How Coworking Has Brought The Serviced Office Industry Full Circle

Published on September 19, 2018 - By Cecilia Amador de San José

• Looking at coworking today, it’s fair to say that although history doesn’t repeat itself, it does rhyme.
• The concept of “co-working”, people working alone, together, first appeared in the 20th century.
• Howard Shaw, an industry pioneer, shares why he believes coworking has brought the serviced office industry full circle; from the desk space of the 40s and 50s, to the 60s executive suites, to today’s coworking spaces.

Some argue that history tends to repeat itself. Mark Twain didn’t exactly believe this. Instead he argued that history often rhymes. When it comes to the flexible workspace industry, the latter is the case, or so thinks Howard Shaw, son of Ivan Shaw, the man who founded the first serviced office company back in 1961.

The concept of people working alone, together is not new. It’s been in place since since the early 20th century when artists and writers used to gather in one space to work on personal projects.

Later on, in the 1940s and 1950s, the concept gathered some strength when professionals looked for a location where they could meet and represent others in different cities. At the time, the only option was a large room with multiple desks; some of these locations offered secretarial services as well.

Speaking with Allwork.Space via the phone, Shaw believes that modern day coworking is an improved version of the 40s-50s desk space concept. “It’s basically desk space coming back. It’s coming full circle,” he said.

Howard Shaw was an industry pioneer. His father founded New York Offices, the first serviced office company, in 1961 in New York City.

New York Offices catered mainly to the corporate clients and Shaw shares that the company provided a lot in terms of services for operations and everything was charged on a per use basis.

“The company  was very successful in New York, so we decided to open more locations. We started with one in Atlanta and then Chicago. The national expansion is what drove us to change our name to OmniOffices; we needed a name that would represent our brand regardless of the city we were in.”

Around the time OmniOffices began its expansion, executive suites had already become a known way to make business. OmniOffices was able to stand out from its competitors because it was the only company at the time that had multiple city locations.

“Most executive suites would focus only in one city. OmniOffices, on the other hand, had a nationwide network; this is what appealed to large companies the most. We had the ability to support them in several cities.”

This is similar to what is starting to happen today with coworking. Corporate coworking has fully taken off, with research predicting that 30% of corporate portfolios will comprise flexible workspaces by 2030. Workspace brands that are attracting these types of corporate clients are those that have a national or international presence, like WeWork, Industrious, Serendipity Labs, and Convene.

And just as coworking today was mostly powered by the tech industry, executive suites in the 60s were powered by the computer industry, which was nascent at the time.

“One of the things that contributed to the success of executive suites was technology. Back in the 60s, the cost of equipment was very expensive, like video conferencing equipment. Executive suites alleviated much of that cost for companies back in the day.”

OmniOffices offered services similar to the ones coworking offers today. It also had a hospitality approach.

“We offered everything a corporate office needed to run smoothly: secretaries, phone, meeting rooms, conference rooms, and virtual office services. We even had an in house travel agency for our clients, where we would book their travel itineraries.”

OmniOffices eventually reached 24 locations across 24 major cities. The company was gearing up for international expansion in Europe when it was bought by Carr America, a real estate company, sometime in the mid 90s. The locations were later acquired by Regus.

“International expansion was crucial for the company’s survival,” Shaw commented.

History does seem to rhyme.

While most of the coworking industry is made up of small, independent operators, only 40% of them are profitable. It’s brands with an extensive footprint the ones that are being successful today and the ones that are attracting tomorrow’s clients.

And while the concept of desk space started out as an open, shared area; executive suites brought to popularity the private office. Coworking started out as purely open space, however, just as professionals back in the 60s and 70s wanted their own desk and space, coworking members today also value their privacy. This has led coworking spaces to adopt a more executive suite feel…albeit improved and more transparent.