The shared office space or coworking marketplace has been one of the fastest growing industries in the U.S. and the rest of the world. As part of the startup community, you may have sat in a coworking office and realized you were in a bustling space where you could work amongst other freelancers, developers, and creatives in a productive, supportive atmosphere.
The Deeper Dive
Here is a deeper dive into what makes coworking spaces more than just a place to work, and how a few new companies are changing the model of how to capitalize on these work trends.
Large commercial real estate developers are jumping on board and redesigning their spaces to have smaller offices and much larger common areas. This shift toward collaboration vs. privacy is taking place in all sorts of firms - since it fosters interaction, teamwork, and innovation, all while cutting costs.
Even the accounting company PricewaterhouseCoopers (PwC) modernized 35 of their offices last year and reduced its space per employee by 30 percent.
About 80 percent of PwC’s U.S. employees are millennials. "The younger generation likes an open environment, they have been raised in an environment of much more stimulus around them all the time," says Ken McCarthy, principal economist at Cushman & Wakefield. Thus, people are working more independently and in smaller teams.
If you were working as a freelancer or a small startup in the big apple back in 2011, there were less than four coworking space brands. I do not mean places like Regus, I am talking about independently-owned collaborative spaces where you could meet interesting people and exchange ideas. Now, fast forward to 2017 with the explosion of the WeWork unicorn startup, which has over 20 spaces in New York City alone- you cannot seem to walk down a city block without running into a coworking space.
The latest data indicates that there are over 13,800 shared coworking spaces globally. This is not a bad thing and is actually great for a few reasons. One of the biggest reasons is that this trend has allowed for the rise of freelancer/self-employed workers and businesses.
The barrier to starting your own business is much less difficult to cross than almost ever before. This, of course, comes with the increase in entrepreneurs actively competing with others in similar industries.
Competition is good for any company. With competition, businesses are forced to innovate or risk eventual obsoletion. At the basis of competition is the idea that if a company does not make a better product, someone else will dominate that respective industry with respect to that product. We are living in a consumer-first economy and to me, that drives everything that is special about the free market.
As much as spaces push forward to create better products and services, they may still get lumped together into one category. This can give people outside of the coworking world the perception that they may simply negotiate a lease, simply rent space, sell it and that is all. Coworking is not simply a term or another word for office space, even though it may seem like the term is expanding to include different and additional types of office spaces.
I think this coworking phenomenon has been generalized as an industry. If you are a real “coworking space”, it is much more than just a rented desk or place to work.
The Airbnb of Coworking
If you think of WeWork as an analogy of being the Marriot of workspaces- it fills commercial office space with refreshments, receptionists, and programming. This is very similar to the way a hotel operator designs and manages its space. As a result, software companies like Croissant Coworking, LiquidSpace or Pivot Desk have emerged, offering flexible membership access to some of these commercial office spaces.
These software companies allow businesses with excess office, desk and common area space or conference rooms to list them for rent by the day, week or month. They are thought of and advertised as “on demand” access coworking spaces. LiquidSpace has booked over 2 million conference rooms.
Pivot Desk has focused on being a platform that helps to monetize extra desks for shared office spaces- usually targeting growing startup companies. Introducing desks as an on-demand service allows businesses with office spaces to offer longer-term leases to businesses after clients have experienced the space. Just as companies like WeWork continue to prove the demand for flexible, short-term leases, these companies have been creeping into similar territory facilitating access to several different shared workspaces.
Some companies use a different model; via partnerships and expansion, where they boast of having over office spaces within major cities like New York, Boston, San Francisco, Los Angeles and Washington DC.
Croissant even has a mobile app that gives you on-demand access through a monthly membership that lets you choose from their list of coworking spaces.
To me, this model is interesting; my business, Vab Media Digital Agency loves using the Croissant Coworking service. Even though we have a dedicated office space, we are always looking to try out new co-working spaces and network with other entrepreneurs. Every coworking space's vibe, hackathons, workshops, events, layouts, and perks are all slightly different. You can join Croissant with no monthly commitments and you can visit any one the locations in its vast network of shared office spaces.
Several companies will give me unlimited hourly access on a monthly basis -- it’s also less expensive than a monthly pass to any office space. One of the useful aspects of having a flex Coworking Membership is that if I have a meeting downtown, I can meet my client and do my own work after the meeting.
Even though I am not close to my home base, I can still get work done. All I need to do is pop into a nearby coworking space afterward to finish out my work day.
I like working from different spaces, networking with different people and being around other entrepreneurs. Environments, such as BootUp in Silicon Valley has been specifically designed to support young companies and has been invaluable as they reach out globally in the entrepreneur world to help startups.
The life of a startup can be difficult at times, but surrounding yourself with smart, dedicated and hard-working people is the best cure for the startup blues. Some coworking places offer massively discounted services for their members, others offer direct links into investor relationships, and some have even made partnerships with tech incubators like Techstars to get more exposure.