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When Coworking Spaces Fail – “Live” & Uncut

3 minute read
by Alex Hillman

Guest contributor Michelle Leddon interviewed me via email for a Deskmag piece on Coworking Space Failures, which I happily obliged, especially given my interest and recent info-gathering efforts on the topic.

The article just went live but I feel like it left out a lot of the context that I tried to provide for the conversation. Article length and multiple viewpoints are what keep Deskmag’s publication tight so I’m by no means troubled by the outcome, but I do want to share the rest of the interview for benefit of others who weren’t part of the dialogue.

Thank you to Michelle for putting the piece together, and including me in the research, and asking questions that I don’t get asked often enough.

Leddon: There are some responses from a survey that desk mag did that suggest they fail because of miscalculations on the part of the owner relating to location, space details, etc… others that there are often disagreements between partners or visions that collide and I just wondered what your data showed.

Hillman: This is describing general business fatalities, nothing here is unique to coworking and I think that’s important to realize.

**Leddon:** I am interested to find out how many places failed because the community fell apart or never developed and what were the reasons that happened.

Hillman: This is hard data to collect because most owners won’t admit this. I’ve been in close proximity to many spaces that have opened and failed for this reason but the owner cited other reasons as an excuse for the space not surviving. Everything from location to economic conditions. The truth is that for every failure I’ve seen that blames it on some external factor, I’ve seen spaces succeed in those same external factor because they got the community part right.

**Leddon:** I am writing a bit about the concept of group think, mobbing and things like that and wondering to what extent places failed because the community did.

Hillman: Another common pattern I see is that people mistake “gathering human beings” for community. Defining community is hard (when countless professional studies disagree, how are we supposed to agree?), but there are absolutely defining elements. People gathering is one of them, but it’s the easiest/least meaningful.

I believe that coworking spaces tend to succeed when the community model they establish is more of a community of practice compared to a community of interest. Community health is absolutely correlated to coworking space health, but it’s deeper than just the members and their interactions. I know a LOT of coworking spaces that are held together because of their leadership beating a drum and being constantly involved. That community’s dependence on the leader (a host, community manager, etc) is an easy killshot for the community when that person burns out or simply needs to take a break.

Community sustainability is just as much about the leaders health as it is the community’s health.

**Leddon: **What I am trying to get across is that as wonderful as coworking is there are failures, there are traps to watch out for that a coworking space can have many of the same problems as a typical office. Did you find any evidence to support that idea? Or do you have any quotable thoughts on that?

Hillman: Yes, yes, and yes. 🙂

The #1 trap that I see is the idea that many coworking spaces skip over the community, or assume that by providing a place that it’ll magically happen on it’s own. Unfortunately, there aren’t “community elves” who are looking for new coworking spaces to make communities in – it’s an intentional process. Counterintuitively, it’s even harder to build community once you’ve got an empty space because now you’re doing the community building equivalent of food shopping on an empty stomach.

The #2 trap is forgetting that it needs to be a sustainable business, but one that doesn’t consume the community as they both grow. They two need to be complimentary and symbiotic, not parasitic. Too many communities either place burden on the business, or the business ends up placing burden on the community members. Balance, as always, is the correct answer 🙂


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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.