Coworking spaces today are ubiquitous, but in 2002, the year one of the first official coworking spaces launched in Vienna- and then in San Francisco in 2005- not so much. The idea of corralling freelancers, contractors, entrepreneurs, remote workers and small teams into a single space was inspired by “hackerspaces” that was opened in 1995 in Berlin, Germany, and led to workspaces-as-a-service in the early 2000’s. The biggest difference between “coworking” (the name “coworking” was coined in 1999) and its predecessors is the effort that owners/operators put toward creating a community by offering business services, networking opportunities and social events to their members.

Number of coworking offices in 2008: about 160.

Number of coworking offices by the end of 2018: more than 18,900.

Global Coworking Survey; Statista.com

The popularity of coworking has spawned its own universe of “parasitic” businesses, like subscription platforms that allow members to hop from one coworking spot to another anywhere in the world; and developers in San Francisco are building out an app that’s like Airbnb for coworking. Instead of transforming your apartment into a hotel room, Codi users can turn their living room into a coworking office. Coworking is so popular in New Zealand that in 2017, the country declared its first National Coworking Day on May 22.

Following the Great Recession, economists began tracking investments in coworking office spaces and determined they’re among the “few bright spots in the office market during the economic recovery,” according to an article published last year in the Wall Street Journal. These business plans have become so popular with investors that they’re one of the most valuable startup categories.

One recent large-scale body of research on the topic of coworking, titled Coworking Spaces: Working Alone, Together, and published by University of North Carolina’s Kenan Institute, asserts that for start-ups, a coworking space membership can increase the chances of the company succeeding. Being part of a professional community provides businesses and remote workers with opportunities for networking, developing strong professional connections and social support. Members tend to have better problem-solving outcomes when they work in these motivating and energizing environments. “If you don’t know how to do this or you don’t know how to do that, there’s somebody around here who has an idea and people are super generous with their time. It’s truly a community,” according to a coworker interviewed for the “Coworking Spaces” article.

All of the advantages outlined in the Kenan Institute’s research are framed by a professional culture that most members work in or adjacent to. The key takeaway is that coworkers share an office space with other dynamic, driven professionals who encourage one another to strive for success. While it’s pretty common to find many mentor-mentee relationships among these communities, another advantage that is unique to coworking communities is the diversity. Even networking events that aim to attract various audiences struggle with this, but coworking spaces are typically as inclusive as the city in which they’re located.

One of the biggest surprises to emerge from research on coworking communities is who benefits from this flexible business model the most. Early on, as the gig economy was in full swing, it made sense to market aggressively to remote workers, however the desire for affordable office space was also growing for small teams and startups. You wouldn’t think a team of workers are socially isolated since they have have a built-in community of coworkers to socialize with and bounce ideas off of. Because these coworkers are all working toward the same goal there’s an expectation that their enthusiasm and motivation are built in. When compared to the cost and square-footage of a private office, a coworking membership for a small team can be a lot less expensive.

The survey data did reveal something interesting- according to Travis Howell, the author of “Coworking Spaces, “Teams actually benefit more from the [coworking] community than individuals”, the community and office amenities provide young companies with an air of legitimacy. “For example, when companies host potential clients, investors, and hold recruitment interviews, they are able to hold these meetings in a conference room in a professional setting, rather than a home office or a coffee shop.” Howell interviewed dozens of startup workers and found that without the perks and ambiance of a fully furnished office space and availability of conference rooms, the growth potential for startup businesses would have been extraordinarily constrained. There’s nothing impressive about meeting potential investors or recruits at Starbucks -- or worse, a team member’s living room.  

What about you? Are you a freelancer, contractor, or do you work for a large corporation? What do you like best about coworking?

Preliminary findings suggest that the primary reason that people choose to work in a coworking space is not for the space itself, but rather for the community within the space.

Coworking Spaces: Not Just For Remote Workers Anymore

Written by Riki Markowitz