Support our non-partisan non-profit newsroom 💜 Donate now

Co-working gains steam, so is the business behind it

Gigi Douban Aug 28, 2014
HTML EMBED:
COPY

Co-working gains steam, so is the business behind it

Gigi Douban Aug 28, 2014
HTML EMBED:
COPY

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.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.