Author: jeanyveshuwart

“Spaces that haven’t designed a unique visual identity, specialized communities, will risk getting lost in the noise”.

Kelsea Crawford is the CEO and cofounder of Cutwork, an architecture and design studio focused on designing new ways to live and work. Based between Amsterdam and Paris, Cutwork has  5 years of experience design in furniture and spatial concepts for coworking spaces, innovation hubs, private offices, and coliving spaces. Cutwork has been involved in the famous Station F project, the world biggest startup campus, based in Paris, France.

Hi Kelsea. You design coworking spaces. Can you explain to us what is your approach and what do you start with when you are asked to design a flexible workspace?

At its core, we aim to design workspaces that encourage the meeting of people and ideas. We begin every project by thinking about how we can use design to encourage collaboration, to cultivate strong communities, and to foster meaningful work.

After a 2 year collaboration with Station F (the largest startup campus in the world and home the European hubs of Facebook, Microsoft and Ubisoft) and speaking with over 200 coworking spaces last year, we have developed our approach to flexible workspace around three key ideas:

  1. Mobility – the ability to change one’s surroundings and move between different types of space for different styles of work and collaboration.
  2. Versatility – the use of smart furniture designs that have multiple uses and functions.
  3. Flexibility – the ability to easily transform or rearrange a space for different uses.

We start the design process with an open dialogue about where we can add the most value as design partners. For the most part, this includes developing spatial design concepts that will scale across multiple spaces, furnishing a space, and designing custom products. One of our biggest advantages is that our furniture design process is built on digital technologies that make it simple for us to modify any of our existing products to develop unique, custom solutions for our clients. 

While we use a lot of technology to make things super efficient on the manufacturing side, we’re pretty old school when it comes to the actual design – we like to sit together around a table with a big piece of paper and draw. This way we can really map out the challenges and limitations currently presented by the furniture and spatial design, and come up with the best solutions that fit the space and budget.

It’s simple for space operators to survey big name spaces and think, this is what appeals to my market of millennial freelance workers!

We see some recently designed coworking spaces looking the same. Are designers becoming lazy? Or do space operators lack inspiration when submitting their requirements and guidelines?

More than becoming lazy or lacking inspiration, I think the market is just maturing. New spaces are easily lured into copying established models of success. It’s simple for space operators to survey big name spaces and think, “this is what appeals to my market of millennial freelance workers! If I can do that, my space will also be a success”. The problem with this is that everyone is asking the same question and coming up with the same solution. While this can make for a safer bet in the short term, the real risk in this strategy becomes evident when looking at the numbers: the coworking market is predicted to double in size over the next 4 years, from 14,000 spaces to over 30,000 spaces (Small Business Lab’s December 2017 Survey). This is insane market growth! For coworking spaces to succeed in the long term and survive this flood of competition, there’s a real need for original, distinct, and innovative design.

We see a lot of recurrent gimmicks in workspace designs, Silicon Valley inspired kind of workspace, for instance… What do you think of it? 

Station F (Paris)

These types of “gimmicks” and trends are typically playful, easy to understand, and straightforward to implement, which is why we see them turning up all over the place. While they can be effective when done well, I think the bigger conversation here is that coworking spaces should be wary of adopting these kinds of trends just for the sake of it. This risks missing a meaningful opportunity to use design as a means to encourage collaboration, help build strong communities, and make the space more valuable to its members.

Do furniture providers do their job of supplying a wide enough variety of products or are we stuck with “prêt à porter” giving little room for design creativity in the workspace?

There aren’t many companies out there today that are designing furniture specifically for coworking and flexible workspaces. For now, most spaces are stuck making traditional office furniture work, or they end up designing their own because so few options exist in the marketplace. A coworking space is not a traditional office – so why are people still furnishing it like one The opportunity to design for these new usages is what’s most exciting to us. With our latest collection of furniture, we worked with our clients to map out the most common gestures and habits of the modern coworker, looking at all the tools and objects they carried with them and designing for their natural workflow; modular boards for writing or displaying sticky notes, hooks for headphones, shelves for screens of all sizes, and organizers for the daily tools.

What’s really exciting about coworking spaces is that there is such a new story to tell – this fundamental shift in the way we work and where we do it.

More broadly speaking, how does space design support the branding story of a coworking/flexible workspace? Do space providers understand that, nowadays?

In a general way, spatial design is the physical representation of a brand. What’s really exciting about coworking spaces is that there is such a new story to tell – this fundamental shift in the way we work and where we do it. With this comes many opportunities to use architecture, interior design, and furniture as visual tools to help express a brand’s values in an immediate and impactful way. Aesthetics are really important because it sets the tone and qualifies the audience the space attracts, and that audience will eventually become the space’s community. I think space providers are definitely beginning to understand how valuable these tools are, especially as competition becomes more and more fierce. Spaces that haven’t designed a unique visual identity or built tight-knit, specialized communities will have a much harder time standing out and risk getting lost in the noise. 

Can a corporate-focused, flexible serviced office develop inspiring and disrupting workspace environments, or are these things limited to startup and freelancer-focused coworking spaces?

They can, and we are already beginning to see this transition take place. Most serviced offices are simply following the model that traditional corporate offices have established – a model which is definitely being challenged and influenced by startups and coworking spaces. Corporations have already begun testing the waters by housing teams or departments within coworking spaces, dissolving the boundaries of the office culture and embracing startup working styles to accelerate innovation and growth. And it’s definitely catching on. Just last year, business employees became the largest demographic in global coworking spaces, surpassing freelancers. And the early signifiers are clear: the employees surveyed in coworking spaces are happier and more fulfilled in their roles, and these satellite departments are moving faster and are more productive than they had been in the traditional office environment. As traditional corporate offices continues to adopt these concepts and work styles, I think we’ll see a similar influence in serviced corporate offices.

Spaces that haven’t designed a unique visual identity or built tight-knit, specialized communities will have a much harder time standing out and risk getting lost in the noise.

What do you expect as being the upcoming trends in coworking space design, in the 12-24 months to come?

There are three key trends we’re watching for in the next 2 years:

1. Specialization. As the market matures, we’ll see coworking spaces becoming more and more specialized to support specific communities. Coworking spaces for women, coworking spaces with daycare services, coworking spaces for app developers, etc. These niched communities will have unique needs and usages, and spatial design will evolve to meet them.

2. Investment in Design. To stay ahead of the competitive curve, coworking spaces are making serious investments in design to set themselves apart. Today, the average space dedicates around 40% of the total opening budget to furniture and spatial design. In the near future this figure will only increase, as many more companies are able to raise investment capital in the wake of WeWork’s success.

3. Coworking + Co-living. As cities densify and the cost of living continues to increase, we expect the increase of shared coliving spaces will be nearly as dramatic as the rise of coworking. Furnished, flexible apartments that service a young, freelance workforce will build on the same movement as coworking, and we think many of the big players in the coworking market will lead the way

Just last year, business employees became the largest demographic in global coworking spaces, surpassing freelancers. And the early signifiers are clear: the employees surveyed in coworking spaces are happier.

Photos credit Handover

Kelsea Crawford will be a speaker at the upcoming Coworking Europe 2018 conference, in Amsterdam.

Pacific Workplace : “What we learned from the takeover of a coworking brand”

A few months ago, Pacific Workplaces, a California based business centers network, took over Next Space, a coworking brand with locations in Berkeley, Santa Cruz and San Jose.

Why did a business center operator buy one of the best known historical bay area’s coworking brand ?

What was the vision and how is the integration going ?

Laurent Dhollande, CEO of Pacific Workplaces and boss of CloudVO, one of Coworking Europe 2017 conference‘s partners, shared his insight, last November, in Dublin, during one of Coworking Europe’s session (cfr video below).

Strong community, weak processes

“No one can curate a community as well as Next Space”, says Laurent Dhollande, first. “They have a solid brand recognition and informal culture, which is an asset”.

“Independent coworking space management is a hard thing to operate, though, adds the CEO of CloudVO. Many are run by very passionated people who focus on the community, but often overlook the monetization of additional services as well as the improvement of the operational side.”

“Next Space different locations, for instance, were too remote from one another to manage the network easily. The management was very decentralized. There  processes were not up to date. They didn’t leverage technology to run the space, for rooms online booking, for instance. They had an insufficient number of meeting rooms. They didn’t kill inefficient new initiatives fast enough“.

Word of mouth marketing vs SEO

“Next Space marketing was mainly made through word of mouth and social media, whereas we focus a lot on Search Engine Optimization (SEO) and search engine marketing (SEM)“.

Next Space’s financial situation was weak, whereas Pacific Workplace financial situation is strong.

According to Laurent Dhollande, Next Space wasn’t good enough with the development of additional side revenues, aside of the revenue stream generated by coworking subscriptions.

“At Pacific Workplace, Virtual Office, makes 30% of our revenues, as opposed to a mere 6% at Next Space”, illustrates the CEO of CloudVO.

Complementarity and ultimate convergence

Despite some flaws, Pacific Workplaces choose to keep the Next Space brand alive as well as the website. The identity is strong and the complementarities with the mother company seem clear.

“The is a convergence between the models, observes Laurent Dhollande. Within the coming 5 years, the two brands and customer experiences might become only one“.

 

“We believe we have an ideal Coworking model to be franchised”

In France, the Trigano family is a close to a legend. Decades ago, Gilbert Trigano founded the worldwide famous ‘Club Med‘ brand. In 2017, his grandson Jeremie is now walking in his shoes. Mama Works is a network of coworking spaces inspired by their experience in the hotel industry, especially with the Mama Shelter brand, a collection of designed by Philippe Starck hotels, with locations now in a handful of cities in Europe and North America.

Hi Jeremie. Can you introduce Mama Works?

Mama Works aims to combine the creative and entertainment know how of our hotel brand Mama Shelter, as well as the real estate expertise of our partners. After having modified the shape of the hotel industry in France, we wanted to take on a new challenge by developing an alternative to traditional office spaces. A new generation of “workers”, eager to work in a friendly and stimulating atmosphere is emerging. The workplace is no longer just an office but a place to live and share and that’s why we created. This subtle blend of expertise and fun has given birth, we think, to a stimulating community buzzing with ideas and fizzing with energy! 

We use to say that coworking is to become an industry similar to the hotel industry. Do you agree?

We absolutely agree that the flexible workplace environment is starting to reflect the hotel industry. Like hotels, coworking spaces are segmented, vary in sizes, specialise in niches, offer different services, and start working with OTAs (online booking services) to sell empty desks.

Why, would you say, are hospitality service professionals well or better positioned than others to address the need for workers and companies for new work environments?

We are in the service business when most of the big coworking structures are run by real estate professionals and funds. As such we are here to serve our clients and sell them an experience, not an office desk!

We are in the service business when most of the big coworking structures are run by real estate professionals and funds. 

The Accor Group (one of the world leaders within the hotel industry) is one of your shareholders. Is it important to be supported by such a major world player?

Mama Shelter (the hotel brand from which Mama Works comes) has kept its full independence. We run Mama Works as a division of Mama Shelter. We have launched a start up within our start up!

A real estate broker has been assigned (Cushman & Wakefield) to market your work facility to tenants. How receptive are real estate brokers to the coworking model, would you say?

Brokers are highly responsive and understand there is a switch in the consumption of office space. They also realise there is a gap to fill in the commercialisation of these spaces. However, I believe the brick and mortar approach to selling offices spaces will slowly be replaced by online distribution channels offering the capacity to filter your searches by interest. 

How is your broker rewarded?

A nice commission.

Why not putting a proper sales force in place?

We have a sales team in place but as for hotels in some instances, it is more cost effective to use third parties which have a broader reach.

Are the Mama Shelter hotels and the new Mama Works offerings connected?

We are currently offering our Mama Works members a special rate in all Mama Shelter properties.
We are also giving special Mama Mobile (daily desk rentals) rates at our Mama Works locations to our Mama Shelter residents. Eventually, we will have coworking spaces inside our hotels and really have an integrated offering. 

One speaks more and more about coworking and co-living. Is it a bundle you might be exploring?

Yes, we are already looking into it.

How ambitious are Mama Works plans? Do you plan to stay in France only or are you considering an international expansion?

Pretty ambitious. We are going to use Mama Works Lyon as a laboratory. We already signed a site in Bordeaux opening in a few months and Lille in 2018. We have plans to expand internationally and have already signed a location in Europe…

Is the franchise model we see in the hotel industry appropriate for the coworking world, would you say?

Mama Shelter does no franchise. But we believe Mama Works is the ideal business model for franchise. Unlike the hotel industry, the coworking world relies on very few employees. It is easier to set up a franchise with 4 staff members and as long as we can keep a say on recruitment (not operations) we believe our concept can grow as a franchise model!

It is easier to set up a franchise with 4 staff members and as long as we can keep a say on recruitment (not operations) we believe our concept can grow as a franchise model!

How would you say you position Mama Works (in terms of target, tenants’ profile,…) as opposed to other independent of international coworking players?

We are trying to position Mama Works as an urban kibbutz for coworkers. We want our community to feed on each other and grow organically. Mama Works is chic, high tech, affordable but most importantly human, friendly and lively.

Coworking to change the work culture in Japan

Takayuki Hagihara is one of the well-known faces within the coworking global scene. Tokyo based Takayuki travelled the world visiting dozens of coworking spaces and building up a limitless knowledge of the multi-diverse way the coworking model is implemented on the five continents. ULSLab’s (Ubiquitous Lifestyle Laboratory, his company) mission is “the realization of a society where everyone can cooperate without being tied to a location”.

Hello Takayuki. Can you introduce yourself and your activities ?

After a long career as an engineer, I decided to start my own company. As many in my situation, I started to visit some of the shared offices in Tokyo. During my investigations, I entered a bunch of coworking spaces. It appeared to me that coworking, as a working place, could become a very promising alternative to traditional workplaces. I met many attractive operators, such as Kyo, from PAX Coworking, the founder of one of the first coworking spaces to have opened in Japan. I figured out that the Coworking model was about something much stronger than just the “work environment”. As of today, we provide professional services both for service provider side and enterprise side on work style change management.

How is the situation of coworking in Japan in 2017 ? 

According to a 2016 research on service providers for telework which was conducted by the Japanese Ministry of Land, Infrastructure, Transport and Tourism, 1.987 flexible workplaces are active in Japan, claiming to be coworking spaces. Some are business centers. Based on the survey, we can say that 65.3% are operated by private organizations. About one third is profitable. The survey doesn’t make a clear distinction between the different offerings, though.

Do you see some specific drivers in Japan as opposed to other coworking offerings you have seen around the world ?

I do not see any significant differences between Japanese coworking spaces and European, Asian and US spaces I visited. I can find a foreign counterpart for any to Japanese coworking space I know. Each space differentiates itself from the others. That said, yes, at a smaller level, there are maybe some characteristics specific to Japan. For instance, kitchen and dining areas are relatively seldom in Japan, if I compare it to what I have visited in the US, Europe or the rest of Asia.

What about the profile of the tenants : freelancers, expats, startups, employees from private or public organizations ?

Freelancers and small startups are quite common. Accountant and independent consultants sometimes. Small businesses launched by retired people is something more unique in  Japan. We see them in some coworking spaces. Large enterprises also start to let their employees to work from shared offices and coworking spaces. On July 24th (2017), the government launched what they called ‘Telework day’. According to a report, more than 60,000 employees worked at home or from third workplaces, different from the company’ offices.

How important is it to build up a community feeling in coworking spaces in Japan (with events, happy hours, a celebration of people’ birthday, etc.) ?

It really depends on the space. Some operators I met are keen to organize lunches or coffee breaks in order to trigger new conversations, good to establish relationships. However, some (young female, for instance) attendees do not want to join drinking events. The community manager is critical to overcoming these barriers.

Just recently, WeWork announced a $300 Mio deal with SoftBank in order to open 40 spaces in Japan. What does the deal tell about the evolution of coworking in Japan? 

SoftBank isn’t the only one. There are many investments in the shared workplace business. Large real estate companies started branded spaces. Some company started more than one brand – focusing enterprise use, Tokyo branch use, coworking, innovation hubs, …

What about the role of independent operators ? Is the coworking market mainly in the hands of big brands, such as what we see in some other Asian countries ?

Independent operators are still vital and sometimes belong alliance programs provided by large brands. For example, Tokyu Corporation – one of the top private railway in the metropolitan area which also has real estate business subsidiary – started the brand NewWork currently focusing on enterprise employee hot desks near its railway stations has contracted with more than 10 independent coworking spaces as well as their own spaces.

How ready is the commercial real market to embrace coworking in Japan, would you say ?

Traditional property owners like to stay good old leasing model. There is a huge development in Tokyo area for high-end property and it makes an existing property to be rated as 2nd class. So, some owners decided the new coworking model to survive.

Paris coworking boom equally fuelled by independent and branded spaces

The maturation of the coworking market showcases a more and more perceivable split between two kind of players :

  1. well funded growing coworking brands, with a multi-location strategy, on the one hand
  2. locally rooted independent coworking spaces with a more focused identity and community, on the other hand.

The pattern gets confirmed is a steadily growing number of metropoles around the globe London, Berlin, NYC, Chicago, Singapore, Sydney, Shanghai and many more.

Paris is no exception.

The international real estate advisory company Arthur Loyd just published a data supported study on the rise of the coworking industry in the Paris region.

As much as 10 football fields to open in 2017

According to the study, close to 70.000 m2 of coworking space are to open in 2017. “It’s as much as the total coworking openings we have seen in the Paris ragion in 5 years“, underlines the firm.

Whitin the last 24 months, the coworking offering increaseded by 167%.

The number of coworking spaces ninefolded, from 20 spaces in 2012 to a total of 177 in 2017 !

“Nowadays, a mere 7% of the digital natives’ population (18 to 30 years old) consider to work from a traditional office”, observes the Arthur Loyd study.

Growth equally supported by branded and independent coworking spaces

Who drives the market up ?

According to the study, the parisian market is evenly divided in terms of the number of spaces between the independent and the branded coworking spaces (WeWork, Spaces, etc.).

Independent coworking spaces in Paris started to ignite the demand seven years ago.

Arthur Loyd mentions Solleiles Cowork, Mutinerie, La Cantine (now Numa), La Ruche, La Cordée, Lawomatic  and many more, including bigger independent networks such as Remix Coworking.

The rise of branded networks of coworking spaces is more recent in Paris, as it is in other major cities in Europe, Asia or America.

Remix Coworking

International brands like WeWork or Spaces (Regus group) opened their first locations only this year in the French capital.

Meanwhile, well-known French companies and investors have invested in the building of local coworking brands, now expanding in Paris and in other major cities in France (Lyon, Marseille, Bordeaux, Lille…). Those are Nextdoor, Kwerk, NOW and some others.

Branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.

According to the Arthur Loyd study, the main difference between the independent and branded coworking spaces lies in the average surface of the respective coworking spaces : within the Paris region, the average size of independent coworking spaces is 364 m2 as opposed to 1.061 m2 for the branded coworking spaces.

In other words, branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.

More independent spaces located in the city’s off-centre areas

A difference surfaces as well in terms of geographical location. Whereas branded coworking spaces tend to open in the very center of the city, close to the most prestigious addresses, on the main avenues, a.o., independent coworking spaces are, on average, more often located in the off-centre districts.   

Lease costs obviously play a role.

It means that the price of a desk for members is slightly lower within independent coworking spaces (401 € /month, on average) as opposed to the branded space with multi-location (493 € / month for WeWork), writes the report.

Some spaces also position themselves within or close to the digital entrepreneurship hotspots or in Paris’s trendiest neighborhoods, not far from Bastille, Le Sentier or République“, comments the report.

A real impact on the real estate market in Paris

Coworking will only absorb about 3% of the total transactions made in 2017, according to Arthur Loyd Investement. The market is generating a lot of new value, though. Landlord should take it seriously into consideration.

For different reasons, as observe in other countries, corporations now are becoming users of coworking spaces.

Expect more growth to come in Paris.

The breakdown between Branded coworking spaces networks and independent coworking players will be a hot topic to be addressed during the upcoming Coworking Europe 2017 conference, to take place in Dublin (November 8-10). 

London: The coworking market sees signs of a price war looming

Hector Kolonas is the founder of Included.co, an online platform organising group purchases for a network of over 200 coworking communities in the world. The service helps the spaces to buy supplies and services at a discounted price, thanks to the generated volumes.

As a London-based startup, which initially started to work with the London coworking ecosystem, Hector is ideally positioned to depict the evolution of the coworking market in one of the most innovative and dynamic cities of Europe and the world. The competition is becoming fierce, as somehow confirmed the discussions which took place at the recent eOffice London Coworking Conference.

Hi Hector. The coworking offering strongly increased, during the last three years London. What are the main drivers of the growth, according to you?

Hector Kolonas, Included.co

Indeed, we enrich over 50 business communities across London, up from just 2 when we launched in the city. This is at a similar pace to the number of new spaces opening up. This growth includes serviced offices adapting space into open-plan, flexible workspaces; new coworking brands; expansion of existing coworking brands; and new takes on what coworking could look like for different niches.

There are two main drivers behind the rapid growth of coworking communities in the city, namely economic and social.

First up, rent in London is crazy expensive, as can be expected for any thriving capital city. So the notion of ‘sharing’ office expenses like rent, electricity, coffee and workspace management is a no-brainer. The increasingly flexible terms (mostly month-to-month) allow for businesses to invest in growth and their staff, instead of into sunk costs normally associated with office rentals. But that’s the same everywhere, and a reason why coworking has exploded across the globe.
What’s most interesting in London though, is how rapidly the workspaces that ‘get community right’ are growing. With the growth in popularity of entrepreneurship in the UK (and Europe) a lot of passionate and brilliant people have converged in London.

What’s most interesting in London though, is how rapidly the workspaces that ‘get community right’ are growing.

At the beginning, everyone went at it alone, hiding the lessons they’d learned as competitive advantages for their businesses. Community-focussed coworking spaces broke down these barriers and showed members that they could grow faster by sharing knowledge, experiences and contacts.
With this combination, it’s no surprise that London has begun exporting some of their coworking brands across the UK, and into Europe. It won’t be long until a few start launching in the US too.

With this combination, it’s no surprise that London has begun exporting some of their coworking brands across the UK, and into Europe

Are major brands supporting the development of the coworking market or is it fueled by the multiplication of more and more independent project?

The Sillicon Roundabout, in London, around which gravitates a number of startups focused coworking.

The two seem to be resonating in London, creating opportunities for each other.
The big brands (both in the coworking sector and from other enterprise-focussed businesses) are creating huge spaces that create a buzz in the media and promote the fundamentals of sharing workspaces on more flexible terms than traditional rentals.
The independents are either becoming large brands in their own rights or carving out perfectly built oases for specific business niches. Whilst we’ve definitely seen a few independent spaces having to shut their doors, a vast majority are working on the expansion, with 2nd, 3rd or even 4th locations opening in the coming 12 months.
Businesses are increasingly switching between the two, based on the kind of employees they want to attract; customers they serve, and the additional costs they can shrink.

How about the profile of the new tenants: mainly freelancers, startups, SME’s or corporations?

As London is a melting pot of epic proportions, there’s a space (or subset of spaces) for almost every profile. From large polished spaces for consultants, professional services and the likes; to workspaces built around reclaimed furniture in warehouses.
Some spaces limit membership to specific niches or business types, others are happy to accept any member that doesn’t create negativity in the workplace.
There is definitely a growing shift of corporations moving autonomous teams into these coworking communities, but there’s still a lot to be learned about how to integrate these teams with the other non-corporate members, in a way that isn’t detrimental to the corporation.
Wherever there are startups, there are passionate and creative people, and thus a growing number of freelancers can be found in and around the most buzzing coworking communities in the city.

Is the demand growing fast enough to absorb the growth of the coworking offering in London?

Work.Life is among the coworking brands expanding fast in London.

The growth in the flexible workspace is astronomical. We’ve literally lost count of the number of shared workspaces available or being used in London, with new coworking spaces opening almost every day or two.
We’ve been exploring when market saturation will occur and helping the operators of our partner workspaces to prepare for the coming dip in demand.
At the current rate (and according to our back-of-a-napkin calculations) there should be enough demand to sustain the current workspace growth for the next 20ish months. From their workspaces who only offer wifi and desk space will start haemorrhaging members to the community-lead spaces who’ve attained enough economies of scale and additional revenue streams to push down their membership fees.

From there workspaces who only offer wifi and desk space will start hemorrhaging members to the community-lead spaces who’ve attained enough economies of scale and additional revenue streams to push down their membership fees.

With some of the traditional commercial real estate players also exploring the coworking sector, the fight for not only tenants but brand loyalty will move from location and price to tangible value and stability.

Speaking of pushing down membership feels, some players noticed the beginning of a price war in the coworking market. Do you see this? 

Even though I’m confident that the ‘war for tenants’ will be fought on the value and community front, there is definitely signs of a price war looming in the London ecosystem.
Operating costs for coworking communities are growing due to business rate increases; the gentrification of specific burrows; and the ‘sexiness’ of coworking sneaking into rent-renewal negotiations with landlords.
This opportunity has been seized by some of the bigger players to drop prices, offering what are essentially loss-leader memberships to attract tenants and potentially starve off competing spaces. We’ve had reports of members within some space being directly targeted with unsolicited marketing about workspaces “at half of what they’re currently paying”.

We’ve had reports of members within some space being directly targeted with unsolicited marketing about workspaces “at half of what they’re currently paying”.

With more and more sales teams being hired to fuel expansion, being able to absorb losses to acquire potential long-term customers is becoming a weapon of choice.
But the line between sales and community is also being crossed more and more. With some members even reporting having received messages congratulating them on personal milestones (possibly mined from private social media channels) before offering them a free tour or discounted membership as a gift.
I should obviously note that this isn’t the whole industry though, as many coworking space managers are actually and actively collaborating behind the scenes to help each other out.

With London’s center being so dense and expensive, do you see an expansion of the coworking offering in the suburb? Are those spaces different (size, positioning…) from those located downtown?

Second Home has opened a location in Lisbon

There are actually two interesting trends here.
Firstly, great community-focussed spaces from outside Zone 1 and 2 are opening new workspaces towards the centre or on other sides of the city. By leveraging their knowledge, brand equity and operational experience they can offer more affordable or valuable workspace offerings. These workspaces can either be smaller satellite-style offices or grander whole/half buildings with new features designed specifically based on the requests/needs of their existing members.
Secondly, larger brands are diversifying their market exposure, potentially hedging against the coming market saturation and price wars. This means they’re opening locations in cities like Dublin, Manchester, Lisbon, Barcelona and others. In smaller cities, the new workspaces are normally larger due to lower rentals and operating costs. A number of local coworking brands have also raised VC funding to fuel this growth.
Whilst no brand wants to ever be seen to be ‘fleeing’ the centre, some communities are moving further outwards to keep their businesses feasible. With superb community coordinators, and when well explained, this can happen without any long-term detriment to the brand, and can sometimes even strengthen members’ relationships to the community.

You mentioned it above. Coworking spaces diversify their revenue sources. What can you say about it?

From all the communities we observe, assist and enrich, we’ve picked up on 3 different avenues for revenue diversification. These are excluding the renting out of registered addresses and meeting rooms, which can be expected in any thriving metropolitan ecosystem.
The first is sponsorship, which is arguably the most attractive, because who wouldn’t want to have ‘free money’ thrown at them? Professional service and technology brands are happy to write cheques to community coordinators, to lock in the exclusive promotion of their offering. What we’ve found is that around 75% of the time, these offerings are not what the member businesses need or even want, but the community manager’s hands are tied by the agreements with sponsoring firms.
The second is the merger of partnerships and affiliate revenue. Normally delegated to community managers, this creates a bottleneck for the operating team. Not only do they have to deal with a huge amount of non-stop inbound partnership requests, but they also need to somehow figure out if:
a) the service/product supplier is legitimate,
b) the offer will create value for their members,
c) the workspace will make enough revenue to recoup this invested time.
The third is actually where we work every single day. We handle inbound partnership requests, negotiate on behalf of 200 communities, and ensure that the workspaces get a fair apportion of generated revenue on a long-term basis. As we don’t offer any exclusivity, members will never be tied to a single provider, allowing them to discover solutions that their coworkers are using, and saving money with.
This means that the members of each space in our network get access to a growing set of solutions, and the community coordinators can focus on implementing creative ways to connect their members to the solutions. Some of our partner communities are saving their members £1,000’s in unavoidable expenses each month, driving up their own long-term revenue and building great brand loyalty at the same time.
With the price war looming, and the costs of operating increasing, it’s no wonder why so many coworking communities are becoming included too.

“Coworking is an emerging industry comparable to hotels or restaurants”

 Jean-Yves Huwart, founder of SocialWorkplaces.com and initiator of the Coworking Europe conference was interviewed, last month, by Building magazine, a Canada-based magazine covering the Real Estate and Construction industry.

It’s not a secret that the Real Estate industry is wondering how to deal with the growing phenomenon of coworking. The flexible model could slowly disrupt the traditional office market. New concepts have emerged.

Jean-Yves Huwart

The landscape remains blurry, though, for outsiders. Many traditional players keep struggling to make the distinction between the wide variety of offerings: serviced office, coworking, shared workspace, incubator, business centers, fablabs, etc.

As a matter of facts, instead of looking at the individual models, we think the challenge is nowadays to consider the emergence of a whole new hospitality industry, similar to hotels or restaurants.

This is the focus of the interview:

Could you start by outlining the key functions and objectives of Social Workplaces?

We have been involved in the Coworking movement since 2010 (that year we organised the first Coworking Europe conference), and started to link up coworking communities from Europe and beyond.

From a few dozens of coworking spaces in operation around the world eight to ten years ago, we have witnessed an increase to up to 13.000 units as of today worldwide, according to the Deskmag Global Survey 2017 which is supported by SocialWorkplaces.com.

Through these years, we have had the opportunity to interview and talk with many tenants and operators. We have become more and more convinced that what coworking brought, first for freelancers and start-ups, was an actual re-invention of the function of the workplace, broadly speaking, for the digital age. This was for any kind of workplace, any category of employer.

Once the ability to access your production tools has become ubiquitous, why is there a need for you to have a workplace? For us, coworking provided the answer: people need to be in touch with other people with whom they like to be with, both for their personal equilibrium as much as for professional reasons.

This is especially important at a time when routine tasks can be more and more automated and when workers are requested to provide more creative and social outputs. We call this the Social Workplace, inspired by the coworking experience.

How would you define specifically a coworking workplace relative to shared office, public workspaces (community centers, libraries), mixed workspaces, maker spacers and business centre workplaces?

Coworking is open. You can show up anytime and propose yourself to become a coworker. Someone will walk (normally) towards you, be hospitable and make you comfortable. People flow in and out. This is similar to a hotel, a restaurant or a gym. It’s service driven. Usually, coworking spaces also create a proper identity and, thus, a sense of belonging that is at the root of the creation of communities. 

Shared office [models] are more closed. Certainly [in this model] you will be around the same people in the same building all time. This doesn’t impede social interaction. However, it will be more static.

Those models are not exclusive between one another. More and more business centers open up coworking services within their buildings and hire a community manager to build up an emotional relationship with and between their tenants. The added value is no more – or less and less – in the provision of a facility; it is in creating a pleasant environment and experience.

Are there significant differences between approaches in Europe and North America?

Europe and North America are not that different, I would say, in terms of offerings. Big US cities, however, have a higher density of startups and digital workers. So we see bigger players, bigger spaces in the US. That said, it’s just a matter of time before we see Europe catching up in terms of growth.

Who are the current main users/members of coworking workplaces? HOK/Cornet Global 2016 report suggests employees in a corporation are also now a significant and growing percentage of users/members?

Freelancers are the biggest category of users so far. They are the historical first tenants because, in the beginning, spaces were smaller and did not necessarily have the capacity to accommodate bigger teams. The population of freelancers is growing everywhere, however, as the new working generation looks for more freedom and self-achievement. Plus, big companies’ headcounts keep shrinking.

Source Hok

Sideways, we see more and more employees within coworking spaces. Corporations have started to authorise people from their innovation departments, for instance, to work from coworking spaces in order to be in touch with the local start-up scenes. Companies who need a smaller representation office in a city also tend to consider to use a coworking space rather than to go for an office long term lease.

So far, in terms of overall numbers, the trend is marginal. We think it’s just the beginning, though. Fast growing SME’s do not hesitate to put all their teams in coworking space offices.  The Office in the cloud (the cloud here being the coworking spaces) will become mainstream.

What are the most important attributes of a successful coworking place; e.g. shared services, social interaction, flexible (varied and funky?) work areas, IT support?

Pure coworking spaces rarely bother with IT support usually but they do provide a stable, secure internet connection. That’s it. Tenants’ tools are now in the cloud. Besides, today, neither startups nor freelancers need traditional assistant support. Sure, there are exceptions, but those are outdated services with the new generation of digital nimble companies as far as we see it. Again, everything is in the cloud. Spaces need to offer new kind of value adding services if they want to keep their revenue per user at the same level as in the past. Indeed, they need to provide a space with human focused connections, interesting events, social moments, fun and networking. This is what gives value nowadays, not forgetting flexibility and the opportunity to scale up or down easily.

Within the coworking industry, what is the relationship between: 1) large international firms like Regus, Servcorp and WeWork; and 2) smaller independent operators?

The analogy with the hotel industry is for me the most relevant. You have Accor, Shangri-La’s, Holiday Inn, Best Western proposals, aside from AirBNB’s, Bed & Breakfast, independent hotels, camping or even couch surfing. These can be fully complementary. Each reaching out to different needs, profiles or customer expectations, all according to the context of the booking. These accommodation offerings are not mutually exclusive, I would add. Depending on the context, you may consider staying at a Regency hotel because your need is professional only, you don’t look nor have time to socialise or discover a city. But on holiday time, the hospitality of a Bed & Breakfast or, even, the fun of couch surfing might suit you.

That said, with hotels, etc., we speak only about a few days. The main difference between the need for lodging and the need for a workplace is the duration of the stay. With a workplace, you commit for a few months, at the least, not for a few days. The quality of the social experience then become a much higher driver of choice.

What is the significance of secondary coworking spaces such as those promoted by hotels, coffee bistros, libraries, maker spaces, etc.?

Again, the element of duration is key here. Working from a coffee shop during one or two hours (depending on the battery life of your computer) might be fully convenient. Noise and comfort are not (so) critical, in this case. This will be another story when you have to stay eight hours a day, five days a week. You probably will look for a proper work environment.

What is the role/significance of LiquidSpace or similar apps that use the Airbnb approach to attracting workers? 

Liquidspace and the likes are like Booking.com for hotels. They are sales channels and helpful online directories. The dimension of service is critical, though. If space fails to provide the required hospitality and quality of service, the trust will be broken. This is a service business. Forget it, and you will lose. 

The HOK study raises the issue of upcoming renewal of leases for many coworking spaces, as many are based on five-year leases. Is this an important concern?

It’s still a bit early to say, as the wave of bigger, stronger spaces is less than five years old, overall, in Europe. However, this is certainly a very big challenge ahead. We are not aware of accurate data about this. A lot of coworking spaces, through their activities, have brought a lot of value back to properties – sometimes to the whole neighbourhood within which they operate – and have not been rewarded for doing so. I would advise any coworking operator to really consider this when negotiating. That being said, we hear more and more of landlords getting in touch with coworking operators in order to partner up. I’m personally a strong believer in this kind of mutual partnerships where risk is shared.

What is the potential growth of demand for coworking spaces over the net decade? HOK suggests overall it will stabilise around 2% -4% penetration

We saw those figures. As far as we understand it, this includes business centres as well. To me, the turning point will be when coworking space operators will be able to host companies with 200-300 people or more while providing mutualized support services without losing their ability to accommodate people on an individual base. This will create convivial environments within full office buildings, with [the coworking operator] becoming a concierge, facilitator, connector, ecosystem builder, etc. Social Workplace will become the standard. Ultimately, we believe that no employee will accept anymore to work in the old-fashioned, dull closed and dry office environment they have experienced in the last decades. Then, expect the penetration rate [of coworking] to become much much higher.

In Summary, what is the future of Coworking workspaces over the next decade; what will be the key trends?

This is just the beginning [but] it will evolve under many shapes.

Head pic. Hotel Schani, Vienna.

Coworking spaces in the EU getting ready to welcome UK leaving companies #brexit

Last week at the Social Workplace Amsterdam 2017 Conference, Eduard Schaepman, CEO of Tribes, told the audience that 26 companies from the UK already reached out to them to prepare the partial transfer of their team and activity to the Dutch city.

Eduard Schaepman, Tribes

“London established companies are using the passport multi-location flexible office brands offer to commute between cities and prepare themselves up for when the Brexit will be completed”, said the representative of another major network, based in The Netherlands.

For sure, coworking spaces in Europe are preparing themselves for a flow of requests coming from companies currently based in London, Birmingham or Liverpool.

One can more speak of a round of observation than a real rush, though. So far.

Dublin: most of UK company enquiries come from FinTech’s

Mike Hannigan, Coworkinn

Mike Hannigan from Coworkinn, in Dublin, the city where the upcoming Coworking Europe 2017 is to take place, made a small poll, last week within the Irish coworking scene.

Here is main feedback he received from his fellow spaces regarding the expected impact of the Brexit on their operations:

  • There have been a lot of enquiries, but few major moves yet.
  • A number of virtual offices are being opened, helping boost presence and quantify benefits of potential move
  • The majority of enquiries from financial and Fintech companies
  • An increasing number of Digital Marketing and Web development agencies are “talking” about moving to Ireland by 2019
  • Definitely more enquiries than actual moves. This might change now the Brexit process has started – but we need to wait and see.
  • A large volume of enquiries are from Northern Ireland.
  • Some existing Irish companies have reported securing new contracts as a result of Brexit, presumably beating competition from UK based competition.
  • Very small coworking spaces have seen no effect at all
  • On the Northern side of the border (i.e. in U.K. territory) they have seen an influx of Irish companies setting up virtual offices in the UK. This balances out the apparent rush to set up virtual offices in the South. The UK will remain an important market for S.Ireland.
  • Spaces on the border see opportunities in that their N.Ireland (non-eu) clients will be very close geographically to S.Ireland (eu).

A big move out to be expected in 2019?

The story seems similar elsewhere in Europe. More enquiries than real moves, yet.

That said, we all are getting ready, say representatives of some coworking spaces in France, for instance. 

“As far as we are, we certainly expect an increase in the demand of companies moving from the UK to France due to the Brexit, especially once we will have opened our new location at La Defense”, tells a spokesman at Kwerk, a coworking spaces network operating in France. La Defense is the country’s biggest business district.

The attitude remains as pragmatical in Berlin. The city is often told to be the main competitor of London in Europe as far as the startup ecosystem is concerned.

“So far, we didn’t receive more enquiries that what we deal with on a usual base”, tells Stéphanie Bison, from Ahoy! Berlin, a major coworking space based in the capital of Germany. “That said, everybody speaks about it, here”.

The big move could definitely happen closer to March 2019, once the Brexit will have formally taken place…

COWORKING EUROPE 2017 (Dublin, November 8-9-10) : REGISTRATION IS OPEN

Coworking hubs are a key driver of Amsterdam’s plan to become a world startup hotspot

StartupAmsterdam is a public/private initiative, with a time-span of four years to fortify the city’s position as leading startup hub in Europe, and increase the international visibility of Amsterdam’s startup ecosystem. The growth of a wide web of coworking spaces and accelerators all over Amsterdam is a strong argument used on StartupAmsterdam‘s communication materials to convince outsiders of the powerful position ot the City as one of the the most vibrant startup hotspot in Europe.

Iris Muis is StartupAmsterdam’s startup liaison . The startup liaison oversees Amsterdam’s startup ecosystem, managing data on the city’s startups, co-working spaces, corporates connected to the Corporate Network, relevant events and more. We interviewed Iris about how important the growing Amsterdam coworking hubs’ network was for the developement of city’s  startups ecosystem.

Hi Iris. What is StartupAmsterdam ?

In 2015, the City of Amsterdam has realised that, to play its part in the European startup ecosystem, it had to invest in the city’s vibrant startup scene. Local government teamed up with the startup community and drafted a plan of action: StartupAmsterdam. This plan consists of fifteen measures to help startups grow, based on the five basic requirements for startup success: talent; customers; content; capital and an environment that is startup-minded.

StartupAmsterdam works with an extensive network of partners and is happy to share its approach with other cities. It does not invest in individual startups. We help optimize the startup climate in the city, making sure all is in place for you to make a success of your startup.

Iris Muis

According to your website, the city’s wide network of Coworking spaces are one of Amsterdam’s main assets to lure Startups. Why ?

The City of Amsterdam is proud of its well-developed and diverse startup ecosystem which embeds these companies and the knowledge institutions, high-quality accelerators, incubators, startup academies, corporations, coworking spaces and VC firms that help them grow.  Not only are coworking spaces key players in the startup ecosystem, they also provide a basic need for startups: a place to work. Amsterdam’s city centre is crowded, because of the limited space we have in our circular grid of canals. Coworking spaces can lower the threshold for startups to have an office space in the city centre.

What is the difference you make between coworking spaces and accelarator/incubator offering ?

Accelerator programs offer intense training courses for startups. Incubator programs offer in-house mentoring, and coworking spaces offer space to work. For the oversight of those different players on our website, differentiation is easy. Most of the time, accelerators, incubators and coworking spaces approach us to ask if they can be placed on the relevant oversight. Startup physical Hubs are key players in our startup ecosystem. To see an overview of the amazing incubators and accelerators in our city check our website: http://www.iamsterdam.com/en/business/startupamsterdam

More than 1.100 startup would be based in Amsterdam. How many work from hubs (coworking and accelerators) ?

What I can say now is that these hubs are an important driver of startup growth in this city, as they often support seed or early stage startups and really strengthen their growth. We have set up a governmental incubator called Startup in Residence. One of StartupAmsterdam’s measures details how local government can act as launching customer to startups. In collaboration with the Chief Technology Office (CTO) of Amsterdam we set up Startup in Residence: local government invites Dutch and international startups to devise innovative solutions to social issues in the city. The pilot of this incubator successfully ran in 2015 with seven startups. Currently we are running Startup in Residence 2.0.

Since the summer of 2016, seven new coworking spaces have opened their doors in Amsterdam.

Are Amsterdam’s coworking spaces becoming more numerous or simply bigger ?

B.Amstedam

Both. For example, coworking space B.Amsterdam started out with 20K square metres in 2015, and now has more than doubled in size, to an astounding 42K square metres: http://b-buildingbusiness.com/amsterdam/. Since the summer of 2016, seven new coworking spaces have opened their doors in Amsterdam. We keep track of them, their addresses and the amount of square metres of co-working space they have.

Do those hubs collaborate ?

Amsterdam’s ecosystem is very well-connected and parties work together where needed. We have a small hands-on team working on executing the fifteen measures of our action programme. Some examples of what StartupAmsterdam has been up to so far: establish Launchpad Meetups to connect corporates and startups; help launch startup academies like BSSA and the Growth Tribe academy to educate the talent startups need; kickstart Amsterdam Capital Week to connect startups to capital; bring code into Amsterdam school curriculums and educate teachers to do so; attract talent to help startups grow; establish international relations and organise bootcamps to the benefit of our startup community; to know more about what we do we recommend you browse our online news section and about page.

Coworking hubs in amsterdam are both becoming bigger in size and more numerous

The StartupAmsterdam website offers a useful calendar of all the startup-related events in Amsterdam. The calendar is open to all to upload startup events taking place in Amsterdam, just hit the “Submit Event” button. After we agree that your event is relevant to Amsterdam’s startup community it will show up on the calendar!

Amsterdam is also one of the tech clusters in the Netherlands that work closely together under the name of StartupDelta. In the past one and a half years, StartupDelta has linked up the various innovation hubs in the Netherlands and positioned our country as one of the most attractive startups ecosystems in Europe. Whereas StartupDelta was a governmental programme on a national level, StartupAmsterdam is a four-year action programme on a city level. The Dutch capital city is one dimension in the multi-faceted ‘StartupDelta of Europe,’ the Netherlands.

How about welcoming ‘talents’ in Amsterdam. Is your approach similar to what you do with advising startups ?

For welcoming talent in Amsterdam and connecting them better with the startup ecosystem, we have developed several programs. TechConnect is a program that brings together students and graduates with a tech background with startups. We also work closely together with the universities in Amsterdam, for instance in designing an honours track for excellent students to introduce them into the world of startups. Coding 4 Amsterdam is another program.

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Global Coworking Survey 2017

The Deskmag Global Coworking Survey 2017  is out. Survey

The first results where presented at Coworking Europe 2016 (Brussels, Nov 28-30).

Download the worldwide data and statistics here below.

As of today, there is close to 1 million coworkers worldwide.

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carsten