Locus Workspace is for Sale – Update

As many of you know, Locus Workspace was put up for sale in March, partly due to the COVID-19 crisis, but largely due to my own decision to move on from the coworking industry.

As many of you also know, there was a buyer who made an offer that I accepted and showed enough interest to pay a non-refundable deposit.

Unfortunately after several months of mostly waiting for legal contracts, and for reasons I do not fully understand, the buyer pulled out and Locus is once again on the market.

Along with just announcing the unfortunate news, the purpose of this blog post is to give a brief overview of what’s next for Locus and Locus members and about what is for sale for those who might be interested in buying.

UPDATE FOR MEMBERS AND POTENTIAL MEMBERS: How will this affect your membership

For people who have been members of Locus since its early days, you’re likely aware that this may not affect your membership in a noticeable way at all, except for the unavoidable psychological uncertainty that comes from not being sure what will happen. That said, there is unavoidable uncertainty associated with not being sure who if anyone will buy Locus. If Locus doesn’t find a promising buyer by the end of September, we will begin a 3-month process of closing the space, so that Locus would be completely closed for business by the Christmas holiday. I do not expect that to happen, but it is a real possibility. If that did happen, all prepayments for long-term memberships would be pro-rated to the date Locus would no longer be usable and the remaining amounts returned to the members’ accounts. Ideally there will be at least 2.5 months from the time the closing is announced until the space would no longer be open for business. At minimum, there would be one month’s notice.

Information for Potential Buyers

Some Reasons to Buy

  • It’s a great price (I’m leaving the business for personal reasons and believe it’s a great deal for the right kind of buyer). Don’t hesitate to ask about price and financials if you might be interested. But please only serious inquiries.
  • It’s the longest-running coworking space in the Czech Republic with a stellar reputation and a broad online presence.
  • I will transfer all domain names and social media pages and groups, including URLs. Some of the URLs have presumable value as the coworking concept has grown exponentially since I purchased them (coworkstation.com and coworkingplace.com among others, along with Locus’s own functional domain names). For social media groups, Locus manages several Prague Meetup Groups with more than 1,000 members.
  • The sale includes extensive physical assets needed for running a coworking space: desks, chairs, lamps, data projectors, filing cabinets, etc.
  • I will make every effort to transfer all knowledge and resources for running the space, including extensive protocols for managing the space (though after the sale I will expect reasonable remuneration for my time).
  • There are currently two full-time interns with Erasmus fellowships and a part-time paid experienced community manager who are expected to remain at Locus during the transfer of ownership and into the first few months, assuming the sale process can proceed over a reasonable time period.
  • While Locus was hard-hit by COVID-19, membership and net profits have increased monthly since the initial lock-down in March, despite the fact that summer months are traditionally the slowest of the year. I expect the positive trend to continue strongly in September and October, as there tends to be a large increase in membership after the summer holiday season.
  • If you want to enter or expand in the coworking industry, Locus is a great way to get started.
  • While I would expect the negative impact of COVID to continue for several months, I also expect improved long-term prospects for coworking  in general as companies seek to promote remote work and flexible office space as a direct consequence of COVID.
  • Locus is profitable and unless things change can pay a reasonable living wage for a working owner/manager.
  • There is meaningful potential for increased net profits for an experienced event manager, sales person, or business manager without extensive change from the current model.

Some Reasons NOT to Buy

  • COVID-19 remains impactful and unpredictable, and it’s difficult to know how the coworking business will be affected in the short-term and in the long-term future. If you are looking for an investment without any risk, this is not the investment for you.
  • Unless you plan to be an owner manager for at least the first year, or to use this space as a springboard for learning or expansion without expectation of profit, the potential profit margin is not investment-grade, in my opinion: only people who want to be involved in running a community-oriented coworking space should see this as an opportunity.

Some Reasons to Buy or Not to Buy Depending on You

  • I started a coworking business because I wanted to do something that had community value and not primarily for a social business (meaning one that adds value to the human condition and not just for profitability) and one of the main reasons I am selling rather than just closing down is because I do not want to see Locus die when it continues to have a lot of value for members. While I also believe it’s a good investment for the right buyer, I am not at all interested in selling it to the wrong buyer.
    • With that in mind, if you are looking to immediately pivot to a different kind of business or even a different model of coworking so that current members will likely want to look elsewhere, you are not the right candidate.
    • You’ll also be buying from a person who started a business with social good in mind and who continues to be committed to those values, which can be confirmed with inquiry from long-time members of the space, which means you can count on a kind of honesty and direct communication in the sales process that often would not be provided.
  • Locus is an English language space with members from more than 20 countries, including about 35% Czech members. If you’re looking for a Czech-language-only space, you would not get the value from buying Locus that it mainly has to offer. If you’re looking for an international community with a strong Czech presence as well, Locus could be ideal.

If you are seriously interested in entering the community-oriented coworking industry and would like more information about financials or anything else, or just to have a conversation about the opportunity, do not hesitate to contact me:

will@locusworkspace.com

Will Bennis, Ph.D.
Founder & CEO, Locus Workspace

Regional Accelerators and Incubators

Below is a list of some of the business accelerators and incubators in the Czech Republic and in nearby countries (or else ones that actively target Czech startups). This is a work in progress, so please help me keep the list current and accurate by sending me feedback or leaving comments!
The terms accelerator and incubator are sometimes used interchangeably and sometimes used differently from how I would use them, so take these classifications with a bit of skepticism. This overlap in usage and similarity in experience has me grouping the two together for this blog post.
For me here are the basic similarities and differences:

Similarities

Both accelerators and incubators provide shared work space and mentorship to startup businesses for a limited period of time (usually 3-6 months) to help startup businesses success. Both also tend to do this on a competitive basis, providing the space and support for free to the selected winners who are deemed to have the most potential.

Differences

Incubators

Incubators tend to be non-profit entities set up by regional governments, academic institutions, or other non-profit organizations with a mission to help support the startup environment. They generally have some kind of institutional support that allows them to provide the free work space and the mentorship. As such, incubators are not as firmly tied to either the limited time period or the competitive nature of acceptance. Some of them have relatively open acceptance based on university affiliation or some other general requirements, and many will not put strict limits on how long a startup can stay. Although they do not as a rule provide capital to the startups, some do, though usually without strings attached or any ownership stake in the company being incubated. Though acceptance may be in batches on a calendar schedule, it is often on a rolling basis as well.

Accelerators

Accelerators, on the other hand, tend to be for-profit entities. They provide free work space and mentorship AND INVESTMENT in exchange for a percentage of ownership in the company. For accelerators, the competitive nature of entry and the limited time period are essential features of the program. They are gambling on getting that next great startup that will compensate for the loss on most companies they accelerate. The investments tend to be small (5-25,000 USD) as does the percentage of ownereship (5-10%). Acceptance for accelerators tends to be on a set schedule, where all of the companies being accelerated will start and finish together, as would a class of students in the same cohort. Often accelerators will have stages with benchmarks, where additional help and funding will be possible as long as these benchmarks are met.
But again, this is my usage based on what I take to be the norms. I may not have it exactly right, and certainly many of the players in these industries mix the concepts as they see fit.
The list is organized geographically relative to Prague, since that’s where Locus Workspace and our members are located.

Prague

Czech Republic outside Prague

  • Help me add to this list!

CEE Region outside the Czech Republic

  • Urban Quest (added 2018.03.29), Warsaw, Poland. PropTech accelerator (Property / real-estate / space technology), sponsored by Skanska, Microsoft, and business__link.
  • hub:raum Krakow, Poland (also locations in Berlin & Tel Aviv). Has both an accelerator and an incubator program.
  • RubixLab Bratislava, Slovakia
  • CEE LiftOff Budapest, Hungary (website not working properly, may be ending)
  • PwC CEE Startup Collider Warsaw, Poland. FinTech focus. Seeking participants from all over the Central & Eastern Europe countries.

Crowdfunding Portals on the Czech Market

Below are a few crowdfunding portals on the Czech market. I’d like to keep the list current and have some details about each, so let me know if you know of any others or have any comments about the ones in the list. Specifically it would be nice to know their pros and cons and whether they have any particular industry focus.

  • Hithit (Czech, Slovak, English; as of 3 Oct 2015 seems to be the largest and best known)
  • startovač (Czech only)
  • kreativcisobě.cz (Czech only)
  • nakopni mě (Czech only)
  • Everfund (Czech-language only; as of 3 Oct 2015, new on the market)
  • Fundlift (still not launched as of 3 Oct 2015; claims to be first EQUITY crowdfunding platform on the Czech market)

No longer operating:

  • Fondomat.cz (no longer operating; may have been the first on the Czech market)

Fundraising for your creative venture?

Hi All,

Thought I’d recommend a websites for fundraising since I guess people following this blog are interested in it. I’ve used it (but as a donor rather than to raise my own money) and it seems great. The site is Kickstarter (http://www.kickstarter.comhttp://en.wikipedia.org/wiki/Kickstarter). It’s only for raising money for creative endeavors. A friend of mine used it to raise money for their theater group (to come to Prague and put on their show for Fringe Festival next month). They were only trying to raise $1000 and just sent the invite to friends and ended up getting almost twice that. I have to say part of the reason I donated was because it was so transparent and easy. Anyway, I’ll use it myself next time I’m trying to raise some money.
Will