WeWork has new competition in Tokyo – Hooters. It’s all about utilization.
Hooters in Tokyo’s Ginza neighborhood has teamed up with Spacee – a space-matching service – to rent out work areas during the restaurant’s downtime.
Hooters has over 400 locations worldwide and they, like all brick and mortar businesses, have a utilization problem. After lunchtime traffic at the Hooters in Ginza dies down, 20 seats open up for rent via Spacee until the dinner rush begins.
While WeWork may not be worried about the competition yet, it’s going to be hard to beat the Hooters price. Spacee members pay only 50 yen, or about 48 cents, for a 30-minute work block, and that includes a discount on some beverages and an atmosphere that some will undoubtedly find truly inspiring.
(Oddly enough, students don’t have to pay the 50 yen fee. But if they’re under 18, then they have to be accompanied by a parent or guardian. Glad someone’s thinking about the children..)
From an entrepreneurial theory perspective, one enormous path for adding value is to reduce inefficiencies. Low utilization – especially for capital intensive goods – is a huge contributor to inefficiency. And over the past 10 years, a new wave of utilization-focused start-ups have flourished on the shoulders of both the internet and mobile phones.
AirBnB increases the utilization of your spare bedroom or couch. Getaround increases the utilization of your car. Lyft and Uber increase the utilization of your time (and your car).
What’s interesting is that these companies are all marketplace plays. The business is in connecting parties with spare capacity with parties who need capacity. Bring together both parties in a trusted forum and you’ve got yourself an interesting business.
Look around you: What inefficiencies do you see? Where is utilization low? Is the value being squandered worth recovering? Can you create a trusted marketplace? Can you acquire customers at a reasonable price?
PS: In other WeWork news, the company is continuing to expand very rapidly. You may have seen some misleading headlines about $18 billion in leases, but that number is the sum of many years of leases, $13.2 billion of which is for 2023 and beyond. Their 2018 and 2019 lease payments are for $706 million and $984 million respectively. Bloomberg covers the story here and here.
PPS: Hooters and strategy. Strategy and Hooters. Are you not entertained?