Ask anyone what’s the coolest business to start and you’ll get the same old answer:
- A high-end café with Instagram-worthy chairs that don’t look like chairs
- An online lifestyle and travel portal hosted by vases pretty faces reviewing places with chairs that don’t look like chairs
- A restaurant selling salted egg everything paired with bubble tea, and with chairs that don’t look like chairs
- An Instagram-worthy co-sharing office space with chairs that don’t look like chairs to attract one-man business who calls himself / herself the CEO
In a surprise move that no one would’ve expected, honestbee, the past tense of “successful startup”, has opted to start the last business.
But if you think it’s yet another move to boost their ego, don’t worry: it’s actually a rather smart move.
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Though only time will tell if that direction is once again driven by ego or logic.
Downsizing Office Space
I won’t need to recap what’s happened to the bee; long story cut short, the startup failed ‘cuz they’ve been burning millions of investors’ money without much revenue. Instead of oBiking, they’re trying to save the company.
For the next four months, their creditors won’t be able to seek money back from them as they’ve got some legal protection thingy for four month to restructure; after that, those creditors can sue them until their pants drop if honestbee still doesn’t pay up.
So, what’s the bee busying with to restructure?
For a start, they finally realise that their Instagram-worthy office is useless if it doesn’t bring in money. The 12,000 sqft office has a gaming room, a gym, a reading area, a 25-seater theatre and even a café.
Instead of downsizing their office, they’re going to convert half of their office into a co-working space, which’ll rent out hot desks, dedicated desks and private office.
The reason?
According to its CEO, “Our office has been done up quite nicely, a lot of money has been spent on it. It makes more sense to stay than to move out, find something else and have to refit… It also give us flexibility if we might need some of that space back.”
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Called b. at Delta, it’ll be able to seat up to 100 tenants. Based on the size of our office (which has just desks and nothing else), 100 people in a 12,000 sqft office can be rather cramped.
And also, quick maths here: if one tenant pays $300 a month, that’ll be a revenue of $30,000
Honestbee allegedly pays $125,000 monthly in rental for this office and habitat.
Quick maths again: Makes sense meh?
But of course we’re not here to judge.
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If this sounds like a super overvalued startup to you, you’re not alone.
honestbee becoming WeWork?
honestbee CEO is quick to refute that, saying, “We have no plans to be a WeWork… We are not going to lease another 10 properties and go into that business. I’m just trying to utilise existing resources we have and make those resources work a little harder.”
Here’s the most interesting part: when The Business Times asked him about the risk of default as tenants are mostly startups (i.e. tenants don’t pay rent and run road), the CEO said, “The risk is higher but the actual quantum is small, in terms of the exposure. We are paying for the rent (of the whole office) anyway.”
Wait…to think I was worried for the tenants and not worried about them.
But anyways.
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All this is still a work-in-progress: for a start, they need approval for their landlord, as subletting any rented premises is usually not allowed. Also, it’s unknown how long their lease for the office is.
Currently, honestbee is still burning USD$1 million to USD$1.5 million monthly. The CEO added, “We’ve managed to bring the cost base down, and we’re still looking to bring it down further by optimising technology to reduce the burn.”
Eh.
Technology to reduce the burn?
How seh?
Let’s continue to wait and see.
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Would you be jailed for being half-naked in public? Well, the answer will shock you. Seriously. Watch this to the end and you'll understand:
