Overcoming the Dot-Coliving-Crash

Across time and history, barely were the innovators the ones taking their innovation to market. And if they did, then they weren’t the ones making it mainstream.

This applies to specific ideas: MySpace was the first large social network, but Facebook became the global one. Wei Dai created B-Money in 1998, but it was only ten years later that an anonymous Satoshi Nakamoto was able to build the first resilient blockchain called Bitcoin. The parts of the iPhone already existed before its existence, but it was Steve Jobs who put them all together.

This also applies to industries: most web companies that lead today, including Facebook, Amazon or Ebay, were all born after the dot-com-crash. We needed some early innovators to set the foundations, but it was only the second generation of companies that came at the right time, with right industry infrastructure, learning from their past competitor’s mistakes.

And behind that phenomena of what we could call the second-mover-advantage lies the advantage of the tweaker: these innovators who take other people’s innovations and fine-tune them to market scalability.

In search for coliving tweakers

Coliving is in search for these tweakers, especially in light that some of the early movers seem to crumble:

Over the 2020 and 2021 year, we’ve witnessed fundamental changes in the coliving industry. Sure, COVID-19 accelerated the sequence of events, yet there is a high probability they would have logically happened either way.

On the asset-light model, certain high-scale operators started buying one another: Ollie being acquired by Starcity, and then the later merging with Common. Then in Europe, Homefully got acquired by coliving operator Habyt, which a few years ago only had a handful of apartments. Habyt then acquired the European parts of Quarters, the former coliving company pioneer that wanted to raise a 1-billion-dollar fund to conquer the world before going bankrupt five years later with hundreds of rooms worldwide.

As another friend of mine, employee of a growing yet financially unstable coliving company, shared with me:

“I mean, at some point we were 35 full-time employees for twelve 4-bedroom apartments and a bed count of less than 50 - do the maths and you know it’s doomed to fail”.

On the asset-heavy side, The Collective recently failed to find an acquirer and is potentially defaulting. Yes, the company went on to even create a dedicated Fund, COLIV, which has not truly taken off on its own, either. If The Collective is defaulting, then our landmark for the last 10 years is vanishing with it.

In short, the coliving industry is going through a change, and we might experience our own sort of mini dot-com-crisis. And while this dot-coliving-crash is probably only the first of many, it indicates that now is the time to bring in a new approach on how to build coliving businesses.

What is certain is that the shift between first and second generation coliving companies will be enormous in terms of operations, design, approach and philosophy - and that we need to overcome that shift by standing together, united, as an industry that is constantly evolving.

What went wrong?

I think that this is not a question of wrong, but rather a question of different.

When looking at the coliving industry, the early movers did a lot right - which led them to growth, recognition, and ultimately creating the coliving brand. Without them, there would be no institutional investment, regional lobbying, press or even general public awareness on what coliving is.

But they had too much to figure out - and couldn’t bring the innovations to perfection. The business model of taking long-term leases wasn’t tweaked fast enough into revenue-share models. The density-optimized design didn’t have enough budget to create beds that unfold from the ceiling. The community building process was running on the top-down mentality instead of involving residents into the experience process.

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Many of these changes were simply not possible because no industry infrastructure, from funding to regulations to trained team employees, was available to them.

We, the coliving industry and movement, owe these early innovators tomorrow’s success. And it is our role, at Co-Liv, to make sure they are seen, heard, and contribute to creating true innovation within the next decade to come.

Building out the next coliving wave

It's time to build out the next wave of entrepreneurs, actors, pushers, doers that will build the coliving 2.0 models. It's also time to help the current ones, the early movers that are still active, to adapt, to iterate, and to learn from our last decade's activities.

At Co-Liv, the global association of coliving professionals, passionates and enthusiasts, we are committed to building out the infrastructure for us all to succeed.

I propose to continue with our approach of "think, connect and empower" to foster a true community of coliving professionals that help each other out:

• Think: we at Co-Liv will put a good part of our focus on building out new content that serves the coliving community. With the launch of the Art of Coliving book in a few days, we are going to set a landmark for what coliving means. As of 2022, we have several content initiatives lined up, and will work with the Co-Liv community to vote on the most relevant content pieces necessary. Our 2022 Co-Liv Summit and one-week Co-Burn festival will also be the platforms to deliver qualitative expert content and community-led exchanges.
• Connect: nothing is more important than connecting the right people at the right time. With more than 400 members and 6k+ direct email followers, there is a lot to do. Members-only networking events, in-person events across the globe, and a physical book launch tour will be the first of many connection initiatives that Co-Liv is going to undertake. We’ll also launch a dedicated arm to further connect coliving professionals within their own companies, but also within niche industries, such as the Tech Community that is launching it's content and networking series in Q1 2022.
• Empowerment: ultimately, we are here to serve the industry. As of 2022, Co-Liv's main mission will be to turn into a leading example of what community-led and community-driven organization can look like. This implies constantly focussing and creating initiatives that serve our members, by and for our members. Co-Liv has already been the platform for many coliving professionals to catalyze their projects, and the upcoming year is going to see a big focus towards more direct empowerment initiatives.

Let us learn from each other. Support one another. Create real conversations. Show transparency. And embody the human values that coliving stands for not only in our spaces, but in the way that we build out our industry.

Join us in this movement. Learn, iterate, and ride the new wave that is coming. Simply, because you and the world deserve it.

Gui Perdrix

PS: This Thursday at 5pm we are hosting the Co-Liv End of Year Show, a mix between Apple Keynote and Late Night Show, where we will present all the 2021 highlights and upcoming 2022 initiatives. If you want to learn how to make the most out of your upcoming year and join our projects, make sure to click here to register for the event.

PPS: To learn more about Co-Liv and become part of our community, you can join as a member today by clicking here.

PPPS: How does this resonate with your situation? Comment below and let us know what you think needs to be tweaked today.