Community in Co-Working (and Other Perks of the Business Trend)

Entrepreneurs find opportunities to collaborate, network and increase their productivity at co-working spaces that have popped up everywhere.
July 15, 2014

Parker Whitney graduated from college in 2008 with a degree in psychology and a large question looming: Now what? “There was no work anywhere,” he says. A year later, he learned that Indy Hall, a co-working site a five-minute walk from Philadelphia’s Independence Hall, had an internship available.

Whitney got the position and soon became the site’s “den mother.” The pay was paltry, the contacts invaluable. One of them was with a web developer named Jake O’Brien, who had designed a couple of video games in his spare time. “I had a little game idea myself,” Whitney says. “We started riffing on the idea.” The two then began collaborating further.

As luck would have it, Whitney later gave a tour of Indy Hall to somebody looking for a game developer. He and O’Brien got a contract job with him. “Indy Hall is such a facilitator for those serendipitous interactions,” Whitney says. Equally important, he adds, is the “go-for-it mentality” that is part of the co-working culture.

Whitney and O’Brien eventually formed their own indie game developing company, Flyclops, and created their most successful iPhone game, Domino! They stopped doing contract work, moved out of Indy Hall and brought in a third partner. The company now has five full-time employees and one part-timer.

Stories like Whitney’s are common in the co-working world. Co-working is part business trend, part social movement. Proprietors stress a sense of community as much as they do the professional benefits. (One San Francisco site bills itself as a “co-working space/clubhouse.”)

Co-working sites are shared open-plan areas where people work independently but communally. Members include telecommuters, freelancers and other independents weary of working from a coffee shop or home, as well as entrepreneurs looking for collaborators. Costs vary depending on the amount of use.

It’s About Relationships

Other businesses are taking notice. The Global Workspace Association—a service industry group for business center and executive suite owners and managers—has added co-working facilities to its membership rolls, and some hotels now offer space for co-working.

Co-working purists say those sorts of spaces aren’t the real deal. “If you don’t have somebody there building, curating… it falls flat,” says Liz Elam, who follows the industry closely and is owner of Link Coworking and Link Too, two Austin, Texas, co-working sites. “They don’t understand that people make a space.”

That’s true at Indy Hall. “Our No. 1 reason people join Indy Hall is they’re alone,” says co-founder Alex Hillman, 30. “They need other people.” That’s also why they stay. “It’s about the relationships they form.” Twenty of Indy Hall’s original 22 members dating back to 2007 remain on board. “Our retention rates are through the roof,” Hillman says.

Laura Forlano, an assistant professor at the Illinois Institute of Technology in Chicago, conducted a survey in 2006–2007 of more than 600 independent workers, entrepreneurs and others in New York City who could choose where to work and opted for public places such as cafes, parks and libraries. She interviewed more than 30 of them.

Survey participants cited many reasons why they worked in a public setting. Some wanted a network of people to talk to. Others found the ambient noise helpful or said that watching passersby helped them focus. Still others needed to escape distractions at home.

Some co-working operators say members tell them that being around other independent workers motivates them. “That’s definitely something I saw,” Forlano says. “Some said if they were watched by others, they were less likely to goof off. It made them feel if other people were working, they had better work, too.”

Collaboration and Productivity

Stephen E. Humphrey, an associate professor of management at Pennsylvania State University, reviewed 40 years of studies on how work is designed along with factors that affect things like performance and motivation. It became clear, he says, that social factors are important to workers. “People like being around other people,” he says. “People want to be part of something. Co-working is a natural extension of that.”

People clearly are more productive when working around others, Humphrey says. More creative too? It’s hard to say. “It’s more complex.”

Independent workers—especially those with families—can benefit from working away from home because doing so establishes a clear boundary between their professional and personal lives, Humphrey says.

Jason Beatty was one such person. Beatty, 43, was running a software company out of the Santa Cruz, Calif., house he shared with his wife and daughter in 2009. “When you work a lot of hours on a startup, you need some separation,” he says. So he joined the local office of NextSpace.

There, he met Jim Brock, who had joined the co-working site for a different reason. Brock, 52, was developing consumer tools for protecting online privacy and was searching for “an opportunity to meet other entrepreneurial people in Santa Cruz. I needed somebody who would be responsible for the technical side.”

Brock sent an email query to fellow NextSpace members, and Beatty responded. The two had lunch several times before deciding to collaborate. “Together we really accelerated the effort” and founded PrivacyChoice in 2012, Brock says. The company created a browser extension called PrivacyFix that monitors to what extent sites such as Facebook, Google and LinkedIn track consumers’ data. In May 2013 they sold the business to AVG Technologies, a global Internet security firm based in the Czech Republic, for an undisclosed sum.

Assisted Serendipity

Co-working sites have a number of ways to help facilitate seemingly chance encounters. Happy hours and lunches to introduce new members are one means. Indy Hall hosts at least six art shows in its building annually featuring the work of “community members and friends of the community,” in Hillman’s words. NextSpace has brought in speakers on topics that include entrepreneurial moms—“momtrepreneurs”—and fundraising for startups. Projective Space in New York City held a one-hour session for engaged couples that would “apply business concepts to the wedding planning process to make it more efficient.”

Disputes arise in any community, of course. NextSpace has “community curators” trained to assist. Hillman says problems seldom arise at Indy Hall. “People are remarkably considerate to the people they know and care about,” he says. “We work hard to be a mediator, not an arbitrator.”

Many co-working sites cropped up around the time of the Great Recession, when new college grads like Whitney couldn’t find work, and workers who had jobs were losing them. Co-working spaces seemed like a good place to network at the time.

The steady, plodding growth of the economy since 2009 means fewer desperate job seekers, but Jeremy Neuner foresees no decline in demand for co-working spaces. He’s the co-founder and CEO of NextSpace, which has eight co-working sites in California—including one that provides day care—and one in Chicago.

Neuner, who was the economic development manager for the city of Santa Cruz (another co-founder was the city’s mayor), is convinced the country is in a “once-in-a-century” permanent shift in the workforce in which an increasing number of contingent workers are essentially free agents who work on a variety of jobs or projects for different employers contracting for their services. Younger workers, in particular, are no longer content to endure frustrating commutes and lifetime jobs, he says, but prefer to apply their skills as they wish.

“They want to trade a little bit of their security for their freedom. [But] they still need a strong sense of community, a place to go” to commiserate with others, Neuner says. He’s not the only one who sees it that way.

No More Traditional Employment

The Intuit 2020 Report forecasts that during this decade, “Traditional employment will no longer be the norm, replaced by contingent workers such as freelancers and part-time workers. The long-term trend of hiring contingent workers will continue to accelerate with more than 80 percent of large corporations planning to substantially increase their use of a flexible workforce.” By 2020, contingent workers will comprise more than 40 percent of the U.S. workforce, Intuit forecasts.

The Intuit report also sees work shifting from corporate offices “toward an in-my-own-place, on-my-own-time work regimen.” Many of these workers will need a place to do business. That bodes well for co-working companies. “We have big plans for the future,” Neuner says, with a goal of 100 NextSpace sites by 2020.

Lansie Sylvia isn’t a contingent worker, but she finds co-working helpful. She’s director of engagement for Here’s My Chance, a Philadelphia for-profit company she describes as a “creative agency for good” that provides high-quality, affordable design and strategic services for nonprofit organizations and social enterprises. She joined Indy Hall because she doesn’t drive and occasionally wanted a space away from her job and home to work.

Sylvia says co-working has helped her gain expertise she lacked and to find collaborators on a project she developed. At her full-time job she was unsure if she was getting her employer a good deal with the search engine optimization firm she retained, so Sylvia emailed Indy Hall members asking for advice in exchange for beer. She got three responses. “In an hour, I knew as much or more about SEO than I could learn in several weeks of Googling,” she says.

In her spare time, Sylvia, 29, and Indy Hall acquaintances formed Philly Give & Get, an all-volunteer organization that organizes semiannual charity auctions that combine professional networking with community engagement while raising money for nonprofits. One of her Indy Hall colleagues is a co-founder of the organization and built the group’s website.

The emphasis on community that co-working sites tout is a boon to networking because it enables members to gauge quickly whether a potential collaborator is somebody they’d be compatible with, Sylvia says. And in a tight-knit community, word gets around if somebody isn’t a good fit. There’s one other benefit, too. “A lot of us have Indy Hall rates for each other,” Sylvia says.

Community as Selling Point

Even so, co-working isn’t for everybody. Members tend to be men in their 20s and 30s who work in digital and tech-related fields. One exception is Hera Hub, three co-working spaces in San Diego County for women; each promises “soft lighting, tranquil fountains, candles and relaxing music” along with opportunities to work and network with other women. Hera Hub plans to open its first franchise location in Washington, D.C., next winter.

By contrast, NextSpace has about a 2-to-1 ratio of male to female members, including a significant portion in technology jobs. “We try to have as broad and deep a talent and membership pool as possible,” Neuner says. Members include a stand-up comic, a sex therapist and an ordained minister, he adds.

“The main selling point is community, but what community is differs from place to place and individual to individual,” Forlano says.

Some sites are more corporate than others. And some have specialized by targeting workers in certain industries—technology wonks, writers and lawyers, for example. University of Texas professor Clay Spinuzzi conducted a 20-month study of co-working businesses in Austin and concluded that some were more conducive to members forming business relationships, while others tended to be limited to one-time transactions, such as one member buying a house from another member who was a real estate agent or commissioning an interior design session.

“There are all sorts of flavors of co-working,” says Elam of Austin’s Link Coworking. “What attracts some may repel others.”

Brock and Beatty, the California men who created an Internet security tool, now work for the company they sold it to and have added a couple of members to their team. Yet they continue to work often from the same NextSpace site where they met. “We’re still benefiting from the co-working environment,” Beatty says. “It’s an environment we prefer to work in.”

Even with pervasive technology that enables people to communicate all day without speaking to one another, workers will continue to seek face time, says Humphrey, the Penn State professor.

“Technology changes the way we act,” he says. “But there is still this innate need for affiliation, for interaction, that technology doesn’t solve. I think it’s such an important need, and it won’t go away.”

Get the 411 on the collaborative communities, and find a co-working office near you.

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