- According to a CB Insights report published in a 2019 Forbes article, 70% of startups fail due to poor decision-making, lack of planning, and absence of financing.
- Many might think that a coworking space is just a millennial trend. But researches and statistics suggest that this is a real business solution that can help startups succeed.
- Spotify, Instagram, and Uber are just some of the successful companies that started in coworking spaces, proving that this shared office type could benefit startup companies.
- Common Ground provides a dynamic and supportive environment for startup businesses to grow.
Who says starting a business is a walk in the park? Your stepping stones to success might as well be the stones you bang your head with. It’s a highway to hell paved with challenges, trials and errors, tech glitches—and failures! In the tech industry alone, 70% of upstart companies fail. That is according to a CB Insights report cited in a 2019 Forbes article.
So before you think of getting Facebook or Apple a run for their money, let’s walk you through the common challenges of starting a business.
- Focusing on what really matters—meeting customers’ needs and developing your product or service
- Making and saving money, and reaching profitability
- Getting the right people to build a motivated, smart, and talented team
- Widening your network for potential investors, partners, and clients
- Installing proper technology and equipment to operate and get jobs done
- Achieving flexibility and scalability depending on business conditions
What if we tell you that coworking can help you with these startup challenges? While many might think coworking space for startups is more of a millennial fad than a real business solution, there are already researches, statistics, and real success stories that tell otherwise. Here are six ways coworking space for startups means business and the proof that it actually works.
1. With coworking, you can forget the 80% involved in starting a business to focus on the key 20%.
Pareto’s 20/80 rule is pretty basic and quite universal. Just as 20% of the population owned 80% of its wealth and 20% of employees create 80% of the work output, focusing on the crucial 20% business considerations can result to 80% growth or profit. The problem is, many startup companies get it upside down. They’re stuck with the mundane 80% like finding and keeping an office, acquiring and setting up equipment, creating and managing teams, when they could have focused on just two things—knowing their customers and developing their product.
Without these two things, this crucial 20%, you don’t have a business to begin with. On the other hand, it’s also true that you have to begin somewhere when starting a business.
Lucky for you, you don’t have to start at your cramped garage like Microsoft did. With coworking, startups can get a fully equipped, ready-to-use office instantly. No need to worry about tech installations, and office maintenance. Most coworking spaces also offer business support services such as recruitment, legal services, and graphic design, so you can focus on your core business functions.
THE PROOF: Indiegogo was once a humble startup, but now, it’s helping hundreds of new businesses and ideas get funded as the biggest crowdfunding platform in the world. Starting in a coworking space in San Francisco proved to be a smart move. They were able to focus on their intended clients, (which were startups) not only by taking advantage of coworking, but more so by being able to cowork alongside them.
2. Get better value and lessen expenses with coworking.
A huge capital investment and the first months marked with loss are normal for new-born businesses. The challenge is how to manage expenses and reach profitability. By choosing to cowork, you are already saving money on office construction or rental, and procuring and setting up furniture and technology infrastructure. You also save on cleaning services, security, office and equipment maintenance, and monthly utility bills.
Coworking space for startups also saves on extra expenditures such as office supplies and refreshments as many coworking spaces offer these for free. They also partner with many companies to provide their members with extra discounts and privileges on key business services and lifestyle perks.
In choosing a coworking space, don’t just look at the price. Know what’s included in the packages or membership plans being offered. Check also the extra benefits and member privileges you could get.
THE PROOF: Common Ground is the largest coworking space provider in Malaysia that has expanded here in the Philippines. All their membership plans come with global coworking access, high-speed internet, business-class equipment, support services, free refreshments, and so much more. For as low as PHP 12,000 a month, you could get a hot desk, while a fixed desk costs PHP 16,000 per month. For small to medium-sized teams, a fully-furnished private office can be availed for only PHP 21,000 a month!
3. Find the right people for your team in one place.
Coworking spaces are full of capable professionals. Based on the Global Coworking Survey, coworking users are highly-educated with 41% holding a bachelor’s degree, and another 41% having a master’s degree. Information technology professionals are still the biggest group in coworking spaces. But public relations and sales are also dominating industries for these shared facilities. People in marketing and the creative industry are also common users.
With this pool of workforce, you could find the right people for your team without going anywhere else. Some coworking spaces also have recruitment specialists onboard to help you with the hiring.
Paul Graham, one of the most successful entrepreneurs around, placed good people as the top essential for a good startup, ranking product development and financial management at only second and third place respectively. Many failed businesses thought creating a good product should come first before setting up a team. The truth is, having the right people by your side is the only way you could develop a good product that customers actually want.
THE PROOF: A coworking space provider conducted a survey (among its members) that was published in Entrepreneur Asia Pacific in 2018. In the survey, 40% of respondents expect to hire 1 to 2 people, while 27% expect to hire 3 to 5 people from the coworking space.
4. You have more opportunities to grow your network so you can grow your business.
Self-made success is something to be doubtful about because you’re going to need all the help you can get when you’re starting out.
Besides a great team of talents, you also need mentors and consultants to whom you can get valuable business smarts and industry expertise. When you work around experienced and like-minded individuals, you don’t only get to learn more. You also catch their energy and vibe that can motivate and inspire you to work.
You find potential partners and investors in a coworking space as well. This is important especially for startups trying to find sources of funding. Ask the assistance of the community manager, so you can get introduced to possible business partners or get referrals. Moreover, you could use the meeting room of your coworking space to invite possible partners and investors coming from other places.
As in the case of Indiegogo, coworking space for startups could also direct to potential clients. It’s just a matter of getting the right exposure by socializing around the open work area, being part of community activities, and attending tailored events to get connected with the right people that can propel your business.
THE PROOF: Spotify began as a tech startup at RocketSpace, a coworking space in San Francisco. RocketSpace connects startups to tech professionals and investors through programs designed for networking and development.
5. Use cutting-edge technology and office equipment needed to operate your business without the high cost.
Technology can make or break a business. Whether for client meetings or when trying to close a sale, technology is present. In this automated times, productivity and speed of delivery are not anymore solely dependent on employees. These depend on the technology used as well.
Therefore, its importance cannot be ignored. But acquiring the best internet connectivity and office tools are enough to stop businesses from even starting. For one, these are costly and installation could also be a problem. Ongoing cost of maintenance could hurt business funds, too.
So it’s really amazing that opting for a coworking space saves your startup from such tech difficulties. When getting a coworking space, check the kind of internet connection and equipment it offers to know if these are apt for the kind of work you’re handling.
THE PROOF: Common Ground takes technology seriously. It offers super-fast wireless and wired connection, and top-of-the-range printers, scanners, and copiers at every location. What’s more, it provides credits and discounts from various leading software providers, and its recruitment specialist partners could help you find an adept Chief Technology Officer (CTO) to further help you when it comes to your tech needs and challenges.
6. Have a flexible office solution that you could scale up or down when needed.
Here’s where things get tricky for startups. Even when things seem to be growing and moving forward, scaling up your business at the wrong time could move your business, together with all those hard work, south! In fact, 70% of startups scale up too early based on the Startup Genome Project. They even go as far as saying that this explains why up to 90% of startups fail.
Of course, there are standards and indications you could monitor to know when you could scale up. Nevertheless, with a coworking space, you could easily scale up or down depending on business situation or growth. Move up to a private office when conditions call for it, but be able to scale down to a three-man setup when a certain project ends.
This way, you are more capable to adjust to the ever-changing and unstable nature of a startup business. You cannot do this with a traditional office. True enough, it’s survival of the fittest. And your capacity to adapt can place your startup at the end of the business food chain.
THE PROOF: Instagram, Uber, Hootesuite, and Weebly are just some of the successful companies and brands that are products of coworking spaces. So while it’s true that many startups have failed, choosing the best coworking space that provides the basic services, great value, networking, high-quality technology, and flexibility can help your startup join the list of the few that actually made it.
Common Ground is a great place to start.
Where you start impacts where you’ll find yourself next. When it comes to coworking, Common Ground provides a dynamic and supportive environment for startup businesses to grow. We have functional and useful facilities and amenities, well-thought out and well-designed open work area, tailored community events and activities, as well as experienced and professional team to ensure your business operate smoothly and efficiently.