This article first appeared in Digital Edge, The Edge Malaysia Weekly on December 9, 2024 - December 15, 2024

The pandemic reshaped business operations and, three years after the Movement Control Orders (MCOs), its impact remains significant — especially in the surge in remote and flexible working. To cater for this growing trend, co-working spaces have emerged in greater numbers, providing open and adaptable work environments.

Casper Foo, co-founder of Sandbox Coworking Space (Sandbox Space), recognised the potential of flexible workspaces early on, having established his business in 2018 — well before the current co-working boom. Today, Sandbox Space continues to welcome start-ups and freelancers seeking productive environments.

Foo attributes the growing appeal of co-working spaces to the limitations of traditional remote work settings. Homes are often filled with distractions, from household tasks to family interruptions, while cafés pose challenges such as lack of privacy and the risk of losing unattended belongings.

“They can come to co-working spaces from 9am to 6pm like coming to work, and just get a desk. When they want to go out for lunch, they can just leave and the staff here will take care of their items,” says Foo.

Co-working spaces have also caught the attention of micro, small and medium enterprises (MSMEs). Foo says these spaces offer small businesses, such as consulting firms, an affordable alternative to traditional offices.

Traditional office rents can start from RM3,000 a month, which does not include additional expenses such as internet, cleaning, maintenance and electricity, which can easily double the total cost, he adds. In contrast, co-working spaces provide a more cost-effective solution by bundling these services into a single package, which can include certain facilities, snacks and coffee.

While affordability draws clients to co-working spaces, Foo believes it is the sense of community and collaboration that keeps them coming back.

A hallmark of co-working spaces is the open, shared layout where clients — whom Foo refers to as “residents” — can work freely. Alongside these communal areas, private offices and meeting rooms are available, fostering flexibility. This set-up can create opportunities for organic networking; for instance, a start-up might find itself seated near a potential partner or a freelancer could connect with a future client.

Foo recalls a case in which a start-up wanted to start a podcast, and his team helped connect it with a podcaster who was also using the co-working space.

“We have residents that can help a growing business, such as social media specialists, content specialists. We even have videographers and website designers. Just talking with the people within the space can get your business up and running. Stuff like this happens every day,” says Foo.

These interactions may not be limited to chance encounters, as the owners of these spaces are also put in a unique position to match these residents for potential collaborations and growth.

“We have a WhatsApp group chat for all our residents, current and past as well. So, sometimes, if someone wants to look something up, we just put a query in the group,” he says.

For Foo, the true strength of co-working spaces lies in the potential to serve as community hubs for business collaboration. Unlike seeking help online or hiring contractors remotely, co-working spaces enable start-ups to interact in person with freelancers, fostering stronger connections and ensuring the quality of work through personal engagement.

While community building is an integral component of co-working spaces, it is not the primary focus of many operators. Larger companies often prioritise offering professional, cost-effective office solutions for small businesses. While some interactions may occur socially, companies such as Spacebox Space aim to fully harness the collaborative potential of co-working environments.

Foo’s inspiration for Sandbox Space emerged from a personal need. When the café he frequented for remote work closed down, he began exploring other options. During a trip to Thailand, he observed vibrant co-working spaces, which he felt was lacking in Malaysia at the time.

Foo and co-founder Lye Yu Min modelled Sandbox Space after these Thai co-working hubs. Rather than focusing solely on professional offices, they designed a more casual environment that encouraged residents to connect, network and collaborate seamlessly.

“We wanted it to be more laid-back because we wanted more freelancers — people who work alone — so that they would feel free to come, work and, maybe on a good day, spark a good conversation with someone and some exciting things might happen,” says Foo.

Sandbox Space’s casual environment, combined with social media campaigns focusing on community-building activities such as group events and barbecue nights, has attracted its ideal residents: growing businesses, solopreneurs and freelancers. The resident demographic is evenly split between solo workers and small businesses, resulting in a dynamic mix of collaboration opportunities.

Foo and his team are intentional about cultivating a culture of collaboration. He recalls numerous instances in which freelancers, such as marketers and copywriters, have offered their services to start-ups seated just across the room.

For example, one of the meeting rooms in the company’s Sri Petaling space was converted into a podcast room, using video equipment provided by a resident free of charge for the use of other residents.

Beyond the environment, Lye highlights the human touch. The Sandbox Space team is small, with at least eight people across two branches. The team knows all of the residents and ensures that the WhatsApp group is active.

“We want to know everyone — all our customers or our residents — so that they are familiar with our people,” says Lye.

All this effort to shape a community paid off when the pandemic hit in 2020. Many co-working spaces at the time were hit hard by the MCO and forced to shut down, as they had difficulty finding customers and keeping their doors open.

For Foo and Lye, the residents that had grown attached to the community at Sandbox Space offered their support even though they were unable to make use of the space.

“They still paid us because they understood our situation; we still have to pay rent. There’s our landlord, who is also not easy to deal with. So, everyone knew our situation, and they continued to pay rent. That’s how we survived,” says Foo.

Today, Sandbox Space remains a busy hub of MSMEs and freelancers, with an average occupancy rate of 80% to 90%.

Having established Sandbox Space before the pandemic, Foo and Lye have observed notable shifts in their resident demographics over time, particularly among freelancers. Initially, their spaces were occupied by predominantly expatriates and digital nomads. But as the pandemic unfolded and in its aftermath, the company saw a significant shift, with more locals becoming its primary clientele.

“When we first started, more than half of [our residents] were foreigners. After Covid-19, this changed, and our marketing also changed; we had to target locals or else we [would be] starved out of business,” says Foo.

Lye notes a steady increase in returning expats, a typical trend driven by the weakening ringgit and Malaysia’s push for foreign investment.

“More foreigners are starting to register; they’re interested in our Contact Us page,” he says.

Foo attributes this phenomenon to the seasonal nature of Sandbox Space residents. At times, the influx of influencers and social media marketers rises, followed by an increase in digital nomads during peak travel periods. Co-working spaces must stay attuned to these shifts and adjust accordingly.

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