The Exchanges

Q And you are expecting to continue the same growth this calendar year?

A Yeah. So, we are finally back into growth mode after, you know, the pause that we took during COVID. We have You know, as a business hit what is called as like operating leverage, operating efficiencies, which means that we are sufficiently covering all of our costs and also incremental costs that we might have for growth by a decent margin, you know, businesses upwards of 20% margins at this point in time. And we want to grow at a pace in which is fast enough for You know, decent amount of expansion because we have still a lot to penetrate in the market, but isn't too much that it ever risks the business margins and us, you know, keeping these healthy margins. So that's kind of a balance that we've now figured out. And, um, we'll be adding, you know, about 20,000 desks year over year, which for us is like between 30 to 45%, you know, growth.

AI assessment note: “we'll be adding, you know, about 20,000 desks year over year”

Q And during those two years of COVID, you saw almost like, what, 10% occupancy or five percent occupancy?

A It was like, zero. First wave was like, the worst, right, where everyone was in panic mode, and government rules and all of that also was, you know, in panic mode. We saw occupancy, like, what is sold, go from 77% at that point in time, down to 47% in, like, a span of 30 days, or, like, 45 days. And this was really because our value proposition was that, was that if your business is not doing well, or, like, you have, you know, if you need to scale back, you can, but it's generally because, like, industries have cycles, and, you know, different companies have cycles, so when you're In so many different industries as like a member base, it's okay because tomorrow, today, let's say tech is kind of scaling back, but BFSI, you know, and banking is expanding, you know, almost doubling more than what tech is kind of scaling back in, in some sense. So you always have that balance, but like COVID, it was, you know, everyone, everyone scaled back. People didn't know what to do. Do I have to pay the rent? Do I not have to pay the rent? Should I negotiate the rent? Everyone used it as an opportunity. So, so yeah, we were worried, but we took a very different approach, I think, than everyone else. We said that we are custodians to a lot of small businesses. In the sense that a lot of people are building their livelihood, their dreams in our space. So today if we take like a draconian stanc…

AI assessment note: “We saw occupancy, like, what is sold, go from 77% at that point in time, down to 47%”

Q And you were able to borrow the DNA from Viva Global to India?

A Yeah, I think a lot of things, you know, we did. One of the things was, as very particular, you know, things that I saw with other brands was that, just because it came to India, they used to automatically dilute the, Quality of the brand, even the way the store would look, all of that stuff just because, you know, India's cheaper, and so you have this free flow to dilute it. We were very particular that, you know, the product and the service level that you get here will be almost exactly, you know, or better than if you travel to, like, the original WeWork in New York. We focused a lot on hiring based on culture, and, you know, WeWork is and continues to be A very mission driven company. So we focused on making sure that we hired strictly for culture, especially in the early days. And we actually also spend a lot of money, you know, sending people or having people train in other markets for, you know, extensive periods of time before they even came and started working, uh, working over here. So I think a lot of those things worked and credit to WeWork also, they had like, you know, brand guidelines and Entire thing documented on how to do everything, and we were able to just kind of copy that.

AI assessment note: “Yeah, I think a lot of things, you know, we did.”

Q So you could have done it under the embassy brand name. Why didn't you get a WeWork brand name?

A I get asked this question, like, A lot, and especially now because of everything that's going on or has gone on with WeWork, but I think it holds good even to today that many developers, you know, even in the country or everywhere else have tried to do this business or replicate the business, and none of them have been successful. It's because I think it was easy for me to see that what WeWork had done is more than just building out space and, you know, renting it out. It was an entire DNA and cultural shift that needed to happen. So there was something about the way that design married with technology, married with the hospitality and service layer, you know, that, uh, they had built, which I knew was very hard to replicate. It's like, you know, saying that, why can't you just operate Four Seasons brand under like a different brand and expect it to be Four Seasons. Now,

AI assessment note: “they had built, which I knew was very hard to replicate.”

Q Are there plans of taking the WeWork IPO in India?

A I would love to. I think that it's a business wise and the way that we are able to grow and, uh, you know, just from the cash flows, the business generates the margins that it generates and the amount of growth potential left in the market is, you know, immense. We would love to like go down that journey, but again, I don't think that we've like zeroed down on a path, you know, or a timeline even. Right now, you know, the business doesn't require much external capital. We just completed a little bit of a raise, and we are generating also positive cash, so external capital is, is really limited, but I do owe our existing shareholders some liquidity and some return on their capital, so I'll have to figure that.

AI assessment note: “I don't think that we've like zeroed down on a path, you know, or a timeline”

Q How did the strategy change in between? And what were your insights during this journey of the last five, six years?

A I mean, it's interesting how the entire, I would say like the segment had changed, you know, originally the word co-working or it was, you know, community working, which was really for, you know, freelancers, SMEs, and, you know, some sort of midsize companies or, or more new age companies. I think that's how it happened across the world, but when we opened in India, you know, on day one, even though we had designed and built a lot of the space for these smaller companies, we actually started getting a lot of interest from, you know, larger companies. I remember we did a deal, you know, for both Microsoft and Amazon in Galaxy, which was unheard of, you know, in the Flex space at that point in time, and These were for these innovation teams or it was an AWS outfit that Amazon was looking at. And for Microsoft, it was like at that time, I think it was something working on three 60 or Microsoft three 60 or something like that, some innovation team basically. And what happened was a very interesting kind of social experiment to some extent where These large companies started to see the, you know, the thing was the employees are the same employee guy working in a small company and an employee in, in a large company as a person. It's pretty much the same. He was between 22 to whatever, 35 years old, had very similar interests, like going out, you know, was interested in what was happ…

AI assessment note: “we actually started getting a lot of interest from, you know, larger companies.”