What is Coworking?
Coworking is an arrangement in which workers of different sectors/companies share an office space. It allows cost savings and convenience through the use of common infrastructure, such as receptionist and custodial services, equipment, utilities, parcel acceptance services and in some cases refreshments.
The days where coworking spaces were occupied only by freelancers and start-ups are far behind us, large enterprises and MNCs have started selecting coworking spaces over private offices in view of the agility and flexibility offered by shared workspace providers.
History of Coworking Culture
The term coworking seems to be a regular part of the life for a freelancer, someone who works remotely, or even start-ups today, but this has not always been the case.
The concept of coworking was first introduced as a workspace office culture in the year 2005 by Brad Neuberg, a Software Engineer from San Francisco.
Similar ideas to that of Neuberg’s official coworking space had been percolating over the years. In 1995, C-Base in Berlin was the first hackerspaces around the world and in 1999, “42west24” in New York City was started with flexible desks for teams and individuals. Both C-Base and 42west24 are seen as precursors to coworking spaces, but without the aspect of “community” that coworking offers.
Flexible workspace are growing in popularity among freelancers, entrepreneurs, start-ups, SMEs and MNCs looking to expand their businesses.
There were nearly 19,000 coworking spaces, around 30,000 flexible workspaces and more than 3 million co-workers recorded globally in the year 2019.
Coworking spaces are estimated to reach 26,000 by 2025, flexible workspaces are likely to be around 49,500 by 2022 and the current total of 3.1 million co-workers are forecasted to nearly double by the year 2022.
Types of Coworking Spaces:
Coworking spaces can be categorized into private offices, community-based offices, shared spaces, and of various other types. Each type of coworking space comes with its own benefits and are usually picked based on the nature of the business and requirement.
Here is a brief explanation of the types of spaces found in the coworking concept for a better understanding:
1. Private Offices :
Usually designed for a team of 4 or more. Though they may cost more than the coworking space, they can provide similar flexibility along with the privacy of a traditional office.
2. Coworking Dedicated Desk :
A desk assigned to you in a shared space with other employees from various other backgrounds and companies is termed as a dedicated desk. It provides an employee with the opportunity to enhance their skills and grow more connections.
3. Meeting Space :
Coworking space providers offer hourly, daily, and even weekly use of their well-equipped meeting rooms for client meetings, team collaboration secessions, planning meetings and more.
4. Event Space :
Corporate meetings, team building events, seminars and any other events can be hosted in the dedicated event spaces.
5. Virtual Office Space :
A virtual office is part of the flexible workspace industry that caters to the demands of evolution in the way we work today. It provides businesses with various services, a prestigious office address and the flexibility to work remotely.
Why is Coworking Space Important? And Do People prefer it?
In General terms, coworking is a community of people assembled at a neutral space to work independently or in groups on different projects, from various backgrounds.
Coworking spaces have become extremely popular in the last few years. Without a second thought, it is a great choice for start-ups and budding entrepreneurs to network and collaborate with like-minded professionals. Large companies adapt to coworking spaces to economize, network and fuel employees’ creativity.
It is not similar to a typical office workspace because the people in a coworking environment generally aren’t working for the same company. Coworking spaces usually offer the same amenities and in some cases even more than you would find in a traditional office.
A major differentiator is flexibility, a long-term lease is not a requirement in a coworking space. Basic facilities like WiFi, printers, cafeteria, and other amenities are common in every co-work space.
Coworking spaces are seeing a demand among entrepreneurs, SMEs and some large sale companies due to the below reasons:
- Community – Even in diversity, it is amazing how a community can help one another grow.
- Flexibility – Coworking space providers always have flexible terms that are more pleasing to an employer, NO LEASE, NO LONG TERM CONTRACTS, etc. are some of the reasons we see companies opting to co-work today.
- Reduced stress – The current pandemic has got almost everyone working from home. While this can be a great way of working, it can easily fall apart as well. The key to have a stress free work life balance is to work outside one’s home but still in proximity to home.
- Networking – Meeting new people in a coworking environment can be great networking that can eventually lead to new opportunities for business growth.
- Motivation level – It is highly impossible to slack off when in a room full of driven people. Energy and productive levels rise high in co-work spaces.
Coworking for Startups and Freelancers:
Whether you are an aspiring entrepreneur or an experienced freelancer, the term coworking must be familiar and relevant to you. In the early stages of one’s business, working from home or a coffee shop may seem enticing and cost-effective. But as one’s business expands, the need to have a space of your own for a bigger team, hosting client meetings, and just having a better work environment also becomes a necessity.
When renting an office, your investment is calculated based on the location, equipment, and design you choose. On the other hand, Coworking spaces are a fully equipped office choice that comes with everything you might need. It includes communication technologies, reception services, mailboxes, amenities, etc.
Collaboration and networking are some of the additional benefits of Coworking Space. While it’s possible to work remotely or from the comfort of one’s home, your business might be missing out on crucial networking that might open new doors.
Coworking Spaces for Small & Medium Businesses:
For SMEs, time is the most important asset. That is why coworking spaces are almost always ready to move in for most Small and Medium businesses.
Coworking spaces are more focused on saving money for businesses. Essentially, coworking spaces are just office spaces that businesses rent on a monthly basis, free of any complicated lease agreements and hefty lease payments. Coworking space providers offer enterprises unmatched flexibility in their use and commitment to space without tying up much-needed capital to a lease obligation.
For an SME, it is important to build and maintain a network of potential clients, contacts, and investors. Most of this can be done inside the coworking environment itself, with the likelihood of finding all three within the small space.
Coworking Spaces for Corporates:
Corporate organizations looking to grow their businesses into a new market often use coworking. They are opting to work from a professional space while avoiding the overheads due to the cost-effectiveness offered by coworking spaces rather than having a corporate office.
Large firms now have headquarters in coworking spaces and focus on growth, leaving the minutiae of setting up an office to the coworking company.
We see many corporate offices utilizing coworking spaces to add a more social and collaborative aspect to the traditional office space. It becomes natural to interact with people from other companies and sectors, this gives the larger corporations access to new businesses with new talents.
Famous brands that use Coworking Spaces:
5 successful companies that were started in coworking office spaces:
Here is a list of the top global companies that are now using coworking spaces:
Future of Coworking Spaces:
As people are choosing a more flexible lifestyle, they prioritize on collaborations and community. No longer do people look to vertical expansion but they tend to slant toward a more horizontal expansion that encourages collaboration opportunities within the community, thus paving the way for cohabitation spaces where people can engage and connect closely while simultaneously experiencing their freedom and independence.
A recent report by JLL stated that the current market penetration of flexible workspaces in total office space stands at 3% and this percentage is expected to go up to 4.2% by 2023.
Pros & Cons of Coworking Spaces
Coworking has become a global trend in today’s business world.
There are some Pros of working in a coworking environment:
- Cheap, flexible membership
- Scaling on demand
- Low-maintenance space
- Creativity and collaboration
- Events and amenities
Although coworking is quickly taking off, it is not always perfect for everyone.
Some Cons of working in a co-work space may include:
- Sacrificed Privacy
- Distracting events
- Crowds and commotion