Why do people pay for coworking spaces

'Free' coworking

Here comes a concept that some coworking space operators might get a queasy feeling. In the Netherlands, using desks in many shared workspaces costs practically nothing. In some of them there is even a free buffet that will keep your stomach stuffed. How does it work when most coworking spaces live mainly from renting their work desks? And how do small coworking spaces react when such a "freeworking" center opens around the corner? Deskmag took a train to Utrecht and looked for answers.
By Joel Dullroy - Thursday December 8th, 2011

The Netherlands has the highest proportion of self-employed in the European Union. Almost half of all employees (44%) work part-time compared to the EU average of 18%. In addition, the Netherlands is a country with a very high population density, in which many people have to get by with tiny apartments.

These factors create a huge need for places where people can do their work undisturbed: a perfect environment for coworking spaces. However, the appearance of Seats2Meet, a large boardroom rental company, has completely changed that environment.

This company started renting meeting rooms for companies that are hosting meetings outside of their offices twenty years ago. There were more and more supporters for the idea and meeting centers were expanded to all of Holland.

Four years ago, Seats2Meet expanded the concept. They created large open work areas and invited people to grab their laptop and come over. In addition, there is a lunch buffet and as much tea and coffee as you want. All of this is available to users free of charge. The users do not pay with economic but with social capital: "We offer them (premises) in exchange for knowledge and added value," said Vincent Ariens from Seats2Meet in Utrecht.

For users, paying with social capital means interacting with other visitors, sharing their knowledge and ideas and thus bringing enthusiasm into the room. Vincent says the free model (or "social capital workplace model") is not a threat to conventional coworking spaces that are paid for with economic capital, just an extension.

"We believe in a combination because the use of social capital is buzz for the location and buzz is business," said Vincent.

Overcrowded desks, no reservable workspaces, expensive conference rooms

The business model is designed to rent out meeting rooms at a relatively high price. The freelancers who pay nothing for work should book meeting rooms for important discussions for which they pay a lot.

Seats2Meet also collects all user data. Visitors have to create a profile within the online networking software that collects all information about the users, their places of work, interests and their connections.

A Seats2Meet location feels like a crowded university hall at lunchtime. There are rows of long tables, each full of people of different ages, sitting over their laptops. The shop is buzzing, to muffle the noise there are carpets and false ceilings.

The buffet area is open at lunchtime. There is a variety of bread, cheese, cold cuts, salads, pizza, all served on disposable paper plates. A push of a button coffee machine spits out hot drinks, and there are taps in various places in the room.

Part of the space is free and shared, but a large part of the space is used for conference rooms that are geared towards increasing sales. This is also relatively high, with an occupancy rate of over 90%.

Renting the conference rooms is not exactly cheap. To try it out, we tried to book a room for the next day. Our meeting would have cost 100 euros for two people, two hours, hot drinks and a lunch buffet.

In contrast to most coworking spaces, Seats2Meet does not offer any workspaces that can be reserved. If there is no more space, then there is no more. In addition to the free offers, there is an alternative for 10 euros per day for people who prefer it quieter. This is a separate area that was used by one person during our visit, while over 100 people romped about in the open work area.

Is it changing the market?

Providing different work areas is the business model of all other coworking spaces in Holland. Since Seats2Meet came out, other providers have been concentrating on high-quality locations and working on a strong sense of community.

"People see the difference," says Ivana Kowsoleea of ​​the Lev Kaupas Coworking Space in Amsterdam.

"Seats2Meet has a place to work, but the difference is that the people who come here (to Lev Kaupas) are members who help each other, share common interests and give each other feedback. When someone has a brilliant idea, other coworkers bring theirs own experiences or help with establishing contact with the right people in their network.

Lev Kaupas is a non-profit space operated by its members. Volunteers take on certain tasks. This focus on a strong community sets it apart from a free workspace that is accessible to everyone. Due to a lack of space, the now more than 40 members of Lev Kaupas are looking for a larger location.

Ivana says that the question of a membership fee does not even arise with the potential members, because after they see the location and understand the structure they are ready to make their contribution. In her opinion, the difference between the two concepts is so great that she does not fear competition from the Seats2Meet model.

"We don't have to compete. We run the coworking space as a collective. If we can offer a good community, good interactions with other coworkers and a good atmosphere, then there is no need to worry."

Other coworking spaces are forced to develop a more creative business model. The Wals Wonen & Werken coworking space in the city of Nijmegen exhibits Italian furniture in addition to its "normal" activities. Everything in the coworking space is for sale, even coffee tabs. Wals Wonen & Werken co-founder Louis Verhagen says that giving away free spaces can attract a lot of visitors and at the same time create a certain working atmosphere.

"Everything has to do with the experience you have," says Louis. "The price filters the audience. Rather, we have serious members when people pay for their jobs. "

Some coworking spaces strike a middle ground. Igluu ​​is a small chain of coworking spaces with locations in three cities. The location in Utrecht offers free workplaces and charges the permanent workplaces and meeting rooms. The advantage lies in the quality precisely because it offers a smaller, more focused community.

"People who pay for their fixed desk are more responsible self-employed." Says Igluu ​​Community Manager Felix Lepoutre, "There are different groups and different types of coworking. Those who are just starting out go to Seats2Meet. When they become a little more successful, come They go to igloo and eventually rent their own office, and this growth means there are different needs at different times.

The last point could be the most important. As the Global Coworking survey shows, most of the coworkers had a home office. You benefit from changing your home office to a workplace in the coworking space. The poaching of members of different coworking spaces from one another is quite low. A free workplace model like Seats2Meet could eradicate working in the home office and in WiFi-enabled cafés.

The limits of the model help other smaller coworking spaces to show their strengths.

International expansion planned

There are certain local factors that support the Seats2Meet model. You are currently expanding into other countries. A bulletin board on the wall shows locations across Europe and even some in Africa. The question is how existing coworking spaces react when the "freeworking" model emerges in their cities.

One answer is to learn from the alternative and adopt best practices. This is exactly what the Nomadz Coworking Space in The Hague did. Seats2Meet opened three weeks ago in close proximity to Nomadz. At first they were shocked, but then Nomadz host Suzanne Gerbenzon decided to cooperate.

"I learned a lot from them," said Suzanne. "Because of them, we have a conference room that we often rent out, even for large companies. This is how we make our profit."

She also believes that her coworking space scores with a sense of cooperation. "People come here because they like it, because it's quiet, because we all know each other, because we help each other and connect with each other. All coworking spaces have their own personality. Here we are like a family."