Coworking: Less a way of work and more a way of life
Coworking spaces (CWSS) are seen as hubs of creativity and innovation across the world. They are popular because they encourage entrepreneurship, the fountain of a good economy. They also foster the world’s rapidly growing force of knowledge workers, including freelancers and independent workers who seek an agile and conducive environment to work from.
CWSS help them to focus on their businesses while the mundane administrative matters ‘take care of themselves’. Besides, they also provide flexibility, mobility and a like-minded community for a collaborative and learning environment.
Brad Neuberg, a San Franciscobased entrepreneur, first started the coworking movement in 2005 and is also credited with having invented the term ‘coworking’. CWSS have since evolved from a simple hotdesk, (a table and a chair to work at, for a variable time on a given day), into incubators and accelerators, providing many value additions that a start-up, entrepreneur or freelancer may find useful.
Today, a typical CWS would include hot-desks, private meeting rooms, coffee/tea and Wi-fi, while further value additions may come from capacity-building programmes, recreation facilities, networking sessions and infrastructure options such as coffee shops, open lounges and event areas.
As CWSS have been around for over a decade globally, their service offering has also matured to cater to needs such as childcare and providing for differently abled people, who may also join the workforce, given the opportunity.
It’s a global trend
Many countries are embracing coworking and the numbers are growing. In 2017, there were around 1.18 million people working in coworking spaces worldwide and the Global Coworking Unconference Conference forecasts 30,432 spaces and 5.1 million paid coworking members worldwide by 2022.
In the US, there were 4,043 coworking spaces in 2017 and it is expected to increase to 6,219 in 2022. In the UK, the self-employed knowledge worker sector is growing too, bringing with it the need for hubs to provide social interaction and clusters of interaction for connectivity. Some major cities around the world even have womenonly coworking spaces, to counter ‘gentlemen’s clubs’.
Whether single gender or mixed, coworking affords all entrepreneurs and freelancers a flexible and supportive environment. Overall, the market shows an average annual growth rate of 24.2 percent since 2007, rendering coworking ‘less a way of working now than a way of life’.
The 2018 Global Coworking Survey, an independent research carried out by deskmag.com gives some interesting insights into the global CWS industry, which shows a steady annual growth.
The top revenue trends in coworking in descending order are: renting desks, which has come down from 40 percent in 2016 to 32 percent in 2018, combined membership plans has also dropped from 18 percent in 2017 to 10 percent, there was a marked increase in revenue from private offices from 18 percent to 27 percent, while meeting spaces and event and class space remained more or less the static at 10 percent and 8 percent, respectively. Other revenue streams included sales of tickets for internal events, public transport and so on. In this industry, profitability has grown exponentially as membership increases. While less than 25 members gave 22 percent profitability, having over 200 members brought in a whopping 81 percent profitability.
So it may not come as a surprise that the average number of members per CWS has been steadily increasing from 31 in 2012 to 82 in 2018.
When it comes to layout, around 50 percent of a CWS’ layout consists of open workspaces. Private offices come in next (25 percent), followed by lounge and coffee spaces were added in 2018 (11 percent) and meeting spaces, event spaces and classrooms in that order.
In terms of their basic business model, over 80 percent of CWSS are for-profit ones, while there are some non-profit and government CWSS, constituting the balance 20 percent.
It’s not just a work desk
The benefits of CWSS are manifold. You can select the package that’s right for you, with no strings attached; you can opt out any time. Some CWS offer daily or monthly rates while others break it down into hours to making it further attractive to short termers.
Apart from common services, each CWS has its own character or ambiance that might click with you. They eliminate the burden of setting up an office, which more often than not is a white elephant for start-ups. Additional benefits include access to professional resources through community events, financial consultancy and mentoring by seasoned and experienced entrepreneurs.
Many CWSS offer business networking opportunities and sharing of skills and one can also make use of community-based advertising and market research. Some of the more advanced CWSS provide venture capital for start-ups and house professional consultancy firms indoors to provide faster assistance and greater convenience.
Location, security and parking are some of the other factors that may be taken into consideration when choosing the right CWS. One thing that almost every coworking space tries to achieve is the right ambiance that is unique to each one.
The top-end facilities strive for the designer look with carefully planned architecture, interior and art, while the more cost-effective facilities focus on a ‘tidy and functional’ look, making their services affordable to a wider community.
Catalyst is community manager
The curator of a CWS is the community manager, who must play the role of the host and catalyst. Her primary role is to promote the space, focus on lead generation and conversion, curate a strong and unique community, fulfil tenants’ business and social needs and last but not least, help retain members.
To ensure continued value to their members, the administrators of CWSS need to be on their toes making sure the facilities are consistently available, the space is well maintained and the environmental vibes are at an optimum, creating a unique and engaged community. The success of a CWS venture is measured by the percentage of happy clients that remain active members of their community.
Why it beats working from home
Apart from the obvious economic benefits, there are also intangible benefits such as a work environment that boosts creativity, focus, productivity and collaboration. Working from home may not be the best option if you are running a sole proprietorship, start-up or working as a freelancer.
According to one study, one thing that all coworkers want to avoid is social isolation and that can easily happen if you are working from home. Other practical considerations come into play such as meeting clients, not having to bother with maintenance and not being distracted by the domestic hullabaloo. This means that one can achieve more and potentially be more profitable. Add to that, the right mix of people in a community and you get what we all know as synergy.
Ongoing research suggests that people who use coworking spaces see their work as meaningful, have more job control and feel part of an important community.
All-in-all, CWS obviously provide a good option for otherwise work-athome professionals, entrepreneurs, freelancers or even scientists as in the case of certain developed countries, to pursue their core business interests. But wait, there are flipsides too.
Darker side – But with a light at end of tunnel
Coworking may not be as rosy as it seems. Many of the people that resort to coworking are entrepreneurs and they share the ‘entrepreneurial gene’. A study carried out by Bouncken et al in 2018 states that although CWSS provide a creative, innovative and collaborative atmosphere to entrepreneurs, the professional and social dynamics in coworking-spaces also bear the risk of stress, exploitation, conflicts and distrust, which negatively affect entrepreneurial self-efficacy and passion. These negative traits, if not addressed, may undermine the advantages and lead to withdrawal of entrepreneurs.
However, Bouncken et al also suggest that CWSS can support entrepreneurs in facing these challenges by developing entrepreneurial communities, providing coaching and social support to budding entrepreneurs.
Coworking industry in Sri Lanka
Sri Lanka has seen the rise of many coworking spaces during the last couple of years, mostly cantered in and around Colombo’s metropolitan region. They usually cost around Rs.1, 500 - Rs.3, 000 a day or Rs.17, 500 to Rs.28, 000 per month.
Value-added services and private or dedicated office space add to the basic cost. These coworking facilities can be easily found on the Internet, along with their prices.
Mirror Business visited a few CWSS to get a first-hand impression about what they have to offer. At the onset it was quite apparent that each space enshrined a unique micro-culture and ambiance. The capacity, services and infrastructure varied as well.
They each had a specific target market and all with a healthy occupancy and much hopes of expansion. Overall, CWSS are getting more and more popular in Sri Lanka, as we too seem be following the same global trends in self-employment and entrepreneurship free of administrative hassle.
Likuid Spaces: Nestling amidst a residential area in Barnes Place, Colombo, Likuid Space had a retro and cosy feeling to it. While there are some start-ups that reside there, most of their members were expats and walk-in tourists. They officially launched in May 2018, although they have been around before that. Likuid Spaces have a capacity of around 40 members, which includes hot-desks, private meeting rooms and also semi-private spaces if one prefers to be relatively undisturbed. The pantry provides basic cooking facilities, coffee and complementary fresh fruits. Its Community Manager Linda Marik explained to us that the space is presently being expanded to meet increasing demand. The rooftop, which is part of the expansion, includes an open lounging area. It has events organised on a weekly basis to keep its members positively charged. Linda says that Likuid Space encourages a friendly culture to foster a strongly knit community.
Coco Space: Akhila Wijeratne started Coco Space in Thimbirigasyaya because he has extra space available in his office. A young entrepreneur, just passed out with a degree in marketing, Wijeratne is very enthusiastic about the growth Coco Space has achieved within just three months. He observes that most young and educated people are turning towards entrepreneurship and freelancing to earn more than what a regular job would pay. He feels there is a need for CWSS for this reason. Things seem to be working well for him, as on some days Coco Space has a full house or packed evenings. Coco Space has a flexible approach to fees, depending on the specific needs of the clients. They offer an hourly rate, making it further cost-effective for those that need a work space for just a few hours and not an entire day.
Hatch: Walking into Hatch, in the heart of the commercial hub in Colombo Fort, there is quite a powerful ambiance. Its co-founders Jeevan Gnanam and Brindha Selvadurai-gnanam have created a spacious and luxurious environment to give coworkers and start-ups inspiration to grow. Hatch includes a cafe, an open cafeteria, an auditorium and an event venue in addition to the usual amenities. Jeevan, who also serves as Chairman of SLASSCOM, tells us that he wanted to set up the facility at this location to make it easily accessible to everyone and yet affordable for new ventures. Presently, Hatch occupies about 20,000 square feet of area covering the ground and first floor of the building. But its plan is to extend this to a total of 70,000 square feet once it’s completed. “This is a world-class facility,” said Jeevan, as he confided in some interesting plans he has in mind. Hatch serves as an incubator and an accelerator primarily for tech and tech-enabled start-ups but there are professionals such as lawyers and others as well using its conveniences. Hatch offers regular events for the community. They also have their own investing scheme, where promising business ventures are reviewed and the most deserving are supported through their network of venture capitalists. A Hong Kong-based coworking facility chain, TEC claims to be the world’s third largest serviced office business in Asia with annual turnover in excess of US $ 200 million, with over 125+ spaces in 30 cities across 13 countries. It offers high-quality private and shared workspaces, business concierge services and meeting and conference facilities for multinational corporations, small and medium enterprises and startups. Situated at the World Trade Centre building in Echelon Square Colombo 1, TEC also offers its members business services to expand their business to Sri Lanka. It has an in-centre events programme and a digital ecosystem that helps TEC members to build relationships and to succeed.
A promising future
It is a well-understood fact that micro, small and medium-sized enterprises form the backbone of economic growth in today’s world. This is all the more reason to support their growth with costeffective business infrastructure and professional guidance.
In addition, the global landscape of employment is rapidly changing, with automation on the rise. Businesses and larger corporates are resorting to leaner structures, cutting down on their staff. These factors are intensified by global economic downturns and many educated and talented individuals are resorting to self-employment and business start-ups to realize their professional ambitions.
In this backdrop, CWSS seem to be the urgent need of the hour, offering such folks a lifeline. The global economy is seeing a transformation in the definition of work that gives people more flexibility and control, with a nurturing atmosphere at an affordable price. Sri Lanka’s private sector is on to this need and the prospects seem quite bright for this way of life. (References: https://www.statista. com/topics/2999/coworking-spaces/; https://www.entrepreneur.com/ article/309197; The 2018 Global Coworking Survey is an independent research carried out by deskmag.com supported by WUN, essensys and NEXUDUS SPACES; https://blogs. ec.europa.eu/promotingenterprise/ coworking-spaces/; Bouncken, Ricarda&aslam, Muhammad &Reuschl, Andreas. (2018). The Dark Side of Entrepreneurship in Coworking-spaces. 10.1007/978-3319-62455-6_10)