Dear All,
*The challenge: *I need help figuring out how (or whether) to save a
coworking space that lost it's key ingredient for success (it's community).
I hope/think it provides a nice example of a more recent kind of problem
that existing coworking spaces will be facing as this kind of business
matures. I also think it provides a good lesson about potential dangers of
expanding even when your first location is a success.
*Here's the story:*
About two and a half years ago my (small) coworking space was full and I
had to decide whether to expand or to just stop accepting new members. Long
story short, I decided to expand.
I thought about how many members I'd need at the new space and how many
would move from the old space and it seemed to me like both spaces would be
sustainable soon after opening the new space as long as growth continued as
it had been for the short term. I expected growth to be a little faster
with the added value of an extra location in a great new neighborhood, so I
thought I was being safe(ish). A couple months after making that choice the
original space went from being full to being less than half full. It no
longer had the sense of community/buzz that made it an attractive coworking
space in the first place.
*Back to the challenge: *is there anything I can do now to restore the
missing key element of community once the community is lost other than to
close the one space and focus my attention on making the second space the
best coworking space I can make it?
*Some important factors in thinking about the problem:*
- *Please accept the premise *that this threshold community size
really is the key difference in whether this space is attractive to new
members (even though it's definitely a simplification).
- *Couldn't I just repeat the formula that made it a successful
coworking space in the first place? *When I first opened, I already
believed a largely-empty coworking space had only a fraction of the value
of a full coworking space, and so I set my prices, very explicitly, at half
the price I expected to charge when the space became more lively. This
worked well. People knew I would increase the prices and they knew they
were getting a great deal to be an early supporter, and I got a lot of
early activity for that reason. When I doubled the prices, there were no
big hiccups. But I cannot reverse that now for a few reasons. Most
importantly, I have another coworking space that is doing well at the
prices I currently charge (and I am not over-charging), as well as many
members who work from the non-sustainable space who paid full price.
There's no simple way I can see to dramatically lower the prices at one
location to get it back to the threshold community size without either
alienating a lot of existing members or giving them back a lot of their
already-paid membership dues which would be a big financial burden (at
least over the short term). Plus it would creat a strange double-pricing
structure for two spaces that otherwise are part of the same community.
- *Why don't I ask my members for a solution? *I have, but so far no one
has had a good solution other than to just close the space, even though
many people would be very upset by it.
- *Why did I lose so many members after the expansion ( isn't that the
real problem)? *The answer is a lot less straight forward--and was a lot
less predictable--than you might think.
- Obviously, a lot of existing members moved to the new location. But I
knew about that in advance and that alone would NOT have changed the
original space for the worse.
- Right after committing to the expansion, I found out that about six
full-time members were leaving as a group. One of them got his own
private
office with room for all of them, and they moved there to work together.
Six members wouldn't have been the difference, but with the space already
having lost a lot of members, the loss of this group who all worked in
the
same area of the space was noticeable.
- I made the commitment to expand at the end of May. I didn't have
enough experience at the time to know it, but summer is a killer for
coworking in Prague, and my membership shrunk by maybe 30% over those
next
three months just as a result of the usual seasonal fluxuation.
- Because the expansion itself was stressful and time consuming, the
quality of the community management at both spaces dropped
significantly.
I was there half as often as before, and when I was there I had a lot
less
positive energy to give to the space. People noticed and several people
were openly upset by the change in quality of the space/community
management.
- I raised my prices for new members at the time of the expansion,
and in retrospect I think that
