[Long Read] Key Takeaways From Coworking Europe 2019

Coworking Europe took place in November, 2019.
The three-day event covered a wide range of topics, from market dynamics and changing corporate needs to running coworking spaces in the cloud and rural areas.
The future holds ample room for industry growth and a shift in the landlord-tenant relationship.

Each year, Coworking Europe attracts hundreds of people from around the world who are interested or actively participating in the flexible workspace industry to share and learn from one another.

I had the pleasure of attending this year’s Coworking Europe 2019 conference in Warsaw, Poland.

The three-day conference was full of numerous speakers and talks, an unconference, and a gathering each evening that brought attendees together to socialize and network.

I met countless people and learned a lot. Here are some highlights.

Day 1

Poland’s Market Dynamics

As a market, Poland’s coworking and shared workspace industry has been exploding. Three years ago, 80% of what is currently in the market as available flexible space wasn’t there. Warsaw has also grown so large that it has become a Top 10 Market with the likes of Beijing, Central London, Amsterdam, and Barcelona.

And yet, only about 12% of people in Poland know what coworking is. Even though 90% of freelancers know what coworking is, only 6% of them actually use the service.

The biggest reason for this disparity is that many freelancers still believe coworking is too expensive, especially if they compare it to working from home or a coffee shop. Financial instability of freelancers is also a barrier of entry for coworking spaces and many freelancers are concerned about their work/life balance.

Europe Market Dynamics

Across Europe, flexible office space, coworking, serviced offices, and managed offices, are still a relatively small part of the real estate market. The market penetration for UK is 7%, 1 – 3 % for Canada and the US, and 2 – 5% across other regions.

Eastern Europe, for its part, has experienced the highest level of growth by almost 150% through a dramatic increase in startups. This has also attracted larger organizations.

What does the future hold?

According to James Rankin from the Instant Group, the flexible workspace industry will continue to have a significant impact on CRE.

Flexible office space supply and demand will continue to grow
Landlords and their business will change
There will be a struggle in selling traditional longer term leases

Rankin also stated that larger organizations and enterprises are increasingly looking at flexible office space options as real options for their staff.

The Less Discussed Benefits of Flexible Office Space

On an organizational level, there are many benefits of using flexible office space, including cost savings, risk management, talent attraction and retention, wellness, and much more.

Thomas Schulz, a managing partner of AllOfficeCenters, says there are three additional benefits of flexible office space that are not being discussed often enough.

1. Value of Time

“Renting conventional office space is more expensive than it seems. Upfront costs are not just fit out, setup, IT, etc. It is about the time and opportunity lost before the lease starts”

2. Value of Flexibility (agility and scalability)

Companies don’t want to accept the limitations of conventional office space. Understanding the future location, space and people needs 10 years from now is incredibly challenging in an ever faster changing world.

3. Value of Corporate Image

A move to a new and better office often helps with impressing clients and existing or future employees. 91% of organizations using flexible workspace reported that recruitment was quicker and easier.

What are modern members looking for in a space?

Flexible workspace members are searching for amenities and activities that contribute both to their personal and professional lives. Some of these include yoga, free food or catering, access gyms, and networking or learning events.

Many workspaces are doing the administration and basics well, however, these activities, special events, a vibrant culture, and workspace design that caters to different types of people and types of work are the most important things that attract, engage, and retain new members.

Designing Space for More Effective Work

Kasja Wojner, the Program Manager of Brain Embassy says that in their workspace they “didn’t want to have coworking with just open coworking and an aisle of private offices.”

She and her team wanted to create areas within their workspace for collaboration, meetings, gatherings, focused time, and much more. The hope was to make people more effective by providing room for different types of people to do different types of work.

If you want to learn more about space dynamics and helping people work better through space design, scroll down to Day 3 for one of my favorite talks of the week.

Can coworking or flexible office options be run in the cloud?

The feelings were mixed, but the general consensus was that coworking was first and foremost a hospitality business.

While some of the service elements of a building or workspace can be automated and made better through new tools, software, and personalized approaches that are still being developed, there is still a distinctly human element to providing a better service that helps to nurture a thriving community.

“Automation should be for reducing costs, but not experience.”

Speaking about technology, there was significant concern of the challenges of IT, security, and privacy in flexible workspaces. For the next phase of growth in the market, there is no room for error in flawed systems that open up someone’s data and personal information to other members and the outside world.

How to Make Spaces more Attractive for Corporate Clients

A healthy space is filled with all types of workers and organizations.

These larger and more corporate groups have different needs and are largely an untapped market for many flexible workspace operators. To attract large enterprises to their space, operators should focus on the following:

Guide them through a discovery phase of what they need from the space.
Make it easy and possible for them to scale up or down with your workspace.
Be able to provide additional requirements in IT, security, privacy, etc.
Provide different conference rooms for different numbers of people.
Enable the ability to transform a space, like allowing them to incorporate their company branding and image into their workspace.

Cultural Impact of Larger Teams

One concern about welcoming larger clients into a flexible workspace is the culture overlap and changes that occur between different (especially larger) organizations and the rest of the workspace’s members

To tackle this issue, operators should consider the following:

Make sure people can brand their space and keep those brands inside their space. When they are in common spaces, they become part of the community as coworkers across organizations.

Revenue Diversification

For workspace operators looking to drive more revenue, here are some options:

Organize and host commercial events; 50% of the revenue of one of the attending spaces was generated by events.
Work with other people and organizations that want to open a space in an area you don’t plan to grow into.
Invite corporates for short term projects to work out of your space.
Provide an answering service and virtual office service.
Sell merchandise of your space.

Day 2: Unconference

During the unconference portion of the event, there were several discussions happening at the same time, so attendees had plenty to choose from.

The first topic I chose was coworking in small towns and the countryside.

Topic: How do you start a rural workspace? What are some of the challenges involved and how do you fund it?

Based on most of the discussion, the funding to open flexible workspaces in rural areas usually came from a mixture of public (municipality, EU funds, or country) and private funds (loan or personal).

The main challenges of opening a rural coworking space?

Brain drain and demographic change in rural areas
Marketing to reach a wider group of people
Tapping into the commuter market
Developing a niche vs accepting everyone
Educating companies on a new way of working

The next talk I went to was about building alliances, networks, and partnerships for growth.

Should coworking spaces “join forces” to attack common problems to create scale or to grow via partnerships?

This discussion was led by Serkan Kurtulus with Cowork7/24.

With competition high, especially in bigger cities, do spaces want to partner in order to work together or is it too competitive?

The consensus of benefits was mixed, however, there were a variety of potential partnerships and alliances.

Ideas for Partnerships and Alliances of Workspaces

City or country wide alliance that provides access to each other’s spaces
Partnerships for bulk buying power
Partnerships with universities to provide an option for students to come into the workspace
Partnerships to drive social good

One example from Serbia: A couple of spaces decided to meet and created a support type group for managers, operators, and owners so that they could exchange experiences and knowledge. They also often found ways to offer a better service to their members by doing this.

Ultimately the discussion came down to the perspective that in Europe many spaces only look at each other as competitors rather than collaborators.

Towards the end of the day, I was a part of a discussion around decentralized workspaces for corporate commuters.

How do we engage commuting employees into coworking communities?

This talk was led by Gregory von Abendroth with 1000 Satellites.

Many of the people in this discussion understood the benefits of working remotely or at least closer to home. From less commute time and a reduction of stress, to greater work-life balance, the benefits are substantial.

What I found interesting was that the greatest challenge for operators is figuring out how to engage commuting members into their workspace.

Some of the ideas shared included: increased local marketing, partnering with the local government for promotions, and working directly with brokers and real estate teams of larger organizations.

There is definitely a lot of room for smaller or rural cities, neighborhoods on the outskirts of cities, and commuter cities to provide an option for people to work closer to home.

Day 3

With this being the last day, it was naturally a little shorter. However, I did want to highlight one of my favorite discussions by Bertie van Wyk with Herman Miller aboutW wellbeing in the workplace.

This discussion speaks to me in many ways as it impacts every single person that works in an office environment.

Wellbeing in the workplace

“A workspace that helps us initiate and regulate social interaction and that takes into consideration factors like personal space, physical and psychological proximity, and territoriality, helps us feel better. And when we feel better, we work better. We explore how social ergonomics interacts with cognitive and physical ergonomics to create a full human experience at work.”

Ergonomics is about more than the body. There are physical, cognitive, and social ergonomics.

Physical – I think we all understand that sitting isn’t great all day and standing isn’t either. We need to find a balance.
Cognitive – How do I decrease my stress levels? How do I make better decisions in a workspace?
Social – How do we make organizations more productive, healthy, and connected? Social Ergonomics can also increase engagement!

There are many many things to consider as part of workplace ergonomics.

Too many amenities can be a barrier.
If people need to work from home to actually get work done, then the space design might be off.
Floor plan and layout plays a big role in engagement and community-building.
Furniture defines how people move throughout the space.
People need privacy on demand.
Social privacy is a choice and a personal decision.
Introverts and extroverts need different things in a space at different times.
Many operators mistake the occupancy of spaces such as meeting rooms – 6 person meeting rooms are not really needed 2- 3 person meeting areas are more commonly used.

This conference was fantastic to experience, Imet an incredible group of people and learned many new things.

Be sure to check out Coworking Europe’s website for more information and look forward to seeing you all next year!If you have any questions or comments for me, feel free to reach out. I love to chat!