What is a coworking space? And how is it relevant to corporate?
A coworking space is where a lot of businesses come together to work on their own business but work in the same space. There is an idea around community and collaboration. Coworking spaces have traditionally been associated with tech startup, though now, with 14,000 spaces around the world, there is a space for every need, including very high end corporate.
The largest coworking space operator in the world, WeWork, is worth $16 billion, which is around the same market capitalisation as Westfield in Australia. The key difference to note is that Westfield was started in 1960 and WeWork was founded in 2010. However, we quickly note that comparing WeWork to Westfield, Lendlease or Regus is like comparing AirBnB to hotels - they're different businesses.
General consensus within the coworking industry, is that the 'coworking' concept started in 2005, based around, included WiFi, coffee and shared desks. The most important aspect about a coworking space is a good community manger and a sense of community. Otherwise, it's just a rented space - which has been around since 'office' was invented.
For a regular punter the fundamental indicator to note about about a coworking space is the offering of a 'month-to-month' membership (leasing) arrangement. This offering is important due to the fast moving nature of being a startup.
I estimate that there are around 500 coworking spaces in Australia and growing rapidly. This is not to say that it's a profitable business to be in. Largely coworking spaces are started by founders who have other businesses and a coworking space is an add-on opportunity for their other businesses. Of course there are pure coworking space operators who make it their main business. To do this you need to do it at a certain scale to be viable.
As I often get asked for advice about starting coworking spaces, I often say, "don't start a coworking space, start a community". Many people who start a space for the space's sake, quickly come up with the problem of needing to fill the space. Without a sense of community and purpose, the value proposition would not be strong enough to complete with regular shared-office or rental office models. Having said that, coworking operators of all shapes and sizes are adapting new business models (aka "pivoting" as they say in startup) to become sustainable and we can expect the coworking industry to be here for the foreseeable future.
I would say that it's a useful concept for corporates to consider as part of their innovation programs. Many large corporates like Telstra, NAB, Coles, Commonwealth Bank, Australia Post and large consulting firms run some form of innovation labs and some take up membership at coworking spaces for their staff to immerse in the startup culture.
Running a 'hackathon' at a coworking space is probably one of the most cost effective forms of problem solving technique I've seen, especially for corporates who spend hundreds of thousands on annual powwows and strategy sessions to drive innovation and change culture.
Coworking spaces are working more closely with corporates in any case, as in the future more than half of the workforce will be self employed. With the rise of advanced technology and the trend towards work flexility, people tend to freelance and consult back to corporates, often working out of coworking spaces. There is now also coworking spaces with childcare which makes an excellent bridge for return-to-work parents, either as self-employed or corporate return-to-work.
From a regional and outer suburb perspective, coworking offers a further opportunity for corporates to engage with talent who would otherwise prefer a "sea or tree change". Not to mention, by leveraging coworking spaces as an extension to the CBD office, corporates can play a role in reducing the need to travel to a central location and hence reduce traffic and congestion. In terms of regional coworking spaces, they can also act as an innovation hub to solve regional problems and become a key connection point for the broader innovation economy.
So coworking overall, is a simple concept yet it can play a key role changing the way we work, solve broad ranging problems and innovate. As I said in a recent article, the coworking industry is, "becoming an adult. Just like grunge music one time it was a niche and now it's mainstream."
You will hear more about coworking, not least through the upcoming, second edition of my book and I think that all businesses, if they have an open and collaborative approach, and are seeking innovation and entrepreneurship, would benefit from working with a coworking space in one form or another