What is Coworking?
Coworking and coworking spaces refer to a model of work where entrepreneurs, small teams, and even large enterprises operate out of a communal office space managed by a third party.
The defining quality of coworking spaces is that resources are shared across all members. When a company purchases or leases a traditional office environment, they maintain exclusive access and control over the floor plan and how the space is used. In a coworking model, areas like work lounges, kitchens, and meeting rooms are shared with other individuals and companies.
The best coworking spaces will offer a wide variety of workspaces that cater to different workstyles and support the needs of individual workers, as well as organizations big and small.
Most, if not all, coworking spaces feature a primary lounge area outfitted with comfortable furniture, outlets, and technology like printers to facilitate the work of individuals and teams. Some providers will complement that primary workspace with more secluded spots for “focus work,” phone booths for calls, ready-to-go meeting and conference space, and even recreational areas for when you need a dash of play in your work.
Coworking providers that go “above and beyond” will offer options for private offices (dedicated or on-demand), private suites that can be customized by an organization, and even smartphone apps to streamline access and use of workspace.
Though the primary feature of a coworking membership is access to shared workspace, membership amenities are another reason to join a coworking space.
Amenities are additional features, benefits, and services provided by a coworking brand in addition to access to workspace. Haibu Space Coworking Memberships, for example, come complete with an all-inclusive amenities package.
At no additional cost, our members enjoy best-in-class amenities like the following with their memberships:
Unlimited craft coffee
Free meeting room access
Mail and packaging services
Free, fast, and secure Wi-Fi
Member-exclusive events and programming
And more
Amenities packages will differ across coworking providers. Always read your membership agreements carefully so you have full knowledge of what is included in your membership and which amenities may come with an extra charge.
An Abridged History of Coworking Spaces
Although the term ‘coworking’ has recent origins, the concept of coworking is not new. In the ‘60s, what we know as coworking was once called ‘
Firms like The OmniOffices Group and Fegen Suites are widely recognized as early pioneers of the industry during this time.
In the early days these firms and others like them would lease office space and furnish it with essentials for work: furniture, designated conference spaces, reception, telecommunications equipment, and even secretaries to fulfill transcription responsibilities. They would then provide this ‘move-in ready’ space to businesses looking for a stress-free transition into a professional environment they did not have to personally manage.
Flash forward to the recession of the early 1980s, businesses everywhere are cutting costs to avert layoffs and potential bankruptcy. At the same time, the world of work is experiencing a technological revolution. Desktop computers, fax machines, and voicemail technology are all streamlining and transforming work in their own way — and eliminating the jobs they’ve made redundant.
Serviced offices were quick to embrace these new technologies and offer them to customers, evolving into “business centers.” This move also eliminated secretarial staff and transcription services provided by the original serviced offices.
Richard Nissen is considered by many to be the first pioneer of the business center model. He is also credited with developing a digital exchange telecommunications system that revolutionized telephone services and message delivery, and ultimately formed the basis for virtual offices.
It was not until the ‘90s that the word ”coworking” first emerged. Coined by game designer Bernard de Koven, the term originally described the collaborative phenomenon of people “working together as equals.” The term would soon take on a more familiar meaning with the rise of the “coworking movement” just a decade later.
In the years following the advent of business centers and virtual offices, the serviced office industry did not hesitate to accommodate the latest and greatest technology. Portable computers, high-speed internet, and exponential increases in data storage all allowed for a greater deal of flexibility in how, when, and where work was performed.
With the barriers to entry falling one by one, remote work progressively became a more accessible (and more acceptable) method of work — and serviced offices were perfectly positioned to become havens for it.
In 2005, the first serviced office to be described as a “coworking space” opened in San Francisco. Founded by Brad Neuberg, his stated mission was to create a space that merged the freedom and ability to work independently with the community and connection that comes alongside working with others. The coworking model soon became the new standard for the serviced office industry.
At the time of this writing, the number of coworking spaces in operation worldwide is estimated to be around 20,000. That figure is expected to approximately double in 2024.
In 2022, an estimated 1.08 million people worked in coworking spaces in the United States alone — that’s nearly double the amount of people who used shared workspaces in 2017. Part of this skyrocketing utilization can be attributed to the large number of companies reducing their real estate portfolios (the amount of office space they own or lease) in favor of hybrid work models where employees split their week working from home and in a company designated-office setting.
Because underutilized office space is still costly for organizations to maintain, many companies have transitioned segments of their business to operate out of flexible coworking environments. In fact, a 2022 CBRE study revealed that 52% of organizations will downsize their traditional office space commitments over the next three years, with 48% indicating that flexible office space is a priority for the future.
What Different Types of Coworking Spaces are Available?
This section breaks down how coworking providers differ in terms of scale and product offerings.
Community
This tier refers to coworking spaces that were built to serve ad hoc business needs for members of a local community. Unlike a Regional or National brand, community-level coworking spaces are typically smaller both in terms of their location network and the amount of workspace they provide. It is common for these providers to operate just one space in a city, or often a handful of sites distributed across strategic locations in its community.
Regional
The middle tier of coworking spaces refers to providers who operate at a scale larger than city or community level. Regional providers tend to manage locations distributed across one or even several states. They are perfect for individuals and companies who can benefit from flexible access to markets across a broad region, but fall short of the sizable location networks and benefits you can get with a national chain.
National & International
If you’ve been paying attention, you’ll know this one. National coworking spaces operate on, you guessed it, a national-scale. As the largest tier of provider, national chains manage dozens, even hundreds of locations distributed across a country. Some brands even operate a presence internationally, like Haibu Space will across the GCC.
The large location networks offered by this tier of coworking space provide unique strategic advantages (detailed in the next section) that Regional and Community level providers do not.
Despite or perhaps because of their ubiquity, National and International coworking brands often specialize in delivering a high standard for customer experience in their spaces. They also employ consistent workplace design standards so that no matter which location a member visits, they always know where to go and what to do.
What are the Advantages of Coworking?
This section breaks down the strategic advantages and benefits businesses receive from using coworking spaces.
Cost efficiency
Perhaps the biggest benefit to coworking is the cost savings it creates. On its face, one might not expect coworking to be a ‘frugal’ option seeing as individuals, teams, and companies must first pay for access to workspace. But take a moment to consider the costs a coworking provider takes on to provide that space.
When a business chooses a coworking space over a traditional office, it gets to cut several items from its budget that were once thought to be unavoidable. Operational costs that may be eliminated can include:
Long term lease/mortgage commitments
Building utilities
Furniture expense
Internet infrastructure
Security
Office equipment and appliances
And much more
The savings from these eliminated costs can be redistributed any way the business sees fit.
Company culture, employee experience, and workplace design
Where we work matters just as much as how we work. Put another way, the environments we perform work in shapes everything from the quality of our work to how much we’re able to complete.
In fact, a recent survey conducted by Haibu Space revealed that 7 in 10 office workers say their physical surroundings impact their productivity and energy levels while working.
Companies that use coworking spaces are outsourcing specific aspects of their culture and employee experience. Though all brands are different, it’s for this reason that coworking providers like Haibu Space staff their locations with personnel expertly-trained to deliver highly-personalized customer service that anticipates member needs before they arise.
Coworking spaces also employ thoughtful design choices to produce desired performance outcomes. Biophilic office design, for example, is a popular design element of many coworking brands. This practice involves incorporating elements of nature such as plants, water, and sunlight into the workplace design, and is reported to increase productivity by 15%.
Another design trend of coworking spaces involves complementing open office space (known to increase collaboration) with quieter areas like phone booths and private nooks to facilitate work that requires high concentration. Many coworking brands will also integrate technology directly into the design of their spaces, such as equipping conference rooms with state of the art technology for a seamless meeting experience.
Last but certainly not least, with hybrid work models on the rise, many businesses that partner with coworking spaces may also see stronger employee retention rates. A recent survey shows two-thirds of employees prefer hybrid work because of the greater work-life balance this model affords. A separate study conducted by Gallup found that 54% of employees would look for a new job if their current employer took away remote work benefits.
In sum, employees report wanting to come into the office a few times a week for collaboration and interactions with colleagues, but also view the independence of hybrid work as a table stakes benefit in today’s world. Partnering with coworking spaces allows businesses to accommodate hybrid work models in a cost-effective fashion, providing a collaborative workspace for employees while also encouraging the flexibility and freedom to work how they know best.
Flexibility
If the start of the 2020s taught us anything, it’s that there’s no accounting for disruption. Recessions, pandemics, natural disasters — external forces will inevitably converge with the world of work and force us to change how we operate, whether we like it or not.
While coworking spaces can’t help you predict disruptive events before they happen, they can help you respond quickly and strategically.
Many coworking brands, such as Haibu Space, allow businesses to stay nimble in the face of uncertainty by offering flexible membership terms. Depending on the provider, membership agreements can be flexibly adjusted across several factors, such as how many employee memberships you pay for, how often you access your workspace, or how much you utilize specific features like conference space.
Coworking providers offer membership flexibility as a benefit to reduce the burden that disruption and uncertainty can place on their members. By enabling member companies to upsize or downsize their coworking commitments with minimal friction, these coworking partners help members maintain business continuity and ensure they only pay for the space and services they use.
Market entry strategies
Organizations with sophisticated customer acquisition strategies leverage the location networks of coworking providers for market entry tactics. These companies will pay for global access to a coworking partner’s network and strategically conduct business operations out of locations in markets they’re looking to break into.
This methodology is more nimble and agile for companies because the coworking spaces remove the barriers and costs associated with more traditional market entry tactics.
A company weighed down by long-term real estate commitments in specific markets does not have the same flexibility to enter new territories. The company must either commit to new dedicated office space in the area, or pay for an individual or small team to operate a remote presence. Both options come at significant cost to the organization, and there’s no guarantee the operations will be successful.
By partnering with a Regional or National brand, the company is able to freely move in and out of new markets using the coworking locations as a de facto base of operations. This agility has the added benefit of mitigating the costs of failure and lowering the threshold of success for new business ventures. Lower risk, higher reward.
Hub-and-spoke business model
Another innovative benefit that companies gain when partnering with coworking spaces is the ability to implement a hub and spoke business model.
A response to the decentralized work experience created by hybrid work and distributed workforces, hub and spoke is a strategy that brings the office to employees. In a hub and spoke model, companies operate a traditional corporate headquarters, or hub office, while at the same time partnering with coworking spaces to prop up satellite offices, or spokes.
To learn more about hub and spoke business models, including if one may be right for your business, we recommend our blog on the subject.
Disadvantages of Coworking Spaces?
Coworking spaces reimagine how shared office space can create new experiences of community and connection in work. But it’s not everyone’s cup of tea. This section breaks down some of the reasons a coworking space might not be right for you or your business.
Privacy
Perhaps the most obvious disadvantage of coworking spaces is a lack of privacy. In most coworking locations, the space you conduct your work in is communal, meaning you share it with workers of different companies.
Though many providers offer private rooms for meetings, phone booths for calls, and quiet nooks for focus work, spaces like the work lounge, hallways, and kitchen are almost always shared.
For this reason, many coworking spaces follow etiquette similar to what you would find in a public library. Keep your speaking voice and disruptive noises to a low volume. Eat food only in designated spaces. Be respectful of others. Handle the space’s technology and equipment with care.
Larger coworking providers may offer options for members and companies who want exclusive access to a workspace, such as a private office or suite. However, this will likely increase the cost of your membership.
Shared resources
Space isn’t the only thing you share in a coworking environment. You’re also sharing valuable work resources like printers, office supplies, kitchen appliances, and more. In a traditional office environment, you already share those same resources with your coworkers.
In a coworking space, the pool you share with is wider and includes dozens of people not in your organization. If you don’t enjoy waiting your turn to use a printer or the kitchen microwave, the more may not be merrier in this scenario.
Limited space customization
When you check into a hotel room or an AirBnB, you don’t repaint the walls, hang your art, and retile the bathroom floor. Why? Because you don’t own the room, your stay isn’t permanent, and when you leave someone else will use the space.
It’s not all too different from coworking. With a standard membership, you pay for access to use the workspace and the resources in it. But standard coworking agreements do not allow you to alter the building or the arrangement of the space.
This may not be a dealbreaker (or a problem at all) for individual members and small teams, who often get everything they need from standard coworking memberships. However, for midsize organizations and larger, the lack of space customization may prove a challenge.
As an organization becomes larger and more complex, specific space customizations may also grow from a “nice-to-have” benefit to an operational necessity — as teams can benefit from deliberate design choices that stimulate how they work best.
That doesn’t mean customization is completely off the table. Coworking providers with options for dedicated offices and suites may allow member companies to customize their spaces as they see fit. However, these options will be more expensive than a standard coworking membership.
Always review the terms and conditions of your membership agreement before making any modifications to any space provided by a coworking brand.
Who Uses Coworking Spaces?
The short answer? Everyone.
Thanks to the industry’s rapid expansion in recent years, there are now coworking spaces that cater to every size of business and customer, from individual workers all the way up to international enterprises.
This section breaks down how different types of individuals and organizations find unique uses out of coworking spaces.
Individual Workers
Freelancers, solopreneurs, remote employees, and any other variety of individual worker are some of the biggest beneficiaries of the coworking models. Solopreneurs love coworking spaces because they provide a stimulating environment to innovate with agility, test new ideas, and pivot without being encumbered by the costs of traditional office space lease. Many also view these spaces as productivity hubs — places where you can escape the distractions of home to focus on impactful work.
Because they are often home to people from many different teams and organizations, coworking spaces are natural hotspots for networking. The communal nature of coworking spaces organically lends itself to the spontaneous interactions and conversations that lead to promising new business connections.
Beyond networking, solo workers also enjoy being members of coworking spaces for the community and sense of belonging they create, which are potent emotions known to create better performance outcomes.
Small teams and businesses
One of the biggest benefits that coworking spaces provide to small teams and businesses is, well, space. Coworking typically offers a more cost-effective means for teams to congregate as they see fit, without the pricey overhead associated with leasing or buying office space outright.
In a post-pandemic world, coworking spaces have become hubs where small and midsize businesses can foster the growth of their company culture. The sense of community and collaboration that coworking spaces naturally create are the perfect remedy for the isolated feelings known to arise in socially distanced, distributed workforces.
Corporations
When large enterprises and organizations use coworking spaces, they tend to prefer providers who operate at a national level because of the benefits that come with a wider office location network.
Partnering with national coworking brands helps large organizations mitigate operational costs. With access to a national (or even worldwide) office network, enterprises are able to reduce financial commitments in their real estate portfolio. No longer encumbered by long-term office lease obligations, they can redistribute the savings into other areas of the business.
For these larger organizations, the sky’s the limit in terms of how coworking spaces can become part of a broader operational strategy. Leveraging the reach and access national-level providers offer, enterprises use coworking spaces as testing grounds for innovative market entry strategies and hub-and-spoke business models, as detailed above in our Advantages of Coworking section.
