Bold Business Logo

The Future of Shared Workspace – Leveraging Flexibility Against Uncertainty

Prior to the pandemic, the world watched as flexible office space provider WeWork plummeted in value. Extravagance and mismanagement led to a tremendous devaluation of the company requiring extensive restructuring. Then, Knotel, a flexible headquarters provider and startup unicorn, filed bankruptcy in the midst of the pandemic. While COVID didn’t help, it had repeated many of the same missteps that WeWork had done. All of this has left many investors wondering whether shared workspaces are workable model. As the world emerges from the pandemic, this is an important question worth considering.

When it comes to flexible office spaces, there are several different drivers that enable such a model to thrive. Prior to the pandemic, a need for mobility and social connections served as motivations for shared workspace. After the pandemic, an escape from working at home became another. (Read more about how working from home will replace the smart city concept in this Bold story.) And with many offices and universities closed, many needed functioning spaces to work or study respectively. All of this has provided opportunities to understand the shared workspace market a little better. These are lessons investors need to appreciate when examining just how viable a flexible office space provider is.

“Right now, we are in the largest work from home experiment. I think we’re about to shift to the largest return to work experiment ever.” – Prabhdeep Singh, Global Head of Marketplace, WeWork

Changing Marketing Strategies

For all shared workspace companies, there is a constant choice that must be made regarding marketing targets. This even pertains to shared office and retail space. In simple terms, companies can choose to either focus on retaining existing clients or pursuing new ones. In terms of costs, recruitment of new clients is more expensive. Therefore, there is a natural tendency to focus on retention. But for flexible office space providers, this may have proven detrimental during the pandemic. With many offices closed, the potential number of new clients skyrocketed. Thus, failing to adapt to this aspect of the market might have reflected a major missed opportunity.

Another aspect of this changing market involved the distinctions between small and medium sized businesses (SMBs) and larger enterprises. Prior to the pandemic, SMBs accounted for the vast majority of clients for shared workspace environments. But with the pandemic, this changed. SMBs had to cut costs, and shared workspace expenses were among some of the first to go. In contrast, corporate executives who lacked an office building sought out flexible office space to meet their needs. Similarly, universities that closed their campuses and libraries did as well to accommodate students. Here again, being able to adapt and target the right aspects of the market were essential for viability.

“What we’ve essentially done is unbundle our space. It used to be that the only way to enjoy our spaces was via a bundled subscription product and monthly memberships. But we realized with COVID, the world was shifting, and to open up our platform to a broader group of people and make it as flexible as humanly possible.” – Prabhdeep Singh

Flexibility in Shared Workspace Packages

When WeWork grew exponentially during its early years, it did so by offering a subscription-based model. Monthly or annual packages were provided to flexible office space users that included specific amenities. For a period of time, this model worked well for WeWork. It also worked well for other shared workspace providers. But once the pandemic hit, few were willing to commit to such long-term agreements. This not only pertained to existing clients but to new recruits as well. Therefore, these providers had to adapt and extend the types of shared workspace options available in order to remain relevant.

The entrance to a cool WeWork space
WeWork was the king of shared workspace prior to the pandemic, but for the obvious reasons, the entire industry is in flux and awash in uncertainty.

For WeWork, they began offering on-demand use and all-access options to their menu. On-demand meant that someone could pay only for the time they wanted on-the-fly without any lasting commitment. All access offerings enabled executives and students to visit any shared workspace beyond a single locale. By doing this, WeWork saw their on-demand reservations grow by 65 percent and revenues by 70 percent. And they also gained new corporate and university clients they would not have otherwise enjoyed. For the time being, it made since to abandon membership plans to allow greater consumer options.

“As a flexible space provider, we are looking at where the world is going. And while we’re a small part of the whole commercial office space industry, we are working to use technology to enable a flexible workspace experience via a great app and the digitization of our spaces.” – Prabhdeep Singh

Reconsidering Flexible Office Space Amenities

As lockdowns and quarantines began, it’s well appreciated that videoconferencing sites became widely popular. (Read more about the innovation and growth of videoconferencing platforms in this Bold story.) For some flexible office space providers, they learned from this and began offering digital and virtual services. In essence, some shared workspace businesses allowed users to connect to on-site services remotely. This made such spaces more attractive when compared to others, especially at the height of the pandemic. Just as online retail and food delivery became increasingly attractive, so did these types of remote office amenities.

Companies like WeWork are now taking this concept and expanding it further. In essence, they have begun experimenting with a “business in a box” package for SMBs and startups. Services might include health insurance, human resource help, payroll services, and other insurance policy access. Smaller companies may be unable to develop such services in-house due to cost and time constraints. By having these amenities in a flexible office space package, however, they’re more likely to consider a shared workspace solution.

Being Dynamic, Adaptable, and Current Is Essential

Each of the above areas demonstrate the importance of adaptability when it comes to shared workspace offerings. Flexible office space providers must be able to quickly assess the market and change their strategies in order to survive. As WeWork’s and Knotel’s struggles have shown, it’s not as easy as it first appears. And mix in a pandemic with major shifts in the workspace landscape, things become that much more complicated. How all of this evolves as the dust settles remains unclear. But in all likelihood, things will continue to change more than they’ll stay the same.

 

The world is getting back to business. Are you ready to join it? Get the acclaimed book that can help you live Bold!

The Downside of Cryptocurrency: Massive Energy Consumption

Cryptocurrency is gaining increasing acceptance globally as more and more people embrace digital currency models. The use of blockchain technology offers many advantages, with most being related to security of transactions. However, these systems, like Bitcoin and Ethereum, are not without their own set of limitations. One of the most notable ones involves cryptocurrency energy use, which is by any estimation quite profound. As cryptocurrency mining has increased, so has the amount of energy utilized. In fact, the entire cryptocurrency system has surpassed the energy used by some smaller nations. (Read more about how the world is inching towards a digital currency model in this Bold story.)

Naturally, there are individuals on both sides of the aisle who are either opposed or in favor of cryptocurrency. Many in favor of digital current systems suggest that cryptocurrency energy use isn’t that much different from other banking systems. But opponents disagree and say cryptocurrency mining is inherently inefficient and needs change. Exploring these perspectives in greater detail can shed some light on current issues and potential solutions in this regard. Given the rise in digital currency systems as of late, this seems like a valuable exercise.

“It is really by design that Bitcoin consumes that much electricity. This is not something that will change in the future unless the Bitcoin price is going to significantly go down.” – Michel Rauchs, Researcher, The Cambridge Centre for Alternative Finance

Why Is Cryptocurrency Energy Use So High?

As noted, cryptocurrency systems involve the use of blockchain technology. Blockchain ensures all digital currency transactions are valid and accurate by comparing data among different servers. However, in order to create new cryptocurrency, highly complex computations must be performed by supercomputers. This process, called cryptocurrency mining, ensures existing cryptocurrency is not being double-used. It also creates new cryptocurrency for the rising demand currently present. All of this demands excessive amounts of energy, which is why opponents are quite critical of these systems.

In total, there are about a million active daily users of Bitcoin and half this amount for Ethereum. The estimated amount of cryptocurrency energy use from mining activities related to these figures is impressive. Overall, cryptocurrency energy use is around 130 Terawatt-hours per year. This figure exceeds the amount of energy used by nations like Argentina and approaches that of Norway and Jordan. Thus, current cryptocurrency mining activity could be said to utilize the same amount of energy as a million people year. Should cryptocurrency mining continue to increase, which is expected, these figures will naturally rise as well.

“Tesla got $1.5 billion in environmental subsidies in 2020, funded by the taxpayer. It turned around and spent $1.5 billion on Bitcoin, which is mostly mined with electricity from coal. Their subsidy needs to be examined.” – David Gerard, Author of Attack of the 50 Foot Blockchain

Fueling Cryptocurrency Energy Use

When it comes to the nations with the highest cryptocurrency energy use, China leads the pack by far. In this regard, China does utilize hydropower to generate energy for cryptocurrency mining. But at the same time, it also uses coal for energy production, which notably has harmful carbon emissions. The use of non-clean energy resources to fuel cryptocurrency mining is what concerns many opposing the industry. While 73 percent of all Bitcoin miners use renewable energy, this accounts for under 40 percent of all energy used. Therefore, it can be reasonably said that cryptocurrency energy use contributes significantly to carbon emissions.

Some dude checking the voltage of some servers
Cryptocurrency energy use is high, making the digital money the furthest thing from “green”.

Certainly, many cryptocurrency mining operations are trying to employ hydropower or solar power. However, seasonal variations prevent this from being a consistent source of energy. As a result, coal and other sources are being used to bridge the gap. Oil and gas companies are readily aware of this and are advancing their capacity to fuel cryptocurrency energy use. Both direct natural gas and burn-off vents from oil production are being utilized by some cryptocurrency mining systems. These developments are why some are suggesting cryptocurrency mining operations should be subject to some type of carbon tax.

“What I like about the Ethereum community is at least they are thinking about how to solve the problem. What I don’t like is they’ve been talking about it for a few years and haven’t been able to actually do it.” – Alex de Vries, Founder of DigiEconomist

Potential Solutions to Cryptocurrency Mining Issues

In order to verify blockchain transactions, a “proof-of-work” model is used. In essence, this means that extremely complex computations must be performed to ensure validity and accuracy. The work performed for these computations demand mega-computers, which notable use tremendous amounts of energy. Therefore, one approach would be to devise a new protocol. In this regard, Ethereum has been considering a “proof-of-stake” model, which is less energy-intensive. Rather than verifying each transaction, digital coins are locked to prevent duplicate use. But to date, the use of such a model has not come to fruition.

Cryptocurrency mining is a bigger problem in terms of energy consumption. (Read more about the debate between cryptocurrency and energy consumption in this TechCrunch story.) New digital coins demand this approach, and with high demand, cryptocurrency energy use is high. The main alternative here is to shift to renewable forms of energy to drive these operations. But to date, this is also not feasible. Coal still accounts for more than half of all cryptocurrency energy use, for which China is a major player. Therefore, the best option for now may indeed be a carbon tax imposed on cryptocurrency mining operations. This could help incentivize clean energy adoption or new solutions.

Comparing Banking Systems to Cryptocurrency

In justifying cryptocurrency energy use, proponents suggest that its energy utilization should be compared to entire banking and currency systems. After all, cryptocurrency is a currency system itself. But these comparisons are not appropriate when considering things like cryptocurrency mining and transactional verifications. Banking systems involve much more than currency production and transactional data. However, if these aspects of banking systems are used for analysis, it’s clear cryptocurrency energy use exceeds current banking procedures. There are many advantages that digital currency models offer, but energy efficiency is not currently one. If cryptocurrency continues to grow, it’s evident that these issues need to be addressed for its long-term viability.

 

The world is getting back to business. Are you ready to join it? Get the acclaimed book that can help you live Bold!

Ethnic Foods on the Rise – The Evolution of the Global Food Industry

Changes in the global food industry have been profound in the last year. Many restaurants were forced to close due to the pandemic and concurrent restrictions. Delivery food services boomed as more people utilized mobile apps and home convenience options. Similarly, grocery delivery apps also increased substantially over the last year. (Read more about the explosion of grocery delivery apps in this Bold Business story.) But these weren’t the only notable shifts related to global food industry shifts. One of the more interesting ones has been that involving ethnic foods. More than ever, consumers enjoy tremendous access to a variety of cultural cuisines. And it seems like these trends will only continue in the future.

For many years, Americans have enjoyed select ethnic foods that have come to be rather familiar to them. Chinese, Italian, and Mexican dishes and spices are commonplace in the U.S. But other types of ethnic foods are not. In fact, it has been challenging to access some international foods because of obstacles related to distribution. Likewise, more exotic cuisines often intimidate consumers. But these are the areas where the global food industry is changing the most. And it’s a big reason such interesting offerings are now more routinely available.

“A lot of these smaller ethnic brands used to be distributed by ethnic food distributors. Now, these companies are going direct to the supermarket.” – “Supermarket Guru” Phil Lempert, a food industry analyst

Direct-to-Consumer Shifts in the Global Food Industry

In many ways, COVID served as a catalyst to many technology shifts over the last year. (How did the pandemic serve as a boost to certain industries? Read this Bold story.) In a similar way, technology has also caused major changes in the global food industry. This has been particularly evident for ethnic foods, which previously used small food distributors. Today, however, many international food suppliers are shipping their items directly to the supermarkets. In some cases, online purchases are going directly to consumers themselves. This has made it much easier to gain visibility off a variety of international foods among potential customers.

Direct distribution is not the only thing that has changed from ethic foods. New marketing strategies are also evolving for the global food industry. Social media marketing like Instagram offers inexpensive ways to familiarize foreign market customers with new foods. Likewise, e-commerce expansion and greater acceptance among consumers to purchase ethnic foods online has also helped. Additionally, branding and packaging design expertise is more readily available as well, especially in the U.S. This, in particular, has enabled the global food industry to grow its international foods offerings substantially.

“Ethnic communities have been overlooked in the online and retail space. We believe the opportunity to provide these fast-growing communities access to exciting and affordable groceries is tremendous.” – Larry Liu, Founder and CEO of Weee!

Catering to Existing Ethnic Communities

When Larry Liu came to the U.S. in 2003, he had difficulty finding the types of ethnic foods to which he was accustomed. As a result, he decided to create his own company called Weee! in an effort to meet this need. After piloting his platform through WhatsApp, he launched a social media-like sight where ethnic foods could be sold to individuals. He then was able to combine individual orders into group purchases, enjoying discounts in the process. Recently, Weee! earned another $315 million in Series D funding and is now valuated at $2.8 billion.

Someone ordering some ethnic foods via their phone
Tech has enabled the growth of the global food industry, bringing ethnic foods to anyone with an Internet connection.

Initially, Weee! focused on expanding the global food industry by making it easier to access Asian and Hispanic foods. But today, Liu is expanding offerings to include Korean, Japanese, Taiwanese, and other ethnic foods. His company offers free delivery for orders over $35, and he boasts over 3,500 products. By all accounts, his online ethnic foods’ platform has been a tremendous success. With this global food industry segment expected to be $464 billion by 2030, Weee! looks to be in good shape.

“The ‘K-wave’ that started from Korean dramas and K-pop is now spreading to Korean cuisine and overall Korean lifestyle.” – Park Ga-hyun, Senior Researcher, Korea International Trade Association

Expanding Cultural Awareness and Diversity

Certainly, technology and the chance to cater to existing ethnic communities account for significant growth of the global food industry.  However, increasing global awareness and cultural diversity is also playing a role. Overall, younger generations are more willing to try new ethnic foods today than generations past. Social media and the Internet have helped fuel this cultural spread. This has been particular evident for Korean foods. With a growing presence of Korean influences in pop culture, it was inevitable that Korean foods would soon be on the scene. As K-pop has grown, so has the awareness of an array of Korean cuisines previously unrecognized.

In the last year, Korea has seen a net 7.7 percent increase in its agri-foods exports to other countries. Likewise, the export of Korean condiments, like gochujang, has increased by more than 25 percent. Kimchi seasoning mix by Seoul Sisters has become one of the top sellers on Amazon. Likewise, the social media challenge to try Buldak spicy chicken noodles is all the rage. All of this shows how cultural expansion is impacting the global food industry in a major way. And the increasing demand for ethnic foods from Korea and other remote areas is inevitable. No longer is the demand for these types of cuisines only coming from ethnic communities.

Variety Is the Spice of Life

Previously, watching Anthony Bourdain try some exotic foods from around the world seemed exciting. But in all likelihood, we weren’t likely to sample such ethnic foods ourselves without traveling abroad. That seems to be rapidly changing today as the global food industry expands, offering an ever-increasing number of international foods. While the pandemic explains some of these changes, it doesn’t account for them all. Demand for such foods is advancing as is the global community overall. And the potential for new culinary creativity with this diversity will undoubtedly advance as well.

 

The world is getting back to business. Are you ready to join it? Get the acclaimed book that can help you live Bold!