Coworking is not Dead; It’s just been Wrong

Think more regionally and by specialization.

2020 has frequently raised one major question, resoundingly repeated by property investors, office space owners, and coworking facilitators, “Is coworking dead??”

No. Consider that it has been addressing and trying to solve the wrong problem.

The flaw of co-working was that it is mostly generically applied. It’s usually just deck/office for coworkers. Some places have tried pushing a uniqueness to it… “For startups” for example.

Frankly, there is no recurringly sustainable demand for such things. People aren’t mostly there because they need a desk (or that they need it for long if they do); they’re largely there to network and get out of the house and into a community. The challenge in that is that in time, coworkers have met most of that community; in the end, we all really just need to get to work as productively as possible

The Way We Work is Evolving

(I penned that headline nearly 7 years ago and never as much as now has it been proven true)

We evolved work from the Industrial Revolution, and awful work conditions that though were created to fill the demands and needs of the era. As companies replaced sole proprietorships (think back further to how everyone use to work for themselves – as boot makers, accountants, bar owners, etc.), and technology changed the need for labor on farms, industry put people to work in office buildings and spaces; it was the next and understandable evolution of workspace out of necessity of the time.

Industry evolved; from sole proprietors, to cogs in the manufacturing machines, to drones in companies and in many respects, it was that era from assembly line through gray cubicals that we might look back on as the “Dark Ages of Work.” People demanded better working conditions and unions emerged, wage disparities started to close and it was no longer acceptable to put children to work. We evolved and for a time, that new work environment was celebrated.

Coworking emerged to serve demand from people to work in other ways.

Intriguingly,  MBO Partners forecast then (when I wrote that in 2013) that by 2020, 60% of the workforce in the United States will be “unteathered” to a corporate office. At the time, only 30% of people working were unteathered. oDesk, then, too asked in survey: 72% of job holders in companies have a desire to be independent. Evolution. Or Revolution?

71 percent reported a boost in creativity since joining a shared work space and 62 percent reported that their standard of work had improved. Also 64 percent were better able to complete tasks on time and 90 percent reported an increase in self-confidence because they now worked in a supportive community.

Who could have seen that 2020 would have us all working from home??

So is Coworking dead?

It’s unfathomable. People don’t want to go back to that cube. We’ve not only evolved to the next stage of how we work, 2020 brought forth the the revolution.

“The most interesting thing is the people and the evolution of people in the way they’re valued in the workplace. The Eighties was a very transitional time for people, we were coming out of the 70s, where people got whatever they wanted in the 80s we hit a recession,” shared Workscape Designs’ John Baran. “Things got more budget-oriented, manufacturers started discounting, really, really low. In the 70s, there was no such thing as a discount; their published list price was pretty much the price that you paid. In the eighties, we saw discounts all the way down to 50%. Then in the 90s, what I saw was, is if you were a talented person, they paid you. It wasn’t about the workspace nearly as much as finding talent and paying them. So we had all these jobs. And we’re looking for talent. Now we have a surplus of jobs, right. And people are trying to decide where they want to work. You go back to the early 1900s people were glad they had a job. They had a desk, an in-tray and out tray, and an ashtray. And they were in an open room. Everybody could see everybody that was the first open workplace. Nowadays people want to feel good about where they work, and how they feel. So now companies can’t just lure them with money. They have to create this work environment that’s consistent with the way they want to work and the way they want to feel. So that’s the biggest change. Now we have to create these environments to attract people to come to work. That’s never been the case before.”

It has to be meaningful.

What Problem Does Coworking Solve? What Problem Should it Solve?

Coworking spaces sit empty. Office parks are vacant. Companies are planning to keep some home, indefinitely. And so the question is asked, is coworking dead?

Why are you spending money for a desk when there is one for free at the coffee shop across the street, or back home??

Startups, in particular, paying for space, just to network, is … I don’t know… use your favorite word… a wise investment?

Okay, so what does work?

Regional use of space and specialization.

Think healthcare, as an example. Cities’ major healthcare services tend to all be in the same part of town.

Co-working but not just in *a* space. Why? Because shared resources and infrastructure. Easier access. And a network of people that matter to the WORK, not just random people out of convenience.

Finance tends to be the same way (i.e Financial District). Media too, need for studios, creatives, etc.

We’re all, in media, familiar already with the important role space plays in our work; with the studio or venue space being paramount to the impact we have – it’s the buildings and structures in the broader sense that drive our economy in the right direction.   “Hollywood comes to mind as an epicenter of where the use of space defines the economy. As we dig deeper we can see that happening elsewhere with new media,” noted John Zozzaro not long ago. “Chicago is building the full stack at 2112. Nashville has taken a lead in music innovation with their incubators and accelerators. Adelaide Australia’s Musitec has been working with the city to develop unique public-private-non-profit partnerships. Even New Orleans is being reinvented down on Bourbon Street, which was cited recently taking note of Austin’s nightlife.”

Built to Suit space, regionally planned with cities and economic development offices, purposeful development, and coworking for a reason, matter.

Coworking based on WHAT people are doing, not the stage at which they find themselves nor merely for convenience or networking.

People will travel to the right part of town for the work. They’ll pay for space and be there when the people there are doing related things. People will cowork when doing so actually meaningfully impacts their business.

For the most part, the attempts at it so far haven’t done that. So people go home and question going back. Validly.

Get to know a bit better how our friends at Workscape Designs appreciate the history and evolution of how we work

Invest with us in Meaningful Space

That is the future of coworking. And not just in investing with us but in the notion of investing together with those that are industry specific and focused – meaningful to the workforce therein.

Develop that finance, banking, crypto, FinTech, security shared space so that entrepreneurs, technology professionals, bankers, and more IN THE SAME SECTOR, can leverage the benefits of being near the companies, resources, and peers meaningful to that work.

Talk with us about your Arts initiatives, the role of media in your city, and the demands and opportunities in developing News, Advertising, Podcasting, and Video Games, as an experience for the culture and community of your economy.

Coworking is evolving, from collaborative community space demanded by people leaving the office, to meaningful space that enables the economy to thrive. People are ready to get back to work, literally and physically.

Comments on Coworking is not Dead; It’s just been Wrong

  • Devin Reeves

    Really good read. You can have a desk and computer anywhere, but nothing beats human interaction…even in these weird times.

  • Rob Ryan

    Awesome and spot on! Been saying it for 18 months since WeWork ipo debacle … shared distributed localized office space will BOOM over next today-10 years. It was inevitable

  • Damon Cali

    The problem isn’t that people don’t value it, it’s that the timing and duration of cashflow and financing are often at odds with stability.

  • Paul O’Brien

    Rob, We should sync up a bit… your work might solve some of what we have at our feet. Trying to get something like this accomplished though is literally like herding cats.

  • Paul O’Brien

    100% Damon Cali and when startups are faced with the same challenge of margins too thin and cashflows unpredictable? They trim what doesn’t work well and focus on what does. Create more value in such spaces by being more purposeful (Built to Suit) than just community, desk, or stage. People will pay more for space they NEED; a desk and community is something people want.

  • Carina Boston Pinales

    Interesting take, I appreciate the breakdown and history. One key part I have gone over in discussions is the expansion of economic opportunity with the boom of the suburbs and how business was not concentrated in major cities anymore (the migration of economic opportunity). Similar we are seeing the future of work bring us full-circle to how remote work brings opportunity with the flexibility of accessible space.

    From the get go we have thought of what value we can bring the individual not just the value we provide in space. I believe that is why we have been fortunate to have a strong presence without stopping throughout this global pandemic. We were surprised to see more opportunity come our way as our value actually increase.

    Hence our interview with All Work: and the spotlight we had recently on


  • Damon Cali

    That’s a little tougher to pull off with real estate. Any well run coworking space will have to do that, because it’s an uphill battle. Real estate is priced by the practice of using high leverage to goose returns by institutional buyers. If you do that with short term leases, you could wind up in a rough spot when the economy turns. But if you go with low or no leverage, you’ve given up your returns unless you do a truly outstanding job. That’s my complaint about it as a business. It’s just plain hard.

  • Shelley Delayne

    Damon Cali Agreed. Coworking works better as a business model when the operator owns the building and is well-positioned enough internally to weather market fluctuations, and isn’t particularly driven to maximize return off the buildings in which they house coworking. It can add tremendous value to a neighborhood; so if they have residential or other commercial properties in a cluster, it could make sense as activation of under-utilized space/market draw.

    The trouble is, the entities who could manage it financially don’t execute it well on the human/community side; they don’t *get* it. They see it as disposable, short-term, fill-in. CBRE and JLL were both working on their own coworking brands; there’s a number of similar out there. But coworking doesn’t work when it feels impersonal and temporary.
    And small owner/operators don’t have the capital or access to the capital to buy a building to even provide the cushion that owning one building can provide; and they fail in hard times as a result. Operating on a knife edge.

    It could also work to have cities invest in the real estate to house coworking spaces, on the grounds that 3rd spaces in neighborhoods are good for democracy, quality of life, and affordability. (Which is true.) And have management agreements with an operator. (This has been proven to work in several cities already; like CO+HOOTS in Phoenix.)
    But I agree with you: coworking business model does not *really* work with the current realities of most commercial real estate. ????

  • Damon Cali

    I would add that if we truly see a long term trend in where people work, there is going to be a hefty adjustment in the office market. Stuff that made sense will not anymore. Maybe there will be some opportunities for innovative business structuring that will make it work. I wouldn’t rule it out, but I wouldn’t bet on it. That type of transformation isn’t quick.

  • Shelley Delayne

    Damon Cali oh, agreed: there will likely be seismic changes — but it’ll take 5-10 years to even begin to show, really.

  • Nick Longo

    I found that the cross-pollination between all kinds of industries and skills creates new things because people and companies have different skillsets and backgrounds. I also found that the creation of new startups through serendipitous collisions and collaborations was from day 1 our secret sauce and that our members created the best companies that way. Specificity doesn’t scale well for ‘new’ ideas, in fact, it creates very small tribes that generally think along the same lines which to me loses the creative input from a set of more diverse people that are needed for real success. Though we focus on Startups that are mostly tech-focused it brings in a lot of people that want to be a part of that. Through their interactions, they learn, try it themselves, or work for each other and that is invaluable to create new things in the future.

  • Shelley Delayne

    Nick Longo amen to cross-pollination.
    A space where people feel a sense of belonging, and the safety to be their whole self produces the most amazing results, and the more varied, the better.
    I mean, you don’t want it so varied that people have *nothing* in common, but too much homogeneity stifles innovation and discovery and creativity.

  • Nick Longo

    Shelley Delayne Completely. For us saying ‘Tech’ & ‘Startups’ gives commonality to those like-minded people we want but doesn’t define it more narrow than that. We want creatives in equal balance to developers. Both are makers. Anything else to me is just a club.

  • Eric Perardi

    Going to bring Co Working to The Crossover

  • Paul O’Brien

    Are you now…? 🙂

  • Tallulah Breslin

    I’m working on setting up kitchen space in South Central Austin. We had originally planned a larger shared kitchen but we’re pivoting to micro-kitchens d/t Covid.

  • Paul O’Brien

    Years ago, I knew of a few entrepreneurs looking for such a thing. You still considering opening it up to others? (no idea these days if the demand is still there, and I’m not talking with such founders as much as I used to; just curious… how can we help you get that off the ground successfully??)

  • Tallulah Breslin

    Paul O’Brien We’re going to turn the building into a bunch of mini kitchens, instead of one large kitchen. The only thing I need is to hear more from the people who will be using the kitchens.

  • Ashley Balstad

    Well done! I had a deep conversation with a peer about coworking just yesterday and the importance of providing spaces that support the success of different modes of work. Creating hubs of resources related to the work being produced is critical to meeting the needs of coworkers.

  • Paul O’Brien

    Precisely! Thanks Ashley Balstad!! (a bit of my hope is that Austin might lead the way on this… we’ll see)

  • Christopher Pendergast

    I’ve long felt that a little extra effort in scheduling would allow a new standard of something like a 40/60 office/home split to work well … not many people want to be ‘at work’ or ‘work from home’ all the time, I know of a large property holder Fortune 500 company that’s considering major restructuring of its office holdings in light of how well they’ve done with everyone at home. There’s major cost savings, workflow efficiencies, and job satisfaction increases to be had …. I think bigger splits like that will become more common.

  • Paul O’Brien

    Love the idea of time splits. Even working a traditional 9-to-5, there is never any reason anyone needs to be literally at the office 9-to-5, unless it’s the kind of work that needs people physically there.

    One day all hands and then flex time 2 in and 2 out seems logical.

  • Kana LiVolsi-Crosby

    Funny I spoke about this during Austin startup week on Wednesday. Could not agree more, coworking needs to be purposeful to work.

Coworking is not Dead; It’s just been Wrong

by Paul O'Brien time to read: 5 min