Coworking is rocking the alternative workspace industry. The trend is spreading like wildfire, yet all coworking office space is not created equal – and not all coworking outfits survive their first year. And even those that do survive aren’t always making a profit.
According to the Global Coworking Survey, only 40 percent of coworking facilities are profitable. But that’s not altogether surprising considering how many start-ups there are in the business. The survey also shows that 72 percent of coworking facilities are profitable after two years in operation. And if the facility is privately run that percentage is even higher at 87 percent.
Still, coworking hopefuls continue to launch new facilities from coast to coast. We caught up with Jim Long, director of Herman Miller Creative Office, a firm that provides designs, technologies and strategic services to help people do great things and organizations perform their best, to get his take on why the coworking trend is spreading so quickly and why some survive and thrive while others fail.
OfficingToday: Why is the coworking trend spreading so quickly?
Jim Long: There is a complex combination of factors igniting the coworking trend: economic recession, unemployment, under-performing real estate and entrepreneurial ambition. These factors are fueled by information and new communication tools, which make work possible in a variety of settings.
OfficingToday: What do you see as the biggest benefits of the coworking model?
Jim Long: For commercial property owners and operators, coworking provides another category of use for their properties. For coworking business operators, it provides an opportunity to grow a business by satisfying the unmet needs of an emerging market. For coworkers, it provides connections, a comfortable and well-equipped space, a community, and an environment conducive to work and collaboration. Co-creation, of course, is one of the most valuable outcomes of the coworking arrangement.
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OfficingToday: What causes some coworking facilities to thrive and expand and others to fail?
Jim Long: Coworking facilities thrive when they are run by good community management that is in close touch with the needs of the co-workers. The community manager (a role borrowed from the online world), helps foster feelings of belonging and helps members to build relationships for personal and professional growth.
OfficingToday: Do you think the coworking model itself will evolve?
Jim Long: The coworking model itself has already evolved and will continue to do so. As collaborative environments proliferate, coworking spaces will continue to differentiate themselves based on varying worker needs. Technology support for collaborative work behaviors will be increasingly imperative to success.
Come back tomorrow for part two of this article, where Long discusses mobile workers, the future of coworking and the future of work.