Is co-working really the answer for start-ups' office needs?

Co-working spaces are booming, but are there downsides to the office solution that so many start-ups and small businesses are taking advantage of?

According to predictions by Emergent Research, co-working membership is expected to grow 40 per cent each year to reach more than a million members worldwide by 2018. In fact, co-working has become so popular that 70 per cent of co-working spaces claim that they can’t keep up with the demand for desks.

But it’s not all sweetness and light in these co-working spaces. Demand means that many start-ups are often crammed into a relatively small space, working elbow-to-elbow with other businesses can take its toll.

One entrepreneur who experienced the negative side of co-working spaces is Kurt Rathmann, CEO of ScaleFactor Partners. He told the Guardian that at first, the flexible terms and ability to create partnershps with other companies in the same space were huge perks.

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But as his business grew, he says that preserving the culture became a concern because, as he said, "you don’t get to choose your neighbours". 

The problems really start when those neighbours are disruptive – or view you as disruptive. Kurt said that while his business has logged steady growth since its inception, other business in the space weren’t as lucky. Sometime he felt that negative vibes permeated in the common areas like the kitchen, as well as the open office space. "We felt this judgment from a lot of folks that we were disruptive," he said.

Disruptions – or being viewed as disruptive – aren’t the only negative that start-ups that choose to base themselves in co-working spaces have to fight, though. And Kurt certainly isn’t the only one to note them.

Rebekah Campbell, founder of location-based shopping recommendation engine Posse, wrote in the New York Times about why she chose to leave the co-working space in Manhattan where she had based her start-up after just two months in the office.

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"Part of the appeal of a co-working space lay in the hope of meeting entrepreneurial teams from which we could learn," she writes. "But for the most part, our co-workers were wannabes with no real interest in building companies. They wanted the vibe of the scene more than its work. People wandered up to me and asked about Posse and whether they could partner with us – even where there was no rationale for doing so. Being in the same ‘community’ extended an implicit invitation for anyone to interrupt our work, pitch an idea or ask advice. Many of the projects sounded harebrained or worse, but they gave their owners the chance to chase the start-up dream for a few months before returning to corporate life."

Rebekah goes on to write that she wasn’t a fan of the way that the owners of the co-working space tried to promote community fun. "Cheery folk breezed through the office every other day offering free coffee, pizza, shots of alcohol on Fridays, massages and so on, all brought to us courtesy of a sponsor."

While these things might sound like brilliant perks to basing your business in a co-working space, Rebekah says she "found the constant stream of activities they provided distracting".

Alex Hillman of co-working space Indy Hall admits that one of the biggest failures of co-working spaces is the failure to build community effectively. "People mistake ‘gathering human beings’ for community," he says. "Defining community is hard but there are absolutely defining elements. People gathering is one of them, but it’s the easiest and least meaningful."

It’s not just entrepreneurs who have noticed issues with co-working spaces though, organisational psychologist Marla Gottshchalk says that they can often have the same problems as traditional work environments. "How a group handles difference in opinion and conflict between members is critical to a healthy working environment," she says. "Allowing varying perspectives is key for any work group to develop effectively."


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