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“We’re not sure if we need a coworking space. There’s another one town over.”
There are a few different mindsets I encounter when talking to coworking space owners. But I’ll break it down into two categories: the ones that get it - and - the ones that don’t. Coworking spaces are not your primary competition for members. In fact, other coworking spaces could, and should, be a great source of referrals and mutual growth.
Now I’m not saying that every town needs to have multiple coworking spaces. I’ve walked away from potential projects when I didn’t feel that starting another coworking space in the town would make sense.
But!
I adamantly maintain that coworking spaces aren’t competing with each other for members.
Before we dive in, let’s take a look at some figures.
According to current estimates*, there are approximately 27.6 million people in the United States who work remotely at least part time. That figure is continuing to grow with estimates that by 2028 77% of departments within corporations will have remote positions.
At the moment there are 3,818 coworking spaces in the United States. That breaks down to just over 1,300 remote work positions per coworking space. There are an estimated additional 15 million home based businesses, which almost doubles the number of potential members per coworking space. Figures from recent studies show that the average coworking space in the United States can accommodate 50-100 members.
Current growth trends continue to show that even with the exponential growth of coworking spaces, the number of remote positions will continue to grow beyond the ability of coworking spaces to house all of those workers.
Ok. Lot’s of figures and lots of averages, and this is zoomed out to a macro scale. However, my experiences continue to mirror the data and I’d like to share my insights with you before you decide that you can’t have a coworking space because the town 10 miles down the road has one.
First question you probably have - if coworking spaces aren’t my competition, then who is?
The biggest competition your coworking space has (or will have) is the potential member’s home.
Why pay $100, $150 + a month to work at a coworking space when they can work for free at home and even get a write off?
And right here, we’ve hit on the crux of the issue but also the solution to the "coworking spaces are my competition" argument.
You need to create an environment that someone cannot recreate in their home.
There are a number of ways to do this and the path you decide to pursue is how you can differentiate yourself from other coworking spaces and isolate your ideal member.
For example, one way to create an environment that competes with a home office is incredible design. I’ve written in detail about the thought that goes into designing a successful coworking space including unique aesthetics. Inspirational design and aesthetics go beyond just looking cool. A well designed space can mean more money in (certain) members' pockets.
A home based interior designer who decides to hold her client meetings in an amazingly designed coworking space is going to close more clients than one who holds those same meetings on Zoom from a walk in closet in her house.
However, the same aesthetics that make the space so visually appealing might also make it harder to control the acoustics of the space, making it less inviting to an attorney who needs to hold very serious and confidential calls.
That attorney (who was exploring coworking spaces because he has a dog that barks at everything and kids who enjoy checking in on him at home) likely would enjoy a space that provides more dedicated and quiet spaces even if the aesthetics are less inspirational.
If you refer that attorney over to the coworking space across town in the old real estate offices you’ve now created a mutually beneficial relationship with another coworking space while helping a local business owner keep their business in town.
We could create numerous examples of different coworking attributes that appeal to some workers but not others. Spaces that encourage or discourage collaboration, spaces that embrace the arts, spaces that are hi tech or low tech, spaces that have a little dust in the corner or spaces that are medical level clean, etc.
When I help a new coworking space launch, I preach the idea that you cannot try to appeal to everyone, you need to carve out a niche that matches you location, your design, your budget, and your personality as the leader of the space. As you market this space, in adddition to attracting your ideal members, you attract people in your area who are interested in coworking but not necessarily interested in your particular space. It’s a benefit to be able to refer those folks to another space that matches their needs.
The conversation doesn’t end there however. Not only are other coworking spaces not your competition, they can become an incredible partner.
First, other coworking spaces are the perfect partner for hosting events. Whether it’s lunch and learns, social events, happy hours, etc, create a partnership where the local coworking spaces all host events (that jive with their ideal members) and market those events to everyone’s members. This adds value to your community at no additional cost, and the marketing of the events will be exposed to potential new members for everyone.
Second, people love added value. If they know that by joining your space, they could have access to other spaces if needed, that is a huge value add. Consider a reciprocal relationship with a similarly minded coworking space wherein your members can use their space once a month for free and vice versa. This is a great benefit to both spaces and helps continue to show the benefits of coworking to those who might still be on the fence (at home in their basement).
Lastly, consider co-advertising. This sounds like a stretch to some people, but hear me out. If two spaces are in a similar geographic area, but cater to different types of members, co-advertising creates a larger budget, more exposure for both businesses, and greater chances of success. You’re likely both running advertising (paid, organic, etc) targeting similar audiences already, instead of competing which drives the cost of advertising up and dilutes the effectiveness, consider combining which lowers the costs and expands your reach.
This philosophy can apply to other businesses that might “compete” for members as well. The local coffee shop is a great place for a traveler through town or a once or twice a month laptop warrior, but they likely draw the line when a customer starts having packages delivered.
Similarly, the local library might have a free business center, but when the same person rents out the room 4 days a week, it’s time for them to move on.
Whatever the case may be, don’t let the existence of another coworking space be the reason you don’t pursue coworking. Meet with them, discuss ideal members, goals, and philosophies with them. Odds are you’ll be able to easily and organically carve out your niche of the local remote worker market. And if you can’t, I’d be happy to help share some ideas.
If you are considering establishing a coworking space in your town, please feel free to reach out and schedule a free, no obligation discovery call. This short call is educational, informative and leaves your armed with more knowledge to help you make important decisions about your project.
*These are from the 2024 Ultimate List of Remote Work Statistics
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