LiquidSpace is undermining everything WeWork is setting out to do
There's a lot to learn in the way a company describes itself. LiquidSpace, according to the company, is not a workshare company. No, it is the "largest, real time network for office space".
Someone looking for a desk to work at for a day, or a small office to use for a while for a startup, might look to LiquidSpace ($LIQUIDSPACE) as a quick option. But that person will also be considering WeWork, Knotel, or a stalwart like Regus.
Unlike WeWork, LiquidSpace doesn't build, design, or directly operate the spaces is lists. Instead, like, Airbnb, it operates a platform that allows workers to find space and property managers to lease it out.
LiquidSpace may be attracting the same customers as those of WeWork ($WEWORK), but it operates a far different model, one analysts and investors are calling property-technology (PropTech). Virtually anyone can list office space — from a desk for a couple hours to a monthly lease for a multi-person office — on LiquidSpace. That desk may be in the corner of a cubicle farm at a large corporation; it may be a private office in a Brooklyn brownstone. Meanwhile, with WeWork, you know what you're getting, for better or worse.
And it's working: LiquidSpace founder Mark Gilbreath tells us that the company is profitable and plans to aggressively scale. What started as what he calls a "space in the moment" platform for those who just need a desk for a few hours, it's now looking to give commercial REITs a flexible option as they look to take on the likes of WeWork and Knotel.
And it's that flexibility that's working for LiquidSpace. The company has raised $26.6 million in over 8 rounds, including one led by Reid Hoffman (co-founder of LinkedIn) of Greylock Partners. Given a surge in interest in the workspace market as WeWork preps for IPO and Knotel threatens to do the same, LiquidSpace's unique business model may be structured to disrupt the disruptors. Here's why.
Workspaces everywhere - not just cities
Because LiquidSpace isn't bound by the buildings and offices that it buys or leases, its location outlay is much more diverse than that of WeWork. This is good in some ways, and creates challenges in others. On the positive side, it means that entrepreneurs and lone professionals are likely to find a desk with WiFi in his or her neighborhood, say as an option to a noisy, crowded cafe with shoddy WiFi. On the other hand, it means that availability in business centers may be limited, and the opticts of a made-by-night desk in the corner of a cubicle farm might not be desireable.
The difference in location outlay becomes more clear when zooming in on areas in which creative entrepreneurs live and work. A map comparison of WeWork and LiquidSpace availability in Brooklyn with Manhattan in the background is telling: Dozens of LiquidSpace spots in Downtown Brooklyn and Williamsburg along with a smattering of locations throughout downtown and midtown all while WeWork's outlay reflects something more corporate.
While LiquidSpace's business model appears structured for scale, its internal workforce doesn't reflect a company looking to take on the likes of WeWork. As of this month, the company's employee count, according to LinkedIn, is down to just 24 people. That's a decrease from a January high of over 30.
A small startup with this level of attrition is concerning, but Gilbreath tells us that the company now employes 35 people and is looking to grow. And while LiquidSpace's director of business development left the company to join Avison Young, the fifth-largest brokerage firm in the world, that company now uses LiquidSpace as its flexible space platform.
That said, the company is only hiring for one position — a product design contractor — according to its careers site.
Running lean may be a good thing from an overhead standpoint, but it also means that the company has little or no overhead to counter-market the likes of WeWork, Knotel, or even Airbnb. But that may change.
Missed opportunities on social media
One would assume that a company like LiquidSpace would want an active social media presence. Check-ins from workers on Facebook or Instagram would go a long way to become an option for traveling workers or those who wish to lease out their space. But LiquidSpace's social presence it surprisingly small.
Facebook followers for the company have stalled at just around 2,400. Meanwhlle, the company hasn't posted anything to its Facebook page since April 22, 2019. Things are a bit more promising for LiquidSpace on Instagram, where it commands 3,350 followers. That account appears to be more active, with an attractive office space image as recent as August 20.
Gilbreath says this is a missed opportunity, and the company hired a Chief Growth Officer to launch a campaign in partnership with a new marketing firm.
"1000% percent agree," he told Thinknum Media. "We have a new campaign rolling out in the next few weeks. Our social presence has been neglected."
Company is bullish on future
Gilbreath sees recent attention given to WeWork and Knotel as a good thing for LiquidSpace. Not only does the platform list inventory from both WeWork and Knotel, but it also has shed light on rapid growth in the workshare industry. This means that institutional owners who are seeing the competitive writing on the wall and looking for a way in to the marketplace may see LiquidSpace as a platform that allows them to get their inventory on the market without brokers or up-front fees.
"We are a digital marketplace at the core. A transactional marketplace," Giblreath said. "Business owners who want to monetize their desks can do so. We're a direct analog to Airbnb. Owners are now offering flexible office offerings, motivated by recognition of demand and out of fear and motivation from what they see with WeWork and others. Big building owners are getting in on it. Some are now willing to take a client for 1 or 2 or 3 years where that was once unheard of."
In other words, LiquidSpace as a platform is positioned to support a rapidly growing marketplace as landlords warm up to the concept.
"The competitive moat for a Wework or Knotel is decreasing," Gilbreath adds.