Peter Drucker, considered an influencer in the fields of business and managerial consulting, shrewdly stated long ago: “Because the purpose of business is to create a customer, the business enterprise has two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Businesses which fail to innovate will eventually die.
Someone who has understood this concept is Adam Neumann, who in 2010 innovated – and revolutionized – the office space when he co-founded communal workspace giant WeWork. Neumann has stated on different occasions that WeWork is seeking to create a world where people make a life and not just a living.
A few decades ago, there was a certain expectation of what a young adult would do when he or she graduated from college. Today, it’s a very different reality. Many individuals are now deeply focused on purpose and meaning, even more than on material goods. They want to go to work to make an impact and receive fulfillment from the mission they pursue.
While WeWork is the frontrunner in this coworking disruption, a myriad of other companies are also opening spaces faster than we can keep track of. The news is full of stories about billion-dollar valuations in this space. With its latest $21 billion valuation, WeWork now tops the market caps of large REITs like Boston Properties and Vornado.
So what are some reasons for the popularity of the coworking space?
Coworking spaces allow entrepreneurs and their teams to sign short-term leases, begin working without worrying about owning any office furniture and equipment, use only the space they need, attract a new type of talent pool, and surround themselves with other like-minded entrepreneurs. In addition, a company renting this space is no longer defined by the stigma of 9 to 5. Most coworking spaces are open 24 hours, meaning that you can get your work done whenever you’d like without conforming to what used to be society’s standards.
An article by Office Vibe states that only 30% of people prefer to work during normal business hours. This means that 70% of the population would like to work outside those hours; what used to be “normal” is no longer the case.
A research study that was performed at Michigan’s Ross School of Business interviewed over 200 people who work in coworking spaces across the globe. What was uncovered in the research study is that people prefer the feeling of being around others without necessarily working with them. People don’t like to work by themselves with no one around, nor do they like to work in a formal office setting.
The study also uncovered that people love to be themselves without feeling as though they are competing with everyone around them. When you’re in a coworking space, you’re not competing against anyone like you would be in an office setting. People are happy to be part of a friendly community.
By the year 2022, according to an article on GCUC, there will be 5.1 Million coworking members within around 30,500 spaces. Coworking spaces are growing fast, and they are here to stay. More companies than ever are shifting towards utilizing a coworking space and are discarding the conventional office.
Coworking spaces, for a good portion of the global population, especially millennials, are much more advantageous than having a typical office space. Companies such as Verizon, IBM, Microsoft, Barclays, and others are now testing these coworking spaces because they’ve realized the value of being in this arena. With such large corporations entering this space, it is only a matter of time until other market players join the trend.