Lei Jianping reported on September 16
Recently, weWork, the originator of co-working, has fallen into the cusp of the storm due to preparations for listing. WeWork was not only exposed to losses, but also significantly reduced its investment by SoftBank, and recently exposed that WeWork's valuation plummeted, and the majority shareholder SoftBank Group requested to suspend listing.
The domestic co-working industry has also been turbulent in the past year, among which, the management of Kr Space has suffered a major adjustment this year, the CEO, CFO, COO and other collective departures, Ucommune Workshop has also carried out layoffs, and the capital market's interest in the co-working field is weakening.
On the other hand, the co-working enterprise Dream Plus has taken a different route, and in the cold environment of the industry, Dream Plus still maintains a steady and healthy development trend, and has entered 4 new cities in the past year.
Among them, from March to April 2019, Dream Plus successively entered Xi'an, Nanjing and Hangzhou, expanding against the trend and opening three cities. Among them, Dream Plus has a layout of nearly 70,000 square meters in Xi'an, and the space of Dream Plus Xi'an Xuhui Center of more than 33,000 square meters has become the largest co-working space in Northwest China.
Dream Plus founder Wang Xiaolu said in an interview with Leidi Network a few days ago that in the case of a bad economic situation, really good companies are more likely to stand out, although Dream Plus is not as rapidly expanding as in 2018, but it is still steadily opening new spaces, opening new spaces are operating well.
"As soon as our newly opened space in Beijing was fully rented, it gave us a lot of confidence. Operations in Chengdu have also gone smoothly, and the space in Chengdu has been profitable. ”
Wang Xiaolu said that Dream Plus has entered hangzhou, Nanjing, Xi'an and other cities with more regional headquarters, many situations are similar to Chengdu, dream plus can copy the experience of the past, less detours, which makes dream plus have the confidence to expand in this year's not very good economic environment.
In addition, when the economic situation is not good, it gives Dream Plus more opportunities to choose properties, and the way of cooperation and negotiation are stronger than before, which is also a good time for Dream Plus to expand.
The area is two-dimensional, while the scene is three-dimensional
At present, WeWork has encountered a lot of doubts, and many people believe that WeWork is a second landlord and its value is overestimated.
What Wang Xiaolu saw was that the WeWork prospectus mentioned members 1044 times, but the squarefeet (square foot) that represented the area was mentioned only 6 times, and the work satation as a product was mentioned 94 times.
Wang Xiaolu believes that behind this is a change in logic. That is, the area on the traditional commercial sales chain is converted into office products to serve users. "This model not only changes the industrial chain, but also changes the pricing logic, and then look back at the valuation, is it more reasonable?"
This is not only a change of perspective, but also reflects the core logic of co-working reshaping the traditional commercial market - from focusing on area or resources to paying attention to people and users. The area-to-area spread business is indeed the second landlord and the thinking path of traditional real estate. Therefore, under the traditional thinking, many people question how much premium can be brought to the unit area by packaging with the concept of the user"
WeWork, or Dream Plus, offers not just space, but a user-oriented product. This product includes physical space, office hardware and software and systems, as well as service and experience improvement.
Wang Xiaolu pointed out that whether it is WeWork's "space as a service (SaaS, space as a service)" or Dream Plus's "Office as a service", they are emphasizing the formation of services with products, but Dream Plus will better play the intelligent accumulation and China's local advantages, seize the opportunities in the Chinese market, and compete with it.
Wang Xiaolu said that the area is two-dimensional, while the scene is three-dimensional. It must be incomprehensible to look at three-dimensional things with a two-dimensional eye, and the public sees a small projection on a two-dimensional plane, but does not see the infinite possibilities of upward extension on the three-dimensional façade.
Therefore, to distinguish between the two-host model and the non-dual-host model, it is necessary to understand what the second landlord does not do - brand, product, user service.
Wang Xiaolu said, "Fortunately, there are such peers as WeWork, fortunately there are not too many Chinese counterparts on this road, and it is more fortunate that Dream Plus found a path with WeWork at the beginning of its establishment (user demand orientation) but with differentiation (intelligent drive, based on local user needs). ”
Copy the pattern to 4 new cities
Dream Plus has received many financings in the process of growth, among which, in November 2017, it obtained a 100 million yuan B+ round of financing led by Ocean Link and followed by Joy Capital, and Zheng Nanyan, chairman of Plateno Group and founding partner of Ouling Investment, also officially became a member of the board of directors of Dream Plus with this round of financing.
In March 2018, Dream Plus completed a 300 million yuan Series B series financing of Ocean Link, M31 Management under Giant Group, and Joy Capital Investment.
In August 2018, Dream Plus received a US$120 million Series C financing led by Hillhouse Capital, General Atlantic Uspanic Investment Group, And Joy Capital, Ocean Link, M31 Capital and Jianfeng Evergreen.
This round of financing has created the largest single financing record in the domestic co-working and office service industry, and Dream Plus has also become the only brand in the field of office services to complete the C round of financing.
Standardization is also one of the core features of Dream Plus products, which enables Dream Plus to create a healthier, more perfect standard office space, and can be large-scale replication under the condition of controllable cost and construction period, so that more office workers can carry out a day's work in a healthier office environment.
With large-scale financial support, Dream Plus itself also has a strong demand for expansion, coupled with the accumulation of a large number of experience in the development of first-tier and new cities in Beijing and Chengdu, Dream Plus has expanded 4 new cities this year: Shanghai, Nanjing, Hangzhou and Xi'an.
Up to now, Dream Plus has an operating area of 300,000 square meters, and 41 spaces have been laid out and operated in the core business districts of Beijing, Chengdu, Shanghai, Hangzhou, Xi'an, Nanjing and other cities. It has settled nearly 1,000 teams including COFCO, Baidu, NIO, AirAsia, Plateno Group, Didi, Today's Headlines, Kuaishou, OPPO, Xueersi, Haitian Netlink, Airbnb, tower.im, VIPKID, etc.
Dream Plus has also successively exported intelligent office overall solutions to China Resources Group, Longhu Group, Plateno Group, Vanke Group, CITIC Group, Jiufu Group, Everbright Anshi Asset Management Company, Huobi.com, Shining Silver, Shekou Merchants Bureau and other enterprises.
Now the dream plus in the newly opened cities have become local "internet celebrity" projects. According to Wang Xiaolu's disclosure to Leidi Network, Dream Plus has followed Dream Plus to these new cities in the process of expanding existing cities and new cities. The characteristic of these companies is that they have generally used Dream Plus products, and when they feel satisfied, they will still use Dream Plus space when expanding in other new cities.
Of course, Dream Plus has always emphasized that unprofitable expansion is futile, and has always maintained a relatively stable operation, and has achieved single-store profitability in Beijing and Chengdu, two cities that have been operating for many years. Wang Xiaolu's logic is that "playing iron also needs to be hard", and the most important thing is a very healthy and replicable business model.
Outside of the 4 newly dabbled cities, Dream Plus also maintained restraint. Wang Xiaolu said that in these 4 new cities, we are not going to go away like dragonflies, but hope to cultivate deeply in the city and have long-term development.
The following is an interview with Wang Xiaolu, founder of Dream Plus:
Lei Jianping, founder of Lei Di Touch Network, interviewed Wang Xiaolu on the spot
Lei Jianping: Recently WeWork submitted a prospectus, and both at home and abroad are very concerned about the listing of WeWork, what do you think of the Listing of WeWork?
Wang Xiaolu: WeWork is the earliest pioneer of the co-working industry, starting to do this thing in 2010 and 2011, and has developed to the present, and has a very large-scale volume in the world.
Dream Plus was also prepared in 2014 and founded in 2015, and was in a way greatly inspired by WeWork. We've been following the development of WeWork, and I think WeWork has been doing one of the more correct things.
If WeWork goes public, it will be a lot of confidence for our whole team, we are more confident or more excited about the coworking thing, and we are thinking about how to do the coworking thing well in China.
Lei Jianping: The WeWork prospectus shows that the company's losses are particularly serious, what do you think of weWork's relatively large losses?
Wang Xiaolu: WeWork has entered a global expansion, and it is a stage of multi-business expansion, WeWork's early stage includes sales, customer acquisition, marketing and expansion costs, and the expenditure is relatively large.
Dream Plus is more concerned about the Chinese market, and is still based on the Chinese market and rooted in Chinese companies. China's competition is more fierce than overseas, and we feel that profitability is a particularly important thing, and if it is not profitable, it is not a very mature and healthy business model.
Therefore, Dream Plus pays great attention to the situation of profitability, and has always regarded profitability as a very important assessment indicator or an important indicator of its own business model.
Compared with WeWork's loss state, whether it is the site climbing period or the site operation efficiency, the dream plus is much better, and we can make a single store profit in Beijing and Chengdu.
It's more about providing membership services
Lei Jianping: I carefully studied WeWork's financial statements, WeWork's increased losses have a lot to do with the rise in rents around WeWork, and many people say that this industry is a second landlord industry, what do you think?
Wang Xiaolu: I think it is normal for many people to think like this, dream plus themselves there are several different types of venues, for self-operated venues, that is, rent and property fees, the cost of rent and property fees accounts for an average of 50% to 60% of the entire site income.
From this point of view, it is true that many people can easily understand that you are a second landlord's business. In terms of cost structure, it is true that this piece also accounts for a large proportion.
But we don't see it that way from day one. We have always agreed that it is now a matter of doing business services for enterprises, more of a space service, to create an office scene for enterprises, through our good service to help enterprises solve very trivial and troublesome problems, to provide them with a good office growth environment. We can have normal commercial profits generated inside.
I think this is definitely not a second landlord's business, and from the perspective of the energy we have invested, we have not invested too much energy in the resource end related to the listing, and in the current market from increment to stock, from stock to the needs of enterprises, we also spend a lot of energy on products, services, and scenes.
Dream Plus does have some such returns, including now many customers are with us for a long time. For enterprises, after choosing the service of Dream Plus, it is difficult to return to the original traditional plan, whether it is to expand the lease or choose an office in other cities, or continue to renew the lease, they will continue to stay with us. Our customers' recognition of our services and our model also gives us more confidence to get things done.
In addition, in addition to the self-operated space, we also have the business of customizing output, which is also not available to the "second landlord". From space addressing, design, and construction to intelligent systems to operational services, we can customize it for businesses that need it.
For example, Longhu Real Estate, Run acceleration and other enterprises are our intelligent customization customers, and SF Express, Twelve Building Culture and other enterprises have chosen our space customization services. The customization business is an extension of our existing business and a complement to our ability to better provide office services to a variety of different types of businesses.
Lei Jianping: The members mentioned in WeWork mentioned 1044 times, but the area was mentioned only 6 times, or the work station as a product was mentioned 94 times, you said that this represents a change in mode, why is this mentioned?
Wang Xiaolu: There are two points, one is that we hope to help us achieve service to people through our operating system, service capabilities and most importantly, we have strong scientific and technological information tools and systems.
It turns out that many office buildings are providing a very simple service for enterprise users. But now in the dream plus space, we hope that we can not only serve this enterprise to provide him with simple services, but also provide him with a service scene, but also serve everyone in the enterprise, their personal needs, their office needs, some aspects of their food, clothing, shelter and transportation during the day.
This piece is also a change in the form of service, from the original only serving an enterprise to now serving an enterprise at the same time as serving everyone inside. Of course, the driving force behind this is that there are many technological aspects of the help.
On the other hand, for enterprises and these people, from a one-time purchase process to a membership purchase, we can continue to provide us with a membership fee related to office services, and become our long-term partner.
Before you also asked why WeWork is not a second landlord, this is a very essential difference from the second landlord, because the second landlord is more concerned about the place, a house, or a space, how the operation of the turnover is.
Our own dreams plus in addition to caring about the effectiveness of the venue, the operation of the venue, but also more concerned about each enterprise can become our members, each of them to become our users, these users and corporate members can follow our long-term stability, we provide them with a long-term sustainable office service, which is also very essential difference with the second landlord.
WeWork is still a $10 billion enterprise
Lei Jianping: There is a lot of discussion about WeWork's valuation, for example, "the father of the gold" SoftBank has cut WeWork's capital injection from $16 billion to $2 billion, and WeWork's valuation has been declining, how to see the change in WeWork's valuation?
Wang Xiaolu: I think WeWork has created a very good business model to solve the needs of a large number of enterprises, and it is indeed a product that is just needed and a solution that is just needed.
In addition, the co-working market is too big, the future development potential is very huge, WeWork's revenue is growing, last year was more than a billion US dollars, this year may be more than three billion US dollars, but still double the growth every year,
Even now, WeWork has only a small share of the market. If we assume that co-working will account for 10 to 20 percent of solutions in the future, the future potential is enormous.
Now Dream Plus is set up in Beijing, Shanghai, Hangzhou, Nanjing, Xi'an and Chengdu 6 cities, our entire operating area has reached 300,000 square meters, but accounting for the entire share of our 6 markets, that is, 0.2% to 0.3%.
Suppose we go to a new city, it is a huge development, at least 5 to 10 times the development potential. I think the market capacity and market potential is huge, and it's a proven success model.
But WeWork has exposed some problems in the pace of expansion, the development model is relatively rough, and the cost in all aspects is very high. Dream Plus pays more attention to refined operation, and the standard requirements for cost control and operation are more stringent. In addition, as far as the Chinese market is concerned, we are based in China from products to culture, and we will have a deeper understanding of the needs of local customers.
Even after the valuation is lowered, WeWork is still a valuation with a market value of more than $10 billion, and we are actually optimistic not about WeWork's $47 billion valuation, but about the market created by WeWork and the value of the new model it brings.
Unprofitable expansion is futile
Lei Jianping: Overall, in the past year or so, including the current domestic economic situation is not very good, the co-working industry has also undergone great adjustments, how do you think of the adjustment of the current domestic industry?
Wang Xiaolu: We have always mentioned that profitability, the formation of healthy operation of the venue, and the maintenance of a very healthy business model are particularly important. We said at the time that unprofitable expansion was futile.
A lot of things have changed in the industry over the past year, which specifically verified our judgment on this matter at that time, that is, can the venue be profitable? It also shows that the co-working industry must have a very healthy business model.
This year, many companies have these problems and some problems in this regard, especially after the economic environment has deteriorated, the capital market has deteriorated, and if the financing cannot keep up, it will lead to the entire business situation becoming more and more tense, and there will be many problems.
I think that "the iron needs to be hard", and the most important thing is that this is a very healthy and replicable business model.
To be honest, this year's environment is not particularly good, especially the demand of enterprises is affected by fluctuations in the economic environment, and the impact on us is more direct. Relatively speaking, we have been committed to providing a better product and service to enterprises, so enterprises in this economic downturn, or firmly with us, because we provide more just needed services, the economy is worse these enterprises or continue to develop.
Enterprises to develop must need an office solution, will definitely choose a more cost-effective solution to help them do co-working services. We also help many traditional enterprises, these traditional enterprises in the transformation to the new economy, need a good environment, different office atmosphere, to help them do a good job in the development and transformation of the entire enterprise, in this case, enterprises are more inclined to choose co-working space like Dream Plus.
For co-working enterprises, the health of the model and the good ping effect of the site are very important points for long-term sustainable development. Because the cycle is very normal, there are always good times and bad times. But if there is a good ping effect, it can stand in the industry for a long time.
In addition, this year's market downturn, but let us have more opportunities to obtain more high-quality property resources, better office buildings will also find more high-quality operators like us to help them do some improvements in difficult times.
Four new cities have been introduced this year
Lei Jianping: Dream plus this co-working space in Chaoyangmen, Beijing, is still quite full, and I don't feel affected by the industry, how to make these spaces have a relatively high saturation rate?
Wang Xiaolu: On the one hand, in addition to continuing to cultivate in Beijing and Chengdu, the two cities where we first developed, we have also entered 4 new cities this year, and we have also opened up new spaces in Shanghai, Hangzhou, Nanjing and Xi'an.
We have spent a lot of effort on expanding in new cities this year, similar to the experience we have verified in Beijing and Chengdu, and now the dreams of adding to the newly opened cities have become local "net red" projects.
In addition, in the process of expanding existing cities and new cities, many of our former customers in Beijing and Chengdu have also followed us to many new cities and rented a large number of venues. These companies have used Dream Plus products, feel very satisfied, go to other new cities, or expand, or will use Dream Plus space.
So now that we've gone to a couple of new cities, we've found a lot of national companies, and their local branches or local sub-district headquarters are also in dream plus coworking spaces. The cities we have chosen are also places where regional headquarters are more concentrated, such as Xi'an, Hangzhou, and Chengdu, which have also become their choices.
Among the customers of Dream Plus this year, there are indeed many companies that lay off employees, may be poor management, there are some problems, our solution is to better serve these customers, so that they can continue to work in the Dream Plus space during this time, rather than choosing another place. This piece also stabilizes a large number of customers.
On the one hand, we are going to new cities, on the other hand, we have also opened a lot of new venues in the original cities to sell, and at the same time stabilize existing customers and let these customers introduce us to more new customers.
Have the confidence to expand against the trend
Lei Jianping: The dream adds to my feeling that the whole is steady and steady, it was only in Beijing and Chengdu, but in the case of a relatively bad economic situation this year, why did it expand 4 cities at once, and how to maintain a balance in the two pieces of expansion and cash flow?
Wang Xiaolu: First of all, Dream Plus also completed the largest round of financing in the domestic co-working industry in the summer of 2018, and we also have strong expansion needs. In addition, we have accumulated a lot of experience in both Beijing and Chengdu in the development of first-tier and new first-tier cities.
To tell you the truth, when we first went to Chengdu, our first venue was not particularly smooth, and then after we changed our strategy and upgraded our space, the next few venues in Chengdu were very successful, which gave us a lot of confidence.
We copied these models to the same cities, like Hangzhou, Nanjing, And Xi'an. After we arrive in these cities, the situation in Chengdu will be more similar, and we will take a lot fewer detours, so that we are more confident that we will expand in a too good economic environment this year.
Lei Jianping: What do you mean by detours and pits?
Wang Xiaolu: For example, in Chengdu, the first venue we just went to, a lot of product designs for customers, and the local design is not very matched. In fact, there is still a big difference between second-tier cities and first-tier cities in terms of demand side and usage habits, so we have made a lot of adjustments that are closer to the actual needs of customers for local needs, and then several venues will be much better.
Lei Jianping: Dream Plus has always emphasized that it has a set of product logic and system, it is easy to spread to these cities, and even exported to the outside world, can you talk about its role in supporting the expansion of Dream Plus in these different cities?
Wang Xiaolu: First of all, we definitely have a lot of experience in the site selection end, which helps us better choose the city, choose which areas in the city, which categories of buildings are in line with our needs and in line with the quality of customer needs.
We also have a very complete system of design hardware ourselves, and in May this year we became the first CO-working space in Asia to obtain WELL certification.
Obtained the WELL certification known as the "Oscar" in the field of healthy buildings
We have incorporated this health certification system into each of our own venues, our site is particularly healthy, you can directly move in after the decoration, and it is not a general health standard, but a space that meets the international WELL certification level of this layer of standards, we have done a lot of work in the selection of materials, types, and the layout of the space.
In addition, we are also thinking about how to improve the efficiency of our operations and the ability to operate services to achieve the current level.
The downturn in the environment is a good opportunity for dreams and development
Lei Jianping: The overall feeling this year is that the capital industry is a bit cold to the co-working area, how to view the changes in the capital market?
Wang Xiaolu: This year's entire economic environment, including the relatively sluggish office market, is a particularly good opportunity for development. On the one hand, really good companies can stand out more in such an environment, and although Dream Plus has not expanded as rapidly as last year, it is still steadily continuing to open new venues and opening new spaces, and opening new spaces is still doing relatively well.
As soon as our newly opened space in Beijing was fully rented, the operation was still relatively good, and we had a lot of confidence in ourselves.
On the other hand, when the economy and the office market are not good, it gives us more opportunities to choose properties, and we have more opportunities to choose many better properties, and the way of cooperation, the ability to negotiate and bargain is stronger than last year and the previous year.
So I think this year is the starting point for us to take off and a better time node for us to take off.
Lei Jianping: What changes will happen to the company strategy of Dream Plus this year?
Wang Xiaolu: On the one hand, it is more focused, we pay more attention to the coverage of urban density, and in each city, we hope to be able to deepen our cultivation and become the first co-working brand in the local city. We were first in Beijing and Chengdu, and now we are the number one office brand in the local market.
We have gone to 4 new cities in the past year, and we have not gone to these 4 new cities like dragonflies, but hope to cultivate deeply in this city and have a long-term development.
On the other hand, it is necessary to do some continuous improvement in the product area. This year, the number of companies and users we are staying in has increased by almost 3 times, and we are constantly upgrading and adjusting the sustainability of our products and markets according to the needs of our customers.
———————————————
Founded by Veteran Media Personality Lei Jianping, Lei Di Touch Network is a signed author of headlines, if reprinted, please indicate the source.