A movement that has entrepreneurs from various businesses working desk-to-desk—or cubicle-to- cubicle—in shared office space is transforming the economy.
Ask entrepreneur Manick Bahn, who launched the mobile app Rukkus, offering tickets to various events at a discount. His journey to becoming a start-up CEO began in his New York City apartment. “We did that at the beginning and we tried to do as far as we could to conserve capital. And when we hired two or people it just wasn’t working anymore to fit everyone in a small space like an apartment,” Bahn said.
He tried running his business out of slightly larger venues too. “At one point we worked out of a coffee shop for about a week, that was interesting. But it’s dfficult to leave your computer at a seat, have to run to the restroom. There were a lot of logistical problems,” he said.
Like many startups, Bhan’s company was facing initial growing painsexpanding fast but constrained by its physical workspace.
Enter WeWork, a leader in this fast-growing industry of co-working spaces that is changing the way startups and smaller companies do business. More freelancers and entreprenuers are opting to set up shop in coworking spaces like WeWork or The Yard, where they can rent a cubicle, an office or suite month-to-month and get access to office resources.
This co-working “community” is gaining a great deal of interest—from entrepreneurs and investors.
WeWork has grown from nine locations a year ago to 21 today in the U.S. and Europe, and plans to expand to 60 locations in the next 12 months. It has more than 15,000 members—that’s 5,000 businesses that have added some 6,000 employees in the past year. As for the The Yard, the company has four locations since opening their flagship Brooklyn location in 2011.
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Is this all a sign of a small-business bubble? WeWork’s CEO Andy Neumann says not at all. Many small businessess “have not had access to cheap capital, they’ve not had big investments thrown at them. Most of our companies are businesses that have real cash flow that either had 4 or 5 employees before and we working from their home or Starbucks or a backoffice and now understand that coming to a shared space, they will do much better.”
Co-working spaces like The Yard and WeWork offer amenities at a relatively low cost—a receptionist, conference rooms, kitchen, lounge areas, free WiFi, coffee and tea. But mostly, Andy Smith the executive director of The Yard says the network is invaluable.
“You can come to a space like The Yard and find a network of entrepreuners, where everyone is hungry and everyone is working hard.”
Rental terms are flexible, too. Entrepreneurs can upgrade their space as their company expands.
That’s what Rukkus did—growing from seven to 15 employees in less than a year—while renting space at WeWork. “They basically take out a lot of the logistical challenges you might face as a start ups face out of the equation and just let you focus on your business,” Bahn said.
But for Bahn, one of the most coveted amenities of working out of a shared space is sharing information and ideas—the sense of community.
“There’s no book that teaches you how to build a tech start-up,” Bahn said.
But being around others who are doing the same can help.