Northwest Arkansas Democrat-Gazette
City enters co-working scene
Entrepreneurs, startups get resources to grow their businesses
BENTONVILLE — The trend in co-working spaces is making its way from large cities to smaller regions and, in Northwest Arkansas, from Fayetteville to Bentonville, giving entrepreneurs and startup companies space and resources to grow their businesses.
Co-working spaces involve a shared working environment often used by people not employed by the same company. It allows small businesses and startups to rent space on a shorter commitment than a typical lease and provides a more professional environment than a home office. Most co-working spaces also have shared amenities and foster an atmosphere of collaboration.
Joe Saumweber knows first-hand what it’s like to start a company in a less than professional environment. He and Michael Paladino launched RevUnit in Bentonville five years ago out of his house and held board meetings at the public library.
“Thinking back on those times, we really could have used a place that felt cool and had a good vibe, that would have helped us to get off the ground and become confident in who we were,” he said.
The technology services company employs 65 people and has offices in three cities, including sharing the former Farmers Exchange building, according to Saumweber. The building, on Southwest A Street, was renovated and rebranded as Exchange.
Saumweber partnered with Wal-Mart, which uses the front of the building as a co-working space for startup companies. RevUnit occupies the back of the building.
MORE SPACE
At least three more co-working spaces have opened or will soon in Bentonville.
Gallery on Fourth opened Monday on the second floor of First National Bank at the corner of Southwest A Street and Southwest Fourth Street.
Grit Studios is operating out of a temporary space in Midtown Center on Northwest Second Street until renovation of the second floor of the Massey Building
is completed in the spring.
CAST Coworkspace plans to open at 327 S.W. A St. sometime next year.
All three include spaces where small businesses, contract workers, freelancers and remote employees can work in a professional and collaborative environment. Each will provide shared amenities, such as kitchens, coffee, Wi-Fi and printing.
Work environments include open desks, private offices, lounge areas and conference rooms, according to those developing the spaces.
Operations vary depending on the office from monthly memberships to hourly or daily desk rentals to social memberships where workers can pop-in so many times over a certain period.
Gallery on Fourth is a concept of Blue Zoo Creative, a Fayetteville-based brand-building agency, which saw the need for more co-working space as the freelance community continued to grow, said Mark Cloud, Blue Zoo Creative CEO.
He referenced a Forbes article saying freelancers make up 35 percent of the U.S. workforce. The number of freelancers reached 55 million last year, up from 53 million in 2014, according to the October 2016 article.
“Our target audience is the person who’s been doing it for a while,” Cloud said. “They are looking to get out of the house, give them another place to do some work, or they want to go to the next level. We’re giving them an opportunity to have a professional office space without paying $1,000.”
It’s $250 to lease a desk for a month. Six of the 16 were taken as of late October. There’s also a 12-foot-by-12foot photo studio that can be used with a membership or rented by the hour.
JOINING THE TREND
Co-working spaces are common in larger cities and metropolitan areas, and Green Circle Projects saw the need in Springfield, Mo., where it’s based, said Jessica Pearson, marketing director for the property management and development firm.
The firm has had so much success at its first CAST Coworking Space it just opened a second in Springfield and is set to open one next year in Bentonville. There’s a huge opportunity for co-working space in Northwest Arkansas because of the entrepreneur energy, she said.
There are more than 10,000 co-working spaces around the globe, according to the Global Coworking Unconference Conference, an organization orchestrating co-working conferences. The industry has quadrupled over the past five years with more than $1 billion invested in it last year, according to the organization’s website.
The Iceberg Coworking Space opened in the basement of the Metro District Commercial Center on Spring Street in Fayetteville in 2012. It closed in 2014 when organizers chose not to renew the two-year lease.
Startup Junkie Consulting, a firm for young businesses and entrepreneurs, leads CenterSpace, an entrepreneur and innovation space in the Pryor Center in Fayetteville.
There also is a co-working space in the University of Arkansas’ Brewer Family Entrepreneurship Hub, which opened just off the Fayetteville square in September. It aims to help faculty, students and alumni turn their research into commercial ventures.
An effort to reduce the square-foot cost for office space often drives co-working spaces in larger cities, Saumweber said.
“Often times, it’s a major leap from a garage to an office in a major metro area, so co-working is a bridge for that,” he said.
CHALLENGES
The Iceberg was used by the startup community but took too much money and effort to maintain, said Maurice Elliot, co-founder of Northwest Arkansas Entrepreneurship Alliance, the group that organized the space. It needed a full-time manager to oversee day-to-day operations, but those who started it had their own businesses to grow. The more they grew, the less time owners had to devote to running The Iceberg.
“There’s only so many hours in a week,” Elliot said.
Elliot founded Fayettechill in 2009 and is the company’s CEO. A co-working space would have given him more connections and resources had there been one when he started his company, he said.
“It’s an amazing tool for people starting out,” he said.
Officials in the University of Arkansas’ Office of Entrepreneurship and Innovation surveyed those who would use Brewer Family Entrepreneurship Hub and toured co-working spaces in Atlanta to find out what was needed for a space to be successful.
There were three aspects that repeatedly came up, said Sarah Goforth, the office’s director of outreach: solid, high-speed Internet for easy uploads, good acoustics that provide a sense of privacy but are conducive for large events, and good, free coffee.
“It fuels everything,” she said.
Andrew Miles, co-founder and CEO of Grox Industries, uses the Hub when he needs an office or wants to bounce ideas off others. He and the other co-founders created Grox last year out of the University of Arkansas Walton College of Business New Venture Development Program. The company reduces energy costs by using lighter and lower thermally transmittance material.
“From a startup perspective, it provides a cost-effective work place while we raise funds and try to expand our team,” he said of the Hub. “The hub is still new and growing from a utilization perspective, but when it really becomes a ‘packed’ house, it will provide a wealth of ideas and viewpoints from the hard working entrepreneurs that will call it home.”
MORE THAN SPACE
The need for co-working space in Northwest Arkansas is less about the financials and more about providing support for startup companies, Saumweber said.
“Co-working is one of those things, it’s like food, shelter and water for the startup community,” he said.
Nine startups use the Exchange in Bentonville for their work space. Exchange is unique in that the space is free and startups are selected based on an application process.
The partnership between RevUnit and Wal-Mart provides those companies with mentorship opportunities and access to events to foster relationships between entrepreneurs and established businesses.
The startups don’t have to be retail-specific because of Wal-Mart’s support, Randy Salley, the retailer’s senior vice president for retail technology, said during Exchange’s opening in May. He said Wal-Mart has no plans to invest in the startups and the companies won’t be required to work for the retailer. Rather, Wal-Mart sees Exchange as its contribution to the startup community.
Grit Studio’s intention is to help build and support an entrepreneurial ecosystem in the region, as well as provide space for startup companies, said Rick Webb, director. It wants to help big businesses support the startup community, help startups grow their businesses and create a sense of place and brand identity with a physical location, Webb said.
“We kind of facilitate as a third party, but really the magic comes when startups are helping startups and enterprises are leaning in,” he said. “It’s fun to watch.”
Grit memberships are really about access and visibility, Webb said. Members will have their own work space in the Massey Building. There will be open desks as well as private offices. Unclaimed work space will be available for rent for nonmembers. Meeting rooms can be converted into conference rooms.
PROVEN SUCCESS
Vic Gatto, CEO of Jumpstart Foundry, hopes to have the same success in a co-working space in Bentonville as he did in Nashville when launching his business.
“It’s the best place to get embedded into the community,” he said. Jumpstart Foundry invests in 15 to 20 healthcare startups each year across the country. Its one employee based in Bentonville uses Grit Studios’ temporary space and will move with Grit into the Massey Building.
“I think we’ll do the same thing in Bentonville,” he said. “It’s a good place to start with one, two, three employees.”
Webb and Saumweber also mentioned the importance of having space to hold different educational events about the growing entrepreneurial efforts in the region. Co-working spaces provide that, they said.
“It takes a village to raise a startup,” Saumweber said. “We’ve just had some outstanding mentors and people willing to get involved and provide coaching along the way.”
That’s one of the main benefits of places such as Exchange, he said.
“It’s a refuge for entrepreneurs,” he said. “It’s a place where you can find that connection and community and increase your chances of success.”