The first day of Global Coworking Unconference Conference – GCUC USA 2017 began with a session conducted by, Greg Lindsay. He is a member of the NewCities Foundation and a contributing writer for Fast Company. He is also the co-author of Aerotropolis: The Way We’ll Live Next. The session was titled Cities-as-a-Service. He discussed the details of how countless opportunities could be created from cities if utilized correctly.
Few years ago, Greg toured the city of London with Peter Wynne Rees who has been a master-planner for 30 years. Rees is responsible for 60 million square feet of office spaces in the city. Some of those are the Gherkin, the Cheesegrater and the Walkie-Talkie. Rees showed no interest in talking about the performance of the skyscrapers for banks. Instead, they spoke of the interstitial spaces. He shared his principle for planning cities with Greg, “People make spaces, places make gossip and gossips make people money.” The idea is that strayed bits of information gets shared. They then migrate and cross-pollination occurs between firms, propelling cities forward. Greg states the concept as the animating pulse of coworking.
Historical references to Coworking
Next, he mentioned Samuel Pepys from the 17th century, who was the first mobile worker. He was a clerk for the Royal Navy. Samuel spent most of his time trying to track people down for meetings. In his diary, he expressed the difficulties of moving to and fro between the docks, the pubs, and the coffee houses, for his work. The coffee houses served as the original engines of democracy. They were seldom populated with men discussing the issues of the day. The culture during those times dictated frequent discussions held in open spaces. Another aspect of the culture required one to participate in the conversations as both an active listener and speaker. Greg stated, “Again, this form of cultural impulse which has been absent in the offices, has been resurrected and incorporated into coworking’s culture.”
“The story of coworking has been about breaking work free from the boxes that we have put it in,” said Greg. We have seen the scale of work escaping beyond the office buildings out into the public realm. He believes cities are the places where people can break away from individual firms, meet other people and create enterprises. The vibrant cities ecosystems were what created prosperity. In 1969, renowned journalist, Jane Jacob predicted Detroit’s downfall in her book, The Economy of Cities. She attributed the failure to the over-specialized large companies and loss of small percolating firms that were generating new ideas.
Cities as Social Reactors
Urban physicists Geoffrey West and Luis Bettencourt wrote a paper arguing that cities are not machines or organisms. Instead, they are large social reactors where you take people and their social networks, compress them in space and time, causing fusion. The outcome will be new ideas, productivity and all sorts of wage growth. Coworking captures those same energies. “It is about taking new accommodations and social networks of actors and compressing them in space, time and culture; where they are expected to meet each other in the form of community and achieve great things,” said Greg.
In the last decade or so, the suburbs are failing. Retailing also appears to be undergoing a probable terminal crisis. The reason is that the USA has lost 89K jobs since October. Some estimates show that there are a billion square feet of surplus retail space across America. Talk with a man who had leased a building, in 1998 revealed 99.2% occupancy rate on its opening day, which is now 1.3%. The CEO of first Platonic Realty is selling off its entire suburban Virginia portfolio.
The plans for New Jersey planning organization put out a whole report of what they called stranded assets. They tabulated the dead malls and found five Empire state buildings worth of unused office space, 150 thousand parking spaces and seven central parks worth of empty land around them. The great white whale of isolated assets was the Eero Saarinen’s Bell Labs built in the 1960s, spreading over 2 million square feet. The point Greg aimed to make with his observations is that the big corporations who build and occupy these spaces are just as isolated as the structures they left behind.
Founders of HP – Bill Hewlett and David Packard effectively created Silicon Valley from their garage. They created this mythology of the heroic entrepreneur, striving to make his ideas into realities. However, failing to acknowledge the networks of support and people, and cross-pollination of ideas, which is how actually innovation or learning happens. This idea, along with a few bad leaders, led to the demise of HP as a tycoon. After Carley Fiorina, HP has been splitting itself apart and selling off pieces of itself. For the past 50 years, the same thing happening to corporations across America. A study was done on the return of assets and the measure of utilizing the assets efficiently. It revealed that traditional organizational hierarchy is great at scaling work up to a point, but they can’t generate new ideas.
British economist and author, Ronald Coase wrote a famous paper called The Nature of the Firm where he asked the question why do corporations even exist. He postulated three ideas on how work happens – find work, negotiate it and make sure it gets done. The moment it gets difficult to do all that due to high transaction cost; you end up with massive, vertically integrated corporations, like General and HP. The abundance of free communication offered by the internet today makes it easier for them to fire and hire people. These people then move onto coworking spaces.
A few years ago, Greg set out to tabulate the new taxonomy of workspaces. His study focused on where workers were going once they left the corporate offices. In 2014, Harvard Business Review published his findings. It shows the evolution of the notion that where you work, and the association you work with is more important than your startup. A smart approach applied by Rocket Labs; VC’s now know to go there to find startups and, vice versa. Greg tied his findings to Bill Joy’s law, who famously said that no matter who you are, most of the smart people work for someone else. According to Greg, corporations should be asking the question of how to work or engage and find the smartest people. He stated, “Coworking spaces is the answer to the riddle.”
One of the small firms inside WeWork – Brilliant Collaborations founded by siblings Jonathan Smalley and Melanie Charlton, met 400 out of 500 people of WeWork in their very first year. Half of their first-year clients were individuals who were literally down the hall. Eventually, over three years they merged with another small firm to create a network with the freelancers inside that space. They also formed a little ad hoc group with other companies to bid on emerging projects. Their clientele is not limited to the firms presently occupying the space, but also includes ex-members of the space. Coworking for them is not about just being in a physical space and building a robust community. It is about the whole vector of going forward from that, focusing on the new network or organism they are creating. Greg shared, “I think this is powerful because it has started to make the benefits of coworking tangible.”
Coworking is offering people incredible benefits. They are learning faster, meeting more people, solving problems and as a result, coming up with great ideas. Also, coworking spaces can also allow 50% cost savings. Cities can scale these positives. Since the recession of 2009, cities have capitalized on these network effects and coworking workspaces to harness it energies and move forward. Through reports put out by LinkedIn, we can see where the connections are happening, and that will help you to figure out the most significant coworking profit areas.
Importance of Community
A recent paper argued that almost all the jobs since the recession have been part-time gigs. The findings were backed up by the rise in the sharing economy and freelance economy, since 2009. Greg recommends, “Coworking is aiding the world.” Working and face-to-face communication between peers at the same time make this program impenetrable against software, e-commerce, or other corporations. Watching programs work and making things work alongside people are going to escape the boundaries of a traditional office. All these have lead to coworking offered as a luxury amenity.
BMW Mini set up A/D/O – a creative space in Greenpoint, Brooklyn. It is a combination of coworking space, restaurant, a startup accelerator, high-end workshop, public spaces, projects gallery and design store. It was designed to be a hybrid space where BMW Mini could test out various ideas. The startup accelerator was at the heart of it. Greg had a chance to interview all the teams there at the end of their demo day. One statement that kept on coming up was -“How much I learned from the other founders”- referring to the peer networks and shared commonality they get out of it. Thus, showcasing the attributes of a shared community.
Creating Social Networks
Greg brought up the question, “In a coworking space, how do we identify, which members should work together?” He is working with a group called West Point; US military academy has its network science center there. They tried to people in the environment and create algorithms to figure out, who one should be talking to, to further their aim. In 2013, one of Greg’s friend started a startup, where they came up with a software, and a key invention, human facilitators. These great ace facilitators could learn from the software, could adapt to the software and reject the bad ideas. They gave every participants survey, where they asked personal questions such as, ‘how many children do you have’ and ‘have you ever had any near fatal disease.’ Over the course of years, they introduced people who could bond over the personal information shared, creating a specific social network. In the last two years, the program has spawned 60 community-led initiatives; for example, the first Uber ambulance delivery network in India.
Many coworking spaces and shared workspaces are trying to create these social networks. However, no one has adequately cracked the code yet. Greg points out the key to it will be matching the software and the community manager. Next attempt would be to get the software out into the cities. The app would depend on the cities, like many apps do, such as Tinder and Pokemon Go.
At the end
He closed the session by highlighting the relation between cities and coworking, saying, “Cities always form around work.” So, to revitalize them and keep them active; it is essential to come up with ways to connect people. Greg emphasized, “The ways or approaches should go beyond the traditional hierarchical corporations, and that is extremely important.”