3 minute read
Coworking is in danger of becoming mainstream.
Their numbers have grown dramatically every year since 2006 – in 2017 more than 1 million people will work in one. But their business model won’t scale and profits are low. Worst, their mainstream appeal may threaten their success.
Pieter Levels gives a bleak analysis of their business model – coworking spaces have low margins and don’t scale. Only 40% are profitable. He suggests looking at big pocketed corporates wanting to do remote work and get into the ‘free thinking’ vibe. These corporates would send teams to remotely build products and services in coworking spaces, and pay top dollar for it. But I doubt that this will work – it goes against the magic potion that makes coworking so effective. I don’t believe that just because a team of stiff corporates trade in their leather shoes for flip-flops and sunburns that they are going to transcend their old thought patterns and ways of working. Only immersion into a new culture can do that.
The strength of the nerd community makes coworking great.
‘The future of work is social’ Steve Munroe tells me at Hubud, Bali’s first coworking space. As co-founder of one of the premiere coworking spaces worldwide, he emphasizes that Hubud does more than 430 community events in 365 days. Their strength is their community. It appears to me (after visiting 6 coworking spaces in as many countries but never having lived or spent significant time in one) that the real secret is how intensely members of these communities interact. They want to have access to interesting people with unique perspectives. Nerds. It’s people getting together and nerding-out about their life’s passions and being willing to share without expectation of reciprocal gain. They share because they want to. It’s hedonistic. They are indulging in each other’s insightful perspective for the pleasure of it – and the coworking space merely facilitates this with stimulating environments and activities.
‘You are the average of the 5 people you most associate with’
How to scale coworking? I would argue that the key is to accentuate their advantage. Compared to traditional work environments or working at home, coworking is like hitting a holistic refresh button. You can hit the beach in between focused work sessions and bump into entrepreneurs thinking about the next, next thing. A good community finds creative ways to help people nerd-out and get fresh angles on radically new ideas – in business and other aspects of life. But do coworking spaces take this far enough?
The turnover in coworking spaces is increasing and loyalty is decreasing. This reflects that nomads are indeed nomadic – they need new stimulus and clearly most coworking spaces are still falling short. Consistent WiFi, a desk, and beach access isn’t enough. Stopgap solutions are for the coworking spaces to create niche communities such as hubs for writers or designers. Simultaneously they can co-locate a mix of business types to exchange thinking. But what they really need is a systematic way to balance access to fresh thinking and effective work hours. Think peer to peer learning, synergized interest groups and flexible integration with corporate life. Yes even corporates can benefit by sending individuals/small teams on short sabbaticals or flex hours (but these corporate nomads can’t dominate the coworking culture).
The key to scale is to offer immersion in communities of fresh thinking to a wider target group, with deeper pockets, at more dispersed intervals. Perhaps KLM’s idea to allow you to chose who you sit next to on a flight is a good analogy, if you (or your company) can design who your spend time with – then you can design relevant fresh thinking and effectiveness into your work!
The future of work is social, and you can design it.
So indulge yourself. The future of coworking is about connected communities with tools for stimulation and renewal. Coworking spaces should lean on their advantage of bringing together communities with radically new perspectives. I dare to argue that they should design programs and orchestrate communities they expect will enjoy synergy. Knowing how to create bespoke work environments and communities will be their competitive advantage. But be weary, if coworking spaces attract a mainstream mindset and culture they will lose their potency.
P.s. This week two of the entrepreneurs I coached opened their creative coworking hub and community – Hub Hoi An! Congrats and good luck.