“Employees are going to want a flexible work policy, and that’s an opportunity for us.”

Office Evolution

How coworking spaces changed the office for good

Led by the multi-billion-dollar WeWork, there are now more than 18,000 coworking spaces around the globe. How did we get here?

Nothing has quite changed the meaning of “going to the office” more than the rapid rise and growth of coworking spaces. Before their introduction two decades ago, individuals worked in offices supplied by their employer, a coffee shop, library, or other public space.

As of 2018, more than 1.6 million people around the world share coworking spaces with employees of other businesses as well as self-employed writers, marketers, programmers, and others, according to Deskmag. Led by the multi-billion-dollar WeWork, there are now more than 18,000 coworking spaces around the globe. How did we get here?

The problem

“Coworking really started with freelancers and entrepreneurs who needed more social interaction than they could get at the kitchen table or the coffee shop,” says Bryan Murphy, CEO of Breather, a flexible office space provider.

With the rising price of real estate, freelancers and early stage entrepreneurs weren’t likely to rent their own office spaces. Shared office spaces rose from the dual need of an inexpensive workspace with the benefit of being in a collaborative space with other professionals.

The solution

Before the modern iteration of coworking came into existence, there were hackerspaces. One of the first of these spaces was c-base, which opened its doors in 1995 in Berlin. The not-for-profit group offered free access to the internet and focused on its community. Sounds familiar, right? Other flexible offices popped up in the following years, but it wasn’t until a decade later that a collaborative workspace opened that actually called itself a “coworking space.”

Brad Neuberg, a San Francisco-based software engineer, wrote in 2005 that he had been unhappy both working for himself and at a startup, and sought “the freedom and independence of working for myself along with the structure and community of working with others.” He rented out space from a feminist collective for $300 and opened the San Francisco Coworking Space. (That space, and two spaces that followed, eventually closed.) Neuberg did not respond to a request for comment.

In 2008, on the opposite side of the country, designer Miguel McKelvey partnered with Adam Neumann to create Greendesk, a coworking space with an environmental bent in New York. The pair eventually sold that business to the building’s landlord (it’s still open today) to open a new coworking company focused on community: WeWork.

The evolution

The Great Recession created conditions that were beneficial for coworking. Many people were laid off from their jobs, leading some to found their own companies. Coworking offered a way to save on the high expense of an office and to cater to an increasingly mobile workforce, with smartphones and laptops becoming the norm. For larger companies, coworking spaces also offered an easier and less expensive way to provide space for employees far from their main offices.

The latter has proven to be a big growth driver for WeWork, which, after a multi-billion-dollar investment from Japanese conglomerate Softbank, spread rapidly across the globe, with more than 800 locations in 119 cities. Forty-three percent of the company’s customers are now enterprise companies, according to a WeWork spokesperson, with two-thirds of the global Fortune 500 holding WeWork memberships. WeWork has evolved beyond its roots as a space for early-stage companies and freelancers, offering single-member floors to meet the needs of these large customers that include IBM, Sprint, and Facebook.

There’s lots of room in the coworking space, however, and many companies have risen up with niche offerings. For example, Knotel pitches itself as a grown-up WeWork, The Wing caters to women, and The Assemblage hopes to provide “mutual interconnectedness,” whatever that is.

“All of the coworking spaces have gotten better at offering a full plate of services,” Murphy said. “They’ve also done a good job of differentiating. There’s some inexpensive, basic coworking facilities all up to super luxury solutions.”

The future

Many people are currently working from home, and it’s unclear when people will return to offices or their coworking spaces, many of which are temporarily closed. At least one company, Cove, a coworking company with locations in DC and Boston, has adapted to the times with the introduction of cove@Home, a service that offers a virtual community, tips for setting up a home workspace, and home deliveries of coffee and snacks.

This situation won’t last, and coworking spaces will eventually open again, but they may look a bit different. WeWork has said it will place seats further apart, put signs up to encourage social distancing, provide wipes and hand sanitizer to its members, and perform more cleanings. Other coworking spaces will surely take similar action.

“Right now, we’re fully focused on creating an environment that prioritizes the safety of our members and employees and that our members feel fully comfortable returning to,” a WeWork spokesperson told Inverse.

If the work-from-home trend holds, it can prove to be a boon for coworking companies, as businesses eschew from signing leases for offices, preferring the flexibility afforded by the likes of WeWork.

“A coworking space is a quick, obvious half-step,” Sam Rosen, co-founder of coworking membership company Deskpass, tells Study Hall. “When we reintroduce the idea of the office, employees are going to want a flexible work policy, and that’s an opportunity for us.”

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