Can Companies Grow In Co-Working Spaces?
Over just the past couple of years, we’ve watched modern co-working become a multibillion-dollar industry, seemingly right under our noses. WeWork’s now valued well into the 11-digit range, and attempts to jump into the fray are everywhere, from in-house shared space provided by companies like Silverstein Properties, to small operations popping up outside of traditional office districts. But if part of the point of co-working spaces is to help small companies grow, what happens when they do?
When Triptease, a company that helps hotels increase direct sales, needed to move on from one of Grind’s co-working spaces, Grind CEO Ben Dyett (above) didn’t mind that the company's roughly 20 employees were leaving. That’s because Triptease, which just this week closed on $7M in a Series A round, wasn’t really leaving.
Ben tells us Grind went to Triptease and asked what they needed in order to stay, and it turned out they could provide it at a new space they’re preparing to open up. The new space is being built out with the company's feedback, Ben says.
Sometimes whether to stay in a co-working space or move on isn’t even up to a company. Ben tells us one company he didn’t want to name that had rented space from Grind received Series A funding and promptly left for its own dedicated space—not by choice, but because its funders insisted on it.
And Upworthy, a viral web content producer, has opted to stay at a Grind space, Ben says, even as its team has grown to around 25 people. He says the reason companies like that can stay in space typically reserved for single-digit-employee companies is twofold.
First, Grind favors a lot of common workspace, dedicating between 30% and 50% in each location’s footprint to it. Second, companies have to be up for the mingling and chance encounters that come from spending a lot of time outside of their dedicated space. Ben says in the case of companies like Upworthy, those factors align.
Waiting a while to move into your own space isn’t always such a bad thing, says JLL’s Jason Schwartzenberg.
“The biggest mistake is timing,” Jason says. “Growing companies rarely know how long it actually takes to identify a space, negotiate, build it out and move in. Usually they underestimate the time it takes.”
Jason worked with Dave Partners CEO Dave Carvajal to check out dedicated space in Manhattan a few years ago. But Dave says his eight-employee executive recruitment firm is better suited to a co-working space. It moved back into a WeWork location in the Flatiron District last year, after a stint sharing space with a larger company in the Financial District.
Dave says the location in the heart of Silicon Alley was the big thing, but it also didn’t hurt that his firm, which caters to fast-growing tech companies, fits right in among the entrepreneurs that populate a WeWork space. “I feel like I can bring my clients here,” he says. “But also, you never know who you’ll bump into.”
But bumping into people might be exactly what a growing company wants to avoid. Jacob Layani, who runs the New York operation of a digital signage company called Crown TV, spent about a year and a half of shuffling between co-working spaces in Brooklyn. Then Jacob landed in at 1000 Dean St in Crown Heights and tells us the windowless 700 SF office is ideal. He says the main issue was privacy; if you’re writing code that’s for your eyes only, it’s not hard to see why glass walls and open workspace might not suit you.
For those cut out for it, Ben tells us he hopes Grind will eventually be equipped to support companies as big as 50 or more employees. What it comes down to, he says, is "people really want to work in communities."