The past few years have been remarkable for the technology industry. It seems like every week that another tech startup is valued in the billions of dollars. With private market valuations of technology companies continuing to grow, more and more entrepreneurs are looking to get in the startup business. How many entrepreneurs would rather have a monotonous desk job than own their sure-fire startup?
A “Unicorn” is a startup company with a valuation exceeding $1 billion. In the past decade, unicorn startups like Airbnb (Founded: 2008, valuation: $25.5B), Uber (2009, $68B), and Snapchat (2011, $17.8B), have all seen a massive inflow of funds from private tech investors.
California is home to numerous technology corporations, and Silicon Valley is probably the first place that comes to mind when you think about startups. Venture Beat pointed out that almost half of the startup “unicorns” are in California. They also show, however, that unicorns are scattered across the globe, with headquarters in China, Germany, India and Canada.
These days, an entrepreneur can open his own startup anywhere. Email and phone forwarding enables you to run a business effectively from anywhere in the world. As a result, coworking spaces have popped up in major cities around the world.
Where Can Entrepreneurs Find Cheap Alternatives to Office Space?
Deskmag gives a great definition of a coworking office: “Every workspace with flexible structures that is designed for and by people with atypical, new types of work – that is not exclusively for people from one certain company.”
Before the rise of coworking spaces, entrepreneurs had very few options apart from leasing office space. Sure, you could set up shop in a (cramped?) home office, but every business needs an address. Nowadays, entrepreneurs can occupy coworking spaces on a membership basis.
The major economic reason why an entrepreneur will use a coworking space is to save time and money. Coworking space operators will usually offer flexible terms that allow renters to move in and out and upgrade or downgrade their pre-furnished offices as the renters please. But a coworking space has value that extends beyond what a business can save on rent.
Coworking spaces deliver value-added benefits that are difficult to quantify in dollar terms. The first benefit is the networking opportunities. The second benefit is helping your business project a more professional appearance.
The first major benefit of a coworking space is the opportunity to network with like-minded people. In the entrepreneurial world, who you know can be equally important as what you know. A great coworking space is a congregation of minds who share similar aspirations. Every person who walks in the door is a professional, and a coworking space is an ideal place to bounce ideas off your peers and create long-lasting business relationships
In addition to networking, a coworking space can help entrepreneurs project a more professional image for their business. Just like a toll-free number is more effective as a branding tool than a personal phone number, a coworking space will make a business look more established than a home office. A business address and phone number will show clients and investors that an enterprise is well-established.
These days, it is the small customer, or small group, that supplies the highest amount of demand for office space. There are more small groups looking for office solutions than there are large groups looking to lease an entire building or entire floor.
We look for this trend to continue as large corporations downsize. In addition, we expect coworking operators to modify their approach in order to attract more clients.
We expect four themes to emerge during 2017 with regards to coworking: niche communities, corporate partnerships, around-the-clock renting and added services. First, operators will appeal to specific groups and professional sectors to create a stronger community. Second, coworking providers have started to form partnerships with corporations. Third, the shared-space concept will be extended into living arrangements. Finally, look for some operators to experiment with concierge services, travel offerings, etc. in order to entice renters.
How to Choose the Right Coworking Space
The coworking market currently has thousands of players. Locations have sprung up in huge numbers in cities like New York, Hong Kong and Singapore while operators are designing new service offerings and rental models. Entrepreneurs, especially those with web-based businesses, are able to work in whatever country they choose thanks to virtual phone numbers and offices. No matter which country you reside in, there are several important factors to focus on when choosing a coworking space.
- Focus on community
Networking is one of the greatest benefits that come with a shared office space. We advise you to consider the types of businesses that occupy the space and decide if these peers will help your business grow
- Focus on function
What goals does your business have for the future? Some coworking providers have programs to accelerate the growth of occupants. For example, StartHub in Miami offers an incubator for global ventures launching in US markets, along with other great programs. You want a coworking space that will support your business.
- Focus on location
If your virtual office is far away from where you live, chances are you won’t spend much time there. We recommend choosing an office that is close to your home.
- Focus on utilities
High-speed internet is a requirement for doing business in today’s internet environment. The facility should come equipped with Wi-Fi, a fax machine and conference rooms. Some locations have a kitchen and free coffee and snacks. Others offers 24/7 access to the office. The utilities you want to look for will depend on the needs of your business.
Do you have experience with coworking? How did your business benefit from joining a coworking space? Do you recommend any particular locations? Share your comments below.