To coincide with International Coworking Day, we're celebrating with an overview of the state of the industry based on our unique position at Habu. We've observed several exciting trends over the last year and share them with you below.
Another year has passed in the coworking world and so much has changed so quickly it can be hard to keep up. So let’s start with a few highlights.
I’m hardly doing justice to 2017–2018 in coworking with that short list, but you get the point. Coworking is everywhere. Which gets us to our first topic, rural coworking.
Over the last 150 years or so, we’ve seen a massive migration from rural areas to city centers due to a perceived increase in quality of life and better work and financial opportunities. Access to modern technology was primarily focused in these economic centers, attracting ever more people over the ensuing century and a half and giving cities the edge over rural communities.
Then the internet arrived. Pundits and futurists lifted the victory banners boldly declaring that the internet would fundamentally change everything, even going as far as to say people would no longer commute into the office if they could work online from home.
And they were right, but just 30 or so years early.
However, we’ve finally arrived. The tides are reversing. Ever more workers are returning to the towns and villages they once escaped from because the internet is finally at a tipping point that allows remote work to not only be possible in more remote locations but often even preferred to in-office and city-based work.
It makes sense that coworking would spread to the suburbs and rural communities when you think about it and I’ve outlined several reasons for this shift below.
It turns out that digging up the streets in San Francisco is incredibly expensive and there's lots of red tape. That's pretty obvious. With its colorful neighborhoods and quirky residents, San Francisco has struggled to approve much in the way of new property developments due to a thing called NIMBY (not in my backyard). NIMBYs don't want growth. They want their nice little ‘hoods to stay as they are and they don't like construction. So the same issue affects the installation of high-speed internet and fiber optic lines. All of which is a bit amusing considering that San Francisco is regarded as the tech hub of the world.
That’s not all. When you dig up the streets in San Francisco, not only do you need to get approval from the Board of Supervisors (SFs City Council), you also have to lay out a ton of cash to get the job done. Shutting down streets and moving equipment in and out of San Francisco will cost you tens of millions of dollars depending on the size of your project. And the same goes for almost all super-dense cities.
Because denser cities are so expensive and difficult to develop in, many smaller cities and towns have installed faster internet and fiber optic lines at a much more rapid rate. And they’ve done so without having to come up with anywhere near the same amount of dough.
Coworking spaces in the suburbs and some rural areas have been able to take massive advantage here, which has finally opened up the doors for remote workers to gain back the benefits of a productive and comfortable office along with all the communal benefits of coworking, without the commute. That has enabled them to justify working remote to their bosses because a coworking space is not the same as working from home. So, because these suburban and rural spaces have popped up, there is now a justification for in-office workers to go remote.
Internet tools and SaaS products have entered a golden era for enabling remote work. With tools like Slack, Skype, Zoom, Meistertask, or whatever platforms your team uses, a remote worker is just about as connected as any person that physically goes into the office. At least, that is true for large teams and organizations.
So long as suburban and rural coworking spaces have ample phone booths or meeting rooms, remote workers should be able to work from anywhere that is adequately equipped.
While many young professionals still flock to city centers for their vibrant neighborhoods, 24/7 lifestyle, and a plethora of economic opportunities, many have begun to realize there is a downside to city life. With their noisy streets, millions of passersby, endless possibilities for stimulation, and an incessant onslaught of advertisements, cities are rife with distraction. It's enough to make your head spin, and it's often impossible to relax.
Perhaps on a visit home to the family or while on a much-needed-but-rarely-taken vacation, many city-dwelling professionals have reconnected with suburban and village life. It’s quiet, calm, and spacious, qualities that are great for focus, productivity, creativity, and self-reflection.
Aside from that, rural areas and suburbs are often far less expensive than city centers. When you can reduce your cost of living by 30–50%, but make relatively the same amount of money by working remotely part or even full time, making the move is incredibly appealing.
Coworking founders the world over have lamented the entrance of corporate money and commercial real estate interest into our coworking paradise in recent years, but their coming was inevitable. Moreover, collectively they’ve only dipped one toe in the proverbial water. Much more is coming. CRE is about to perform a cannonball into the coworking swimming pool, and the waves will be enormous. We recently did a deep dive into this which you can read about here.
While for the first couple of years CREs have been researching, testing the waters, and creating reports, now they are taking action. At Habu, we’ve had our lion’s share of meetings with CRE firms in the past year, and we’re sure our competitors have as well. What’s more, many coworking spaces have been in meetings with CRE firms and corporates also, as is evidenced by the numerous deals that have been announced in the last six to nine months.
As if that weren't enough, JLL, the second largest publicly traded commercial real estate brokerage firm in the world, has been conducting extensive research into flexible workspace and coworking. And now they are ready to dive in. In their industry report, Bracing for the Flexible Space Revolution, they state "although flexible space currently accounts for less than 5 percent of current office inventory, JLL projects this figure could rise to 30 percent by 2030 due to insatiable levels of tenant demand for flexible-term spaces."
The CREs see the opportunity, and they aren't only hungry for a bite, they're ravenous.
To some, coworking niches may seem like old news. But they are bigger than ever and, to my delight, the methodology of shared workspace and coworking is beginning to transform every industry in the world.
And it’s not just childcare-focused spaces, fintech, and spaces for female professionals. It’s travel, blockchain technology, shared food labs, and science parks. Strangely enough, there’s even a real estate focused coworking space now. How’s that for irony?
In fact, one of our customers, Stillpoint Spaces, is transforming the psychotherapy world. Their director, Aaron Balick, has this to say in an upcoming guest post on Habu:
"Starting on the streets of Berlin and Zurich and then moving to Paris and London we ran programmes called "Psychoanalysis on the Streets" to engage members of the public about the exciting ideas of psychoanalysis in open, modern, and accessible ways. These events, run in pubs, cafes, and in urban centres, soon grew to include brick and mortar venues where therapists could practice, and members of the public could engage in depth psychotherapy in other ways. These other ways reached London in the spring of 2017 with the development of Stillpoint Spaces London in Clerkenwell."
Imagine: going to visit your "shrink", as Aaron jokingly called them, in a coworking space! Imagine psychotherapy professionals not only gathering at trainings and industry conferences a few times per year but chatting every day, comparing insights and knowledge to better help people with their challenges. That's really cool.
We have no doubts at Habu that coworking and flexible workspace will have some role in every industry on the planet over the coming years.
More personally, I’m still holding out for a space travel coworking space. A space-space if you will. Although, I think I may be waiting for quite some time. I’m looking at you, Elon Musk!
I can hardly go two weeks these days without meeting somebody that wants to start a coworking event or conference. Hell, I’ve even started one, though mostly by accident.
There are now dozens of coworking events and conferences happening all over the world, though I’ve entirely lost count.
The rise in popularity of coworking events is indicative of one thing only: while coworking is exploding, people remain in the dark as to how to start, grow, and manage their spaces. Running a coworking space is so hard that we continuously seek out others doing the same to inform and inspire us.
A quick aside: that is one reason why we recently launched Habu's resource library, More Than a Desk. It’s pretty clear to us that it’s not just workspace technology that’s needed to support the industry, but also practical and conceptual tools and tips that help workspaces start out on the right foot, as well as scale up.
And yet, even though there are more and more coworking events popping up, they’re missing some critical people, who we've already talked about: CREs and corporates. The reason these valuable groups don't attend is that there's almost no content for them. That's not good because they are the people who hold some pretty important cards. They have the money, the property, and the experience in coworking’s parent industry: commercial real estate.
Sadly, most coworking people don't want CREs and corporates at coworking events. So even though conference organizers wish to involve CREs more, organizers are stuck between a rock and a hard place trying to include one audience without displeasing the other.
So far all attempts at bringing CREs into the most popular coworking events have mostly failed, perhaps with the exception of GWA, though many wouldn't call that a coworking event. Personally, I've never attended it, so you'll have to be the judge for yourself.
With so much happening in this industry, you'll find that there's a lot more going on than we can cover here. That said, here’s a list of a few other things I'm noticing. I’m sure we’ll expand on some of these emerging trends in greater depth over the coming months!
All in all, we view the state of coworking as being in great shape. It’s healthy, thriving, and ever-evolving, which means long-term resilience. I hope you enjoyed our unique perspective on things. If you did, please share it on social media or with a fellow coworking founder, manager, or interested party.
Marketing Director, founder at Coworking Insights, coworking maven, digital nomad, lover of wine & tacos.