Tag: Coworking

Manuel Zea is the founder of CoworkingSpain.es and the organizer of the Coworking Spain Conference, one of the first national conference ever organized on coworking. Manuel saw coworking moving from a fragile new born to an industry on it’s way to disrupt the traditional office market. As of today, Spain is still the country with the highest number of individual coworking space per capita. A few days after the Coworking Spain 2018 conference, which took place in Madrid, it was a good time to ask him about the situation of coworking in the country.

Hi Manuel. Can you tell us about the story behind CoworkingSpain?

Manuel Zea

“CoworkingSpain.es” is born in 2010. That year, I was invited to speak at the first European conference on coworking. I had entitled my presentation: “An overview of the coworking in Spain”. Prior to the date,  I reached out to all the existing coworking spaces at that time, in the country. I had collected so much information that I decided to start a blog called CoworkingSpain.es, which listed coworking space operating in Spain. The year after, I took part to the second Coworking Europe conference in Berlin. I said to myself: it’s time to organize a similar conference in Spain. This was 7 years ago.

What is the main learning you get out of such a longevity? 

I think working with passion and love is what makes me work every year at the conference. Its a hard job with a really small team, so doing things with passion and love is key for us. As you mention, the competition is now rising between the 3 biggest international operators, now active in Spain. You can feel how they want to get market share and they are using marketing strategics to get more penetration into the market. Collaboration between spaces is possible but to a certain limit and easier between smaller spaces. Collaboration between big coworking brands is more difficult. Be will work on that, though.

Why, would you say, coworking spaces have an interest to collaborate with one another?

My opinion is that collaboration is a way to grow faster and organized and a way to learn faster. There is a lot of experience in every single person that can solve in a simple way a problem that seems big to you. Collaborartion is the perfect way to accelerate your serendipity.

According to your Spanish coworking survey, Spain counts about 800 coworking spaces, still one of the highest number in Europe…

Utopicus

This is a legacy from the economical crisis. Eight years ago, there was just a bunch of coworking spaces. Their mission was to spread the word about the coworking word and educate the world about what coworking was.  This was a really tough job. We can’t figure out something more complicated than to teach a market about a service one isn’t even aware there might be a demand for. That was our job from the beginning and it has been the mission of the Coworking Spain Conference all those years: Connect all the coworking space managers, support each other in resolving common problems, make noise around  the ‘coworking’ word in Spain.

Can you give us an overview of the growth of the coworking Spanish market, today?

The coworking industry in Spain is now growing by 20% annually. We experience a professionalisation of the sector. The industry is maturing.  Big brands are in Spain. They take a lot of sqm up. The coworking brands are now representing 3% of the total number of coworking operators in Spain. Though, they cover the 30% of the market. They are being very agresive and the penetration into the markets is being big.

The big brands are already in Spain getting a lot of sqm and growing already the 3% of the coworking brands own the 30% of the market.

The average size of coworking spaces in Spain is 200-300m2, which might sound pretty small according to the standards seen in other countries. What should be the strategy for small spaces to survive?

Since the begining of the “coworking era”, a great deal of the spaces in operation in Spain are proportionally small. This explains why Spain had such a high number of individual spaces when compared with other countries. Nowadays, the big names are changing the industry. As far as I see it, the small spaces shouldn’t be too much impacted. The can  focus ont their small communities or transform their spaces into another business. The managers of these small coworking spaces can easily change the model and turn their shared office place, for instance, into a design agency. They have a lot of flexibility, and didn’t invest too much money in their space. It’s another story for medium size spaces. Those will have to transform themselves. Coworking is their main activité. They invested a lot of money. The big international brands are more likely to hurt  them. They need to be ready for change and increase the value proposition to their communities.

The medium size spaces are the one who need to transform or change the most.

Are there still doubts about the rising importance of coworking in Spain?

Not anymore. Last year, coworking was everywhere. Credit to the big players. WeWork opened. Spaces, by Regus, continued its expansion. And the most commented transaction of the year was the acquisition of Utopicus by the Real State company Colonial. So the word coworking had been spreading a lot last year. We made it!!!!

TSH (The Student Hotel) has been developing  a co-living and coworking offering for more than a decade. Founded in The Netherlands by Charlie McGregor, a Scot born in Edinburgh, TSH operates 10 locations in various cities in Europe, among which Rotterdam, Amsterdam, The Hague, Eindhoven, Paris or Barcelona. TSH plans to open up a total of 40 locations in European cities by 2021. Florence, Dresden, Bologna, Madrid, Berlin, Rome, Vienna or Toulouse are in the pipe.

Hi Charlie, can you introduce yourself and tell us about how The Student Hotel started?

Charlie McGregor

My father built the first purpose-built student rooms in Edinburgh, where I grew up.  At 25 I bought a small student accommodation company and sold it 10 years later when I moved from London to Amsterdam and started The Student Hotel. The first Student Hotel project was completed just as the full implications of the global financial crisis unfolded. But we pressed on.  

You offer many different perks within all your locations, going from hotel services, gym, food, up to coworking spaces (TSH Collab). Do you operate everything yourself ? 

We operate the accommodation and coworking ourselves.  In some we also operate The Commons – our restaurants and bar brand; in other places we work in collaboration with local companies.  In Florence, for example, we partner with local restaurant, La Menagere and at TSH Campus in Barcelona the partnership is with Grupo Raval.  At TSH Amsterdam City we have an Olympic length (50m) pool and crossfit Vondelgym run by local celebrity athletes.

Is TSH a student only place, as the name indicates it?

TSH is much more than student accommodation. We have students staying for a term or a year, but we also have hotel and co-living guests.  That’s just on the accommodation side.  Then there’s the local startups and entrepreneurs in our Collab coworking spaces, classrooms and auditorium.  All our hotels are open to the local community who come to enjoy the restaurants, bars and super fast, free wifi in the communal spaces and we actively encourage this mix.  We want people make connections they may not find somewhere else.

Why having a specific coworking offering on top of your other services makes sense? 

There was a demand.  Guests and the local community needed coworking space.  TSH Collab was created to answer that need – a step up from working on a laptop in the lounge or bar.  The upward trend of entrepreneurs, startups, freelance workers, and digital nomads is growing fast.  With TSH Collab we can offer everything under one roof.

TSH Collab

The benefits are that all our guests – whether they are studying, staying in the hotel, or working – have a place to connect with each other.  It creates a dynamic vibe that enables people to get things done. 

In addition, parents, friends and family need somewhere to stay when they visit our student guests, they need somewhere to eat and socialise.  Our co-living guests need somewhere to meet and work.  We are continually asking ourselves what future guests will need and add services that make sense.  We call it the Complete Connected Community.

Are the co-living ‘guests’, in majority, the users of all the other different services? 

TSH is open and inclusive.  You don’t have to be a guest to eat or drink here.  You don’t have to be a TSH Collab member to stay or use the communal spaces.  We have an amazing mix and are happy that people can take advantage of the things they want to use. We are a Complete Connected Community.  That runs through everything we do – the community feeling is central to both co-living and coworking at TSH.

Guests and the local community needed coworking space.  TSH Collab was created to answer that need – a step up from working on a laptop in the lounge or bar. 

How do you position yourself as opposed to other workspace operators?

TSH employs a Connector in each location and that person plays a crucial role in all The Student Hotels, ensuring that our guests and community members have the possibility to truly connect during their stay and before or after via our digital- and social channels. The Connector position is the glue that holds together our co-living, coworking, co-dining communities. The TSH Connector is more than just the leader of our fun squad. A true connector turns our mishmash of hotel guests and coworking professionals into a cohesive community of both students and students-at-heart. The Connector position is the glue that holds together our co-living, coworking, co-dining communities. He/she encourages people to meet and inspire each other by events and programming based on the four brand themes of The Student Hotel: Social&Cultural, Health&Sports, Learning, and Career&Entrepreneurship. The Connector is the open door for everyone who likes to join our community because they are the most connected person in our buildings.

A true connector turns our mishmash of hotel guests and coworking professionals into a cohesive community of both students and students-at-heart.

You don’t introduce yourself so much as just an accommodation provider, and focus more on the co-living side. What is the difference between the two concepts? 

Our student guests can stay for a term to a year as part of their international studies.  Co-living guests are usually with us for a couple of weeks to a few months; digital nomads, freelancers or contractors who find themselves in a new city for work.  Hotel guests usually stay from a night or two or a week.  The co-living element comes from the community feel – we don’t differentiate, we don’t separate.  Everyone gets to live side by side, use the same facilities, regardless of how long they are with us.

The co-living element comes from the community feel – we don’t differentiate, we don’t separate.

By 2020, you expect partnerships with 1.500 universities. Do you position yourself as the solution provider to move away from the “student housing crisis” that some campus face, with innovative models? 

The world of higher education and training is subject to massive changes: rising international student mobility; transnational campuses, online learning, summer schools and life-long learning have dramatically altered the demand for accommodation. We see a growing demand for short-term and flexibility coupled with a sense community and shared values and purpose. It was a void between hotels and student dorms that TSH is filling with its variety of coliving arrangements. In that sense we are complimentary to the current offering.  

It was a void between hotels and student dorms that TSH is filling with its variety of coliving arrangements.

Based on your experience, should the coworking industry take its inspiration from the accommodation and hospitality industries?

We should take our inspiration from everywhere; the reason CO applies now to living and working shows a growing space of new opportunities. Hospitality teaches us the importance of service. Accommodation, the importance of a home and a sense of community. At the current architecture biennale in Venice the Dutch pavilion is dedicated to Work and it underlines that since Yoko Ono and John Lennon demonstrated for peace in bed we have started using the bedroom as a space to work. We constantly see new opportunities to improve our concept and operational model; new technology enables us to connect and stay in touch with our growing customer base while the way our customers study, travel, sleep and work is changing year on year.  We see more and more barriers between hotels, office space, restaurants and residences being broken down. That is why is say we are – also operationally – a Complete Connected Community. Hybrids like The Student Hotel will become the norm as we are satisfying more needs than just a place to work or a roof over your head.

Since Yoko Ono and John Lennon demonstrated for peace in bed we have started using the bedroom as a space to work.

Pauline and Dimitar are the founders of Coworkies, a Berlin based company connecting like-minded professionals working out of coworking spaces and displaying job opportunities. For the last 2 years, they’ve been doing a coworking world tour. They visited 287 coworking spaces, in 30 cities around the world, with majority in Europe. They are sharing their main learnings and takeaways from an almost 2 years long tour.

Hi Pauline. Can you introduce yourself, the initiative you run and why you had the idea to tour coworking spaces in Europe?

With my co-founder at Coworkies, Dimitar, we started about 2 years ago and at the time, I was managing a coworking space myself in Berlin (called Rainmaking Loft, which rebranded recently as The Place) which is only for startups. 

Dimitar was working for Startupbootcamp (a startup accelerator) that was one of our tenants. There, we realized that members were constantly seeking other professionals to work with but their opportunities were only limited to their physical space.

At the time, we knew the coworking scene of Berlin quite well but did not really know how other cities were doing coworking in the sense. Why did it started there? who are the local players? How do people use the space to connect? Why are people actually needing a coworking space and many more questions for which we were seeking answers? Instead of relying only on what we found online, we decided to pack our bags and travel the world of coworking!  Traveling is for us an incredible learning curve, we get the chance to meet inspirational founders and managers and see really interesting coworking concepts.

How did you choose the spaces and community you visited?

Before going somewhere, we do a lot of research about the city we are about to visit. We strongly believe that coworking is about the people and not about sqm., so we look for spaces who are in coworking to build meaningful and impactful communities at work. Next to our own research, nowadays we also get a lot of tip from the network of coworking professionals we’ve created.

There are so many coworking spaces, what kind of criterias did you use?

In relation to the previous question. We prioritize recommendations by our network for coworking spaces with passionate founders. I think this is the most important one. There are no reasons for us to meet people who are not passionate about what they are building.

After having toured the Europe’s coworking scene, what are you three main learnings you come back with about the development of coworking on the continent ? 

1.There is no best coworking space – each and every coworking space is VERY unique!

During our travels, we often get asked “so what’s the best coworking scene you’ve seen?”. To be honest, there is no best coworking space. Each and every coworking space we visited is very unique and has its own vision, vibe and community. In Europe, we were amazed to see how diverse the market is – there are so many different type of spaces: from makerspaces to coworking for parents or musicians, it’s really blossoming around many interesting topics.

2.The coworking market in Europe stretches from mature markets to very new markets.

Europe is a very interesting place when it comes to coworking. If you take Berlin, where coworking started between 1999 (with hackerspace C-base) and 2005 (Betahaus) the market is now more mature. Some of the spaces have been around for more than a decade and have seen many spaces coming into their market. It also means that people are “aware” about coworking because they’ve seen it for so long. On the other side of the spectrum, if you take cities like Warsaw or Bratislava, coworking is a much newer concept and they need to educate the market from scratch to what it means to cowork and what is the difference compared to Regus or just a normal office.

3.There are way more independent coworking spaces in Europe than in Asia or USA

Our journey took us, so far to three continents. And when comparing Europe to the rest we see how here in Europe we have more independent coworking spaces, that means in Asia there are way more brands who have multiple locations. Related to that is also the size of spaces in Asia and USA, they feel significantly larger than those in Europe. Of course we have few mega-hubs like Station F or Maria 0-1 in Europe, concepts that have not catched up so much in Asia yet.

If you take cities like Warsaw or Bratislava, coworking is a much newer concept and they need to educate the market from scratch

Are there strong differences between cities or countries you visited ? 

As I started to touch base on my previous answer, there is HUGE differences in every city we visited and there are few reasons for that:

• Coworking did not start everywhere for the same reasons: in London, it started because prices for offices were too high. If you look at Barcelona, it started during the crisis, when Creatives decided to gather and share their workspace.
• The scene of each city is very different: London has about 400+ coworking spaces of various sizes from 10 to 600+ people, with a huge part of the crowd being startups. If you take a city like Madrid you will find way less coworking spaces and a lot of them are actually for creatives and artists. It’s one of the cities where we’ve seen the least amount of computers vs. the amount of hand-craft-makers.

The way one does coworking is also very different from the north of Europe to the South. In Scandinavia or even in Germany, people use coworking spaces from early morning to 6PM whereas in the south of Europe it was very different! Before 10, there is not much going on and people tend to stay really late at night, so the coworking owners have to adapt to that rythm.

One big difference also occurs when the city is also popular among Digital Nomads (like Lisbon, Porto or Barcelona). Building a community that includes Digital Nomad can be really challenging sometimes, but all the spaces we met do it extremely well.

Madrid is one of the cities where we’ve seen the least amount of computers vs. the amount of hand-craft-makers.

Do space operators shared some of their challenges? What are they ?

Yes, they do! I think one of the biggest challenge that anyone always struggle with is about the business model. We all know coworking has an extremely flexible business model, which means that for some of the spaces, generating stable revenue every month is not easy. Another one is how to deal with constantly fluctuating community as you need to have really strong culture to keep the vibe intact.

One of the biggest challenge that anyone always struggle with is about the business model.

From what you know of coworking on other continents, what is specific to Coworking in Europe ?

I think Europe, thanks to its richness of cultures and languages has one of the most diverse coworking scenes in the world. As I was saying earlier, there are so many different type of spaces around Europe, it’s really fascinating and inspiring. I believe here is where a lot of the new coworking concepts are emerging before starting to spread around the world.

What did your tour inspired you about the future of coworking on the continent ?

It’s always very hard to predict the future but from what we saw, it looks like coworking will be even more curated, meaning spaces are rethinking their vision and narrowing it down to one vertical of interest. Be it creatives only, startups only, parents, musicians or any other type of community that comes together because they share a common interest and can learn from each other and collaborate. The power of community seems to become more and more important both for spaces and for coworkers. Follow Coworkies’ blog for the comprehensive report city by city

Hi Davide. Why does Talent Garden speaks about “campuses” rather than “coworking spaces” when telling about your locations? What is the difference?

Davide Dattoli, CEO Talent Garden

 Talent Garden considers itself as an international innovation platform, who operates facilities where members can meet, work, learn and collaborate. We use the word “campus” rather than “coworking” because Talent Garden was founded with the aim to create ecosystems that would connect, support and grow the best startups within technological and digital arenas. We wanted to contribute to the professional development of future global innovators.

Is this a way for Talent Garden to differentiate from the competition while other international brands are gaining ground?

I wouldn’t say that. In opposition to some international coworking operators who look first at growing a real estate business, at Talent Garden, community is genuinely at the core of what we do. We focus on new ways to transform and connect both flexible work and education environments, as requested by digital entrepreneurs and businesses.

The Innovation School is an important part of your activity. Would you say that Talent Garden is today a training agency as much as it is a coworking spaces operator?

The two businesses coexist, giving value to one another. Education is a fundamental part of our ecosystem. In 2015, Talent Garden became active in the education sector with the launch of our School of innovation – a school that offers training in the fields of digital and innovation, with a focus on coding, data, design, marketing, and business. We really believe that this is an integrating part of our offer.

We believe and invest a lot in the growth our Innovation School, which today accounts for 25% of turnover along with coworking (50%) and events. And it is exponentially growing: in 2017 we trained 500 students, 1,000 children, 2,300 professionals and involved over 70 companies in its programs.

You use to partner up with universities. Why do universities need Talent Garden?

We partner with universities that share our innovative approach. We recently announced the opening of our new campus in Dublin in partnership with Dublin City University (DCU), a new hub for digital innovation. This will be the first collaboration of its kind in Europe. In DCU, we have found a University partner with the same entrepreneurial DNA and ambition as Talent Garden. This made the selection process easy. The existing DCU Alpha community of digital and IoT innovators is the perfect home for us, whereas the University partnership will help us to scale our Innovation School offering globally.

We believe and invest a lot in the growth our Innovation School, which today accounts for 25% of turnover along with coworking (50%) and events.

Does it tell something about the future of education, would you say?

We realize that there is an educational gap between the jobs on offer and the professional training required to fulfill those jobs. We created our Innovation School in this context.  We train young people and professionals. We bring new cultures and skills to businesses and we offer upgrades and updates to those operating in the work environment.

We realize that there is an educational gap between the jobs on offer and the professional training required to fulfill those jobs. In this context, we created our Innovation School

We also believe in lifelong learning and change management within individual companies. Today 70% of corporate learning happens at work thanks to on-the-job learning and relationships between colleagues, 20% through coaching and networking and the remaining 10% through traditional training activities, and yet this is where companies devote 80% of their training budget. For this reason, we offer an innovative training methodology, putting people at the center of the learning process based on cross-pollination and co-creation, to make sure that the expenditure in training gives results in proportion to the investment made.

Today 70% of corporate learning happens at work thanks to on-the-job learning and relationships between colleagues, 20% through coaching and networking and the remaining 10% through traditional training activities

Talent Garden has partnerships with tech companies such as Google or Cisco too. How does it work?

We support corporates by analyzing their business needs and devising ad-hoc projects to help them embrace the opportunities offered by digital technologies to reach their full potential. Moreover, we allow their cross-pollination with our community of innovators and expose their brand to our stakeholders. This year we involved 180 partners (corporates and SMEs), providing them with the right tools to devise new, innovative ways of working. Corporates may have the capital and resources, but often lack the agility, internal culture, and expertise of startups that are essential for driving innovation and success.

Innovation is a key element of corporate growth and requires the right combination of people, processes, and technologies.

The wide majority of your spaces are located in Italy. How is the coworking industry growing in Italy?

Compared to other European markets, Italy is still at an early stage in the fields of startups development and innovation. That is why we are building a European network, to connect countries and leverage each other’s potential while supporting the best tech and digital professionals in their growth.

Kelsea Crawford is the CEO and cofounder of Cutwork, an architecture and design studio focused on designing new ways to live and work. Based between Amsterdam and Paris, Cutwork has  5 years of experience design in furniture and spatial concepts for coworking spaces, innovation hubs, private offices, and coliving spaces. Cutwork has been involved in the famous Station F project, the world biggest startup campus, based in Paris, France.

Hi Kelsea. You design coworking spaces. Can you explain to us what is your approach and what do you start with when you are asked to design a flexible workspace?

At its core, we aim to design workspaces that encourage the meeting of people and ideas. We begin every project by thinking about how we can use design to encourage collaboration, to cultivate strong communities, and to foster meaningful work.

After a 2 year collaboration with Station F (the largest startup campus in the world and home the European hubs of Facebook, Microsoft and Ubisoft) and speaking with over 200 coworking spaces last year, we have developed our approach to flexible workspace around three key ideas:

1. Mobility – the ability to change one’s surroundings and move between different types of space for different styles of work and collaboration.
2. Versatility – the use of smart furniture designs that have multiple uses and functions.
3. Flexibility – the ability to easily transform or rearrange a space for different uses.

We start the design process with an open dialogue about where we can add the most value as design partners. For the most part, this includes developing spatial design concepts that will scale across multiple spaces, furnishing a space, and designing custom products. One of our biggest advantages is that our furniture design process is built on digital technologies that make it simple for us to modify any of our existing products to develop unique, custom solutions for our clients. 

While we use a lot of technology to make things super efficient on the manufacturing side, we’re pretty old school when it comes to the actual design – we like to sit together around a table with a big piece of paper and draw. This way we can really map out the challenges and limitations currently presented by the furniture and spatial design, and come up with the best solutions that fit the space and budget.

It’s simple for space operators to survey big name spaces and think, this is what appeals to my market of millennial freelance workers!

We see some recently designed coworking spaces looking the same. Are designers becoming lazy? Or do space operators lack inspiration when submitting their requirements and guidelines?

More than becoming lazy or lacking inspiration, I think the market is just maturing. New spaces are easily lured into copying established models of success. It’s simple for space operators to survey big name spaces and think, “this is what appeals to my market of millennial freelance workers! If I can do that, my space will also be a success”. The problem with this is that everyone is asking the same question and coming up with the same solution. While this can make for a safer bet in the short term, the real risk in this strategy becomes evident when looking at the numbers: the coworking market is predicted to double in size over the next 4 years, from 14,000 spaces to over 30,000 spaces (Small Business Lab’s December 2017 Survey). This is insane market growth! For coworking spaces to succeed in the long term and survive this flood of competition, there’s a real need for original, distinct, and innovative design.

We see a lot of recurrent gimmicks in workspace designs, Silicon Valley inspired kind of workspace, for instance… What do you think of it? 

Station F (Paris)

These types of “gimmicks” and trends are typically playful, easy to understand, and straightforward to implement, which is why we see them turning up all over the place. While they can be effective when done well, I think the bigger conversation here is that coworking spaces should be wary of adopting these kinds of trends just for the sake of it. This risks missing a meaningful opportunity to use design as a means to encourage collaboration, help build strong communities, and make the space more valuable to its members.

Do furniture providers do their job of supplying a wide enough variety of products or are we stuck with “prêt à porter” giving little room for design creativity in the workspace?

There aren’t many companies out there today that are designing furniture specifically for coworking and flexible workspaces. For now, most spaces are stuck making traditional office furniture work, or they end up designing their own because so few options exist in the marketplace. A coworking space is not a traditional office – so why are people still furnishing it like one The opportunity to design for these new usages is what’s most exciting to us. With our latest collection of furniture, we worked with our clients to map out the most common gestures and habits of the modern coworker, looking at all the tools and objects they carried with them and designing for their natural workflow; modular boards for writing or displaying sticky notes, hooks for headphones, shelves for screens of all sizes, and organizers for the daily tools.

What’s really exciting about coworking spaces is that there is such a new story to tell – this fundamental shift in the way we work and where we do it.

More broadly speaking, how does space design support the branding story of a coworking/flexible workspace? Do space providers understand that, nowadays?

In a general way, spatial design is the physical representation of a brand. What’s really exciting about coworking spaces is that there is such a new story to tell – this fundamental shift in the way we work and where we do it. With this comes many opportunities to use architecture, interior design, and furniture as visual tools to help express a brand’s values in an immediate and impactful way. Aesthetics are really important because it sets the tone and qualifies the audience the space attracts, and that audience will eventually become the space’s community. I think space providers are definitely beginning to understand how valuable these tools are, especially as competition becomes more and more fierce. Spaces that haven’t designed a unique visual identity or built tight-knit, specialized communities will have a much harder time standing out and risk getting lost in the noise. 

Can a corporate-focused, flexible serviced office develop inspiring and disrupting workspace environments, or are these things limited to startup and freelancer-focused coworking spaces?

They can, and we are already beginning to see this transition take place. Most serviced offices are simply following the model that traditional corporate offices have established – a model which is definitely being challenged and influenced by startups and coworking spaces. Corporations have already begun testing the waters by housing teams or departments within coworking spaces, dissolving the boundaries of the office culture and embracing startup working styles to accelerate innovation and growth. And it’s definitely catching on. Just last year, business employees became the largest demographic in global coworking spaces, surpassing freelancers. And the early signifiers are clear: the employees surveyed in coworking spaces are happier and more fulfilled in their roles, and these satellite departments are moving faster and are more productive than they had been in the traditional office environment. As traditional corporate offices continues to adopt these concepts and work styles, I think we’ll see a similar influence in serviced corporate offices.

Spaces that haven’t designed a unique visual identity or built tight-knit, specialized communities will have a much harder time standing out and risk getting lost in the noise.

What do you expect as being the upcoming trends in coworking space design, in the 12-24 months to come?

There are three key trends we’re watching for in the next 2 years:

1. Specialization. As the market matures, we’ll see coworking spaces becoming more and more specialized to support specific communities. Coworking spaces for women, coworking spaces with daycare services, coworking spaces for app developers, etc. These niched communities will have unique needs and usages, and spatial design will evolve to meet them.

2. Investment in Design. To stay ahead of the competitive curve, coworking spaces are making serious investments in design to set themselves apart. Today, the average space dedicates around 40% of the total opening budget to furniture and spatial design. In the near future this figure will only increase, as many more companies are able to raise investment capital in the wake of WeWork’s success.

3. Coworking + Co-living. As cities densify and the cost of living continues to increase, we expect the increase of shared coliving spaces will be nearly as dramatic as the rise of coworking. Furnished, flexible apartments that service a young, freelance workforce will build on the same movement as coworking, and we think many of the big players in the coworking market will lead the way

Just last year, business employees became the largest demographic in global coworking spaces, surpassing freelancers. And the early signifiers are clear: the employees surveyed in coworking spaces are happier.

Photos credit Handover

Kelsea Crawford will be a speaker at the upcoming Coworking Europe 2018 conference, in Amsterdam.

Gargi Shah is the co-founder of one of Mumbai‘s first coworking spaces. When she opened The Playce in November 2012, the coworking concept was practically unheard of in India. Gargi spent many days dreaming up ways to explain what she did to her grandmother, who still believes that her granddaughter rents out offices for a living. The Playce has completed five eventful years – a proud home to creative, entrepreneurial and even outlandish co-workers.

We spent some time talking with her to get her impressions about running a coworking space in one of the biggest, densest and fastest developing city in the world.

We use to claim coworking is all about community. Some players say tenants just appreciate the flexibility and a convenient environment. How do you see it?

Gargi Shah

Coworking is NOT just about the community. Customers come with different goals. Some are looking for a productive office space, some are looking to find like-minded people, others for an affordable setup still, others choose coworking for the unprecedented flexibility it provides. 

Coworking is NOT just about the community. Customers come with different goals.

Having a strong community in a coworking space makes the space attractive, but it is one of the many things that space offers. It can be one of the best ways to retain customers, especially teams.

Is Coworking just a smart Real Estate game?

Coworking is generally much more than simply a Real Estate calculation. There are community, flexibility, affordability and a host of other useful services offered to the customer.

That said, there are many cases where coworking is a way to leverage non-premium properties. In these cases, it starts with a smart Real Estate Game. The premise in question is typically not a premium property for a variety of reasons – location, floor plan, market conditions etc. This makes it tricky to rent out the entire premise to a single lessee.

The owners of such Real Estate premise have come to realise that coworking can give them a quick-fix to their rental requirements. Running a coworking space is a clever idea because the premise generates at least some revenue (even if it is less than market rent) instead of lying vacant. Coworking customers are looking for affordable workspaces even if it means that they have to compromise on certain other parameters. It’s a win-win for both the parties.

Mumbai is one of the biggest and crowdiest metropoles in the world. Coworking is booming. Is community less important in big cities?

The community is just as important in the big cities, perhaps even more so because the coworkers (entrepreneurs, startups, freelancers, etc) are working in a highly competitive market. They need all the support and encouragement they can get. It certainly helps them to know that there are others like them who are sticking their neck out for their idea. The support of the community and kindred souls is invaluable when an entrepreneur is starting out. 

The community is just as important in the big cities, perhaps even more so because the coworkers are working in a highly competitive market.

On the flip side, a coworker has many more options in a big city – cafes and restaurants (long the ‘offices’ of lone warriors), extra unused desks in traditional offices, apartments etc. This makes it harder for coworking spaces to retain customers.

How do we fill in coworking spaces in India?

India is rather diverse and most coworking spaces have their own niche offering. Some offer unbeatable prices, some offer creative interiors, some have simply located themselves in a high-demand location and some have an organic community built over a period of years. In Mumbai, there are diverse demographics who need a coworking space to suit different needs. It is mainly an overwhelming demand for flexible office spaces that drives the coworking market of Mumbai.

Most coworking spaces have their own niche offering. Some offer unbeatable prices, some offer creative interiors, some have simply located themselves in a high-demand location and some have an organic community built over a period of years

Fun, conviviality, learning, networking… Is it only for startups or Gen Y and Z?

Oh no, not at all. In all our workshops and events we have seen incredibly large participation from established freelancers and folks in their forties, fifties and even a few in their sixties. One would expect that startups and Gen Y/Z folks would be a big part of the fun and networking, but more often than not they don’t have the time and inclination to get out of their personal space and explore. They are buried in their startup challenges and personal journeys. It is the 30s and over a crowd that tends to have a more long-term perspective and are an integral part of the fun, learning and networking side of things.

One would expect that startups and Gen Y/Z folks would be a big part of the fun and networking, but more often than not they don’t have the time and inclination to get out of their personal space and explore

Rialto is a sales and marketing software as a service offering CRM functionalities tailored to the commercial real estate industry. This “broker portal” allows operators and brokers to exchange inventory and enquiries for space. The rise of the demand for coworking and flexible workplace offering might hit dramatically the traditional intermediaries within the workplace world.

We interviewed Nicolas Kint, the founder of Rialto, to get his impression on how big the change might become and whether coworking operators and brokers can one day understand one another and become partners.

Hi Nicolas. Can you introduce yourself as well as Rialto?

I joined the industry in 2013 as director of a business centre group in Ghent, Belgium. When next supporting the launch of a residential property inspection software solution to the market in 2014, surprisingly enough I was contacted by several brokers and operators of commercial property portfolios. I realised the commercial property industry was underserved by the market. Tight budgets and a need for vertically integrated processes made the market unattractive to the large players like Microsoft, SAP or Salesforce. That’s when I decided to found Rialto. In March 2015, we incorporated with the support of Pi-Labs in London.

The rise of coworking and flexible workspaces is told to be disrupting the office market and its traditional long-term lease contracts. Do you see that happening?

The imminent growth of flex workspace is driven by a couple of factors which today coincide. While the potential of coworking and flex workspace has hardly been underestimated, the timing for this inflexion point was hard to predict. I’m not sure whether we should call this trend “disruptive” to the conventional office leasing market though. There are several examples of specialised office space asset management teams, which have – many of them already for years – been experimenting with flex workspace concepts, typically with very low ROI. I believe that incumbents who got their timing right will have been making the right investments to capture the bulk of this growing market.

Intermediates such as real estate brokers used to play a big matchmaker role between property owners and tenants. Do you see them able to adapt to the new reality of flexible service based office? Or will real estate brokers disappear?

The role of intermediates is changing, and those firms with a strong positioning supported by a long-term vision, supportive for intrapreneurship, will still be able to create a lot of value going forward. To answer your question whether they have a role in the new reality of flex workspace, I definitely believe so. Employers will have to deploy a range of workspace solutions. This will most likely always be a mix of conventional and serviced real estate. This new reality creates a clear demand for professional advice by both landlords and tenants.

Employers will have to deploy a range of workspace solutions. This will most likely always be a mix of conventional and serviced real estate.

Coworking, flexible and social workplaces. Who can help them to fill in their space? Can they rely only on themselves?

I like to compare this to the hotel market. You have “independent” players versus the “international brands” or “houses of brands”. Your location(s) might compete with Spaces from IWG just as the boutique hotel around the corner competes with Sofitel from Accor. In terms of direct sales, the large players are hard to fight. They can leverage their brand and have built well connected corporate sales teams. Of course, you can beat them in leveraging your community and word of the month, but also in building your indirect sales partnerships with specialised brokers.

Your location(s) might compete with Spaces from IWG just as the boutique hotel around the corner competes with Sofitel from Accor.

Is there a difference between countries, from what you see?

Well, the more mature a market, the better the existing solutions available, the more experienced and better informed the market is. It’s no surprise markets like London, Paris and Amsterdam count several strong brokers and advisory teams in flex workspace.

It’s no surprise markets like London, Paris and Amsterdam count several strong brokers and advisory teams in flex workspace.

Brokers are paid on commission, usually, a percentage of the first paid rents, for instance. What can be their business model, tomorrow, if the commitment to a coworking space is no more than a month?

The flex workspace market has become competitive. If you’d ask me, I’d make sure the “carrot” for the broker is clear. Although the commitment could be restricted to a month, you expect the new customers to use the space for months even years. That’s the interest of building revenue models which allow managers to quickly calculate the Net Effective Rent corresponding such agreements in order to help them understand what cost of acquisition is affordable.

What about the role of online direct matchmaking platforms which are taking a bigger and bigger importance? They position themselves as kind of Booking.com of meeting rooms and office. Can’t they make real estate brokers an obsolete profession as well?

I’m happy you name Booking.com. When they started out 20 years ago, no one in the industry would have imagined they had the potential to become the dominant force in the market they today are. I’m convinced the office market won’t allow this to happen. Instead, expect a strong level of M&A going forward where some of the larger and more successful incumbents will be able to absorb the digitalisation, flex workspace, smart office trends and build future-proof propositions.

What can be the added value of those platforms in the future? Both for coworking spaces as for startups, freelancers and bigger companies?

The market is massive. Yes, startups, freelancers, large corps, …all of them will continue to take on the workspace. Winners will be those who can afford to specialise.

Do brokers nowadays really understand the full value coworking spaces provides to their members, aside of the square meterage and the location of the space (things such as hospitality, community, network, side services, image, conviviality, etc.)?

If I may, I’d not necessarily question the brokers, but rather the market as a whole. Are we willing to pay for the full value coworking spaces create? If the market is to grow 20% a year, there is a strong need for educating the market on those values you name.

Will it be a new job, you think?

Yes, developing, commercialising and managing flex workspace definitely requires specific knowledge and experience.

GKRE, a UK based flexible workspace specialist, could be a kind of new operator in the market: a matchmaker between real estate owners, on the one hand, coworking and flexible workplace operators, on the other hand. GKRE advises landlords and building owners throughout the UK on their flexible workspace options and opportunities to partner with flexible workspace providers. The company has recently been involved in the merger and acquisition of businesses worth over GBP 40 million, in some 50 buildings.

Will Kinnear

We interviewed Will Kinnear, Chartered Surveyor specialising in the flexible workspace industry.

Hi Will, could you introduce yourself and tell us about GKRE?

I started as a consultant to Regus acquiring multiple sites throughout the UK on their behalf. Since the creation of GKRE with Douglas Green in 2013, we have acquired more than 450.000 square feet (42.000 m2) of new sites for the UK’s leading operators throughout London and the UK. Clients include operators and landlords across the UK, from major PLCs to independent companies.

The flexible workspace market has grown fast in the last recent years. What are the reasons for this growth, according to you?

The growth of the market has been driven by a number of factors: the demand from occupiers for more flexible ways of working; technology in the form of laptops and mobile phones allowing people to work from anywhere; the explosion of small businesses and freelancers. Traditionally, flexible workspace operators were quick to seize on the demand for flexibility and, by offering something alternative to the traditional leasing model, grew their portfolio of sites steadily on the back of this. In the past three to four years, flexible ways of working have become commonplace for SMEs and even corporates, who have looked to operators to provide them with workspaces that meet their growing demand for dynamic and flexible ways of working. This, in turn, has driven operators and property owners to expand their offerings exponentially to the extent that the flexible workspace sector is no longer a secondary sector in the property market.

 In the past three to four years, flexible ways of working have become commonplace for SMEs and even corporates.

How do property owners look at the flexible model of space renting? Do they come to you? If so, why?

Property owners have had to look at the product being offered by operators given that demand for flexible working from occupiers has continued to grow. We are actively being approached by landlords and developers who want to understand better how the model works and how they can make the most of this growing trend. This is challenging the way property owners look at what they offer tenants.

Would you say that commercial property owners are starting to consider to partner up with flexible workspace operators, the same way property owners deal with hotel chains?

Yes, they are. Historically, flexible workspace operators have been at the forefront of this growing sector. However, over the past two years, there has been a distinct increase in property owners and developers wanting to enter the sector. Flexible workspace operators traditionally have taken lease deals where they have control over the space within a building and their clients. Partnership and management agreements between property owners and operators have allowed property owners to share in the upside and desirability of the sector while leaving the operator to the day-to-day running of the centre. We are currently working with a number of property owners who are considering their options. These may include working with an operator on a partnership basis or running their own operation.

Partnership and management agreements between property owners and operators have allowed property owners to share in the upside and desirability of the sector while leaving the operator to the day-to-day running of the centre.

Is the shared revenue model the future, in this kind of partnership?

It may be in some circumstances. Some property owners have assets within a portfolio that simply aren’t set up to enter into a shared revenue model. They will, therefore, have to let space on a traditional basis to an operator so that they are able to fulfil any requirement they have to provide flexible workspace within their mix of properties. They can also, of course, choose to run their own operation under their own brand. The shared revenue model will be attractive to both property owners and operators in some locations where both parties see a mutual benefit to providing a flexible workspace product. Going forward, we see opportunities for all kinds of models including leasehold, freehold and partnerships arrangements. We expect plenty of variety throughout the UK, and the model chosen will be driven to a large extent by the location, the property owner’s view of the market and the operator’s desire for a foothold in a particular area.

The model chosen will be driven to a large extent by the location, the property owner’s view of the market and the operator’s desire for a foothold in a particular area.

Some real estate owners fear that partnering with flexible workspace operators means they will lose direct contact with their traditional tenant customers. On the longer term, it could be detrimental to them, as they will be reliant on the flexible operator. Are they right?

This is a genuine concern for some owners as the end user will usually only have day-to-day contact and dialogue with the operator. To get round this and retain control of and connection with the end user, several property owners are looking to run their own operations, or, partner with operators but run the centres under their own brand.

Would you recommend property owners to create their own flexible workspace customer brand?

Possibly, but in every case, we would look at a property owner’s requirements in order to give them the best possible advice. Depending on what product they want to provide, the levels of service make these operations highly management intensive and for this reason not every property owner has the setup or desire to do it themselves. In these instances, we will work with a property owner to ascertain what options are available to them access the flexible workspace market.

Business Centres, Coworking, startup-friendly environment… How do you deal with the different services and positioning in today’s market?

Every operator thinks of their business in a different way and will position their product in the way that they best think sells it to potential occupiers. Often, an operator will offer a blend of options within a centre in order to maximise revenue.

What are your real estate predictions for the flexible workspace market in the UK the next five years?

We believe the market will continue its excellent growth. We expect to see more property owner-based operations in the market along with more all-inclusive managed products as landlords offer further flexibility in order to meet what occupiers are looking for. The new accounting rules coming into force in January next year are already impacting on demand as companies seek to take long-term leasehold premises off their balance sheets. We also expect to see retail and corporate occupiers offering flexible space. Industry data suggests that flexible workspace could account for 10% of the occupier market within 10 years across the UK.

Industry data suggests that flexible workspace could account for 10% of the occupier market within 10 years across the UK.

Eduardo Salsamendi is involved in the industry of flexible workspace since 1990. That year, he founded his first business center Klammer located in Northern Spain. 

In 2008, Eduardo Salsamendi founded the European Confederation of Business Centers Associations (EUROCBCA ), headquartered in Brussels. while being the president of the Spanish Worskpaces association  ProWorkSpaces.

We talked with Eduardo about how the evolution of the flexible workspace industry, and especially how the coworking culture is now influencing the sector.

Hi Eduardo. Could you offer us an overview of how the flexible workspace industry is doing in Spain, as we speak? 

Eduardo Salsamendi

Spain has a different workspaces ecosystem than the neighbor countries. We have a lot of smaller independents business centers that are representative of their owners’ own way of living. That said, the average size of the spaces kept steadily growing over the last 15 years. With an acceleration in the 24 months. The average size of our spaces in square meters has evolved from 600 to 900 m2 over the last five year. This figure might be misleading, though, due to the break down between the very big and very small spaces. If we have a look at cities, Madrid counts nowadays for more than 1/3 of the total flexible workspaces number in Spain, followed by Barcelona. 

According to you, what are the main challenges traditional business centers are facing now? 

The good news is that we are no more just speaking about money or space, but about the people’s needs. The flexible workspace industry now works on making people feel good while working, supporting them in the making of more efficient work. Technology changes the way we work. Users mentality changes too. 

What kind of distinction would you make, today, between a coworking space and a business center?

To us, the distinction between coworking and business centers is something more and more of the past, as flexible workspace operators today embrace elements of both worlds. At ProWorkSpaces we now define a flexible workspace operator as someone offering a combination of space, services, technology, and community. And the “traditional” kind of paid services are permanent offices, virtual offices, and spaces sold by the hour or by the day (meeting rooms, training rooms, offices, workstations…). Everyone makes his own recipe based on these ingredients.

Coworking has brought more visibility to the flexible workspace industry.

Would you say that the rise of Coworking benefited the traditional flexible workspace industry, so far?

The irruption of coworking made a revolution of the flexible workspace industry possible. Traditionally, real state players were focused on space, business centers were focused on service – Space as a Service- and Coworking operators were focused on community. In the early days, one of coworking’s biggest challenge was profitability. However, coworking quickly pivoted and incorporated elements of the “traditional” business center, usually more profitable.  Coworking has brought more visibility to the flexible workspace industry. It made flexible workspace cooler. We understood that we needed to work on communities of users. In addition, we learned that offering different environments across our spaces was an added value. Many operators include different kind of spaces and ambiances: open common spaces, more informal ones, different types of meeting rooms, workstations in an open space…  

We will continue to work on the SaaE concept (Space as an experience).

Where do you see the industry going in the coming years?

The industry will continue to change and grow very fast in the coming years. We expect different kinds of workspaces looking for their specific customers. The people in the industry love putting labels on what is a business center, what is a coworking space… but users don’t care. They look for a workspace that solves their needs where they feel comfortable. We will continue to work on the SaaE concept (Space as an experience). For me, the best reward is when a lead comes for a tour and says: “Wow, I want to work from here”. On the other hand, corporations build teams for projects. They collaborate with freelancers. The new economy includes uncertainty. The flexible workspace industry is the perfect solution for this, with flexibility and immediacy. You can know what you need today. However, you are never sure about what you will need tomorrow. We have an enormous growth horizon ahead of us as, nowadays, we still only represent a tiny portion of the whole offices market.

The people in the industry love putting labels on what is a business center, what is a coworking space… but users don’t care at all.

Picture source : Spacesworks Madrid

Download the full Small towns and rural Coworking Survey 2018

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Coworking is not a ‘city only’ phenomenon. Since a while, singles, young couples and families are moving away from the noisy pace and high costs of metropoles to settle within remote areas, looking for wellbeing and affordable cost of the countryside.

If Coworking in small towns and rural areas isn’t new, it keeps nowadays growing, as the last Coworking Europe conference’s editions confirmed. 

Therefore, it made sense to more specifically survey this segment of the coworking market in order to understand the coworking realities experienced outside main urban centers.

1/The Survey sample

Spaces from all over Europe and the world took part in the survey.  Within the final sample, France, Germany, Austria and Spain are the most represented countries.

Most of the surveyed spaces (62%) are located in towns with a population 50.000 to 150.000 inhabitants big. About 20% of the survey spaces are located in towns with less than 10.000 inhabitants and a 4% in the pure countryside.

The respondents operate rather small coworking space in size, between 100 and 200 m2 on average. Only 17% operate surfaces larger than 501 m2.

A majority of the spaces have been in operation for more than 3 years. One third of the spaces represented in the sample are 4 years old or more.

2/ Competition is still low

The lack of awareness about the existence of the “Coworking” concept is mentioned as one of the biggest challenges coworking spaces struggle with in small town and rural areas.

The positive flip side of the situation, is that they face few or no competition in their immediate surrounding.

A big deal of the respondents in rural areas provides with traditional coworking services : meeting rooms, hot-desking in an open space, fixed desk in an open space and event venue.

Mokrin House (Serbia) is an example of a very successful coworking project located in the countryside.

Product such as ‘content production’, ‘private offices’, or ‘sponsorship’,  are offered to a lower extend in rural area located coworking space.

More than 80% of the surveyed spaces operate without any public subsidies.

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3/ Rural “satellite offices” aren’t hot yet

The biggest part of the surveyed coworking community members live within a range of  5 to 20 km from their space.

According to the respondents, the first motivation of members to join the space is : “looking for a business minded work environment“. They “look for a place where they can discuss with other peers and find new opportunities” in second place. The third motivation is : “we like the atmosphere of the space“.

The coworking communities are mainly composed out of freelancers, SME’s, employees and startups.

The coworking space is barely used as a satellite office of corporate employees aiming to avoid to commute to their company’s HQ.

4/An untapped potential 

The main takeaway from the survey is likely that coworking in small town and rural area still offers a big untapped potential.

A big deal of the faced challenges are related to market education.

The coworking market outside big cities still is in a fairly young stage of maturation. There is room for growth, as the average surface and the level of local competition appear pretty low.

Moreover, so far, the opportunity for larger organizations to use small town located coworking spaces as satellite offices is widely unnoticed.

Download the full Small towns and rural Coworking Survey 2018

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Reminder

Coworking spaces play a key role revitalizing small towns and rural areas bringing the talent back. A good example is The Ludgate Hub located on the Southern coast of Ireland, in one of the most rural and remote areas of the country. After two years, the main results of the Ludgate Hub include the formulation of a digital strategy for a rural town, the creation of new jobs for the area, introduction of new families into the area, a boost of expenditure in the building, and services.

See the interview here.