NearDesk
The oyster card for desks: rent desk space by the hour at various locations around the UK!
- Location
- London, United Kingdom
Categories: Property Mixed Digital/Non-Digital B2C
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Investment
sought: - £50,000
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Equity
offered: - 2.79%
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Investment
amount: - £50,000
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Valuation
(pre-money): - £1,742,115
Idea
Introduction
NearDesk let users touch-in, touch-out and rent desk space by the hour at different locations around the UK. They only pay for the time they use - with a single monthly invoice for the whole company.
Cards are issued by NearDesk - and by partners who issue co-branded cards in return for commission (5% of spend for two years)
We raised £134,500 via Seedrs on 26 Jan 2013 (After delays getting EIS approval - now confirmed).
As a result of that funding, we are now live.
We are doing this follow-on funding (at the same price per share) to delay the need for a larger growth funding round and allow us to stay focused on progress.
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
> We raised £134,500 on Seedrs (At the same price per share as this round)
> Since then, we are now live. You can now register for a card, touch-in, touch-out and get billed at NearDesk locations around the UK and get billed the next day (Live since May 2013)
> 70 locations are now live on our website.
> Developed and tested the software to be, in our opinion, easy to use.
> First Partnerships live through our website
> Viral registration built - which encourages users to share NearDesk with their contacts
> Referenced in, global property consultancy, CBRE's report "The Work Shop". They requested and now have printed cards for their team to use in the UK.
Monetisation strategy
Members pay for their usage at rates set by the operator of the location (For example London is generally £2.50 to £10/hour with a daily cap)
Of that spend the breakdown is:
> 87% goes to the location
> 5% goes to the card issuer or referral partner
> 8% goes to NearDesk
In a member's first year, we keep the first £20 they spend in a location. Members then pay £20 per year for the card.
Use of proceeds
Funds are needed to cover salaries and developers.
Now we are live with a clear revenue model, we are focused on rolling-out out to:
More users:
> See Marketing Strategy
> Letting partners add/manage their own affiliate codes
More locations
> Letting locations add/manage their own profile
> Demand mapping from users to focus our efforts and prove demand
More usage:
> Emails and social media to encourage members to become active users and advocates
To maximise scalability and reduce the need for NearDesk to hire staff, we plan to let stakeholders (Employers, Locations and Affiliates) manage their own profiles.
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. According to CBRE's report "The Work Shop", Companies currently 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 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 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 to shift from 25 year to 3 month to hourly leases will continue. 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 our primary customer acquisition tool to be affiliate partners with existing databases. These can be simple referrals - or co-branded cards.
We can now track different partners and issue different brands of card.
The incentives for a partner organisation to promote NearDesk cards are:
> 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 NearDesk locations
> 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
We expect to increase these activities by promoting viral (refer a friend) behaviours.
We are starting to engage large corporate accounts - but are limiting our time here due to the traditional long-lead times with corporates. Our partnership model (5% of spend) allows partners to be rewarded for recruiting corporates as well as small companies.
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, 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. Note: US ex-competitor LooseCubes ceased trading on 16 Nov 2012. They had a free rather than pay by the hour "revenue model")
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.
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