The Future of Coworking: a Q&A with GCUC’s Liz Elam
In 2011, there were 1,130 coworking spaces with 43,000 members. Now there are an estimated 3,800 spaces around the world, with more than a million people coworking. In that time, coworking has gone from a small movement to a global industry.
We spoke with Liz Elam, executive producer of the Global Coworking Unconference Conference (GCUC) and founder of Link Coworking in Austin, Texas, about the current state of coworking, where the industry is headed, and the changing nature of work. Here are the highlights of our conversation.
Cat Johnson: We know that coworking is experiencing incredible growth around the world. What does that look like on a practical level? Who is building spaces and why?
Liz Elam: We’ll see the biggest surge coming from corporate America. It will be directly tracked back to disengagement of workers. It’s an innovate or die moment. If companies don’t include coworking into their business, people will vote with their feet. They don’t have to work for you—they will go where they want to be.
By corporate coworking, do you mean spaces for corporate employees or spaces that are owned by corporations?
All of the above. And also corporations turning their spaces into what feels and looks more like a coworking space.
How is that growth impacting the workplace industry and coworking movement as a whole? What kind of changes are you seeing in the industry?
We’re seeing a lot more competition than we’ve ever seen before. For a long time, the mantra was, ‘You can’t build them fast enough for the growth coming your way.’ But in little Austin, Texas, we’ve got two million people, 55 coworking spaces, and more on the way.
There is a lot more competition, so it’s starting to drive change in the industry. I don’t necessarily think that’s a bad thing. You have to become more nimble; you have to look at other sources of income; you have to produce events. You can’t just open a space and think people are going to come in. That’s never worked and that’s more so now than ever.
Aside from events, what else are people doing to innovate and drive change in the industry?
One of the things coworking has traditionally poo-pooed is virtual mail. People are starting to figure out that virtual mail is a great business. It’s also a way to get people to see your space. There’s still a need for people to see coworking to understand coworking. Just talking about it doesn’t really do it—you’ve got to experience it.
From your industry insider perspective, where do you see coworking going from here? What do you think things will looks like in one year or three years?
I think we’ll continue to see incredible growth. I think we’re going to see a lot more operator models. I think we’ll see a lot more corporations enter the market. The really good news for coworking operators—that we’re just starting to see—is that there will be a lot of sponsorship opportunities available to operators that weren’t there before. I get a unique peek into that because of my work with GCUC.
Red Bull was one of the first ones to figure out that coworking spaces are, in fact, a marketing goldmine. The people in coworking spaces are early adopters, they’re brand advocates, and they’re the right people to get a product in front of because, if they like it, they have large networks and they’re going to tell people about it.
Coworking spaces are part of what I like to call the recommendation culture. People come into the space and say, ‘I’m thinking of buying this car,’ and everyone will turn and participate in the conversation about why that’s a good idea or a bad idea.
When we’re looking at a small community-focused space that has maybe 25 or 50 members, and then an international chain that’s valued at $16 billion, are we still talking about the same industry or movement? If so, what common goals do all these spaces share?
Even though there is a big elephant in the industry, they still walk the walk of wanting to be a communal space. They’re still providing the human interaction that is much-needed in the coworking industry.
I think it’s a really good thing that WeWork is choosing to brand themselves as coworking. It’s an indication that we’ve really struck a chord in the world. Regus has a coworking brand, as well, and they’re proliferating that very quickly.
The good news is, in talking with Steve King from Emergent Research, there still is enough demand for everybody, and then some. But in certain markets, you’d better up your game or you will go away.
I do think we’re in the same industry. I think three years down the road we’re going to see lots more operators, lots more sponsorships, lots more players, and a massive proliferation of corporate coworking.
What do you think is the most exciting thing about this shift in the way people work?
The thing that makes me so happy is that people are forcing a change that is reverberating across the world. Working in a grey cubicle, with crappy lighting, is no longer acceptable. At a very huge level, the people have risen up and said, ‘This is not okay and I’m not going to work that way.’
It’s a power to the people thing. We all have to work—we’re not all Peter Pan—but we can now choose where and how, and that’s revolutionary.
What are the biggest challenges the industry faces right now and how are operators working through them?
The biggest challenge is growth: how you grow, and how you handle the growth in your city. I’ve seen it hands-on with my own spaces in Austin. It’s good, in that it forces you to pivot and change and grow and reorganize things and perhaps reconstruct your space, but those things take money.
Coworking has always been a low-margin industry that was powered by passion. That’s a little bit dangerous. You have to approach it as a business. And, that being said, there is going to be a correction in the economy. There has to be. This just does not last. What is your plan when the inevitable blip comes, because it is coming. How will you survive? Have you saved money? What can you do that’s different?
Be thinking now about how you’re going to do that. Be saving now for that month when the rent, or payroll, is going to be really close. Put things in place today, because this is not going to last.
Anything you’d like to add?
You’re not alone. There are lots of opportunities to connect. There are lots of collectives being formed in cities. We met here in Austin recently and were really harping on the Go Local campaign. Don’t think that as a coworking operator you have to be alone, because you don’t. Come to GCUC, meet your people, start an alliance in your city. Don’t do this alone.
Cat Johnson is a writer and content strategist focused on coworking, community and the future of work. Publications include Shareable, Yes! Magazine, Mother Jones, Triple Pundit and GOOD. She’s the author of Coworking Out Loud, a guide to content marketing for coworking spaces and collaborative teams. Follow @CatJohnson on Twitter: @CatJohnson