Coworking spaces are popping up everywhere
This is why.
In 2006, there were no more than 30 coworking spaces in the entire world. How things change! Our industry grew out of the basements of a few freelancers, struggling to stay motivated in isolation. Freelancers who were seeking to satisfy a fundamental need to surround themselves with like-minded people. The humble origin of coworking spaces is almost unrecognisable in the industry today, save for one thing: the clear importance of the people who make up a space’s community.
As a concept, coworking is still very much in an experimental stage. Demand has doubled year on year, even in the early days. It survived, in fact thrived in, the global financial crisis thanks to the resulting surge in spin-out businesses and self-employment.
At the beginning of 2013, more than 100,000 people were actively using the 3,000 coworking spaces that had cropped up around the world.
By that time, we were no longer building infrastructure purely for lonely entrepreneurs but also a diverse global community of startups, creatives, portfolio careerists, change-makers and employees of those few corporates who value innovation.
Word on the street (in property circles at least) is that there’ll be 50,000 flexible workspaces in the world three years from now. Other sources have taken a more conservative estimate but still predict that based on the current 40% growth rate, there will be more than a million global coworking members by 2018. Naturally, the opportunity of a growing market has seen a few big names explode onto the scene, backed by institutional capital. In the past year alone, coworking organisations have raised close to a billion USD.
However, with its 10th anniversary just having passed, the first global wave of coworking is still dominated by single space operators. And while the larger chains are bringing the concept of coworking into the mainstream vocabulary, it’s those independent spaces that have been responsible for driving deep-seated cultural change.
What we’re seeing now is that many of these spaces, having built up a strong community of like-minded coworkers, are in need of greater capacity to meet demand. In the most recent census, 60% of existing coworking spaces shared their intention to expand, either through extensions or opening additional locations. This is demonstrative of a shift in the market from an influx of new names jumping on the bandwagon towards the emerging dominance of the few with solid reputations.
Anecdotally, in London there has been extraordinary month on month growth in the past year, particularly amongst existing players. WeWork are soon to launch their fifth location. SecondHome are rumoured to be adding two floors to their site. Northerners, Hello Work, are moving south. And of course, we’ve just announced the November launch of Huckletree Shoreditch.
In neighbouring regions, the same pattern is emerging. Dublin market leader, DogPatch Labs, is adding 8,000 square feet to their premises in the Docklands. Parisian group, Mutinerie, now has two coworking hubs and a rural space just outside of the city. Many of the big names in Europe, like London’s TechHub and Berlin’s betahaus, are even crossing national borders.
For the most part, these spaces are growing because they have earned a reputation as a community that people want to be a part of. As such, being able to say that you are a member of that community holds great gravitas. It puts you side-by-side with inspirational coworkers and aligns you with partners to grow your business.
Consequently, people who had previously been motivated by price are starting to invest in coworking membership for the strength of the community itself, rather than the simple convenience of renting a desk with flexible terms.
Part 2 of this article will explore the changing mentality resulting in growing levels of self-employment and entrepreneurialism. We’re zooming in on London, and how movement in the way we work is affecting the coworking market.