Also referred to as ‘millennial workspaces’, co-working spaces have gradually become the lifeline of startups today. Co-working spaces are the talk of the town because of their ability to cater to workers from all types of businesses. According to industry reports, almost half of co-working space users are small businesses, with only 20 percent categorized as freelancers.
In the past four years, the growth of co-working spaces has been quite massive. The number of co-working spaces globally has more than doubled as of the end of last year —from 8,900 in 2015 to almost 20,000 in 2020.
Have it in mind that the number of workers depending on the products and services provided by co-working spaces is growing even faster—from a little more than half a million in 2015 to nearly 2 million in 2020—a 300 percent increase.
According to industry experts, the number of co-working spaces globally is expected to more than double to almost 31,000, and the number of workers using them is expected to rise and triple to 5.1 million in three years. Co-working also boasts of numerous benefits, but it is not always a perfect solution.
Pros and Cons of Co-working Space for Startups
If you are considering setting up your startup at a co-working space, you must go through the list of the pros and cons of co-working spaces below.
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Community and Complementary Skills
Most often, co-working spaces tend to attract like minds, therefore a startup can find people with the necessary skills they need to further their aim and goals, or perhaps build their client list by being valuable to someone else. If you are having the same problems as another team, you will be able to swap insights to solve these technical challenges.
One of the many disadvantages of working from home is the lack of structure. Your whole plan to have a productive workday crashes immediately you sleep or get distracted by watching a movie or reorganizing your wardrobe. Being at an office and having a dedicated workspace ensure you stay accountable and establish a routine, putting you in the mindset to get the work done.
Amenities and Perks
Aside from the building, renting office space versus co-working space is more about the amenities available. Note that a commercial lease would always warrant a startup furnishing the space with desks, storage solutions, expensive computer equipment, and phone systems.
However, a co-working arrangement offers startups all these at just a small expense. It also offers access to copiers with scanning and fax capabilities, built-in wifi, conference rooms, and even kitchens and breaks rooms for that afternoon downtime when you need to get away from your desk.
For a new business or startup looking to gain market share, finding a co-working space that suits their working style could be a source of inspiration, especially when they are surrounded by people who stimulate their creativity. Note that this might be the group culture or a shared sense of helpfulness, but whatever gets the juices flowing for innovation and productivity, could be found in a co-working space.
Scaling on Demand
If you’re a member of a startup, your group’s size may fluctuate. Having to steadily reorganize a traditional office to suit new members is a real hassle especially if your business is growing. But in co-working spaces this is not a problem; private offices, which are made available by many spaces, are tailored with customization in mind. Whether you are a team of 20 or 100, co-working space providers can make reasonable designs for the team.
Lack of Privacy
In most co-working spaces, lack of privacy has been noted as one of the biggest deal-breaker. Although packages tend to also vary in the different co-working options, there’s a greater possibility that a walled-in office would cost more than what a startup with a constrained budget is ready to pay, perhaps even more expensive than a private office elsewhere.
With more communal arrangements among the desks, the open-style rooms can be quite rowdy and distracting. Also, note that the sound of someone tapping away on their keyboard may eventually drive you crazy. If you need to take a lot of work calls during the day, make sure the space offers phone booths or nooks for private conversations.
Competition Under The Same Roof
Co-working spaces tend to attract like minds, and this entails that a startup can potentially run into people they are competing against for business. However, this could still be an advantage, because if your goals are like-minded, then collaboration can be more beneficial to you. But if you aren’t interested in working together, there could be some uncomfortable moments.
Since there is a wide array of people sharing a space, there will genuinely be some conflict. This can be a personality clash or maybe an actual space issue. The lack of an HR department also entails that arguments will have to be handled between the parties involved.
If you’re launching a startup and you are eager to work around your own hours, then the fact that most co-working spaces are open from 9-5 won’t suit your flexible schedule. Although some startups will see this as a perk, especially since working from home can make you feel like you’re always on call, but for a business that needs to stay flexible, limiting the time the office is open to the usual workday hours may not be very suitable.
Harder to Define Your Culture
For startups, the biggest drawback when it comes to sharing a workspace with a separate startup is defining your business’s culture. Have it in mind that the other team in the space may not align to the same cultural values, and this can make employees self-conscious.
Top Reasons Why Co-working Spaces are Here to Stay
Truth be told, co-working is a global trend in today’s business world. From New York to Seattle, Paris to Prague, Singapore to Shanghai, new co-working spaces are opening regularly. According to experts, this global trend is here to stay, and here are the top reasons why.
Network Hubs of the Future
According to experts, co-working spaces are growing along with the technology available in its time and it is expected to become the network hub for different communities. Co-working spaces are expected to become places where people spend more time working and telecommuting.
Co-working spaces offer businesses and individuals the opportunity to move straight in, shrink and grow their space depending on their headcount, budget accordingly with an all-inclusive cost, and stay flexible with much shorter contracts than a normal lease. For startups that barely know or understand what their headcount is going to be in a year, having that level of flexibility is very critical.
Just like it was noted above, co-working spaces are always filled with businesses that are potential customers and partners. Note that the relationships co-working space users establish in these workspaces offer everything from new revenue possibilities to collaboration.
Almost the same way you may refer prospects to other co-working space partners, co-working spaces also can steer customers in the direction of members. In addition, collaborative relationships may result in reciprocal knowledge-sharing or even service delivery.
Coupled with being locked into long-term leases, the cost of permanent office space tends to be a massive financial drain for small businesses, with many spending upwards of 10 percent of their revenue on them. With co-working spaces being 331 percent cheaper than permanent office space, the low cost of a co-working space is a major driver behind the exponential growth.
Building Entrepreneurial Communities
In sharp contrast to traditional offices where people are more or less confined in large, quiet, and professional spaces without being bothered by anyone around, co-working is more about creating and adapting to a well-defined community of like-minded individuals, partners, and supporters, to exchange ideas and collaborate on projects.
According to experts, co-working spaces will bring about thought leaders, and connect entrepreneurs, all to create solutions-focused businesses.
The reason behind coworking’s growing importance can be attributed to its balance of pros vs. cons. Co-working space pros and cons are direct and equally proportioned, but the benefits out rightly outweigh any disadvantage. Agreeably, it has become a major trend in the last few years and it is powerful enough to stick around for a very long time. Co-working is here to stay and to set a base for the future of work.