When most people think about coworking spaces, they immediately picture a bunch of freelancers and solopreneurs working on independent ventures at shared desks. But coworking spaces are more versatile than this. Many technology startups actually find them to be the perfect place to launch and grow their fledgling businesses. Perhaps you will, too.
What the Heck is a Coworking Space?
In the simplest terms, a coworking space is a shared office space in which individuals and businesses work independently and/or collaboratively within the same physical environment. The owner of the coworking space generally charges a monthly fee to members and, in return, provides amenities like workspaces, 24/7 access, conference rooms, printers and copiers, shared kitchens and bathrooms, coffee and snacks, and mailing addresses.
“Coworking facilities follow various business models,” IT industry insider Margaret Rouse writes. “Some facilities, for example, are cooperatively managed spaces run as non-profit organizations. Such organizations may charge members just enough to support operations. Other models include flat-rate memberships and fee structures based on access for a single visit or a certain number of days per week, month or year.”
Technically speaking, shared office spaces have been around for decades. However, it’s really been within the past decade that they’ve become mainstream.
Five Profound Benefits for Tech Startups
While individual freelancers make up the majority of coworking spaces, it’s becoming increasingly popular for tech startups and their teams to utilize shared office space in lieu of traditional leased office space. Here are a few reasons why:
Cost
When compared to the traditional cost of leasing office space in a big city or desirable area, a coworking space gives startup teams a cost-effective alternative that’s comparatively inexpensive. Not only do you get the office space, but you also gain access to other resources that would add up if they were to be purchased individually (like copiers, printers, utilities, desks, chairs, etc.).
Flexibility
The tricky thing for startups is the lack of predictability. You might have a team of three people producing US$100,000 in revenue today, and a team of 12 people producing $10 million in revenue 18 months from now. If you lock yourself into a traditional office space lease, you’ll be forced to make some tough financial decisions. With a coworking space, you can go month to month and change your office space as you scale (up or down). This flexibility is invaluable.
Location
As previously mentioned, real estate is often expensive in markets where business is thriving. But if you’re a new startup looking to grow, you need to be in the thick of things. After all, it’s beneficial to rub shoulders with business leaders and entrepreneurs who have clout. Renting coworking space allows you to insert your startup into a prime physical location without paying a massive premium.
Take Houston, Texas, USA as an example. It has one of the fastest-growing tech scenes in the US and commercial real estate is expensive. But startups can circumvent this premium price by using a Houston coworking space like Novel, which has a location in the heart of the Houston Central Business District.
Networking
Where else can you spend hours, days, weeks and months working alongside other business owners who are successful and skilled, yet aren’t competing directly against you for customers or revenue? A coworking space creates an environment that’s ripe for natural networking. You don’t have to schedule coffee meetings or attend conferences – you just show up to work every morning and you’re able to rub shoulders with a network of talented people and interact with their businesses.
Individual Performance
Research shows that people who spend time in coworking spaces see their work as more meaningful than they would in a stale, traditional office space. In response, they thrive and their performance skyrockets. There are a couple of reasons for this.
“First, unlike a traditional office, coworking spaces consist of members who work for a range of different companies, ventures, and projects. Because there is little direct competition or internal politics, they don’t feel they have to put on a work persona to fit in,” researcher Gretchen Spreitzer writes for Harvard Business Review. “Working amidst people doing different kinds of work can also make one’s own work identity stronger.”
Secondly, coworking spaces usually cultivate a culture where it’s normal to help each other out – and there are lots of opportunities to do so. With so much support coming from within the startup and outside of it, it’s hard not to get excited about doing good work.
Think Outside the Box
As the founder of a startup, you can’t afford to do things the same as every other business. You don’t have the luxury of following the status quo and assuming everything will work out. The only way to make headway and succeed is to think creatively and to do things differently than the rest of the pack. Making a coworking space your home base is just one step in this direction. Try it and see what you think!