Research Report MARKET POTENTIAL FOR COWORKING SPACES. Vancouver, Washington. Isaiah Miller Nicole Olsen Kayla Rich Manami Takao

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1 Research Report MARKET POTENTIAL FOR COWORKING SPACES Vancouver, Washington Isaiah Miller Nicole Olsen Kayla Rich Manami Takao Faculty Advisor: Iis Tussyadiah, PhD HBM 495: Case Studies and Research School of Hospitality Business Management Carson College of Business Washington State University Vancouver In Collaboration with City of Vancouver, Washington April 29 th, 2016

2 TABLE OF CONTENTS Executive Summary Introduction Literature Review Global Coworking Surveys Regional and National Coworking Surveys Major Trends and Forecasts Case Studies Case 1: Digital Peninsula Network, Penzance Case 2: Agora, Berlin Case 3: Commune, Sydney Methodology Business Survey Interviews Interview Findings Coworking Space Owners Current Coworking Space Customers Potential Coworking Space Customers Vancouver Business Survey Findings Market for Coworking Spaces Consumer Need for Business Resources Access to Office Spaces Field of Potential Customers Workspace Characteristics Coworking Space Amenities Coworking Space Price Range Recommendations References Appendix A. Interview Transcripts with Coworking Space Owner B. Interview Transcripts with Current Coworking Space Customer C. Interview Transcripts with Potential Coworking Space Customer D. IPZ Survey Summary Research Report COWORKING SPACES P age 2

3 EXECUTIVE SUMMARY Coworking spaces are common creative spaces designed for workers to connect, collaborate, and promote productivity. It has been suggested that successfully applying these three factors leads to happiness among workers and, consequently, drives demand for coworking spaces. The flexibility, the ability to create professional and social connection and provide different work environments, as well as price, location, and infrastructure are key factors for the success of coworking spaces. Case studies on various coworking spaces throughout the world prove that coworking spaces are beneficial because workers have more job control and feel part of a community. Consumers who use coworking spaces often enjoy the fact that they are able to move about freely and access their space at a decided time of choice. The feeling of belonging that comes with being a part of a coworking community shows that coworkers value connection with others. More often than not, coworking spaces fail simply because they lack the ability to create a sense of community. Many businesses are not seeing the importance of coworking spaces to provide profit to companies. By allowing employees the flexibility of coworking space use, this creates higher customer morale, and therefore contributes to better work habits and performance. It is also shown that spending time away from an office can help employees to become more creative in their work. Coworking spaces are created to allow people to collaborate, connect, and be productive, these factors create the happiness associated with working in these spaces. This happiness is what drives the movement of coworking spaces. However, consumers select coworking spaces to rent not only based on the community and social vibes they feel in the space, infrastructure plays a major role in the decision making process. The main factors that contribute to the efficiency of a coworking space are location, building, infrastructure, layout, furniture, equipment, and sound levels. The goal of this research project is to analyze the potential market for coworking spaces in Vancouver, Washington. Specifically, this research was designed to analyze the market and find the best possible answers to the following research questions. First, we analyze the potential for coworking spaces by identifying how businesses can benefit from using coworking spaces. In particular, this question was directed at how small businesses could benefit from using the space and why a potential customer would use a coworking space. Second, we aim to identify the factors that influence consumers decision to use a coworking space and the criteria they use in selecting a coworking space. This will help us make a recommendation on what potential customers are looking for in a space. Lastly, we aim to identify the key success factors for coworking space Research Report COWORKING SPACES P age 3

4 businesses. This helps us with making our recommendation to potential owners on what they need in order to run a successful coworking space in Vancouver, Washington. In order to answer the aforementioned research questions, two main methodologies were used to gather quantitative and qualitative information: a survey and interviews. A survey was created and sent out by the City of Vancouver to 50 different local businesses. This survey aimed at identifying respondents knowledge of and possible demand for this type of business model. The survey also aimed to look at the expectations and desires of these potential coworking space customers. Of the 50 businesses that received the survey, 11 of them responded to the questions regarding coworking spaces. While the number of respondents was small, the data collected shows that 60% of respondents showed an interest in coworking spaces and 70% said that accessibility to coworking spaces was important. All respondents indicated that they had an interest in business incubators and/or an interest in business accelerators. The survey also shows how important certain characteristics and amenities are for businesses when selecting or using a coworking space. Further, we also conducted interviews with three main groups in order to identify the market potential and the needs of said market. They are: coworking space owners, current coworking space customers, and potential coworking space customers. The purpose of these interviews is to identify current success factors of coworking spaces and to look at the motivations and expectations of current and potential customers. By identifying the key success factors and customers needs, we were able to make recommendations to potential coworking space startups in Vancouver. What seemed to be the outlying need in the eyes of those we surveyed and interviewed was that rather than needing a creative space there is more of a need for resources that offer support for startup businesses that will help them grow and flourish. Startup business support is one of the key factors that contribute to a successful coworking space and satisfied coworking customers. Research Report COWORKING SPACES P age 4

5 1. INTRODUCTION Coworking spaces are a relatively new and quickly growing business models today. In essence, coworking spaces are a type of shared office, where individuals and groups can rent out desks and rooms. It is an environment where people from different professions are working in the same space, and, thus, can help foster collaboration between workers. Because of the recent emergence of the business model, little research has been done in this area. Therefore, this project, in partnership with the City of Vancouver, Washington, seeks to look in depth into coworking spaces to understand the characteristics and components that define them and identify the criteria for a successful coworking space. Researching coworking spaces is important because this applicable hospitality research can help bridge the gap between research and real life implications. As stated by King, Funk, and Wilkins (2011), the issue exists of hospitality research not having a broad enough scope. Additionally, research does not always correlate to what hospitality professionals find important. Researching coworking spaces fills in some of that gap. The topic is new and rather unexplored, but could be a very relevant and needed service in the future, especially in Vancouver, Washington. The economic market in Vancouver is growing and there is bound to be new businesses, both small and big, emerging. Coworking spaces are a new breed of workspace for freelancers and small business professionals that could potentially help this growing economy thrive. This is why doing research on co-working spaces is important, especially for Vancouver. This research will explore what drives coworking spaces to be successful and the infrastructure that helps create that outcome. It will also delve into what current and potential customers look for in coworking spaces. This can help establish what a prospective coworking space in Vancouver, Washington would need in order to attract and retain customers. The close proximity of Portland, Oregon will add to the research. Portland is home to several operating coworking spaces and provides an opportunity to observe this business model in action as well as a chance to interact with those driving the business in the local area. Therefore, this research aims to answer three main research questions: 1. How can businesses benefit from using coworking spaces? 2. What factors influence customers to use coworking spaces and what criteria do they use in selecting a coworking space? 3. What are the key success factors for coworking space businesses? Research Report COWORKING SPACES P age 5

6 2. LITERATURE REVIEW Co-working is becoming increasingly popular, especially for businesses that take creative thinking, collaboration, and allow their employees to freelance work outside of the office. There has been a significant increase in people working independently, but it is found that working alone can take a toll on employees who neglect to have peer to peer contact. Working from home can significantly impact the ability to separate work from one s personal life. Co-working allows consumers who are involved in freelance work, nomadic work, distance and telework, or independent contracting to separate home from work by providing a work space, yet still allowing the independent structure of working from home. The ability for more people to work anywhere, but without isolation, is a consistently growing idea. Figure 1. The Entrepreneurial Mindset (Source: Hanson, 2013) In the United States, Brad Neuberg is generally credited as starting the coworking movement in 2005 when he organized Spiral Muse in San Francisco (Spinuzzi, 2012). By 2011, over 700 coworking sites had opened globally (Deskmag, 2011). Yamazumi (2009) argued that the knowledge society has shifted from mass production to inter-organizational collaboration. This shift results in new types of agency [that] are collaborations and engagements with a shared object in and for relationships of interaction between multiple activity systems (Yamazumi, 2009, p. 213). Co-working is defined as work that includes independent contracting, freelancing, virtual teams, and peer production (Spinuzzi, 2012). Liz Elam defined coworking as a membership club that brings people together who share the need for a place to conduct their business Research Report COWORKING SPACES P age 6

7 in an interactive space. Lisa McTiernan defined coworking as a nontraditional or part-time flex office space where [independent professionals] can truly get some serious work done, network with others in an environment that is affordable, low-commitment, flexible, and easy. Similarly, Perch s Facebook page specified that our space is designed to provide a wide variety of users with a creative, functional and affordable workplace community (Spreitzer, Bacevice, & Garrett, 2015). The most prominent research done in coworking is through interviews of those who use coworking spaces to find out why they use them and how they are beneficial when it comes to their work and business. Upon interview analysis of coworkers and the proprietors of coworking spaces, it is found that although each describes themselves as being part of the coworking community, the reasons why they feel benefitted differ at several points. Proprietors see it as a way to provide for the community and instead of providing services, they are providing space. The community work spaces defined themselves in terms of serving local communities; the object was to work alongside, but not with, others necessarily. It is important for there to be an opportunity to have quiet policies in their spaces, a characteristic unique to this category of coworking space. Both also had mixed uses, in keeping with their larger community-oriented missions. In contrast, the proprietors of some coworking spaces saw their sites as providing office space for those who do not work in an office but miss the interactions and amenities of the office environment. In contrast with the community work space, the unoffice encouraged discussions; interaction between the coworkers was an essential feature of this coworking space. The main take away from the data collected by different coworking spaces is that they are beneficial because workers have more job control and they feel part of a community. Consumers who use coworking spaces often enjoy the fact that they are able to move about freely and access their space at a decided time of choice. Most coworking spaces are open 24/7. They are also given the option to work in a quiet space or a more social, collaborative space. While coworkers value this freedom, it is also found that they value structure within their professional lives. Coworkers reported that having a community to work in helps them create structures and discipline that motivates them. Thus, paradoxically, some limited form of structure enables an optimal degree of control for independent workers. (Spreitzer, Bacevice, & Garrett, 2015). The second point, the feeling of belonging that comes with being a part of the coworking community, shows that coworkers value connection with others. Each space has its own uniqueness and its own vibe, provided by the management to create an experience personalized to the members of that space. An example being Research Report COWORKING SPACES P age 7

8 Grind, a coworking space in New York and Chicago. Anthony Marinos, who oversees Grind s marketing, community management, and member services, stated: When it comes to cultivating our community at Grind, we re all about the human element. We consider ourselves as much a hospitality company as we do a workspace provider. Our staff knows all of our members by name and profession, and we re constantly facilitating introductions between Grindists. (Spreitzer, Bacevice, & Garrett, 2015) Another example is the coworking community We-Work whose mission is to create a place you join as an individual, me, but where you become part of a greater we (Spreitzer, Bacevice, & Garrett, 2015). The beauty of it is that this type of socializing in a professional setting is not forced on members, but a great option. In the past year, there has been a dramatic increase in companies that use coworking spaces for teams or allow employees to work from them. Several types of companies are starting to use these spaces, businesses ranging anywhere from thousands of employees to twenty. Businesses are becoming more willing to allow the use of coworking spaces because it allows employees flexibility. By allowing this flexibility, this creates higher customer morale, and therefore contributes to better work habits and performance. It is also shown that spending time away from an office can help employees to become more creative in their work. For example, a company that focuses on marketing and consumerism can use the coworking space not just to work, but to explore and observe human behavior that relates to his or her work. Using others around themselves to spark new ideas and gain information is the most important contribution of using collaboration as a tool in a coworking space. Another reason businesses are starting to turn to coworking spaces is that it helps in teaching lessons that can be applied at the office. Flexibility is important, but so is having the ability and willingness to learn how to work with or around others. People want to be able to craft their work in a way that has purpose and meaning (Spreitzer, Bacevice, & Garrett, 2015). Companies believe that by allowing workers to use coworking spaces to complete work, they are also allowing employees to create connections, which can further contribute to business. Spreitzer, Bacevice, and Garrett (2015) suggest: The combination of a well-designed work environment and a well-curated work experience are part of the reason people who cowork demonstrate higher levels of thriving than their office-based counterparts. But what matters the most for high levels of thriving is that people who cowork have substantial autonomy and can be themselves at work. The growth in use of coworking spaces is expected to expand and become increasingly more popular in the near future. Research Report COWORKING SPACES Page 8

9 Research shows that companies who use coworking spaces often have greater levels of customer morale, which leads to higher productivity and success of workers. Businesses are starting to take notice of coworking spaces and the potential they offer to employees. Though reasons for wanting to use coworking spaces for out of the office work vary based on the type of company, some of the reasons big businesses are starting to make the move towards the use of coworking spaces is to search for development partners, cost savings, staff acquisition, the need to be "up to date" in order to grow, enhancing the capacity for innovation and the development of tools and applications based on its own product range (Stiefel & Reif, 2014). Companies are starting to see the positive impact that coworking spaces have on performance, and therefore how they may increase profits from the coworking movement. Figure 2. Benefits of a Freelance Workforce (Source: Hanson, 2013) According to Stiefel and Reif (2014), there are eight elements to why businesses are drawn to coworking: get away, sponsorship, rent, accelerator and incubator programs, takes away home office, educational, and sabbatical elements. Each of these elements proves that the research found is correct in that the spaces are beneficial because workers have more job control and they feel as though they are a part of a community. With this control comes the flexibility of getting away, whether it be from home or the company office. Flexibility is important, but so is having the ability and willingness to learn how to work with or around others. Some companies may sponsor the cost of a desk space for workers because they view the value of education and productivity as higher than the desk cost for employees. The sabbatical element of the coworking spaces, meaning the combination of leisure and work, is substantial in the use of project work, as it combines high standards as well as creativity and effectively improves motivation and retention (Stiefel & Reif, 2014). The conclusion drawn from this study shows that coworking is not just for freelancers and Research Report COWORKING SPACES Page 9

10 startup businesses, but can offer major benefits to companies. This is also valuable to coworking spaces because those that seize the opportunity of working with companies, can design their spaces to meet the needs of those employees and businesses, and therefore have a competitive advantage over other spaces (Stiefel & Reif, 2014). Not all coworking spaces are able to provide the kind of environment necessary to attend to consumers and business needs. These are the kind of coworking spaces that often fail. The main factors that contribute to the efficiency of a coworking space are location, building, infrastructure, layout, furniture, equipment, and sound levels. But more often than not, coworking spaces fail simply because they lack the ability to create a sense of community. Community is the key to a successful coworking space. It is an opportunity to bring a group of people together and create a sense of belonging, allowing for special areas of expertise and personal goals to shine through. Without this sense of community, there is no way for workers to thrive. According to Alex Hillman of Indy Hall (Bermudez, 2015): The truth is that for every failure I ve seen that blames it on some external factor, I ve seen spaces succeed with those same external factors because they got the community part right. Coworking spaces need to be seen as more than just prime real estate. Coworking spaces are created to allow people to collaborate, connect, and be productive, these factors create the happiness associated with working in these spaces. This happiness is what drives the movement of coworking spaces. Though these qualities can be copied, they are intangible, they cannot be replicated because you cannot replicate a feeling a space brings. In order to be successful in the coworking world, this sense of belonging has to be present within the space. 2.1 GLOBAL COWORKING SURVEYS At the 2011 Coworking Europe Conference, Deskmag (an online magazine about coworking, its people, and spaces) presented the preliminary findings from a global coworking survey. The key points of this survey touch on the importance of collaboration and community for higher productivity among members of coworking spaces. It also shows that coworking contributes to an individual s network, which can benefit ones business tremendously. Overall, the study shows that among the various benefits of coworking spaces, community is the most important aspect for its members. Research Report COWORKING SPACES P age 10

11 Over 1,500 people from 52 different countries participated in this survey. The two key findings that came from the survey were that coworking increases an individual s productivity and their network. Here are a few of the statistics (Foerstch, 2011): 92% said their social circle had increased a lot 80% said their business network had grown 75% reported an increase in productivity 86% said their isolation had decreased In addition to these, 96% of respondents said that community is a very important factor when choosing a coworking space. The survey also went on to ask members questions that related to trust with other members within the space, and what they liked most about their coworking space. Most of the answers in some way showed that community was the most important to most members. To conclude the survey results, Deskmag found that overall most members of coworking spaces were satisfied with their space. The average rating that members gave their space in the survey was 8.4 out of 10. The data closely relate to our findings, which show that social belonging is one of the most important factors that make a coworking space successful. Coworking space members want to join a space that fosters a sense of community and belonging for its members. This in turn helps people make connections and helps them grow their businesses. While there are many studies that can prove how coworking plays such a strong role in productivity and timely task completion, some studies suggest that using a coworking space can also make you work smarter. Renting a coworking space is cheaper than renting an office space in some areas, but that is not the main reason workers are drawn to spaces. The chance to be a part of the community of similar-minded individuals is the may lure. Spaces allow workers to adopt a support group, benefitting from others experiences, instead of trying to work out problems alone. Independent workers are learning to work smarter, not harder, by using the community for their resources. Research Report COWORKING SPACES P age 11

12 2.2 Regional and National Coworking Surveys A. Coworking Spaces in Europe According to a Coworking Europe 2010 survey (Huwart, Szkuta, & Osimo, 2010), over 150 coworking spaces have opened in various cities such as Amsterdam, Paris, Brussels, Berlin, Milan, Warsaw, Lisbon, Dublin, and Budapest. More than half of the coworking spaces surveyed were small, with 52% having only 8-19 seats. Less than one fourth of the spaces, at 23%, had 20 to 49 seats. And 19% had the capacity to fit 50 to 100 members. The remaining 6% are really large facilities that had the capacity to have more than 100 seats. A majority of the coworking spaces surveyed were commercial companies, making up 75% of the market. Less than one fifth at 13% are non-profit organizations which reinforces the assumption that coworking spaces are profitable, even if it is in the long run of these services. The public bodies constitute only 2% of the sample, and one fourth of the spaces (23%) have a different legal entity (social enterprise or other). Additionally, only 25% of the coworking spaces surveyed said that they have received support from local public authorities to launch their project, while 75% of the coworking spaces were launched through a bottom-up initiative. At 51% almost half of the coworking spaces that took the survey said that they based their business model on subscription fees, and the other half combined subscription fees with event organization or other services. There was no coworking space surveyed that mentioned government subsidies as its revenue. The other 2.1% said that they used other activity. It is suggested that it is another argument for a strong market value of these initiatives (Huwart, Szkuta, & Osimo, 2010). Most of the coworking spaces surveyed host an assorted mix of starting entrepreneurs, freelance workers and teleworkers (83%). Only 13% focus specifically on freelance and even less (4%) focus on starting entrepreneurs. Coworking Europe 2010 refers to another survey from Berlin University, which showed that women accounted for almost half of the sample (40%) and that the majority of coworkers range from 30 and 40 years old. A majority of the Coworking Europe 2010 survey respondents (66%) said that being in coworking space stimulated the creativity of the members to a large extent. Only one third was less enthusiastic and estimated that the creativity of the members is stimulated only every once in a while. Furthermore, a vast majority of the coworking spaces surveyed confirmed that the space generated at least one project started by coworkers who met in the coworking space (87%) (Huwart, Szkuta, & Osimo, 2010). Research Report COWORKING SPACES P age 12

13 B. Coworking Spaces in North America A recent survey of nearly 700 coworkers across North America, conducted by Global Coworking Unconference Conference (GCUC) and Emergent Research (King & Ockels, 2015), revealed many benefits of coworking spaces. Of those surveyed: 84% were more engaged and motivated when working in a coworking environment; 67% claimed that coworking improved their professional success; 69% feel more successful since joining a coworking space. The data collected also indicates that networking and the social aspect are what makes coworking spaces popular: 87% meet other members for social reason: 54% meet up after work and on weekends, 33% meet up during work hours 82% say that coworking expanded their professional network 80% turn to other coworking members for help, guidance, and to find or source work. Coworking spaces also provide the opportunity for learning and gaining new skills: 69% learned new skills by collaborating with other members 68% reported that working at a coworking space improved their existing skill set. On average those surveyed rated an 8.2 out of 10 in satisfaction with their coworking space. About 90% rated being highly satisfied or satisfied with their coworking space, only 5% rated being dissatisfied. Several key factors that play a role in making a coworking space successful: 95% said location was very important (68%) or important (27%) 83% said that a community manager was very important (43%) or important (40%) 82% said that the people in the space were very important (39%) or important (43%) 73% said that interior design was very important (26%) or important (47%). Out of the respondents to the survey millennials (aged 21-34) seemed to get the most out of coworking spaces: 88% said that social networks expanded versus 75% of non-millennials; 88% said that professional networks expanded for them compared to the 77% of non-millennials; and 79% said that they collaborated more versus non-millennials. On average, members work 23 hours per week onsite and visit about 3.5 days Research Report COWORKING SPACES P age 13

14 out of the week. 64% of those surveyed report that their coworking space is their primary work space, with 27% reporting that home is their primary space, and 9% saying other (client site, employer site, etc.) (King & Ockels, 2015). C. Coworking Spaces in United Kingdom According to DTZ (2015), a global leader in property services (merged with Cushman and Wakefield in 2015), the coworking industry in the UK has grown increasingly in the past few years. This growth is a response to several trends, one being that 74% of millennials want flexible work schedules and 88% favor the kind of collaborative culture offered by a flexible working environment over a competitive culture (DTZ, 2015). Another trend is that self-employment and micro businesses are growing rapidly. Both of these groups employ millions of people and the rate of their growth means many of them will contribute to future demand for more flexible working environments. According to the article s research if just 1% of home workers joined a coworking community, a minimum of 2.1 million square feet would be required to satisfy demand. And if just 1% of micro businesses took out coworking membership for their employees, a minimum 3.9 million square feet would be required to satisfy demand. Furthermore, the continued expansion of technology into every work place is enabling workers to harness services and devices in ways that will support increased flexible working. The continuation of these trends should support the strong development of coworking spaces. Ultimately, workers of different types and industries are starting to see the office as a sociable setting, private offices for concentration and confidentiality are rarely sought after. Traditional working environments do not meet these requirements and are no longer as desirable (DTZ, 2015). Based on Deskmag s Global Coworking Survey 2015, Social Workplaces (n.d.) produce a number of statistics and figures that represent the coworking space market in the United Kingdom (UK) compared to the global market. These statistics give a good insight on what growth looks like for the coworking market both in the UK and worldwide. Therefore, by looking at the UK coworking market, we can draw conclusions on what it takes to have a successful coworking space. According to the study, 43% of coworking spaces in the UK have 50 or more members operating within the space as oppose to the 38% globally. One contributing fact to why coworking is expanding more in the UK has to do with space. The study also showed that 39% of coworking spaces in UK have 50 or more desks as opposed to 34% globally. We could infer that coworking, being a relatively new business model and trend, is not as popular as traditional workspaces or working out of a coffee shop. In addition, 79% of coworking spaces said they had Research Report COWORKING SPACES Page 14

15 plans for expansion in 2016 compared to only 62% globally. This could be due to the fact that in the UK more space has been occupied and used for coworking. The demand is there, it is just a matter of meeting it with supply. Another important factor when considering the coworking space is the types of space. In the UK coworking is not just a success because of the amount of space provided but also because of the type of space provided. In the survey, 52% of coworking spaces reported that they hosted an open space and globally only 49% hosted the open space concept. The open space concept is one of the key elements to having a successful coworking space because it encourages collaboration and community. In our studies and the cases that we observed most respondents expressed a certain need for community and collaborative workspace. This coupled with the quantity demanded of space makes for a great coworking space market in the UK and a great model for global demand. C. Coworking Spaces in Brazil Movebla, one of Brazil s work style magazines, conducted a survey on the coworking space market in one of the fastest growing economies in the world today (Orlandi, 2013). The interviews were done in 2013 and were based on the Deskmag s Global Coworking Survey. Their questions were centered on the profile of the coworkers, their use and access of the space, the collaboration and integration that took place and their own private workspaces. One of the big findings was that job control was a very important factor for most coworkers. Most members are freelancers and entrepreneurs whose work is not static. In their survey they found that not all the members of the coworking space used their rented space all the time. The studies show that only 46% of members actually used their space daily which means that the other 54% work back and forth between their space and home or other workspaces. The importance of job control for coworkers doesn t just mean that members are able to work wherever they feel most comfortable that day, but rather it also relates to an individual s businesses and the needs of that business to be flexible in regards to meetings with clients and other requirements to run the business successfully. In their survey, they found that 59% of respondents expressed that it is important for them to have around-the-clock access to their desks for their business needs. This statistic shows that job control is very important for coworking space users. Aside from job control, this research done on coworking in Brazil shows that the sense of community and belongingness is strong within coworking space and that is what members are looking for. Fernanda Nudelman, founder of Brazil s first coworking space, Pto de Contato, explained that one of the most important aspects of their coworking space was the diversity and the fact that so many different entrepreneurs Research Report COWORKING SPACES P age 15

16 were collaborating on so many different projects that they all seemed to benefit (Orlandi, 2013). Looking at our research in comparison to theirs, there is a common theme, which is community and social interaction. In their analyses of the first coworking space in Brazil, they found that some very successful companies and relationships came from a collaborative work environment and that is the most important aspect of coworking spaces. 2.3 Major Trends and Forecasts According Shriar (2014), there are eleven factors that will eventually cause workers to leave their cubicles. These results were taken from three different coworking spaces. The data represents what was forecasted for the year It was stated that approximately 40% of the workforce would be independent contractors or freelancers, with 78% under the age of forty; which make up the majority of coworkers. In 2014, 70% of workers who were already working in coworking spaces 74% of millennials want flexible work schedules and 88% reported feeling healthier and even favor the kind of collaborative culture offered by a flexible more relaxed at home, than when working environment over a competitive culture. working in a previous office setting, (DTZ, 2015) with 68% claiming they have better focus in the coworking space. Of these coworkers, 64% agreed that they are more productive at completing tasks on time and 92% of the overall conducted population are happy with their coworking space. Creating more interactions and confidence through the use of the space was rated at 90-91% among workers. The 24/7 availability of spaces contributed to 50% of the population receiving higher income, as 30% of workers prefer to work at odd hours. The flexibility allows them to work whenever they choose to. These eleven facts are believed to be the reasons behind workers retreating from their cubicles and joining coworking spaces (Shriar, 2014). In 2013, Deskmag found that there were over 110,000 people working in over 2,500 coworking spaces around the world, with a continual growth rate of 83% per year, which concludes that they are doubling worldwide with every passing year. The reasons why coworking helps individuals work smarter is given the fact that on average 72% of workers wish they were doing more independent work that challenged and interested them, as well as having the desire to choose when, how, and where they worked. The balance Research Report COWORKING SPACES P age 16

17 that comes with separating work life from home life by use of coworking spaces accelerates work pace because there are less distractions, a professional environment is provided, and a secure high speed internet availability (Hanson, 2013). Figure 3. Growth of Coworking Spaces (Source: Hanson, 2013) In 2015 the worldwide searches for the term 'Coworking' on Google climbed by around 60% compared to two years ago (Foertsch, 2015a). And when looking back at the past five years, the search volume for 'Coworking' has increased six fold in comparison to other queries. This research shows us that people showing an interest in coworking spaces and are actively seeking out information about them. The demand for 'Coworking' on google has seen a climb. A stable upward trajectory can be seen in the USA. Compared to coworking, home office has seen a downturn in popularity. Even though it seems as though more people work in the home office, this trend does not manifest itself on Google. According to the author, the requests for this term have been cut in half worldwide (-57%) over the last ten years. In English-speaking countries, like the USA, the same trend presents itself only slightly less so (-43%). The author also looks at data from Wikipedia. On Wikipedia, 'Coworking' is the leading search term compared with other flexible workspaces, as a look at the retrievals on the English-speaking version shows. In total, information can be found in 23 languages about 'coworking'. Articles about coworking are currently requested by % of all Wikipedia users in comparison to all other pages. Coworking spaces on Wikipedia had total of 450,000 pages views in Five years ago, it only had 65,000 page views. Because of the trends found on google and Wikipedia showing how much people are searching for information about coworking spaces helps to support the data collected on how much people are interested in coworking spaces (Foertsch, 2015a). Research Report COWORKING SPACES P age 17

18 In a recent Global Coworking survey by Deskmag (Foertsch, 2015b), results of growth are not very different from past years. In 2015, coworking spaces were experiencing issues of location, pricing, and challenges in creating awareness of spaces. However, these issues have not impacted the growth of coworking in any negative way. It is projected that by the end of 2016, there will be an estimated 10,000 new coworking spaces open. There are many plans for expansion to occur in current coworking spaces, judging by the expected growth of the future. When interviewed, 62% of coworking space owners had plans to expand their spaces or add additional locations. In 2014, only 66% of spaces that were profitable planned to expand, whereas in 2016, profitability as at an all-time high and 78% owners plan to expand. With the projected growth rate, there will be a major leap in the number of members per space. For spaces that have 50 or more members currently, there is a 25% likelihood that expansion will take place. Businesses that have been in operation for months are also more likely to expand (69%), as opposed to those that have been in business for a year or less (52%) (Foertsch, 2016). With such dramatic increases expected for coworking spaces, there is a question of customer loyalty. In data taken for 2016, 4 out of 5 members plan to stay at their current spaces, but there is also data that states 15% of workers use multiple spaces if they travel consistently. There has been an overall increase in members that travel and approximately 1 in 5 members no longer work at their There will be an estimated 12,000 coworking spaces first tried out space. Member loyalty operating by Global Coworking Unconference Conference, 2014 also shares a link with certain populations. In major cities with high populations, 61% of members reportedly do not plan to change spaces, comparable to the 71% that would be willing to change, living in cities with less than 99,000 people. Location will play a highly important role in the expectations for future expansion of spaces (Foertsch, 2016). A research study distributed at the Global Coworking Unconference (GCUC) in 2014 forecasted the growth of coworking spaces from the years While it is estimated that 10,000 coworking spaces will be operating by the end of 2016, there will be an estimated 12,000 by The reason for this projected growth all lies behind the fact that there is an increasing number of members per each space. The number of members per space is increasing because of these given facts: new spaces tend to be much larger than the first generation of coworking spaces, existing spaces are expanding by adding more space and more members, and coworking facility operators have learned to optimize their space use and serve more members per square Research Report COWORKING SPACES P age 18

19 foot of space. It is expected that there will be one million coworking members by 2018 (Small Business Labs, 2014). Figure 4. Coworking Member Forecast (Source: Small Business Labs, 2014) Research Report COWORKING SPACES P age 19

20 3. CASE STUDIES Case 1: Digital Peninsula Network, Penzance The Digital Peninsula Network (DPN) was established in 1999 in Penzance, Cornwall, UK, with the goal to provide a community hub for collaboration and training for the information and communication technology (ICT) and digital sector, information technology (IT) and creative businesses in Cornwall (DPN, 2016; Work Hubs, 2010). As a resource center, part of their services is hotdesking facilities, room and equipment rental, and office services, which reflect the nature of the small business community of Cornwall. Much of our research and findings in relevance to what coworking space users look for in a space and what makes a space successful aligns with DPN s values and goals, which are to be the hub of training and collaboration for the ICT and digital sectors in the Penzance area in hopes of fostering productivity. DPN is a successful example of a coworking space that has implemented the right design and business model to create a productive workspace for freelancers who are working in the same industry. They serve the IT/ICT industry which includes website designers, programmers, Internet marketing specialist, etc. What DPN has found is that among the different amenities and services they offer, collaboration has played one of the biggest roles. In the past, DPN put out an annual survey that asked the space users how much turnover occurred with projects where they collaborated with other DPN members. What they found was that from 2002 to 2005 of the members they surveyed almost half of the 1.23 million that they made from their businesses came from collaboration with other members. To be exact 510,000 was directly subcontracted from member to member. Not only does this show the value in collaboration that our research has also yielded, but it also allowed the local government to score DPN higher among Objective One-funded projects. This was a win for DPN s funding source. Aside from training and collaboration, DPN has also found that amenities, office space flexibility and location have impacted their success in a positive way. DPN offers all the normal amenities for an office space along with different options for working such as hot desks, private areas, and meeting rooms. Location is a huge factor as well. Similar to our research, they found that it is important to members to be in a location where they can walk to stores, restaurants and coffee shops. Research Report COWORKING SPACES P age 20

21 Figure 5. DPN, Penzance (Source: cowork-klitmoller.dk) As our research suggests, DPN s success has come from its ability to bring small businesses and freelancers together in a collaborative working environment with all the right amenities and surroundings, which has boosted productivity for these businesses. Below are some statistics on the businesses and members that contribute to making this network a success (Work Hubs, 2010): 240 DPN members a large number, thought to be home-based; Provides a range of services from website design and internet marketing companies to software development and hardware systems installers; Runs two successful business networks: 4,050 Network Cornwall members (women in business) and 350 Cornwall Media Focus members (mainly filmmakers). Research Report COWORKING SPACES P age 21

22 Case 2: Agora, Berlin Agora is a Berlin, Germany based space that hosts people and collaborative projects based on a philosophy that reflects the values of its community: diversity, self-organization, and social ties (Agora Collective, 2016). Two initiators started the project with the idea of turning an old factory/housing building into a space for collaborative entrepreneurship and creativity. The success of this particular coworking space comes from its connections to social development in the area and the design/use of the building to create a collaborative workspace for different individuals with different needs. The initiators took a four-story factory building and gradually converted it into a hub of collaboration for different freelancers and businesses. The building is divided up so that the ground floor is used as a meeting area with project space along with a café. The first floor is a space for silent coworkers. The second floor is a dynamic coworking area, the third is designed for teams, and the fourth is used as an artist residence studio. Agora has found immediate success because of this mixed use of their floors along with community development. This strongly correlates with our findings which stress an importance on job control and social belonging. Figure 6. Agora s Workspace Concept (Source: Hubmann, 2014) A large part of Agora s success comes from their use of the building, which is a very important factor to consider for a coworking space startup. Our research shows that it is very important to coworking space users that they have the ability to control their work environment. At Agora the different floors provide coworkers with the different options that they want. The architecture, design, layout, furniture, etc. all play into the success of a coworking space. One of Agora s strong points is the lighting of the building. With a Research Report COWORKING SPACES P age 22

23 south facing front and large windows, the space has better lighting than most. Aside from the design of the building, which fosters a great coworking environment, the idea of offering three different coworking space concepts, communal areas, a garden and a café all make the space a hub for community development, which has led to, in recent years, a grant for European Union (EU) funds because of its impact on the community. This is reflected in the images below. In conclusion, the success of this coworking space is rooted in its primal use of the space to accommodate the different needs of the different users, the design of the space and Agora s contribution to collaboration and community development which is what users look for in a coworking space. Figure 7. Agora, Berlin (Source: coworkworldwide.com) Research Report COWORKING SPACES P age 23

24 Case 3: Commune, Sydney Some coworking spaces are designed to be used with specific career communities in mind. Commune, a coworking space located in Erskineville, Sydney, Australia, was created primarily for designers, events, and workshops for event planners, graphic designers, and interior designers. This case is important to note because it is the coworking space that is setting the standard for spaces in Sydney, Australia (Creative Spaces, n.d.). Deb Morgan, the creator of Commune, wanted to create a space unlike others she had attended. She could not find the collaborative, creative energy she was searching for among competing spaces. Morgan wanted to create a comfortable, woodsy vibe, for the space in order to make it not seem so cold, like a cubicle office (Creative Spaces, n,d.). This relates to the importance of structure and atmosphere. Structure is among the top priorities for why consumers chose a space, so Morgan decided to focus on the environment as a selling point. Some of the items and amenities in Commune that give it the comfortable feeling Morgan was searching for were pine tables and chairs, drawers, storage space, lockers designed to hold camera equipment, shelving, a refrigerator, kitchenette, comfortable vintage couches, using globes and maps as decoration, setting up fast internet connections, plants, website for the space, routers, printers, and office supplies. The goal was to create a spacious area, unlike the crammed together arrangements in other spaces. Morgan also made it a point to be very selective when it came to who was allowed to purchase the desk spaces. This relates to the portion of the research that demonstrates the importance of creating a sense of community and collaboration. With similar design backgrounds, careers, professions, and ideas, it would be easy for collaboration to take place; hence why Morgan needed to be selective in order to create the space she wanted (Creative Spaces, n.d.). Research Report COWORKING SPACES P age 24

25 Figure 8. Commune, Sydney (Source: thecommune.co) Research Report COWORKING SPACES P age 25

26 4. METHODOLOGY To answer the research questions, in addition to literature review and case studies, two types of information gathering approaches were selected: a survey and interviews. The survey was a means to gather quantitative research, whereas the interviews were to gather qualitative data. 4.1 Business Survey An online survey was developed with the city of Vancouver to collect information regarding customer opinions about service attributes, and to determine consumer s knowledge and demand of coworking spaces in Downtown Vancouver, WA. The survey was distributed to 50 different businesses in the Downtown Vancouver area. The link to the online survey was sent out to a list of business who might be interested in using a coworking space. The survey includes consumers inclination and opinions for coworking spaces on a 3-point rating scale. The survey was designed to answer the question if businesses would be interested in coworking spaces and allows the analysis of the market potential in Vancouver, WA for coworking spaces. The survey also helped determine how to run a successful coworking space by identifying consumer s expectations and desires when it comes to coworking spaces. 4.2 Interviews In order to further answer the research questions, interviews were conducted with three main target groups: coworking space owners, coworking space customers, and potential coworking space customers. The first target group is owners of currently operating coworking spaces. A list of coworking spaces in the Portland, Oregon area were created. Businesses on that list were contacted to set up tours of their properties. Observational data on the physical setup of coworking spaces and amenities were collected through the tours. Based on the tours, certain properties were chosen and contacted again in order to set up interviews with current owners or managers. Interviews followed the basic format set up in the Interview Protocols. Information from these interviews were compiled and compared to help identify trends in opinions and beliefs regarding the operation of coworking spaces and what can make them successful. The second group consists of individuals using coworking spaces at present. They were identified based on the properties whose owners are selected for interviews too. Owners were asked for permission to interview their customers, and from Research Report COWORKING SPACES P age 26

27 there individuals were asked. These sets of interviews sought to gather information on what current users of coworking spaces look for in a space, such as amenities and services, as well as why such a set up works for them. It was a method to gather demographic data on the people who use these spaces, especially regarding profession. The third and last group is made up of potential customers of coworking spaces. These individuals were found and approached at cafes. These interviews were conducted to compile information on the current knowledge potential customers have when it comes to coworking spaces, as well as their interest in using one, particularly if one were to open in downtown Vancouver, Washington. Research Report COWORKING SPACES P age 27

28 5. INTERVIEW FINDINGS 5.1 Coworking Space Owners We interviewed five owners/managers of coworking spaces in Portland, OR, including DeskHub, Collective Agency, TENpod, Forge Portland, and CENTRL Office. DeskHub is a chain of coworking spaces, with five locations from San Diego to Salt Lake City (Savills Studley, 2015). This space opened in Portland, OR in 2015 and can accommodate 200 workers (Savills Studley, 2015). Collective Agency is a smaller, single-site location that is very dedicated to its members and finding people who are passionate about what they do. They also stress the importance of community. TENpod opened in 2003 and just recently expanded to two locations. Forge Portland is a single-site location that has been open for one year. They emphasize sharing resources and working socially. The last space, CENTRL Office, opened about one and a half years ago. They are a multilevel office that also has event space and showers for their members. All of the interviewees are current managers at these coworking spaces: Madeline from CENTRL Office, Alex from Collective Agency, Rob from Forge Portland, Lorelei from TENpod, and Brian from DeskHub. The interviews took place from February 15 th to March 11 th of 2016 and were conducted in the respective coworking spaces. We were also given tours at the same time in order to get a sense of the space and find similarities in appearance across all of the spaces. The interview transcripts are provided in Appendix A. Figure 9. DeskHub, Portland (Source: deskhub.com) Research Report COWORKING SPACES P age 28

29 Of the five managers interviewed, two mentioned that they opened their business because they liked the idea of people from different professions working together and collaborating. Otherwise, the answers varied. One manager said that they saw a need for a coworking space, and that is why they opened one, another said that they saw the monetary advantages of the business model and thought it would a lucrative opportunity. The last manager, had a vacant building and decided to let people rent out desks there and work, creating the first coworking space in Portland, TENpod. When it came to the advantages of the business, three stated that the collaborating and chance to network are advantages, while the other two mentioned that the costs associated with the business model are low and that it is a convenient and consistent business for start-up companies. Figure 10. Forge Portland (Source: forgeportland.org) Figure 11. CENTRL Office, Portland (Source: centrloffice.com) Research Report COWORKING SPACES P age 29

30 Table 1. Toured Coworking Spaces Business Location Facilities Price Marketing CENTRL Office 1355 NW Everett St, Portland, OR Forge Portland Collective Agency TENpod DeskHub 1410 SW Morrison St #850, Portland, OR NW Sixth Ave, Suite 200, Portland, OR NE 45th Ave, Portland, OR NW 11th Ave, Portland, OR /7 access Conference rooms Kitchen Wi-Fi Coffee/beer Phone rooms Printer Showers Ping-Pong Lockers Mail service Parking 24/7 access Conference rooms Kitchen Printer/copier Coffee Wi-Fi Phone room 24/7 access Conference rooms Wi-Fi Bike parking Computer monitors Printing 24/7 access Conference rooms Alarm system Coffee Kitchenette Parking Mailing Printer 24/7 access Conference rooms Printer Wi-Fi Kitchen Mailing Storage $295 shared desk $395 private desk $995-$3295 private office $225 shared desk $325 private desk $500-$800 private office $150 basic membership $250 regular membership $375 membership and reserved desk $250 standing desk $335-$350 desk $400 flex newbie, or shared desk $500 fixed desk Price varies for private offices. Hosting events, reaching out to local businesses and hotels. Website and word of mouth. Social media and word of mouth. Website and word of mouth. Website and social media. All five companies chose to design their spaces to be very open and modern with four of them having a mix of both private and shared desks and just one having strictly shared desks. This was witnessed during the tours we were given. Bright open areas was a common theme among the all the coworking spaces. As for amenities, all five offered some combination of coffee/tea/kitchenette, printers, and conference rooms. All Research Report COWORKING SPACES P age 30

31 five offered some kind of 24/7 access to guests too. Three allowed anyone to come in 24/7, while two only let members with permanent desks in 24/7 and offered shared desks during standard office hours. This follows the trend of coworking spaces being open 24/7 as outlined in the literature review. Figure 12. Collective Agency, Portland (Source: desksurfing.net) The majority of the coworking spaces chose their prices based on market prices and conditions and all of the spaces had staff during office hours. The prices and types of spaces provided varied. CENTRL Office had shared desks for $295, Fore Portland for $225, and DeskHub for $400. Private desks were $395 at CENTRL Office, $325 at Forge Portland, $335-$350 at TENpod, and $500 at DeskHub. Private offices ran for $995-$3295 at CENTRL Office, $500-$800 at Forge Portland, and variable prices upon request at DeskHub. TENpod did not have specified shared desks, but did offer standing desks for $250. Collective Agency, on the other hand, did not have specific prices for desks, but rather different types of memberships. Their basic membership was $150, regular membership was $250, and membership plus a reserved desk was $375. The five interviewed spaces chose to market their businesses through a mix of social media/internet and word of mouth. Research Report COWORKING SPACES P age 31

32 5.2 Current Coworking Spaces Customers Eight current coworking space customers were interviewed. They were interviewed during the same trips where the coworking owners were interviewed, and, therefore, occurred during the same time period. The professions of interviewees included an entrepreneur, the director of a local Portland magazine, a software developer, a graphic designer, a supply chain manager, a wine business owner, a paralegal, and a broker for Studley Homes. Five of them first heard of coworking spaces through friends, two through the internet, and one from both. Seven of the interviewees mentioned that a convenient location was a large factor in their choice of space, while some additionally stating that they liked the atmosphere or environment. This is consistent with the findings from Digital Peninsula Network (in case 1), which found that location was a large determining factor in which space customers chose. Figure 13. TENpod, Portland (Source: tenpod.org) Most of the customers said that the advantage of a coworking space was the ability to get out of their home and have more space to do their work and focus. The desire to get out their homes correlates to the findings from Stiefel and Rief (2014), where it was determined that the sabbatical nature of coworking spaces and the ability to get away were attractions. When it comes to the disadvantages, the cost and difficulty with parking in downtown Portland were both mentioned twice. The most frequently mentioned amenities were coffee, quiet or private areas, printing, 24/7 access, WiFi, desks, chairs and other basic office supplies. Having quiet or private spaces goes along with the research in Agora, Berlin (Agora Collective, 2016). This Research Report COWORKING SPACES Page 32

33 case looked at the importance or structure within a coworking space and how a space can be divided to accommodate all types of workers. Current customers wanting areas for quiet work and privacy further validates this research. Thirty minutes was the limit on how far customers were willing to travel for a coworking space, or about 10 miles. Six of the eight customers preferred a quiet work space, while two preferred a more collaborative atmosphere. From the data gathered on the current customers, the drivers and deterrents to using a coworking space for current customers can be determined, as presented in Figure 6. BARRIERS DRIVERS Figure 14. Drivers and Barriers of Renting Coworking Spaces 5.3 Potential Coworking Customers Interviews with potential coworking customers were conducted in coffee shops with 26 interviewees. It was determined that the most likely users of coworking spaces are those who frequently go to coffee shops to work. Therefore, we targeted coffee shop customers specifically when looking for interviewees. Most of the coffee shops were located in downtown Vancouver, WA, including Starbucks, Compass Coffee, Bleu Door Bakery, Black Rock Coffee, and Peet s Coffee. These interviews occurred between February 15 th and March 25 th of Research Report COWORKING SPACES P age 33

34 Out of the 26 people interviewed, about half had heard of coworking spaces. Of the ones that had heard of them, the majority had learned of these spaces through friends. This is similar to the current coworking customers, where most of them had learned of coworking spaces through friends. Among the potential customers, 21 said that a coworking space would work with their profession. These professions ranged greatly, from business analysts to freelance workers to photographers. Coffee, WiFi, quiet meeting areas, and 24/7 access were mentioned most often when describing Most Frequently Mentioned Desired Amenities: Coffee desired amenities. The desired Reliable Wi-Fi amenities described by the potential Quiet Meeting Areas customers is very similar to what was 24/7 Access described by current customers, showing a strong need for certain amenities in any space as well as a strong correlation between these potential customers and actual ones. In the literature review and case studies, it was pointed out that customers appreciate quiet work areas, which can be further evidenced here though the responses gathered regarding desired amenities. The range of price points were great, which is from $75 to $1000. Generally, the respondents who stated lower prices were thinking of just a chair at a table, while the respondents stating the higher prices were thinking of private offices. The average price was around $390. As for distance potential customers would be willing to travel, the average distance was about 15 miles or 30 minutes. Twelve of the 26 were definitely interested in possibility of a coworking space in Vancouver, seven were somewhat interested, and seven were either not interested in general or not interested at the moment. The general cause of being uninterested was having a profession that did not work with coworking spaces. Research Report COWORKING SPACES P age 34

35 6. VANCOUVER BUSINESS SURVEY FINDINGS 6.1 Market for Coworking Spaces The survey sent out by the city of Vancouver was sent to 50 different businesses in the Downtown Vancouver area. Out of those 50 businesses, 19 responded to the survey, and 11 of those 19 responded to the questions regarding coworking spaces. Of those 11 respondents, 60% showed an interest in coworking spaces, while 40% had no interest. In comparison, 50% of the respondents had an interest in business incubators as well as a 50% interest in business accelerators. Because of the low number of respondents to the survey it is difficult to produce a clear picture of whether or not there is an interest by businesses for coworking spaces in Downtown Vancouver. Figure 15. Interest in Business Resources 6.2 Consumer Need for Business Resources In comparison to the 60% of respondents who showed interest in co-working spaces, 55 % of respondents say that they believe there is no need for coworking spaces in Vancouver. Only 27% of the respondents see a high need, and 18% percent say that there is some need for coworking spaces. Compared to coworking spaces, the data shows that respondents see more need for business incubators and business accelerators. Rather than needing creative spaces, respondents see a need for resources that offers support for startup businesses and will help them grow. Research Report COWORKING SPACES P age 35

36 Figure 16. Need Assessment for Business Resources 6.3 Access of Office Spaces One of the questions the survey asked respondents was how important accessibility to a variety of different office spaces were to them as creative firms and tech firms. Looking specifically at coworking spaces, 70% of the respondents said that accessibility to coworking spaces was important to them, while 20% said that accessibility to coworking spaces was very important, and only 10% said that it was not important. Overall respondents did not care what kind of office spaces it was as long as it was affordable, with 80% saying affordability was very important and 20% saying it was somewhat important. Figure 17. Importance of Access to Various Office Spaces Research Report COWORKING SPACES P age 36

37 6.4 Field of Potential Customers To determine the range of where the City of Vancouver should reach out to potential businesses, the survey asked respondents how far they would be willing to travel to get to work. Three-fourths of the respondents said that they would only be willing to travel less than 5 miles (37%) and up to 10 miles (36%) to get to work. This suggests that businesses that are in Downtown Vancouver or in the close surrounding area should be the main target when promoting coworking spaces in Downtown Vancouver. Only 18% said that they would be willing to travel miles to get to work, and 9% said they would be willing to travel more than 15 miles. Figure 18. Willingness to Travel to Work 6.5 Workspace Characteristics According the research that was discussed earlier in this document the main factors that contribute to the efficiency of a coworking space are location, building, infrastructure, layout, furniture, equipment, and sound levels. Collaboration and connectivity help coworking space customers be productive, and these factors create the happiness associated with working in a coworking space. The data collected from businesses that are not currently using coworking spaces supports this. On a scale of importance, from 1 being not important, 2 being somewhat important, and 3 being very important, respondents of the survey had an average score of 2.0 to 2.8 on questions asking them to rate how important they thought a characteristic was for a work environment. Research Report COWORKING SPACES P age 37

38 CONVENIENT LOCATION ATTRACTIVE INTERIOR DESIGN LOW COST (RENT) FLEXIBLE WORK HOURS QUIET AND SECLUDED PLACE CLOSE TO RESTAURANTS/CAFÉS CLOSE TO OFFICE SERVICES ABILITY TO MAKE CONNECTIONS WHILE ABILITY TO COLLABORATE WITH OTHERS ABILITY TO LEARN NEW SKILLS FROM OTHERS ABILITY TO SHARE KNOWLEDGE WITH OTHERS Figure 19. Importance of Workspace Characteristics 6.6 Coworking Space Amenities Through interviews with coworking space owners and existing coworking space customers, data was gathered on the amenities offered that have made those coworking spaces successful. Using this information we asked respondents of the Vancouver Business survey to rate how important certain amenities were to them for a coworking space. On average all of the amenities listed were rated as either somewhat or very important, with the top amenities being: meeting spaces, reliable Wi-Fi, 24/7 access, Most Important Amenities: and parking. Both the interviews and Meeting Spaces Reliable Wi-Fi the survey show that providing certain Access to Specialized Equipment amenities are important to consumers Parking and are what potential customers look for when searching for coworking spaces. Research Report COWORKING SPACES P age 38

39 RELIABLE WI-FI TECHNICAL SUPPORT PRINTING AND COPYING SERVICES LIBRARY MEETING SPACES (E.G., CONFERENCE ROOM) CAFÉ SERVICES KITCHEN OR KITCHENETTE 24/7 ACCESS ACCESS TO SPECIALIZED EQUIPMENT LOUNGE SPACES PARKING Figure 20. Importance of Coworking Space Amenities 6.7 Coworking Space Price Range To determine what potential customers would be willing to pay a month for a coworking space, we looked at three different types of offices normally offered at already existing coworking spaces: (1) a shared desk, (2) a private desk, and (3) a private office. Research was done on what existing coworking spaces charge to determine the price ranges. A majority of the respondents said that they would only be willing to pay less than $75 a month for a shared desk, making up 46% of the businesses that answered the survey. While 36% said they would be willing to pay $75-$150 for a shared desk, and only 18% said they would pay $150 or more. With this data it could be assumed that a price range between $75 and $150 a month would be the best option as those willing to pay more than $150 would fall into that category, making up 54% of the potential market. Approximately 70% of the respondents said that they would only be willing to pay less than $250 a month for a private desk, while the other 30% said they would be willing to pay $250-$500 for a private desk. None of the respondents said that they would be willing to go over $500 for a private desk. This shows that a majority of the potential customers that responded to the survey would be willing to pay more than $250 for a private desk. The last price range looked at is for private offices. 56% of the respondents say that they would only be willing to pay less than $500 a month. While 33% said they would be willing to pay $500- Research Report COWORKING SPACES P age 39

40 $1,000 a month for a private office. Only one respondent said that they would be willing to pay $1,000 a month for a private office. Figure 21. Willingness to Pay for a Shared Desk Figure 22. Willingness to Pay for a Private Desk Research Report COWORKING SPACES P age 40

41 Figure 23. Willingness to Pay for a Private Office Research Report COWORKING SPACES P age 41

42 7. RECOMMENDATIONS There is definitely interest in having a coworking space open in Downtown Vancouver. This can be gathered from both the interviews and the survey. Approximately 46% of the potential coworking space customers interviewed stated that they would be very interested in using a coworking space in the downtown area if one were to open and 60% of respondents to the survey said the same. Results from the survey also shows us that 90% of the respondents believe that access to coworking spaces is somewhat Interested in Coworking Spaces? to very important. Although the total 46% coffee shop customers said yes number of people who said that they 60% local businesses said yes are interested is small, it shows that there is some market potential for the business model in the Downtown Vancouver area. Should a coworking space open in Vancouver, various recommendations can be made regarding the structure and general setup of the space. First of all, location will be very important. As outlined in the literature review, case studies, and interviews, location is a key factor in customers choosing a space. Both interviews with potential customers and survey found that most customers are unwilling to travel more than 15 miles, or 30 minutes, to reach the space. That means the scope of potential customer most likely falls within a 15 mile radius of the Downtown Vancouver area. In addition, Case Study 1 mentioned the desire to have food options within walking distance. The structure of coworking spaces is also important for customers. Customers like having different areas for different functions. As evidenced through interviews, the ability to have quiet areas and private areas is needed in order to allow them to focus on work. Having separated structure (with areas to socialize) will also add to the sense of community, which was highly stressed throughout this research. It would give like-minded individuals a place to work in the way that they want to work, allowing for opportunities to collaborate too, if wanted. Another key factor is amenities offered. Standard office amenities, such as fast internet or Wi-Fi and printing, will be required. In addition, 24/7 access, coffee, and private meeting rooms are strongly suggested as they were consistently found in various interviews with potential and current customers. Price will also be very important. The survey ranked price as the most critical factor, and several interviewees mentioned price as a disadvantage to coworking spaces. Price will depend on the type of space offered, whether it is a shared Research Report COWORKING SPACES P age 42

43 desk, a private desk, or a private office. All coworking space owners stated that their prices were at least partially determined by market prices (i.e., how much their customers are willing to pay) and the prices other spaces are offering (i.e., competition). As found through the survey, most respondents are unwilling to pay more than $150 for a shared desk, with the majority unwilling to pay more than $75. For a private desk, respondents were unwilling to pay more than $250, and for a private office, they would not pay more than $500. However, beyond the tangible aspects of the business, the intangible are equally important. The tangible part, including location, amenities, and price, may be what initially attracts customers, but it is the intangible that can make them stay for much longer. As emphasized throughout the research, a sense of community and belonging is essential. This sense of community can greatly increase the happiness of those who work in coworking spaces, which can lead to greater productivity and the desire to continue using such spaces. Adding a sense of community can be done in small ways. Some coworking spaces that were interviewed would host small events for their members or have free dinners Being able to work with others and gain new ideas can periodically. Others would help further add to the sense of community and belonging. members advertise any events they Making areas where members can socialize or relax can were hosting or spread the word about foster collaboration. upcoming local events. It is these small characteristics that make up the atmosphere and energy of each individual space. Additionally, creating an environment where collaboration can occur is important. Being able to work with others and gain new ideas can further add to the sense of community and belonging. Making areas where members can socialize or relax can foster collaboration. It can also be done through small community events or anything else that helps members connect with one another. These intangible qualities are what define one coworking space from another, and if done right, can lead to a successful and long-lasting coworking space. Research Report COWORKING SPACES P age 43