Given the intense interest in startups these day, more and more young entrepreneurs are looking to coworking facilities to grab relatively inexpensive office space. In addition to WiFi, fax, conference rooms, kitchen and snack-prep areas; these ‘rental’ business studios also offer new companies the opportunity to rub elbows with others in their world. The coworking space industry has seen growth in recent years and that swell is only going to continue.
“It’s a natural evolution of technology,” said Sande Golgart, western regional vice president with flexible workspace provider Regus. “It’s a blend of technology and people getting smarter about getting efficient use out of their space. Nowadays people don’t necessarily need a landline all the time that’s plugged into a wall that they have to go to and sit in front of every single day.” Nowadays an office worker can be mobile and an on-the-go entrepreneur would simply be wasting money by paying for a full time office, Golgart explained.
The social aspect of coworking has become a draw as well. “Some even prefer to work around other people,” says Golgart. “They find it inspiring, they find it more cost effective and they find that they’re able to be very productive in that environment because of technology.”
Regus, which generated about $610 million revenue from its U.S. business in 2012, saw about 30%. So far this year, the company has established over 40 new locations in the United States, upping its office count to about 600. U.S. growth has been strongest in San Francisco, Los Angeles and New York. The company also plans to spread to accommodate workers that want to operate closer to their homes, in areas like Maryland, New Jersey and the Chicago suburbs. On the global stage, Regus plans to grow to 2,000 office spaces worldwide from its current number of about 1,500.
“From a basic economic standpoint, the largest pool of demand for office space is the small customer or small group,” Golgart explained. “You have a much larger pool looking for small office solutions than you do large groups looking for an entire building or an entire floor.” As large corporations downsize and entrepreneurs become more bold, that trend will pick up pace, he added.
“The world of entrepreneurs and small businesses is growing exponentially and, frankly, we’re just trying to keep up with that growing demand,” said Golgart.
Riding the same trend but in a slightly different fashion is Gangplank, a low-cost coworking and collaborative workspace operating in Virginia, Ontario, Canada; and various locations in Arizona. “We like to say Gangplank is infrastructure for creative people to define the new economy,” says co-founder Derek Neighbors.
Acting as a coworking area and informal, organic incubator; Gangplank sees itself, in part, as a community center. The locations are publicly funded (through philanthropy or municipal partnership) and offer programs in health, studio arts, and classes taught by educators from local institutions. Gangplank workers don’t pay with money, rather a pay-it-forward model that asks users to spearhead a class or seminar, mentor others, or assist with social contracts made with the local municipality. To put it simply, Gangplank doesn’t accept money, just time and talent.
“We believe that the 21st century economy will be largely fueled by capital other than monetary capital,” says Neighbors. “Meaning influence capital or social capital, human capital—we believe that those are going to be much more powerful as we shift from an industrial to a knowledge-based economy.”
The first of the Gangplank locations opened in 2008 and the organization now runs five facilities. Neighbors said the trend to coworking is very real. There are a growing number of independent workers – toiling at home or remotely – that see coworking spaces as an opportunity to avoid working alone. Also, young entrepreneurs with new companies that require very little office area are starting out in such facilities to save money and meet others to collaborate with.
Gangplank receives up to five calls per week from people wanting to start a new coworking location under the organization’s banner. “Currently we’re getting a lot of interest from both Northern and Southern California as well as Florida,” said Neighbors. Gangplank has yet to decide exactly where its new spot will sprout.
“I think that this movement is teaching not only individual freelancers a lot but is teaching corporate America a lot about how people interact, what makes them effective at creation and is really defining the future of how companies interact with each other on a deeper level,” says Neighbors.