Last Updated on October 17, 2021 by Ehubber
About half of U.S. startups choose to run their business from home, but your home office may not be a suitable environment if your startup is growing and you want to bring more people on board or meet with clients. It can also be difficult to separate home and work life, which actually increases your risk of burnout. A coworking space brings together remote workers, small business owners and staff, and freelancers in a shared work environment. Big names such as Indiegogo, Instagram, Timehop, Uber, and Wanderfly have even used them.
The key benefit to coworking spaces is flexibility. Each coworking space has a different layout, like an open office with lines of desks and breakout areas, or a more enclosed setup (with private offices and meeting rooms).
You can choose to “hot desk,” (use whatever desk is available) or pay a little more for your own desk. You can also reserve meeting rooms or use a coworking space as a virtual office. Whatever the setup, you will be sharing office amenities and communal areas (such as the kitchen) with your fellow coworkers. It’s important to find a coworking space that’s a match for your startup both in terms of your business requirements and ethos.
What Is Coworking?
Coworking spaces are shared office environments for independent professionals (Pohler, 2012; Spinuzzi, 2012) and have been increasing rapidly. In 2015, 7,800 spaces existed worldwide with a growth rate of 83% from 2012 to 2013 (Foertsch, 2013) and 36% from 2014 to 2015 (Foertsch, 2015). Various professionals, predominantly independent ones such as freelancers or remote workers, use these spaces as their places of business (Pohler, 2012).
Coworking spaces are shared workplaces utilized by different sorts of knowledge professionals, mostly freelancers, working in various degrees of specialization in the vast domain of the knowledge industry. Practically conceived as office-renting facilities where workers hire a desk and a wi-fi connection these are, more importantly, places where independent professionals live their daily routines side-by-side with professional peers, largely working in the same sector – a circumstance which has huge implications on the nature of their job, the relevance of social relations across their own professional networks and – ultimately – their existence as productive workers in the knowledge economy.
Contemporary coworking originates in 2005 in San Francisco. It brought the possibility of envisaging a ‘third way’ of working, halfway between a ‘standard’ work life within a traditional, well-delimited workplace in a community-like environment, and independent work life as a freelancer, characteristic of freedom and independence, where the worker is based at home in isolation. This third way was coined ‘coworking’ without the hyphen, to indicate the practice of working individually in a shared environment – and to differentiate it from co-working (with a hyphen), which indicates working closely together on a piece of work (Fost, 2008) – although often these terms are used interchangeably.
As outlined by Pratt (2002), the San Francisco Peninsula was one of the leading areas in new media production in the early 2000s as a result of a ‘hybrid’ infrastructure of interaction able to connect technologies, spaces, and people. Pratt notes that San Francisco, located at the end of the Silicon Valley with a high concentration of technology industries and hardware companies, satisfied the requirements of a contemporary ‘product space’.
This was due to an efficient socio-spatial division of labor and cultural ambiance naturally entailed into a ‘bohemian’ environment – a vibrant culture infused with political activism and socially organized work patterns based on social networks and tacit or shared knowledge (Pratt, 2002). Since its inception, the idea of coworking has quickly spread to become, ultimately, a ‘trendy topic’ bearing huge expectations concerning the future of knowledge work. Johns and Gratton for instance, define coworking as the ‘third wave of virtual work’ (2013: 1), that seeks to restore ‘co-location’ in the digitalizing mode of production where tasks can be performed anywhere, anytime.
A proliferation of coworking initiatives and ventures can be currently witnessed in different cities worldwide, for a somewhat self-proclaimed ‘coworking movement’ that now aligns with other similar ‘trendy’ concepts which flourished in the post-crisis economy, such as ‘startups’, ‘social innovation’ or ‘sharing economy’ (Botsman and Rogers, 2011). This literature review locates coworking principally in relation to these approaches to challenge the often overenthusiastic framework of interpretation and confront it with the existing empirical data.
Coworking shows a significant global diffusion together with an impressive annual growth rate, particularly since 2007-08, interestingly coinciding with the onset of the global economic crisis. Moriset (2014), using data collected by the international online editorial Deskmag, a well-reputed online reference for the coworking movement, shows how coworking is largely diffused in the so-called ‘creative cities’ of advanced economies, such as London, Berlin, and Paris in Europe, San Francisco and New York in the US, but also embraces a larger perspective, with a reported presence of 129 spaces in Japan, 95 in Brazil, 60 in Australia and 39 in Russia (Moriset, 2014) with a growing presence in China (Lindtner and Li, 2012).
Moriset’s (2014) exploratory study reports an overall number of 2,498 mapped spaces worldwide. This appears to be just a downward estimate since a growing number of businesses of different sorts are currently opening coworking ‘sections’ within their activities, indeed without formally registering as coworking spaces. In his work, coworking spaces are epitomized as ‘third places’ between home and work. He argues that coworking is a global phenomenon that maintains strong local roots, as it frames into policies that point towards the emergence of creative districts around urban environments – and casts a light on the risks of a possible ‘coworking bubble’, given that the profitability of these initiatives is often still low (ibid.).
In order to directly address the latter issue, we should take into account that since the earliest coworking phenomenon reports, the primary rationale of coworking is not, in principle, business-oriented. On the contrary, a significant element that seems to characterize coworking practices is an ‘open source community approach to work (Leforestier, 2009), intended as a collaborative practice that seeks to establish communitarian social relations among the member-workers. According to an article on Network World, coworking is conceived as a ‘movement’ or a ‘philosophy’ characterized by four common values: collaboration, openness, community, and sustainability (Reed, 2007).
Most of these independent professionals worked from home prior to renting a place of work in a coworking space, where they may have suffered from a feeling of isolation, among other problems (Spinuzzi, 2012). Thus, coworking spaces represent one possible buffer against isolation by providing, in addition to business infrastructure, the opportunity for social interaction.
Coworking spaces are flexible in their pricing structure and commitment level. The majority will let you rent a space on a monthly, weekly, or even daily basis.
You can also seek out a co-working community that’s been carefully cultivated to boost your chances of success. For example, some co-working spaces are run alongside incubators (where you are provided with a variety of resources and services to accelerate your business development)—but you may have to apply to work in such spaces. Other spaces target specific industries, like technology or creative pursuits. However, the majority of co-working spaces will accept anyone and everyone.
Of course, there are plenty of pros and cons for startups using coworking spaces. For example, if your startup needs privacy or you would like to design and change your own office layout at will, traditional office space may be a better option.
But if you don’t mind sharing a few office amenities with other startups and entrepreneurs, a co-working space could be a solid option for your business.
Why You Should Consider Coworking
There seems to be something special about coworking spaces. As researchers who have, for years, studied how employees thrive, we were surprised to discover that people who belong to them report levels of thriving that approach an average of 6 on a 7-point scale. This is at least a point higher than the average for employees who do their jobs in regular offices, and something so unheard of that we had to look at the data again.
It checked out. So we were curious: What makes coworking spaces – defined as membership-based workspaces where diverse groups of freelancers, remote workers, and other independent professionals work together in a shared, communal setting – so effective?
- Improved facilities over your local coffee shop or home office: Let’s face it, a coffee shop or your home office can present some challenges to professionalism—namely noise and non-business interruptions. Coworking spaces come with everything you need to get your work done. An abundance of power sockets, functional furniture, plenty of desk space, and high-speed Wi-Fi connections come standard in most facilities.
Dossey Richards, CEO at dev-shop Lotus Technologies, runs his business from the NYC-based The Farm Coworking. He said: “The decision to move from my local coffee shop and work inside a coworking space has been a decision that has dramatically changed my life as well as my quality of living. I’d recommend it to all freelancers, employees, and entrepreneurs looking for a new work experience.” You also have more control over your work environment compared to a coffee shop. You can choose to plug in your laptop and work in a shared environment if you prefer to work surrounded by like-minded souls, or use a private office space if you need some peace and quiet.
Many facilities also rent out meeting rooms for when you need to talk to your clients, and some also have additional areas (such as nap pods or breakout areas) to give you access to a wide variety of working spaces. Plus, free tea, coffee, and snacks are often thrown into the deal at a coworking space, which could be the final nail in the coffin for working at your local coffee shop.
- Coworking gives you a flexible and cost-effective solution: A traditional office space rental can be the solution your startup needs, but they generally require a long-term financial commitment. However, coworking frees your startup to be nimble as it grows and changes. You can use the space as and when you need to on a day-to-day or month-to-month basis. You can rent meeting rooms as and when you need to. You will not be tied into paying rent for months at a time.
Coworking is also generally a cheaper option than an office rental. For example, if you wanted to work in the Manhattan area of New York, you could rent a shared desk for just $25/day or $250/month; or a dedicated desk is $400/month at a coworking space. Office rents come in at least $1,000/month (depending on the size of the office and amenities you need) and come with fixed terms of at least six months in the same area.
- You will network on a whole new level: Coworking spaces are used by a community of freelancers, entrepreneurs, and small businesses, so there are plenty of networking opportunities with people who are also trying to build a business. Dossey said: “What I love about coworking is the access to all the experiences other companies are having. Being an entrepreneur is a learning curve and the speed of your success is limited to the speed you can learn about starting and running a successful venture. Having access to other people to communicate my day-to-day challenges with has been vital to our growth.”
Coworking spaces often encourage inter-community relationships where chats over the water cooler can quickly turn into work exchanges or budding partnerships. If, for example, you’re a tech startup and need someone to help you write a killer press release, you’ll probably find a writer at a coworking space who’ll fit the bill.“The Farm [coworking space] has and always will be a life-changing experience for me,” says Dossey. “Being in the space with all the other entrepreneurs has given me a level of exposure and insight that would have normally taken years to develop. Through my conversations with other members about topics like sales strategies and hiring, I have been able to grow my company into a profitable and rapidly-growing venture.”
Some coworking spaces double up as event venues and offer their communities a range of ways to meet fellow coworkers and the wider business community. Whether it’s a few free beers on a Friday, a yoga class, a simple lunch and learn session, a high-profile product launch, or a symposium offering training on a new range of skills for your business, you may get the chance to learn something new and meet new people. Many spaces also encourage their members to host events to showcase skills and market their business. Such events are often promoted by the space, and in some cases, you’ll have experienced community managers on hand to help you with everything you’ll need to run a successful event.
- There’s plenty of business-based advice available: A coworking space can present a perfect opportunity to get advice on your startup. First, you have access to a community of coworkers with varied experiences and skills that can help you frame a particularly tricky problem. Second, many spaces are run by a team of enthusiastic managers who can point you in the right direction, offer some advice, or help you think through logistics.
Some coworking spaces are also set up as accelerators and incubators; an incubator specializes in growing new and early-stage business and an accelerator offers rapid-growth tools for more established businesses. Both can be resources for information on how to grow your business, depending on your startup’s development stage and needs—whether it’s applying for funding or finding a mentor.
- A coworking space will grow as your business grows: Another benefit of the flexibility of a coworking space is that you can scale up as and when you need to. Whether you suddenly need more facilities to match a peak in demand or to employ more staff to help you during busy times, it’s likely that a coworking space can be more nimble and flexible than a traditional office rental situation. Plus, your employees will thrive in a coworking environment. Research reveals that coworkers feel they have more control over their work, that their work is more meaningful, and they value the community element of coworking.
Every coworking space is different in terms of its atmosphere and community. You may want a highly professional environment, or something a bit more relaxed. It’s important to visit a space or check reviews about it before you sign up. Go on a tour and ask the community (as well as your guide) all about the space and what it’s really like to work there. Even better you can join the Ehubber community too, it’s easier to access coworking spaces globally by clicking here.