This past January we sent John Sherman to the Coworking Unconference Asia hosted by Hubud, Bali’s first coworking space. John works closely with the 1961 founders on business development while also working out of the 1961 on his own business ventures. We recently caught up with John to get his thoughts on the conference and learn where he sees coworking heading in the future.
In 2005 Brad Neuberg coined the term “coworking” to define collaborative workspaces and launched the first official space, San Francisco Coworking Space. Fast-forward and the collaborative trend appears to be catching like wildfire; by July 2013 the 3,000th coworking space opened its doors.
Although Deskmag’s most recent coworking forecast predicts less expansion, desk space is still a hot commodity as seven out of ten spaces say they are having trouble keeping up with public demand.
This year’s Coworking Unconference Asia brought together coworking representatives from all over the region to attend workshops, panel discussions and talks given by those well established in the coworking community.
“In a nutshell, the conference was a networking opportunity for people who either own, manage, or work for coworking spaces.” John recalls.
Qualitative vs. Quantitative
During the conference two spaces stood out to John, each having become very successful even though they use two very different business models.
Alex Hillman, founder of Indy Hall one of the longest running coworking spaces, developed his business model around the community. “Build the community first, and everything else comes after that.” He told conference goers during a remote presentation.
Once you’ve determined the need of the community, then you can create your business.
Jonathan O’Byrne, Founder and CEO of Collective Works, a coworking space located in Singapore’s Central Business District took a different approach.
“He didn’t come from a business background,” John explains. “But he came up with a business plan and presented it to his colleagues. They ripped it to shreds. For 6 months he’d come up with something new and they would tear it apart until he found something that would work.”
Both Alex Hillman and Jonathan O’Byrne have created successful spaces using different techniques but John wonders if they are the exception and not the rule.
Before the conference, he had a few suspicions regarding the challenges facing coworking spaces, primarily regarding how the spaces planned on making money.
“There are a lot of great ideas floating around but most spaces have a difficult time monetizing them. They have tons of enthusiasm and passion but an inability to leverage that into a successful business. Most new spaces are motivated not purely by profit but also a sense of social, economic, and environmental responsibility.”
John sees this as a double-edged sword. On one hand, a greater sense of responsibility is a positive thing but you have to have the experience and drive to turn that into a profitable business.
“As I like to say, the road to bankruptcy is paved with good intentions.”
But the outlook isn’t all bleak.
According to John, the key to a successful space lies in government and corporate sponsorships. Many corporations are keen to get involved, either as a part of a CSR campaign or just to be involved in something on the cutting edge. And the way John sees it, the future will bring large businesses clambering to get in on the action.
Future of Coworking
Despite the challenges, John feels coworking will be around for a while. “I see coworking headed in a lot of different directions, as long as the model is profit driven. Once a profit motive is apparent, big businesses are going to come in.”
And he’s already seen this starting to happen.
“I see coworking becoming hijacked by the corporate model: even now coffee shops in cities like London and San Francisco are retrofitting their spaces to make them more like coworking spaces. It’s interesting the effect they’re having on existing businesses, a reactionary change, not necessarily progressive.”
So, the takeaway?
It sounds like the coworking community is brimming with ideas and passion. Partner that with a solid business plan and enthusiastic investors and you are on your way to creating a successful collaborative community.