Bringing The Cooperative Business Model To Coworking: A Q&A With Cowork Niagara’s Trevor Twining

WITH TREVOR TWINING
Trevor Twining, founder of Cowork Niagara, explains how the cooperative model helped them ensure that the idea of mutually-supported success is embedded into the community’s DNA
  • Five years ago, Trevor Twining created Niagara’s first ever coworking cooperative
  • Twining tells they did this because they wanted members to not only feel like they were involved and had a say, but to actually have a say
  • Twining explains how the one member, one vote model works and how it’s help them build a strong community

When Trevor Twining launched Cowork Niagara, he took a community first approach, meaning he built the community before launching the space. He wanted members to have a say in how the space was run and to buy-in to the community from the start.

But Twining didn’t stop there. Now president of Cowork Niagara Cooperative Inc., Twining and the founding members looked for a business model that would truly engage the members in ownership of the space. They eventually landed on the cooperative model and, in April of 2014, launched Cowork Niagara as a co-op coworking space. It remains the only English-speaking coworking co-op in Canada.

Allwork.space spoke with Twining, who is also a freelance podcast editor and producer (Disclosure: Twining co-hosts the Ouishare Radio Write Club podcast with the author), about getting community buy-in for a coworking cooperative, the one member one vote approach to running a space, and the benefits of the co-op model for coworking.

Allwork.Space: How did Cowork Niagara come about?

Trevor Twining: I started Cowork Niagara with a group of people, following the community first model. I had been to coworking spaces before and knew Niagara needed one. I started following what Alex Hillman was doing at Indy Hall and knew that’s what I wanted. I was stalking his blog and Twitter feed and digging into everything I could about the community first model.

Rather than going out and immediately building a space, I started talking to people about this idea I had, hoping to bring others on-board. When we made the decision that we were ready to open a space, we had about 20 people who were interested. Once it became time to sign on the dotted line, there were 12 of us.

Allwork.Space: How did you go from a community first project to actually creating a co-op?

When we were setting up the business, we wanted members to not only feel like they were involved and had a say, but to actually have a say. Any consumer technically has a say in how a business is run because they either buy from them or they don’t. We wanted it to be more formal than that.

We were looking at all sorts of models based on shareholders and it started to get really complicated. We were talking about all this out in the open during jellies at a local cafe. In those conversations, there was a woman I became friends with who was starting a local food co-op and she asked me if I had considered building Cowork Niagara as a co-op.

Because she was already involved in the process, she recognized that many of the values we were talking about are already the values of cooperatives. I didn’t know the first thing about cooperatives at that point. I didn’t even know regular businesses could be cooperatives—I only knew about agricultural co-ops, or credit unions, things like that. She told me about how co-ops work in Ontario.

The thing that sold us on the co-op model was that, in a typical cooperative business, which can be for-profit or not-for-profit, every member becomes an owner in the space. How that ownership is reflected is that those members elect a board of directors and that board of directors manages the company. It’s no different than any other company. If you have a corporation, even if you’re the owner of the corporation, you have to have directors. The directors might just be you as the president, then a secretary and treasurer, but you still have them. Even if you are a single person operating as a corporation, you still have that structure.

We were still going to be able to run the business how we wanted, we just now had a structure where the membership could be involved to the extent we wanted them to. We wanted to commit ourselves to them and we wanted them to be committed to us. The co-op structure was a perfect fit. If you compare this to how things would be done in a traditional corporation, there are all sorts of shares you have to issue and it becomes much more complicated. We looked at the simplicity of creating a co-op and knew it was what we wanted. Within two or three weeks, the papers were filed.

Allwork.Space: Tell me more about the Cowork Niagara model. Is it one member one vote? Is it set up as a nonprofit? What do you do as members come and go?

Yes, it’s one member, one vote. When members join the cooperative, they pay an annual membership fee. They have all the privileges of membership for as long as they pay that fee. Our memberships are separate from using the space. We have an annual membership that any independent worker in the Niagara region can maintain and they get voting rights in Cowork Niagara, the corporation. Some of those members also subscribe to using our coworking space, but that’s not the only service we provide to our members.

We set up a for-profit cooperative corporation. Our initial approach was to be one hundred percent self-sufficient. We weren’t going to ask for grants or anything like that. Setting ourselves up as a for-profit corporation prevented us from even exploring those options. In many ways that has worked out to our benefit—it was a good choice—but our thinking on that has changed a little bit over the years.

One of the things we discovered as we started connecting with our local municipality and the business services they offer is that, in many ways, we’re interconnected. I probably shouldn’t have been as insistent as being for-profit because it’s limited us in some of the things we can do. But those limits, over time, ended up being healthy for us.

In the future we can probably explore some of the things we wanted to do. For instance, there were some partnerships we could have gotten on space if we had worked with the city, where the city subsidized space if we were a nonprofit. Because we’re for-profit, we didn’t qualify for those subsidies. Because we had to figure out a solution where we didn’t have that, it made us stronger as an organization.

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Allwork.Space: What are some of the other services offered by Cowork Niagara, besides coworking space?

I think our best example of a service we built for our members is our Freelancer Lab. It’s a six-week bootcamp designed to teach people the basics of managing a freelance practice.

Allwork.Space: Do you do annual profit-sharing, or do profits go back into the space?

We’ve not been in a situation yet where we’ve had to worry about dispersing profits. There are a couple of ways that corporations—particularly cooperatives—deal with that. We have some debt we’re paying down from initial members loans, so we’re taking care of that first.

This year there’s a surplus but we’re holding it in reserve because we still have irregular cash flow from time to time. In another year or two, based on our current projections, we’re going to be able to issue our first dividends. In order to do that, there’s a concept in cooperatives called a patronage return. Essentially, we determine the share everybody gets. Everybody has one vote but that doesn’t mean that an equal share compensates everybody equitably. Everyone’s treated equally, but we’re talking about the equity of the corporation.

With a patronage return, you take the lump sum amount and calculate what each person contributes, in terms of percentage, to the overall revenue. I’m a dedicated desk subscriber, so I pay considerably more than a hot desk subscriber, so I’m entitled to a larger patronage return.

There’s a calculation that everyone sees. Our board of directors determines how much we’re giving back and we present that at our annual general meeting then our membership votes on that, or amends that in some way, but they have a say in how that’s dispersed. And because they have a say in how the board of directors is elected, if they decide that, as president, I’m not pulling my weight, they can all get together and toss me out. It’s a democratic process. If I continue to do well, I can be elected again. But we have term limits, which we set up in our bylaws. We have three term limits of two years. We’re now in our fourth year so I have one more term I can run, then my terms are done.

Allwork.Space: What is the biggest benefit of the cooperative model for coworking?

The biggest benefit is that, when you have a coworking space that’s a cooperative, the members aren’t just there because the space is nice or they believe in the space. They’ve actually bought in and invested—they’re part owner of the space. They’re going to succeed if you succeed. This happens in less formal ways in many other spaces that are run well. We wanted to make sure the whole idea of mutually-supported success was embedded right into our DNA. Because it’s there, it manifests in so many other ways. When you see people interacting and supporting each other, they’re doing it because they find enjoyment in it and they want to help other people, and they’re also doing it because they know that it’s helping the business, which is helping them.

Allwork.Space: What is the biggest challenge of the coworking cooperative model?

The biggest challenge—and this happens with many cooperatives—is that there is a disproportionate amount of effort amongst members so not every member contributes equally to the overall success of the organization. We see this in spaces everywhere and co-ops everywhere, so it’s not something particular to coworking co-ops, but there is a small number of people who do the majority of the work.

How we’re handling, or mitigating, that is by finding new and different ways of taking that concept of patronage and applying it to the work, as well. That way, people who do the work get credit in some other way, whether it’s through reduced subscription fees or free ancillary services. We’re basically looking at ways to recognize those who do extra work. We want to make sure people don’t resent doing extra work because they’re not receiving compensation. Nothing’s worse for morale than someone putting in a huge amount of work and everybody getting the same compensation.

Allwork.Space: If there’s a space operator thinking of creating a coworking co-operative, or converting an existing space to a co-operative, how would you advise them? What’s a good first step?

The very first step I would take is to find your local cooperative association. Every jurisdiction that has legislation around cooperatives has a cooperative association of some kind. Make the connection with the association and let them know you’re interested in creating a cooperative. Work with them and get them involved early in the process to help guide you.

Setting up a cooperative is similar to many traditional corporations, but it’s not the same—there are factors to consider. One of the big challenges we had early on was finding a lawyer who understood cooperative corporations because the paperwork is different. Cooperative associations already have all those resources so you don’t have to reinvent the wheel.

You’ll also find that you’ll be brought into the family of all the other cooperative businesses operating in your area—many of whom you probably already know as businesses but didn’t know they were cooperatives. In making those connections, you start to see how rich and diverse those ecosystems are. Then you start to participate in them. Cooperatives have a number of values that are expressed in various principles. The one I love the most is principle six: cooperatives will cooperate with other cooperatives. So you have a preference for working with cooperatives, within other cooperatives. This creates all sorts of interesting ways to express partnerships and shared services.

Because people get the idea of cooperation, it reduces the amount of friction in setting these things up initially and it allows some really interesting things to happen in a very short period of time. All of that comes from the initial contact you make with your cooperative association.

Allwork.Space: Thanks, Trevor. Is there anything you’d like to add?

This is a lot of work. Anyone who runs a coworking space knows that getting everyone on the same page is a lot like herding cats. Running a cooperative is no different, but there are long-term rewards. The work upfront has big benefits later on. It’s invest now, reward later, which not everybody has the patience for. We’re heading into year five, we’re stronger than ever, and a lot of that we owe to the cooperative model.