing vaccinations and relaxed COVID restrictions, things are back in a big way. Our spaces are filling up again, and we are beginning to hold events. Yet, despite the turnaround, we took the painful decision to restructure the Berlin business, vacate our Neukölln location, and put the Berlin business on a more sustainable financial path. It wasn’t easy - we’ve had to part with an area of Berlin we love and say goodbye to some great employees, but this move is giving us the space to breathe and concentrate on the next chapter of betahaus.
Coworking is at the heart of what we do and will remain so. As a coworking pioneer in Europe, we intend to keep it as our central focus, even as we expand to take advantage of new opportunities.
Our Kreuzberg location will remain our flagship and serve as a lab for new models of working that we will explore. Our main keyword going forward is “flexibility”, so watch out for new ways we can work with maximum flexibility AND a healthy work-life balance. Our Hamburg presence is growing - the betahaus Hamburg team is opening a new location there this year, while our other locations in Barcelona and Sofia remain stable and thriving.
One of our new areas of exploration is ecosystem development and workspace as a service.
Physical space is only a very small part of the value proposition for coworking. The real value emerges from the people and ideas that occupy it. As part of our Space- and Ecosystem-as-a-Service offering, we’ll be supporting governments and organizations as they work to establish and build up entrepreneurial ecosystems in their communities. We’ll also be offering insights on the more tactical parts of developing a space, offering expertise on space design, tech, and tools to manage a space, as well as programming and community building to help their ecosystems flourish on their own.
Another workstream we’ll be pushing forward revolve around our platforms such as One Coworking and betahaus+.
One Coworking connects spaces around the world and allows its members to roam to other spaces. As workers move away from long commutes and more teams go remote, having a network of interconnected coworking spaces will be a vital part of their collaboration.
We’ll also be focusing more on betahaus+ – our digital workspace and community – where freelancers, entrepreneurs, startups, remote workers, and creatives can access new opportunities and collaborations from home or from anywhere in the world.
Timing is everything! We still believe in Neukölln and have our hearts set on coming back, but right now we need to focus on recovering from the pandemic. And please remember that many businesses, especially small and mid-sized businesses dependent on people and community, like cafes and restaurants, are only now coming to terms with COVID-19. Many like us, who have almost a year of revenue shortfalls, may not survive or only survive the way we did - by restructuring. We are thankful for the support we have received - especially from our members and our clients, some of whom came forward in a big way.
Christoph, Max and Madeleine