HAS COWORKING LOST ITS WAY OR WAS THE ORIGINAL MODEL FLAWED TO BEGIN WITH?
WeWork, arguably the coworking industry barometer, recently announced 12 months free membership in New York if you commit to a contract for a further 2 years. In London, they recently opened a space in St Katherine's Dock above another coworking space called Rainmaker Loft, forcing its closure.
Could these aggressive expansion tactics be the first signs that coworking operators need to fight for members? Could this be the result of WeWork’s need to expand at the rapid rate to satisfy their investors? Whatever the reason, the once sanguine world of coworking is seemingly getting its first taste of true commerciality.
For many, coworking started with the notion of creating workspaces that support collaboration, and therefore mutually beneficial business relationships between its members. Since its explosion in 2008, there existed a caring, sharing feel to competition whereby this disruptive, gig economy-supporting industry was a movement for good. Coworking operators didn’t need to worry about the ominous threat of competition, as we were part of a positive movement reacting against the coldheartedness of the corporate world. The usual aggressive and uncaring business practices had no place. So, have WeWork changed that?
Perhaps not. Arguably, WeWork do not offer the same model synonymous with original coworking ideal. Arguably, the word coworking, in their minds, is more office As A Service (AAS). Yes, they offer the opportunity for you to interact with other businesses, but this is not curated or actively encouraged and most members take private offices. Sure, they do lay on social and business networking events, but one wonders how much real transactional member-to-member interactions there are. And this is no surprise; when you look at the financials of running a coworking space as it was originally intended. It can be incredibly hard to make money and ensure a steady cashflow. The very nature of helping small businesses and start-ups means they can’t afford huge rates and will leave you when they can afford their own office. To survive, operators should go premium or diversify in order to survive.
We truly believe coworking is a new way of procuring office space that disrupts the traditional model by offering flexibility and a great experience. Operators should start to offer space beyond start-ups and small business whilst still catering for those members who prefers a more collaborative working environment. There’s plenty of companies that will buy into the fantastic service and designs that coworking operators offer. We feel that is WeWork’s intention. If you’re a start-up, you’re more likely to sign up to short term membership. For Rainmaker Loft to close, you get the sense there was more to it than simple competition.
Third Space UK Group Ltd was founded in 2016 to offer Coworking consultancy and act as Coworking operators.