Tips to Ensure the Success of Your Coworking Space
Chris Cooley, the Co-founder and Chief Innovation Officer of Evelo Agency, has been exploring the global coworking and flexible work industries for the past ten years.
We spoke with Chris about what defines the success of a space.
In your experience as a consultant, what do you think defines the success of a coworking space?
The most important element that defines the success of a cowork is an understanding, and appreciation, for the importance of the harmony between a business model and a defined culture. In my experience, these are the three key factors that define the success of a space:
- A clear and profitable business model: The turnover and operations cost needed to fill a space is too much to overcome in the early months of launching a space, financially. Without a clear target audience and business model, including profitable pro forma projections to accompany a coworking concept, many fail.
- A strong mission and community leader: Without a mission and community leader who is involved in the facilitation of a culture, there is very little to differentiate one space from another. Price then becomes the key difference and if you are not price competitive, you lose out.
- Defining and aligning to your target audience’s needs: Members become frustrated when the space doesn't align with their personal needs.
I did a TedX talk that outlines this which you may be interested in.
In contrast, what are some examples of coworking done wrong?
If you opened a space five years ago, you could fill it simply by branding it as a coworking space since it was rare back then. Fast forward to today, however, we are beginning to see market saturation, even in medium-sized cities.
I'd encourage those who opened a few years ago to be conscious of your culture. Did you take the time to build a mission and vision that you and your members live for? If you have people leaving your space, it may be because you didn't build a feeling that people can "buy" into and people are leaving because a cheaper space opened close by.
This is something we have seen in almost every market we have worked in, from Africa to Europe and all over the states. This atrophy in membership is happening everywhere because of the growth of the industry.
What advice do you give to companies interested in creating a coworking/flexible work concept?
- Collect data that matters to your specific audience, not just your city or regional demographics because you need to get more granular than that. Then, identify a proper model to serve the people you have pinpointed.
- For a start, make sure there are enough people who fit your target audience in your local area to fill up your space.
- Be sure you have the operations set up to be profitable within the first year. This way, you can at least be sure to make your money back within 3 years, considering the initial money put in for the fit-out, infrastructure and operations costs of the space.
If you don't have these items in place, wait until you do to lease a space or open a location. Make sure you can be profitable and have a user base defined.