Small Business Labs

Coworking and the Recession

Reuters has an article on the wider appeal of coworking due to the recession.  We continue to see coworking growing through the downturn, although probably not as robustly as it would have if the economy stayed strong. 

In past recessions self-employment declined during the early stages of the recession and then picked up in the middle and later stages.  This recession appears to be following the same pattern.  And with the recession over 1 year old self-employment probably started picking up late last year and will continue to grow this year. 

The new self-employed will need places to work and network and this bodes well for coworking.

Great Explanation of Coworking

NBC News has a great story on coworking.  The video is short (2:05 minutes), focuses on the social aspects of coworking and is one of the best explanations of the concept I've seen.

NBC News SF also has a coworking story.  It is on Cubes & Crayons, a coworking facility that also has daycare.  It also does a nice job explaining coworking.

For those not interested in watching the video, an SF Chronicle story describes coworking as:

"Laptop nomads - that growing tribe of folks who can be found typing away at any cafe with wireless Internet access - are starting to put down roots. And some .... are doing it through co-working, a 21st century twist on the old idea of the shared artists' studio.

In co-working, a group of freelancers or other solo entrepreneurs share one big office space with perks that they might not get at home, such as conference rooms, espresso machines and opportunities for socializing."

For more info, see our category on coworking or visit the coworking blog

The Impact of the Recession on Coworking

Over the last couple of weeks we've been talking to people in the coworking community about the likely impact of a recession on coworking. 

This included a brief discussion on the Coworking Google Group, which is an excellent resource for keeping up with coworking and coworking facilities. 

A small majority of the people we got feedback from believe an economic downturn will be good for coworking.  The most common reason given is rising unemployment and fewer traditional job opportunities will result in more coworkers and more demand for coworking spaces.

A second reason we heard is a recession will likely result in companies reducing office space to save money.  As an alternative to company office space, employees will turn to coworking spaces for facilities and a social environment. 

A sizable minority felt the overall impact of the recession would be negative.  The most common reason given is there will be fewer opportunities for independent workers.  A second reason is coworkers will cut their costs in part by moving back home, or to coffee shops and other free spaces.

We agree with the majority.   In previous recessions small business formation increased.  And today it is much cheaper and easier to start a small businesses or become an independent worker, contractor or consultant than it was in the past.

Coworking facilities provide low cost, on demand space for independent and affiliated workers.  They also provide a social environment and a work community.  These features will be attractive in a down economy.   

Coworking Meets Coplaying

Great article in the SF Chronicle on Cubes and Crayons, a new coworking site in Silicon Valley.  The facility combines coworking with a licensed day care facility.  Key quote on their clients:

"Cubes & Crayons so far has about 25 members who sign up for a certain number of hours of work and child care each week, plus other users who drop in when space is available. Most are parents like Grant and Chan who use both the child care and the work space, but some are people like McConachie and his partners who simply need quiet work space on an occasional basis."

Places like Cubes and Crayons provide new options for parents looking for flexible careers, work/life balance and job options - including career on and off rampers.  These are folks that, for a wide variety of reasons, are moving in or out of traditional full time employment.  For more on this topic, take a look at the Youronramp site.

Coworking meets coplaying - a great idea. 

Press Round Up on Coworking

Lots of coverage on coworking:

1.  The Christian Science Monitor on March 3rd describes coworking:

"The concept tries to combine the structure and socializing of a company office space with the flexibility of working from home. There are desks to rent, conference rooms to reserve, and still plenty of room to recline.

Coworking spots cater to the telecommuters, freelancers, and entrepreneurs of the e-mail era. These laptop bedouins represent a growing segment of the US workforce, and many coworkers say others are bound to find similar arrangements."

2.  The New York Times on February 20th describes coworking:

"...where someone sets up an office and rents out desks, creating a community of people who have different jobs but who want to share ideas."

3.  The New York Times on February 28th describes hybrid coworking spaces:

"...many accounts it is an unusual hybrid: equal parts business incubator, coworking and learning space and members-only networking group."

4.  The SF Chronicle on February 19th describes coworking:

"In co-working, a group of freelancers or other solo entrepreneurs share one big office space with perks that they might not get at home, such as conference rooms, espresso machines and opportunities for socializing."

Obviously coworking has captured the imagination of the press.

SF Chronicle, NY Times on Coworking

The San Francisco Chronicle had a cover story yesterday on coworking titled "Shared Workspaces A Wave of the Future".  The article provides an excellent description of coworking:

"Laptop nomads - that growing tribe of folks who can be found typing away at any cafe with wireless Internet access - are starting to put down roots. And some .... are doing it through co-working, a 21st century twist on the old idea of the shared artists' studio.

In co-working, a group of freelancers or other solo entrepreneurs share one big office space with perks that they might not get at home, such as conference rooms, espresso machines and opportunities for socializing."

The article also points out the growing interest in coworking by traditional office suite companies:

"In Santa Clara, a traditional business center, Bowers Office Center, started offering a co-working option several months ago."

We discuss coworking in our first Future of Small Business report, and believe these facilities will supporting the growth of next-gen artisans. 

There is a very useful list of coworking resources at end of the article.

***Update - just noticed the New York Times has an article on coworking today.  It is in the front of the small business section.  Two major articles in two days in two leading newspapers - a good sign that a trend is moving beyond the fringe and towards the mainstream. ****