Rant: Coworking vs. Incubator
Recently on the coworking list, the “what is coworking” debate has flared up again, this time comparing it to an incubator. For context, the original question was posed:
I’m wondering if you all can provide some wisdom on the difference between a coworking space and an “incubator”. Is it just semantics? If there are more substantive distinctions, how would you boil them down? -Adam Huttler
Some excerpts from responses include:
…one thing that incubators do most reliably is fail. Largely because there’s insufficient collaborative critical mass, and because they don’t typically include the services that early stage startups need to get momentum, such as software developers, graphic designers, and tech writers, just to name a few. Finally, most incubators get their start as real estate plays for unmarketable space. -Axon
and
As a result, you have a more diverse work environment of people who are self-sufficient, as opposed to an incubator, where that isn’t necessarily the case. Incubators and coworking spaces are not equivalent, but they share a lot of the same DNA. Like apes and humans. -Tony Bacigalupo
and
…many of our businesses have gotten stronger by being in proximity to other like-minded business people. But that’s mostly a product of the community that’s naturally created by the way the space is designed. People that like each other talk. It works. -Derek Young
and
Best option for a company is to look around at what exists and find a home where they feel welcome and can do the best work. -Nate Westheimer
All good stuff from people whose opinions I’ve come to respect. The whole discussion got my gears turning. So, after a few days of chewing, I decided to respond.
Note: I’ve been in an admittedly high-stress mode for the last week, so the rant probably comes across more intense than it needs to, but the contents are still valuable and I wanted to share here what I wrote on the google group.
So here it goes:
The simplest way to approach this is the same way we determine what operations fall under the coworking umbrella: their core values. While incubator and coworking businesses services tend to overlap, their individual purposes are very clearly defined. Incubators can encourage coworking. Coworking can incubate independents, businesses, and even products and services.
Just remember, in all cases, the core values remain in place and, more importantly, in prominence. Community, Collaboration, Openness, Sustainability, Accessability.
In the last year, I’ve seen all of the above take place.
Example: Incubation encouraging coworking - DreamIT Ventures is a Philly version of the now popular Y-Combinator model, sort of a “startup summer camp”. Startups apply, recieve a small amount of seed funding, and are placed in physical proximity with a number of other startups that share, at the very least, one thing: a reasonably common place in their startup cycle. The business services and cash aside, I was lucky enough to consult with one of the DreamIT startups and quickly realized (and I wasn’t the only one to verbalize this) that the REAL value in the program was the comradery of growing your startup together alongside other startups. Sharing in successes and failures. Giving and recieving advice. Becoming stronger as a collective of teams.
“Funding Day”, their “summer camp graduation” event, was last week, and seeing the result of 4 months of growing businesses together is something that’s amazing.
Coworking incubating independents, ideas, products, teams, and even regions – Many of you already know about the activities and results that we’ve had organically form within our community at IndyHall. Some of the larger succsses are iSepta and RipIt.app, but there are other, less visible ones: we’ve been there for more than a handful of people who left their jobs that they hated to go independent, and they credit the community of Indyhall for allowing them to be able to be comfortable taking the leap. We’ve had our fingers in dozens and dozens of events that have quite literally changed the landscape of the city.
I’m not saying this to brag, as it has nothing to do with ego. My point is, coworking has such immense gravity and influence on more than just where people are working. Even the members we’ve had that joined simply for desk space quickly realized what they were involved in, and without anyone asking or telling them to, changed their tune and became more community oriented.
In all of these instances, the core values have been at the forefront of an initiative and the results have been hugely positive. I know I have a habit of getting preachy, but it really comes down to the recipe model (or the pizza analogy, as Tony has taken it). If I order a steak and it’s got a side of greens on the plate, that’s fine. But if I order a steak and I get a salad with a couple of strips of sirloin across the top, I’m going to be pissed.
Incubation is extremely valuable, with and without coworking as part of it’s model. Coworking is extremely valuable, with and without the incubation.
Call a spade a spade. Get over your identity crisis.
Be a part of a community, and be a community leader. If you’re not doing one of those two things, you’re probably not coworking.
Encourage collaboration at every opportunity. Being open and transparent helps that.
Sustainability is just as much about eco-friendly practices as it is making sure that the things you’re doing within your community work towards it’s ability to sustain itself.
Accessibility, to me, means not being exclusive. If you asked me a year ago if I expected the diversity of IndyHall to include government-focused business strategy consultants, green home developers, video game programmers, and educators, I’d have laughed. But today, we have all of that and more. Accessibility of the resources to anyone who benefits from them is important. I’m not here to evaluate your business model. My only concern is that you’re making enough money to pay our membership dues.
</rant>
Alex, great post. I recently hosted an event where the question of paying open-source developers came up. At the surface, it seems reasonable. But it’s prickly in the same way coworking and/or incubation is prickly, because while the ideas are really very different in their goals and values, there’s enough obvious synergy and enough overlap in daily activity to 1) make the differences less obvious on the outside than they appear to the insiders, which 2) results in lots of questions about the two models, and potentially lots of confusion. I’ve recently noticed that searching for “coworking” on Google returns a lot of sponsored results for cube farms, executive suites, etc. Clearly commercial interests are playing on (preying on) the confusion to fatten their sales pipeline. I’ll be very disappointed if the trend continues.
Todd
Todd, Being an open source developer, much like being on the more “altruistic” side of the spectrum when it comes to coworking, does NOT mean that one is casting themselves into poverty simply because of their decision!
William Hurley has a great post of over the BMC blog called “Welcome to Opensville” that outlines the necessary ecosystem that sounds very similar to what we need in order for coworking to continue to flourish while maintaining stability and remaining true to it’s values.
There’s nothing wrong with either decision. The more they coexist, the more symbiotic they can become. I’m actually extremely interested in how some of the “enterprise” style coworking can positively influence the movement. The fact of the matter is, in order for it to do so, there needs to be consistent guidance. I’m not bothered by the commercial interests, I’m bothered by the inconsistency in messaging that it generates.
Alex,
I completely agree with you about the identity crisis regarding ‘coworking’ and ‘incubating’. There is a similar semantic debate about the difference between ‘incubator’ and ‘accelerator’ – but the answer is the same in both cases. It’s not what it’s supposed to be, it’s what the community makes it. I’m hoping to keep the coworking and incubator separate but very permeable at the new Katy Dock (www.katydock.com). I feel that they are symbiotic and collaborative entities – the coworking space is for getting stuff done, and maybe some peer collaboration where the incubator (Technology Center of West Houston) is much more top-down consulting and investment into early stage companies. Coworking is a good way for people to learn about the incubator and vice versa, but they are and should be very distinct from each other.
Alex–
Great rant.
I guess my perspective is that it’s pointless to get caught up in nomenclature. I’m less concerned with labels than outcomes. Which is why the function of incubation as one aspect of coworking (informed by the 5 values) is more important than people getting confused about whether it’s an “incubator”, a “small business development center”, an “economic development strategy”, or a clubhouse for nomadic workers. It can be all those things and still satisfy the value pillars, I believe.
What I’m finding in my conversations with traditional economic development organizations is that they are still fixated on the conventional approach to incubation, but only because they don’t know anything else. When I introduce the Uptime concept as a new model for incubation, they embrace it enthusiastically. I believe there is great potential for public and private non-profit agencies to devote resources to proliferating this remarkable movement in their respective markets.
I also see great potential for mobility from sole proprietor to freelancer to entrepreneur as people who initially enrolled for the use of the wifi and the copy machine aspire to building more ambitious enterprises.
Anyway, I think the semantics of this are going to be confounded for awhile, but I expect the outcomes to more than compensate for that.
–Ax
Ax, I completely agree. The hardest issue to address is that education that you’re doing well, from what it sounds like. Coworking is sorely missing consistent messaging materials, they’d make yours, my, and many others in our larger community’s jobs MUCH easier.
If only I had some spare time to work on them…
Who has an identity crisis? Seriously?
I love coworking but run an incubator. That makes my incubator that much more community oriented. I’m sure if I ran a coworking space and loved deliberate business incubation as much as I do my coworking space would benefit from it was well.
Imagine if the coworking pitch looked more like the pitch to many incubators…
“You get free access to lawyers and accountants, introductions to possible clients, and a great community of like-minded people who will become your friends and peers.”
Even with the same people involved, I think you’d have a whole different coworking culture. By diluting the focus on community, and by expecting to be given things just by virtue of being there, you’d encourage an entirely different way of engaging.
I say this as a happy veteran of the DreamIt Ventures incubator and a big fan of startup incubators in general.
My one suggestion to programs like these is to focus more of the pitch on the value of the community, and less on the transactional elements. It may be a harder sell, but it could pay off in terms of a much more collaborative culture between the teams.
Hi, I found your blog on this new directory of WordPress Blogs at blackhatbootcamp.com/listofwordpressblogs. I dont know how your blog came up, must have been a typo, i duno. Anyways, I just clicked it and here I am. Your blog looks good. Have a nice day. James.
While both are useful, co-working will be a more fertile ground, as Incubators are formed by investors who select projects based upon what they perceive to be the current market, and will invariably be a step behind. -This is especially true of regional incubators. There’s also an aspect of incubators that seems distastefully like exploitation, as they tend to take a piece of a very young company for very little investment.
Nathan–
I think some incubators certainly are guilty as charged. Others not so much, inasmuch as they are not-for-profit economic development efforts informed by good intentions (but little else).
I’d like to step back from definitions for a moment, since none of us has any authority to state unequivocally what an incubator or coworking is.
Coworking is a movement in its infancy, sezaxon. I think there may be as many different models for it as there are iterations of it. Some spaces are “resident desk” models, for example. Others are more ad hoc and cafe-styled. And pretty much everything in between. The one thing they seem to have in common is a shared set of values (that are still evolving, I might point out.) When I first started looking into it, I’d already created a model for my own iteration, even before I knew anyone else was doing something similar. By the time I’d written my business plan, I learned there were Four Value Pillars. Shortly thereafter, it was Five (add Accessibility). There seems to be a Sixth emerging (add Localism?) Who knows what may accrete to this.
In my strategic planning practice, I start with Vision, then Values. And I’m not persuaded that we all share the same vision, even if we pledge adherence to the value set. For me, the important question is Purpose. Once you have a clear and compelling vision of what you could be, you boil it down to the core purpose. Vision should be aspirational; Purpose is cardinal. Principles (or Values), are ordinal. I know this is doctrine, but stay with me.
My Purpose in creating a coworking space is to stimulate economic development through entrepreneurial initiative. I hope that early stage startups will see the value in coworking as a community of interest, not just the use of the internets and the copy machine. That’s my strategic imperative.
Community for its own sake is a wonderful thing, but a community coalesced around a shared purpose has enormous potential to be a disruptive force for positive social change in the larger society it inhabits. A coworking scene that hosts a dozen independent workers who share risks and rewards, obligations and opportunities, can be a great springboard for those workers to achieve more, individually, and as a discrete community. No blame.
But my vision is to create a multifaceted community that can be a crucible for emerging innovation enterprises with the potential to become very large companies creating career-grade employment opportunities for knowledge workers, who in turn will stimulate economic activity, establish themselves in the civic deliberation, and contribute positively to regional prosperity. It’s a lot to ask of a workplace, but I’m optimistic.
Earlier, Alex bemoaned the lack of consistent message materials, and Blake suggested that marketing should emphasize the community aspects, rather than the transactional (and presumably the infrastructure assets). From my one-sheet (feel free to plagiar– er, repurpose to suit): “an ad hoc collaborative network of like minds, domain experts, private investors, coaches, and mentors available to help you achieve success; in person, on the phone, and on the web. It’s a professional social circle that shares your entrepreneurial passion and priorities. It’s regularly scheduled guest speakers, workshops, panel discussions, and networking events for executive development and strategic relationship building.” This doesn’t really address the feel-good aspects of community, but it does, I think, evoke a sense of communal intimacy.
Sorry for the long post; I don’t have time to make it shorter…
–Ax