The coworking real estate company WeWork just added $400 million to its coffers with a Series E raise at the end of June, putting its valuation just shy of $1 billion. For a company that was founded in 2010, that’s some quick growth. And for what? you may very well ask. A space with a conference table and a pot of stale coffee?
Not quite. Coworking has grown up, and it’s now a more sophisticated creature—and a pretty snazzy one, to boot. It’s designed to create the kind of environment many office-shackled employees can only dream of: a choice of places to work, to be alone, and to interact, with not just opportunities but expectations of socializing and networking. What coworkers and the companies that run these spaces recognize is that they’re not really selling space—they’re selling community.
The demand for desk space
It’s difficult to put a firm number to how many self-employed workers there are in the U.S., but one study from the Freelancers’ Union and Elance-oDesk found 34 percent of U.S. workers could be considered freelancers. Couple that with the amount of startups—according to the Kaufmann Foundation’s Kaufmann Index report on national startup activity, there’s been a 10 percent increase in the amount of new entrepreneurs in the U.S. That’s a lot of desks. Add to that the companies that want extra space, maybe in different locations, cities, or countries, for their extra staff, international staff, or traveling employees and don’t want to or see the need to establish another office.
The importance of work friends
Four of Gallup’s questions for its Q12 (the 12 questions on which it bases its employee engagement survey) are about work relationships. One specific example: “I have a best friend at work.” Why does this matter? Because close relationships between coworkers is really good for business—for productivity, focus, health, and more. Gallup has even done a meta-analysis to dig deeper in how relationships and business work together.
Less about space, more about selling community
WeWork co-founder Adam Neumann recognizes the value of community—he mentioned it constantly at TechCrunch NYC, and also for this piece in The Atlantic. Community can’t be forced, he acknowledges, but a big part of WeWork’s m.o. is analyzing and creating environments that encourage community.
Deskmag, a website dedicated to all things coworking, reported in its Global Coworking Survey that 96 percent of coworkers stated that community is the biggest thing they look for in a coworking space.
Traditionally, work relationships would be forged over, say, a morning cup of coffee in the kitchen, and those relationships would all be among employees of the same company.
But the cowork model turns that model on its head—relationships are now easier to build with employees (or maybe the sole employee) of other companies, creating an environment ripe for easy sharing of ideas and networking. One tenant describes it “like a real-life LinkedIn.”
Companies are starting to look to this idea internally as well. SAP’s AppHaus in Dublin was opened in 2012 as a flexible workspace for development teams, and as a place to host workshops and collaborations with customers and users. AppHaus Heidelberg followed in 2013.
Not a model for everyone
Coworking spaces don’t work for everyone. Some don’t like the constant desk switching, noise, interruptions, and organized activities. The lack of a dedicated physical space can make forming a solid and separate corporate culture difficult. And people can really be slobs.
Deskmag’s forecast also found that if people don’t like a space, they’ll quickly switch, and now there are more coworking spaces than ever, that’s not so hard.
Want more on where the workplace is heading? See The Future of Work.