The challenge: I need help figuring out how (or whether) to save a coworking space that lost it’s key ingredient for success (it’s community).
I hope/think it provides a nice example of a more recent kind of problem that existing coworking spaces will be facing as this kind of business matures. I also think it provides a good lesson about potential dangers of expanding even when your first location is a success.
Here’s the story:
About two and a half years ago my (small) coworking space was full and I had to decide whether to expand or to just stop accepting new members. Long story short, I decided to expand.
I thought about how many members I’d need at the new space and how many would move from the old space and it seemed to me like both spaces would be sustainable soon after opening the new space as long as growth continued as it had been for the short term. I expected growth to be a little faster with the added value of an extra location in a great new neighborhood, so I thought I was being safe(ish). A couple months after making that choice the original space went from being full to being less than half full. It no longer had the sense of community/buzz that made it an attractive coworking space in the first place.
Back to the challenge: is there anything I can do now to restore the missing key element of community once the community is lost other than to close the one space and focus my attention on making the second space the best coworking space I can make it?
Some important factors in thinking about the problem:
Please accept the premise that this “threshold community size” really is the key difference in whether this space is attractive to new members (even though it’s definitely a simplification).
Couldn’t I just repeat the formula that made it a successful coworking space in the first place? When I first opened, I already believed a largely-empty coworking space had only a fraction of the value of a full coworking space, and so I set my prices, very explicitly, at half the price I expected to charge when the space became more lively. This worked well. People knew I would increase the prices and they knew they were getting a great deal to be an early supporter, and I got a lot of early activity for that reason. When I doubled the prices, there were no big hiccups. But I cannot reverse that now for a few reasons. Most importantly, I have another coworking space that is doing well at the prices I currently charge (and I am not over-charging), as well as many members who work from the non-sustainable space who paid full price. There’s no simple way I can see to dramatically lower the prices at one location to get it back to the threshold community size without either alienating a lot of existing members or giving them back a lot of their already-paid membership dues which would be a big financial burden (at least over the short term). Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
Why don’t I ask my members for a solution? I have, but so far no one has had a good solution other than to just close the space, even though many people would be very upset by it.
Why did I lose so many members after the expansion (& isn’t that the real problem)? The answer is a lot less straight forward–and was a lot less predictable–than you might think.
Obviously, a lot of existing members moved to the new location. But I knew about that in advance and that alone would NOT have changed the original space for the worse.
Right after committing to the expansion, I found out that about six full-time members were leaving as a group. One of them got his own private office with room for all of them, and they moved there to work together. Six members wouldn’t have been the difference, but with the space already having lost a lot of members, the loss of this group who all worked in the same area of the space was noticeable.
I made the commitment to expand at the end of May. I didn’t have enough experience at the time to know it, but summer is a killer for coworking in Prague, and my membership shrunk by maybe 30% over those next three months just as a result of the usual seasonal fluxuation.
Because the expansion itself was stressful and time consuming, the quality of the “community management” at both spaces dropped significantly. I was there half as often as before, and when I was there I had a lot less positive energy to give to the space. People noticed and several people were openly upset by the change in quality of the space/community management.
I raised my prices for new members at the time of the expansion, and in retrospect I think that had a big impact on membership growth. I solved the problem later, but it was already too late.
All of these challenges came at pretty much the same time, so that by the end of the summer the space was–in my opinion–below that key threshold, even while the other space was growing/gaining members.
You may not buy it, but I conceptualize this as mainly a consequence of hitting a low point in a random walk where a lot of bad things that could go wrong happened to go wrong at the same time (of course, if I were wiser, I could have avoided these things and so they’re only a result of luck from my limited perspective). Bad luck in this sense of random variation happens, just as good luck happens. So the question here is: when bad luck does happen in such a way that you lose a critical mass of your community, can you do anything to restore the value of the space to get the community back rather than have it continue to shrink over time?
If you read this far, thank you! If you have any great insights, thank you thank you thank you!
Tricky indeed! We ran in to this twice in our history so I can relate.
The first time was when we were exploring the idea of opening a second Office Nomads across town for the same reasons you mentioned. With our diluted attention our first space wasn’t what it had been and we received our first (and only) negative yelp review. Remember when Susan sent a similar letter out to this group? To weather it then, we pulled back from our expansion plans and ended up scrapping the idea.
Turns out that was a good move for us because soon after another floor in our building opened up and we did expand in this location. We doubled our size causing everyone to spread out and then our membership dropped significantly. They call that the empty disco effect. You need a certain amount of activity or people just move along. This time we powered through it but did incur more debt than we originally projected.
As for what we did to power through it was really about presence and intention. It’s the same kinds of stuff you do to make any space great. The critical component is the community managers. Who is there to know what is going on and make adjustments as needed? Who is there to say good morning or go for a walk with a member if someone needs to just cry it out? Who is helping smooth out the process of becoming a new member and keeping things fresh for the long timers? If the answer is no-one, or you are trying to do it in two locations, then that is your issue. Each space needs it’s own team.
We had this also when we went from one space to two. I tred a lot of things. But in the end for us anyway it came down to this right here:
Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
(Emphasis added)
That was how I thought of it also. Our second location was also set up specifically to deal with a problem I could not address in the first space, which the inability to have storage/warehousing/shipping. So I thought of it more as an annex or supplement to the first space conceptually.I am a locaton independent kind of girl anyway.
I was dead wrong. Couldn’t have been more wrong. It didn’t clear up until I finally accepted that the second location had its own identity, its own groove, and all efforts to make it be like its sister location or to spread the community over both locations had the effect of strangling them both off.
Here’s how strong the effect is: our second location is set up on a revenue sharing model with the owner of the building. Community management is now in the hands of one of the coworkers there, who also is paid for this on a revenue sharing basis (each of us gave him a piece of the action). I had thus accepted that I would be lucky to break even with that many fingers in the pie. I was wrong about that, too. Once it broke away to do its own thing, it did better with more costs.
The reasons the problem appeared are of course interesting; but more important it seems to me is to identify what is stopping you now, irrespective of how it happened two years ago. You can’t get the community back, you can never get back to where you were, for the same reasons you can’t step in the same river twice – the water has continued to move in the mean time. You can only go forward with the two separate, different, communities you have, only one of which is having an adolescent identity crisis.
Thank you both so much for sharing your stories. Very helpful getting these other perspectives (even if they don’t give me an obvious solution).
Will
···
On Thursday, June 11, 2015 at 10:52:46 AM UTC+2, Jeannine wrote:
Hiya, Will,
We had this also when we went from one space to two. I tred a lot of things. But in the end for us anyway it came down to this right here:
Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
(Emphasis added)
That was how I thought of it also. Our second location was also set up specifically to deal with a problem I could not address in the first space, which the inability to have storage/warehousing/shipping. So I thought of it more as an annex or supplement to the first space conceptually.I am a locaton independent kind of girl anyway.
I was dead wrong. Couldn’t have been more wrong. It didn’t clear up until I finally accepted that the second location had its own identity, its own groove, and all efforts to make it be like its sister location or to spread the community over both locations had the effect of strangling them both off.
Here’s how strong the effect is: our second location is set up on a revenue sharing model with the owner of the building. Community management is now in the hands of one of the coworkers there, who also is paid for this on a revenue sharing basis (each of us gave him a piece of the action). I had thus accepted that I would be lucky to break even with that many fingers in the pie. I was wrong about that, too. Once it broke away to do its own thing, it did better with more costs.
The reasons the problem appeared are of course interesting; but more important it seems to me is to identify what is stopping you now, irrespective of how it happened two years ago. You can’t get the community back, you can never get back to where you were, for the same reasons you can’t step in the same river twice – the water has continued to move in the mean time. You can only go forward with the two separate, different, communities you have, only one of which is having an adolescent identity crisis.
Hey Will, I encountered a lot of the same challenges back in 2013 and addressed them by figuring out how to get people to engage with each other in a different way. I knew I couldn’t just get people to be an excited part of a participatory culture just by willing them to change, so I thought about how I could re-engineer the culture from within.
Since it was around the turn of the year and people were making New Year’s resolutions, I thought a goal-setting group would be good. I knew I needed one!
So I kicked off a 5 week accountability group, called it Cotivation, and targeted people who were interested in membership but had not yet joined. I made the start date of this program an excuse for people sitting on the fence to jump in and give it a try.
Existing members were also welcome, so we had a cross-section of brand new members and longtime residents. Deep bonds were formed immediately, and we ended up having a really strong comeback in terms of both business and culture that following year.
As Jacob mentioned, he and Susan encountered an even more similar situation to yours when they expanded. Susan’s version of Cotivation was a huge help to them as well.
So, in general, I’d say it’s helpful to look for ways to reboot culture from within through some new participatory programming. We’re doing training for new Cotivation organizers next week, so if you’re interested in that hit me up to discuss!
On Thursday, June 11, 2015, Will Bennis, Locus Workspace [email protected] wrote:
Jacob and Jeannine,
Thank you both so much for sharing your stories. Very helpful getting these other perspectives (even if they don’t give me an obvious solution).
Will
On Thursday, June 11, 2015 at 10:52:46 AM UTC+2, Jeannine wrote:
Hiya, Will,
We had this also when we went from one space to two. I tred a lot of things. But in the end for us anyway it came down to this right here:
Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
(Emphasis added)
That was how I thought of it also. Our second location was also set up specifically to deal with a problem I could not address in the first space, which the inability to have storage/warehousing/shipping. So I thought of it more as an annex or supplement to the first space conceptually.I am a locaton independent kind of girl anyway.
I was dead wrong. Couldn’t have been more wrong. It didn’t clear up until I finally accepted that the second location had its own identity, its own groove, and all efforts to make it be like its sister location or to spread the community over both locations had the effect of strangling them both off.
Here’s how strong the effect is: our second location is set up on a revenue sharing model with the owner of the building. Community management is now in the hands of one of the coworkers there, who also is paid for this on a revenue sharing basis (each of us gave him a piece of the action). I had thus accepted that I would be lucky to break even with that many fingers in the pie. I was wrong about that, too. Once it broke away to do its own thing, it did better with more costs.
The reasons the problem appeared are of course interesting; but more important it seems to me is to identify what is stopping you now, irrespective of how it happened two years ago. You can’t get the community back, you can never get back to where you were, for the same reasons you can’t step in the same river twice – the water has continued to move in the mean time. You can only go forward with the two separate, different, communities you have, only one of which is having an adolescent identity crisis.
I really liked what Jeannine said, which I heard as, “Step back a little and let the community grow organically”.
I therefore really like Tony’s Cotivation process to kickstart the community.
What I’ve always believed is a few things can replicate: space, process, brand/experience.
Communities are often driven by strong leadership, but until cloning happens, leaders can’t be duplicated nor be at 2 places at once.
After opening a few locations, what I’ve learned is that if you want to open an additional location, you’ll have to establish that the community can grow without your strong leadership actively present. “STEP BACK!”
JEROME CHANG
WEST: Santa Monica
1450 2nd Street (@Broadway) | ph: (310) 526-2255
CENTRAL: Mid-Wilshire
5405 Wilshire Blvd (2 blocks west of La Brea) | ph: (323) 330-9505
EAST: Downtown
529 S. Broadway, Suite 4000 (@Pershing Square) | ph: (213) 550-2235
On Jun 11, 2015, at 7:33 AM, Tony Bacigalupo [email protected] wrote:
Hey Will, I encountered a lot of the same challenges back in 2013 and addressed them by figuring out how to get people to engage with each other in a different way. I knew I couldn’t just get people to be an excited part of a participatory culture just by willing them to change, so I thought about how I could re-engineer the culture from within.
Since it was around the turn of the year and people were making New Year’s resolutions, I thought a goal-setting group would be good. I knew I needed one!
So I kicked off a 5 week accountability group, called it Cotivation, and targeted people who were interested in membership but had not yet joined. I made the start date of this program an excuse for people sitting on the fence to jump in and give it a try.
Existing members were also welcome, so we had a cross-section of brand new members and longtime residents. Deep bonds were formed immediately, and we ended up having a really strong comeback in terms of both business and culture that following year.
As Jacob mentioned, he and Susan encountered an even more similar situation to yours when they expanded. Susan’s version of Cotivation was a huge help to them as well.
So, in general, I’d say it’s helpful to look for ways to reboot culture from within through some new participatory programming. We’re doing training for new Cotivation organizers next week, so if you’re interested in that hit me up to discuss!
On Thursday, June 11, 2015, Will Bennis, Locus Workspace [email protected] wrote:
Jacob and Jeannine,
Thank you both so much for sharing your stories. Very helpful getting these other perspectives (even if they don’t give me an obvious solution).
Will
On Thursday, June 11, 2015 at 10:52:46 AM UTC+2, Jeannine wrote:
Hiya, Will,
We had this also when we went from one space to two. I tred a lot of things. But in the end for us anyway it came down to this right here:
Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
(Emphasis added)
That was how I thought of it also. Our second location was also set up specifically to deal with a problem I could not address in the first space, which the inability to have storage/warehousing/shipping. So I thought of it more as an annex or supplement to the first space conceptually.I am a locaton independent kind of girl anyway.
I was dead wrong. Couldn’t have been more wrong. It didn’t clear up until I finally accepted that the second location had its own identity, its own groove, and all efforts to make it be like its sister location or to spread the community over both locations had the effect of strangling them both off.
Here’s how strong the effect is: our second location is set up on a revenue sharing model with the owner of the building. Community management is now in the hands of one of the coworkers there, who also is paid for this on a revenue sharing basis (each of us gave him a piece of the action). I had thus accepted that I would be lucky to break even with that many fingers in the pie. I was wrong about that, too. Once it broke away to do its own thing, it did better with more costs.
The reasons the problem appeared are of course interesting; but more important it seems to me is to identify what is stopping you now, irrespective of how it happened two years ago. You can’t get the community back, you can never get back to where you were, for the same reasons you can’t step in the same river twice – the water has continued to move in the mean time. You can only go forward with the two separate, different, communities you have, only one of which is having an adolescent identity crisis.
I can’t tell you all how timely this thread is for me! I currently manage a coworking space in Bath and we have recently noticed an increased engagement from our members which is great however, this has also highlighted one of key issues - lack of team space for growing companies. We thought we had this problem last year when members complained about lack of space, this turned out to be more of a perception issue and was quickly fixed by rearranging the main coworking room and introducing additional desks. However, the problem has arisen again, and we are now having to turn away teams of 3+ as we don’t have the space at our current premises.
My colleague and I are now looking at opening a second space, one of my concerns has been though would it make more sense to relocate the entire existing community if possible rather than opening and managing two spaces in the same city?
One of the reasons I think it may not be an issue is that the new space would have its own identity and offering, I imagine that it would offer a higher percentage of team and fixed desk space, with those users encouraged to use the meeting rooms at the original hub, helping to link the two communities together. With the city we occupy being so small I can’t see members moving to the new space due to location either, but I can see that several members would move BUT better to keep them in our community in a new space rather than lose them to a competitor.
I’m just keen to understand if a separate identity/offering is enough to make sure that both spaces can maintain growth?
Thanks
···
On Wednesday, June 10, 2015 at 5:24:10 PM UTC+1, Will Bennis, Locus Workspace wrote:
Dear All,
The challenge: I need help figuring out how (or whether) to save a coworking space that lost it’s key ingredient for success (it’s community).
I hope/think it provides a nice example of a more recent kind of problem that existing coworking spaces will be facing as this kind of business matures. I also think it provides a good lesson about potential dangers of expanding even when your first location is a success.
Here’s the story:
About two and a half years ago my (small) coworking space was full and I had to decide whether to expand or to just stop accepting new members. Long story short, I decided to expand.
I thought about how many members I’d need at the new space and how many would move from the old space and it seemed to me like both spaces would be sustainable soon after opening the new space as long as growth continued as it had been for the short term. I expected growth to be a little faster with the added value of an extra location in a great new neighborhood, so I thought I was being safe(ish). A couple months after making that choice the original space went from being full to being less than half full. It no longer had the sense of community/buzz that made it an attractive coworking space in the first place.
Back to the challenge: is there anything I can do now to restore the missing key element of community once the community is lost other than to close the one space and focus my attention on making the second space the best coworking space I can make it?
Some important factors in thinking about the problem:
Please accept the premise that this “threshold community size” really is the key difference in whether this space is attractive to new members (even though it’s definitely a simplification).
Couldn’t I just repeat the formula that made it a successful coworking space in the first place? When I first opened, I already believed a largely-empty coworking space had only a fraction of the value of a full coworking space, and so I set my prices, very explicitly, at half the price I expected to charge when the space became more lively. This worked well. People knew I would increase the prices and they knew they were getting a great deal to be an early supporter, and I got a lot of early activity for that reason. When I doubled the prices, there were no big hiccups. But I cannot reverse that now for a few reasons. Most importantly, I have another coworking space that is doing well at the prices I currently charge (and I am not over-charging), as well as many members who work from the non-sustainable space who paid full price. There’s no simple way I can see to dramatically lower the prices at one location to get it back to the threshold community size without either alienating a lot of existing members or giving them back a lot of their already-paid membership dues which would be a big financial burden (at least over the short term). Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
Why don’t I ask my members for a solution? I have, but so far no one has had a good solution other than to just close the space, even though many people would be very upset by it.
Why did I lose so many members after the expansion (& isn’t that the real problem)? The answer is a lot less straight forward–and was a lot less predictable–than you might think.
Obviously, a lot of existing members moved to the new location. But I knew about that in advance and that alone would NOT have changed the original space for the worse.
Right after committing to the expansion, I found out that about six full-time members were leaving as a group. One of them got his own private office with room for all of them, and they moved there to work together. Six members wouldn’t have been the difference, but with the space already having lost a lot of members, the loss of this group who all worked in the same area of the space was noticeable.
I made the commitment to expand at the end of May. I didn’t have enough experience at the time to know it, but summer is a killer for coworking in Prague, and my membership shrunk by maybe 30% over those next three months just as a result of the usual seasonal fluxuation.
Because the expansion itself was stressful and time consuming, the quality of the “community management” at both spaces dropped significantly. I was there half as often as before, and when I was there I had a lot less positive energy to give to the space. People noticed and several people were openly upset by the change in quality of the space/community management.
I raised my prices for new members at the time of the expansion, and in retrospect I think that had a big impact on membership growth. I solved the problem later, but it was already too late.
All of these challenges came at pretty much the same time, so that by the end of the summer the space was–in my opinion–below that key threshold, even while the other space was growing/gaining members.
You may not buy it, but I conceptualize this as mainly a consequence of hitting a low point in a random walk where a lot of bad things that could go wrong happened to go wrong at the same time (of course, if I were wiser, I could have avoided these things and so they’re only a result of luck from my limited perspective). Bad luck in this sense of random variation happens, just as good luck happens. So the question here is: when bad luck does happen in such a way that you lose a critical mass of your community, can you do anything to restore the value of the space to get the community back rather than have it continue to shrink over time?
If you read this far, thank you! If you have any great insights, thank you thank you thank you!
Hi Folks, long overdue thanks for all the replies on this. They were EXTREMELY helpful.
Best,
Will
···
On Friday, June 12, 2015 at 12:59:23 PM UTC+2, TatjanaRose wrote:
I can’t tell you all how timely this thread is for me! I currently manage a coworking space in Bath and we have recently noticed an increased engagement from our members which is great however, this has also highlighted one of key issues - lack of team space for growing companies. We thought we had this problem last year when members complained about lack of space, this turned out to be more of a perception issue and was quickly fixed by rearranging the main coworking room and introducing additional desks. However, the problem has arisen again, and we are now having to turn away teams of 3+ as we don’t have the space at our current premises.
My colleague and I are now looking at opening a second space, one of my concerns has been though would it make more sense to relocate the entire existing community if possible rather than opening and managing two spaces in the same city?
One of the reasons I think it may not be an issue is that the new space would have its own identity and offering, I imagine that it would offer a higher percentage of team and fixed desk space, with those users encouraged to use the meeting rooms at the original hub, helping to link the two communities together. With the city we occupy being so small I can’t see members moving to the new space due to location either, but I can see that several members would move BUT better to keep them in our community in a new space rather than lose them to a competitor.
I’m just keen to understand if a separate identity/offering is enough to make sure that both spaces can maintain growth?
Thanks
On Wednesday, June 10, 2015 at 5:24:10 PM UTC+1, Will Bennis, Locus Workspace wrote:
Dear All,
The challenge: I need help figuring out how (or whether) to save a coworking space that lost it’s key ingredient for success (it’s community).
I hope/think it provides a nice example of a more recent kind of problem that existing coworking spaces will be facing as this kind of business matures. I also think it provides a good lesson about potential dangers of expanding even when your first location is a success.
Here’s the story:
About two and a half years ago my (small) coworking space was full and I had to decide whether to expand or to just stop accepting new members. Long story short, I decided to expand.
I thought about how many members I’d need at the new space and how many would move from the old space and it seemed to me like both spaces would be sustainable soon after opening the new space as long as growth continued as it had been for the short term. I expected growth to be a little faster with the added value of an extra location in a great new neighborhood, so I thought I was being safe(ish). A couple months after making that choice the original space went from being full to being less than half full. It no longer had the sense of community/buzz that made it an attractive coworking space in the first place.
Back to the challenge: is there anything I can do now to restore the missing key element of community once the community is lost other than to close the one space and focus my attention on making the second space the best coworking space I can make it?
Some important factors in thinking about the problem:
Please accept the premise that this “threshold community size” really is the key difference in whether this space is attractive to new members (even though it’s definitely a simplification).
Couldn’t I just repeat the formula that made it a successful coworking space in the first place? When I first opened, I already believed a largely-empty coworking space had only a fraction of the value of a full coworking space, and so I set my prices, very explicitly, at half the price I expected to charge when the space became more lively. This worked well. People knew I would increase the prices and they knew they were getting a great deal to be an early supporter, and I got a lot of early activity for that reason. When I doubled the prices, there were no big hiccups. But I cannot reverse that now for a few reasons. Most importantly, I have another coworking space that is doing well at the prices I currently charge (and I am not over-charging), as well as many members who work from the non-sustainable space who paid full price. There’s no simple way I can see to dramatically lower the prices at one location to get it back to the threshold community size without either alienating a lot of existing members or giving them back a lot of their already-paid membership dues which would be a big financial burden (at least over the short term). Plus it would creat a strange double-pricing structure for two spaces that otherwise are part of the same community.
Why don’t I ask my members for a solution? I have, but so far no one has had a good solution other than to just close the space, even though many people would be very upset by it.
Why did I lose so many members after the expansion (& isn’t that the real problem)? The answer is a lot less straight forward–and was a lot less predictable–than you might think.
Obviously, a lot of existing members moved to the new location. But I knew about that in advance and that alone would NOT have changed the original space for the worse.
Right after committing to the expansion, I found out that about six full-time members were leaving as a group. One of them got his own private office with room for all of them, and they moved there to work together. Six members wouldn’t have been the difference, but with the space already having lost a lot of members, the loss of this group who all worked in the same area of the space was noticeable.
I made the commitment to expand at the end of May. I didn’t have enough experience at the time to know it, but summer is a killer for coworking in Prague, and my membership shrunk by maybe 30% over those next three months just as a result of the usual seasonal fluxuation.
Because the expansion itself was stressful and time consuming, the quality of the “community management” at both spaces dropped significantly. I was there half as often as before, and when I was there I had a lot less positive energy to give to the space. People noticed and several people were openly upset by the change in quality of the space/community management.
I raised my prices for new members at the time of the expansion, and in retrospect I think that had a big impact on membership growth. I solved the problem later, but it was already too late.
All of these challenges came at pretty much the same time, so that by the end of the summer the space was–in my opinion–below that key threshold, even while the other space was growing/gaining members.
You may not buy it, but I conceptualize this as mainly a consequence of hitting a low point in a random walk where a lot of bad things that could go wrong happened to go wrong at the same time (of course, if I were wiser, I could have avoided these things and so they’re only a result of luck from my limited perspective). Bad luck in this sense of random variation happens, just as good luck happens. So the question here is: when bad luck does happen in such a way that you lose a critical mass of your community, can you do anything to restore the value of the space to get the community back rather than have it continue to shrink over time?
If you read this far, thank you! If you have any great insights, thank you thank you thank you!
