How Waterman is trying to build a co-working community into an Australian business empire
Neville Waterman’s goal is to provide businesses with the spaces and communities they need, when they need them.
Neville Waterman might have his name on the building, but he doesn’t have an office. Not in the way you or I would have an office, at least. The space he’s chosen for our conversation is a plush boardroom, one of several break-out spaces, training rooms, and private working areas dotting the 7000-square-metre Waterman business complex in Scoresby, Melbourne. For now, the boardroom is his domain, but it could just as easily belong to any of the dozens of architects, lawyers, accountants, or startups who call the co-working site their base of operations.
Such is Waterman’s goal: providing businesses with the spaces and communities they need, when they need them. And today Neville Waterman needs a place to explain his company’s journey, from one accidental co-working venture in suburbia, to his dream of providing Australian businesses with everything required to meet their full potential.
The boardroom is optional. Still, it’s not the worst place for Waterman to lay out his vision, and explain why he believes his model can empower businesses across Australia.
From accounting firm to co-working contender
Waterman is an Australian co-working company with five business centres across suburban Melbourne, plans to open another this month, 11 over the next two years, and in Waterman’s dream scenario, “a couple of hundred of them” through city fringes and semi-regional sites in the decades to come.
Driving that planned expansion are Waterman members, who pay a set monthly fee for access to business centre amenities. For individuals, that might look like a desk, access to monitors, and bookable meeting rooms. Small businesses and startups may choose to rent out an office part-time. Larger enterprises can secure a private working environment for prices the company claims are far below the equivalent of rent on a traditional office space.
While coworking spaces like WeWork and The Commons have latched onto Australia’s inner-city suburbs, Waterman has a distinctly different market: suburban neighbourhoods not traditionally home to high-density shared office spaces.
Reclining in the Scoresby boardroom, Waterman says that focus extends back to the start of the company, which grew out of his Narre Warren accounting and financial planning business in 2013.
“We basically took on more office space than we needed, because that’s what was required to take that particular office,” Waterman said of the first office, located some 40km from the Melbourne CBD. “And so I thought, ‘I’ll just sublet some of that space’. And that’s exactly what we did.”
But something strange happened. As Waterman’s accounting firm grew, so did the businesses which sublet office space, Waterman says. A bond between the businesses started to form, too, with Waterman saying each firm benefited from proximity to the next.
“So it sort of got to this point where we kind of all needed more space,” he said. “And we didn’t really want to part, if you like.”
What began as Waterman’s search for an extra 50 square metres of office space turned into 600, shared between a number of businesses.
“And then 1300 square meters of space came available in the building next door,” Waterman said. Buoyed by his positive experience subletting the original space, and “cultivating an environment that was producing a very, very positive result” for every business involved, Waterman signed on for the full 1300 square metre space.
“I became a believer: as long as you found the right type of businesses, you’re actually better together for a whole lot of reasons,” he said. “I could see that if he could multiply that you could do something really good for business.
“So we went down this track and we basically decided to take the whole 1300 square meters.”
Waterman, as we know it, was born.
Post-lockdown trends becoming mainstream
The company’s unique focus on suburbia goes a long way to explaining its success to date. Before his offering hit the market, businesses with headcounts too small to necessitate a standalone office would have been forced to lease co-working space close to the city centre, Waterman says. That’s a turn-off for founders who want a centralised location, without totally uprooting their business from the suburbs they call home. Today, Waterman estimates nearly all of its customers live within 15 minutes of their nearest Waterman business centre, where the commute to a competing inner-suburb space may take three times as long.
Those co-working members, spread across 3500 individuals and businesses, are expected to drive turnover of $15 million in 2022, Waterman says, with the company eyeing a turnover of between $35 million and $40 million in 2025.
Its positioning also appears to have given the company a post-lockdown edge over some of its urban competitors.
The first batch of lockdowns saw Waterman revenue slow down in March 2020 and bottom out in December that year, as the company negotiated with tenants over leases they simply could not use. But when the harshest lockdowns lifted, the company found that its suburban tenants were not simply sticking to work-from-home protocols. Instead, the forced experiment led companies to put more faith in hybrid working as a long-term solution.
“We felt that we had already pioneered an enterprise product and had large, well-known corporates that were using that product,” Waterman said. “And it made sense to us that it would just be a matter of time before corporate Australia or businesses really caught on to this idea of the value of working close to home, instead of spending an hour, an hour and a half in traffic.
“We just thought it would take maybe up to 10 years.”
Not so.
“We’ve always had a long-term vision in terms of where we’re going to plant these centers, and at a core level, what flexible working is,” Waterman adds. “And COVID-19 has really just come along and said, ‘Well, hybrid working is flexible working’. And it’s just put it on the map, and it’s here to stay.”
“All the necessary resources to help business”
While Waterman is bullish on suburban shared working spaces in a post-lockdown economy, the company’s expansion goals aren’t solely based on businesses seeking the convenience of a local co-working space.
Rather, Waterman believes co-working spaces can facilitate chance encounters which businesses to better each other in unexpected ways. And because his financial services benefited from a like-minded community in Narre Warren, Waterman says the company is prepared to make those introductions for the benefit of its customers.
“If we go back to the original motivation for multiplying [our floor space], the motivation wasn’t that we could increase our office space so that we could just have people to rent it,” Waterman said.
“That was never the motivation. We could multiply doing something good. And the good was that we were providing, that environment was providing genuine support to business.”
Perhaps that looks like Waterman connecting a burgeoning startup with a public relations firm ahead of a product launch, or linking a physiotherapy chain to accountants operating down the hallway. Listening to the founder speak, it’s clear he believes those opportunities will multiply as the company grows even larger.
The next phase is creating an environment that contains all of the core elements for business success, where the physical space is just a “means to an end” for corporate success.
“We have not realised this yet, but our mission is to create exceptionally healthy environments that actually contain all the necessary resources to help business,” Waterman said.
“The end is the success of the business,” Waterman added.
“And what is success? We’re not just talking about financial success, we’re talking about the wellbeing of the business owner themselves and the success of the business. And if the business thrives, that’s good for the individual. It’s good for their staff, and their families, but it’s good for this nation. It’s good for our country.”
It’s a lofty goal and not one without challenges.
First is the likelihood that any business which does achieve significant success while operating within a Waterman facility may choose to establish its own bespoke office space, leaving the Waterman community entirely. Second is the chance that worsening economic pressures may convince fledgling businesses to operate remotely, rather than book in-person time at a local business centre. Third is the fact Australia’s business centre market is growing; while Waterman undoubtedly has the upper hand in suburban markets, WeWork and The Commons still command a significant chunk of Australia’s shared work market, and could lure thriving businesses into the city.
Waterman himself is confident in what his business has to offer.
“I don’t concern myself too much with competition, I think if they’re doing a good thing, that’s wonderful,” he said.
“I just want to get to the point where we can deliver what it is that we want to deliver.
“We’re on a journey, and we’re not there yet. But if we get there, we’ll do something special.”
