A virtual physical office address for hire? Why?

WeWork recently launched ‘virtual offices’ in India.

The news that spoke about this launch explained the context as “will help businesses and self-employed individuals with a professional address at a central business district where its 35 workspaces are located“.

Why would anyone need a virtual office? Customers “can use one of its office addresses for their official communication or government formalities“.

Reading more, I figured that Regus, another ‘office spaces’ company has virtual offices too. The idea of a virtual office goes beyond merely providing an ‘office address’ for hire (it earlier used to be a PO Box number!). Most virtual office providers also offer value-added extras like (physical) mail forwarding and professional call answering services where the receptionist answer calls in your company name! As Regus explains, “They’ll transfer calls to you or take messages on your behalf. If someone drops in to see you unexpectedly, they’ll let the visitor know you’re elsewhere that day“.

All this logic made perfect sense for a physical coworking office that you book via WeWork or Regus and where you go to work occasionally/every day and meet people because those people would find it easier to travel to the central business districts of cities because they tend to be better connected due to the location. But how does this help a virtual office where the entire point is that there is no office in a physical location?

Also, how or why does a fancy address in a central location make a difference?

The fancy address, in the offline world, signified a certain status – that the person can afford a place in a central location… which means they have the affordability to potentially stay in business and is perhaps not a fly-by-night operator. That’s the overall impression when you see a central address on a business card or letterhead. They helped announce trustworthiness.

Now, when the entire concept of the office is under threat, is a physical address the most essential to building trust in the brand? That seems like using the image of a floppy to denote ‘save’ in a digital document!

The launch news also mentions, “This (virtual offices) will help in facilitating wider networking opportunities, expansion of talent base“. Again, I’m not entirely sure how the virtual offices are going to help in networking opportunities or expansion of talent base?

If the potential/actual employees are working-from-home or working-from-anywhere, they would hardly care that there is a physical address for the company in their own city. The talent base, in itself, is without a rooted address, so why would the company need one?

The talent base would also consider other signals besides a physical office address to trust the organization they may be applying to/considering – the years in existence, people who work for that company, and their online footprint, the client base of the company, financials, and so on. The office address is perhaps the least relevant in this case.

The final point of advantage that makes limited sense is to use that virtual address for the purposes of Government/Administrative communication! For instance, registering a business with this virtual address and not using your home address for the purpose. This adds a leash to your business that you need to keep paying to retain! It also adds an extra layer of complexity in getting your administrative work done – anything sent from the Government would land in your virtual office and you are their mercy to receive it. Of course, when the whole world is completely moving online/virtual, why would you be using physical mail is a different question that questions the very foundations of a virtual address in the first place 🙂

I totally get the point behind WeWork’s announcement. Physical offices are fast going out of fashion. WeWork, and Regus, have to somehow keep using their prime office spaces at expensive locations. And virtual office offerings seem like a good extension. But I’m not entirely sure if the need for them exists at all. The home is now both office and home and it makes sense to consolidate everything virtually – so why need a virtual physical address at all? The physical address (along with location), in itself, is an appendage that is being (or will soon be) done away with as we are seeing in the emergence of ghost kitchens.

Having said this, there may be two potential audience segments for whom this may be useful: entrepreneurs who live in rented accommodation (this is bound to be quite significant), and foreign entities who want to set up an India base.

For the former, when I asked a couple of entrepreneurs I know personally, they said they had actually used their parents’ home address (in remote places at that, in Assam, Bihar, Jharkhand, and Gujarat) for the purpose of an address in the GST and other Government formalities! They said that since they are starting out, this saved them costs even further and they felt that this did not tie them to an external service that would force them to keep paying! The location/city/address was merely needed for a formality, for them, not to demonstrate any advantage.

But, for foreign entities who wish to set up a base in India without having to invest in a dedicated physical facility, the virtual address should be very ideal – gives them a prestigious and central location to show off and win some instant street cred befitting their foreign status.

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