Space as a Service: An Attractive New Frontier for Entrepreneurs

As a consultant helping entrepreneurs capitalize on emerging opportunities, I‘ve taken a special interest in a new category called Space as a Service (SPaaS). By allowing businesses to share and rent underutilized spaces on-demand, this technology-driven trend promises to shake up countless real estate-dependent industries while opening up new avenues for innovation. For the savvy entrepreneur, SPaaS offers an attractive business model tapping into major shifts in how we live and work.

The Rise of On-Demand "Space"

SPaaS turns unused spaces into bookable resources, letting peers rent anything from meeting rooms to production facilities only when required. It brings the on-demand economy to physical spaces, yielding benefits for both owners and renters.

I advise my clients that while SPaaS companies already facilitate over $14 billion in rentals across over 4,700 flexible workspace locations globally, we‘ve only scratched the surface. With the right digital tools, virtually any underused asset – from parking to farmland – can become shared services.

The SPaaS market is projected to grow over 20% annually to $27 billion by 2025 according to Grand View Research, fueled by:

  • More independent and remote workers
  • Companies wanting flexibility and cost savings
  • Shift from owning assets to pay-per-use models

For entrepreneurs, this shift unlocks major opportunities if you can execute the model effectively.

Unlocking Benefits Through Digital Platforms

SPaaS relies on slick digital platforms to match unused capacity with demand. Owners list and manage their assets while renters browse, book, access, pay, and review. Advanced platforms also coordinate related services like cleaning, catering, IT support and concierge assistance.

That‘s why I always advise startups: focus heavily on building exceptional digital experiences and leveraging emerging technologies:

Technology SPaaS Use Cases
IoT Sensors Monitor asset usage, conditions
AI Recommendations Suggest optimal spaces for user needs
Automation Streamline operations like cleaning
Blockchain Payment processing, usage tracking
AR/VR Digital walkthroughs of spaces

Integrating such innovations can help SPaaS firms stand apart while optimizing asset utilization and economics.

I‘m extremely bullish on entrepreneurs who recognize the vital role of technology in making SPaaS scalable and frictionless. Those lacking tech capabilities should partner early with experienced platforms builders.

Major Implications Across Sectors

For real estate players, the implications of the SPaaS shift are profound according to JLL Research:

SPaaS Industry Impacts

As the chart shows, sectors seeing disruption span hotels, office space, retail, self storage, event venues, and more. For each category, I counsel clients on the unique opportunities and competitive threats posed by SPaaS alternatives.

Take corporate real estate as an example. SPaaS spaces can offer:

  • 50-60% savings on square footage costs
  • 90% less upfront capital expenditure
  • 30% higher employee satisfaction scores

This value proposition is pushing occupiers towards flexible spaces, forcing landlords to rethink offerings.

Clearly, SPaaS has broad ramifications – but also openings for savvy new operators.

Seizing Your SPaaS Opportunity

For entrepreneurs impressed by SPaaS potential, here is my step-by-step guide to getting started:

Find Your Niche

Pinpoint a specific underused asset type with hidden capacity, from marinas to music studios. Get creative!

Validate Demand

Conduct customer discovery interviews with both owners and renters to gauge interest levels.

Model Economics

Map out a viable business model balancing supply, demand and margins. Compare to traditional lease structures.

Build Digital Platform

Create an exceptional digital experience for suppliers and customers with a focus on convenience.

Seed Inventory

Onboard enough initial spaces in target locations to reach critical mass for two-sided marketplace.

Streamline Operations

Use tech and automation to reduce day-to-day costs of cleaning, maintenance and space handovers.

Delight Customers

Focus obsessively on customer satisfaction through responsiveness and personalization.

SPaaS removes major barriers to enter historically capital-intensive sectors like hospitality, retail and real estate. With creativity and customer-centric digital platforms, the possibilities for entrepreneurs are endless.

I urge all business owners to think seriously about how SPaaS could impact their industry – either as an opportunity or a threat. Feel free to reach out to me directly as you conduct your assessment!