Think about co-working in 2017 and one of the first names on your mind is likely to be WeWork. The company is valued at $20bn and is about to become London’s biggest private office tenant. Bear in mind WeWork only launched 7 years ago – that’s phenomenal growth by anyone’s standards.
In the last few months they’ve acquired an education company and a community marketplace, launched in Asia, started a gym chain and got into the apartment business. Questions remain over their valuation and ability to weather a downturn in the real estate market, but right now they’re showing little sign of slowing down.
With WeWork seemingly making all the headlines, what else is going on in the business of workspaces?
Here are 8 of the key trends I see continuing to take flight in 2018.
1. Snacking & Space Hopping
For freelancers and soloists in particular there are usually 3 components to a typical week; doing the work, talking about the work, and finding the work.
The latter often means traveling to meet people. Face-to-face tends to be most effective, but shuttling back and forth between meetings is definitely not most efficient.
For those hopping between locations or just wanting to utilise a workspace for a few hours of focused time as and when they want it, new services have arrived to serve this need.
One example is Croissant. For just over $100 they’ll give you 50 hours per month to be used at spaces across a number of US and European cities.
Whilst their supply of workspaces is still a little sparse at present, and the nature of their pricing model appears to be weighted more favourably towards the user than the workspace provider, the increasingly competitive co-work industry means a growing number of spaces will be likely looking at alternative ways to generate interest and revenue.
Perhaps snacking will become a key part of our (work) diets.
2. Keep it in the family
London headquartered Second Home are shortly opening a new space in the ultra-trendy* Hackney borough of East London.
The area already has a number of co-working spaces available (including a sizeable WeWork offering), so how are Second Home going to stand out?
Easy. They’re installing a fully operational creche service so members can have ‘bring your kids to work’ day, every day.
With terms of parental leave high on the agenda of employers and HR departments, and an ongoing shift towards a more flexible work/life balance, will the in-office creche become a fixture of companies’ perks lists?
It’ll be interesting to see whether the trend of more young families moving away from cities (as has happened in London) will affect demand too.
* I was a long-term resident, which perhaps negates this.
3. Values-based workspaces
NYC startup The Wing have raised both eyebrows and capital (from WeWork amongst others) with their female-only workspace and members’ club offering.
I’ve had a couple of interesting discussions with people recently around balancing the need for safe spaces vs. providing bridges and access for others to better understand the the challenges that caused these safe spaces to be created in the first place.
Personally I hope they’ll find a way to allow admittance to men from time to time as there’s plenty for us to learn. Maybe that’s for another article…
In either case, we’ll see more spaces appear built on values, interests and passions.I referenced this in a previous post here >
The challenge for these operations will be balancing niche focus vs commercial viability as it’s unlikely most workers will hold memberships to several spaces at once.
Expect The Wing to be one that keeps flying.
4. The excess capacity opportunity
Airbnb is the most notable example of a business built around leveraging the excess capacity of an asset class.
Spacious are taking this approach to co-working, operating around the hospitality sector. The NYC-based startup work with bars and restaurants to fill their often sparsely-populated weekday downtime with laptop-wielding workers. Just like Airbnb, it’s one of those concepts that at first glance feels like it shouldn’t work, but Spacious are growing at a fair old clip with a presence in NYC and San Francisco so far.
The recent New York launch of London retail pop-up startup Appear Here plus a glut of ecommerce fashion and lifestyle brands scaling up in the city makes me feel we’ll see Spacious’ model appear more in 2018; less agile bricks and mortar businesses will be looking for new revenue streams as they feel the strain of rising rents, lower occupancy and a continuing shift to ecommerce.
Where else could there be excess capacity to utilise?
If anyone fancies working out of screen 1 at the Union Square cinema next week, I’ll bring the popcorn.
5. The branded hangout
Working out of the local coffee shop? Forget it. Next year will see the rise of the branded hangout space.
On opening in June this year, Ian Schrager’s new ‘Public’ hotel instantly became a destination work and meeting spot for the knowingly cool set around NYC’s Lower East Side.
The Ace Hotel chain have been in this position for a few years of course. Rather than booting out the posse of people taking up the hotel’s lobby space all day for an average per-head spend of 1 cup of coffee, they’ve happily turned a blind eye. Presumably keeping the place vibrant post-check out and pre-check in gives them a nice bump of extra social proof, street cred and the potential for serendipitous collaborations that their brand will be inextricably linked to.
Quickly building their own work/hangout spaces are retailers like Lululemon and Dr Smood. Usually quietly stylised offerings in the basement of their retail operations, there’s definitely still an element of discomfort and confusion around utilising these places to spend a working day. However, they tend to be completely free of charge and in desirable locations – very appealing to the early-stage freelancer or startup founder. Also, anything with a stigma which is starting to disappear is well worth paying attention to, and I’d class these spaces in that category.
What’ll be interesting to see is which other brands jump in and how happy people will be to nail their colours to those office-shaped masts. Not everyone is going to be keen to be hanging out at American Apparel’s co-work, even if the coffee is good.
And yes, this is again connected with filling Excess Capacity…
6. Airport lounges
Like a lot of people I find the air travel experience trying at the best of times.
After flying a lot for business, I slimmed down my travel a little and found my loyalty cards getting demoted extremely quickly, along with my air miles being of little value for any of the routes I really cared about. No bueno.
Airports are generally pretty miserable places to spend time, and with the airline business being a notoriously difficult one to operate in, there appears to be some scope for innovation.
Monocle magazine have long been suggesting the growth in kiosk-style cafes, and they’ve made inroads in a few cities with this idea.
It appears there’s huge scope to serve airport visitors with an alternative to the business lounge, especially as rewards points tier are being jacked up and airport usage is on the up.
Don’t be surprised to see WeWork at JFK or Heathrow in the very near future.
7. The work club
Football club, member’s club, night club, jazz club. If it’s a club, expect to see it start offering business services to members old and new.
Soccer (football) clubs in the UK are putting community-focused workspaces high on the wish-list for their architects, with English Premier League clubs Tottenham Hotspur and Crystal Palace both with new stadiums in the works.
There’s a ceiling on match day ticketing revenue (especially with serious fan backlashes against recent price hikes – we’re looking at you, Arsenal…), so clubs are exploring everything from VR to branded offices to keep their fanbase engaged and coffers full.
Again connected with fulfilling excess capacity, nightclubs are also getting in on the act. Ministry of Sound in London sold their label business to Sony Music and just two weeks ago committed to a joint venture for their events brand which sees that team move out of the MoS office space adjacent to the legendary night club.
MoS are now actively positioning themselves as a shared workspace provider, and have already been using the cavernous ‘Box’ room of the club for a number of alternative live events. Perhaps there’s another joint venture on the horizon…
8. Return of the cubicle
The office cubicle. It’s almost a poster child for what today’s workers abhor; grey, closed, isolated, made of non-breathable fabrics. Surely its death should be cause for celebration?
Maybe not. A number of recent studies have shown that open plan offices have significant drawbacks, one being the difficulty for people to focus. In the days before Slack, WhatsApp and fluctuating Bitcoin prices this may not have been such an issue. Nowadays there’s a very strong desire from a lot of people to mute the noise and do focused work.
This study from furniture brand Haworth digs deeper. Broadly speaking, they recommend a mix of private and open spaces, encouraging recharging, and giving people control on where they spend their time.
We may not see the resurgence of the original office cubicle, but there’s plenty for architects and designers to set their minds to. All they need is a private space to do it…
And for your life outside of work…
Just as Marriott hotels are building apartments to compete with Airbnb, luxury residential real estate developers are moving towards the models of WeWork and Soho House – offering full workspaces, libraries, basketball courts, coffee shops and various other perks as part of your ‘living experience’. All at a price, of course.
One of the notable examples here in New York is The Eugene, next to the burgeoning Hudson Yards development.
In many cases these extra amenities are used as a clever hook to bring in tenants, but in reality get relatively low utilisation. Whilst the financials probably hold up, no one wants to see a bunch of empty common areas in a building, and some of the new build towers already have a ‘investor safety deposit box’ feel as it is.
Will this mean another case of excess capacity ready to be exploited?
It’s meta, but watch out for the workspace provider taking over the running of the workspace.
Got an opinion? Want to continue the conversation?
Let me know in the comments or drop me a line here.