Hi Marius,
I think your analysis misses a great deal. It’s part of what bothered me so much about the original article: I expect the average person thinking about this business casually to dramatically underestimate the costs and overestimate the revenue. You probably haven’t been through the process of running your own office with a team of employees, and so haven’t been confronted with the variety of costs and time involved, much less running your own coworking space with the variety of additional costs for providing services and helping to build a sense of community and a liveliness. Until you’ve been through it, most of those costs don’t jump out at you. But I don’t expect a journalist, whose job it is to dig in and try to get an objective picture of things (in my naive idealistic view of journalism)–to make the same mistake.
It wouldn’t normally bother me so much, except that this topic hits close to home and it is a domain where there’s already a ready bias in the direction showed by the journalist that I would love to be set right, rather than reinforced. Coworking is a domain, in my experience, almost unparalleled in the “for-profit” world, where the people who run the businesses do put social welfare at a premium and try to figure out how to do good while also doing good business, and so this particular charge, that they’re doing the opposite, when it’s bases on back-of-the-napkin analysis and selective consideration of the evidence that grossly misrepresents what we do, hits a nerve.
Even if you’re talking about a space that has 100 full-time members at $200 per member in a big city, you are very likely not looking at a coworking space where the owners are making what they could make as an employee, given their level of expertise. Yes, they might be bringing in $20,000 / month (plus more for events, meeting room rentals, other add on services). But how much are they spending on a lease that can accommodate that many members? How much on supplies and upkeep? How much on marketing and other services they must pay for? How much on the maybe four employees’ salaries who help manage the space? It would be EASY to have $20,000 in revenue each month and still spend more. In a major city for a space in a good location, just the four employees and the lease might cost more than that. It usually won’t, because most coworking spaces just can’t succeed at the prices they charge for memberships without getting screaming good deals on their spaces and working really hard to get employees in it in part because they want to do something they believe in rather than just to earn the kind of money they’d be able to earn outside this industry.
Yes, of course there are some people getting rich in the coworking business (I can now say, only because I read some articles about WeWork). But name an industry where some people aren’t getting rich? I’m not happy about it, but the percentage in this particular industry is probably about as low as it gets for a new industry getting the attention that coworking gets.
I’m obviously overly agitated about this particular issue and it is great to get your input. But just to give a better sense as to why this article aggravated me so much.
Best,
Will
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On Sunday, February 8, 2015 at 9:29:11 PM UTC+1, Jerome wrote:
100 members are a lot for most spaces.
Jerome
www.BLANKSPACES.com
On Feb 8, 2015, at 10:57 AM, Marius Amado-Alves [email protected] wrote:
Hmm, you’re right my statement was kind of confusing–because I have used low ballpark figures (200$ city, 100$ village). Such values are on the fair side. Social enough in spirit (meaning you’re not rolling in bank notes).
Nevertheless I feel it can be lowered still. 100 members at 200$ equals 20000$ cash monthly, which kind of sounds much more than “enough” at many locations.
Extremely dependent on location, this business, and on time too. Like realestate I guess. Still studying this.
I read the article! After all it’s Sunday, and I took a break. The article is sensationalist and lacking, like most media. What it lacks is the (necessary) integrative view of coworking. But the details are right, and have the potential to scare away some people, maybe atract others, while yet infuriating others… The article also sounds confusing. On one hand it sounds partial against coworking, maybe the author had a bad experience. On the other hand it depicts coworking as a very profitable business, which maybe will send investors that way (only to close doors after a year because they ignore the community aspect).
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