The Rise of Free Coworking
Individuals don’t want to pay for a coworking desk.
Now, of course, reading that sentence as a coworking operator, you might be saying to yourself “Oh, poor freelancers, no worries, I can just attract different people to my space.”
While that may seem like a feasible idea, the truth is whether we’re talking about freelancers, remote workers, small business owners, or high-paid contractors — very few of these workers are willing to pay for access to a coworking space.
Over the years, I’ve seen many small (up to 300 m2) coworking spaces open their doors, struggle to attract clientele and then close down after only a couple of years.
In these instances, I seem to always find they have followed the same simple playbook:
- Rent a space
- Create a community
The problem is, this playbook doesn’t work in most cases.
In reality, it’s extremely hard to make money from a small coworking space unless you have different motivations (you own the property, you want to rent unused space in your own office, or you are trying to attract prospects for your consulting business, etc.).
And perhaps the most desperate thing I see all the time? Paid Facebook Ads that attempt to educate the market: “Don’t work from home, come to work from our coworking space”.
The margins in this business are just too small to acquire customers in such an expensive way.
Where is the money in the coworking business then? Serviced offices for startups, agencies and corporations — that’s where all the big players like WeWork or Knotel are focused.
Can you compete here?
One of the reasons why small coworking operators struggle is the rise of what I call “free coworking”. Consumers have never had more options to find a productive workspace than they do today.
More coffee places embrace laptop workers
Only a few years ago, it was a challenge to find many coffee places where you were welcomed to regularly come and work without interruptions for a few hours. Often times, Starbucks was the only option.
Now I see smart café operators creating special areas with large desk spaces dedicated specifically towards catering to people that want to come and work on their laptops. These spaces are usually the least popular area in the cafe, with people instead choosing to sit next to each other, and as a result, space is very efficiently used for those looking to adopt the cafe as their coworking space.
These remote workers create a nice vibe for the café, many times becoming ambassadors (free marketing) through social media and word-of-mouth and often staying much longer than regular guests, on average spending significantly more money on food and coffee.
Lobbies of upscale hotels are perfect for working
Hotel lobbies are usually my first choice for working while travelling. And the best part — you don’t have to be a customer at that hotel.
Lobbies of 4 or 5* hotels are usually empty during the day and often have many of the features of a high-end coworking space: comfortable desks/chairs, good wifi, plugs and a quiet environment (with not very loud ambience music).
I asked a few times at the reception if it’s OK to work from there if I’m not a hotel guest and their reaction was always positive. It makes a lot of sense — a few people with laptops can bring some energy to an otherwise empty lobby and perhaps even add some additional revenue for the hotel café.
Sponsored coworking spaces
When your business has an unused space, you can convert it into a PR tool.
The first time I saw a free sponsored coworking space was in 2016. The Bank of Ireland decided to offer an area of one of their branches in Dublin as a free coworking and they organised there tech events there in the evenings.
A similar space has existed for a while in Bratislava and it’s sponsored by the mobile operator Orange.
I noticed that most regulars working there are freelancers and there are always a few people like me who come from time to time just to change their home-office environment.
Many public libraries have evolved to the modern age and installed super-fast internet — the last piece to become a perfect place for any freelancer to get things done.
The silent environment has one downside though — it’s almost impossible to make calls. However, on the other hand, you would have a hard time finding a more beautiful workspace than this public library in Lisbon:
Well, unless you visit this public library in Prague that is:
I have a couple of Facebook community groups for digital nomads in Europe. These groups help nomads and expats to relocate to new locations like Lisbon or Gran Canaria.
When new coworking spaces are launching in these cities, their operators always share the news in the groups.
I tried an experiment in Gran Canaria in 2017 and asked one of these new coworking spaces if they would organise a free coworking day for the digital nomad community, offering an opportunity for people to discover the space and generate good marketing for the operators.
They agreed and we created a Facebook event.
Around 10 people showed up at the coworking space that day and hundreds saw that there is a new space available in town. I started to get messages from different coworking operators saying that they would like to organise a similar event for themselves.
As it started to become a time-consuming task, I proposed the operators work independently to choose a date, create a FB event and share it in the group.
Then I replicated this experiment in my Lisbon Digital Nomads Facebook group, but with a little difference — I began encouraging new members of the group to organise and coordinate the events for themselves.
As the nomad/expat community in Lisbon is much bigger than in Gran Canaria, coworking days became very popular and one unexpected thing began to happen — people started to organise coworking days around specific topics and themes — for example, coworking sessions for marketers.
People have been incredibly creative and have quickly reinforced my belief that the most important essence of these coworking days are the people you can meet whether you’re coming together in unused cafés, gardens or any number of other unique spaces.
It’s been so exciting seeing how these events have taken off and in December 2018 there were even 3 free coworking days organised by 3 different people at 3 different venues in one single week.
Buffer ran a survey State of Remote asking remote workers about the location from which they primarily like to work. It’s not a surprise that most people prefer to work from home and coworking spaces have to fight for a very small niche of remote workers.
If you run a coworking desk focused on remote workers, there is a sad truth — only 8% of these people are your potential customers and you have to fight for their interest amongst other coworking operators.
So, what are the solutions?
As a coworking operator, I believe you have 2 options:
- Become bigger and focus on private offices
- Focus on some niches
Focusing on some specific niches/tribes can help you to automatically create a community around specific topics and attract some people who might not have visited your space before.
Here are some examples:
- Coworking for outdoor enthusiasts
- Content creators
- Post-Revenue SaaS Startups
- Digital nomads
- Real estate technology startups
This is an approach I also follow and am happy to report I have seen great success.
My company Surf Office organises team off-sites and company retreats in Europe and the US. In some of our 12 locations we operate our own coworking space, in others, we cooperate with local operators. We are only focused on hosting retreats, workshops, hackathons, trainings, meetups and corporate events.
We are always looking for new coworking partners — you can find more details here.