Co-working Space: Catalyzing the Entrepreneurship Culture

Demand for co-working spaces has been gaining traction around the world since its introduction in the US in 1999. The increasing trend toward entrepreneurship over the last decade has further precipitated demand for these co-working spaces. According to Deskmag (Co-working magazine), there are 2,150 co-working spaces worldwide, 1,000+ of which are located in the U.S. (a number that is growing rapidly).

Over the last five years, co-working spaces have been gaining acceptability among users, especially due to increasing costs associated with renting out independent offices. These spaces also act as a hub for sharing ideas and building networks which are essential for any entrepreneur. Due to possible synergies, the number of co-working space users has increased exponentially over the years, increasing from 9,900 in 2009 to 82,000 in 2012.

Internationally, co-working spaces have been offering a number of values to their clients, which include – low cost, convenience, flexibility, and community of co-workers. Alongside, many co-working spaces regularly offer courses and workshops for improving the business management skills of entrepreneurs.

The main benefit of a co-working space is the opportunity to interact with like-minded people. These interactions pave the way for fostering innovative ideas which may result in groundbreaking new products. Other perceived benefits include knowledge sharing, low costs, flexible work time, random discoveries & opportunities, etc.

The revenue for a typical co-working space comes predominantly from desk charges, while the other sources include meeting space rent, event space, food & beverage, and tickets for events. Survey results show that desk charges, on average, constitute 61% of total revenue while meeting and event space contribute 19% of revenue between them.

The popularity of co-working spaces is mainly propelled by rising rent for commercial and residential properties. With the increasing urban population, the price and rent of properties are expected to shoot up further. Hence, co-working spaces will prove a cost-effective alternative for fledgling entrepreneurs.