Maria Montero

The limits of coworking.

It feels like There is a WeWork on every street today. Take a walk through downtown Manhattan (please don’t) and it might even seem like there are more WeWorks than office buildings.

Consider this an ongoing discussion on Urban Tech, its intersection with regulation, public service issues, and other complexities where people have a full PHD. I’m just a sour, born and raised New Yorker trying to understand why I’ve been stuck between subway stops for the past 15 minutes, so reach out with any of these thoughts: @[email protected].

The joint work has permeated cities around the world at an astronomical rate. The rise has been so remarkable that even SoftBank, which dominates the headlines, appears to be willing to bet on the success of its colossal Vision Fund on continuous change, having poured billions into WeWork, including a recent $ 4.4 top-up. billion which saw the valuation rise to $ 45 billion.

And there are no signs of a slowdown in the trend. With increasing frequency, new startups are popping up in cities looking to convert underused brick or commercial space into low-cost co-working options.

It’s a strategy that spans across all types of businesses from retailers (where companies like Workbar have helped retailers offer portions of their stores) to more vertical niches like parking garages, where companies like Campsyte are transforming empty lots into spaces for joint work outdoors and corporate off-sites. Restaurants and bars may even be the most popular for co-working, as companies like Spacious and KettleSpace turn restaurants that are closed during the day into a private co-working space during their off hours.

Before you know it, a startup will be tying an Aeron chair to the top of a telephone pole and calling it “WirelessWorking.”

But is there a limit to how far joint work can go? Will all the shops, restaurants, and open spaces that line city streets be filled with MacBooks, Cappuccinos, and Moleskine notebooks? That could be too difficult a task, even for the movement taking over the skyscrapers.

Photo: Vasyl Dolmatov / iStock via Getty Images

So why is everyone trying to turn their favorite neighborhood dinner spot into a part-time WeWork in the first place? Working together offers a particularly attractive use case for underutilized space.

First, I co-work falls under the same General business zoning categories such as most freelance businesses and very little additional infrastructure aside from a few extra outlets and some decent WiFi are required to make a space an effective replacement for often crowded coffee shops and distracted using sensible pricing. Poor, remote, or nomadic workers who make up a growing portion of the workforce.

Therefore, businesses can list their space at little or no cost, without having to deal with structural changes to the design that are more likely to emerge when it comes to emerging solutions or event rentals.

On the supply side, these co-working networks don’t have to buy leases or make capital improvements to convert each space, so they can offer more square footage per member at a much lower rate than traditional co-working spaces. . . Spacious, for example, charges a monthly membership fee of $ 99- $ 129 for access to its network of reviewed restaurants, which is cheap compared to a WeWork counter, which can cost between $ 300 and $ 800 per month. in New York City.

Clients are realizing more affordable job-sharing alternatives, while low-margin businesses facing rising rents from underutilized properties can pool resources in a network and access a whole new revenue stream at a very low cost. The value proposition is proving to be seriously convincing in early cities – Spacious They told the New York Times that so many restaurants were voluntarily applying to join the network that only five percent of all applicants were eventually accepted.

Basically, the business model here checks many of the boxes for successful markets: acquisition and transaction friction is low for both customers and suppliers, and both see real value that did not previously exist. The unit economy looks strong, and looking at both sides of the market builds trust and community. Finally, there is an observable network effect whereby providers benefit from higher occupancy as more customers join the network, while customers benefit from greater flexibility as more locations join the network. .