A few months ago, Pacific Workplaces, a California based business centers network, took over Next Space, a coworking brand with locations in Berkeley, Santa Cruz and San Jose.
Why did a business center operator buy one of the best knownhistorical bay area’s coworking brand ?
What was the vision and how is the integration going ?
Laurent Dhollande, CEO of Pacific Workplaces and boss ofCloudVO, one of Coworking Europe 2017 conference‘s partners, shared his insight, last November, in Dublin, during one of Coworking Europe’s session (cfr video below).
Strong community, weak processes
“No one can curate a community as well as Next Space”, says Laurent Dhollande, first. “They have a solid brand recognition and informal culture, which is an asset”.
“Independent coworking space management is a hard thing to operate, though, adds the CEO of CloudVO. Many are run by very passionated people who focus on the community, but often overlook the monetization of additional services as well as the improvement of the operational side.”
“Next Space different locations, for instance, were too remote from one another to manage the network easily. The management was very decentralized. There processes were not up to date. They didn’t leverage technology to run the space, for rooms online booking, for instance. They had an insufficient number of meeting rooms. They didn’t kill inefficient new initiatives fast enough“.
Word of mouth marketing vs SEO
“Next Space marketing was mainly made through word of mouth and social media, whereas we focus a lot on Search Engine Optimization (SEO) and search engine marketing (SEM)“.
Next Space’s financial situation was weak, whereas Pacific Workplace financial situation is strong.
According to Laurent Dhollande, Next Space wasn’t good enough with the development of additional side revenues, aside of the revenue stream generated by coworking subscriptions.
“At Pacific Workplace, Virtual Office, makes 30% of our revenues, as opposed to a mere 6% at Next Space”, illustrates the CEO of CloudVO.
Complementarity and ultimate convergence
Despite some flaws, Pacific Workplaces choose to keep the Next Space brand alive as well as the website. The identity is strong and the complementarities with the mother company seem clear.
“The is a convergence between the models, observes Laurent Dhollande. Within the coming 5 years, the two brands and customer experiences might become only one“.
In France, the Trigano family is a close to a legend. Decades ago, Gilbert Trigano founded the worldwide famous ‘Club Med‘ brand. In 2017, his grandson Jeremie is now walking in his shoes. Mama Works is a network of coworking spaces inspired by their experience in the hotel industry, especially with the Mama Shelter brand, a collection of designed by Philippe Starck hotels, with locations now in a handful of cities in Europe and North America.
Hi Jeremie. Can you introduce Mama Works?
Mama Works aims to combine the creative and entertainment know how of our hotel brand Mama Shelter, as well as the real estate expertise of our partners. After having modified the shape of the hotel industry in France, we wanted to take on a new challenge by developing an alternative to traditional office spaces. A new generation of “workers”, eager to work in a friendly and stimulating atmosphere is emerging. The workplace is no longer just an office but a place to live and share and that’s why we created. This subtle blend of expertise and fun has given birth, we think, to a stimulating community buzzing with ideas and fizzing with energy!
We use to say that coworking is to become an industry similar to the hotel industry. Do you agree?
We absolutely agree that the flexible workplace environment is starting to reflect the hotel industry. Like hotels, coworking spaces are segmented, vary in sizes, specialise in niches, offer different services, and start working with OTAs (online booking services) to sell empty desks.
Why, would you say, are hospitality service professionals well or better positioned than others to address the need for workers and companies for new work environments?
We are in the service business when most of the big coworking structures are run by real estate professionals and funds. As such we are here to serve our clients and sell them an experience, not an office desk!
We are in the service business when most of the big coworking structures are run by real estate professionals and funds.
The Accor Group (one of the world leaders within the hotel industry) is one of your shareholders. Is it important to be supported by such a major world player?
Mama Shelter (the hotel brand from which Mama Works comes) has kept its full independence. We run Mama Works as a division of Mama Shelter. We have launched a start up within our start up!
A real estate broker has been assigned (Cushman & Wakefield) to market your work facility to tenants. How receptive are real estate brokers to the coworking model, would you say?
Brokers are highly responsive and understand there is a switch in the consumption of office space. They also realise there is a gap to fill in the commercialisation of these spaces. However, I believe the brick and mortar approach to selling offices spaces will slowly be replaced by online distribution channels offering the capacity to filter your searches by interest.
How is your broker rewarded?
A nice commission.
Why not putting a proper sales force in place?
We have a sales team in place but as for hotels in some instances, it is more cost effective to use third parties which have a broader reach.
Are the Mama Shelter hotels and the new Mama Works offerings connected?
We are currently offering our Mama Works members a special rate in all Mama Shelter properties.
We are also giving special Mama Mobile (daily desk rentals) rates at our Mama Works locations to our Mama Shelter residents. Eventually, we will have coworking spaces inside our hotels and really have an integrated offering.
One speaks more and more about coworking and co-living. Is it a bundle you might be exploring?
Yes, we are already looking into it.
How ambitious are Mama Works plans? Do you plan to stay in France only or are you considering an international expansion?
Pretty ambitious. We are going to use Mama Works Lyon as a laboratory. We already signed a site in Bordeaux opening in a few months and Lille in 2018. We have plans to expand internationally and have already signed a location in Europe…
Is the franchise model we see in the hotel industry appropriate for the coworking world, would you say?
Mama Shelter does no franchise. But we believe Mama Works is the ideal business model for franchise. Unlike the hotel industry, the coworking world relies on very few employees. It is easier to set up a franchise with 4 staff members and as long as we can keep a say on recruitment (not operations) we believe our concept can grow as a franchise model!
It is easier to set up a franchise with 4 staff members and as long as we can keep a say on recruitment (not operations) we believe our concept can grow as a franchise model!
How would you say you position Mama Works (in terms of target, tenants’ profile,…) as opposed to other independent of international coworking players?
We are trying to position Mama Works as an urban kibbutz for coworkers. We want our community to feed on each other and grow organically. Mama Works is chic, high tech, affordable but most importantly human, friendly and lively.
Takayuki Hagihara is one of the well-known faces within the coworking global scene. Tokyo based Takayuki travelled the world visiting dozens of coworking spaces and building up a limitless knowledge of the multi-diverse way the coworking model is implemented on the five continents. ULSLab’s (Ubiquitous Lifestyle Laboratory, his company) mission is “the realization of a society where everyone can cooperate without being tied to a location”.
Hello Takayuki. Can you introduce yourself and your activities ?
After a long career as an engineer, I decided to start my own company. As many in my situation, I started to visit some of the shared offices in Tokyo. During my investigations, I entered a bunch of coworking spaces. It appeared to me that coworking, as a working place, could become a very promising alternative to traditional workplaces. I met many attractive operators, such as Kyo, from PAX Coworking, the founder of one of the first coworking spaces to have opened in Japan. I figured out that the Coworking model was about something much stronger than just the “work environment”. As of today, we provide professional services both for service provider side and enterprise side on work style change management.
How is the situation of coworking in Japan in 2017 ?
According to a 2016 research on service providers for telework which was conducted by the Japanese Ministry of Land, Infrastructure, Transport and Tourism, 1.987 flexible workplaces are active in Japan, claiming to be coworking spaces. Some are business centers. Based on the survey, we can say that 65.3% are operated by private organizations. About one third is profitable. The survey doesn’t make a clear distinction between the different offerings, though.
Do you see some specific drivers in Japan as opposed to other coworking offerings you have seen around the world ?
I do not see any significant differences between Japanese coworking spaces and European, Asian and US spaces I visited. I can find a foreign counterpart for any to Japanese coworking space I know. Each space differentiates itself from the others. That said, yes, at a smaller level, there are maybe some characteristics specific to Japan. For instance, kitchen and dining areas are relatively seldom in Japan, if I compare it to what I have visited in the US, Europe or the rest of Asia.
What about the profile of the tenants : freelancers, expats, startups, employees from private or public organizations ?
Freelancers and small startups are quite common. Accountant and independent consultants sometimes. Small businesses launched by retired people is something more unique in Japan. We see them in some coworking spaces. Large enterprises also start to let their employees to work from shared offices and coworking spaces. On July 24th (2017), the government launched what they called ‘Telework day’. According to a report, more than 60,000 employees worked at home or from third workplaces, different from the company’ offices.
How important is it to build up a community feeling in coworking spaces in Japan (with events, happy hours, a celebration of people’ birthday, etc.) ?
It really depends on the space. Some operators I met are keen to organize lunches or coffee breaks in order to trigger new conversations, good to establish relationships. However, some (young female, for instance) attendees do not want to join drinking events. The community manager is critical to overcoming these barriers.
Just recently, WeWork announced a $300 Mio deal with SoftBank in order to open 40 spaces in Japan. What does the deal tell about the evolution of coworking in Japan?
SoftBank isn’t the only one. There are many investments in the shared workplace business. Large real estate companies started branded spaces. Some company started more than one brand – focusing enterprise use, Tokyo branch use, coworking, innovation hubs, …
What about the role of independent operators ? Is the coworking market mainly in the hands of big brands, such as what we see in some other Asian countries ?
Independent operators are still vital and sometimes belong alliance programs provided by large brands. For example, Tokyu Corporation – one of the top private railway in the metropolitan area which also has real estate business subsidiary – started the brand NewWork currently focusing on enterprise employee hot desks near its railway stations has contracted with more than 10 independent coworking spaces as well as their own spaces.
How ready is the commercial real market to embrace coworking in Japan, would you say ?
Traditional property owners like to stay good old leasing model. There is a huge development in Tokyo area for high-end property and it makes an existing property to be rated as 2nd class. So, some owners decided the new coworking model to survive.
The maturation of the coworking market showcases a more and more perceivable split between two kind of players :
well funded growing coworking brands, with a multi-location strategy, on the one hand
locally rooted independent coworking spaces with a more focused identity and community, on the other hand.
The pattern gets confirmed is a steadily growing number of metropoles around the globe London, Berlin, NYC, Chicago, Singapore, Sydney, Shanghai and many more.
Paris is no exception.
The international real estate advisory company Arthur Loyd just published a data supported study on the rise of the coworking industry in the Paris region.
As much as 10 football fields to open in 2017
According to the study, close to 70.000 m2 of coworking space are to open in 2017. “It’s as much as the total coworking openings we have seen in the Paris ragion in 5 years“, underlines the firm.
Whitin the last 24 months, the coworking offering increaseded by 167%.
The number of coworking spaces ninefolded, from 20 spaces in 2012 to a total of 177 in 2017 !
“Nowadays, a mere 7% of the digital natives’ population (18 to 30 years old) consider to work from a traditional office”, observes the Arthur Loyd study.
Growth equally supported by branded and independent coworking spaces
Who drives the market up ?
According to the study, the parisian market is evenly divided in terms of the number of spaces between the independent and the branded coworking spaces (WeWork, Spaces, etc.).
Independent coworking spaces in Paris started to ignite the demand seven years ago.
The rise of branded networks of coworking spaces is more recent in Paris, as it is in other major cities in Europe, Asia or America.
Remix Coworking
International brands like WeWork or Spaces (Regus group) opened their first locations only this year in the French capital.
Meanwhile, well-known French companies and investors have invested in the building of local coworking brands, now expanding in Paris and in other major cities in France (Lyon, Marseille, Bordeaux, Lille…). Those are Nextdoor, Kwerk, NOW and some others.
Branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.
According to the Arthur Loyd study, the main difference between the independent and branded coworking spaces lies in the average surface of the respective coworking spaces : within the Paris region, the average size of independent coworking spaces is 364 m2 as opposed to 1.061 m2 for the branded coworking spaces.
In other words, branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.
More independent spaces located in the city’s off-centre areas
A difference surfaces as well in terms of geographical location. Whereas branded coworking spaces tend to open in the very center of the city, close to the most prestigious addresses, on the main avenues, a.o., independent coworking spaces are, on average, more often located in the off-centre districts.
Lease costs obviously play a role.
It means that the price of a desk for members is slightly lower within independent coworking spaces (401 € /month, on average) as opposed to the branded space with multi-location (493 € / month for WeWork), writes the report.
“Some spaces also position themselves within or close to the digital entrepreneurship hotspots or in Paris’s trendiest neighborhoods, not far from Bastille, Le Sentier or République“, comments the report.
A real impact on the real estate market in Paris
“Coworking will only absorb about 3% of the total transactions made in 2017, according to Arthur Loyd Investement. The market is generating a lot of new value, though. Landlord should take it seriously into consideration.“
For different reasons, as observe in other countries, corporations now are becoming users of coworking spaces.
Expect more growth to come in Paris.
The breakdown between Branded coworking spaces networks and independent coworking players will be a hot topic to be addressed during the upcoming Coworking Europe 2017 conference, to take place in Dublin (November 8-10).
Hector Kolonas is the founder of Included.co, an online platform organising group purchases for a network of over 200 coworking communities in the world. The service helps the spaces to buy supplies and services at a discounted price, thanks to the generated volumes.
As a London-based startup, which initially started to work with the London coworking ecosystem, Hector is ideally positioned to depict the evolution of the coworking market in one of the most innovative and dynamic cities of Europe and the world. The competition is becoming fierce, as somehow confirmed the discussions which took place at the recent eOffice London Coworking Conference.
Hi Hector. The coworking offering strongly increased, during the last three years London. What are the main drivers of the growth, according to you?
Hector Kolonas, Included.co
Indeed, we enrich over 50 business communities across London, up from just 2 when we launched in the city. This is at a similar pace to the number of new spaces opening up. This growth includes serviced offices adapting space into open-plan, flexible workspaces; new coworking brands; expansion of existing coworking brands; and new takes on what coworking could look like for different niches.
There are two main drivers behind the rapid growth of coworking communities in the city, namely economic and social.
First up, rent in London is crazy expensive, as can be expected for any thriving capital city. So the notion of ‘sharing’ office expenses like rent, electricity, coffee and workspace management is a no-brainer. The increasingly flexible terms (mostly month-to-month) allow for businesses to invest in growth and their staff, instead of into sunk costs normally associated with office rentals. But that’s the same everywhere, and a reason why coworking has exploded across the globe. What’s most interesting in London though, is how rapidly the workspaces that ‘get community right’ are growing. With the growth in popularity of entrepreneurship in the UK (and Europe) a lot of passionate and brilliant people have converged in London.
What’s most interesting in London though, is how rapidly the workspaces that ‘get community right’ are growing.
At the beginning, everyone went at it alone, hiding the lessons they’d learned as competitive advantages for their businesses. Community-focussed coworking spaces broke down these barriers and showed members that they could grow faster by sharing knowledge, experiences and contacts.
With this combination, it’s no surprise that London has begun exporting some of their coworking brands across the UK, and into Europe. It won’t be long until a few start launching in the US too.
With this combination, it’s no surprise that London has begun exporting some of their coworking brands across the UK, and into Europe
Are major brands supporting the development of the coworking market or is it fueled by the multiplication of more and more independent project?
The Sillicon Roundabout, in London, around which gravitates a number of startups focused coworking.
The two seem to be resonating in London, creating opportunities for each other.
The big brands (both in the coworking sector and from other enterprise-focussed businesses) are creating huge spaces that create a buzz in the media and promote the fundamentals of sharing workspaces on more flexible terms than traditional rentals.
The independents are either becoming large brands in their own rights or carving out perfectly built oases for specific business niches. Whilst we’ve definitely seen a few independent spaces having to shut their doors, a vast majority are working on the expansion, with 2nd, 3rd or even 4th locations opening in the coming 12 months.
Businesses are increasingly switching between the two, based on the kind of employees they want to attract; customers they serve, and the additional costs they can shrink.
How about the profile of the new tenants: mainly freelancers, startups, SME’s or corporations?
As London is a melting pot of epic proportions, there’s a space (or subset of spaces) for almost every profile. From large polished spaces for consultants, professional services and the likes; to workspaces built around reclaimed furniture in warehouses. Some spaces limit membership to specific niches or business types, others are happy to accept any member that doesn’t create negativity in the workplace.
There is definitely a growing shift of corporations moving autonomous teams into these coworking communities, but there’s still a lot to be learned about how to integrate these teams with the other non-corporate members, in a way that isn’t detrimental to the corporation.
Wherever there are startups, there are passionate and creative people, and thus a growing number of freelancers can be found in and around the most buzzing coworking communities in the city.
Is the demand growing fast enough to absorb the growth of the coworking offering in London?
Work.Life is among the coworking brands expanding fast in London.
The growth in the flexible workspace is astronomical. We’ve literally lost count of the number of shared workspaces available or being used in London, with new coworking spaces opening almost every day or two.
We’ve been exploring when market saturation will occur and helping the operators of our partner workspaces to prepare for the coming dip in demand.
At the current rate (and according to our back-of-a-napkin calculations) there should be enough demand to sustain the current workspace growth for the next 20ish months. From their workspaces who only offer wifi and desk space will start haemorrhaging members to the community-lead spaces who’ve attained enough economies of scale and additional revenue streams to push down their membership fees.
From there workspaces who only offer wifi and desk space will start hemorrhaging members to the community-lead spaces who’ve attained enough economies of scale and additional revenue streams to push down their membership fees.
With some of the traditional commercial real estate players also exploring the coworking sector, the fight for not only tenants but brand loyalty will move from location and price to tangible value and stability.
Speaking of pushing down membership feels, some players noticed the beginning of a price war in the coworking market. Do you see this?
Even though I’m confident that the ‘war for tenants’ will be fought on the value and community front, there is definitely signs of a price war looming in the London ecosystem.
Operating costs for coworking communities are growing due to business rate increases; the gentrification of specific burrows; and the ‘sexiness’ of coworking sneaking into rent-renewal negotiations with landlords.
This opportunity has been seized by some of the bigger players to drop prices, offering what are essentially loss-leader memberships to attract tenants and potentially starve off competing spaces. We’ve had reports of members within some space being directly targeted with unsolicited marketing about workspaces “at half of what they’re currently paying”.
We’ve had reports of members within some space being directly targeted with unsolicited marketing about workspaces “at half of what they’re currently paying”.
With more and more sales teams being hired to fuel expansion, being able to absorb losses to acquire potential long-term customers is becoming a weapon of choice.
But the line between sales and community is also being crossed more and more. With some members even reporting having received messages congratulating them on personal milestones (possibly mined from private social media channels) before offering them a free tour or discounted membership as a gift.
I should obviously note that this isn’t the whole industry though, as many coworking space managers are actually and actively collaborating behind the scenes to help each other out.
With London’s center being so dense and expensive, do you see an expansion of the coworking offering in the suburb? Are those spaces different (size, positioning…) from those located downtown?
Second Home has opened a location in Lisbon
There are actually two interesting trends here.
Firstly, great community-focussed spaces from outside Zone 1 and 2 are opening new workspaces towards the centre or on other sides of the city. By leveraging their knowledge, brand equity and operational experience they can offer more affordable or valuable workspace offerings. These workspaces can either be smaller satellite-style offices or grander whole/half buildings with new features designed specifically based on the requests/needs of their existing members.
Secondly, larger brands are diversifying their market exposure, potentially hedging against the coming market saturation and price wars. This means they’re opening locations in cities like Dublin, Manchester, Lisbon, Barcelona and others. In smaller cities, the new workspaces are normally larger due to lower rentals and operating costs. A number of local coworking brands have also raised VC funding to fuel this growth.
Whilst no brand wants to ever be seen to be ‘fleeing’ the centre, some communities are moving further outwards to keep their businesses feasible. With superb community coordinators, and when well explained, this can happen without any long-term detriment to the brand, and can sometimes even strengthen members’ relationships to the community.
You mentioned it above. Coworking spaces diversify their revenue sources. What can you say about it?
From all the communities we observe, assist and enrich, we’ve picked up on 3 different avenues for revenue diversification. These are excluding the renting out of registered addresses and meeting rooms, which can be expected in any thriving metropolitan ecosystem.
The first is sponsorship, which is arguably the most attractive, because who wouldn’t want to have ‘free money’ thrown at them? Professional service and technology brands are happy to write cheques to community coordinators, to lock in the exclusive promotion of their offering. What we’ve found is that around 75% of the time, these offerings are not what the member businesses need or even want, but the community manager’s hands are tied by the agreements with sponsoring firms.
The second is the merger of partnerships and affiliate revenue. Normally delegated to community managers, this creates a bottleneck for the operating team. Not only do they have to deal with a huge amount of non-stop inbound partnership requests, but they also need to somehow figure out if:
a) the service/product supplier is legitimate,
b) the offer will create value for their members,
c) the workspace will make enough revenue to recoup this invested time.
The third is actually where we work every single day. We handle inbound partnership requests, negotiate on behalf of 200 communities, and ensure that the workspaces get a fair apportion of generated revenue on a long-term basis. As we don’t offer any exclusivity, members will never be tied to a single provider, allowing them to discover solutions that their coworkers are using, and saving money with.
This means that the members of each space in our network get access to a growing set of solutions, and the community coordinators can focus on implementing creative ways to connect their members to the solutions. Some of our partner communities are saving their members £1,000’s in unavoidable expenses each month, driving up their own long-term revenue and building great brand loyalty at the same time.
With the price war looming, and the costs of operating increasing, it’s no wonder why so many coworking communities are becoming included too.
Jean-Yves Huwart, founder of SocialWorkplaces.com and initiator of the Coworking Europe conference was interviewed, last month, by Building magazine, a Canada-based magazine covering the Real Estate and Construction industry.
It’s not a secret that the Real Estate industry is wondering how to deal with the growing phenomenon of coworking. The flexible model could slowly disrupt the traditional office market. New concepts have emerged.
Jean-Yves Huwart
The landscape remains blurry, though, for outsiders. Many traditional players keep struggling to make the distinction between the wide variety of offerings: serviced office, coworking, shared workspace, incubator, business centers, fablabs, etc.
As a matter of facts, instead of looking at the individual models, we think the challenge is nowadays to consider the emergence of a whole new hospitality industry, similar to hotels or restaurants.
This is the focus of the interview:
Could you start by outlining the key functions and objectives of Social Workplaces?
We have been involved in the Coworking movement since 2010 (that year we organised the first Coworking Europe conference), and started to link up coworking communities from Europe and beyond.
From a few dozens of coworking spaces in operation around the world eight to ten years ago, we have witnessed an increase to up to 13.000 units as of today worldwide, according to the Deskmag Global Survey 2017 which is supported by SocialWorkplaces.com.
Through these years, we have had the opportunity to interview and talk with many tenants and operators. We have become more and more convinced that what coworking brought, first for freelancers and start-ups, was an actual re-invention of the function of the workplace, broadly speaking, for the digital age. This was for any kind of workplace, any category of employer.
Once the ability to access your production tools has become ubiquitous, why is there a need for you to have a workplace? For us, coworking provided the answer: people need to be in touch with other people with whom they like to be with, both for their personal equilibrium as much as for professional reasons.
This is especially important at a time when routine tasks can be more and more automated and when workers are requested to provide more creative and social outputs. We call this the Social Workplace, inspired by the coworking experience.
How would you define specifically a coworking workplace relative to shared office, public workspaces (community centers, libraries), mixed workspaces, maker spacers and business centre workplaces?
Coworking is open. You can show up anytime and propose yourself to become a coworker. Someone will walk (normally) towards you, be hospitable and make you comfortable. People flow in and out. This is similar to a hotel, a restaurant or a gym. It’s service driven. Usually, coworking spaces also create a proper identity and, thus, a sense of belonging that is at the root of the creation of communities.
Shared office [models] are more closed. Certainly [in this model] you will be around the same people in the same building all time. This doesn’t impede social interaction. However, it will be more static.
Those models are not exclusive between one another. More and more business centers open up coworking services within their buildings and hire a community manager to build up an emotional relationship with and between their tenants. The added value is no more – or less and less – in the provision of a facility; it is in creating a pleasant environment and experience.
Are there significant differences between approaches in Europe and North America?
Europe and North America are not that different, I would say, in terms of offerings. Big US cities, however, have a higher density of startups and digital workers. So we see bigger players, bigger spaces in the US. That said, it’s just a matter of time before we see Europe catching up in terms of growth.
Who are the current main users/members of coworking workplaces? HOK/Cornet Global 2016 report suggests employees in a corporation are also now a significant and growing percentage of users/members?
Freelancers are the biggest category of users so far. They are the historical first tenants because, in the beginning, spaces were smaller and did not necessarily have the capacity to accommodate bigger teams. The population of freelancers is growing everywhere, however, as the new working generation looks for more freedom and self-achievement. Plus, big companies’ headcounts keep shrinking.
Source Hok
Sideways, we see more and more employees within coworking spaces. Corporations have started to authorise people from their innovation departments, for instance, to work from coworking spaces in order to be in touch with the local start-up scenes. Companies who need a smaller representation office in a city also tend to consider to use a coworking space rather than to go for an office long term lease.
So far, in terms of overall numbers, the trend is marginal. We think it’s just the beginning, though. Fast growing SME’s do not hesitate to put all their teams in coworking space offices. The Office in the cloud (the cloud here being the coworking spaces) will become mainstream.
What are the most important attributes of a successful coworking place; e.g. shared services, social interaction, flexible (varied and funky?) work areas, IT support?
Pure coworking spaces rarely bother with IT support usually but they do provide a stable, secure internet connection. That’s it. Tenants’ tools are now in the cloud. Besides, today, neither startups nor freelancers need traditional assistant support. Sure, there are exceptions, but those are outdated services with the new generation of digital nimble companies as far as we see it. Again, everything is in the cloud. Spaces need to offer new kind of value adding services if they want to keep their revenue per user at the same level as in the past. Indeed, they need to provide a space with human focused connections, interesting events, social moments, fun and networking. This is what gives value nowadays, not forgetting flexibility and the opportunity to scale up or down easily.
Within the coworking industry, what is the relationship between: 1) large international firms like Regus, Servcorp and WeWork; and 2) smaller independent operators?
The analogy with the hotel industry is for me the most relevant. You have Accor, Shangri-La’s, Holiday Inn, Best Western proposals, aside from AirBNB’s, Bed & Breakfast, independent hotels, camping or even couch surfing. These can be fully complementary. Each reaching out to different needs, profiles or customer expectations, all according to the context of the booking. These accommodation offerings are not mutually exclusive, I would add. Depending on the context, you may consider staying at a Regency hotel because your need is professional only, you don’t look nor have time to socialise or discover a city. But on holiday time, the hospitality of a Bed & Breakfast or, even, the fun of couch surfing might suit you.
That said, with hotels, etc., we speak only about a few days. The main difference between the need for lodging and the need for a workplace is the duration of the stay. With a workplace, you commit for a few months, at the least, not for a few days. The quality of the social experience then become a much higher driver of choice.
What is the significance of secondary coworking spaces such as those promoted by hotels, coffee bistros, libraries, maker spaces, etc.?
Again, the element of duration is key here. Working from a coffee shop during one or two hours (depending on the battery life of your computer) might be fully convenient. Noise and comfort are not (so) critical, in this case. This will be another story when you have to stay eight hours a day, five days a week. You probably will look for a proper work environment.
What is the role/significance of LiquidSpace or similar apps that use the Airbnb approach to attracting workers?
Liquidspace and the likes are like Booking.com for hotels. They are sales channels and helpful online directories. The dimension of service is critical, though. If space fails to provide the required hospitality and quality of service, the trust will be broken. This is a service business. Forget it, and you will lose.
The HOK study raises the issue of upcoming renewal of leases for many coworking spaces, as many are based on five-year leases. Is this an important concern?
It’s still a bit early to say, as the wave of bigger, stronger spaces is less than five years old, overall, in Europe. However, this is certainly a very big challenge ahead. We are not aware of accurate data about this. A lot of coworking spaces, through their activities, have brought a lot of value back to properties – sometimes to the whole neighbourhood within which they operate – and have not been rewarded for doing so. I would advise any coworking operator to really consider this when negotiating. That being said, we hear more and more of landlords getting in touch with coworking operators in order to partner up. I’m personally a strong believer in this kind of mutual partnerships where risk is shared.
What is the potential growth of demand for coworking spaces over the net decade? HOK suggests overall it will stabilise around 2% -4% penetration
We saw those figures. As far as we understand it, this includes business centres as well. To me, the turning point will be when coworking space operators will be able to host companies with 200-300 people or more while providing mutualized support services without losing their ability to accommodate people on an individual base. This will create convivial environments within full office buildings, with [the coworking operator] becoming a concierge, facilitator, connector, ecosystem builder, etc. Social Workplace will become the standard. Ultimately, we believe that no employee will accept anymore to work in the old-fashioned, dull closed and dry office environment they have experienced in the last decades. Then, expect the penetration rate [of coworking] to become much much higher.
In Summary, what is the future of Coworking workspaces over the next decade; what will be the key trends?
This is just the beginning [but] it will evolve under many shapes.
Ahoy! Berlin is a Berlin based space for coworking and innovation. The more than 4.000 m2 big space host now freelancers as well as sartups and corporations.
Hi Stéphanie, can you introduce the Ahoy! Berlin project? What is it about?
Our main goal is to create a dynamic yet sustainable community where people have the freedom to collaborate, to explore and to have fun. We stand behind the main 5 shared coworking values – community, openness, collaboration, mutual help and equality, but we added another one – well-being.
As a second concept line we have the nautical theme which is implemented in every detail in Ahoy. It likens the new startup economy to the open sea with it’s strong currents and unpredictable weather. Ahoy serves to help budding startups and freelancers steer clear of potential pitfalls by connecting them to a wider community of possible collaborators and investors via Tech Berlin sister companies Openers and Tech Open Air while also offering additional services like event management and legal advice.
Ahoy started as fairly small space and scaled up rapidly. Was it the founders’ plans to go this way?
Ahoy! was founded in December 2011 by Nikita Roshkow and Nikolas Woischnik. The first location was in Charlottenburg and was only 400 m2. Over the years, the space grew up to 1700 m2. As a result of this natural and organic growth in September 2015 Ahoy moved to a new location, which currently has over 4200 sqm spread over 3 floors.
Thе scale up wasn’t by accident, but it also wasn’t strictly planned. Our expansion was a result of hard work, willingness to develop the coworking concept, team members’ devotion and community strength.
In December 2015 we opened our second location in Sao Paulo with 450 m2. It’s managed by Felippe Burratini who is an Ahoy! Berlin Alumni. This is a perfect example of the way how the coworking synergy works.
How receptive was the Landlord to accompany this process?
He helped us a lot in our recent growth in the last year – from the moment we moved to our current location until now, we expanded from only 1 floor to 3 floors. Even now the landlord constantly keeps us in a loop for potential new buildings.
Ahoy hosts some bigger companies. What are corporations looking for in a coworking space ?
According to our observations and regular feedback we get from our corporate community members we know that there are 5 main reasons:
To establish themselves quickly in a new city or a new market
To reduce costs and risk of new projects
To get closer to startups and entrepreneurs
To acquire more autonomy
To recruit new talents
Is the social and community dimension important in their choice, or do corporation’s employees in your space keep themselves aside as an island in the space?
The companies that use team offices often stay together in groups. Nevertheless, many of the interactions and collaborations between them and the other community members happen in very informal, chill and friendly atmosphere, while having a coffee, a lunch or a drink after work in our open cafe area. That’s the moment when the best ideas are born. The phenomenon known as “serendipity”.
Isn’t the flexibility and offered scalability a sufficient a value proposition for bigger organisations within you space?
It’s not only the space, the services and the possibilities to grow within the space that attract the bigger organisations. It’s also about the social interaction and the access o a professionally diverse community.
Do you work on mingling actively all of your tenants/members, including those working as employees for a company ?
Yes, we do work on that – we organise various community events:
community breakfasts;
captain’s’ lunches, strictly focused on bringing together the CEOs of the companies at Ahoy;
skills exchange;
drinks after work;
yoga classes
German classes.
We also facilitate the process of professional interaction by connecting our members based on the fields they work in. In order to foster the community development we use internal communication channels where they can introduce themselves and approach the other members.
What are the main differences between individual members with respect to the level of engagement with the rest of the community?
I’d say that the level of involvement and engagement in the community depends more on personal traits like collectivism and extraversion than on the type of membership. We have community members from big companies that are actively involved in the community and freelancers who prefer to stay on their own.
Desks VS offices ?
For us it is important to have them both – we offer fix and flex desks, as well as team offices. We’re striving to meet the needs of the freelancers, the startups and the corporations.
Are you working on hosting more corporations in the future ?
We are open to everyone who want to join our space and become part of our community. At the same time we’re trying to keep the balance between freelancers, startups and corporations. We believe that this is the only way we can preserve the community diversity – the aspect that makes the coworking idea so appealing.
Do you see a new level of openness in bringing employees from other departments ?
More and more corporations are open to send entire teams and departments to coworking spaces. However, the process of making that decision still takes more time and it often goes through the several rounds of approbation. There is often as much internal negotiation as there is with the coworking operators. Managers need to convince their superiors and their employees of the value of such spaces.
However, once a corporation embraced that change, the trend spread easily through the entire company.
Do you think medium-size and big companies could outsource a big part of their office and facility management to bigger coworking spaces in the future ?
We’ve seen it’s already happening – from having an office in a coworking space to renting entire buildings managed by coworking companies, corporations are now switching to another way of perceiving the working process.
Ahoy! Berlin will be a speaker at the upcoming Coworking Europe 2017 conference in Dublin.
Marouan Aoudia is an Algerian national, born and educated in the US. During 10 years, he worked in the corporate world before shifting towards the entrepreneurial world, end of 2015, armed with a long list of projects among which to open a coworking space in Algeria : The Address.
Hello Marouan. Could you introduce yourself as well as The Address project?
I was introduced to coworking for the first time on April 2015 during a visit to the US, and I immediately thought about seeing this concept into Algeria.Along with my strategic partners Majda and Chouaib, we worked on the concept, activities, and the general branding of the space.The Address was born on Feb 2016 as the 1st coworking space in the country.It is located in the capital, Algiers, and in area that has multiple options of public transportation for ease of reach.The Address is approximately 250 m2 big in surface. Our vision is to create an environment that embraces the notion of connection, collaboration, and creation among the members. We welcomed members from diverse sectors and backgrounds, some just starting out in their entrepreneurial journey and others are established professionals that require a work space while in Algiers.This mix of backgrounds and experience level is what makes The Address a unique space I believe.
What are the reasons Coworking can thrive in Algeria, according to you?
As for any service proposition, to be successful, it needs first and foremost to solve a real problem that exists. Coworking solves an issue that many entrepreneurs and independent professionals are facing in Algeria : the lack of affordable space where they can work, a place to receive potential clients, an opportunity to connect and network with peers, ability to establish their commercial license without important capital requirements. Coworking put simply tackled all these problematic and it allowed many people to take their 1st step towards establishing their projects with just a small capital, establish a commercial license and be connected with fellow members as support system.
According to you, coworking can help emerging countries such as Algeria to diversify their economy. Can you elaborate ?
Marouane Aoudia
Currently Algeria is tapping into its foreign reserves just to maintain economic stability after witnessing the massive drop in oil prices, a resource that historically served as the main economic contributor.Faced with the situation on hand, we have no choice but to diversity and develop other sectors of the economy.As previously stated, Coworking in Algeria plays an important role in creating an environment that supports the development of a startup scene and the entrepreneurial landscape in general.We are seeing a new stream of startups being founded at Coworking spaces that eventually graduate to standalone businesses as they scale up their operations.The numbers are out there, in many economies around the world SMEs contributes the heavily in to nation’s GDP figures and employment sector.Again, Coworking is the 1st step towards that journey, the starting point in a chain of business development that will see a small startup become an valuable economic contributor.
Coworking is the 1st step towards that journey, the starting point in a chain of business development that will see a small startup become an valuable economic contributor.
Coworking communities can become connection hubs between entrepreneurs from emerging and developed economies. How can we achieve that better?
Definitely, coworking spaces from across regions and continents once connected can serve as the ambassador’s of the world in their respective countries.Once this has been achieved, we can start working on an array of projects whether its digital in nature or anything else that is both relevant and of added value.Coworking owners have the capacity to engage the members, influencers, and local community towards a common initiative.It is worth noting that idea aside the most challenging part in these sorts of grand scale initiatives is the quality of execution and sustainability.On the profitability side, Coworking spaces can again collectively seek funding from international organizations in return of the value that these projects can bring home.
What can we say about the Algerian digital ecosystem and how coworking can help?
The digital ecosystem in Algeria is lagging behind even when looking at it from the perspective of North Africa region.It is hindered by two main issues, the low speed and at times unreliable internet connection and the lack of structured e-payment system.So we have an infrastructure issue more than anything.
There is a lot of interest among youth for everything related to digital world and Coworking spaces are serving as platforms connecting the community members by organizing seminars, events (SW: cfr Algeria Startup Altitude, for instance), workshops, and trainings related to it. As the infrastructural issues are resolved, Coworking will be playing more of an active role in initiating
Does the coworking working model speaks also to SME’s or bigger companies, or is too early in the country?
At The Address we already have a number of SME clients.These are clients where the HQ are based outside of Algiers but still have strong client base in the city.We offer them special corporate packages that would allow them the use the space when visiting and more importantly we offered them virtual office service by serving their client base administratively on commercial transactions. We also host corporate evening events at the space for themes that speaks to youth and entrepreneurship.
The Address is settled in a “Commercial Centre”. Why is this location appropriate for a coworking space would you say ?
We are located in hybrid building that has a mall, commercial offices, governmental agencies, and residential studios.The center offers many advantages.First, the center has 1000 free parking spaces, a luxury that you will not find elsewhere in the city where parking is a major issue.Second, the center offer security 24/7 allowing us the run evening events without any fear for safety.Third, our clients and Coworking members appreciate the services that the commercial center has to offer in terms of food court, catering, dry cleaner, gym, among other things that makes life just a bit easier.
In Europe or in the US, we hear more and more about “dying” shopping malls. Can coworking save “commercial centres” ?
A dying garden needs to be rejuvenated.The way to do it is to remove the dead plants and inject new seeds that can break ground and foster.Dying infrastructure is no different; if malls are dying they can be converted to a mix of commercial offices, innovation hubs, art galleries,…the economic cycle will always see concepts that will seize to exit in the expense of new fresh initiatives, our role is to adjust accordingly.
What are your main challenges and hopes?
As a Coworking space owner the challenge is to continue to promote the concept and build awareness, get better traction and create greater demand to sustain operations.A year and half into our existence, we have taken great strides towards that goal and have adopted well to meet the demand of our community and corporate clients.
At a macro level, I hope we will see more initiatives in Algeria from private sector that goes towards the development of our young human resources.Emerging countries have abundance of talented youth that are never given the proper mentoring, resources, and opportunity to excel.More often than not, they opt to travel to Europe, US, and there they develop into influential figures and contributors to their adopted nation.We need start to start paving a road for their success while they are here.
Skibbereen is a 3.000 inhabitants town located on the Southern coast of Ireland, in one of the most rural and remote areas of the country. In 2015, in order to re-create a dynamic of opportunities in the region, a range of major companies, associations, and public players joined forces to build up a platform supporting entrepreneurship, connected to one of the fastest broadband connection in Ireland: Ludgate Hub.
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 building, and services.
Ludgate Hub illustrates how a concerted action supported by a coworking space might pave a set of new options to address the challenge related to the economical desertification of many rural zones in Europe and beyond.
We interviewed Gráinne Dwyer, CEO of Ludgate Hub, who told us more about the initiative.
Hello. Can you tell us how did the Ludgate Hub project started?
The initiative has been developed by a steering group consisting of a group of local entrepreneurs, digital ambassadors and business owners of local enterprises. The board felt it was important that the initiative came from the ‘bottom up’ and came from the community as it was a more sustainable method of town development. There was also a general feeling of neglect of the town by local authorities and national Government.
Picture: Emma Jervis Photography
The board of eleven members includes representatives from major organizations, such as RTÉ, the national broadcaster, Google, AIB bank, Vodafone, a.o.
Reasons why the group has become involved is firstly to create opportunities for the younger generations of the area and give them an option to live and work in the area when they are older. They aim to stem the tide of youth emigration and provide meaningful sustainable opportunities for the town in terms of connectivity, investment and jobs.
After the board was formulated, the next step was to identify buildings suitable to develop a digital hub. Corporate sponsors were sought to further support the development of the hub and to contribute towards the operational costs.
To help the board of 11 and the management team of two, the group found members of the public to help with the project through voluntary ambassador roles. The board recruited individuals interested in education, retail, agriculture and other key sectors of the project to lead sector specific projects.
Picture: Emma Jervis Photography
It has to come from the bottom up
What were the initial purposes of the project?
The initial purpose of the project was to facilitate jobs and stimulate the local economy through a four pillar approach :
1 – The Ludgate Hub
Developing the Ludgate Hub was key, the hub is a 10.000 m2 state of the art coworking space with a 1GB connection.
The building was donated by a local businessman John Field and was once a cinema and then a bakery in the middle of the town. The hub has meeting rooms, training space and state of the art video conferencing facilities, & has attracted international start-ups from LA, Chicago, London, South Africa, Spain and world wide. The hub is now a beacon of innovation and has already started to encourage fringe enterprises and collaborative projects as a spin off.
Picture: Emma Jervis Photography
Companies like the BBC, National Geographic, Google, Facebook and Reuters have all used our hub in the last six months.
The long term vision is to make Skibbereen a hotspot for technology start-ups and multinationals to locate and prosper at a global level enhanced by the 1GB connection.
The long term objective to create 500 direct jobs and 1000 indirect jobs via a sustainable digital economy for Skibbereen and the wider West Cork area.
Visions like these are unheard of in rural Ireland – but now connectivity is making the impossible, possible. We provide, mentoring and business advisory in the hub, we can also offer virtual mentoring and advice via video link.
2 – Facilitate Digital Literacy
We knew we needed to reach all levels of our community – young and old. We wanted to create an inclusive society – digital for all a connected community.
A key pillar to our initiative was to make sure the community knew about our 1GB connection, but more importantly that they knew how to use it.
We rolled out iPad and tablet training classes, which enabled all members of our community to email, shop online, bank online and video call with their relatives worldwide. This combatted rural isolation and empowered our community.
We rolled out coding classes in our local secondary school enabling students aged 16-17 to learn how to code, and how to develop websites. We opened our doors to the local Coder Dojo group which train young people how to use programmes like Scratch, Minecraft and learn HTML. We have kids from age 6- 16 and their numbers have doubled since moving to the Ludgate Hub.
3. Create eStreet : encourage retailers to trade globally
Ireland’s first initiative to encourage traditional retailers to trade globally.
The third task was to economically enable our community, we developed Ireland’s first digital Main Street www.estreet.ie. eStreet is a collaborative, eCommerce model it is set to become Ireland’s first fully, inclusive eCommerce community portal.
The platform gained national and EU recognition for its solution to help combat rural disadvantage and economic decline; via a multi-pronged digital strategy.
eStreet is paving the digital path for other towns and areas to follow and shows rural towns how to help themselves to a better future. Eleven of Skibbereen’s retailers are pioneering this project to increase their online visibility, sales and open up to new markets.
4. Re- Brand rural Ireland
We created Ireland’s first National Digital Week a digital conference set in rural Skibbereen. The hugely successful event attracted 1,600 attendees to West Cork and hosted over 80 international and National speakers.
The vision for the event was to showcase that rural Ireland is ready to embrace technology and it certainly worked, Skibbereen is now considered the Digital Capital of Ireland.
What are the roles respectively played by Vodafone, Google, the Cork County Council, AIB, and all the others involved ?
All of our sponsors support us through corporate donations or free services, services include free legal support, or accountancy services.
Picture: Emma Jervis Photography
Their motivations stem from believing in the regeneration of rural Ireland and the importance our rural areas have on our regions, our cities are heavily reliant on the success of the rural hinterlands.
All companies that have supported us have done so as a leap of faith to back a very ambitious project, their commitment to the Ludgate Initiate reinforces their own ambitious targets and support for SMEs nationally.
We believe the hub is sustainable as the community is heavily invested in the project, both the community and board are safeguards of its future success.
Since our inception in 2015 we were declared Ireland’s first rural digital hub – a case study which has inspired 22 other towns and villages to develop their own community backed enterprise initiatives. As 95% of our projects are privately funded through donations or corporate sponsorship we have a strong track record in raising capital to support the project.
The factors that ensures its success is to curate the Ludgate Community, by ensuring the needs of the community are met, that we can offer the same services as urban areas to grant equal opportunities for rural start-ups as those of their urban counterparts.
It is essential that we have a continuous stream of seed fund capital to further encourage start ups to relocate here, it is also essential that we maintain a stream of mentors to encourage and support start-ups in the Ludgate Hub.
Is the coworking space open to anyone?
The coworking space is open especially for ‘digitally enabled businesses’, we do not take in call centre staff or manufacturing companies. We aim to attract companies which will use or bandwidth but are complementary to each other, e.g.. we will not take in ten website developers as it will lead to unsustainable competition.
Our main tenants include, web designers, app developers, graphic designers, animators, online services, online tourism providers, online education platform providers and services which are traded online.
How about the results and impact of the Lugdate Hub project so far ?
The main results of the Ludgate hub include the formulation of a digital strategy for a rural town, the main benefits include, the creation of new jobs for the area, introduction of new families into the area, a boost of expenditure in building, and services.
In total the hub has engaged with:
4 University Collaborations
250+ Active Members of the hub a month
25 Co-Working Companies
Supported 15 Community Groups
Serving West Cork Population of 80,000+ (West Cork)
attracted 1600 Attendees to National Digital Week every year
Attracted 400 Pledges of support from National & International Companies
Some other benefits are :
We have delivered coding classes to 25 students per year
We have delivered digital innovation classes to 15 students per year
We have taken on over 40 secondary school students per year for training and work experience
We have delivered iPad training for 45 people in 2016 aim to deliver to 120 people in 2017
We have enabled 11 rural retailers to trade online through our eStreet platform.
We have employed over 11 people throughout the year
Spent over 1.8 million euro on local services & trades since 2015.
Have a seed fund of €500,000 euro, donated by private individuals attracting companies to Skibbereen – including the funding of four start up companies.
We have supported the ‘coder dojo’ club of 65 kids who learn coding, minecraft and web development.
We have supported over 2,800 bed nights in the local area due to Ludgate events and operations.
We have attracted over 15 new Ludgate members to permanently move to West Cork with their families
What are the main challenges you had to face rolling out the project ?
Our greatest challenges include local services, not meeting the needs of tech start-ups (eg. local solicitors with little start up experience). However all of our local service providers have retrained or provided new specialists to meet the needs of our tech start ups.
Picture: Emma Jervis Photography
Also mention the lack of Government funding. The largest challenge with regard to the setting up of the Ludgate Hub is the lack of supports for capital funding. e.g.. funding to support the capital refurbishment of a building, or to assist with the internal reconfiguration of a building.
In terms of marketing, due to our large marketing presence, we have been inundated with requests for tours of the hub. As our human resource hours are tight, tours can take up too much time of our working day and hence we have reduced access to the hub and declined tours due to lack of resources.
Ultimately, not having a blueprint to work from, we did not engage in a feasibility study as we have very little state data on who lives in the area and what sector they are in. Census records do not depict adequate information for rural areas to demand a feasibility study of a project of our size.
Why is the 1GB bandwidth capacity such an important element in the whole storyline ?
Picture: Emma Jervis Photography
We started this project 18 months ago, & realising a vision for rural Ireland as a ‘Gigabit Society’ was not an easy task – but we engaged with the community early on, we held information evenings, town hall meetings and organised inclusive workshops so the community – and the community alone would shape this project.
We looked internationally and saw what was achieved in rural Kansas, the Google Kansas project landed a 1GB connection and within two years over 121 new companies were formed – could this be achieved in rural Skibbereen? With the 1GB connection, it will give the young people of Skibbereen the opportunity to create the next Google or Facebook.
The board pushed to get a 1GB connection. SIRO a joint venture between ESB and Vodafone heard our story and came on board as a partner and selected Skibbereen as a demo town for their fiber optic 1GB roll out. Skibbereen became the first 1GB rural town in Ireland.
I think in summary our visionary 1GB connection – which does not create an environment which places rural Skibbereen on-par with urban centers, but excels them further was one of the most successful aspects.
We have companies moving from the US, Spain, and London to Skibbereen which is something conceived as impossible in the past, however with our 1GB connection now everything is possible.
Could coworking spaces play a key role revitalizing rural areas bringing back skilled well-paid job?
I think coworking spaces are the future for rural areas as it facilitates communities to get access to research, access to meeting spaces and networks, ideas, funding, and mentorship.
Communities that feel confident, inclusive, organised, and those that ultimately feel influential are those that are most likely to succeed.
Coworking spaces are the future for rural areas.
Looking ahead 30MBs is not enough for rural areas a 1GB – 10GB vision is needed. Key opportunities lie in the future of mobile workers as by 2020 80% of large corporations will offer agile working. We need to give young people the opportunity to help shape their home communities.
We need to support coworking spaces, give opportunities for smaller businesses to become digitally enabled and give an opportunity for the incubation of companies in rural areas. We need communities inextricably linked to the development of digital hubs – diversifying all local rural sectors of their local economies.
Picture: Emma Jervis Photography
The core strengths of our project is a strong organising board, access to capital and community support. Communities who want to develop their own projects need to spend adequate time planning and finding out what will work with their own local strengths.
Every community needs to find their niche and USP. Communities need to ask themselves what will attract people from urban areas to move to rural areas, they need to package those offerings and market it.
Communities also need to look internationally for examples of best practice or successful case studies eg.
Google Kansas is an example of a 1GB connection which transformed the region, attracting 121 new companies from 2012-2014 and spurred on over €3 million worth of investment in projects across many sectors.
The core strengths of our project is a strong organising board, access to capital and community support
Ludgate Seed Capital Funds is the startup program you are running. Who is supporting it?
We run an open call for start-ups to relocate to Skibbereen since November 2015, the program is very attractive for start-ups as it not only provides seed capital but a wealth of world-class mentorship, success is only a part of a roadmap for seed companies which locate in the Ludgate hub.
All companies that locate here have access to our sponsor supports including support from AIB, Ronan Daly Jermyn, Moore Nathans and KPMG.
How different are rural digital businesses when compared with their “urban” peers? Are their clients rural only?
No we believe there is no real difference, if anything rural businesses are becoming more savvy as they do not have the luxury of a natural domestic market, rural businesses believe opportunities are now global.
Rural businesses believe opportunities are now global.
What can the Ludgate experience teach other rural communities in Europe who experience economic desertification?
Source : Flickr
The Ludgate Hub was only made possible due to many conditions :
1. Broadband connection
Broadband was the upmost important factor to the success of the project. Our Siro/ Vodafone 1Gb connection, not only put us on par with urban areas but excelled our rural town further than urban areas.
The combination of the 1Gb connection in the town now meant that we had the same broadband speeds as Singapore which was a pull factor for digitally enabled businesses which needed this high-level connectivity (eg. web developers, designers, fin tech, online services, video production). The high-speed connection has attracted high-value jobs which have a greater impact on the local economy than entry level/graduate jobs like (call center services or customer support).
The combination of the 1Gb connection in the town now meant that we had the same broadband speeds as Singapore which was a pull factor for digitally enabled businesses
2. Skibbereen’s geographical position.
Skibbereen is located 100kms from its nearest large urban center (Cork City) making it an undesirable location for an effective commuter town – this creates opportunities and challenges for the town. But This creates a busy town atmosphere with cafes, restaurants, and shops full throughout the day. The town is also located 2kms from the coastline in the South West of Ireland along the Wild Atlantic Way. The area is known best for tourism, outdoor activities, and artisan food.
So, the area acts as an ‘alternative’ option for people to work from. The town has a number of primary schools (ages 4-12) and secondary schools (ages 12-18) with the capacity to take on new students at all times. This is in stark contrast to urban schools which often have two-year waiting lists or suffer from over crowding.
The town has a number of primary schools (ages 4-12) and secondary schools (ages 12-18) with the capacity to take on new students at all times. This is in stark contrast to urban schools which often have two-year waiting lists
The availability of education for young families is a very attractive offer for those working in Dublin city and acts as a pull factor to the area.
Projects like Ludgate has attracted high-level workers away from Dublin, these workers are often high value to a company and the company will allow remote working to retain their staff. Rural digital hubs like Ludgate can act as an effective counter-balancing measure to the congestion seen in our capital city. 3. Community Support
We engaged early on with the local citizens and community by hosting ‘town hall’ style meetings. Our first meetings kicked off inviting various stakeholders in a range of sectors to attend. Stakeholders included; local business and service providers, retailers, teachers, farmers, students and local authority officials.
Picture: Emma Jervis Photography
Our community meetings were transparent and informative which led to trust building in the community, the style of the meetings was inclusive and we asked attendees to help shape the early plan for the project. By keeping the community informed we gained significant support from the beginning as they felt the project was theirs from the start.
The board of 11 members who created the project all work on a pro-bono basis, their expertise and international network was a crucial part of the success of the project. Our core sponsors AIB have been instrumental to the success of the project, and have truly shaped the direction of where we are going into the future.
Packaging and marketing of the town: We needed to get the town to sell ‘itself’, so we worked with the local chamber of commerce to help them to do up their website. We encouraged banks and service providers (accountants, solicitors etc) to make their services “start up” friendly, and to make their services seamless for young people to access who are returning to the area from international locations.
LudGate Hub will be a speaker at the upcoming Coworking Europe 2017 conference in Dublin.
Last week at the Social Workplace Amsterdam 2017 Conference, Eduard Schaepman, CEO of Tribes, told the audience that 26 companies from the UK already reached out to them to prepare the partial transfer of their team and activity to the Dutch city.
Eduard Schaepman, Tribes
“London established companies are using the passport multi-location flexible office brands offer to commute between cities and prepare themselves up for when the Brexit will be completed”, said the representative of another major network, based in The Netherlands.
For sure, coworking spaces in Europe are preparing themselves for a flow of requests coming from companies currently based in London, Birmingham or Liverpool.
One can more speak of a round of observation than a real rush, though. So far.
Dublin: most of UK company enquiries come from FinTech’s
Mike Hannigan, Coworkinn
Mike Hannigan from Coworkinn, in Dublin, the city where the upcoming Coworking Europe 2017 is to take place, made a small poll, last week within the Irish coworking scene.
Here is main feedback he received from his fellow spaces regarding the expected impact of the Brexit on their operations:
There have been a lot of enquiries, but few major moves yet.
A number of virtual offices are being opened, helping boost presence and quantify benefits of potential move
The majority of enquiries from financial and Fintech companies
An increasing number of Digital Marketing and Web development agencies are “talking” about moving to Ireland by 2019
Definitely more enquiries than actual moves. This might change now the Brexit process has started – but we need to wait and see.
A large volume of enquiries are from Northern Ireland.
Some existing Irish companies have reported securing new contracts as a result of Brexit, presumably beating competition from UK based competition.
Very small coworking spaces have seen no effect at all
On the Northern side of the border (i.e. in U.K. territory) they have seen an influx of Irish companies setting up virtual offices in the UK. This balances out the apparent rush to set up virtual offices in the South. The UK will remain an important market for S.Ireland.
Spaces on the border see opportunities in that their N.Ireland (non-eu) clients will be very close geographically to S.Ireland (eu).
A big move out to be expected in 2019?
The story seems similar elsewhere in Europe. More enquiries than real moves, yet.
That said, we all are getting ready, say representatives of some coworking spaces in France, for instance.
“As far as we are, we certainly expect an increase in the demand of companies moving from the UK to France due to the Brexit, especially once we will have opened our new location at La Defense”, tells a spokesman at Kwerk, a coworking spaces network operating in France. La Defense is the country’s biggest business district.
The attitude remains as pragmatical in Berlin. The city is often told to be the main competitor of London in Europe as far as the startup ecosystem is concerned.
“So far, we didn’t receive more enquiries that what we deal with on a usual base”, tells Stéphanie Bison, from Ahoy! Berlin, a major coworking space based in the capital of Germany. “That said, everybody speaks about it, here”.
The big move could definitely happen closer to March 2019, once the Brexit will have formally taken place…
As of today, we provide professional services both for service provider side and enterprise side on work style change management.
Just recently, WeWork 
“Coworking will only absorb about 3% of the total transactions made in 2017, according to Arthur Loyd Investement. The market is generating a lot of new value, though. Landlord should take it seriously into consideration.“
Ireland’s first initiative to encourage traditional retailers to trade globally.
The coworking space is open especially for ‘digitally enabled businesses’, we do not take in call centre staff or manufacturing companies. We aim to attract companies which will use or bandwidth but are complementary to each other, e.g.. we will not take in ten website developers as it will lead to unsustainable competition.
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