The oyster card for desks: rent office space by the hour at various locations around the UK!
Business overview
| Location | Letchworth Garden City, United Kingdom |
|---|---|
| Social media | |
| Website | www.neardesk.com/ |
| Sectors | Property Mixed Digital/Non-Digital B2C |
| Company number | 7900409 |
| Incorporation date | 6 Jan 2012 |
Idea
Introduction
NearDesk would let users touch-in, touch-out and rent work space by the hour at different locations around the UK. They'll only pay for the time they've used - with a single monthly invoice for the whole company.
Cards would be issued by NearDesk - or by partners who issue co-branded cards in return for commission (5% of spend for two years)
Later we have plans to allow users to use an "NFC" enabled phone instead of a card.
We planned to raise £84,500 via Seedrs - which was 100% funded on 14 Nov 2012. We realised that there were passionate advocates who wanted to invest but did not invest in time - so we did a second round of £50,000 at the same share price, to give a cash buffer. The second round was 100% funded on 10 Jan 2013.
Unfortunately HMRC decided that our previous business plan may not be eligible for EIS tax relief. NearDesk’s business is creating an “Oyster card for desks”, but as an additional activity it had been operating a co-working space. Companies engaged in certain trades as a substantial part of their business are not eligible for EIS, and property leasing is one of those trades.
HMRC has determined that the operation of the co-working space qualifies as property leasing, and that it represents a substantial part of NearDesk’s business; both we and Seedrs disagree, but rather than engage in a potentially long battle with HMRC, we have agreed to divest the co-working space into a separate company, called “DeskLodge”, that will be unconnected with NearDesk.
This means that an investment in NearDesk will now represent an investment solely in its “Oyster card for desks” business and will not include the co-working space. We have created a separate listing for "DeskLodge" which can be invested in on Seedrs. Operating the test location would have been done by NearDesk – but will now be done by DeskLodge. This activity was never core to NearDesk and was planned to be shut-down as the core business grew and partner locations fulfilled that role (and would have had to be shut-down in any event to retain EIS relief). DeskLodge has no such restrictions so represents an additional opportunity rather than reducing the value of NearDesk.
Intended impact
We want to let people work productively anywhere.
In particular, our ten-year mission is to enable a million people to work near home one day per week.
We believe workers would combine working at the office, home, coffee shops - and hot-desks.
Working near home would significantly reduce the time, stress and pollution associated with daily commuting. According to research carried out by O2, 52% of their Carbon emissions came from staff getting to work each day.
Companies would be able to reduce costs by cutting empty desks whilst retaining and attracting great people (Average Central London Workstation: £12,400/year).
We believe the other benefits of our system would include:
> A hundred million hours saved commuting each year
> A less stressed, more productive work force
> More dynamic, more profitable companies
> More vibrant communities with people able to shop on their high streets and kiss their children good night
Substantial accomplishments to date
> Our website is live
> We spoke at the industry conference (BCA) - and are speaking to a number of operators as a result.
> From July to December 2012 we operated a 5,000 sq ft location at London Bridge to test the system daily with real users.
> We have built the first version of the software. This has been further developed since our first listing.
> 39 locations already have card readers installed - and we plan to start accepting paying users in February.
> We raised £84,500 on Seedrs - Company 903
> We raised £50,000 on Seedrs - Company 942
Now replaced by this combined listing at exactly the same share price
Monetisation strategy
Users pay for their usage at rates set by the operator of the location (For example, £4/hour capped at £25/day)
Of that spend the breakdown would be as follows:
> 87% goes to the location
> 5% goes to the card issuer
> 8% goes to NearDesk
Users pay £20 per year for the card. In a users first year, we would keep the first £20 they spend in a location.
Use of proceeds
Our objectives for the next six months are:
A. Rapidly getting to break-even to remove the need for additional funding and let us focus on profitably scaling the business
B. Launch, measure and optimise a scalable way to recruit users. These statistics would help us recruit more partners to issue cards and more locations to host events and accept cards.
The actions we believe would achieve this are:
1. Finalise the billing software for hourly users and roll-out to fifty locations.
2. Finalise the event software which lets locations host events for partners as a way of gaining new NearDesk users. Get ten locations hosting events.
3. Launch the cards with partners. Get ten partners actively promoting the cards.
Market
Target market
Initially freelancers and small companies.
Our initial marketing strategy is to target those who belong to partner networks and attend networking events.
We find that they currently work at home which can be lonely - or pay to use coffee shops which can be less productive - and involves piles of receipts.
We believe the mass market would come from employees of larger companies working near home part of their week. Companies, we feel, currently have to have larger offices than they need - and not everyone is able to work from home.
Commuting is not a purely London centric problem - with the national average commute being 45 minutes each way (7.5 hours per week) - most of it in cars.
Characteristics of target market
3.7 million people now work at home part of their week. But home working can be lonely and not suitable for all, leading to the growth of hubs and business centres to enable hot-desk working in professional shared workspaces.
There are now 2,000 business centres and at least 129 UK work hubs (up from just 24 in 2008). The market is still very fragmented; the largest, best known provider has 160 UK business centres. Similar trends are happening globally.
In our opinion property is one of the largest costs for many companies – and the cost and stress of commuting artificially increase the salaries commanded by talented staff. Technology now allows flexible working – combining time in the office with home, coffee-shops and flexible work hubs. With 100 million square feet empty in the UK, we believe the trend will continue from 25 year to 3 month to hourly leases. UK Government plans to start hot-desking to reduce their £25bn/year property costs with an “8 desks for 10 staff” guideline.
Marketing strategy
We expect early users to come from networking events at a hub on the NearDesk network. We do not yet have hubs everywhere - and our experience suggests that users like to see a location before they start using them. Doing this individually is impractical - so we plan to invite existing groups to different NearDesk partner locations.
Members of existing networks would RSVP to attend their usual meetings via the NearDesk website. When they arrive at the location, they would be given a NearDesk card. The day after the event, they would get an email inviting them back to that venue - we plan to provide £40 of free wine from Naked Wine if they spend four hours there in the next two weeks.
(This would be profitable for us - even if they choose not to return)
We also plan to partner with existing networking groups to issue co-branded cards. This would be more effective when we have a broader range of locations.
We already have the functionality to track different partners and issue different brands of card.
The incentives for a partner organisation to promote NearDesk cards would be:
> To earn 5% of spend for the first two years (£100/user spending £20/week)
> To bring their network to life and drive traffic to their website by connecting their members when they are in hubs
> To get their users carrying their card. We plan to add simple tools to let these cards be used for other purposes so that more groups issue them
> To get access to free locations for events (Subject to locations offering their space)
We expect to increase these activies by promoting viral (refer a friend) behaviours.
Competition strategy
The primary competitor is Regus BusinessWorld offering a network of 160 Regus locations around the UK for a single annual fee (Often given free). Because there is no marginal cost for these spaces, users tell us they are often overcrowded. Their day offices are a great offering - but some find them expensive and anonymous. Regus are just one of many operators - and we hope to offer their spaces alongside many of the 2,000 non-Regus locations in the future. We are not relying on this partnership in our planning.
There are other alternatives such as:
Working at home - Which can be great for some - but not for people without somewhere productive, with distractions such as children at home - or simply for people who find themselves less productive alone.
Coffee shops - Which are not designed to be productive for extended periods of time and involve at least one payment/receipt per visit.
Other competitors include: DayOfficeCard, LiquidSpace, LooseCubes, HandyForWork, DeskWanted, WorkSnug
(Most of these are search sites, some offer a pre-book, pre-pay model - but none currently offer a "touch-in" or "one click reserve" service)
We hope to beat our current and future competitors through a combination of:
> Using our revenue sharing business model to partner with networks, locations and search sites
> Building better technology to give a better user experience and create loyalty
> Focusing on the UK market initially – expanding overseas from a strong base Our own experience suggests that a "pay as you go" service which does not require pre-booking or paying only for full days would be very useful - and we hope you do too.
(Note: LooseCubes ceased trading on 16 Nov 2012. They had a free rather than pay by the hour "revenue model")
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