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I'm Watching: 3rd Wave Coworking

8 minute read
by Alex Hillman

For the third year in a row, I’m learning a lot about the global state of coworking from patterns I first notice in Asia. And for the first time in a while, the outlook is good. 🎯

Early in 2019, I spent a few weeks in India as part of my annual pilgrimage to the CUAsia event see friends and learn what’s happening in the world of coworking across Asia and pan-pacific regions.

It was on that trip I started thinking about the things that I’ve noticed in the last 24 months (specifically since I wrote about what’s wrong with the coworking industry).

To help understand what I’m noticing about coworking in 2018 and 2019 I’ve found it helps to look at coworking’s history through three distinct waves (not unlike coffee, ska, and feminism) as points of reference.

Let’s take a look at what we can learn from these waves, one at a time.

**First Wave Coworking: The Beginning **

First Wave Coworking was basically pure trailblazing, and on a global scale.

Most coworking before 2010 was First Wave Coworking, as well as some later pioneering efforts in other cities and regions.

The first wave was marked by the coworking movement, and driven by a cultural shift taking place at the intersection of the internet, an increasingly mobile workforce, and a realization that working from home wasn’t all it was cracked up to be.

Everyone involved in first wave coworking was just…figuring things out. Often in public.

I think First Wave Coworking biggest contribution was establishing coworking as an identity, a thing to be a part of, a thing to join.

I can say a lot about First Wave Coworking because I was a part of it. I have my biases in favor of the time, and I have lifelong friendships as the result of it.

I also have my critiques of First Wave Coworking, including some generalizations about how the blind idealism of the First Wave often wasn’t sustainable on its own.

But the important thing about First Wave Coworking is that it was a mixed bag of attempts and experiments and that was a good thing. Very quickly, many of us learned a lot of lessons about what works, what breaks, and what matters.

Second Wave Coworking: Growth, but at what cost?

I remember the year that big real estate brands showed up at coworking conferences for the first time. It was 2010, and I was in Berlin for the Coworking Europe conference when Second Wave Coworking was really on full display for the first time.

After that conference, I penned my article Sex, Coworking & Rock Roll based on my observations of the first major schisms in people asking “what is, and isn’t, coworking?” as well as my own reconciliation with what it meant at the time for my own work and Indy Hall.

NB: those “what is REAL coworking?” debates were already an annual-ish schtick in the online communities, but in 2010, it was noticeably more bloody and anxious.

In short, Second Wave Coworking was marked by opportunism of all kinds, the real estate invasion was the most visible kind.

Hoodies & sneakers were clashing with suits & loafers. Some straight Jets vs Sharks stuff, including some nasty stuff said in both directions. But it wasn’t just real estate people.

Lots of people saw what First Wave Coworking had done, and once they were done laughing at it, they decided they wanted a piece of the action for themselves.

  • some people showed up because they thought it was cool
  • some showed up because they thought it was gonna make them rich
  • some only showed up because they were scared of being left out of the changes to come

Second Wave Coworking ushered in an era of expensive, brightly colored furniture and glossy marketing campaigns. An era of a zillion desk-rental marketplaces and self-titled experts talking about the “future of work” from their corporate outposts.

During this period, a lot of my talks and articles featured elements about coworking cargo cults and the industrialization of coworking.

Many of my friends were afraid that coworking was losing its heart. At times, I’d say they were right to be afraid.

Personally, I was annoyed more than anything.

Because before Second Wave Coworking came along, there was a good chance that if you were into coworking, you and I were going to be friends. Second Wave Coworking broke that experience, and I had to work way harder to find signal among the noise.

Like I said, more annoying than anything.

I also think we have to admit that Second Wave Coworking turned off a lot people from coworking because most Second Wave Coworking spaces sucked so hard. Granted, far more people still have never set foot inside a coworking space of any kind, but it’s undeniable that much of the negative public sentiment about coworking exists because many people’s first or only experience in a “coworking” space is a big box McCoworking joint.

But Second Wave Coworking did contribute something important.

Second Wave Coworking undeniably brought coworking to the mainstream.

But with that scale, Second Wave Coworking introduced bigger failures and flaws than ever before. It took a previously idealistic and utopian concept, and showed just how poorly it could be done.

I’m not saying this to be snide, this is a seriously important contribution.

I wish I had written it down somewhere, but many years ago I started saying that coworking won’t be entered into textbooks about business or cultural history until there are massive successes, and even more massive failures.

We haven’t seen who is going to be the textbook failure yet…but I have my predictions. 😬

Now, the period of Second Wave Coworking isn’t exactly over. It’s still “growing” but the amount by which it’s growing has become fairly predictable and even. That’s not precisely true in some markets, especially Asia, but I’ll say more on that in a minute.

First Wave Coworking isn’t totally dead either (hi, Indy Hall is still quite alive and thriving!)

But now that we’re past the decade mark for most First Wave Coworking founders, the vast majority have either closed their doors, sold the business, or changed their model to service the “demand” for private offices.

I have a small number of first wave contemporaries, I’m close friends with most of them, and I’m grateful for that. But truthfully, it’s also a kinda weird feeling.

I’m okay with though because I’m actually really excited about what comes next…

Here Comes Third Wave Coworking, and It Looks Good.

This also brings us back to the story at the top of this piece, about my visit to India and what I noticed in how coworking is operating in Asia.

I’m calling these new patterns Third Wave Coworking.

And I saw a lot of Third Wave Coworking in Asia. A LOT.

I see a lot of Third Wave Coworking in my email inbox these days, both from founders and staff.

I see a lot of Third Wave Coworking in the latest generation of spaces, most opening in the last 18-24 months.

What makes Third Wave Coworking unique?

Third Wave Coworking is often aware of the First Wave idealism, and of the pioneering values.

Or, if they aren’t explicitly aware, their actions embody them more naturally than the opportunism of Second Wave.

Third Wave Coworking is ALSO aware of Second Wave’s mistakes, and is more deeply in tune with what makes so much of it feel fake and disconnected and shitty.

Third Wave Coworking is the pendulum swinging back. This is part of an inevitable correction.

TWC is often more modest than Second Wave Coworking, while still being ambitious.

TWC is often a bit more grounded than the unbridled idealism (and often, terrible business acumen) of many First Wave Coworking operations.

A lot of Third Wave Coworking doesn’t even look like an office.

The Third Wave Coworking founders (and staff!!) that I’ve met are smart enough to see what makes coworking actually valuable, and also smart enough to want to avoid the mistakes of both first and second wave coworking.

Third Wave Coworking is investing in research and education instead of the fanciest furniture and free lunches. They’re doing their homework, hiring for expertise and asking really good questions.

Third Wave Coworking seems to balance getting good at both sides of the coworking business: the operations side and the community development side. It understands how both parts create distinct business value.

Third wave coworking is still tiny.

But it’s visible to me, and I think will continue to be more visible over the coming months and years.

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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.