MBA student: Confused about Profitability of Cowroking?

[Cameron]

Hi all!

First off, this is a fabulous group, and I love the coworking idea!

I'm an MBA student and I need to choose a topic to write a
profitability/feasibility analysis on for a class, and am interested
in writing about this concept, but wondering about the profitability.

I've researched a lot, and it seems like people have different
answers... a lot say its not profitable since its the community aspect
that's appealing, while others say it can be profitable if you do it
right (what IS considered right is the question?).

I don't want to start a repetitive post, but I would love to hear from
those of you who have experience with running/owning a coworking spot.
Do you break even? If you go beyond break even, is it by much? Is
there anyone who is experiencing growth even with the recession? What
are your membership plans? Does being profitable have to do with
charging for extra services? Most of all, is this a business that one
should approach with a mind frame of making money or with one of
community, or both?

Don't worry about answering EVERY question... I'm just trying to be as
through as I can be in my research! I would be happy to post my
findings once it's all done! :)

Any help would be awesome!

Thanks in advance!

Cam :)

[Cameron]

OH! I forgot to add... does LOCATION matter? I live in Los Angeles,
for example, where rent is high, but things are SO far apart (not very
metro). So would coworking be better in a condensed area? Like SF or
NYC? THANK YOU!!!!!!

[WHERE MMM]

WHERE is very excited to see more interest in this topic and to support the advance of coworking we are offering free usage of our space to those who are working on their thesis on coworking.

[Alex Hillman]

Great questions, Cameron.

First off, we're located in the downtown area of one of the top 10 largest cities in the US. I'm glad you asked the question, because our business model is based on our location. Location is directly correlated to profitability, but in my mind, only in terms of how the business model needs to adjust for location. This takes into account local economic climate, but also local cultural needs.

Sprawling cities have made coworking successful. I'd hope that Matthew Wettergreen from Caroline Collective chimes in about how they've dealt with the sprawl of Houston.

But more about us:
  

Do you break even?

The first office we opened in August 2007 was operationally break even in ~7 months. When we grew into our new office in May of 2009, we operated at a loss for 4.5 months before achieving monthly breakeven.

If you go beyond break even, is it by much?

At our peak of utilization at our old office, IndyHall was generating 100%+ of its monthly operating expenses in profit. So if it cost us $3500/month to run the space, we brought in $7000/month to revenue. Our new space has more than double the operating costs (nearly triple, in fact), but we haven't had to adjust our rates. We achieved this by being thoughtful in managing our expenses, and keeping our costs simple and measurable. All profit for the ~1 year of profitability was put back into paying back debt (which took ~12 months) and finding ways to improve the space (capital improvements, other investments).
 

Is there anyone who is experiencing growth even with the recession?

We grew from 1800 sq ft to 4500 sq ft, and from ~45 paying members (14 full time) to 90+ paying members (26 full time) between March and today. Our 2nd biggest growth rate was in January of 2009, where our full time membership nearly doubled. This pushed us into considering new space.

What are your membership plans?

http://indyhall.org/membership/
 

Does being profitable have to do with charging for extra services?

We don't charge for anything other than membership. We occasionally make a few bucks from hosting an event, but that's barely enough to register.

 

Most of all, is this a business that one should approach with a mind frame of making money or with one of
community, or both?

I think the answer is that the frame of mind we've operated under is triple bottom line:
Profit - profit, for us, is one half of our path to sustainability. If the business side of IndyHall is not profitable, we don't have resources to invest in our community and we can't continue to grow to fulfill our mission.
People - investing in our community is the other half.
People leads to profit. Profit doesn't necessarily lead to people. Involving the community in the operations of the business has been a part of our secret sauce.
Place - investing in our city. This is at the core of our mission of making Philadelphia a better place for people who want to make a living doing something they love.

For the last 2+ years, our model has worked for us on at least three fronts:

1) we've been profitable, twice.
2) we've grown to ~100 simultaneously paying members across all levels
3) we've been recognized by individuals, businesses, and representatives of the city that our efforts and our community are a significant contributor to the growth and visibility of a community in a city that wasn't otherwise known for technology, creative, or independent workers.

-Alex

--
-----
--
-----
Alex Hillman
im always developing something
digital: al...@weknowhtml.com
helpful: www.unstick.me
visual: www.dangerouslyawesome.com
local: www.indyhall.org

[scott anderson]

This was an awesome answer. I am in St Cloud, MN and am currently just in the “looking into’ stages of this coworking world. I love the idea & think the possibilities could be endless.

Again,

Thanks for all the time and energy your put into your thoughts.

It is greatly appreciated,

 

Scott Anderson

Statewide Property Inspections

320-761-2100

Web www.statewidepropertyinspections.com

Blog http://statewide-homeinspections.blogspot.com/  <-----please click on the link

p.s If you thought my services were worth your time and money, I  would greatly appreciate a short testimoanial. A good word or two goes along way when trying to grow my business.  Thank you.

 

---

[Cameron]

THANK YOU!!!! You guys are awesome!

Alex, your detailed answers REALLY help! Thanks so much!! :)

On Oct 29, 10:15 am, "scott anderson"

<sc...@statewidepropertyinspections.com> wrote:
> This was an awesome answer. I am in St Cloud, MN and am currently just in
> the "looking into' stages of this coworking world. I love the idea & think
> the possibilities could be endless.
>
> Again,
>
> Thanks for all the time and energy your put into your thoughts.
>
> It is greatly appreciated,
>
> Scott Anderson
>
> Statewide Property Inspections
>
> 320-761-2100
>
> Webwww.statewidepropertyinspections.com

> <http://www.statewidepropertyinspections.com/>
>
> Bloghttp://statewide-homeinspections.blogspot.com/ <-----please click on
> the link
>

> p.s If you thought my services were worth your time and money, I  would
> greatly appreciate a short testimoanial. A good word or two goes along way
> when trying to grow my business.  Thank you.
>
>   _____  
>

> digital: a...@weknowhtml.com

> helpful:www.unstick.me
> visual:www.dangerouslyawesome.com
> local:www.indyhall.org
>

> On Wed, Oct 28, 2009 at 3:31 PM, Cameron <sy.kash...@gmail.com> wrote:
>
> Hi all!
>
> First off, this is a fabulous group, and I love the coworking idea!
>
> I'm an MBA student and I need to choose a topic to write a
> profitability/feasibility analysis on for a class, and am interested
> in writing about this concept, but wondering about the profitability.
>
> I've researched a lot, and it seems like people have different
> answers... a lot say its not profitable since its the community aspect
> that's appealing, while others say it can be profitable if you do it
> right (what IS considered right is the question?).
>
> I don't want to start a repetitive post, but I would love to hear from
> those of you who have experience with running/owning a coworking spot.
> Do you break even? If you go beyond break even, is it by much? Is
> there anyone who is experiencing growth even with the recession? What
> are your membership plans? Does being profitable have to do with
> charging for extra services? Most of all, is this a business that one
> should approach with a mind frame of making money or with one of
> community, or both?
>
> Don't worry about answering EVERY question... I'm just trying to be as
> through as I can be in my research! I would be happy to post my
> findings once it's all done! :)
>
> Any help would be awesome!
>
> Thanks in advance!
>
> Cam :)
>

>  image001.jpg
> 3KViewDownload

[Alex Hillman]

My pleasure.

By the way, I love the idea that Danielle posted earlier in this thread that they would host anyone studying coworking as their thesis. I admittedly haven't discussed this with Geoff, but I'd encourage the same kind of thing at IndyHall.

One of our interns actually got his undergraduate in psychology and I'm honestly jealous of the lens he gets to look at IndyHall through. I know that I've learned immense amounts about communication, community, business dynamics, and more just by spending my days at IndyHall. ANYONE studying business, communication, or even seemingly unrelated fields like psychology, I'd recommend spending some time working from a coworking space.

-Alex

--
-----
--
-----
Alex Hillman
im always developing something

digital: al...@weknowhtml.com

helpful: www.unstick.me
visual: www.dangerouslyawesome.com
local: www.indyhall.org

[Kelly Brown]

Hi Cam,
BTW - can't get much more of an authority on coworking than Alex.

But figured I'd share some of our learning as well as we just
completed our 1st year in Akron and are preparing to open a 2nd
location in a nearby city (Cuyahoga Falls).

>>Do you break even?
*Just about* - I expect we'll be at our break even point in
December.
We learned a lot in the first year and both our location, market &
pricing model is slightly different than Philly.

Akron isn't a top 10 city -- not even close :)
We're definitely a small city with midwest sensibility for space &
work environement.

We found our members are less accustomed to the shared corporate
environment than larger cities. In our experience, we found most
people in our area are *first* taken aback at the concept of sharing a
work area, office or even a table with someone else. Some come in
with the idea they are going to get an executive suite. Many
immediately embrace it. But still - we found most of our members
wanted private areas they could reserve & sneak away to for phone
calls, meetings, etc.

We changed suites within the same buildling and went from 3600 sq feet
to 2200 -- it gave us more private space for people to break away from
the bustle of the main work area and certainly cut down on our
expenses.

We also raised prices recently which helped a lot. We were greatly
under priced at first and that was a mistake. We didn't see any price
resistance.

>>Is there anyone who is experiencing growth even with the recession?

We are experiencing growth. We gain 2-3 new members each month -- and
haven't seen much attrition. We're currently at 35 members.

We're preparing to launch a second location as well. Our local
community has been VERY supportive -- and we've tried to be very
involved on that front. That has given us a good reputation so
neighboring cities have been reaching out asking for us to open
locations in their area as well.

We're committed to starting this one off at break even and have
entered an agreement with the building owner re: revenue sharing to
ensure that. If we get 6 members to commit to the launch - we'll move
forward. Then every member will benefit because they can use either
space -- extending our value.

>>What are your membership plans?

http://www.officespacecoworking.com/membership-pricing/

>>Does being profitable have to do with charging for extra services?

Not yet. We expect to offer additional services soon -- secretarial,
book keeping, simple lead generation etc. These are the services most
of our members are needing and we've already helped a couple get some
things off the ground.

>>Most of all, is this a business that one should approach with a mind frame of making money or with one of
community, or both?

Both -- can't do one without the other. As Alex points out you can't
enjoy the benefits of the community unless that community can
financially sustain itself. We try to be honest with that -- we have
to make money or we won't exist. People respect that -- we all need
to earn a living.

Best of luck!
Kelly Brown
Office Space Coworking
http://www.officespacecoworking.com

[Tara Hunt]

Citizen Space (San Francisco est. November 2006)

Do you break even? 

Mostly...that is the goal. Sometimes we do, sometimes we fall short.

If you go beyond break even, is it by much?

If and when we go beyond breaking even, it's only by 1/2 month ahead. This makes saving for a rainy day (2009 had many of them) a little tight.

Is there anyone who is experiencing growth even with the recession?

We grew our space this year because of the demand (in January/February), but in the summer, we had a bit of an exodus because multiple residents were looking to cut costs.

What are your membership plans?

$300/month - lite (you get a key, but no 'desk' - just come in and work whenever)

$425/month - full (you get a key + desk where you can keep your stuff and call your home. Access 24/7)

FREE (requested donations) - drop-ins (only when people are around - no after hours or weekends)

http://citizenspace.us/pricing/

Does being profitable have to do with charging for extra services?

We make extra $$ from events...helps out a bit, especially during low membership times.

Most of all, is this a business that one should approach with a mind frame of making money or with one of community, or both?

Community...making $$ is a bonus, but if you do it for the community, you won't be disheartened those months when you are paying out of pocket to keep the space open (which I've done for a while now).

Tara

--
tara 'missrogue' hunt

Book: The Whuffie Factor (http://www.thewhuffiefactor.com)
Blog: HorsePigCow: Marketing Uncommon (http://horsepigcow.com)
Twitter: http://www.twitter.com/missrogue
phone: 514-679-2951

[Mike Schinkel]

On Oct 28, 2009, at 6:55 PM, Alex Hillman wrote:

People - investing in our community is the other half. 

People leads to profit. Profit doesn't necessarily lead to people. Involving the community in the operations of the business has been a part of our secret sauce. 

Thanks for sharing these Alex.  This list is such a great resource.

Can you elaborate on exactly how you involve the community in operations of the business?  Do you open the books to the community?  Do you have them vote on enhancements?  What logistics/technologies do you use?  Other specifics?

3) we've been recognized by individuals, businesses, and representatives of the city that our efforts and our community are a significant contributor to the growth and visibility of a community in a city that wasn't otherwise known for technology, creative, or independent workers.

Can you suggest how you got notices by the representatives in your city? I'm fearing that Philadelphia is more progressive than Atlanta in that respect...

-Mike Schinkel

Ignition Alley Atlanta Coworking

http://ignitionalley.com

[Alex Hillman]

Can you elaborate on exactly how you involve the community in operations of the business?  Do you open the books to the community?  Do you have them vote on enhancements?  What logistics/technologies do you use?  Other specifics?

We spent 9+ months developing events that didn't require a permanent space of our own (Jellies, happy hours, etc). When we started looking for space, we asked people what, and where, they were interested in. The trick when asking for feedback is knowing how to process the feedback loop. We had our own roadmap in mind, but took advantage of feedback to help prioritize.

When it came to finding the space, we involved the community by posting photos on Flickr (an idea borrowed from Citizen Space). People got to see what were were looking at, what the attributes of each space were, etc. Even if they didn't have a "vote", our transparency let them be a part of the process.

We've been public about our growth numbers, most recently integrating them into a new quarterly "Town Hall" meeting format. We share membership numbers, and goals. The most valuable part of the Town Hall has been a section of the format that asks attendees for 2 things that they love about IndyHall, and 2 things that they'd like to help change about IndyHall. We intentionally frame the 2nd part to give them the opportunity to volunteer, and be a part of the improvement they want to see. Our last Town Hall (last week) left us with pretty clear goals for the next couple of months, and have some new "project leads" stepping up from within the community.

The hardest part of community involvement is going beyond being transparent. Leading by example (and finding others within the community to lead by example) and show that "if you want to do something here, you can!". We're as responsive as we can be to suggestions and ideas for improvements to the space and the workflow. It's rare that an idea can't, or won't, be implemented. The only time we dodge a suggestion is if it conflicts with our core values, and at that point we get to explain those core values and help the person re-model their suggestion in such a way that it fits better.

There's no fancy technologies. We tried something like UserVoice.com, but found that it was just a lot more effective on our scale to remove all barriers between members and our leadership...with the goal of our members *becoming* leaders in the community. We're always looking for, and trying, new ways to involve people, with events, formats, projects, and more.

Can you suggest how you got notices by the representatives in your city? I'm fearing that Philadelphia is more progressive than Atlanta in that respect...

 

I think I'll give the same advice I give to startups that ask about "how to get press": be bold. Find ways to add value, and do it in bold ways. If you're doing good things for your city, and you keep doing good things for your city, and you continue to make sure that they're visible, you will get noticed.

Leaders get noticed.

Make your organization a leader in your local industry.

Make improving your city a part of your goal. A part of your mantra. A part of your reason for existing. When Geoff and I started working on the earliest stages of IndyHall as a community concept, he was telling me about his founding of his local civic association with the goal of improving the neighborhood he lived in. The value of working to improve your surroundings is immense, and that became the beating heart of our mission: to make Philadelphia a better place to make a living doing what you love. That's a great mission to check ideas against, and partnerships, and opportunities. People identify with it, and it's crystal clear why you're there.

It's also important to define why you're interested in being noticed by the city. Is it for recognition? Press? Funding? Public resources? What else?

Desks and collaboration are NOT a part of our core mantra, surprisingly to some. You're not going to get the attention of the city by putting a bunch of desks in a room. You ARE going to get the attention of the city by gathering minds, achieving goals, proving a track record, improving a local industry, and as I said at the beginning, being bold at every turn.

As far as Philadelphia being "more progressive" than anywhere...our city, like any city, has some serious problems. We've managed to make ourselves a viable part of a solution to at least one of those problems. And the best part about our solution is that it doesn't rely on the city for support. We keep doing what we're doing, with or without them. We've had similar discussions with other organizations that are big and slow-moving, and our mentality has always been, "look...we're working towards the same thing, and that's great. but we're not going to wait around. we're going to keep doing what we're doing, and when you're ready to get on board, or see an opportunity to get involved in a way that you're comfortable...we'll still be here and you're more than welcome to join us".

In the spirit of disclosure, it helps that Geoff has been involved with civic organizations. Quite a bit. He's been on transition and branding committees with the mayor's office. He's sat on panels and boards with leaders from many, many significant communities. He's not directly involved with the city, but having people involved with your community that have a a track record with city officials helps. Again, if this is a part of your goal, be on the lookout for those people, and give them an opportunity to contribute by bringing their network to the table.

-Alex

--
-----
--
-----
Alex Hillman
im always developing something
digital: al...@weknowhtml.com
helpful: www.unstick.me
visual: www.dangerouslyawesome.com
local: www.indyhall.org

[Mike Schinkel]

Hi Alex,

Great responses all!  I do have some additional questions; the sensing vs. intuitive component of my intellect is kicking in and I'm needing some examples to get it. (Sorry in advance for asking so many questions.)

We've been public about our growth numbers, most recently integrating them into a new quarterly "Town Hall" meeting format.

We share membership numbers, and goals. The most valuable part of the Town Hall has been a section of the format that asks attendees for 2 things that they love about IndyHall, and 2 things that they'd like to help change about IndyHall. 

Great idea!

We intentionally frame the 2nd part to give them the opportunity to volunteer, and be a part of the improvement they want to see. Our last Town Hall (last week) left us with pretty clear goals for the next couple of months, and have some new "project leads" stepping up from within the community.

Can you elaborate on what you do and/or how you frame it to give them the opportunity to volunteer?

have some new "project leads" stepping up from within the community.

Can you mention some "projects" and how you establish project leads?

The hardest part of community involvement is going beyond being transparent. Leading by example (and finding others within the community to lead by example) and show that "if you want to do something here, you can!".

Can you give examples of "Leading by example?"

The only time we dodge a suggestion is if it conflicts with our core values, and at that point we get to explain those core values and help the person re-model their suggestion in such a way that it fits better. 

How do you define your "core values?"  On your website you have:

By putting a community's best interests first, we've created a work environment focused on openness, collaboration, community, sustainability, and accessibility.

How do you define the "community's best interests?"  And which "community?"  In Atlanta we have the broader community which is far too broad to have consistent interests beyond lack of crime, etc.

There's no fancy technologies. We tried something like UserVoice.com, but found that it was just a lot more effective on our scale to remove all barriers between members and our leadership...with the goal of our members *becoming* leaders in the community. We're always looking for, and trying, new ways to involve people, with events, formats, projects, and more. 

How do you deal with ensuring that people can communicate with not only you but all the other members, and in a way that is not overbearing? For example, neither me nor my partner are at the space every day 9-5 so many of our Occasional members can go weeks without seeing us.

We have just set up a Google Group for discussion amongst members but I feel that will quickly become unbearable for some if there is too much inane discussion, and not everyone will actually join the group.

We've thought about using Yammer but not everyone wants to run yet another client.

We've thought about using a hashtag like #ia on Twitter and also having large screen on the wall of each of our two areas that scrolls the #ia screen so people didn't have to always be paying attention to Twitter but big screens cost $$$.

Any other ideas?

I think I'll give the same advice I give to startups that ask about "how to get press": be bold. Find ways to add value, and do it in bold ways. If you're doing good things for your city, and you keep doing good things for your city, and you continue to make sure that they're visible, you will get noticed. 

As a startup entrepreneur, I have lived "bold" many times in my past so I definitely get that. But what I don't yet get are specific examples of what bold looks like related to promoting a coworking space.  Can you give some examples of what you guys did that has been "bold?"

Make your organization a leader in your local industry.

We have many different industries in Atlanta. Which local industry did you guys choose to be the leader in, and how?

Make improving your city a part of your goal. A part of your mantra. A part of your reason for existing.

What kind of things are you doing to improve Philly?  I guess I'm looking for constraints. Members filling potholes would improve the community but probably isn't the best choice we could make for improvement.

When Geoff and I started working on the earliest stages of IndyHall as a community concept, he was telling me about his founding of his local civic association with the goal of improving the neighborhood he lived in. The value of working to improve your surroundings is immense, and that became the beating heart of our mission: to make Philadelphia a better place to make a living doing what you love. That's a great mission to check ideas against, and partnerships, and opportunities. People identify with it, and it's crystal clear why you're there. 

We've been focused on building a "community center" for creative, technical, and startup-focused individuals with a goal of helping them get to know each other, become resources for one another, and ultimately grow business for one another.  Sounds though like that's not what you mean.  Sound like you are referring to something "greater" than that?  

Again, can you elaborate?

It's also important to define why you're interested in being noticed by the city. Is it for recognition? Press? Funding? Public resources? What else?

Good point.  I'll really have to think about that one.

Desks and collaboration are NOT a part of our core mantra, surprisingly to some. You're not going to get the attention of the city by putting a bunch of desks in a room. 

We've made a point it's not the desks, but we have focused on the value of collaboration.  Sounds like you don't see that as having much value?

You ARE going to get the attention of the city by gathering minds, achieving goals, proving a track record, improving a local industry, and as I said at the beginning, being bold at every turn.

Examples?  What kind of goals?  How have you improved (a) local industry(s)?

And the best part about our solution is that it doesn't rely on the city for support.

Heh.  Same here.  We've decided "rather than wait on them doing the right thing, we'll do the right thing without them."

We keep doing what we're doing, with or without them. We've had similar discussions with other organizations that are big and slow-moving, and our mentality has always been, "look...we're working towards the same thing, and that's great. but we're not going to wait around. we're going to keep doing what we're doing, and when you're ready to get on board, or see an opportunity to get involved in a way that you're comfortable...we'll still be here and you're more than welcome to join us". 

Great positioning, I like it.

In the spirit of disclosure, it helps that Geoff has been involved with civic organizations. Quite a bit. He's been on transition and branding committees with the mayor's office. He's sat on panels and boards with leaders from many, many significant communities. He's not directly involved with the city, but having people involved with your community that have a a track record with city officials helps. Again, if this is a part of your goal, be on the lookout for those people, and give them an opportunity to contribute by bringing their network to the table.

Interesting. I have been involved in the startup and entrepreneur community running Atlanta Web Entrepreneurs (1800+ members in 3 years) but have not gotten involved with the city yet. I guess that part should have been obvious to me, and I also guess I can see how we need to align it with our goals and mission.  

Funny how things are so obvious once someone points them out to you. :-)

Thanks again, and thanks in advance.

[Alex Hillman]

Great responses all!  I do have some additional questions; the sensing vs. intuitive component of my intellect is kicking in and I'm needing some examples to get it. (Sorry in advance for asking so many questions.)

OK, let's see if we can tune the dials a bit   

We intentionally frame the 2nd part to give them the opportunity to volunteer, and be a part of the improvement they want to see. Our last Town Hall (last week) left us with pretty clear goals for the next couple of months, and have some new "project leads" stepping up from within the community.

Can you elaborate on what you do and/or how you frame it to give them the opportunity to volunteer?

 

Having people involved in the space from the get-go sets this example. We signed a lease on a Tuesday, and sent out an e-mail that day asking people to show up on Saturday with rollers to start painting. The following week, a desk-building party. Turning tasks into social events sounds sneaky, but it's worked really well at helping people identify with a sense of ownership. They're more than paying members, they have an emotional attachment to the space because they've contributed to its existence. They're proud of it.

The beauty of this is that it's the first shove in a cycle of creating more of this mentality. The people with that sense of attachment lead by example, and new members that join see that activity and the reward (public thanks and recognition is the simplest reward), and the cycle continues.

Tying needs to special interests helps, too. One of the topics at the Town Hall was regarding the installation of Bike storage. Someone who actually rides his bike every day has a vested interest in seeing that happen. I gave him the contact info of our landlord to see if they're interested in supporting the idea before we do it ourselves. He gets to run with it and not only fulfill his own self interest in having a bike rack, but now he's a hero for the other bikers.

have some new "project leads" stepping up from within the community.

Can you mention some "projects" and how you establish project leads?

The bike rack project is one example. Designing and installing sound baffles to cut down on echo is another.

I think the #1 way we've established project leads was to pair peoples' interests and areas of expertise, with their own self-interests, with the greater benefit of the community. It takes some massaging sometimes, but more often than not, the opportunities present themselves as the diversity of the community and its' needs grows.

The hardest part of community involvement is going beyond being transparent. Leading by example (and finding others within the community to lead by example) and show that "if you want to do something here, you can!".

Can you give examples of "Leading by example?"

Monkey see, monkey do. :)

Before some members started collaborating out in the open, people more or less kept to their own projects, socializing but less on the idea exchange. Once a few members started showing that it wasn't only safe, but beneficial to work out in the open, share ideas, and find partners...collaboration and teams started to form MUCH more often.
 

The only time we dodge a suggestion is if it conflicts with our core values, and at that point we get to explain those core values and help the person re-model their suggestion in such a way that it fits better. 

How do you define your "core values?"  On your website you have:

By putting a community's best interests first, we've created a work environment focused on openness, collaboration, community, sustainability, and accessibility.

How do you define the "community's best interests?"  And which "community?"  In Atlanta we have the broader community which is far too broad to have consistent interests beyond lack of crime, etc.

Core values aren't shared 100% across the board. There's no requirements that you need to identify with any, or all, of those things in order to be a member of IndyHall. What we believe is that the greatest value from involvement is when some, or all, of those values are considered. There are also lots of people outside of the paying membership that identify with those values. They tend to be the ones that we align best with as an organization. Tend. :)

How to define the community's best interests is tough, but what it means in this case is that it was the community and not any one individual's best interests. Does that help?
 

How do you deal with ensuring that people can communicate with not only you but all the other members, and in a way that is not overbearing? For example, neither me nor my partner are at the space every day 9-5 so many of our Occasional members can go weeks without seeing us.

We have just set up a Google Group for discussion amongst members but I feel that will quickly become unbearable for some if there is too much inane discussion, and not everyone will actually join the group.

We've thought about using Yammer but not everyone wants to run yet another client.

We've thought about using a hashtag like #ia on Twitter and also having large screen on the wall of each of our two areas that scrolls the #ia screen so people didn't have to always be paying attention to Twitter but big screens cost $$$.

Any other ideas?

We use Basecamp in the same way that you've used a google group, and even in that case, you end up with some people paying more attention than others.

A lot of our members are on Twitter, and we broadcast a lot of messages/updates that way, but it's not 100%.

We have a bi-weekly newsletter that we distribute with Newsberry.

We have a Campfire chat room that gets used in waves. Geoff is a big proponent of Campfire but I haven't seen adoption pick up enough to make it consistently used.

E-mailing me, while old and funky, is tried and true :)

I've seen Ning groups born and die. I've seen Facebook groups born and die.

There's a very real problem, especially as you grow, with keeping communication moving when members (and owners/catalysts) are not in the space every day. It's something we continue to try, and I'm always interested in new ideas.

The only thing that's CONSISTENTLY kept people in touch was events...not tools.

Introducing regular ritual events help. One of our newest is a regular group lunch, every Friday. It's focused on new members meeting people, but not exclusive to it at all. 

As a startup entrepreneur, I have lived "bold" many times in my past so I definitely get that. But what I don't yet get are specific examples of what bold looks like related to promoting a coworking space.  Can you give some examples of what you guys did that has been "bold?"

I think that the act of opening a coworking space in the public fashion we've been talking about, itself, is bold. That's a really good question, though. I'd need to come back for some more specific examples.
 

Make your organization a leader in your local industry.

We have many different industries in Atlanta. Which local industry did you guys choose to be the leader in, and how?

 Our focus was initially on independents and mobile/remote workers, which was easy, because I was (am) one. We're actually NOT focused on startups, but we are focused on business in Philadelphia. I think by showing that there was an alternative way, not just place, but WAY of working...we garnered interest from the general business community in Philadelphia (and elsewhere).

Make improving your city a part of your goal. A part of your mantra. A part of your reason for existing.

What kind of things are you doing to improve Philly?  I guess I'm looking for constraints. Members filling potholes would improve the community but probably isn't the best choice we could make for improvement.

Improving the visibility of a quickly growing industry is economically valuable. Our biggest goal, and so far success, has been changing the perception of Philadelphia from both the inside and the outside. Internally, it's a morale booster, which translates into more people doing things (developing groups, projects, businesses, etc). Externally, its a marketing tool on behalf of the city. The fact that people outside of Philadelphia know what's going on here, where 2 years ago, people IN Philadelphia barely knew what 

We've been focused on building a "community center" for creative, technical, and startup-focused individuals with a goal of helping them get to know each other, become resources for one another, and ultimately grow business for one another.  Sounds though like that's not what you mean.  Sound like you are referring to something "greater" than that?

No, I think you nailed it. We've used the term clubhouse. But it's interchangeable with community center.  

What's "greater" than that is the fundamental shift of mentality that comes as a result. People consider what they are capable of differently when that clubhouse and support network exists. That mind-shift was what we really wanted. Space along the way is an extremely valuable bi-product of the process.

Desks and collaboration are NOT a part of our core mantra, surprisingly to some. You're not going to get the attention of the city by putting a bunch of desks in a room. 

We've made a point it's not the desks, but we have focused on the value of collaboration.  Sounds like you don't see that as having much value?

I may have mis-spoken here. Collaboration is extremely valuable, and as I've mentioned, is part of the mind-shift we've experienced. I'll eat my words and say "my bad".

Collaboration, though, is tough to impose. It's environmental, but it's also organic. I think space is a step towards opportunities for collaboration (acceleration of serendipity, if you will). I think we focused more on togetherness than collaboration (until we formed IndyHall Labs, which IS in fact about aiding collaboration), but collaboration came as a more organic bi-product.

You ARE going to get the attention of the city by gathering minds, achieving goals, proving a track record, improving a local industry, and as I said at the beginning, being bold at every turn.

Examples?  What kind of goals?  How have you improved (a) local industry(s)?

 

I've got a bunch of examples through here so far that I think help draw this picture better. Again, I can come back with more specific examples if needed.

WHEW! That was fun.

As a sidenote, I'd love to turn this dialogue into something a bit more readable so it can be republished. If anyone's interested in taking that on, I'd be happy to proofread for context and start sharing it around.

-Alex

[Mike Schinkel]

On Nov 1, 2009, at 1:15 PM, Alex Hillman wrote:

Having people involved in the space from the get-go sets this example. We signed a lease on a Tuesday, and sent out an e-mail that day asking people to show up on Saturday with rollers to start painting. The following week, a desk-building party. Turning tasks into social events sounds sneaky, but it's worked really well at helping people identify with a sense of ownership. They're more than paying members, they have an emotional attachment to the space because they've contributed to its existence. They're proud of it.

The beauty of this is that it's the first shove in a cycle of creating more of this mentality. The people with that sense of attachment lead by example, and new members that join see that activity and the reward (public thanks and recognition is the simplest reward), and the cycle continues.

Excellent.  We didn't do enough of that from the get-go.  Hopefully we can course-correct.

Tying needs to special interests helps, too. One of the topics at the Town Hall was regarding the installation of Bike storage. Someone who actually rides his bike every day has a vested interest in seeing that happen. I gave him the contact info of our landlord to see if they're interested in supporting the idea before we do it ourselves. He gets to run with it and not only fulfill his own self interest in having a bike rack, but now he's a hero for the other bikers.

Great point!

The bike rack project is one example. Designing and installing sound baffles to cut down on echo is another.

I think the #1 way we've established project leads was to pair peoples' interests and areas of expertise, with their own self-interests, with the greater benefit of the community. It takes some massaging sometimes, but more often than not, the opportunities present themselves as the diversity of the community and its' needs grows.

That example was what I needed, thanks.

Monkey see, monkey do. :)

Before some members started collaborating out in the open, people more or less kept to their own projects, socializing but less on the idea exchange. Once a few members started showing that it wasn't only safe, but beneficial to work out in the open, share ideas, and find partners...collaboration and teams started to form MUCH more often.

So the point is to look for things people want in the space and get them to start making them happen, right?

How have you handled things that need funds?  Established a budget?

Core values aren't shared 100% across the board. There's no requirements that you need to identify with any, or all, of those things in order to be a member of IndyHall. What we believe is that the greatest value from involvement is when some, or all, of those values are considered. There are also lots of people outside of the paying membership that identify with those values. They tend to be the ones that we align best with as an organization. Tend. :)

So the first FAQ are your core values you speak of? 

http://www.indyhall.com/coworking-faqs/

How to define the community's best interests is tough, but what it means in this case is that it was the community and not any one individual's best interests. Does that help?

To clarify here, when you say "the community" you are referring to the community of your members and not the broader community of Philly, right?

We use Basecamp in the same way that you've used a google group, and even in that case, you end up with some people paying more attention than others.

Not a fan of 37 Signals...

A lot of our members are on Twitter, and we broadcast a lot of messages/updates that way, but it's not 100%.

Do you use a hashtag so people can go back and find the updates?

We have a bi-weekly newsletter that we distribute with Newsberry.

Ha!  I see you are using a Philly company.  We use MailChimp, and Atlanta company. :-)

We have a Campfire chat room that gets used in waves. Geoff is a big proponent of Campfire but I haven't seen adoption pick up enough to make it consistently used.

Hmm.  Interesting.

E-mailing me, while old and funky, is tried and true :)

True, but that only works for member-to-operator, but not member-to-member. 

I've seen Ning groups born and die. I've seen Facebook groups born and die.

Yeah, wasn't thinking those would work well either.

There's a very real problem, especially as you grow, with keeping communication moving when members (and owners/catalysts) are not in the space every day. It's something we continue to try, and I'm always interested in new ideas.

We are seeing that problem now.

The only thing that's CONSISTENTLY kept people in touch was events...not tools.

Funny you mention.  We plan to start coordinating lunch & learns once we hit 100 members.  My Meetup organizer background is emerging here.

Introducing regular ritual events help. One of our newest is a regular group lunch, every Friday. It's focused on new members meeting people, but not exclusive to it at all. 

Good idea.  I'll have to see what my partner thinks of that.

I think that the act of opening a coworking space in the public fashion we've been talking about, itself, is bold. That's a really good question, though. I'd need to come back for some more specific examples. 

LOL!  I guess you are right there; many locals have been telling us essentially that.

Funny thing is, people I either "get" it right away or no amount of describing it can get me to think they really get it.  That tells me the concept of coworking has a long way to go before the mainstream understand it (if they ever will, and if we even want that, dunno.)

 Our focus was initially on independents and mobile/remote workers, which was easy, because I was (am) one. We're actually NOT focused on startups, but we are focused on business in Philadelphia. I think by showing that there was an alternative way, not just place, but WAY of working...we garnered interest from the general business community in Philadelphia (and elsewhere).

Sorry to ask so many questions, but... you focused on "business", how has the general business community embraced this?  I mean, you don't have tens of thousands of members.

And by focused on business, are your members mostly doing freelance work for larger organizations in Philly?

And how diverse is your membership?  Do you have developers, designers, lawyers, artists, writers, marketers/pr, lawyers, accountants, etc. etc., or are you more specialized in your membership?

Or maybe I should just plan a trip to see your space. :-)

Improving the visibility of a quickly growing industry is economically valuable. Our biggest goal, and so far success, has been changing the perception of Philadelphia from both the inside and the outside. Internally, it's a morale booster, which translates into more people doing things (developing groups, projects, businesses, etc). Externally, its a marketing tool on behalf of the city. The fact that people outside of Philadelphia know what's going on here, where 2 years ago, people IN Philadelphia barely knew what  

Good point. Besides this list where have you been showcased to people outside your city?

No, I think you nailed it. We've used the term clubhouse. But it's interchangeable with community center.   

What's "greater" than that is the fundamental shift of mentality that comes as a result. People consider what they are capable of differently when that clubhouse and support network exists. That mind-shift was what we really wanted. Space along the way is an extremely valuable bi-product of the process.

Gotcha. I think we're on the right track with it then.

Collaboration, though, is tough to impose.It's environmental, but it's also organic. I think space is a step towards opportunities for collaboration (acceleration of serendipity, if you will). I think we focused more on togetherness than collaboration (until we formed IndyHall Labs, which IS in fact about aiding collaboration), but collaboration came as a more organic bi-product.

So true!  We are planning to do things to simply catalyze, and learn from what is effective and what isn't to improve over time.

WHEW! That was fun.

And very enlightening for me, thanks.  Hope it was helpful for the rest of the list too.

As a sidenote, I'd love to turn this dialogue into something a bit more readable so it can be republished. If anyone's interested in taking that on, I'd be happy to proofread for context and start sharing it around.

One of my members has been pushing me to write a book about Coworking with her help (she's more of an author who uses subject matter experts.)  I told her "I'm not the expert" but was thinking about you, Tara, Tony, Jerome, and several others on this list.  

If you are really interested, I think she would be interested in helping us get together to write a coauthored book entitled (something like) "Coworking: The Future of Work and How You'll Love it."   We could do the Tim Ferris thing and use Google AdSense to do market research for the title that would appeal the most.

So if you are serious, let start a dialog.

-Mike

[felicity at cubes]

Fantastic discussion. I love to hear what everyone is sharing, and am
keeping
track of the discussion as I am working on a research piece on
coworking.
I am interested in particular in how coworking is changing the way
business is
done and people select careers and employment.

On a couple of the points discussed:

Ownership not just by space owners:

There is an interesting synergy between coworkers but also between
the people who get involved in the space.
As Alex said, inviting people to come with rollers starts to give them
ownership of the space.
I was talking to an employee the other day who mentioned that being
appreciated helps her take
ownership of her job. This applies to coworkers in that we find
thanking our members for being part
of our community helps them to reach out to other groups.

Events for connections/membership:
Also, events bring the connections faster than just inviting to work.
We utilize
events to bring in new members and create opportunities for people to
chat with each other.
Often are newer members aren't quite sure how to start discussions
until they have met people
in a social setting or class. Our events tend to have an educational
component i.e. round table
discussions, marketing bootcamp, 18hr startup, etc. These are
interactive events, not just a
have a speaker in and everyone sit and listen. Of the people who come
to our roundtables, we have
50 - 75% sign up as members within 2 weeks of the round table
discussion.

Finally:
Meetups are great way to introduce people to your events when you are
unknown. They also
can serve to bring more people in as you grow.

Just my 2 cents...

Felicity
Cubes&Crayons
Outside the Cube
In San Francisco and Silicon Valley

[Natha]

Do you break even? If you go beyond break even, is it by much?

Yes we do, almost daily

Is there anyone who is experiencing growth even with the recession?

Yes, we have a strong growth of coworkers from september.

What are your membership plans?

- 250€ per month
- 10€ per day
- 7€ per half-day
- a free space

http://lacantine.org/blog/un-espace-de-coworking

Does being profitable have to do with charging for extra services?

No, we doesn't charge for "extra" services But we make € from events
and meeting rooms renting.

Most of all, is this a business that one should approach with a mind
frame of making money or with one of
community, or both?

For this part i totally agree with Alex's answer (sorry if i don't
developp my thought but my english to poor to answer clearly)

Natha

[Cameron]

Thanks a lot everyone. The general notion I'm getting seems to be that
you CAN make a profit, but not too much... right?
So the profit is capped (especially since there are only a certain
number of desks/chairs available)? Not necessarily a business to start
if you are only looking at the bottom line, since that goes against
the whole idea of coworking.

Again, thanks for the detailed info :)

[ourspace...@gmail.com]

If you want to make much money in anything you need to expand your
business, and do it very well! If each of your coworking site profits
$100K and you 5 you can then do pretty well! It's about how you
relentlessly pursue your community!

Jodi Dean
ourspacefortwayne.wordpress.com

[Susan Evans]

Hi all,

Great thread. I haven't been able to get to answering all the
questions specifically, but Cameron I'd weigh in with a big yes to
that last question of yours - we can make a profit, but just not a big
one. The space itself is never going to be a big money maker, but
what happens within the space is where profits for members and owners
alike can really get going. I like to think of the idea of profits
from Office Nomads going in part to creating a rainy-day fund for the
space itself (ensuring to give back to the space in ways that we'd
like to see in the future), and anything left over passed to staff.

Great questions, and great responses all - Cameron if you're looking
for more folks to reply fully to your list of questions please let me
know - I'm happy to send more details over!

Susan
Office Nomads

[Jason Schaefer]

I am considering the idea of opening a co-working space and enjoy all
the information provided. I keep hearing there's no room for profit or
that the profit is pretty small. Can some one elaborate on this
subject or provide numeric examples either publicly on this thread or
privately to my email. I find the financing details to be extremely
important even when the situation could be a breakeven.

Regards,


Jason Schaefer

[Cameron]

Continuing Jason's thought, if someone could post any type of numeric
info, it would really help me out too! You can always send it to me
privately as well! Thanks again everyone! I love how you are so
helpful! :)

And Susan, I actually read all about Office Nomads in Entrepreneur!
You guys have an awesome space (saw the video online). If you can
elaborate a bit more I would appreciate it! What do you mean by what
goes on within the space? Events? Does your space make a profit based
on events? If you don't mind giving me more specifics, I would
reallyyyyy appreciate it! Thanks again everyone! :)

On Nov 3, 11:46 am, Jason Schaefer <jplayma...@gmail.com> wrote:
> I am considering the idea of opening a co-working space and enjoy all  
> the information provided. I keep hearing there's no room for profit or  
> that the profit is pretty small. Can some one elaborate on this  
> subject or provide numeric examples either publicly on this thread or  
> privately to my email. I find the financing details to be extremely  
> important even when the situation could be a breakeven.
>
> Regards,
>
> Jason Schaefer
>

[felicity at cubes]

Just a final weigh in on this...

Our spaces run differently than traditional coworking spaces in terms
of revenue model. In Cubes&Crayons, most of the revenue comes
from the childcare, although it is difficult to say as the revenue is
interlinked.
In Outside the Cube, we are about being a community of resources and
many people are members without working in the space so we generate
revenue both from space use and events and membership. We also
generate
a decent revenue from people who rent out our space for their events.

Our Outside the Cube events are getting more popular as the brand is
becoming
better known. They tend to be unique and very focused on the
community needs.
For example,next week we host Silicon Valley Business Development
Week and 18 hr startup in our Mountain View location and have a great
roundtable
event - Wine and Biz on the 10th in our San Francisco location. And
then we do
bootcamps - everything from marketing to Django and iphone App
development to
running your business on a shoestring.

For those of you in the Bay Area or just interested, you can see a
full listing of our
SV Calendar: http://www.otcsf.com/events/index/2/
SF Calendar: http://www.otcsf.com/events/index/1/

I think you will find numbers vary by location based on cost of
living, etc.
For us, right now we are providing an affordable coworking space with
a great
community of interesting people with the added bonus of a broader
membership
of professionals to mix with in classes and events. And yes we make a
profit.

Hope that helps.

All the best,
Felicity