How to Start a Coworking Space

The simple method that averts risk, generates great communities, and bolsters your chances of success.
Ryan Chatterton
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February 12, 2019
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11 min read
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Coworking Essentials
Source:
Indy Hall

Many new coworking founders reach out to experts for advice on building a workspace in their hometown. The trouble is, many are in tiny and rural markets. And while rural and suburban coworking is on the rise, it can be tough to get a space going in those places. That said, what I'm about to suggest is an excellent way to start a coworking space with almost zero risks, regardless of market size. What’s more, it works in new, small, untested markets, and it works in large metropolitan cities as well. And it has to do with starting incredibly small.

Now, there are any number of theories and tidbits of advice out there on how to start a coworking space. Have you heard one of these?

  • Build your community long before you open your space, then sign a lease, fix up the space, and grow
  • Start by finding a small but fantastic space which you can afford, then sign a lease, fix it up, market it like crazy
  • Raise some money and do all of the above with a bigger space and more marketing
  • Raise even more money and do all of the above with an even bigger space and even more marketing

All of the tactics above have worked in the past and will continue to work in the future, but what these courses of action leave out is the far more certain path to success.

The Dawn of Coworking

Have you ever looked up stories about the first coworking spaces?

None of them started in beautiful old brownstones, refurbished warehouses, or high rise offices. None of them signed a commercial lease on a space at the outset. They all started far humbler than that.

Most began in nondescript spaces which they either used for free or sublet for next to nothing.

The First-Ever Coworking Space?

Such was the case for Brad Neuberg, who is widely considered to have coined the term “coworking” in 2005. Brad opened the first official coworking space shortly afterward.

Two coworkers from the first coworking space. Photo credit: Brad Neuberg

Brad was unhappy in his startup job, and he figured that others were also lacking a sense of connection to their work and other people. So he decided to do something about it, which he recounted in his article about the birth of coworking, “I decided to create a new kind of space to support the community and structure that I hungered for and gave it a new name: coworking.”

While many of the ideas in Brad’s article, such as connection and passion, are familiar to us these days, the notion of a community coworking space was totally unheard of at the time. So it stands to reason that he didn't start with a big lease and a bunch of funding.

He started by subletting a small room from Spiral Muse, a San Francisco feminist collective, for $300 per month. The catch was: he could only use the space two days per week, and he'd have to set up and tear down the space each time. The space hosted a maximum of eight people. What's more, Brad was broke. He had to borrow the money from his dad to pay for the space.

Spiral Muse was a grand experiment. While that first space closed a year later, Brad and some others found a larger space and launched The Hat Factory, the world's 2nd coworking space.

Based on my research, it looks like The Hat Factory closed sometime between 2009–2010. However, even though these spaces no longer exist, we can certainly say that these experiments were a success simply by looking at today’s coworking industry, which is booming. From that small ripple, a workspace tsunami has grown.

But if you think Brad’s story is humble, check out the next two famous examples.

New Work City in New York City, NY
Photo credit: Tony Bacigalupo

Tony Bacigalupo, founder of coworking space New Work City, has a similar story.

“I discovered a Jelly already running in 2007,” Tony told me. A Jelly is a casual working event that can be hosted anywhere, even somebody's house. "I started getting active there," Tony continued, "and eventually moved into an apartment where we could host the Jellies, and I started to help run the New York-based chapter."

That same year, Tony joined a group that was trying to start a coworking community out of a café space in the East Village, called CooperBricolage.

New Work City grew out of both of those efforts. But it wasn’t until November 2008 that Tony and company signed a sublease with a startup who had extra room in their office. So, we see that even when they did get a space, it wasn't all on their own, and the risk factor was much lower.

NWC wouldn't move into their own commercial space until 2010.

Indy Hall in Philadelphia, PA
Photo credit: Alex Hillman

Indy Hall is perhaps one of the most well-known independent coworking spaces in the industry, started by Alex Hillman in 2006.

In the beginning, Alex didn’t have the idea to start a coworking space at all. He simply wanted to connect with and work alongside other freelancers who felt lonely. Longing for the type of community that existed in San Francisco, Alex began attending every event he could to meet as many like minded people as possible. He found some and they connected immediately.

“We decided to start meeting up and working together,” Alex said. “We’d meet in cafes, bars, restaurants, other people’s offices, and the occasional living room. Anywhere with WiFi that wouldn’t kick us out.” Alex and his new group of friends continued this for more than one year, between September 2006 and August 2007.

And all the while, as they’d connect with new people, they’d invite them to join the working sessions.

But as the group grew, they realized this situation couldn’t last forever. After months of working from cafes, they grew tired of the uncomfortable furniture and worrying about pissing off the baristas. The community started talking more and more about getting a space of their own.

The conversations about a permanent home led Alex and crew to a space in Philadelphia’s Old Town. But before signing the lease, Alex wanted to make sure people were committed. So he hosted a membership signing party the night before signing the lease, and asked people to jump onboard.

Alex recounted the story in an interview on the Philly Who? podcast: “And I said, ‘Bring your pens, bring your checkbooks. We can do payment processing online. I’ll sign the lease tomorrow if people pay for memberships tonight.”

Indy Hall welcomed its first 22 members that night, and the next day, Alex signed the lease for the community’s first permanent home.

Never miss a beat!
Want to see it in action?
The Garage of Dreams

My point is this: start small. If you want to ensure that you build a wonderful and thriving community that lasts years and years, start small.

And whatever you think is small, think even smaller. Think closer to home.

Do you have a garage? If so, then park your car somewhere else (or better yet, sell it for extra capital), clean up the garage, make it cool, and there you go. You have your coworking space.

Do you have a large apartment or house? Ask yourself if you really need a kitchen table, sofa, and in-home gym. Sell that stuff, buy some desks and chairs, and get to work!

Do you know somebody with unused commercial space? It may be in rough condition, but perhaps with a bit of TLC you can bring that old space to life, and build a home for a thriving community inside it.

Is there a cafe in your neighborhood with an owner who ‘gets it’? See if you can reserve a spot there twice per week to cowork with anybody who shows up.

Do your friends or family have any of the things described above? If so, I smell a partnership opportunity!

The idea with all of these space is that they are free, or very close to free, and that they provide a gathering place for your community.

But the question remains: how do you gather that initial community?

The First Ten

Indy Hall founder, Alex Hillman, has contributed a lot to the international coworking community over the years. One such contribution was his insightful audiobook, The First Ten. It’s filled with anecdotes from Indy Hall’s inception and growth over the last ten years. And the title is an apt play on words. While it’s about Indy Hall’s first ten years of life, it’s also about getting those first ten members.

While Alex always advocates building your community before your space, I’ve turned things on their head here by talking space-first. But I do so with the same intent as Alex.

Note that I didn’t suggest you lease a space. I only said you should have access to a space, just like Alex did. That’s because people gather in spaces. But the space doesn’t need to be an office. The space could be a park, a cafe, or your garage.

And once you have that space, there’s only one group of crazy people that would meet up to cowork in your garage or basement: your like minded friends. So start with them.

Coworking at Ziferblat, Manchester. Photo credit: Freelance Folk Popup Group

If you already have some like minded minded friends, great! Call them up and get them in on the idea. Let them know what you’re doing, set a date to begin, and start coworking.

If you don't’ have any like minded friends, that’s okay. Recall Alex’s story about attending events and meeting like minded people. He wasn’t networking at those events, he was making friends.

So spend the next few weeks or months doing what Alex did. Get out there and make some new friends. No coworking community can survive without people and the bonds between them.

Keep It Going

Now that you’ve got a group of friends working in your living room, after a month or two, they might get a little bored. So what then?

Well, keeping a community together is all about intent and following through on that intent. In other words, what is it that the community aims to accomplish and what are you doing to achieve those goals?

Perhaps you’ve gathered together to support each other’s freelance careers, but just working alongside each other might not be enough. Maybe spending time talking about challenges and celebrating each other's successes will take things to the next level.

Try hosting a weekly mastermind or feedback session where one or two of your coworkers can talk about a challenge they’re going through and get input from the group. With the right people, this can happen naturally, but adding in a little structure let’s people plan and invite others.

Encourage coworkers to collaborate on work together to get more done and take on bigger projects. We talk about serendipity all the time in coworking, but sometimes serendipity needs a little nudge.

Experiment with other ways to connect and reinforce one another. Go on weekend trips together, host dinner parties, watch movies, play board games, or start a cycling group. Try anything and everything that people are interested in that might bring them closer together.

Be Receptive to Others

As you work together in your garage or living room, eventually the word will spread. Friends will tell new friends. The topic will come up in conversations at parties. People will be curious about this coworking thing you’re doing.

Invite those curious people to come by and try it out. Introduce them to the crew. Let them present at your mastermind session and gather valuable feedback.

Growing Up

Keep doing the things in the above two sections until you’re out of room. Then upgrade to a larger gathering space.

You can try to keep it free or cheap if possible, but at some point you’ll need to go commercial if you want to grow. Note, I said want. You don’t have to grow if you don’t want to.

But if you do want to grow, your next step is finally to look for a more suitable workspace. It’s at this point that you should consider leasable office space. You can still keep it low-key, on the outskirts of town, in a defunct candy factory, but you’re going to have to put down some money.

Approach your community with the idea of moving. See who’s onboard. Talk about the benefits, the downsides, and the vision for the future. Plan it together. Look at spaces together. Narrow down your list and present it to the community.

Then, with the community’s blessing, pre-sell the first month or more to raise capital for furniture or other improvements and, more importantly, to ensure people are committed to the idea. Nothing is worse than a pile of promises that disappear when it comes time to pay the bill.

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People often say, “go big or go home.” But what they don’t understand is that home is often the best place to start.

Starting a successful coworking space is far less complicated when you realize that the space part of the term is rather flexible, as the three founders at the outset of this article rightly understood.

And while it may be tempting to do what the big boys are doing, it’s often a surefire way to failure. Start small, grow slowly, and invest in people. In that way, you can avert risk and build a coworking space that will inspire others for years to come.

Ryan Chatterton

Marketing Director at Habu, founder at Coworking Insights, coworking maven, digital nomad, lover of wine & tacos.

© 2019, Habu Spaces Ltd.