If your business has outgrown the garage or the coffee shop, but you’re not quite ready to sign a lease for your own office space, coworking might be the solution you’ve been looking for.
Coworking has grown dramatically in the last five years among entrepreneurs and small businesses. According to Deskmag, an online magazine about coworking, more than 800 coworking spaces are operating in the United States today, nearly double the number in 2010.
These communal workplaces offer small business owners shared access to everything from WiFi and printers to business seminars and coffee. The culture is casual and collaborative. Devotees prize coworking for the way it fosters innovation, networking, and the exchange of ideas among a diverse population of entrepreneurs, remote employees, and freelancers.
“People initially come here because they need a place to work, but they stay for the community,” says Liz Elam, founder of Link Coworking in Austin, Texas.
Elam had the idea to start a coworking space before she knew what it was called. She had just left a 14-year career with a major computer firm and was tired of trying to make phone calls or find an electrical outlet in a crowded coffeehouse. But she felt isolated working at home. Elam decided to create a “grown-up” workplace for professionals, she says, with an open floor plan and an inviting atmosphere.
That was four years ago. Today, Elam is opening a third Link location in Austin and is searching for space for a fourth. She thinks one reason coworking has taken off is because mobile technology ramped up just as the economy slowed down. Suddenly, she says, a lot of people realized they needed a new way to make a living and found they had the tools to do it virtually anywhere.
The Bureau of Labor Statistics (BLS) has also found that work is decentralizing. By 2020, the BLS forecasts that about 40 percent of the American workforce will be made up of independent contractors, temps, and sole proprietors.
Bump and connect
Bill Jacobson was still working on his tech startup in 2009 when he founded Workbar, a network of coworking spaces throughout the Boston area. Like Elam, he couldn’t find the kind of place he wanted to work, so he created it. “I didn’t even know what coworking was,” Jacobson said. “I felt like I could work from lots of places, but I needed a place to meet with my team, and I wanted to be with other people.”
He was intrigued by the concept of “bump and connect,” which promotes ways to meet people outside your own company and industry.
Professional development is part of the package as well. Workbar has about 700 members representing about 300 companies. They’re divided into eight sectors, including professional services, technology, energy and environment, and life sciences. Workbar brings in speakers and events on topics specific to each sector as well as broader subjects such as raising capital. They also have social nights and book clubs, to deepen the sense of community.
Workbar hubs in Boston and Cambridge are networked with about 50 other coworking spaces throughout the metro area. Members have access once a month to work in one of the other locations. “It’s nice if you want a commute that’s farther than your kitchen table but shorter than 20 minutes,” Jacobson says.
Even though collaboration is the coworking buzzword, everyone needs their own space sometimes. Workbar follows a standard setup, with common areas, semi-private areas for head-down work, and a switchboard area to make and take calls. Meeting rooms are also available.
A diverse population
Deskmag conducts an annual survey to track coworking trends. In 2013, 53 percent of coworkers were freelancers. Entrepreneurs with employees made up the next largest group, at 14 percent.
Another large segment of coworking is remote employees. The latest survey found nine percent of respondents worked off-site for a company with five employees or fewer, and another nine percent worked for firms with six to 99 employees.
Most members of Enerspace in Palo Alto are tech startups, says founder Jamie Russo. The firm’s Chicago location is about 60 percent startup businesses, with a variety of other professionals like attorneys, real estate agents, and marketers.
So what is the benefit of sitting shoulder to shoulder with someone in a different line of work? For Russo, relationships with other small business owners are valuable because many of the issues are universal. And people like to get advice from people they trust.
“There are so many things you need to know that have nothing to do with your business, like taxes and employee benefits,” Russo says. “You can read about all those things, but it’s much more helpful to have a conversation. You want to know that the person giving you the referral has the same mindset as you.”
The Deskmag survey also found that coworkers see themselves as more productive and creative than they were in traditional settings. More than 60 percent of those surveyed reported that their measure of work improved significantly, and 90 percent said coworking made them more confident.
An affordable arrangement
One of coworking’s biggest selling points is the low overhead. Options at Workbar range from a $125 per month membership that gives access five days a month. At the top end they offer private, lockable offices for four people ranging from $1,200 to $3,000 a month. The most popular option among coworking spaces is a membership that provides 24-hour access and/or dedicated work space for about $300 to $500 a month.
Russo says coworking also allows small companies to have a presence in the center of a thriving commercial district. In downtown Chicago, for example, she’s found the minimum amount of commercial space available to lease is 4,000 square feet. That costs more than $8,000 a month, requires a five-year commitment, and doesn't include furniture, Internet, or a kitchen.
For many companies, coworking is an affordable arrangement while they find their feet. Some offer a discount to clients who sign a six- or 12-month contract. But the month-to-month model is appealing to entrepreneurs who don’t know what their needs may be down the road.
Russo says she depends on her anchor clients to meet her own rent and pay her staff. But flexibility is such a big part of the coworking culture that she knows it must be part of the model. Members are asked to give 30 days’ notice before moving on. “We provide teams with really flexible space, and if something changes, they have the ability to leave,” Russo says. “That’s the difference between having tenants and having members.”
The average stay at Enerspace is about six months, Russo says. At Workbar, Jacobson says it’s closer to one year. The company networks with a wide variety of “outer spaces” to help growing firms find the next right fit.
In Austin, Elam’s third Link location caters exclusively to teams of 10 or more members, because she was seeing a demand. “Larger groups still want a collaborative workspace,” Elam says.
Next month in Kansas City, the coworking community will ponder what’s next at the third annual Global Coworking Unconference Conference, which is run by Elam. Last year’s conference drew more than 300 attendees. And the ABC show Shark Tank has taken notice of Workbar; the show will have an open casting call in May at the Cambridge location.
The heart of coworking is community, and it appeals to a workforce that feels cut off rather than connected by technology. “I can get a super workout at home, but I belong to a gym for the motivation,” Jacobson says. “I think everybody should have some level of membership-based workspace for those kinds of benefits.”