Over the last couple of years, we’ve heard one resounding question from nearly every major industry: “Why does it have to be this way?”
Uber asked why anyone couldn’t be a cab driver. Airbnb asked why hotels were the only way to find lodging. Companies like WeWork and Industrious asked why an office space needs to belong to one company.
For all of their issues (and there are many), these companies have changed the game in their respective industries. Traditional power structures and relationships like landlords and tenants are being reworked and reimagined.
It’s only natural to want to get into this disruptive space and carve out your own piece of the pie. Today, let’s take a closer look at coworking offices with some tips on how you can create one that (hopefully) lasts.
The Rise of the Coworking Empire
It’s no secret that coworking as an idea has boomed over the last decade. Just before the pandemic, it was estimated that there were 14,000 coworking offices around the globe, with millions of workers occupying these shared spaces every single day.
Here are the basics for the uninitiated.
Coworking offices are essentially empty office spaces that can host individuals, start-ups, or outright businesses, depending on the size of the space. Any of these people or organizations can rent out space for a day, week, or even months at a time.
Some rental agreements or memberships will offer open desks; others will offer private conference rooms. Many offer a communal working space and kitchen stacked with free snacks to help sweeten the deal.
The Silicon Valley start-up boom encouraged coworking as an enterprise, but its earliest incarnation dates back to a hacker basecamp called C-Base out of Berlin in 1995. A similar “entrepreneurial center” was founded in Vienna a few years later.
These are both considered precursors to the coworking movement, which started in earnest in 2005 in San Francisco (no surprise there). Thus began the coworking boom. Start-up companies or motivated freelancers with little overhead cash could work in a real office with high-speed WiFi and decent coffee without signing a lease.
Soon coworking spaces entered nearly every major city, each with its own signature and flair. Some were better suited for traditional businesspeople with simple, corporate styling. Some were designed for creatives with colorful and obscure furniture and private phone booths.
Whatever the case, the market for coworking spaces was certainly there. It’s interesting, then, to consider why some have (rather publicly) failed, which we’ll address below.
The Future of Office Work
We’d be remiss to host a conversation about office work without mentioning the major rise in work from home over the last two years. In 2020, the pandemic forced most office workers to grab their laptops and set up camp at home. Within a week, millions were calling into meetings and trying to figure out how to make their Zoom background more attractive.
Before 2020, people thought remote work on this scale was impossible. Outside of the software engineering space and a few open-minded companies, WFH was considered a liability to employers who feared that efficiency would decrease.
It quickly became clear that people are entirely able to work from their couches. In fact, some people are even more productive at home.
So, Is Office Work Gone Forever?
If all of this is true, what can we expect of in-office work in the future? We’re of two minds.
- Work from home will continue to be a viable option for many, even after the pandemic becomes more manageable.
- In-office settings will be necessary for certain jobs, occasions, or people.
It may be tempting to view work from home as the death of in-office work, but we don’t see it that way. Anyone who fully transferred to remote work over the last two years will tell you that it’s an imperfect solution. Certain meetings, events, or projects require in-person collaboration to succeed. We don’t see that need going anywhere, despite recent virus surges.
What’s more, while many flourished in remote settings, plenty did not. Many workers wanted to get back to a designated professional space and found the blurring between home and work to be troubling—and, at times, exploitative. Plus, 45% of office workers think in-person time with their boss will help with their career development more than remote management.
For every person who sits on either end of the spectrum, there are probably two more who sit somewhere in between. A hybrid model of some WFH and some in-office work is the most likely scenario for many companies.
If anything, we see these societal trends as a good sign for anyone looking to get into the coworking space. Companies may be less willing to pay for a full office lease and more willing to pay for a shared space, where they no longer have to worry about things like utilities, maintenance, or stocking the kitchen.
As more individuals have more freedom to design their own work schedules, we see coworking offices as an obvious option.
Four Tips on Creating a Coworking Space
With all that said, let’s get into the tips to create your own coworking space.
Tip 1: Explore Your Market
It goes without saying that in any business venture, you want to make sure you’re never flying blind. It’s a good idea to start exploring a market you know very well, rather than planning to open an office in a city you don’t. First and foremost, you need to make sure that there’s a genuine need from the community for a coworking space.
The best free snacks in the world can’t entice a person who’s not interested to come into the office. Do some research, talk around, and see what types of new businesses are popping up in your desired area. Are they led by young people? Are they technology-centric? Are they in need of server space or meeting rooms?
Choosing your location is also an essential step. You’ll want your space to be ultra-convenient for commuters.
Tip 2: Consult People Who’ve Been There
When you’re building a coworking space, networking is your friend—not so much because it’ll help you make useful connections, as much as it will help you avoid mistakes that other coworking businesses have made.
WeWork, the coworking giant, fell apart in 2019 after a doomed public offering revealed that the business hadn’t been profitable since 2015. What went wrong? Frenzied and erratic spending, rapid expansion, low occupancy rates, and far-too-low rental prices.
The lesson here is simple: You have to start small. You have to build community and convince investors in the area to come on board. You have to charge people a number that makes sense for your business.
Tip 3: Diversify Your Offering
Once you’ve done your research, it’s time to start considering what type of space you can offer. Resist the urge to offer a one-size-fits-all deal and explore a model of premium membership, not unlike a gym. Give businesses exclusive access to private conference rooms for a fee.
You can also explore a pricing model that charges higher rates for short-term use and offers rewards and discounts for long-term agreements, ensuring continuous cash flow.
There’s no one right way to build a coworking space, but there is a way that maximizes your revenue streams.
Tip 4: Prioritize Function Over Style
Assuming you have done all the legwork to get to the point of opening an office (congrats!), we want to emphasize that your first priority needs to be function. The office should be impeccably maintained. Everything needs to work before you start adding bells and whistles.
The intention of the space, whether it’s for creative types or tech start-ups, will begin to take shape once you have people filling the rooms. From there, you can start to add benefits like a cafeteria (say hello to extra revenue), a coffee shop, or even a child daycare.
These add-ons will help you differentiate from the competition. They’re great, but don’t forget to prioritize the quality and functionality of the space itself. A great latte can’t fix a broken space.
The truth is, we need offices. Working from home can be stressful and exploitative, with personal time boundaries continuously being pushed with mobile notifications and late-night emails. A space for work means we can set boundaries and enjoy a healthier work/life balance.
With the right coworking venture, you can offer an option that helps alleviate those issues and builds a different future of work.