Infuriating article on the "high premiums" charged by coworking spaces in Bloomberg

Well, the “intangibles” cited by Liz in the article certainly cured my loneliness. And I didn’t even have to pay exorbitant NeueHouse rates (good thing, because what passes for coworking there costs more than rent on my Manhattan apartment). Just sayin’.

If anything, this article spurred my interest to write on how coworking rates – at least in NYC – seem to be inversely proportional to the quality of the community.

Melissa

···

Melissa Mesku

Founding editor, New Worker Magazine

the magazine for and by people who cowork

newworker.co

If the writer knew what he was talking about, he wouldn’t have hyphenated the word “coworking”. Duh!

···

On Wednesday, February 4, 2015 at 2:31:48 AM UTC-7, Will Bennis, Locus Workspace wrote:

I have never been so pissed by an article on coworking: http://www.bloomberg.com/news/articles/2015-02-02/co-working-spaces-an-expensive-cure-for-loneliness

Can’t believe Bloomberg would publish this kind of financial analysis (treating the only cost of business as the lease cost). My ongoing struggle with running a coworking space has been with the fact that margins on memberships for the most part need to be lower than they should be to compete with spaces funded by grants, accelerators treating the space as a business cost for the hopeful investment payoff, big businesses using coworking spaces as mascots/advertising/sources of inspiration, or other spaces that are just operating at a loss because they underestimated the expenses involved in operating a space.

Anyway, just putting this out there to promote some good old group resentment at the media. :slight_smile:

Anyone disagree and think Bloomberg got it right?

Will

If the writer knew what he was talking about, he wouldn’t have hyphenated the word “coworking”. Duh!

I wish that were true. Editors, again, religiously follow the AP Stylebook and since coworking as a term is neither in the dictionary nor in the Stylebook, even the BEST writers who bring a convincing argument to their editors get their words hacked.

For example, I spoke to the author of the recent Times article about coworking and vacations.

She’s a really great journalist, and that article showed for it. But it had the hyphen. Here’s an excerpt from an email I had with her about a completely different article:

Frustrating, but true.

-Alex

···

The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

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On Thu, Feb 5, 2015 at 1:03 PM, M.E. Ralph [email protected] wrote:

If the writer knew what he was talking about, he wouldn’t have hyphenated the word “coworking”. Duh!

On Wednesday, February 4, 2015 at 2:31:48 AM UTC-7, Will Bennis, Locus Workspace wrote:

I have never been so pissed by an article on coworking: http://www.bloomberg.com/news/articles/2015-02-02/co-working-spaces-an-expensive-cure-for-loneliness

Can’t believe Bloomberg would publish this kind of financial analysis (treating the only cost of business as the lease cost). My ongoing struggle with running a coworking space has been with the fact that margins on memberships for the most part need to be lower than they should be to compete with spaces funded by grants, accelerators treating the space as a business cost for the hopeful investment payoff, big businesses using coworking spaces as mascots/advertising/sources of inspiration, or other spaces that are just operating at a loss because they underestimated the expenses involved in operating a space.

Anyway, just putting this out there to promote some good old group resentment at the media. :slight_smile:

Anyone disagree and think Bloomberg got it right?

Will

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Nick Clark of Common Desk in Dallas wrote a pretty good response exposing the poor math in this article: http://thecommondesk.com/blog/coworking-spaces-the-inexpensive-solution-for-a-cool-office

···

On Wednesday, February 4, 2015 at 3:31:48 AM UTC-6, Will Bennis, Locus Workspace wrote:

I have never been so pissed by an article on coworking: http://www.bloomberg.com/news/articles/2015-02-02/co-working-spaces-an-expensive-cure-for-loneliness

Can’t believe Bloomberg would publish this kind of financial analysis (treating the only cost of business as the lease cost). My ongoing struggle with running a coworking space has been with the fact that margins on memberships for the most part need to be lower than they should be to compete with spaces funded by grants, accelerators treating the space as a business cost for the hopeful investment payoff, big businesses using coworking spaces as mascots/advertising/sources of inspiration, or other spaces that are just operating at a loss because they underestimated the expenses involved in operating a space.

Anyway, just putting this out there to promote some good old group resentment at the media. :slight_smile:

Anyone disagree and think Bloomberg got it right?

Will

Not read the article, but I do feel cowork fees are “too high” in a couple contexts:

space with hundreds of coworkers in a big city e.g. Berlin thus earning many tens of thousands of euros monthly; that’s very good business for the owner, but somehow inbalanced w.r.t. to the social economy spirit of coworking

many people would benefit from coworking but cannot afford the high fees e.g. unemployed people

this is just an observation about the dimension of the fees, not about the article which I haven’t read and probaly will not, sorry

There are some coworking spaces that are either publicly subsidized or operate like a cooperative to be able to accommodate the local, perhaps depressed, economy.
However, economics 101 says there is no free lunch, so costs are costs, so an owner earning $$ is likely faced with $$ costs.

That said, BLANKSPACES has always offered very affordable $100/mo WorkBar plans for now 7 years. :slight_smile:
JEROME CHANG

WEST: Santa Monica
1450 2nd Street (@Broadway) | Santa Monica CA 90401
ph: (310) 526-2255

CENTRAL: Mid-Wilshire
5405 Wilshire Blvd (2 blocks west of La Brea) | Los Angeles CA 90036
ph: (323) 330-9505

EAST: Downtown
529 S. Broadway, Suite 4000 (@Pershing Square) | Los Angeles CA 90013
ph: (213) 550-2235




···

On Feb 7, 2015, at 12:37 PM, Marius Amado-Alves [email protected] wrote:

Not read the article, but I do feel cowork fees are “too high” in a couple contexts:

space with hundreds of coworkers in a big city e.g. Berlin thus earning many tens of thousands of euros monthly; that’s very good business for the owner, but somehow inbalanced w.r.t. to the social economy spirit of coworking

many people would benefit from coworking but cannot afford the high fees e.g. unemployed people

this is just an observation about the dimension of the fees, not about the article which I haven’t read and probaly will not, sorry

Visit this forum on the web at http://discuss.coworking.com


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I want to respond to this directly because I have been involved in running and setting up both non-profit and for-profit coworking spaces. The social economy does not equal giving things away for below cost. A social enterprise still needs to operate as a business entity - just one that puts profits behind delivering a good service.

Unless you own the building or are subsidized/bankrolled by some wealthy folks, your operating costs are driven by the market. Commercial real estate for those of us who lease space is both a supplier and a direct competitor at some level.

We are not greedy, soulless bastards who fall asleep in a pile of money surrounded by naked women. We work hard to provide a good service to a community - usually at not much above our costs. Very few people are getting rich in this business.

As for those not able to afford coworking, at the HiVE, I always allocated a number of desks (usually 5% of the total desks) that I could give away for free or next to free for groups in need. Usually charities or non-profits doing a lot of social good. That’s how I helped people in tough situations.

Do I feel like not giving the starving artist a free desk somehow means that I have lost my way? Fuck no. Coworking is a privilege, not a right. I’m not the social safety net. I have to build communities that will thrive and grow and create impact in the community.

Unemployed people have many resources available to them in my country - that is paid for by the taxes I pay and my tenants pay. I do not need to provide a free service to them.

Should we give a free pickup truck and lawnmower to the person who is unemployed and wants to start a gardening business? Most people would say that is ludicrous but you’re suggesting I do the same thing by 100% subsidizing overhead costs for someone trying to make a living as a creative class professional. Why should I do that?

/rant

···

Aaron Cruikshank

Principal, CRUIKSHANK

Phone: 778.908.4560

email: [email protected]

web: cruikshank.me

twitter: @cruikshank

book a meeting: doodle.com/cruikshank

linkedin: linkedin.com/in/cruikshank

On Feb 7, 2015 12:37 PM, “Marius Amado-Alves” [email protected] wrote:

Not read the article, but I do feel cowork fees are “too high” in a couple contexts:

space with hundreds of coworkers in a big city e.g. Berlin thus earning many tens of thousands of euros monthly; that’s very good business for the owner, but somehow inbalanced w.r.t. to the social economy spirit of coworking

many people would benefit from coworking but cannot afford the high fees e.g. unemployed people

this is just an observation about the dimension of the fees, not about the article which I haven’t read and probaly will not, sorry

Visit this forum on the web at http://discuss.coworking.com


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Nice to ear first hand from owners with social awareness and practices, thanks.

Sorry if my observation sounded general i.e. about all spaces.
Of course you cannot charge below cost (never said that).
(But, as you say yourself, “very few people are getting rich in this business.” So, still, some people are.)

Unfortunately at some contries/locations (and this is first hand knowledge from my side) there is no help for unemployed to access coworking, in any form, either support from authorities, or low fees. The usual fee around 200 euros (cities) or 100 euros (small towns) is out of reach for these people. We’re trying to improve this locally, and I’ll post if anything actually happens (which I doubt).

Marius, I do see your empathy for the unemployed. It’s commendable. But your below is unfortunately contradictory. You say one cannot charge below cost, but later criticize the typical plan is too $$. What if a space offers “at cost”, maybe 10% less? 20% less? Would that really help the unemployed? No, of course not. The cry for help is for FREE and as I had said before, there is never a “free lunch” - economics 101. Prices are dictated by the market as Aaron said, and by the realities of operating expenses.

And I would say this on behalf of any of us spaces who have expanded or added locations: most have done so for the long view, and for expanding the coworking industry and relevancy, not at all because the first or prior space made huge piles of cash or something.

Think about it. Our business has generally a fixed capacity, aside from “infinite” revenue from classes like at GA. Most have figured out that, “oh cool, I’m finally making some margin. If I have more scale, and each subsequent space costs less because I’m not creating the brand again, or I’m further up the learning curve to make hopefully fewer mistakes…I’ll expand to average out a better return.”

I for one, spent what now seems like a ridiculous SIX months of security deposit for my first space because it was 2007…a whole year before the Great Recession began. (I was told that some tenants paid 12 months!) I obviously learned and pay much less for later spaces. I now pay less for nearly everything. Sometimes a lot less, sometimes just slightly less. I’ve also doubled my efficiency to extract more from this previously “fixed” capacity. All in the name of furthering this coworking movement and industry.

I hope that clarifies any inaccurate perceptions from the public.

From someone who has been in the trenches for 7 very long years,

Jerome

www.BLANKSPACES.com

···

On Feb 8, 2015, at 5:52 AM, Marius Amado-Alves [email protected] wrote:

Nice to ear first hand from owners with social awareness and practices, thanks.

Sorry if my observation sounded general i.e. about all spaces.
Of course you cannot charge below cost (never said that).
(But, as you say yourself, “very few people are getting rich in this business.” So, still, some people are.)

Unfortunately at some contries/locations (and this is first hand knowledge from my side) there is no help for unemployed to access coworking, in any form, either support from authorities, or low fees. The usual fee around 200 euros (cities) or 100 euros (small towns) is out of reach for these people. We’re trying to improve this locally, and I’ll post if anything actually happens (which I doubt).

Visit this forum on the web at http://discuss.coworking.com


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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).

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).

Visit this forum on the web at http://discuss.coworking.com


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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

···

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).

Visit this forum on the web at http://discuss.coworking.com


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Thanks for more first hand information.

/*
Personally I found this part particularly interesting.

“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.”

I cannot help wonder which expertise might that be. I had the impression cowork owners have all kinds of backgrounds. Say a big city cowork owner cuts $5000 for themselves from the $20000+ cake, 100k per annum. They’re missing out on what, a 200k annum job? What jobs are those? CEO, CTO, CFO, VP? Wow, I had no idea owners came from these positions.
*/

In my analysis of the article I tried to be objective, impartial. (I don’t get which “great deal” I’ve missed, but no worries there.)

Maybe the fuel of this discussion is the relatively infrequent negative reviews of coworking. We’ve all seen lots of articles praising the unending niceties of the “new way to work.” Many such articles are also sensationalist and lacking. This negative article touches some points that are seldom addressed in the positive ones, but still some information, albeit partial, is of interest and, well, true. Same as in the positive reviews.

All this is still new and a comprehensive view is still building–but it must integrate the good as the bad.
Finally, this is probably just philosophy and maybe off topic so please feel totally free to just ignore me.

Hi Marius,

I hear your sarcasm so hesitate to reply, but you seem to be sincerely missing the key point: After operating costs, a space like that could easily be running at a net loss without paying the owner a penny. The idea that the average owner of a space with that capacity is taking 25% of revenue as salary is just naive.

But, even taking your numbers as correct, if the owner was taking $5000 as profit / month, that’s $60,000 / year, not $100,000 / year. And yes, I would guess most people running coworking spaces in bigger cities(in the USD market) have backgrounds that could earn them more than $60,000 / year as employees, without the risk involved with running a coworking space.

Best,

Will

···

On Monday, February 9, 2015 at 4:38:48 PM UTC+1, Marius Amado-Alves wrote:

Thanks for more first hand information.

/*
Personally I found this part particularly interesting.

“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.”

I cannot help wonder which expertise might that be. I had the impression cowork owners have all kinds of backgrounds. Say a big city cowork owner cuts $5000 for themselves from the $20000+ cake, 100k per annum. They’re missing out on what, a 200k annum job? What jobs are those? CEO, CTO, CFO, VP? Wow, I had no idea owners came from these positions.
*/

In my analysis of the article I tried to be objective, impartial. (I don’t get which “great deal” I’ve missed, but no worries there.)

Maybe the fuel of this discussion is the relatively infrequent negative reviews of coworking. We’ve all seen lots of articles praising the unending niceties of the “new way to work.” Many such articles are also sensationalist and lacking. This negative article touches some points that are seldom addressed in the positive ones, but still some information, albeit partial, is of interest and, well, true. Same as in the positive reviews.

All this is still new and a comprehensive view is still building–but it must integrate the good as the bad.
Finally, this is probably just philosophy and maybe off topic so please feel totally free to just ignore me.

Since Will beat me to the send button, I needn’t point out the math. I’ll share my personal experience: I left a $100k+ job to open Cowork Frederick. I have yet to draw a salary and am doing part-time consulting while growing our cowork community, which slows down the growth of both efforts.

···

On Mon, Feb 9, 2015 at 10:38 AM, Marius Amado-Alves [email protected] wrote:

Thanks for more first hand information.

/*
Personally I found this part particularly interesting.

“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.”

I cannot help wonder which expertise might that be. I had the impression cowork owners have all kinds of backgrounds. Say a big city cowork owner cuts $5000 for themselves from the $20000+ cake, 100k per annum. They’re missing out on what, a 200k annum job? What jobs are those? CEO, CTO, CFO, VP? Wow, I had no idea owners came from these positions.
*/

In my analysis of the article I tried to be objective, impartial. (I don’t get which “great deal” I’ve missed, but no worries there.)

Maybe the fuel of this discussion is the relatively infrequent negative reviews of coworking. We’ve all seen lots of articles praising the unending niceties of the “new way to work.” Many such articles are also sensationalist and lacking. This negative article touches some points that are seldom addressed in the positive ones, but still some information, albeit partial, is of interest and, well, true. Same as in the positive reviews.

All this is still new and a comprehensive view is still building–but it must integrate the good as the bad.
Finally, this is probably just philosophy and maybe off topic so please feel totally free to just ignore me.

Visit this forum on the web at http://discuss.coworking.com


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Glen Ferguson

Cowork Frederick

122 E Patrick St

Frederick, MD 21701-5630

+1 (301) 732-5165

www.coworkfrederick.com

@CoworkFrederick

"In my analysis of the article I tried to be objective, impartial. (I don’t get which “great deal” I’ve missed, but no worries there.)”

The “great deal[s]” you’ve missed are:

overestimated # of memberships

overestimated take-home pay of $5k, or 25%

wrong math of $100k/year…should be $60k/year

your implication that a lease, supplies, etc. is below $15k/mo.

any implication that private business owners in a risky venture should subsidize or give away free plans for the sake of the “social economy”. Don’t confuse socialism and social economy.

I suspect you think the “some who get rich” include WeWork. WeWork is barely a coworking space. For a while, they readily admitted they weren’t coworking, which makes sense. They’re exec suites who have much more hip marketing and design. But whatever they are, kudos for them for figuring out a success that’s appropriate for them. Seriously, the rest of us are HAPPY they’re getting all this attention [or hype].

your original contradiction - which you now say you’ve corrected - about one’s not charging below cost vs. free plans

"still some information, albeit partial, is of interest and, well, true”

“some…partial” is absolutely an overestimate, because most of the article was factually, and therefore idiotically wrong.

So pretty much the “great deal” you missed amounts to the same “great deal [of inaccuracy]” of that article.

JEROME CHANG

WEST: Santa Monica
1450 2nd Street (@Broadway) | Santa Monica CA 90401
ph: (310) 526-2255

CENTRAL: Mid-Wilshire
5405 Wilshire Blvd (2 blocks west of La Brea) | Los Angeles CA 90036
ph: (323) 330-9505

EAST: Downtown
529 S. Broadway, Suite 4000 (@Pershing Square) | Los Angeles CA 90013
ph: (213) 550-2235




···

On Feb 9, 2015, at 7:51 AM, Will Bennis, Locus Workspace [email protected] wrote:

Hi Marius,

I hear your sarcasm so hesitate to reply, but you seem to be sincerely missing the key point: After operating costs, a space like that could easily be running at a net loss without paying the owner a penny. The idea that the average owner of a space with that capacity is taking 25% of revenue as salary is just naive.

But, even taking your numbers as correct, if the owner was taking $5000 as profit / month, that’s $60,000 / year, not $100,000 / year. And yes, I would guess most people running coworking spaces in bigger cities(in the USD market) have backgrounds that could earn them more than $60,000 / year as employees, without the risk involved with running a coworking space.

Best,

Will

On Monday, February 9, 2015 at 4:38:48 PM UTC+1, Marius Amado-Alves wrote:

Thanks for more first hand information.

/*
Personally I found this part particularly interesting.

“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.”

I cannot help wonder which expertise might that be. I had the impression cowork owners have all kinds of backgrounds. Say a big city cowork owner cuts $5000 for themselves from the $20000+ cake, 100k per annum. They’re missing out on what, a 200k annum job? What jobs are those? CEO, CTO, CFO, VP? Wow, I had no idea owners came from these positions.
*/

In my analysis of the article I tried to be objective, impartial. (I don’t get which “great deal” I’ve missed, but no worries there.)

Maybe the fuel of this discussion is the relatively infrequent negative reviews of coworking. We’ve all seen lots of articles praising the unending niceties of the “new way to work.” Many such articles are also sensationalist and lacking. This negative article touches some points that are seldom addressed in the positive ones, but still some information, albeit partial, is of interest and, well, true. Same as in the positive reviews.

All this is still new and a comprehensive view is still building–but it must integrate the good as the bad.
Finally, this is probably just philosophy and maybe off topic so please feel totally free to just ignore me.

Visit this forum on the web at http://discuss.coworking.com


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Oops, sorry about the bad math (the vision of the “2” and the “5” there took over the “12” not there)

I kind of stand by my non-numerical opinions, but no big issue, just philosophy in very early state, it’s a long way to the truth, and you guys are incredibly helpful, thanks.

As said opinions are a bit counter the usual praise of coworking they’re bound to be provocative here, yes, but not sarcastic as such, hope you believe that, I don’t want to be recalled as the sarcastic guy here, please.

Ok I see now some owners have quit their 100k+ jobs to go develop coworking. Good.

Thanks.

Right on, Aaron!

···

On Sun, Feb 8, 2015 at 12:06 AM, Aaron Cruikshank [email protected] wrote:

I want to respond to this directly because I have been involved in running and setting up both non-profit and for-profit coworking spaces. The social economy does not equal giving things away for below cost. A social enterprise still needs to operate as a business entity - just one that puts profits behind delivering a good service.

Unless you own the building or are subsidized/bankrolled by some wealthy folks, your operating costs are driven by the market. Commercial real estate for those of us who lease space is both a supplier and a direct competitor at some level.

We are not greedy, soulless bastards who fall asleep in a pile of money surrounded by naked women. We work hard to provide a good service to a community - usually at not much above our costs. Very few people are getting rich in this business.

As for those not able to afford coworking, at the HiVE, I always allocated a number of desks (usually 5% of the total desks) that I could give away for free or next to free for groups in need. Usually charities or non-profits doing a lot of social good. That’s how I helped people in tough situations.

Do I feel like not giving the starving artist a free desk somehow means that I have lost my way? Fuck no. Coworking is a privilege, not a right. I’m not the social safety net. I have to build communities that will thrive and grow and create impact in the community.

Unemployed people have many resources available to them in my country - that is paid for by the taxes I pay and my tenants pay. I do not need to provide a free service to them.

Should we give a free pickup truck and lawnmower to the person who is unemployed and wants to start a gardening business? Most people would say that is ludicrous but you’re suggesting I do the same thing by 100% subsidizing overhead costs for someone trying to make a living as a creative class professional. Why should I do that?

/rant


Aaron Cruikshank

Principal, CRUIKSHANK

Phone: 778.908.4560

email: [email protected]

web: cruikshank.me

twitter: @cruikshank

book a meeting: doodle.com/cruikshank

linkedin: linkedin.com/in/cruikshank

On Feb 7, 2015 12:37 PM, “Marius Amado-Alves” [email protected] wrote:

Not read the article, but I do feel cowork fees are “too high” in a couple contexts:

space with hundreds of coworkers in a big city e.g. Berlin thus earning many tens of thousands of euros monthly; that’s very good business for the owner, but somehow inbalanced w.r.t. to the social economy spirit of coworking

many people would benefit from coworking but cannot afford the high fees e.g. unemployed people

this is just an observation about the dimension of the fees, not about the article which I haven’t read and probaly will not, sorry

Visit this forum on the web at http://discuss.coworking.com


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I find it sad that this discussion of whether or not coworking is worth it is now based on shallow quantitative analysis of coworking’s profitability.

Marius is more off-base with his accusations than his numbers. As far as I understand it, his grievances with coworking are: 1. Coworking is too expensive for the common man who needs it. 2. Coworking space operators are getting rich by charging excessively. 3. People on this thread have real experiences not based in conjecture and are willing to do actual research (like reading the article in the OP)

  1. As others have stated, the market determines prices. Find me a more inexpensive option for the independent worker and I’ll believe you coworking is overpriced.

Furthermore, free or discounted coworking HELPS NO ONE IN THE LONG RUN, not even the coworker. If the coworker has to rely on the benevolence or patronage of another individual to make their workplace sustainable, they have lost their workplace independence and interdependence on each other to share the space. They are instead, much like a factory employee or unemployed citizen on the dole, dependent on some third party to provide things for them.

The common man has banded together to create coworking and is working very hard to sustain it. As far as I know, coworking is priced very affordably for an independent professional in every city. You cannot isolate a location like NYC, SF, Tokyo, or London and extrapolate its prices to the rest of the world. If it was too expensive for the local population, it would go out of business (as many coworking spaces do). Just like all other markets, a FAIR PRICE (determined by supply/demand) is reached through equilibrium. The barrier to entry is way too low to enforce any local oligopoly.

  1. No one on this thread (save for maybe Jerome :wink: ) has built an empire or made a fortune in coworking. This is a ridiculous conclusion from the misinformation Marius has accumulated in 1 above. Not even going to address this further.

  2. You are not the first nor the last person to judge coworking from afar. Just curious Marius, how much time have you spent in a coworking space? Are you a proud member of your coworking community? You don’t have to be an owner/operator to enjoy the benefits of coworking. In my experience, the owner/operator role is actually the least desirable in the community because it carries so much more obligation and duty than any other member.

Free from those obligations, have you found people you can collaborate with? Have you found coworkers that inspire you and challenge you when you need feedback on a project? Have you found coworkers you can’t wait to dedicate your weekend to helping? Have you found coworkers that you can’t wait till happy hour to grab a beer with? Until you’ve experienced the sense of belonging in a coworking community, I don’t think any amount of shitty math can justify 1 Euro a month.

The real story has nothing to do with the above. The poorly understood economics of profitability for a coworking space should have little influence on someone looking to join a space. The things that should matter are:

  1. Does this space have the necessary features for me to do work here?
  2. Is the space and community an environment that empowers and motivates me?
  3. Are these the people I want to spend my waking hours around?
  4. Are my membership dues a fair exchange for the benefits received above?

The irony of this whole discussion to me is that no one has ever not joined Fort Work as a result of the inability to pay. Granted, we are priced very competitively for our market, but I don’t think that’s why. More common that not, members are actually suspicious of the low cost and have on more than one occasion questioned the financial viability of the space if we did not RAISE RATES. Yes, I have members come up to me and tell me they feel uncomfortable about the low costs and felt they owed more.

Many others have said that placing a price on coworking is actually impossible because the value is not collected upfront. I think they correctly realize that coworking in its very nature is not transactional, but about forming relationships.

Thus from a relationship viewpoint, I think this argument can be redeveloped for any relationship, a classic example being the cost comparison between a whore and a wife, or on doing your own taxes vs hiring an accountant, etc. In the end, one can’t put a price on a relationship, not because it won’t be quantified, but because the numbers betray the story of what a relationship is all about.

···

On Monday, February 9, 2015 at 11:18:55 AM UTC-6, Marius Amado-Alves wrote:

Oops, sorry about the bad math (the vision of the “2” and the “5” there took over the “12” not there)

I kind of stand by my non-numerical opinions, but no big issue, just philosophy in very early state, it’s a long way to the truth, and you guys are incredibly helpful, thanks.

As said opinions are a bit counter the usual praise of coworking they’re bound to be provocative here, yes, but not sarcastic as such, hope you believe that, I don’t want to be recalled as the sarcastic guy here, please.

Ok I see now some owners have quit their 100k+ jobs to go develop coworking. Good.

Thanks.

Oren- +10. Thanks for clearly articulating the hard work (and joy) of being an owner/operator. As one myself, I have yet to meet anyone who has started a space to “make crazy money” who was still with it for very long.

I also think it is fine for us to reinforce that coworking is not for everyone, and for those that think that the benefits they get from it (collaboration, connectedness, community, etc.) aren’t worth the price then it’s ok for us to bless and release them. Many others will step quickly into the void they left because those things are well worth every penny paid. Blessings to all the owners/operators/community members that drive that value just by being their awesome selves.

Joel Bennett

Veel Hoeden Coworking

···

On Mon, Feb 9, 2015 at 3:00 PM, [email protected] [email protected] wrote:

I find it sad that this discussion of whether or not coworking is worth it is now based on shallow quantitative analysis of coworking’s profitability.

Marius is more off-base with his accusations than his numbers. As far as I understand it, his grievances with coworking are: 1. Coworking is too expensive for the common man who needs it. 2. Coworking space operators are getting rich by charging excessively. 3. People on this thread have real experiences not based in conjecture and are willing to do actual research (like reading the article in the OP)

  1. As others have stated, the market determines prices. Find me a more inexpensive option for the independent worker and I’ll believe you coworking is overpriced.

Furthermore, free or discounted coworking HELPS NO ONE IN THE LONG RUN, not even the coworker. If the coworker has to rely on the benevolence or patronage of another individual to make their workplace sustainable, they have lost their workplace independence and interdependence on each other to share the space. They are instead, much like a factory employee or unemployed citizen on the dole, dependent on some third party to provide things for them.

The common man has banded together to create coworking and is working very hard to sustain it. As far as I know, coworking is priced very affordably for an independent professional in every city. You cannot isolate a location like NYC, SF, Tokyo, or London and extrapolate its prices to the rest of the world. If it was too expensive for the local population, it would go out of business (as many coworking spaces do). Just like all other markets, a FAIR PRICE (determined by supply/demand) is reached through equilibrium. The barrier to entry is way too low to enforce any local oligopoly.

  1. No one on this thread (save for maybe Jerome :wink: ) has built an empire or made a fortune in coworking. This is a ridiculous conclusion from the misinformation Marius has accumulated in 1 above. Not even going to address this further.

  2. You are not the first nor the last person to judge coworking from afar. Just curious Marius, how much time have you spent in a coworking space? Are you a proud member of your coworking community? You don’t have to be an owner/operator to enjoy the benefits of coworking. In my experience, the owner/operator role is actually the least desirable in the community because it carries so much more obligation and duty than any other member.

Free from those obligations, have you found people you can collaborate with? Have you found coworkers that inspire you and challenge you when you need feedback on a project? Have you found coworkers you can’t wait to dedicate your weekend to helping? Have you found coworkers that you can’t wait till happy hour to grab a beer with? Until you’ve experienced the sense of belonging in a coworking community, I don’t think any amount of shitty math can justify 1 Euro a month.

The real story has nothing to do with the above. The poorly understood economics of profitability for a coworking space should have little influence on someone looking to join a space. The things that should matter are:

  1. Does this space have the necessary features for me to do work here?
  2. Is the space and community an environment that empowers and motivates me?
  3. Are these the people I want to spend my waking hours around?
  4. Are my membership dues a fair exchange for the benefits received above?

The irony of this whole discussion to me is that no one has ever not joined Fort Work as a result of the inability to pay. Granted, we are priced very competitively for our market, but I don’t think that’s why. More common that not, members are actually suspicious of the low cost and have on more than one occasion questioned the financial viability of the space if we did not RAISE RATES. Yes, I have members come up to me and tell me they feel uncomfortable about the low costs and felt they owed more.

Many others have said that placing a price on coworking is actually impossible because the value is not collected upfront. I think they correctly realize that coworking in its very nature is not transactional, but about forming relationships.

Thus from a relationship viewpoint, I think this argument can be redeveloped for any relationship, a classic example being the cost comparison between a whore and a wife, or on doing your own taxes vs hiring an accountant, etc. In the end, one can’t put a price on a relationship, not because it won’t be quantified, but because the numbers betray the story of what a relationship is all about.

On Monday, February 9, 2015 at 11:18:55 AM UTC-6, Marius Amado-Alves wrote:

Oops, sorry about the bad math (the vision of the “2” and the “5” there took over the “12” not there)

I kind of stand by my non-numerical opinions, but no big issue, just philosophy in very early state, it’s a long way to the truth, and you guys are incredibly helpful, thanks.

As said opinions are a bit counter the usual praise of coworking they’re bound to be provocative here, yes, but not sarcastic as such, hope you believe that, I don’t want to be recalled as the sarcastic guy here, please.

Ok I see now some owners have quit their 100k+ jobs to go develop coworking. Good.

Thanks.

Visit this forum on the web at http://discuss.coworking.com


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