Here at Stacklist, we work in a co-working space called Alley NYC in Chelsea, and we are big fans. We have been here since January and have enjoyed the space itself, the community, the phone booths (where we conduct stacklist interviews) and some of the simpler things like cereal and excellent coffee.
Those sentiments resonate with 39% of founders, who all told us in their stacklist interviews that their teams work out of coworking spaces like WeWork, Spark Labs (NYC), 1871 (Chicago) and 1776 (Washington DC). We were curious about the industry “space” of co-working spaces. How fast is the industry growing? Does the concept of coworking have legs outside of startups and tech? We’re price-jaded NYers, used to paying a pretty penny for any space, but what does pricing look like nationally and globally? And, besides convenience and infrastructure, what are the real reasons startups opt for coworking.
We looked to the experts over at deskmag and checked out their 2015-2016 annual report on co-working spaces. They do an annual study on coworking globally and, this year, interviewed 1679 people on their use of coworking spaces. It’s a rich study and we wanted to highlight what we thought were the most interesting points.
Why people like co-working spaces
Humans are fundamentally social creatures. In traditional office spaces, socialization is inherently stifled, whether because of walls and individual offices or because of the mere fact that yours is the only team you interact with during the day.
Co-working spaces facilitate interaction and networking that humans on an instinctual level need in their everyday lives. 76% of members of co-working spaces valued a sense of community in their work environment above all other benefits of being in a coworking space. 75% valued interaction with others. 58% felt like part of their co-working communities.
And this community nature of co-working spaces plays out in other benefits as well; working in the same space can lead to collaboration with other startups and the sharing of ideas. There is a prevailing sense of equality, with 69% of members feeling like there was no sense of hierarchy in these co-working spaces. Additionally, 45% felt that working in a co-working hub could lead to new job opportunities or projects.
What we also noticed was that 62% of members valued affordability of co-working spaces as 1 of their top 10 reasons to work in a co-working office. But is it a good deal after all?
How much does it cost?
So we know that members benefit and thrive in these co-working communities from intangibles like community. But the affordability is unambiguously important.
Overall, 85% of respondents reported that they felt they were getting a good price for the value of the co-working space. Deskmag broke down price into 3 distinct categories with prices average across global coworking spaces (keep in mind that most coworking spaces are in urban which creates some consistency of economics though there are still huge disparities - for example, between NYC and, say, Raleigh).
For 24/7 access, the monthly membership fee averaged $305 per member.
And, for those startups that only need to work a couple of days a week, the price was only $134 (note: deskmag did not clarify the specific number of days a week).
And cost isn’t just about monthly price. With growth and the uncertainty thereof, it’s also about the the flexible durations of coworking vs. longterm leases in traditional offices. And it’s about the cost of time - not having to build an attractive conference room yourself, nor setup and manage infrastructure. Startup teams want to be building their companies, not their office space.
Who is using co-working spaces?
Here at Stacklist - as is true across the startup community - we are getting younger and younger, recently bringing on some recent college graduates (say hello to yours truly). It turns out that this is not a unique situation for other startups. As the millennial generation gets to work, their presence in the work force has increased. 28% of employees in co-working spaces were aged 18-29, up from 25% in the previous year’s report.
Freelancing is also on the decline within coworking spaces. While 42% of employees that were based out of these co-working spaces were freelancers in the 2013-2014 report, that number drastically decreased to 32%. Similarly, the percent of full time employees working in office spaces increased from 37% to 51%.
Co-working vs. traditional office
Once upon a time, people mostly saw co-working offices as an upgrade from a home office, where startups often begin. Once your team grew big enough or you got that seed funding, it was time to pack up things at home and move into a new office. While the original goal for many startups was a traditional office environment, co-working spaces have created a grace period wherein teams can wait for the right time to make that large investment and commitment.
In the 2013-2014 report, 57% of members worked from a home office before moving into a co-working space. That number faced a steep decline, falling to 44%. That number is being pushed downward by the increase of teams in traditional offices deciding to adopt the coworking space lifestyle. While 23% of members moved from a traditional office workplace to a co-working space, in the 2013-2014 report, that number jumped to a high of 37%. It appears that this sense of community has become more valued in the business world.
Is it worth it?
One of our core values at Stacklist is providing the resources for startups to make smart, quick decisions about tools so they can focus on growing their startup. We think the perks of coworking spaces ultimately provide exactly that benefit.
Co-working spaces are turnkey. Teams can move in, open their computers and get to work within moments of arriving on their first day in a space. Coffee’s brewed. The wifi works.
There is a built-in community of likeminded business people and startup folks. The sense of community and the networking ability alone is a great benefit to offer to new members of your own team.
The economics work. Monthly membership rates tend to be reasonable, especially with a larger supply of coworking spaces entering most urban centers. More importantly, you have flexibility at a stage of business when flexibility is key.
In most cases, these spaces have been thoughtful about architecture, interior design and lighting, which all contribute to a pleasant space for every member of your team.