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A Hub Of An Idea: Social Impact Start-Up Gives Co-Working A Comeback

Social impact entrepreneur Brad Krauskopf is making co-working cool again. His businesses in Australia have been helped by an MBA from IE Business School.

Wed Mar 12 2014

The heat is rising outside, but from an office in Melbourne Brad Krauskopf is trying to keep a cool head. It is no easy business running a chain of start-up companies that are both for-profit and yet seriously sustainable.

Not that he has lost any passion for the subject, which is making a grand comeback on the business school scene. Brad gained his MBA at Spain’s IE Business School, a champion of all things socially responsible and a school which has placed sustainability firmly back on its menu.

It has only been five years since Brad, who is the CEO and co-founder of Hub Australia, graduated from IE’s program, but so much has changed since then. He hasn’t just moved from Madrid back to Melbourne to launch a collection of learning community “hubs” – he has done so during perhaps the biggest crisis in business ethics this century; the build-up to the financial crisis.

Brad owns and runs a branch of the Impact Hub Network; part innovation lab, part business incubator, and part community centre. He makes money by selling memberships that allow Australians to access collaborative working and learning environments.

In four years the MBA graduate has steered the company’s growth to more than 1,000 members across three cities. Brad runs Hub Melbourne, Hub Sydney and Hub Adelaide, the latter the newest edition to his collaborative empire.

He has more ambitious plans for expansion and wants to create a platform for collaboration across “diverse” sectors and generations of people. The entrepreneur has just launched a third company, Third Spaces, focused on creating workspaces for organisations.

That might net him a profit, however small, and it would be easy to forget that these are businesses as well as social enterprises. Businesses that have huge “capital intensity”. Bad has invested a “very large sum”, sourced from investors and family, and let’s not forget the tens of thousands he paid to attend one of Europe’s premier business schools.

He admits it has been difficult, however rewarding. “The sheer capital intensity of the business has been a challenge,” Brad says while diving into a taxi in Melbourne. “You can’t do anything with the Hub without the capital required.”

If business school is famed for diversity then the cohort at IE, so far away from his home in Australia, provided an advantageous glimpse into his future. “A key aspect of the Hub, which is always its strength and a challenge, is the diversity of different people,” Brad says.

“We’re dealing with 50 different industries, and four generations of people every day. Collaboration is based on trust, so getting all those people to trust each other takes time.”

Four years has proved an adequate amount; the business has swelled, no doubt, but Brad has been running his own companies since he banked a Bachelor’s degree at Monash University.

His first company, TD Squared, managed and marketed large music events in Australia. He is surprised to hear the old girls' name, but lights up when talking about his first venture which he co-founded in 1995.

It is clearly a career path he was destined to follow, MBA or no MBA. What makes entrepreneurship so much better than the corporate track? “It was never a choice. It was just what I did,” Brad explains.

“I like creating something from nothing. The thing I enjoy most in entrepreneurship is that initial phase of getting off the ground.”

TD Squared was just a bit of fun, he says. He ran the company with a business partner during his early 20s’. The real test came seven years later when he became the managing director of an IT services company. He co-founded the business, Maxxam Computer Systems, and that gave him the chance to raise it from the ground up.

For a while they achieved some success. The co-founders grew revenues at an average of 40 per cent per annum over five years and were awarded a spot on Business Review Weekly’s Fast Starters list in 2007.

Why an earth did he leave? Brad can only talk freely about a couple of the company’s problems, he says. “It did well and then quite badly. Unfortunately I exited when we weren’t doing so well,” he explains.

“I was doing something I didn’t enjoy doing. It wasn’t aligned with what I was passionate about. I got to the point where I didn’t enjoy running my own company.”

A bad spot for any entrepreneur, he will agree. Brad has always been about creating for-profit businesses which also create impact and, ultimately, Maxxam Computer Systems wasn’t one of them.

He entered IE’s MBA program soon afterwards and specialized in Sustainability and Social Innovation. “I wanted to get the hell out of there. I wanted to make a complete and utter change to what I was doing,” Brad says of leaving his life behind in Australia.

“We’re talking about Madrid here; there are many worse choices you can make.” Indeed. IE is one of Europe’s highest-ranking MBA schools. But there were a few factors that drew him to Spain.

IE is renowned for its sustainability initiatives and Brad became the president of the school’s Net Impact Chapter. Incidentally that is how he got involved with the Hub. He met the founder of Hub Madrid, another branch of the organisation, and was inspired by their ability to make a huge social impact with very few resources.

The Hub tries to balance profit and impact, which means that you constantly try to do more than is required of the business, he says. “But not have to, that is not the right phrase; all companies should have to,” Brad quickly clarifies.

He can’t say the MBA is a key reason for his entrepreneurial success – not least because he was running companies years before flying to Spain. But it did give him exposure and diverse networking opportunities. And that, he says, has never been more relevant for today’s MBA students.

“It certainly exposed me. It was tremendously rewarding,” Brad says.

Schools that cater for social impact and diversity have a significant advantage. So too do companies, he adds. “The individuals and organizations that can figure out how to harness the value of it will find themselves with a significant advantage over companies that don’t.”

He will be hoping, then, that his start-ups share in that reward.