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Is this desirable?

Is this viable?

Is this feasible?

Is this desirable?

The Innovation Trinity- Commune

Is this feasible?

Pros

Cons

I have used Investopedia's 8 point test to assess viability.

(Bradley, 2023)

  • High uniqueness.
  • Have secured upstart funds from their first funding round.
  • Have a strong customer focus and understanding.
  • No direct competition.
  • Poor economic mood can improve the appeal of their value proposition (increased need of affordable housing).
  • Good timing, due to increasing single-parent households.
  • Access to cheap, but effective marketing (press and rental platforms).

Ways Commune is viable

Commune's focus on creating affordable housing where single parents and their children can thrive is well-aligned with the desires of this expanding demographic.

Commune's value proposition directly addresses the growing need among single-parent families for affordable and supportive housing. Statistics indicate that in France, 1 in 4 families is headed by a single parent in 2021 (Commune Coliving, 2021). There is evidence of sustained growth too, as according to EuroMonitor, the fastest growing household type over 2022-2027 is set to be single-parent households, expanding by 4.7% (EuroMonitor International, 2023).

This is driven by the changing household compositions in France.

Overall, yes.

Commune Coliving Website

Additionally, research suggests that a significant percentage of single parents experience housing-related challenges and are actively seeking community-oriented solutions to alleviate their struggles. (Commune Coliving, 2021).

In what ways is Commune at risk of not being viable?

  • Upstart Costs- Although Commune raised £1.5 million in their funding rounds (Senbel, 2022), this is fairly modest considering the high start up costs needed. Low capital is a significant threat to the viability of being able to fund fast expansion .
  • Customer and Economic Mood- Commune operates in the affordable housing market as their USP. The responsibility of offering below market housing may result in lower profit margin and flexibility to withstand economic downturns whilst remaining profitable. Serving a potentially more vulnerable comes with addtiional reponsibilities, which may hold financial burden for the company.
  • Cash Flow- Rental returns are monthly, as opposed to one-off return, which could reduce liquidity for investments/emergencies.
The viability of Commune therefore relies on effectively managing these challenges, whilst capitalising on its strengths.

Commune's viability as a company seems promising, given the successful building of two communes to date, expansion plans, and the growing demand among single-parent families. Additionally, the company's commitment to environmental sustainability aligns with consumer preferences for eco-friendly housing. The feasibility of Commune's ambitious expansion goal of 500 Communes in the next 10 years, depends on its ability to navigate the intricate factors, including housing regulations, economic fluctuations, and legal compliance, which may pose significant challenges. Although there is sustainable growth prospects, the rate at which they aim to scale may in reality be much slower.

Is Commune feasible?