I have a love/hate relationship with the press, especially when it comes to coworking. Mostly because I know what’s NOT in the story.
On one hand, I can’t imagine a world where coworking’s increasingly mainstream presence could’ve happened without articles in mainstream press like the NY Times, the Wall Street Journal, and Wired Magazine.
On the other hand, these same publications have largely chosen from one of the following narratives:
- Cheap space.
- Flexibility (read: no commitments).
- “Collaboration”, but only vaguely speaking.
- Open floor plans.
- Tech, startups, and “talent”.
If you follow along on this blog (or any time I talk about coworking on twitter), you know that these themes are not representative of coworking’s thus-far successes, nor what I see as its potential or future.
Ever wonder why the press has gotten coworking so, so wrong?
The stories about coworking that DO hit the news stands aren’t surprising when you realize that:
- the people writing about coworking have almost never experienced a coworking space for themselves, and
- the people writing about coworking almost never interview members, only owners/operators
These two biases factor for a lot of the media’s poor discussion of coworking today, and also point to how we can start making it better.
Expectations are a big challenge for coworking
People start coworking spaces expecting that if they offer a room full of desks and services, those desks will magically fill up with people. Because that’s what the press shows.
People expect their “tenants” to get along in open floor offices…and even expect them to start collaborating, as if some law of physics predicts that will happen. Because that’s what the press shows.
And on the other side of the exact same coin, people are joining coworking spaces expecting…well, they don’t even know what to expect, most of the time, because of the confusing messages from the press.
At Indy Hall, we spend a tremendous amount of time helping prospective members understand what they’re even buying, and also helping other coworking spaces even understand what they’re selling.
Is it a desk? An office? Meeting space? Business partners and collaborators?
No, no. We aren’t in the business of replacing a long-term lease with an affordable monthly rental option. We’re not in the leasing business at all.
And let’s be honest: if your plan is to sell access to workspace for less per month than a mid-range hotel room charges per night, while offering any sort of premium services to hopefully attract and retain tenants, how long do you expect to be able to keep your doors open?
No. Coworking isn’t a real estate business. Not now, not ever.
Improve the story, improve expectations.
But when Lauren Hertzler knocked on our door after taking over Peter Key’s beat of the happenings in technology, education, energy, and venture capital, I thought differently.
She was starting fresh. She had no idea what coworking was, or what Indy Hall was.
She hadn’t watched us “grow up”, or become attached to our story.
She could see things fresh again, with open eyes and most importantly, what I noticed was a genuine curiosity.
Lauren wrote an article that was this week’s cover story for the Philadelphia Business Journal, pictured to the right. You can even read the entire 1300 word feature story online without a subscription using this link, something that the Biz Journal doesn’t normally permit with their feature stories until 4+ weeks after the print date.
And I encourage you to read it, it’s quite good.
And take note, that Lauren is the first journalist I’ve interviewed with who:
- spent an entire day working in a coworking space (not just interviewing people)
- embraced my insistence that for every coworking space founder/operator she spoke to, she should speak to at least a couple of members of that space as well.
Lauren asked a lot of questions. Way better questions than the usual questions I’ve gotten for coworking stories.
She challenged me on a bunch of my “party line” responses, too, asking for more evidence or explanations.
I have 3000+ words of unprinted interview
Lauren interviewed several other coworking spaces, and a few members. Meanwhile, she still had to tell a story to tell, a word count to meet, and an editor to make happy.
So I’m sharing my whole interview here, for you to learn from.
I’ve done this before with DeskMag (an online magazine about coworking whose name never fails to strike me with irony), and more recently, with an interview with an Italian newspaper. But I’ve never published a FULL interview with a mainstream business publication before.
- You’ll see my quotes from the article in context.
- You’ll see my recurring recommendations to speak with community members instead of just owner/operators.
- You’ll see how I respond to Lauren’s questions.
- You’ll see how I reinforce my points and offer citations/references for my facts. Citations and references which, surprisingly, I’ve never had a journalist ask for, but I always offer. Keep that in the front of your mind next time you’re reading the news.
Below, you can see the complete transcripts of our interview, unedited, straight copy-pasted from my email. The only thing I’ve altered is to reorder follow-up questions (and their answers) to appear directly after the original question/answer they reference.
Interview with Lauren Hertzler, Philly Biz Journal
Lauren: Give me a brief history of Indy Hall (what are the big aspects I can’t miss).
Lauren: What makes a coworking space work?
Two things make a coworking space work:
1 – It has to be better than the alternative. For most people that means it needs to be better than working from home or from a cafe.
2 – People need to be able to see beyond the space. They need to see value in being around each other, but also in being a part of a community that extends beyond the walls of the physical space. A successful coworking space helps people help themselves, and help each other, even when they’re not in the room.
Lauren: Define a coworking space.
First, let’s define coworking. My favorite definition is from the Seattle Collaborative Space Alliance:
“Coworking is about making the personal choice to work along side other people instead of in isolation.”
That personal choice is critical. Everyone in a coworking space is there because they want to be. In today’s world of work, that’s a rare opportunity that creates immense value for everyone involved.
But it’s important to realize that coworking can and does happen in many more places besides coworking spaces. Anywhere you can CHOOSE to intentionally work alongside people who you don’t NEED to work with, you’re coworking. Indy Hall started by doing this nomadically, taking over cafes and bars (including our now long-standing neighborhood mainstay, National Mechanics) that have wifi. These temporary and often casual working experiences are better than being alone, but not as good as a place that’s set up with strong wifi, appropriate noise levels, ergonomic workspaces, and without leering baristas.
Coworking Spaces are places that can facilitate the act of coworking. It’s not as simple as setting up a room full of desks and chairs and turing on a wifi connection, though. Those spaces experience the challenges of high turnover that come with short-term (usually monthly) rentals, mostly because they treat “members” as a fancy new word for renter.
I like to think of coworking as a kind of club, and a coworking space as the clubhouse. Without a club that people want to be a part of, the clubhouse doesn’t have a reason to exist.
Lauren: Comment on Philadelphia’s coworking space scene.
For a long time, Indy Hall was the only show in town (other than a couple of spaces that opened and closed within a year after ignoring our advice about the importance of community). But the thing is, Indy Hall isn’t perfect for everyone, and we didn’t have anywhere to send people who were looking for something a little bit different.
In the last couple of years, more spaces have opened. Some have followed our advice better than others. Many continue to ignore it (and struggle). Overall, the effect has been positive: more people are discovering that coworking is even an option, and more importantly, there are more and more “styles” of coworking.
Compared to where we were less than two years ago, things are better. But we’re still at the very beginning. Peoples’ experiences are varied, and not always in a positive way.
The vast majority of the potential that coworking has for making Philadelphia better has still not yet been realized.
Lauren: Where do you see the future of coworking spaces in Philadelphia going?
I don’t see a long-distance future for most coworking spaces, actually. Most coworking spaces won’t look like “coworking spaces” in 10 years. To look at this as a real estate trend is a big mistake and a major red-herring. I think that the future is less about space, and more about place, and the sense of belonging that comes with place-making.
Coworking is less of a future-trend than people make it out to be. This is how we used to work. When Philadelphia was at its peak 150 years go – as a manufacturing and knowledge capital of the world – people were succeeding by working together. They were playing an active role in making their industry – and their city – a better place.
Lauren: Are you referring to the physical appearance? Does this mean you see more of these coworking spaces that don’t have a “community” dying, and then the ones that will thrive (and stick around) will be the community-oriented ones? Do you foresee Indy Hall lasting many more years to come, the same way it is now? Or are you saying coworking spaces will sizzle out? Any comments on if the job market changes or not, then the number of people working out of coworking spaces will fluctuate?
I think that, done right, Coworking Spaces are laboratories for people working together. The four buzzwords that EVERY company is uttering (and totally confused how to do well) are: recruitment, retention, innovation, collaboration.
Many coworking spaces are just recreating offices. They’re solving a “desk problem”, but I don’t think that problem actually exists long-term and more importantly, the underlying problem of “people suck at working together” is usually left untouched. When people no longer need a desk, they move on.
Coworking spaces might “look” different (and many will vanish). But more importantly, I think that coworking will be come more of a verb – a style of working that happens in all kinds of places, including more traditional organizations. More and more of the work that I do is with traditional organizations, and the lessons that we’ve been able to learn by running Indy Hall as a community instead of an office rental have been able to provide tremendous value to helping those organizations with their culture. “Corporate culture” in many ways, isn’t as ephemeral as companies make it out to be. It’s concrete, takes effort and intentionality.
Indy Hall already looks different than it did 8 years ago. Hell, it looks different than it did 2 years ago. That’s because we’re constantly listening and evolving. Why would it look the same 8 years in the future?
Other examples of “Indy Hall that doesn’t look like Indy Hall” are the N3rd St Farmers Market and Indy Hall Arts. Both of these arms of the community (and the business) have the exact same coworking DNA and lessons at their core, being applied elsewhere. And we’re just BARELY getting started with that kind of evolution.
The future of coworking isn’t more coworking spaces. It’s coworking as an “operating system” for more and more types of businesses.
Lauren: Any chance coworking spaces might start turning into incubation spaces?
The question is, incubation of what.
The near-contemporary idea of incubators is that they incubate companies. By applying pressure (usually a time constraint) and providing money and resources (usually in return of % of equity), hoping to “hatch” as many companies as possible. But it’s become an odds-based game, focused on maximizing the number of companies to improve the chances that one is a runaway hit paying for the rest of them. This venture-capital minded approach isn’t just measurably unsuccessful, I believe that it’s damaged the entrepreneurial mindset by positioning gatekeepers in the business community.
Just this past week, I watched a man walk into Indy Hall and say “I’m about to get into an incubator program, but I have to hire a developer first.” Nevermind for a moment that he’d be largely unsuccessful at convincing anyone here to work with him based on that pitch, the fact that he’s spending time out of his day to walk into coworking spaces prowling for a supposed “missing piece” to his business before an incubator “lets him in” is a damn shame.
Lauren: How do coworking spaces change people’s lives?
Ask our members:
http://flyclops.com/much-love-to-indy-hall-221 http://newworker.co/mag/ratzabi-philly/ https://cjdawsonphoto.exposure.co/independents-hall http://adjoterus.tumblr.com/post/81796521670/took-what-i-need http://radio.indyhall.org/2014/03/episode-16-nicole-arasim-indy-hall-member-since-october-2012/ http://radio.indyhall.org/2014/02/episode-12-rob-epler-indy-hall-member-since-april-2011/ http://radio.indyhall.org/2013/10/episode-8-jennifer-hensell-indy-hall-member-since-july-2012/ http://dangerouslyawesome.com/2011/07/why-do-people-love-indy-hall-we-asked-they-told/
I have lots more where that came from.
Here’s the thing – to find out how coworking spaces change peoples’ lives, you can’t ask the people who run the coworking spaces. You need to hear it from someone whose life has actually been changed by being a member of the space.
Lauren: Can you name a few great coworking spaces around the nation/world that I should know about?
- New Work City at Broadway & Canal in NYC
- Office Nomads in Capitol Hill, Seattle, Washington
- Les Satellites in Nice, France
- The Salt Mines in Columbus Ohio
That’s just a few – but the thing they have in common is that they put their communities first.
Lauren: How have coworking spaces (yours and others) evolved since you first opened Indy Hall?
There’s a broader “spectrum” of what is being called/considered coworking.
In the last 2 years, I’ve started reminding people that the word “coworking” is about as specific as the word “restaurant”. The word by itself doesn’t tell you if it’s fast food or fine dining, if it’s a $2 meal or a $200 meal. If it’s chinese food or BBQ.
The word “coworking” is at an inflection where it has the same issue. So asking how coworking has evolved is like asking how restaurants have evolved.
One of the biggest changes for us has happened in the last 2 years: until a couple of years ago, most of the people who found Indy Hall heard about Indy Hall first (from friends, an article, an event, or usually some combination of all three). Only once they were here they discovered that Indy Hall was part of a bigger “thing” called coworking that happened in other cities.
Nowadays, people are seeking out coworking, finding us as one of their options, and coming in to try us out. This is ultimately a good thing, but we’ve had to learn a whole new way of interacting with prospective community members because most of them have read about coworking as a way to “rent a desk”. 95% of the time, people who come in wanting a desk don’t even know that something like Indy Hall is possible, so they wouldn’t know to ask for it even if they wanted it.
I’m certain that most coworking spaces don’t do this work, and as a result, struggle with a whole range of problems from conflicts among members to corrosive membership churn.
Lauren: Is coworking becoming overrated because of all the new spaces opening?
I think this is the wrong question. Back to my restaurant analogy: do restaurants become overrated because more of them open in a city? Or do some kinds of restaurants flourish more than others? You can’t ask a question like this at the beginning, you can only answer it with real data based on what actually happened. Most closings don’t share data, which from bruised egos to blatant lies, people generally don’t like talking about what they screwed up unless they’ve somehow managed to avoid certain death and can talk about the mistake in the shadow of their success.
Are more coworking spaces struggling and closing? Yes. But those spaces have things in common, and having done my own research, their mistakes are completely avoidable.
Lauren: And you say the question about coworking spaces being overrated isn’t the right question. That is a question that stemmed out of conversations with my fellow coworkers. You say it’s not the right question to ask, but it’s a question we’re thinking of. I guess I can rephrase: Are people making coworking out to be this cool, hip way to work, even if it’s not really benefiting them?
It depends on who is doing the talking.
If members are talking about how awesome it is, it’s not overrated. If the operators are talking about how awesome it is, you have to consider their biases. And if the press is talking about how awesome it is, without having ever having even TRIED coworking themselves….well then they’re a big part of the reason things could be perceived as “hyped”.
Most of the people talking about coworking are coworking space owners and the press. This is why I’ve been urging you to talk to coworking space members.
Some people do it because it’s cool, sure. But for MOST people who walk into Indy Hall (we give several tours a day, 5 days a week), we get the “holy shit, where have you been all my life. I HATE working from my house. The isolation is literally driving me nuts.” THis is a very real need for a lot of people, and a growing population.
That population isn’t startups, or even “tech” specifically. It’s independent workers, which includes freelancers, consultants, remote workers and “contingent” workers. When people talk about the jobs that “aren’t coming back”, it’s because a lot of positions have been moved from full time employees to “contingent” workers – a mix of part time and long term contractors who are free-agents in the industry instead of being tied to a single company. MOST of these people are new to being independent, and MOST of them have no interest of ever going back to being an employee.
Research on independents shows 17.7MM independent workers in the US alone for 2013, and a projected 24MM by 2018.
Close to $1.2 trillion in total income was generated by independents in the US in 2013, up 20% from 2012. They also spent over $150 billion on non-payroll/contractor expenses. Independents earn income both globally and locally: $43 billion came from overseas while a robust $700 billion came from their metro areas. Nearly 10 million households receive at least half of their income from independents.
The #1 thing all of these independents have in common is isolation. But again, most coworking spaces think they’re addressing a desk need. We hear from people all the time that they’ve tried other coworking spaces and it was just as isolating as being at home. A lot of coworking spaces don’t realize how much more work it is than providing desks to solve the isolation issue.
If you ask a member if they like coworking, you’re not going to get a very informative answer. If you ask them how coworking has made their life better, that’s where you’ll find gold.
Lauren: How do you sustain a coworking space?
There are three facets that you need to focus on at all times:
Participation, Relationships, and Empathy
Lauren: Do you think it’s healthy for our city’s coworking scene to have all the different spaces cater to different types of people?
Different types of people, yes. But different “types” is less about demographics and more about what people care about, and how they do their work. Within Indy Hall and all successful coworking communities, you’ll find a diversity of industries, experiences, and knowledge. That’s important. But the things that people REALLY have in common are usually just below the surface.
Lauren: Do you know of any local coworking spaces that have recently closed? If so, why do you think they closed?
Yes. They do everything backwards: they open a space without a community, and they struggle to get people in the door let alone stay there.
They bite off more than they can chew, they get involved with investors who don’t understand what’s necessary to make coworking work, their core business becomes a commodity business (short term space rental) which is a race to the bottom.
Lauren: Do you think partnering with other coworking spaces is key?
Lauren: Are other coworking spaces in Philadelphia competition?
Only the ones that think they’re in competition.
Lauren: Anything to add?
You really need to talk to our members, and members of other coworking spaces.
Lauren: Explain your business model.
We’re a membership business.
Lauren: How did you fund Indy Hall from the beginning, and how have prices evolved over time?
We’re 100% bootstrapped. We pre-sold memberships to our existing community, raising a little less than half of the cash we needed to open our first space. I invested $10k of my own money for the rest, which the business was able to pay back inside of 18 months.
We’ve borrowed money twice both to support expansions, and both times from members within the community.
Our prices didn’t change for the first 6 years, we raised them for the first time earlier this year.
Lauren: Are you profitable?
Yes, and growing.
Lauren: Is it just being done because it’s the cool thing to do? And on the other hand, are people opening up coworking spaces because they look cool, and it’s a seemingly fun job. (This is all just based off of presumed thoughts of our readers, by the way.) Do you see this at all?
Alex: Yes – coworking spaces are often being opened because people think it’ll be fun. But that’s not a coworking thing, that happens in ALL Kinds of small businesses and it’s run even more rampant in startuplandia. It’s my PASSION! So I’m going to turn it into a business.
But again, they don’t understand the problem they’re solving, or who they’re solving it for. They see startups and desks, and they cargo-cult their way forward.