Co-working gains steam, so is the business behind it
A man walks past the neon sign in front of the 'We Work' co-operative co-working space on March 13, 2013 in Washington, DC.
For telecommuters putting in too many hours in a coffee shop or at your dining room table, there's co-working. There are more than 3,000 co-working spaces around the world, six times as many as there were just four years ago. But as business ventures go, a lot of these modern shared work spaces are short-lived.
Think of it like a gym membership, only for your office. Pay a fee — daily or monthly — and you get a desk, a phone, maybe a meeting space. Bonus: You still get the buzz of being around other working professionals.
Steve King, partner at Emergent Research, a consulting firm that tracks the co-working industry, says don't expect co-working to go away anytime soon.
"They haven't peaked yet," he says. "It's an industry that continues to grow very rapidly. It's not a very old industry."
The economy has left more people working on their own, and looking for a decent work space. As companies scale back, they're less willing to sign on to long-term leases.
"They can expand or shrink as they need to because they're basically paying month-to-month," he says.
Plus, King says, working from home has its challenges. Namely, distractions.
"You know, they take the dog for a walk or they start snacking, or there's a repeat of 'Gilligan's Island' on TV that they want to watch," says King.
However, King says like any new industry, co-working has a pretty high degree of churn.
"Churn is a nice way of saying a lot of businesses go out of business," King says.
Last year, Atticus Rominger helped launch SocialVenture, a co-working space that used to be a warehouse in in Birmingham, Alabama. You can pay $175 a month for a desk or $375 a month for a private office. He says after doing a little research, his company found plenty of people interested in renting space.
"But we also found a lot of people who'd kicked the tires on co-working for many years and never really kind of took the bait," Rominger says.
In the last five years or so, at least three other co-working spaces in Birmingham have come and gone. Rominger says at SocialVenture, renting out desks hasn't been a problem. But creating a co-working culture — where there's a close-knit group of workers collaborating and bouncing ideas off of each other — is a different story.
"And that's something that we're going to really just have to grow into as we balance the desire to have this active and close co-working community with the realities of having a mortgage and operating a real estate venture," he says.
In other words, Rominger says, the priority now for his co-working space is to find a profitable business model.
That energy and feel-good vibe can come later.