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!