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The Coworking Value Proposition – Part 2 (Members)

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In Part 1 of this Series on the Value Proposition of the Coworking Industry, I provided an overview of how an increase in the distributed workforce is driving change in the traditional office model. While many remote or distributed workers have depended on a home office or coffee shops to fulfill their workplace needs, these are not the ideal setting for a productive worklife. Coworking is the right solution, and the industry is just getting started.

Goldilocks & the Three Bears (St. Nicholas serial, 1873)

Over the course of the next four entries in the series, I’ll go through what the value proposition of coworking looks like for each major stakeholder in the industry: members, commercial real estate, employers, and communities. As the operator of a coworking space, these are the groups that are most important for me to consider when establishing and communicating the value of my business. For each of these groups, I’m going to ask & answer the same five questions with that group’s perspective in mind:

  1. What are the benefits of coworking?
  2. Why are these benefits valuable?
  3. What are their main problems?
  4. How does coworking solve these problems?
  5. Why is coworking the best solution to these problems?

As members are the lifeblood of coworking spaces, that is where I’d like to begin.  This is likely the group I’ve seen the most written about, but its also the most important and thus is very deserving of the attention.

What are the benefits of coworking for members of coworking spaces? 

Distributed workspace: Coworking spaces provide professional work environments away from a corporate office besides a home office, coffee shop, hotel lobby, or library. This includes good desks and supportive chairs, fast and consistent internet access, well designed work areas, private spaces for calls and client meetings, as well as coffee and snacks to keep you going throughout the day. (For more, check out the base level in Maslow’s Hierarchy of Needs for Coworking Members)

Flexible workspace: Coworking spaces offer flexible membership & lease terms that can vary from as short as hourly, daily, and monthly, to multi-year leases (*although with the new IPFS16 standards, leases 12-months and shorter are the most desirable –  need to write more on that in another post). The workspaces themselves are flexible as well. Most coworking spaces provide a range of casual café or lobby seating, open desk space, and private office suites.

Affordable workspace:  Particularly when compared to the overhead costs of renting and maintaining private commercial office space, coworking space memberships are extremely affordable. For the cost of one membership, the office space, utilities, meeting space, restrooms, kitchen amenities, and more are typically included.

Connected workspace: Coworking spaces have professional communities, other people around to provide human interactions, even if small.

Why are these benefits valuable? 

A full time job averages over 2,080 hours per year. That’s a lot of time, so there should be a high bar placed on what those workplaces offer to make that time pleasant and productive. And as more people are able to participate in remote work, the infrastructure to support that workforce needs to be where the workforce is – coworking spaces provide that infrastructure. For more on why I think the benefits of coworking are valuable, see “Maslow’s Hierarchy of Needs for Coworking Members”. What it comes down to is time is valuable, and the more productive those limited hours are, the more valuable they become.

What are the main problems being faced by customers?

Productivity. For those that can work remotely, there is still a need for somewhere to work and do so productively. For those that freelance, are on small teams, or work for themselves, there is still a need for somewhere to work and do so productively.

Work-Life Balance. Long commutes are detrimental to personal health and time, and to the environment. Costs of living are often too high near a corporate office to be able to move closer (think Silicon Valley/New York City) and moving is not always a good option when it takes a family away from their social support network.

How does coworking solve these problems?

In short, by providing flexibility & community, and everything else needed to achieve a high level of productivity.

By providing a professional work environment where it is needed, not where a person is told to be. Good internet access to ensure digital connectivity, nice office space for ergonomics and to support focused work, a community of other professionals to support human connection when desired. Locations distributed throughout communities, from downtown centers to rural towns. Varied workspace for focus, for collaborative space, for privacy, casual work, etc. Easy to access, flexible for when life changes.

Why is coworking the best solution to these problems?

Coworking spaces meet the professional needs of the distributed workforce, but they also help meet our personal needs by decreasing loneliness and increasing autonomy in how, where, and when to work. A recent FlexJobs Survey found that the reasons professionals say they would prefer to work from home rather than a corporate office included a decrease in distractions, a decrease in interruptions from colleagues, less stress from a long commute, and less office politics. While working from home can provide these benefits, there are even more downsides that cannot be ignored: home life distractions, isolation from peers, reduced work-life delineation, no professional meeting space for client meetings, etc. Coffee shops and other public spaces may remove the feelings of isolation to a degree, but only because of the presence of people. They lack the peer networking opportunities. Often they are too casual, can offer little to no privacy, may be noisy and thus distracting, and may not provide the level of stable internet connectivity and hours that are required for a truly productive work life.

Coworking spaces are the goldilocks solution for the distributed workforce. They are not the too-rigid corporate office or too-casual home office or coffee shop. They are just right.

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The Coworking Value Proposition – Part 1

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Between being a coworking space & building owner the past five years and being the co-founder of a software company focused upon supporting the operation of coworking spaces, I have spent a lot of time thinking about the industry. Not just my own space and its growth and performance, but how the industry fits into the overall evolution of the workplace and what its trajectory is going to be in the upcoming years.

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The traditional corporate office is becoming antiquated and many corporations have already experimented with changing their operations to attract and retain employees – from adding perks like fancy chefs and on-site dental care to replacing the old cubicle with hip open office plans. Some of these experiments have worked better than others, but ultimately have not resulted in the increase in employee productivity and satisfaction that was desired. As digital tools have become more available, the movement from the corporate office to remote options has been gaining momentum. There is no denying that the future of work is distributed. Over 50% of employees across the globe are working part time remotely and that number is estimated to grow significantly in the next few years.

The need for a professional office environment for those workers, however, has not diminished as a result of movement. The coworking industry has not kept up with the need for distributed workspace. When a good solution is not available, we improvise and use what is accessible instead. An example of this is the number of remote workers that work-from-home or from coffee shops. There was first a rise in the number of employees working from home, taking advantage of telework policies. Then, as wifi became more accessible, many of those same employees filled tables at the corner coffee shop. The increase in the use of home offices and coffee shops was not a result of those being the best workplaces, but rather the only alternative options for so long. Likewise, commuting long hours to a main company office. People don’t commute because they will be most productive and happy at that office, they do so because there has not been a viable alternative.

That has begun to change, and it should. The demand for office space has become distributed.

The mission of the coworking industry is to drive the decentralization of the workplace that increases the productivity of the workforce. Coworking spaces provide a professional office environment wherever and whenever one is needed.

The value proposition of the coworking industry is a strong one. This is why there has been such a buzz around it in the past few years. While still a very young industry, it was already proven its not going anywhere. What exactly is the value proposition for coworking? In this series of posts, I’m going to explore that from the perspective of users of coworking spaces, commercial real estate owners, employers, and communities.

It’s not enough to articulate a value proposition for an entire industry, it is also important for the individual companies within the industry to articulate their own value, and then deliver on it. My hope is that not only will this series serve as a guide for my fellow coworking industry colleagues on how to craft compelling messaging to attract and retain members in their own spaces, but provide some perspective on the industry as a whole, whether you’re in the business or not.

Stay tuned or subscribe to this blog so you won’t miss the next entry!

  • Part 1: The Value Proposition of the Coworking Industry: An Overview
  • Part 2:  The Value Proposition of the Coworking Industry: Members
  • Part 3: The Value Proposition of the Coworking Industry: CRE
  • Part 4: The Value Proposition of the Coworking Industry: Employers
  • Part 5: The Value Proposition of the Coworking Industry: Communities
  • Part 6: Creating a Value Proposition for your Coworking Space
  • Part 7: Delivering on your Value Proposition
  • Part 8: Communicating your Value Proposition
Maslow's Hierarchy of Needs

Maslow’s Hierarchy of Needs for Coworking

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Coworking spaces pride themselves on offering a great workspace and communities of peers to work around. Building and maintaining a thriving coworking community requires an understanding of what members need in order to be productive.

What is it that members of coworking spaces need? At the most basic level, a place to get work done. Better than they could find at home, the local coffee shop, or their company headquarters.

Is that all they need? What is it that motivates someone to pay for a membership at a coworking space? Am I providing it? As the owner of a vibrant coworking space, this is a question that I return to on a daily basis. It drives every business decision I make. If I didn’t continuously evaluate this question, I would lose members and my revenue source. In the coworking industry, members are everything.

To explore this more deeply, I’ve turned to Maslow’s Hierarchy of Needs, a positive theory of human motivation first proposed by American psychologist Abraham Maslow in his foundational 1943 paper. The theory outlines both the basic needs of human beings as well as the order in which they need to be satisfied for a person.

Maslow’s Hierarchy of Needs, adapted for members of coworking spaces.

The needs, which I’ve adapted for members of coworking spaces, are categorized by Maslow as physiological needs, safety needs, needs for love & belonging, esteem needs, and self-fulfillment or self-actualization.

Basic needs

Physiological – Physiological needs are the most fundamental. They pertain largely to requirements for personal comfort. In a coworking space, this starts with the quality of the physical space itself. A coworking space must have nice desks and comfortable chairs that are conducive to working at a computer for long hours. There should be good lighting, comfortable temperatures, good air quality, and clean bathrooms. The environment should have minimal distractions to allow for focus and concentration. And coffee is a must. Lots of coffee.

Safety – First and foremost, safety and security for coworking members means trust. Trust that there will be reliable internet access so they can do their jobs and maintain their own personal financial stability. Trust in a safe building, through access control, security cameras, or well-established community rules and good staffing to assure members of their privacy and personal security while they are at work. And trust that their interests will be taken into account when changes are being made to the work environment.

Psychological needs

Belonging – As humans, we need love. Beyond our family and social circles, we need to feel a sense of belonging in our larger circles, including our professional ones. Professional relationships can combat feelings of isolation and loneliness. Sometimes, just being around people is helpful.

Esteem – Professionally, coworking members are seeking to be productive in their jobs or careers. They want to achieve their professional goals, and thereby receive respect and recognition for those accomplishments.

Self-fulfillment needs

Self-actualization – Self-actualization is narrowly defined by Maslow in the following way,  “This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming.”

A coworking space, or any business, that serves the higher and largely intangible needs of their customers will be rewarded with a more satisfied, more loyal customer base. And that translates directly to value for a business that is solely dependent upon its members.

As coworking space owners, we should follow this hierarchy consciously and deliberately. It is easy to focus upon the lower levels needs of our members. We spend lots of time and energy picking out the right paint colors, the location of our space, the layout, the furniture, or the artwork. There are building access solutions and policies to help with safety & security and great bandwidth is something I worked on before even picking up paint samples.

Meeting psychological needs is the reason many professionals choose to pay for a coworking space. The basic needs around physical space and safety can often be met at a home office, but friendship and professional relationships become more difficult when working for long hours in isolation. Coworking spaces offer a great way for freelancers and distributed workers to maintain positive professional social connections.

As Maslow wrote, “if all the needs are unsatisfied, and the organism is then dominated by the physiological needs, all other needs may become simply non-existent or be pushed into the background.”

The fastest way to lose members is not meeting their basic needs. 

It’s clear that a member that can’t find a private place for a phone call, experiences intermittent connectivity, or can’t stand the fluorescent lighting has a likelihood of canceling their membership. Less obvious is a member leaving as a result of their psychological needs not being met. A coworking space that is making adjustments only in the snack cupboard and is not putting enough effort into fostering potential interactions among members is missing a key component of member retention.

Determining where to focus efforts as a coworking manager and also discerning between what will impact a physiological need and a psychological one is hard. It can feel a bit like whack-a-mole tending to everything members ask for. That is, if you don’t have data to help you see what the needs actually are. Will your members talk to one another more if you offer a big after-hours event, or if you simply put out donuts & bagels one morning? If you are spending too much time tracking invoices and expenses, do you have the bandwidth to create a new customer pipeline for your unused meeting space? Do you know how often your meeting space is being used?

Having a complete picture of how your members are using the space is the only way to know how to meet their needs, from the most basic needs like lighting and furniture, all the way to helping them achieve self-fulfillment.

Achieving one’s full potential even partially as a result of where you work is where things get really interesting, and the research is clear – people that work from coworking spaces thrive. According to research conducted by a team of productivity researchers, members of coworking spaces see their work as meaningful, they feel in control of their job and their work, and they feel a sense of community.

Having a great workplace with a strong community, members have the bandwidth to focus upon their self-fulfillment. One of the largest factors that the researchers attributed the higher levels of productivity to was the autonomy enjoyed by workers in coworking spaces. When someone is able to bring their whole self to work and is not bogged down by unmet lower level needs, they are able to bring the best of their energy, their creativity, and problem solving skills to their work.

A coworking space that can help their members achieve this type of outcome is one that will enjoy high levels of member satisfaction, retention, and the best business outcomes.

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The value of time.

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As a physicist, I know a thing or two about time. I have spent countless amounts of it pondering its meaning, its measurement, and our relationship with it. I have lectured on how the gravitational pull of a black hole affects it and how it slows down if you are moving at close to the speed of light. So when I say that time is our most valuable asset, I mean it.

Image by Gerd Altmann from Pixabay

These days, although I may not be working to uncover secrets of the universe, I am still very much working on the importance of time. My focus now is on getting more leverage on my time so that I am spending more it of doing the things that are most important to me, both personally and professionally.

Personally, that meant doing things like moving to Lake Tahoe and away from the soul crushing traffic jams of Silicon Valley. When my oldest was a baby, there were way too many nights that my husband didn’t make it home from work before bedtime. Even my 5-mile commute could sometimes take an hour. Now, the time we used to spend in rush hour traffic is spent enjoying the trails and beaches of Tahoe with our daughters. We are both home to do things like work on homework with our oldest, actually cook a nice meal, and play with our toddler.

Professionally, its easy to never have enough time, particularly when it comes to running our coworking space. As a coworking space owner & manager, I have a bazillion different things that need to be done each day, and it is impossible to do a bazillion things well. There’s coffee to make, desks to be rented, tours to give, building maintenance to schedule, bathrooms to clean, dishes to put away, forks to buy (again), interns to manage, coffee to make (again), social media posts to write, events to plan, calendars to manage, expenses to track, community to build, and on and on.

I know I am not alone in my juggling act. It is one of the most common topics I see brought up by other coworking colleagues. It is all too easy to get bogged down in the tasks that keep us busy each day. The trap of being busy is a dangerous one. While it may feel like working hard, its not necessarily working well. Time at work should be focused on what is most important to make my business better, more profitable, and more resilient.

What is important for my business? Members, members, members.

Rather than spending hours buried in spreadsheets and databases, it is more important for me to be spending face-to-face time with my members. I love talking with them, learning what they like and need, and helping them so they can get the best leverage on their own time by working from my coworking space. The more time I have to spend actually with my customers, the better. Those interactions are what help inform decisions on space allocation in the building, on the events we host (or don’t), on additional product lines we offer, and what amenities we invest in.

In order to have enough time for the human part of the business, the busy parts need to be handled in a much more efficient and automated way. However, no matter how much time I personally spend with members, there is still only so much I can learn about their needs from the space or remember from the interactions I have with them.

This is why building Jellyswitch has been so important to me. What is needed is a balance between complete automation and manual management for coworking. Things like conference room calendars, billing, and building access don’t need the same human touch as space design, tours, or events, and can be operationalized. At the same time, it’s important not to lose the information and insight that can be gleaned from all of the little human interactions that happen day to day. Managing and tracking everything in one place rather than across multiple systems or not at all, I am able to see the full picture. And with that view, I can make the most of my most valuable asset for the benefit of my customers & my business. My time.