There is so much to consider when you start your own business such as, where do you base yourself? Hiring private office space for a new start up or freelancer is likely to break the budget. The solution: coworking spaces. A coworking space is an office environment used by multiple businesses and freelancers who rent and share desk space. Co-workers benefit by gaining an official office location and sharing office resources (e.g. Internet).
However while there is a clear economic benefit, there are even greater business opportunities within these collaborative spaces. An office environment filled by professionals with different areas of expertise means knowledge is shared between businesses and freelancers. This advantage is felt firstly by the co-workers but most importantly this passes on to any client.
Once you scratch the surface, you discover strong communities within coworking spaces who have teamed together to offer greater services to their clients. We recently spoke to three coworking spaces in Europe to gain insight into the motivation which led to many people building and joining such spaces and the value created today.
Coworking Spaces Solve Employment Issues Created by Recession
According to Bloomberg Review, the recent global recession has been the worst since the Great Depression, and the “lost generation” who are unemployed due to this recession (50% in Spain, nearly 60% in Greece), are unlikely to recover from the lost opportunities. Germany and France were criticized for proposing business lending, but let’s face it – what better option is there than encouraging people to start their own business? With small business loans (where needed) and coworking spaces, more people have an opportunity to create an income and contribute to the economy.
“The GEC (Global Economic Crisis) had just struck and we knew a lot of people were going to be affected by the recession. We started the business to provide a place for such people going out on their own,” says Araceli Camargo of The Cube, London’s first-ever coworking space. “It was an economic response and we wanted to offer a space to people who were going to be affected by the recession.”
Three years ago over in Barcelona, Spain, a new coworking space, 021 Studio, was launched due to similar economic circumstances. Although coworking was practically unheard of at the time with just a handful of such spaces in the Spanish city, the 021 Studio founders saw an opportunity.
“European multinational companies began to implement delocalized jobs as a form of work. Many such people preferred to keep their work separate from home. They began to look for alternative spaces where they could work and be in the company of other professionals.” explains Julián Figliolo.
Oliver Strunk, of RavalCo also in Barcelona, initially started his coworking space to create income from his property. At the time he assessed that the economic risk of renting to multiple parties was lower than letting it to one individual. It was also a great offer for the new co-workers themselves. “For freelancers and small startups there’s a direct economic benefit – costs are not so high, administration is less and they meet other people interested in collaboration opportunities.” An idea that was again born out of an economic response resulted in a thriving coworking space in a city that is on the verge of having the highest coworking density in the world!
The Swarming Effect & Comfort Effect of Coworking Spaces
The environment in which we work is often crucial to our success, and for many, a coworking space fosters the right professional working space in which to wheel and deal.
“In this economy most of our community are looking to start a business which supports them rather than a larger company. They are creating jobs for themselves. A coworking space is cheaper than your own office so it makes sense,” explains Araceli, “Through herding, people find it comforting to come and work in a shared environment. It mimics an organization and creates that feeling of going to an office with people, colleagues, etc.”
“People want to move around and renting a fixed space would be an impediment. It is also a question of economics, but I think in the first place people want to connect to other people, share a coffee and chat a little bit,” adds Oliver of RavalCo.
People are social beings and a co-working space creates a space to network with like-minded people. At 021 Studio, Julián describes the community of co-workers as like a “family” and not just a group of people sharing desks. “We work side-by-side but also we get together to talk, share a coffee, and have lunch together.”
Benefits of Coworking Spaces for Freelancers and Startups
While the initial motivation behind coworking spaces may seem like basic economics and a place to mingle, there are great business opportunities fuelled by an abundance of a powerful resource: knowledge. By working in a coworking space, you gain an immediate community from which you learn from and which helps you generate economy.
Julián of 021 Studio agrees that the real benefit is not about socializing. All members at 021 Studio are individual freelancers, sole-traders, or separate companies and the founders saw a great opportunity in the variety of skills and professions present at 021 Studio. “By coming together and combining our experience and skills, we now work as one and can offer services to our clients that would not have been possible for us to do as individuals on our own.
Freelancers and startups at a coworking space are given access to experts that they would not easily meet when working at home or elsewhere. This enables professionals to work closely together, yet independently, and share expert knowledge which ultimately benefits the client.
“At 021 we have co-workers who are designers, editors, video editors, marketing experts, translators and more. By consulting with each other, we can resolve any problems and address any doubts concerning specialist matters. In most cases, there is no need for us to use external services, but rather just the great variety of skills around us at the office. This benefits all parties.”
Araceli of The Cube explains how since their launch perceptions of coworking spaces have changed, benefiting both members and clients: “Previously there was a stigma attached to being a sole trader and our members were hesitant to invite their clients to the space. Entrepreneurship was thought to be a passing thing, now it’s an industry supported by all of today’s startups. The stigma no longer exists and people, including our clients, understand the culture – they get it now.”
In fact, the culture is so widely accepted now that The Cube uses its coworking identity to its advantage. In 2013 they launched “Cube Agency” where multiple members with a different areas of expertise collaborate together, pitch to clients, and complete larger projects which might have otherwise not been possible. “If your client knows that you are part of co-working space and can benefit from other co-workers there, then there is a benefit.”
A unique offering by The Cube in London is their workshops for members where co-workers get together, collaborate, share, and learn from each other. “Our events and collectives give our members a sounding board to discuss business and ideas. We also invite industry experts and entrepreneurs to attend and share their experience with our members,” explains Araceli.
By collaborating together, coworking members have found a way to be stronger than the sum of their parts and provide a greater service to their clients.
The Role of Technology in Coworking Spaces
Just over 5 years ago, coworking spaces were non-existent in London. But with the rise of startup companies and widespread freelancing in conjunction with a time of rapid technological developments over recent years, the traditional office and work environment has been reinvented. When asked how coworking spaces and their communities have evolved over recent years Araceli comments on the role technology has played: “Technology is very different nowadays,” says Araceli. “When we first launched, we had to teach people how to make calls from their laptops, but today such things are common knowledge.”
This is one area which has definitely experienced drastic change. Businesses of all shapes and sizes are now very familiar with collaborating online with clients or colleagues and in many companies VoIP conferencings or online meeting software plays a significant role in daily processes.
“Non-monolithic companies as well as working virtually have become far more accepted in our culture,” explains Araceli. “At the beginning, you would have to create all this smoke and mirrors to give off the impression of a large company. Now there is no longer a need for this façade. Everyone was used to face-to-face meetings, and didn’t know anything different, but that has changed dramatically.” Today it’s no problem to organize conference calls over a laptop. People don’t need a lot of space and everything can be done from their laptop over the Web.”
Today it’s common for businesses to deal with clients who are not in the same town or even country, and this is the same case for coworking spaces. Professionals in coworking spaces tend to use a variety of online solutions to customer management, invoicing, client calls via VoIP conferencing, and Mikogo for screen sharing during online meetings.
According to Julián, who uses project management tools such as Podium and Basecamp, the right technology is critical. “Technology is everything to us and we make an effort to use all the opportunities available to us in the market. Most co-workers use tools to communicate over the Web which is essential because most clients are not in town.”
The numbers speak for themselves. As technology has evolved so has coworking and online collaboration, resulting in more than 2,500 coworking spaces around the world with over 110,000 people working in one, according to DeskMag.
The Future of Coworking – Collaboration and Partnerships
According to Julián at 021 Studio there are further reasons behind the rise of coworking spaces, which have led to a permanent place for coworking today and into the future: “Coworking has flourished a lot in the short time since the recession. People found themselves with empty offices which were converted into coworking spaces. Now the concept of coworking is widespread which leads to a great deal of competition and, therefore, we must compete on services.”
“Being a member at 021 presents endless job opportunities for members. We have international and creative members, are abreast of new trends, and can apply this knowledge to the benefit of everyone including clients. From coworking, you develop a more productive way of working, new contacts and constantly new job opportunities. The concept of collaborative work is strongly emphasized and we take advantage of this rising new working model.”
And this is where the true value and benefit of coworking spaces lies – collaboration. This is what has cemented coworking spaces in the business world.
Nowadays, coworking spaces are innovation centres that offer collaboration opportunities as well as educational and social benefits at cost-effective rates, while helping the local community. According to Lawton Ursrey, a Forbes contributor, we are moving towards a community that will impact the local economy. By looking at the smaller, local picture, we are adding to the big picture. In fact, The Cube has formed partnerships with local London enterprises, which adds to the experience for the members.
“Partnerships, such as with the London College of Communication, is the next step for coworking spaces as it places greater value on being a member,” explains Araceli. “The attraction is that this is a community rather than just a random group of people. For us, this is also why we vet people because it will become important to clients to know that you are part of The Cube.”
Considering economic conditions and the explosion of technology and online collaboration services in recent years, the rise of coworking spaces makes perfect sense. A shared office space brings like-minded people together who can benefit from each other’s experience and expertise, network and share contacts, as well as even collaborate on projects together. Most importantly, it’s the clients of coworking spaces which benefit the greatest from this.
Have you had experience with co-working spaces, and if not, would you consider it? Please share your thoughts with us in comments below.