In Berlin there’s loads of companies operating from big co-working spaces like Mindspace and WeWork. Typically those companies are either big companies trying to establish innovation outposts, or Startups.
The pitch
Working in such a co-working space is marketed as a company benefit, and on the surface there’s plenty niceties indeed:
- Central, chic locations.
- Those big co-working space companies operate the office well when it comes to topics like running a reliable WiFi, providing working meeting room booking systems, providing screen sharing everywhere, and a consistent and reasonable level of cleanliness.
- There’s plenty of possibilities to socialize. The co-working spaces run weekly least parties / breakfasts and more. Always with free snacks and booze. Those events are typically well perceived, and people actually get loose (free booze…).
- Meetups hosted in the co-working spaces allow to easily learn after work without the hassle of driving for an hour through the city.
- A lot of brands try to cater to the young, hip, connected crowd residing in co-working spaces. There’s regular free trials for stuff like the newest e-cigarette capsule or whatever. Some “in” events are first communicated to the co-working crowd. The co-working spaces themselves also offer perks for members like cheaper electric scooter commutes – I’ve rarely ever seen someone use one of those included perks, but they are there.
Working in the co-working space feels like being member of an exclusive club. And that’s of course the emotional selling point of co-working spaces: It’s sold as a desirable lifestyle. Companies residing in co-working spaces use the halo-effect from the image of co-working spaces to woo talent. From the company’s perspective it’s an investment into their own attractiveness. And what an investment it is: I’d wager that renting an office in a co-working space is 1.5x to 2x the amount of the cost a company would have, would it provide a similar office themself.
Companies residing in co-working spaces use the halo-effect from the image of co-working spaces to woo talent.
Why startups are drawn to co-working spaces
For startups there’s additional considerations in favor of co-working spaces, and they have to do with the flexibility:
- Finding a good office in Berlin is hard and takes a few months of time. It’s much faster to book desks in a co-working space.
- At first (with a handful of people) the economics might look favorable in comparison to the fixed cost investments required to furnish an own office and hiring an office manager. The co-working space is purely variable costs. But hit a dozen employees and the variable costs of the co-working space are immense. As costs are usually per seat (with some mass discounts), they are scaling more or less linear to the amount of seats. In a self-run office, the cost per seat would decline.
- Startups will have a hard time predicting the development of the team size, especially in early stages. It’s much easier to book an additional seat the month that it’s needed than to predict the correct office size for the next year(s) – over-provisioning a self-run office of course would come at considerable overhead costs in the short term.
- If the cash is running out, the startup can cut costs by leaving the nice co-working space. If the startup fully implodes, there’s no long term contract binding whomever is responsible for the fallout.
Why co-working spaces are bad offices
Here comes the catch: co-working spaces are bad offices. They are designed for the shallow good feeling, not to enable serious, no-frills work.
co-working spaces are bad offices. They are designed for the shallow good feeling, not to enable serious, no-frills work.
- There’s usually not enough space. An additional desk can be rented out for thousands a year. It’s logical that as many desks as possible are cramped into the locations. This also creates bottle-necks at toilets.
- There’s crowds of people working through the space at all times, creating noise and movement. In addition, there’s new, interesting people passing by every day. That makes for a highly distracting environment.
- Things are designed to look good, not to function well. A typical example is lighting: Often there’s nice low-key ambient lighting that creates an inviting atmosphere. It stops feeling so nice once you require bright, neutral light and are not allowed to install it.
I’ve worked in three co-working spaces in Berlin now. Not one of them convinced me as office. co-working spaces to me are typical children of our time: Flexible, slick, luxurious, but in the end so flawed by bad usability. Getting the basics right is worth more than the glamour! #theHypeWearsOf.