Organizations and Transaction Costs
Last summer I interned at a company named Impact Hub. Impact Hub has different HUB (name given to branches) locations around the world with each branch focusing on a certain aspect. However, the overall goal of Impact Hub is to offer their services as an innovation lab, a business Incubator, a social enterprise community center and a unique ecosystem of resources, inspiration, and collaboration opportunities to grow the positive impact of your work targeted to entrepreneurs and startups at different stages. This really interested me because I aspire to become an entrepreneur and hope that one day I can have the ability to work for myself and grow my own business rather than having to work for someone else.
I worked at the Impact Hub - Dubai branch and things were a little different here. The company's main business and focus was on renting out office space to new startups that needed a small place to work. There were two options - either a general co-working space where each company could share a large, usually small teams went for this option comprised of just the owners whose business was newly set up and did not have or want to have any employee expenses just yet and were usually in the incubation phase. The other option for rental space was a private office that could seat a team of 5-8 with a desk for every member. The idea of the organization (Impact Hub - Dubai) was to bring entrepreneurs together so that by renting small parts of a huge space, the cost to rent an office would be lower for everyone than if they were to rent an individual office for themselves. It also wanted to create a social enterprise community so that all these entrepreneurs could help each other out, be it through contacts that could help each, or ideas and advice they had to offer to other entrepreneurs, as such working collectively, they would be able to do much better with everyone's pooled resources than if they were by themselves.
The organization structure of this Impact Hub started with the owner at the top, and below him were only 3 employees for running everything. First, was the receptionist who was responsible for all the admin work and filing of important work as well as keeping track of any people coming in for tours of the place. She also earned a commission on every new client she could get the company. Second, was the programs manager who was responsible for coming up with any new programs or services that Impact Hub would offer and was the only one who had the authority other than the owner to give a new project a go. Lastly, was the Marketing and Operations manager, whose job was to make sure that everything was running smoothly, none of the clients had any problems, while being there for them if they needed and professional help, at the same time he was also responsible for all of the company's marketing and PR efforts. He was also in charge of all the interns working at the company.
The rest of the work was done by interns and they were the biggest group in the work force. There was a group of sales interns, marketing interns, social media and PR interns, and a couple of graphic design interns. I started off at the company working as a Sales intern. To make sure that the sales being made were effective, the sales interns were given different spaces to sell. My job was to try and sell the private offices, despite the public co-working space being pretty full, the private offices weren't selling very well since they were pricier and weren't the biggest of size. I tried different strategies from finding data bases and cold calling and sending email, to putting the private offices up on different real estate websites and listing them and offices available for rent. Putting up the offices online got me the most call backs and I even had many people come to the office for tours and to see the office space I was selling, but the retention rate was pretty low and I wasn't able to close a deal on the office. It was a prime location and so the prices were pretty high and so I didn't know what more I could do.
I am not the type of person to blindly follow someone's instructions blindly without questioning them or figuring out the best way to go about carrying out tasks given to me. It didn't take me time to realize that my efforts were going no where and there were other ways to help out. Soon I realized that the company could include many more add-on services in addition to what they were offering and I had some great ideas. I decided to talk to the person in charge of all us interns, the operation manager, and I kept pitching ideas and how they could be implemented and marketed. He was impressed and put me in charge of the marketing group of interns. While working with the marketing team and the operations manager I wrote a business plan about a new program they could introduce and came up with an ad campaign to go with it. I noticed that Impact Hub could offer more services to help startups such as incubation programs and professionals that could come in and overlook the business model, finances, etc and give advice to these new business owners as to how they could improve their business model and finances. This was very much possible since the owner was very well connected and had many friends and professional associates who could come to the offices for a acceptable fee. I called this the 'Hubstart' and with the help of the graphic designer came up with a new poster for our social media websites (shown below) and also helped market this new program through Facebook and google ad-words.
Throughout this internship I learned a lot and in many ways it was very different compared to the skills I had learned at previous internships. This internship gave me more creative freedom to do what I wanted in order to achieve my goals. For example, I was able to market the personal office in whatever way I liked and, I was also allowed to pitch and work on my own ideas, although I had to get many things approved at every step, I was still given the independence to try and do things my way, and figure out what worked and what did not work on my own. Compared to previous internships where I was given a task and had to do it in the very specific way dictated by my superior, which felt like a lot of mindless work and soon got monotonous. This taught me a lot more about teamwork and comprising some of your ideas for someone else’s for the better good of the final product and finally, it taught me a lot about how to talk to people if you wanted to get something done and a lot of other social skills and may have otherwise not been able to acquire if I had not done this internship.
The organization structure of this Impact Hub started with the owner at the top, and below him were only 3 employees for running everything. First, was the receptionist who was responsible for all the admin work and filing of important work as well as keeping track of any people coming in for tours of the place. She also earned a commission on every new client she could get the company. Second, was the programs manager who was responsible for coming up with any new programs or services that Impact Hub would offer and was the only one who had the authority other than the owner to give a new project a go. Lastly, was the Marketing and Operations manager, whose job was to make sure that everything was running smoothly, none of the clients had any problems, while being there for them if they needed and professional help, at the same time he was also responsible for all of the company's marketing and PR efforts. He was also in charge of all the interns working at the company.
The rest of the work was done by interns and they were the biggest group in the work force. There was a group of sales interns, marketing interns, social media and PR interns, and a couple of graphic design interns. I started off at the company working as a Sales intern. To make sure that the sales being made were effective, the sales interns were given different spaces to sell. My job was to try and sell the private offices, despite the public co-working space being pretty full, the private offices weren't selling very well since they were pricier and weren't the biggest of size. I tried different strategies from finding data bases and cold calling and sending email, to putting the private offices up on different real estate websites and listing them and offices available for rent. Putting up the offices online got me the most call backs and I even had many people come to the office for tours and to see the office space I was selling, but the retention rate was pretty low and I wasn't able to close a deal on the office. It was a prime location and so the prices were pretty high and so I didn't know what more I could do.
I am not the type of person to blindly follow someone's instructions blindly without questioning them or figuring out the best way to go about carrying out tasks given to me. It didn't take me time to realize that my efforts were going no where and there were other ways to help out. Soon I realized that the company could include many more add-on services in addition to what they were offering and I had some great ideas. I decided to talk to the person in charge of all us interns, the operation manager, and I kept pitching ideas and how they could be implemented and marketed. He was impressed and put me in charge of the marketing group of interns. While working with the marketing team and the operations manager I wrote a business plan about a new program they could introduce and came up with an ad campaign to go with it. I noticed that Impact Hub could offer more services to help startups such as incubation programs and professionals that could come in and overlook the business model, finances, etc and give advice to these new business owners as to how they could improve their business model and finances. This was very much possible since the owner was very well connected and had many friends and professional associates who could come to the offices for a acceptable fee. I called this the 'Hubstart' and with the help of the graphic designer came up with a new poster for our social media websites (shown below) and also helped market this new program through Facebook and google ad-words.
Throughout this internship I learned a lot and in many ways it was very different compared to the skills I had learned at previous internships. This internship gave me more creative freedom to do what I wanted in order to achieve my goals. For example, I was able to market the personal office in whatever way I liked and, I was also allowed to pitch and work on my own ideas, although I had to get many things approved at every step, I was still given the independence to try and do things my way, and figure out what worked and what did not work on my own. Compared to previous internships where I was given a task and had to do it in the very specific way dictated by my superior, which felt like a lot of mindless work and soon got monotonous. This taught me a lot more about teamwork and comprising some of your ideas for someone else’s for the better good of the final product and finally, it taught me a lot about how to talk to people if you wanted to get something done and a lot of other social skills and may have otherwise not been able to acquire if I had not done this internship.
Regarding your comment about wanting to work for yourself, I have a friend who is a graduate of the CS department here. He started out to work for Oracle after graduation. A few years later he founded his own company, Xythos, which was an inexpensive file management application. That where I met him. We were an early Xythos customer. Eventually he left that to work for Blackboard, the company that makes the software for Illinois Compass 2G. I believe he has left that now for some other gig. The point of the story is that running your own business requires skill and some luck. On both of those they ebb and flow. You may find you need to be flexible enough to work in a corporate environment, probably initially and then maybe sometime in the future as well.
ReplyDeleteReturning to the substance of your piece and the business model of Impact Hub, I was unclear on whether geographic co-location of various startups was efficient, because certain services the startups needed had to be delivered face to face. This is the economics of location and is referred to as agglomeration effects, which helped to explain the rise of shopping malls 20-30 years ago. Of course, such malls are in decline now. Internet shopping seems to be doing them in. So with startups one wonders whether the big deal is to identify the common package of services, whether delivered virtually or in person. Layered on top of this is the question of available supply of office space in the broader market.
I am ignorant about these matters in Dubai. But considering Champaign as an alternative, there seems to have been excess building of offices over time and therefore a fair number that are vacant and available to rent now. A startup might play that market first and worry about other services it needs later. If that's true, an analogous company to Impact Hub located here would be offering virtual services only, because that's where the value add is.
There are of course a variety of locations in the U.S. associated with innovative activity, so there clearly is some geographic clustering. Silicon Valley is the most well known of these. But urban areas have gotten so expensive to live nowadays that startups really can't afford to be there unless they have an independent source of funding. For those which just have the idea as their main asset, they may need more humble working environs. These are the sort of underlying economic conditions that should be considered for a business like Impact Hub.