What I Learnt at Coworking Europe 2022

It’s been five years since I last attended a Coworking Europe conference. I so enjoyed being back in the mix with like-minded people facing shared challenges with a similar level of enthusiasm.

Since attending my first in Barcelona back in 2013, and speaking at Milan, Brussels, and Dublin, this time we were brought together in Amsterdam for a couple of days of deep thinking on coworking, flexible workspaces, and the future of work.

B. Amsterdam was a great venue, and Laura and Cariann were pretty happy with day one

It was like putting on an old winter coat and finding £10 in the pocket.

It was both comfortable and novel. From hearing the same stories of the unpredictability of human beings and the biggest challenge being toilets and kitchen cleanliness to the mix of multimillion investments and stratospheric growth.

I met wonderful people from all over, from Bulgaria to Bali, Texas to Tokyo. It’s Coworking Europe in name, but a global community in practice.

There were two days of talks, panels, workshops, and unconference sessions, but I wanted to share a handle of things that made me sit up and got me thinking long after the last bite of stroopwafel.

The main development that I witnessed from the sessions I attended is that there are three key trends across the sector:

  • Focus on the market
  • Developing the platform
  • Owning the locale

Separately, you can read my write-up from the session that I delivered on building a team in the world of coworking here.
Also, learn about the first European Coworking Day, created at Coworking Europe and coming in May 2023!

The market

This is more of a focus for the larger operators, but there are similarities with the companies who are specifically looking at owning the locale.

The vibe I got here was very much akin to the old golf club mentality of “I know a guy who can fix that”. A lot of the big players seemed like their goal was Fortune 500 domination, by providing enough pins in a map to be able to service a large and international workforce.

The main panel on day one, featuring Cushman & Wakefield, Wework, IWG, & Adgar Investments & Developemnt

There was a sense that the goal is to become a verb, or byword. Instead of looking for an office, people should just turn to Wework or IWG to solve that problem. They can fix it, make it go away.

Leasing offices, negotiating on space, committing to property is a slow and not very fashionable thing. It isn’t flexible and it requires extra expertise and human resource in the team.

The resonant point here was that previously you’d be paying for an office seven days a week and using it for five, but now you’re paying for seven days and maybe only having it used two or three times a week. It doesn’t add up.

Buying a bulk membership at Desks4You (anonymised to avoid lawsuits) isn’t the sexy thing but solves a problem in a fairly low risk way. It’s a little bit more expensive, but not as expensive as all of the risk and additional things to factor in.

There’s also a sense that the wave of larger employers giving up their offices to go flexible has already passed, but this really isn’t the case. If a company signed a lease in 2017 they might only be hitting their break now, so this really could continue to grow until at least 2024 when we might have a clearer picture of how big the wave is.

This is a slow moving segment which, once secured, is unlikely to be lost. It’s near impossible for the smaller operators to dance with these giant employers because they are unlikely to serve enough of the workforce geographically, and the employers would seemingly prefer the reduced admin of having a single global pass style membership than having to deal with the expenses of every member of staff on a one-by-one basis.

A panel on automation in coworking, with GCUC, Salto, ezeep, UltraSoft, and ISEO.

There’s a longer play in this which is starting to pay off. Traditionally I always felt like the strategy of the likes of Wework was to be seen more as a perk or recruitment trick. I don’t know enough to comment but it would be interesting to know how this is perceived by actual users.

The people making the procurement decision need to know that the spaces are professional, convenient, safe, and cyber secure. Therefore why invest in community management services when the actual users don’t have that much say in where they work?

The priority for investment is therefore less about the day-to-day experience, and more about the head office peace of mind.

Along with the larger operators there are the larger platforms. These are akin to old school agents, and act as the broker between the spaces and the market.

Owning the market has become a battleground. We’ve seen this especially in London, the cost to compete on Adwords is drastically different to anywhere else in the UK. Those clients are valuable, because they’re more likely to be the larger players who, instead of taking five or ten seats, are more likely to take 500, 1,000 or 10,000 — a scale that smaller spaces aren’t interested in.

There were stories of one operator which had over 650,000 customers, and another which was serving companies which had staff in centres in 20 different cities. Or 700 employees who needed access to 500 venues.

The market itself is more than big enough to be shared and fought over by a handful of larger firms, but there is a sense that some of the up-and-coming platforms are positioning themselves to own enough market share to be gulped up when the time is right and things get a bit more saturated. I don’t know if that is going to be in months or years but I’ll follow up on that a little later on.

The Platform

There’s an old school (although, relatively not that old) mentality here around investing into a platform that gives an asset, a differentiator, and something to then extract value from.

A pretty good caption on what coworking is good for, from B. Amsterdam

The problem here is that it isn’t much of a USP, and so many organisations are essentially doing the same things. There’s a lot of duplication and it doesn’t feel like there was much of a distinction that made one stand out more than another.

The long and the short of it is that these are CRMs on steroids, with a range of integrations and added features depending on the priorities of the space.

What I wasn’t clear on is if this is a thriving or false market.

One of the platforms that we have used for a few years was pretty dismissive and rude, even as a long-term customer. There was no curiosity about our use case which gave the impression that we are small fry for them — even though we are, relatively speaking — a larger operator in the independent space.

Another platform had a terrible sales experience, there was no needs analysis or even eye-contact.

It all felt a bit like there was no momentum, but maybe I’m judging harshly a couple of bad sales/customer service experiences.

It didn’t feel like many of the platforms had much confidence in what they do — but some did.

The platforms that did seem confident tended to have a lot more experience in the team from the coworking sector, whether having run their own spaces in the past or just having taken the time to deeply understand the differences rather than just thinking of it as an asset management tool.

They had empathy and could imagine and role play the user need to understand how to pitch the product accordingly and respond to different configurations.

A lot of smaller coworking spaces are still run off spreadsheets and hacked work-arounds. The larger operators have invested millions in building their own in-house systems to give themselves a bit of a moat.

This doesn’t leave much space in the middle, and there also doesn’t seem to be much cross compatibility to pivot into new markets. There’s a low barrier to entry in theory, but the one advantage is that — as with any CRM — once fully embedded it is pretty tricky to change to another.

Here I am delivering what some people called the best workshop in that room in that timeslot they’d ever seen

There was lots of talk of how AI and IoT can solve all sorts of tech problems for our members, such as monitoring how many people are in a meeting room and pinging them after a set number of minutes to tell them to open the windows. But having run spaces with very sophisticated and expensive building management systems I can tell you that if there’s one thing people don’t like it’s being told what to do, and even less so when it is “smart” technology doing the patronising.

A lot of the technology seemed to be for the sake of it rather than from user need, even if the system does know better than the user. Just try sitting in an office with a diverse range of folks of all ages, genders, and backgrounds and ask them to agree what temperature the thermostat should be set at.

There were interesting threads that started on things like the impact of the metaverse on coworking, and distinction between work from home, remote work, and flexible working, but these never really reached a conclusion.

The Location

As always, there are always venues that exist for their immediate community.

This won’t go away, but the location doesn’t just mean the geographic location. This also relates to a location as a vertical, for example a specific target cluster or sector.

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Again, there were some fascinating indicators. There seems to be a lot of interest now in “smaller cities” but there was so much of this which felt icky. There’s a sense that the larger cities are possibly reaching saturation point, but less from supply, and more that all of the good buildings had already been taken up and converted so it’s not slower and more expensive to activate sites. It was consistently claimed that there’s a lot more growth to be had in smaller population towns but with less supply.

There are some really interesting ideas coming through around the different needs for these areas, and how to make coworking accessible.

I’m biased, as we’re particularly interested in place-based solutions to the flexible working agenda, but there’s undeniably a problem here that needs solving.

Regional chains continue to be a trend, servicing the same immediate market and being able to build critical mass. It’s a sensible way to scale.

A lot of the location-focused stuff seems way more authentic to my biased brain, but that’s not to ignore the commercial opportunity. There’s a little bit of a risk that in pursuit of sustainability the more community-focused spaces get criticised for shifting focus, and likewise the chains get accused of something akin to greenwashing when they try to do good stuff for their local areas.

Some people, if not most people, are just looking for somewhere functional, safe, and convenient when they first start looking for coworking spaces. Most people don’t have the privilege of those in larger cities who can choose which coworking space to use, and “find their tribe”. The value from the community becomes more apparent down the line, but to start with it tends to be more about the function of a workspace.

Don’t cha wish your workspace had boats like these? Don’t cha?

This then goes right back to the point about who is making the decision to choose and use the workspace, the differences at a local and multinational level, and the target markets and what they value and expect.

Local markets and global markets have different needs, but there’s still a lot to learn from each other.

What’s Next?

I feel quite strongly that this impending recession is going to lead to a lot of consolidation in the marketplace. This seemed to be echoed by some of the larger players too, expecting the world of coworking to look more like the hotel sector in a decade, with large multinationals dominating and regional boutique operators thriving in their communities.

There appear to be a few ideas and initiatives underway to look at how the larger groups can get the pins in maps but equally retain higher standards and care for communities.

It seems like it is just as slow for operators large and small to get a venue on-boarded. So the opportunity to acquire spaces after operators have done all of the hard work of identifying a site, negotiating a lease (on good terms), completing the Cat A works and then fit-out, then hiring the team, and building a founding membership — bypassing the whole process sounds attractive.

A lot of operators seemed to be living on fumes having burnt through their reserves during Covid, and aren’t very well placed to weather another storm. There could be some deals done quickly in the next couple of months for those smaller chains and independents to be taken into the fold of larger groups, it feels like a win-win.

There was a fascinating panel discussion on franchising in the coworking sector but again it didn’t feel like the moats were very deep. A lot of those conversations felt like the olden-days where everyone turned up feeling like coworking was invented in their hometown. The knowledge base feels so much more accessible and open source now, so charging for that stuff didn’t feel like a very secure long-term strategy.

Ultimately, this is a sector that — although maturing — is still ten or fifteen years off fully finding its place. The diversity is a real asset, and people understand it a lot better now than was the case back in Barcelona in 2013 when it felt like everyone came together feeling like inventors of this radical new thing.

My highlight was catching up with old friends in rooms with questionable history

It’s also still not just one sector. There’s flexspace, coworking lounges, community coworking, business centres, incubators, and so many more distinctions which would mean nothing to my aunty but to those in the midst become hills to die on.

The main benefit of accepting this is a maturing community is that instead of people being outraged by the perspectives of the larger multi-nationals, there was more of a sense of shrugging and accepting that they were talking about a completely different sport. It might look and smell the same, but the differences feel stark.

There’s a lot to be excited about, like European Coworking Day, and there is a real sense of camaraderie amongst smaller coworking operators no matter where they’re based.

Future

I feel as confident as ever that coworking has a bright future. There aren’t many sectors that were hit as hard by Covid but emerged with such hope and promise. All of the upcoming crises create worry, but if the permacrisis since this “industry” emerged over a decade ago has done nothing else, it has built resilient community leaders.

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Finally, on Amsterdam, I’ve never been before* but three observations/questions:

  • It’s like Australia where everything is trying to kill you but instead of insects and animals it’s things with wheels and/or engines. Trams, bikes, and cars, and even worse now with ebikes and EVs everything is silent and incredibly rapid. Therefore, it’s not a good place to have a hangover and walk around with a hood and headphones on.
  • Why are the staircases so steep?
  • Doors don’t open the right way, they crash into each other, especially in bathrooms and hallways (possibly a minor point).
  • Amsterdam is so close that I always figured an opportunity to visit would come up sometime, so never prioritised a trip. I’m glad that opportunity finally came up!

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Gareth I. Jones

Founder of TownSq, focused on building communities of entrepreneurs, supporting startups and B Corps - businesses that are better for the planet.