Questions about starting a coworking space

Posted on 05. Apr, 2007 by in blog, Coworking

Genia and Jim Parker from Tucson, Arizona are in the process of creating a coworking space for creative collaborators utilizing a 1900 square foot building that they own with three distinct work areas.

They’re in the finalization stages and asked for our opinion and experience on the follow six topics:

  1. What surprises have you encountered in operating this concept?
  2. What are the operational areas of concern today?
  3. If you had it to do over again . . . would you?
  4. What services are key to attracting the clientele you desire?
  5. What kind of turnover do you experience?
  6. Who manages the overall space for you? And how are they compensated?

What surprises have you encountered in operating this concept?

Well, first off, starting and running Citizen Space has been tremendously rewarding and gratifying. We spent many, many hours working out of our dining room and out of cafes and while that was fine, it wasn’t the best situation for us, for the cafes, for our health, diet or our sanity.

Finding a space of our own, that we could in turn offer up to other independents like us who felt isolated or uninspired working from home or who were ready to graduate out of cafes and into a space that they had some control and influence over.

That we didn’t really do any advertising (besides a few community-focused events) and still managed to attract four anchors was probably the most surprising; at the same time, we knew that there was a strong desire from many folks for a cafe-like environment in which they could have social interaction but also be productive.

So I’d like to say that I’m surprised by our success so far, and of the growth of the network, though in retrospect, I think we knew that we’d very soon joining and helping to cultivate a rather widespread movement to establish and then network spaces of a like kind.

What are the operational areas of concern today?

For the most part it’s keeping the place clean and tidy; but because we’re very lax on ground rules, we put a lot of trust and faith into the anchors that the space is theirs as much as it is ours and that they should look after it as such. I think we’ve been very fortunate to have the calibre of individuals take the to space as we have; the only real issues that have arisen have had to do with outside groups using the space for meetings and meetups, but even those issues have been minor.

Because of the way that we run the space — where either you have a key and have access or you don’t, we really don’t need to worry about constantly staffing the space, whereas if we charged for use of the coworking area, I think we’d feel something of an obligation to take care and serve those folks. To keep our overhead down and flexibility up, so far we only charge people who have a desk and a key. Everything else is free, except events that charge.

We’re making it up as we go and not trying to guess too much at things we don’t know yet.

My biggest concern is figuring out how we can afford to keep the place going longterm, but I’m not too worried about. These things have ways of working themselves out.

If you had it to do over again . . . would you?

Without a doubt. And y’know, we’ll probably do it again… and again… and again… If not personally, through the many efforts and initiatives of others.

I mean, what’s better than both establishing your own local economy and investing in the place that you live? What’s better than having a startup that hundreds of people around the world care about whether it survives or not?

If we didn’t start at the Hat Factory and then meiosis to Citizen Space, would the network be growing as it is? And really, it’s the network that will be the most interesting thing to see emerge over time.

So yes, definitely, I would do it again.

What services are key to attracting the clientele you desire?

It isn’t much of a service, but the most important thing that a space can offer (I think) is community.

People come back and they stay based on how they feel when they’re in the space. You might offer a lot of fancy things, but if the culture doesn’t feel right, you’ll probably end up back home or at the cafe.

Now, in terms of the basics, you should be prepared to offer high speed wireless internet, water service, trash/recycling/composting… and flower service if you’re particularly ambitious.

We invested in lots of furniture, in power supplies, in cabinets, a projector, cups and a coffee maker, various kinds of seats, whiteboards, a big couch… all on our own dime. But those things are necessary for creating the ambiance and flavor of the space. Our anchors bring themselves, their laptops, an office chair and a positive attitude.

So far it’s seemed to work out well, though it’s not quite sustainable yet at the rates we charge.

What kind of turnover do you experience?

Virtually none so far. We have lots of transitory guests who come and go, but they’re not paying, so we don’t really need to worry too much about that kind of turnover.

We’ve only had one person leave, but that was because of a change in employment.

Who manages the overall space for you? And how are they compensated?

We manage the space! It is certainly a challenge, what with running a consultancy as well, but again, we’ve been conservative in both the number of people we’ve taken in to the space as paying members as well as the services we provide. We don’t have the money to hire anyone but our awesome event planner and assistant, so it all comes down to us and our anchors.

I don’t know how well that works for other spaces, but given our previous experiment with cooperative management, we realized that we needed someone on the lease who could answer questions about the space definitely and take care of issues that the other anchors don’t have time or attention to deal with. That’s part of the attractiveness of the cafe-model — you show up and work and buy coffee — it doesn’t get much simpler. So that’s kind of what we’re competing against, though I think the enticements I mentioned above do give us some advantage.

So, there you go. These are certainly good questions to be asking — and I’d be curious what other spaces think about these topics.

Thanks for asking Genia!

5 Responses to “Questions about starting a coworking space”

  1. ericaogrady 5 April 2007 at 11:05 pm #

    Remind me to login next time…LOL
    After Chris Pirillo’s post today I’m tempted to say “First”.

    In any event — thanks so much for posting this Chris — very helpful. We’re about to setup a co-working space/social media consultancy here in Houston called The Method Agency/Method Café — and my big concern is insurance. There are a fair number of lawyers — and I’m scared of getting sued for some issue or other. What are your thoughts? (Feel free to point me to any posts you might have already written on the subject that I have missed).

  2. Chris Messina 5 April 2007 at 11:24 pm #

    Hey Erica, great question… yeah, that is something that we, as Citizen Agency, had to get for our business anyway. We figure that our business liability insurance that covered the lease also extends to the coworking facility. We have (fortunately) had to test this theory yet, but I think basic liability insurance should cover your office…

    After all, it’s Citizen Agency, LLC that’s paying the rent on the space; the anchors are then subletting from us.

  3. James Nicholson 7 April 2007 at 11:37 am #

    Just found out about you guys and I think this is a great idea! Congrats on having the wherewithal to get this off the ground. I’d love to come by and check out the place at some point.

    Two questions: Do you know of anyone else in SF that’s doing something like this? Also, I read in another post that you’re losing money each month (I used to own an art gallery, so I can definitely sympathize!). Is there a limit to how much you can charge per desk? Have you experimented with higher prices to offset the losses?

    Good luck with the venture!

  4. Chris Messina 7 April 2007 at 11:59 am #

    Hey James, thanks for your comment — I just checked out YourStreet — nice work!

    There is one other active space that we know of in San Francisco called The Hat Factory. It’s actually the space that we started out in, but moved out to have a more office-like environment closer to downtown.

    As for money, well, we kind of figure that our consulting business can cover the difference for now… and while we have thought about raising the rent, we also know that we’re competing with free on two fronts: cafes and home.

    We think that, over time, through events and more inventive charging plans (hotdesks have been mentioned recently) we might be able to recover some of the loss. It’s not a huge concern at the moment, but definitely something that we need to address in the long term.

    Do come and visit us sometime!

  5. Darren Herman 8 April 2007 at 5:21 am #

    Thank you so much for posting this. I’m looking into doing something similar (http://www.darrenherman.com/2007/04/05/an-entrepreneurs-dream-nyc/)

    Would love to talk with you about what works and doesn’t… offline. I’ll be in touch :)


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