I wrote recently about a report from a UK based incubator, which explored the perspectives of British startups and the lure of the London based tech cluster. The general gist of the study was that startups were initially enthusiastic about their London home, but became less so as cashflow became more of an issue and the high rents in the city began to bite.
Co-working spaces are a natural answer to such challenges, with companies such as Hubble providing startups with a relatively cheap and flexible base for their venture. I sense however that co-working spaces need to go beyond providing affordable office space to stop the exodus of startups highlighted in the earlier study.
Innovation hubs
The co-working movement is tapping into a wider zeitgeist around both greater resource utilization but also a more open approach to innovation. We’ve seen this manifest itself in the tremendous rise of facilities such as TechShop and GenSpace, whilst big companies have also teamed up with innovation communities virtually, such as GE and Quirky, and Samsung and Marblar.
Most of these facilities have strong partnerships with a large, corporate backer, whether it’s in the provision of intellectual property or the manufacturing muscle to turn ideas into reality.
Whilst we’ve seen the likes of SAP’s HanaHaus open its doors in recent years, but you sense there is more that can be done to provide those using co-working spaces with a clear path for growth.
Connecting the dots
One such service would be in helping to support the kind of collaborations for which co-working spaces exist. It’s tempting to leave such encounters to serendipity, but the platforms themselves have a unique perspective on just who is doing what, and who therefore may benefit from connecting to one another.
A recent report from the Rockefeller Foundation proposed just such a function, but rather than the co-working platforms acting from their helicopter perspective, the report was aimed instead at venture backers.
After all, a Wharton study from last year found that the single most useful asset that venture backers brought to the startup was their connections. This was regarded as more valuable than the case they infused into the startup.
Business acumen
The Wharton paper also identified the business acumen that venture backers can bring to a project, and I’ve written previously about the vital role ‘2nd generation’ employees at a startup can bring.
A Cornell study found that a large number of PhD graduates are keen to join startups, but perhaps not as a founder themselves.
Indeed, Robert Siegel from XSeed Capital recently told Stanford Insights that getting HR talent on board at an early stage is crucial, both to ensure the talent pipeline is strong and also that the culture is right from the start.
The co-working platforms can perhaps do more to provide access to such talent, whether it’s by building relationships with the academic world or tapping into mentoring communities.
It’s easy to look at stories suggesting that startups are struggling due to high rents and think that it’s the rent that’s the problem, when in reality the problem is more to do with cash-flow and growth.
Providing more support to startups to help them grow therefore is likely to be the best route to underlining the true value of being in a tech cluster. In this regard, I suspect there is a great deal of potential for co-working venues to play a substantial role.
I must say, I've always wondered whether these co-working spaces are all a bit over hyped. I mean there has been so much written about the disruption caused by open plan working, so the assumption must be that enough collaboration occurs to offset that and make things beneficial. I do wonder how realistic that assumption really is.
I always used to like the social aspect of office life so if I ever freelanced I'd imagine I would use something like this all the time.
I work in multiple shared and collaborative spaces, and will admit that some are a little noisy but nothing a good pair of headphones does not solve. However, on the flip side some are so quiet that i worried about getting on the phone incase i disturbed anyone 🙂 haha. I think there is a place for the private office, but in the early phases of a business when you are hustling, looking for inspiration, ideas and people that can help you out I think these spaces are the perfect eco-system for startup development.
Nick is right in that the gains far outweigh the negatives, as the collaboration and exposure to ideas and connections is immense. I think this is a solid idea from Adi, yes these shared workspaces could play a far bigger role and i don't doubt that as the industry matures (bear in mind it is still really in its infancy) layers of services, mentors and relevant products will emerge to make them more productive and ultimately more beneficial for startups. Here comes phase 2 of the Collaborative work space. 🙂
But in short I would not replace the fun, fast and inspired world of collaborative spaces, i feel I have achieved more here than i ever would have on my own in my sitting room. Just watching people build amazing things is motivation enough.
Whats wrong working at home and in cafes? "Co-working" sounds like a desperate form of room sharing.
If you are so lonely you are considering co-working, please seek counselling. No-one should subject themselves to cubicle/open plan office working unless they have to!
Much as I like working from home, it's great to have a place to go to for work. It helps to separate work from life, and that's so important.
That's certainly very true Imogen.
Sitting here in an armchair with a laptop in my, erm, lap. No phones ringing, no office bore droning on, no politics, no eyeing the clock and waiting for the time when I can escape. My commute to work takes all of two seconds. Yes, I really want to be in an office again. Thanks but no thanks.
If it is merely replicating what employed people 'enjoy' in an office then I quite agree with you Stan. I think co-working spaces need to offer much more than that. We're seeing it happen in other fields so it will be interesting to see how more 'knowledge' workspaces evolve in the coming years.
Coworking spaces aren't just places to work, they are also places for independent workers to socialize and organize. This is feeding another important development: the growth of the freelancers' rights movement.
I pay for a co-working space and thus far am finding them really useful. I have the feeling I'm leaving home and going to work, and then finishing work and going home. That distinction is really important for me. Since starting in this co-working space I've made a few friends but even more importantly, I've gained new clients through the other freelancers.
I worked from home for years and it takes a lot of self-discipline. Since having children, having a separate office environment outside the home has become a necessity rather than a luxury.
I've tried a couple out with mixed results. One was tech focused, and most of the people there seemed wedded to their headphones with no social aspect at all. It kind of defeated the point of being there imo. Another one was much more creative focused and there was a tremendous level of sniping going on about creative theft lol
I'm sure there are decent ones out there, but I have yet to really find one.
Creative spaces are always pretty rewarding imo.
I'd love to agree with you about co-working spaces, and there does appear to be some benefit to them, but whenever I've explored ones in my area, the costs have always been super high. Or should I say, far higher than the perceived value I would derive from using them.
I often wonder how valuable clustered spaces actually are for productivity, which is after all what most start-ups are craving as they seek to grow.
Interesting post. It's particularly insightful the comment about the most valuable asset investors bring is their address book. That is useful to know.
I'm glad you found it useful Vijay, thanks for your comment.
The co-working environment is definitely a win for many entrepreneurs.