As Bandit and I continue writing up different sections of our book on independent entrepreneurs, coworking and the decentralization of labor generally, a pesky question periodically comes up. What precisely is coworking?
Of course, one can just take the definition from the coworking wiki: "Coworking is cafe-like community/collaboration space for developers, writers and independents." Clear enough, right!
Well, what about intention, and money, and profitability. From what we've discovered in our research there already exists a broad continuum of options, ranging from more or less communal, non-profit spaces (Citizen Space, Indy Hall, New Work City, The Creative Space, Berkeley Coworking, Hat Factory) to spaces that are run as businesses (Sandbox Suites, Launchpad Coworking, Office Nomads, Workspace, Nutopia, Cubes and Crayons). It will be interesting to see, in the near future, which types of spaces are indeed sustainable and which aren't.
I guess the question I'm raising runs something like this: If a space is for profit and sees itself as providing a place for independents and remote corporates to work, is this coworking? While I would answer yes!, there are plenty of voices out there that would suggest that this is not coworking but is rather just 'office space' rental. Which raises another related question. What happens when an anchor company, one that signs on a lease and gets the ball rolling, moves to a bigger space? What happens then? This company, which essentially functions as the space's patron, will be leaving the rest of the community holding the bag, right? How fair is that? Theie only defense, really, is to say, 'Well, that's business.'
Which is precisely the point. The more I learn about the economics of coworking, the more I'm convinced that the for-profit models will be critical to the scene's long-term survival. That is, remote working corporates and independently employed Millennials constitute a rapidly growing and expanding demographic in the economy. I suspect that this number will continue to rise, particularly in a recession, and they will increasingly need places to go to work and connect with community.
It is one thing for small community groups of entrepreneurs to hold down their tribal camps in the awesome ways that they currently do. Places like Indy Hall, for my money, embody the very best of what coworking is. But, over the long term, the whole seen will (perhaps unfortunately) outgrow the tribal to some extent. Coworking will then be an influential work-trope within the larger economy.
This, in turn, will require capital, risk, debt, and all of the related weights of reality that make up Business. There really is no way around it. At some point in time, whether it is called a 'coworking' space or a 'work club' (see The Coffee Office), they will exist out there in the world as businesses.
Balancing business and community is clearly possible, as Roman Gelfer at Sandbox Suites has shown. I mean, Whole Foods is a huge business, but it remains idealistic and committed to causes that it is passionate about. I suspect that over the next 2 to 5 years, a couple of large coworking brands will emerge, and I wish them the best of luck!
The Butcher
The issue of money versus community in regards to coworking is a complicated one, but let me see if I can shed some light.
1. Without profitability, a coworking space cannot exist. It cannot serve the community unless it can turn a profit and stay in business.
2. Running a coworking space with personal gain in mind is perfectly okay-- but up until recently, anyone who's approached this space with money in mind has ended up running a space without making the community the business's most important offering.
You can totally try to make money running a coworking space-- and that space would still be a "true" coworking space-- but to do so, your business must offer not just desks in a space, but a culture of community and sharing.
People may have drawn a divide between the two because people who run many of the existing spaces aren't making a living off running their spaces, but that's going to change. LaunchPad will be a shining example.
[...] a post today on Not An MBA, the boys evaluated the business side of [...]
up here in toronto, we are attempting to balance the community with the business, taking in to account all of the factors that independents face (finances, emotions, health, etc) and will be pursuing setting up a coworking space as a co-op. this is the only way we can see that if an anchor company leaves/moves on, the community isn't left holding the bag bacause the community composes the fluid membership of the company. it is a more true test of the word community in that everyone ensures the success of the space because each member of the community is an owner.
Thanks for all the feedback! Rachel, I hear what you are saying. Commercial lease-structures in Canada might be a bit different. While there are exceptions here surely, for the most part commercial real estate agents require 1 person to be on a lease. The concept of a group entering a lease is one of those changes that needs to happen here because, it actually spreads risk around and makes more financial sense for the property owner. However, this is just one more area where the traditional business mindset is stuck in the past and refuses to experiment with the future. Indeed, I think that when some commercial property group gets hip to this, new kinds of coop-based leases will come online and be a part of the industry I've been talking about. Are you at Indoor Playground, or are you talking about a new space?
[...] From The Business of Coworking: [...]
I believe coworking is a group of people deliberately meeting to work together, separately. In my opinion the space is merely a detail like the date & time of the meetup. So whether the space is for profit or not is irrelevant to whether or not it's a coworking space. It's a coworking space if people choose to meet there to work together. Let's rewrite the definition on the wiki. ;)
I agree Dusty, this is why, in my eyes, Jelly is SO coworking. The distinction that I've read about, where Jelly is somehow downgraded to 'casual coworking' belittles what is going on there. Once a week, or 11 times a week, coworking is coworking. This sort of pragmatism is one of the things that defines the Austin approach...
cheers
[...] reading The Business of Coworking at NotAnMBA I was inspired to write this [...]
Great post! Your thoughts mirror ours almost exactly when we decided how we would launch http://www.ignitionalley.com in Atlanta, GA. We had to approach it like a business in order to ensure its survival, but first and foremost the business is about building community.