Prominent Queensland-based co-working space and business incubator Little Tokyo Two has been placed into voluntary liquidation, with founder and entrepreneur Jock Fairweather sending a message to members and supporters saying the business had become “unsustainable”.
Founded four years ago, Little Tokyo Two (LT2) had five locations across Brisbane and the Gold Coast, which primarily offered a co-working space service to startup founders and aspiring entrepreneurs. However, the business had also recently expanded into offering incubation services and ‘growth plans’ for startups.
In the message, Fairweather said while the incubation offerings had performed well, the co-working model had become unprofitable and criticised new market entrants for “undercutting” prices.
“The business of running a co-working space has been struggling, with increased competition in the market and new entrants, who undercut prices to attract new members,” Fairweather said.
“After stress testing our future financial model and the financial difficulty we have recently faced we have concluded that the viability of the LT2 as a co-working space is an unsustainable option for our future.”
The business has reportedly been placed into voluntary liquidation, however, there appears to be no insolvency notice published on the companies register for any company named ‘Little Tokyo Two’, nor any company under Fairweather’s directorship.
The Courier-Mail reports Brisbane City Council had invested $5 million in innovation hub The Capital, which Little Tokyo Two was a “foundation tenant” of. The council told The Courier-Mail it was trying to find a new operator to “provide certainty for tenants”.
In his message, Fairweather said the company had made efforts to minimise the disruption for members of the co-working space’s five sites but made no mention on what may happen for startups engaged with the company’s incubation process.
“It has been an amazing journey working with all of the incredible and talented community in South East Queensland. I sincerely apologise to everyone that has been impacted by this change, and I wish you every success in the future,” he said in the message.
The writing may have been on the wall for Little Tokyo Two for some time, however, as a press release from late-February indicated it was moving away from the co-working space model and looking to invest more in scaling companies, rolling out ‘growth plans’ to help businesses hit $3 million in revenue over three years.
At the time, the company said it would be dedicating 100% of its resources to “impactful activities that help the best talent in Australia thrive”.
“Where we do NOT deliver value is by spending a whole day figuring out how to fix the Aircon or find a bolt that’s come out of a chair,” Fairweather said.
Fairweather did not return any calls made to his mobile number, and his out-of-office email message says he is away until May. The Courier-Mail reports Fairweather has already started up a new venture called Two Ventures, which offers founders partnerships, advice and industry connections.
The program also reportedly gives aspiring entrepreneurs access to “quarterly organised investor meetings: Golf Days, boozy dinners’’ and entrance to Fairweather’s “lifetime trust circle’’.
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