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Why coworking spaces close

3 minute read
by Alex Hillman

The closing of Workspace in Vancouver is really, really sad news. I only visited workspace for the first time in this past year, but it’s always been an inspiration from a space design/utilization standpoint for me. I met with Dane while I was there in February, and have the utmost respect for him, his approach, and his involvement over the years.

I can echo that we’ve continued to grow despite (or thanks to) the recession. Great things are happening for many of our members, and we seem to be coming out of a slight summer “lull” of activity and our office has been teaming with people for the last 2 weeks.

We, and transitively, the entire scene, has seen a rejuvenation underway for the fall. Barcamp planning is underway. New event ideas are springing up every day. Peoples’ businesses are taking off. Things are good right now.

Now, the hard discussion.

I hope nobody thinks that I’m crass in bringing this up so quickly, but I kept quiet after the last significant space closing hoping that someone else would bring up these issues, and they were not approached. This is where things get hard for coworking. Bad things will happen. My heart hopes that no bad things happen to anyone that any of us know, but it’s inevitable, and healthy.

My thesis is that in order for coworking to be truly mainstream, it needs to fulfill both successes and failures. Like, massive successes. And colossal fuck ups.

Coworking will never find its way into business textbooks until both sides of the scale have been tipped. We need case studies from both ends of the spectrum to study the longevity of this business concept, this movement, and this way of life.

What strikes me as a valuable lesson with the Workspace closing comes from the e-mail they sent to their members:

Workspace Letter

The new owner mentions that they took on workspace’s pre-existing debt as a public service, and I have to imagine that even making it just past break even while sustaining any amount of debt is bad for the spirits of the management team, which trickles down to the membership.

This reinforces why we believe so strongly in bootstrapping. Spend money like you don’t have any. One of my favorite lessons/stories from Geoff is how he runs his businesses as if there was a recession all the time, so when there actually is a recession, it’s business as usual.

Taking on debt as a public service is a bad move. You’re not helping anyone in the long run.

There’s an immense value in remaining introspective and purposeful with your coworking space. There is no value in a space that’s packed full of amenities, but accrues more debt than members.

Furthermore, I think it’s interesting that Workspace kept the problem from its’ members. I won’t speculate why because that’s unproductive, but it certainly makes me think how I would approach things if we were in hot water for any amount of time.

In recent months we’ve seen the fall of two longstanding coworking spaces: Cubespace, and now Workspace. Both were large spaces, with significant communities that called them home over a long period of time. Cubespace let their community know that there was a problem, but only after it seemed too late. The community’s response was positive and supportive, but wouldn’t support as more than a band-aide. Workspace shocked its members with an abrupt notice. Ripping of the band-aide, to continue the metaphor.

I’m frankly not sure which I prefer, and while I hope that I’m never in the position to make the hard decision that those space owners made, I hope we can all learn from the things they’ve done during their time open.

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Hey, thanks for reading!

Alex Hillman I am always thinking about the intersection of people, relationships, trust and business. I founded Indy Hall in 2006, making us one of oldest fully independent coworking communities in the world. This site is packed with the lessons and examples I’ve learned along the way. You can find me on Twitter, too! 🐦 Say hi.