One of the Midwest’s first coworking communities doubles its downtown Minneapolis location to serve corporate and small business members scaling up.
COCO established its first facility in St. Paul in 2010 and a year later opened its flagship in the historic Grain Exchange in downtown Minneapolis. Since then partners Kyle Coolbroth and Don Ball have taken additional space at the downtown location, added two other Minneapolis locations, acquired an operator in Chicago, and opened and closed a location in Fargo, North Dakota. Today, COCO counts more than 1,000 members at various levels, from virtual to enterprise.
This month, COCO effectively opened another location when it added another 15,000 square feet to the downtown location, doubling its space. We spoke with Coolbroth about COCO’s early days, its changing membership, its business model, and how its growth has paralleled the change in coworking populations.
COCO is a space where members can “build your venture and explore new ideas in the company of other creators, under the theory that ideas and innovation flow freely when great minds pursue their passions around fellow creative thinkers.
It is a philosophy and model they have remained true to as membership has grown: focusing less on real estate and more on building a collaborative environment, robust community and supplying services and spaces that support the growth of businesses of all sizes. For example, the downtown location is one of nine Google partners in North America and offers additional programs sponsored by Google for Entrepreneurs, as well as fellowships, events and educational programs.
Supporting Growing Member Companies Who Don’t Want to Leave
“It did start off early with freelancers and independents,” said Coolbroth of COCO’s early days. “But it very quickly moved into small businesses.
“COCO has been a destination for growing businesses. As their businesses have grown, they don’t want to leave. Almost all our people want to stick around.”
Soon larger companies followed, using the space for off-site retreats and similar opportunities to get away from the office and get work done. Now, enterprises makes up a large proportion of COCO’s membership, and the co-founders saw a need for additional space types.
At the same time, to deliver on its promise to support the growing ecosystem within the successful destination that was the Grain Exchange, founders needed to free up expansion space that allowed members to grow without having to relocate.
An Evolution of Space Types to Serve an Evolving Membership
“When we first started we did not have any enclosed spaces. Other than meeting rooms, everything was open,” Coolbroth recalled. This included COCO’s innovative “campsites,” semi-private group workspaces with only three walls designed to provide dedicated, separated workspaces.
Campsites grew out of an early realization “that people wanted a dedicated place to go to where they could retreat back to do their work,” Coolbroth explained. At the same time, “they wanted to be social or outwardly facing too.”
While some members preferred the openness and energy a campsite delivered, “it wasn’t until we got to the Grain Exchange that we started to discover that some of our growing companies had compliance requirements,” he said.
“If you’re in healthcare, finance, or any of those types of industries that have regulatory requirements, you need the ability to lock the doors.”
“We also discovered that when companies grew, or were enterprise users, they needed to be able to retreat to a private area for a certain conversations and kinds of meetings. They needed the ability to keep stuff up on the walls. We can’t really do that just in a wide open collaborative space,” he noted.
“That’s when we started adding private offices and suites. Teams of four to 20 people were the target,” said Coolbroth.
Over time, COCO expanded to the building’s third floor and part of the fourth. In August, they took over the entire fourth floor. Providing enclosed space was a driver, but not the only one.
“I’ve always wanted to get that last portion of the building, because there are some unique aspects of it,” said Coolbroth, an architect by training. “You go from the trading floor, you cross the private skyway, and you go into this new, kind of like a separate building, but still within the building complex. It has allowed us to experiment and to continue to advance our design too.”
Expanding the space in the current location provided extra flexibility for other uses. Some of existing offices on the trading floor will be converted to event space according to Laurie Healy, COCO director of marketing and communications.
Another driver, according to Healy, was to attract and retain talent, particularly millennials who prefer a downtown location. “We have companies in North Minnesota who establish remote offices here for talent acquisition.”
The new fourth floor spaces will be comprised of a combination of campsites, dedicated single desks, and suites for private offices. Varied spaces fit teams of four to 20 in configurations to support today’s collaborative workflow.
Early indicators show the strategy on target, with half of the space pre-sold by the August opening, and Coolbroth expected to fill to capacity within 60 days. Members are “a combination of current members who are expanding and new members that have come on board.”
Future Plans | Commitment to Growing Businesses, Local Economy
Future expansion plans will be driven by how COCO feels it can best serve its members, which could encompass both additional locations and services.
“While we have growth dreams and opportunities, we’re also extraordinarily dedicated to the Minneapolis/St. Paul community and area,” said Coolbroth. “We want to continue to build and help this ecosystem expand.”
“We’re not out seeking capital at this point and time, so we’re growing ourselves a little organically. We’ll continue to look for locations, both within and outside of the Twin Cities.”
“We also are looking to do more for our membership: bringing more convenience to them, bringing more content and education that they want and need.”
“Our membership – from enterprise to freelance — is looking to become more productive,” Coolbroth related.
“We’ve taken away the risk of a lease, the headache of buying and designing furniture, setting up networks and brewing coffee. We’ll continue to work to take away those speed bumps out of businesses’ way. So, anything that is not core to their productivity and what they’re trying to accomplish are things we’ll start to look at.”
And that applies to the spectrum of membership.
“The gap between what enterprise wants and needs is narrowing with that of small business and entrepreneurs. Technology is the great equalizer,” he said.
“We used to think what an enterprise needed and wanted was different than what entrepreneurs and small businesses wanted. That is converging rapidly. We’re all rushing to the same space, physically and metaphysically.”
People. Who Need People. Are the Luckiest People
Interaction between the startups and enterprises that coworking spaces can foster is what nurtures the ecosystem.
“Enterprises can no longer sequester themselves from the rest of the world. I think entrepreneurs and startups are building solutions that enterprises need,” Coolbroth noted.
“What enterprises are really good at is scaling things. And normalizing them.”
“What they’re not always good at is coming up with those new ideas. There’s a conflict within their cultures and that gets harder and harder.”
“So, there’s this natural convergence happening, along with the demographic changes. As a result, people who want to do that kind of work are showing up, and they’re showing up in coworking. They’re looking for the connective tissue.”
“We’re always mindful of having a good mix of the individual, the freelancer, and the larger teams. We think that having both within the space is what makes it magic. “
“I think there are a lot of pieces,” Coolbroth said, elaborating on COCO’s secret sauce. “The semi private, fully private, and then that wide open collaborative spaces, how we mix that and balance that. The membership. The education, the learning opportunities, the social events we do. I think another part of what we’ve done well that’s different than many of our peers is we’ve made each space unique.”
“One thing we’ve learned over time is that what people really are buying when they become a member is not real estate; they’re not really buying a desk or chair. What they’re ultimately buying is belonging.
“Today you don’t have to convince anybody what coworking is or why it’s real. I think the challenges that lay ahead: how do you build a truly remarkable experience that continues?”