Indy Hall 2012: Reviewing Our Coworking Community by the Numbers

With coworking spaces closing or getting to the brink of closure, it’s important for Indy Hall to do even more to lead by example on the community building side of the operation. The numbers – our bottom line – that are directly related to how we grow our community are worth sharing as well, reinforcing that by approaching a business with community-mindedness, many traditional business growth problems can be avoided entirely.

I can start by saying that 2012 was a huge year for Indy Hall. We grew in a multitude of ways: we added another floor (approximately 3000 square feet of initial expansion, ~1500 more expansion pending this year) to our coworking space as the result of a waiting list for membership. We cleared that waiting list, and have continued to grow well past our highest ever mark of 200 active members on our monthly roster.

Among the increased headcount we saw a notable growth in diversity – more women than ever before joined Indy Hall in 2012, and more industries are now represented among our membership than we’d ever imagined. This kind of growth reflects on the community, making it more rich and creative and powerful than it’s ever been.

Headcount isn’t enough for us to measure success, so our focus continued throughout the year on participation. We saw the resurgence of Indy Hall Night Owls thanks to some dedicated members, and more member-organized events than ever before. We make it our goal to look for ways to say “yes” to our members and help them succeed at programming the community with things that they love and care about. One of the biggest wins of 2012 was the explosion of the Indy Hall Arts community, who most recently produced the biggest collaborative art show that we’ve ever hosted: 25+ artists, many of whom were members and friends of members. 50+ pieces of original artwork created for the theme “Music Inspiring Art”. And an easy 1200+ people through our doors over 4 hours this past Friday night. Massive kudos to Sean Martorana & Mike Jackson for their masterful production of this event. There is no question in my mind that at this point, art is one of the many things that keeps Indy Hall inspired.

The Business of Community

One of our core tenants of our business model was making sure that “if the community is growing and healthy, the business is growing and healthy”. This means that we get to focus on the thing that we care about the most, our members, with the confidence that the membership and the business are in a symbiotic relationship.

So, here are some raw numbers from our 2012 year end report that show what the community’s growth and maturity translated to in terms of bottom line:

  • 29.7% Total Membership revenue growth year over year. NOTE: for 6 months out of 12, we were unable to grow our membership due to lack of space. Read another way, the vast majority of this growth occurred in the 2nd half of the year.
  • 58.1% Basic Membership revenue growth year over year. Basic membership continues to perform extremely well. It hinges on having the community experience be in tip-top shape, and making sure that basic members have a diverse set of paths to participate beyond working at the coworking space.
  • 28% Full Time Membership revenue growth year over year. Even then, full time membership accounts for LESS THAN 50% of our total revenue and LESS THAN 20% of our total membership headcount.
  • 24.2% 6 Pack Membership revenue growth year over year. This is particularly remarkable given that until December of 2012, we did not publicly advertise this membership level!
  • 17.6% Lite Membership revenue growth year over year. This number surprised me because I felt like we had a larger number of people signing up for Lite membership than before. I need to dig into the data but I suspect that this membership level actually has the most churn.
  • 28.1% “drop in” revenue growth year over year. Given our community-first model, drop-ins have never been a marketing focus for us. A large chunk of this increase came from the repurposing of our drop-in model for hosting corporate “workaways”, where a team of 3-6 from a larger company would spend the day working from Indy Hall as a way to plug into the community in Philadelphia. Just a handful of these in the 2nd half of the year added up quickly.

Growing our physical infrastructure this year was costly. Some expenses are obvious and predictable (like utilities and rent), but others aren’t quite as obvious. Some of our biggest “unexpected” expense growths included:

  • 57.9% increase in kitchen supplies costs. This figure includes increased coffee consumption, one of our largest kitchen expenses. Buying the best coffee (thanks La Colombe and One Village!) is, hands down, worth every penny.
  • 20% increase in accounting costs. As our membership has grown, so has the complexity of our record keeping. I love our book keeper and our accountant so I’m VERY happy to be spending this money.
  • 52.8% increase in transaction processing fees. We did manage to reduce our payment processing fees in some cases from 2.9% to as low as 2.3%, but our overall dollars transacted grew by quite a bit. We also made the mistake of processing some of our larger transactions through higher % gateways, which skewed this number against us.
  • 2.5% “shrink” of total revenue. We did not track this number previously so I don’t have a year-over-year comparison, but 2.5% of our total revenue for the year was lost to unpaid, outstanding invoices. This number is embarrassingly high in my mind, and a large amount of it appears to be due to poor record keeping on our part. Either way, it’s something that we’re actively resolving with a new billing workflows that we’ve been implementing this year and will continue to roll out in the coming months.

Grow Carefully

As with any growing business, in the business of community, cashflow is king. The first year after every expansion we’ve gone through has us looking closer at cashflow than we might in more “stable” times. We’re diligent to not bite off more than we can chew, knowing that slow and steady has always helped us win the race.

One of the best parts about Indy Hall is that we don’t HAVE to grow bigger than our community wants to for the sake of pleasing investors, because our investors are our members. If we ever act out of step with their best interests, we’re done for and we know it.

Growth without resilience isn’t sustainable.

Looking Forward

Meanwhile, January 2013 has been our best month in Indy Hall history (even without factoring in a new consulting arm and related productions) in terms of member participation growth and business growth.

If we take January as any indication of what the rest of this year holds, I look forward to smashing our own records and ultimately having more resources for the community to do amazing, never before seen things in and for Philadelphia.

Thanks for another amazing year, everybody.

 

  • http://twitter.com/jpbbennett Joel Bennett

    Alex- Thanks for sharing this info. Encouraged me to do a better end of year comparison.

    On the 52.8% increase in transaction processing fees… I want to provide a small plug for an Iowa company taking on this issue in a big way. DWOLLA (www.dwolla.com, @dwolla) provides businesses an option for a set per transaction fee… FREE for transactions under $10, and only $0.25 for transactions over $10. We’ve offered this as an option for a couple years and have some diehards who love it. The gist is that it does a bank to bank transaction (think ACH/EFT) so it doesn’t use the VISA/MASTERCARD/PAYPAL infrastructure that drives the 2.5+% fees. It takes a little on the front end to set signed up, and you need to educate your members on the option and get them signed up, but it really isn’t all that much more work that setting up a paypal account on both ends. Moving from 2.5% fees to $0.25 fees could be significant if you can get a core of your loyal regulars to convert.

    If you are interested, I’d be happy to connect you up with a few of their awesome team members to make the transition smooth. Let me know if you are interested.

    -Joel

    [No, I get no compensation for plugging Dwolla. I just love vibrant startups from Iowa who kick ass, take names, and change the world before breakfast before planning their next revolution before lunch. That doesn't mean I would take some free swag, though, Dwolla, if you are listening... but I'll still keep plugging.]

  • http://www.dangerouslyawesome.com alexknowshtml

    Thanks Joel. I’ve looked at Dwolla (and think what they’re doing is VERY cool), but we’re opting to go in another direction that’s a lower friction for setup even if it’s at a higher cost. It’ll be a lot easier for us to recover from the 2.5% shrink rate than the work it will take to move people to an unfamiliar payment system.

    Keep plugging, though. See you in Austin?

  • http://twitter.com/nextspacesf NextSpace SF

    Alex, this is awesome. Thank you for putting this together, and for sharing it with the world. Your level of transparency (and prolificacy) continues to impress me. See you at GCUC!

  • Tripp Baltz, cofounder, Scrib

    Terrific, Alex, and congrats. It’s helpful to see the hard data. Thanks for sharing