Coworking spaces continue to grow across all major metropolitan areas offering amenities and respite to the growing number of remote and freelance workers in the US. Do a quick Google search and you’ll find article after article touting the numerous benefits of coworking spaces, from built-in socializing over free beer to the networking potential and aesthetically pleasing office design.
Many small businesses, like New Why, look to coworking buildings as a more affordable option to renting office spaces that require complicated and multi-year leases and as a more attractive option than, say, working from the garage. But what many people don’t know is that the new age of cowork buildings is collecting vast amounts of revenue from and marketing data on the very people who occupy the spaces.
Coworking Spaces of the Past
The idea of cowork buildings and spaces is nothing new. Just think back to the way people used to occupy libraries and the student centers of universities. Both of these spaces offered much the same amenities and opportunities that current coworking companies advertise: communal areas, the ability to meet other like-minded people, snacks, access to information, and spaces inviting people to work for hours. Cities boasted many of their own small work collectives, like The Caroline Collective in Houston, Texas (which is now defunct), offering quiet work spaces and private offices for nominal fees. The space could accommodate approximately 50 people per day and many freelance journalists, writers, and artists used the collective to launch careers and network. Such small enterprises, however, are a thing of the past. Now, the We Company (you likely know them as WeWork) dominates the coworking landscape.
The Benefits of Coworking Spaces
There are certainly tangible benefits to coworking spaces. As Entrepreneur lays out, coworking offices offer the potential for built-in socializing, as aspect that many remote employees enjoy, and the potential to network with others interested in similar projects. They also provide a space to work away from home–an important thing for many remote-working parents– and working outside of your home can offer a new perspective or reinvigorate a project.
The Problems with Coworking Spaces
It’s not all positive, though, despite the plethora of articles online listing only the benefits. Depending on the culture of the space, and who chooses to work there along with you, noise and socializing boundaries can be big issues. Most only offer WiFi, too, and that brings up privacy concerns for those working with sensitive material. And then there is the cost, making many of these spaces available only to people who run small businesses or work for companies willing to pay for the space. The benefits may ultimately outweigh the concerns for many, but what if your coworking building wanted to enter every aspect of your life? Coworking isn’t just about work anymore.
The Monetary Value in Coworking
Most of us think of coworking spaces as a place to simply drop in for a work day and then pack up and go (minus the few who can afford the lockable offices). But what many people don’t realize is that these spaces are becoming much more–they are turning into facsimiles of communities; a stand-in for true community spaces, reaping benefits from those who occupy the space. What exactly does this mean? It means the coworking companies are coming not just for your job time but for your living space, workout needs, and even your child’s education.
Take the We Company for example: they now offer interested people a place to work (WeWork), to live (WeLive), to teach their children (WeGrow) and to sell their goods (WeMRKT). They are piggybacking on Apple’s successful “i” marketing campaign and it’s working. In January of 2019, the We Company reported $2.5 billion in annualized revenue. And more than doubling memberships to 372,000. The We Company claims Ashton Kutcher as a partner, too, and both Kutcher and one of the founders, Adam Neumann, are investors in Uber. The expansion of coworking has been hugely successful from a marketing perspective.
CoWork, CoLive, CoExist
Where things get troubling is in how the We Company wants to move in on all aspects of employee lives. From a small business perspective, it’s not all bad: WeMRKT allows companies who rent spaces at WeWork locations to compete for physical space in We-based brick-and-mortar stores to showcase and sell their products, providing much-needed and useful marketing feedback in real time. And reviews about the first wellness gym from the company (based in NYC), Rise by We, are stellar so far. But all the data on who buys what and when gets reported to the We Company, too.
And then there is the private school, WeGrow, currently in a a pilot program in NYC. As reported by Curbed, the founders (who also founded SoulCycle) want the education initiative to focus on “conscious entrepreneurship” and the children spend one day a week on the founders’ farm for hands-on learning while the rest of the week is spent “getting lessons in business from WeWork employees and clients.” We certainly support a unique and well-rounded education for children, and to explore entrepreneurship if it interests them, but this is taking young children (ages 5–8) as business and marketing models to a new and shocking level.
Immersion into the community of the We doesn’t stop there, either. Enter the WeLive initiative: it offers furnished apartments with flexible leases for a unique coliving situation. The company explains that “This concept is another layer of our platform focused on enabling people to live more fulfilling lives” and units come with a monthly cleaning, a community manager who plans social events, and an app where everything can be organized and scheduled (from work to home in the We universe). And this is all covered in the rent: one payment for all the amenities you could want AND a flexible lease. Not to mention that it generates truly unique data on the way people live and want they want/need in a living space. For example, the flexible leases are designed to work for the “new employee,” who is someone that moves between cities and jobs far more frequently than in decades past.
Communal Living Turns a Profit
According to a leaked investor pitch deck, that Curbed shared, the company forecasted over $600 million in revenue by 2018 for such residential investments, a fraction of the We company’s total revenue. And when combined with the billions in revenue from WeWork, not to mention the billions in investment money, the We Company has turned communal work and living into a highly profitable business model.
As Julie Rice, a WeWork partner explains, the company’s vision “is intended to create meaningful human connections.” But how meaningful can those connections be when the foundation of WeWork and WeLive is on people who are remote employees, moving between cities and jobs? Are these spaces actually engendering communities where people support each other and provide aid during crises, much like our city centers and neighborhoods do now? Or is it all just an excellent marketing campaign turning a robust and quick profit on the backs of a growing number of Americans working as remote employees?
Time may be the only true test of the communal success as coworking spaces are projected to grow to 30% of all office stock by 2030.