Where the Coffee Shop Meets the Cubicle

In the earliest stage of his startup Darius Roberts, 27, shared the de facto office of many a San Francisco techie: a coffee shop.

Working out of a Wi-Fi-enabled java joint in the Mission district was infinitely more pleasant and productive for him than flying solo in a home office at his Oakland apartment. And it provided the opportunity to meet other developers he might even be able to hire one day, as his Web-based car-sharing company, DartCar, grew.

But when Roberts picked up a flyer about a "community office space" called the Hat Factory, he realized there was an even better option. For $10 a day or $170 per month, the Hat Factory could provide him with a desk, standard office amenities, and access to a shared kitchen, private meeting room, and lounge. And something else—community spirit. "You can meet people at a coffee shop, but it's harder to have meaningful interactions," Roberts says. "Co-working lends itself to that."

Not Just for Startups

Over the past few years, co-working facilities—both grassroots, co-op-like versions and for-profit models—have started popping up across the country and the world, from Seattle to Copenhagen. A co-working wiki hosts pages for dozens of other cities with co-working initiatives in progress. And while the concept of shared office space is nothing new to entrepreneurs, an increasing number of them are signing on and finding that the community-building and networking benefits outweigh even the virtues of a shared fax machine.

In a recent report on the future of small business, the Silicon-Valley based Institute for the Future pegged co-working as a trend to watch over the next decade (see BusinessWeek.com, 1/31/07, "The Face of Entrepreneurship"). After co-working first took off with clusters of free-agent programmers and writers, its flexibility and low cost have also proven a good match for startups unwilling to sign a long-term lease. Because many of these facilities operate on a gym-membership model that doesn't assign workers to specific desks, co-working is cheaper than most subleasing arrangements. And unlike traditional business incubators, co-working isn't just for startups with high-growth potential.

The study's lead author, Steve King, says the increasing popularity of co-working facilities reflects the rise of one-person "personal businesses" as well as a broader fluidity between virtual and real-world communities.

Creating Communities

"When we talk to small-business people about their personal businesses, the biggest complaint we hear is about loneliness and the lack of social networks," King says (see BusinessWeek.com 3/22/00, "Battling Isolation When Working at Home"). Although "virtual offices" can fulfill the physical needs of many free agents by providing a mailing address, phone services, and meeting rooms as needed, co-working facilities help fill the social needs people have as well—either informally, by simply bringing together a group of people with similar interests, or formally, through networking events, holiday parties, and even softball leagues.

Fostering community spirit wasn't part of the business plan when Jude Siddall and her husband Gary Romain founded Seattle-based ActivSpace during the mini-storage boom of the mid-'90s. Their idea—renting out small rooms in no-frills warehouse-style buildings—was a hit with hobbyists and small-business owners looking for a low-cost way to reclaim their basements and garages. Though the buildings weren't designed with any community spaces (too expensive), Liddell found that tenants clamored for community anyway, using empty suites to throw wine and cheese parties. The newest ActivSpace, now under construction in San Francisco's Mission district, will be the first with a dedicated gathering place, in the form of a cafe.