Guest Blogger, Don Ball, shares: Lessons From 2 years in the Coworking Business

Guest blogger and GCUC speaker, Don Ball, shares the lessons he has learned from being in the Coworking business with CoCo for two years. He will be participating on the “Ask a Coworking Owner” panel at GCUC.

We didn’t make a big deal of it, but on January 4th we celebrated CoCo’s 2nd anniversary. That is, if you consider a simple handshake a celebration. (We seem to have trouble stopping to admire the view – there’s just too much to get done!)

In an nutshell, we opened our first space in Lowertown St. Paul in January 2010. Then, last July, we opened a space in Minneapolis, on the trading floor of the Minneapolis Grain Exchange.

Looking back, it would have been easier two years ago to open a greasy spoon or a coffee shop, something for which people already had a demonstrated need. But in fact very few people in our region woke up on the morning of 1/4/10 with a coworking need. That’s to say that we had to create the local market coworking. From day one, we had to do a lot to prime the pump, from meetups to breakfasts, speakers – you name it we tried it. It didn’t help that construction on a major light rail project began right in front of our building – you guessed it – on 1/4/10.

Fortunately, optimism prevailed. And so did the patience of our early members, who endured ear- and bone-shattering construction without so much as a wince. We clearly benefited in those early days from the good will of so many of our friends, who were strong vocal supporters. Seriously, without the help of so many people, who talked us up, let us come and speak at events, agreed to bring their events to our humble space, helped us brainstorm new ideas – actually put in their hard-earned shekels to become members! – I’d be writing about an interesting experiment that didn’t quite take off.

But take off it has. Today the CoCo community is bustling, with a membership in the hundreds, and it continues to grow every day. If the greatest challenge in 2010 was just getting people to join, today it’s making sure that the CoCo experience remains meaningful for whomever chooses to join. More on that later.

So, what have we learned in two years?

• Coworking is not about office space – Let’s face it, a room with a bunch of people staring into laptops is not particularly interesting or inspiring. If that’s all there was to this coworking thing, we’d have lost interest long ago. We learned pretty quickly after opening that there was something special going on. We saw people lower their barriers, step out of their social comfort zones and develop meaningful bonds with complete strangers. As one member, a suburbanite who had been working from home prior to becoming a member, said, “this place has changed my life.”
• Coworking is a lousy business model – Only a few weeks into this venture, we knew that there was no way we were going to pay our mortgages and put our kids through school on the backs of a few freelancers. The basic coworking model, or at least as we saw it being executed at other spaces, looked like a break-even venture at best. That forced us to get creative and ask ourselves, who else could benefit (and pay) for the privilege of participating in a creative, collaborative community? That also led us to look beyond individual members and open the community to startups and small businesses and eventually to bringing in a local tech accelerator called Project Skyway. We are still asking ourselves, “who else can we invite to this party?”
• Coworking is the beginning of something huge – If the predictions are right, there will be more and more independent workers and entrepreneurs in the coming years. This new generation of independent, entrepreneurial workers have a different set of needs than your average employee-a-day employee and they need a whole support ecosystem that doesn’t yet exist. It seems to us that there’s a great opportunity here!

So, with a little bit of experience under our belts, we’re heading into Year Three with some focus and a game plan:

Focusing on the community
As fast as is possible with just three staffers, we’re making all sorts of refinements that have to do with focusing our efforts on reinforcing two things: Members and Community. We want to cram as much value as possible into a membership and also strengthen the CoCo community (the two are related but not necessarily the same thing). So, for example…

• We are no longer renting our event space to people from outside the community. It’s way more work than we anticipated. But more importantly, it’s a distraction from our core purpose. Instead, we are going to create a pool of sponsorship dollars that allows us to say yet to events, meetups and user groups that are member-generated, such as the recent Maker Bot meetup or the Wednesday night hackathons — in other words, innovative stuff that members feel passionate about. We’ll occasionally host larger cocktail parties that support the larger tech, entrepreneurial and creative communities – but only if they are events that have a strong benefit to our members.
• We’re hiring a host for St. Paul. This has been long overdue.
• In looking at our membership patterns, we realized that people just love the dedicated desk (“single campsite”) option. Just last month, we added 13 more dedicated desks in both locations. And last month, we took delivery on 25 additional dedicated desks.
• In Minneapolis, we’re going to rearrange some furniture. What has been our event space in the back of the room will now be used for dedicated desks and focused (read: quiet) coworking. We’ll move the Surly (a canvas expedition tent that serves as a meeting room), the Campfire meeting settings and some new, moveable coworking tables onto what’s currently the coworking deck. This area will be dedicated to more “social” (read: talkative) coworking and will be the place where we hold meetups, user groups, etc.
• Later this year, we will launch an educational program that delivers unique, collaborative classes and workshops in the areas of technology, creative arts, business and personal growth.

Robotic hosts and other forms of automation
Honestly, we had no idea how much work is involved keeping track of things like payments, security, membership usage, room booking, network access, etc. Our goal is to automate or systematize whatever possible, so we can focus our best hours on members and the community.

Additional locations
This can happen only after we’ve gotten our operational ducks in a row. Only then, we’d like to open additional locations in some of the suburbs, with the goal of serving suburban coworkers and giving all members more options in where they work, meet and socialize.

We may be open to doing this through some kind of franchise approach. Or perhaps we’ll call it a “co-franchise” – not to be cute, but because the word “franchise” brings to mind soulless hotels and fast food joints, and we’re not interested in having soulless locations anywhere. Quite the contrary, we want every CoCo location to be anchored by an “owner” wants to nurture the local community as much as we do.

So, what do you think? We’d love to hear your thoughts on this wild ride. Do you see any opportunities we’re missing? Do you have any words of advice?