Why Virtual Offices and Co-Working Spaces are Ideal for Early Stage Startups?
By: Startupr Hong Kong Limited
Tags: Startup, Coworking, Freelancers, Entrepreneur, Digital Nomads

Over the years, the traditional office environment has changed and evolved. New ideas of working have been invented and tried, and while some were not very good, others have turned out to be highly productive. As the starting of how work was done, there have been lots of changes in the way we work today, the workplace, and even in the kind of organization that we work in. All these modifications are based on the progress that we humans have made in the society, technology, and even human behavior.

One very good example of evolution is the way that many startup organizations operate. In the past, successful startups started from the founder’s garage or their kitchen. Nowadays, startups are born out of serviced offices and coworking spaces. And it is due to this kind of growth in the industry, shared workplaces among entrepreneurs have a much higher value in creating successful business startups compared to what garages or kitchen tables had provided.

Image credits: Andrew Neel on Unsplash

So why are coworking spaces becoming attractive and why do people working there end up being successful? Why are they so alluring to the startups?

To begin with, we need to first understand all about coworking spaces, what it is and why it is good for a startup. Keep reading to understand more.

What is coworking?

Coworking is the modern way of how and where we work from, becoming highly popular in the last few years. In short, coworking involves a workplace shared among different workers.

Basically, it is a single place shared by different company workers. The working space can be an office place or even an independent activity area. To be clear, all the workers may not be from one single organization and may not have a connection to each other. They simply work in the same shared working environment.

Coworking is normally something that attracts independent scientists, independent contractors, work-at-home professionals, and the people who travel around a lot and end up working in an isolated place.

What is a coworking space?

Now that you are clear with what coworking is, let us now talk about what a coworking space is. A coworking space is the place in which people from different groups work in the same place, and can be any office or any independent activity area. In short, a coworking place is an office that is filled with people who work for different companies or independently.

The main difference between a coworking space and a typical office is that everyone working here are not employed by the same organization. By working in a coworking place, independent contractors or workers get the feel of being in an office and helps them stay motivated. The coworking space offers every kind of facility of a traditional office space and features like the internet, pantry ares, meeting rooms, etc. Nevertheless, instead of offering traditional workspaces and desks, they offer communal work areas.

Workers sit side by side in a large communal workspace to work on their individual projects. There aren’t any private workspaces to work from in such a space. The idea is that everyone shares the same communal space to work and create what they want to. As a matter of fact, the seats in such places are not reserved before hand. They generally work on the philosophy of “first in best dressed” when it comes to the seating.

Why is coworking a great thing for startups?

With all the explanation above on what coworking and coworking spaces are, you might be wondering how can a coworking space help a startup? Well, a startup usually starts with a limited number of people, normally less than 5 or 10 people. At times, it can also just be one or two people who are working on an idea for their startup. And working in a coworking space would help them a lot. In short, they would be able to grow their business and work efficiently.

Here are some of the other reasons as to why a coworking space is great for a startup:

Cost

Running a business is not just about starting it and earning immediately. It takes time for companies to earn a profit in their business. On an average, most companies begin earning profits in their third year. So, it is normal for most startups to cover the costs and break even during the initial years. The coworking spaces are a great option for startups. They can easily give a perfect work environment to the company without costing much for the business.

With access to all the amenities in a coworking space, a startup would be able to function just like it would in a traditional office. And this all can be done for a little amount. The rest of the cash that comes in can be used to grow the company and make things better in the startup.

Flexibility

Even though many startups have an idea on how they would expand their business or how they would want it to grow, there is no assurity of what the future holds. So, if you feel that you can spend all the money you have on setting up and preparing your startup office, you might end up spending a lot and on what is not important. The overall commitment and cost for a startup to open their own office space can be a huge risk or responsibility for the business to support in the initial stages.

By working in a coworking space, you would be able to be flexible. In short, you can move from here whenever you want. Also, when you are ready to have your own place, you can leave the coworking space and begin to work on your own when your company has begun earning profits. Before that, you can use the place and save a lot of money as you enjoy working in a spacier area on a flexible arrangement.

Test the market

About 50% of the companies that start off eventually fail in the market within the first four years of operation. By operating the startup in a coworking space, this allows your startup to test the service or product in the market. This would help you understand the market needs better, and also work towards improving the idea or changing it entirely if it does not work.

If you create your own office space, you may spend too much in the end. In short, the risk in using a coworking space and testing your idea in the market is far less than renting an office on your own. This offers you with a much greater corporate footprint in the market. This is because of the place in which you are working from, which would give your company much more credibility. With this, you would have more sales as well. And then you can use the extra money to grow the business better.

Which startups are suited for coworking?

Even though a coworking place can offer you affordability and flexibility, you would not be able to enjoy any privacy. This means that the others who are working around you would be able to view other companies as they walk around the coworking space. So, if your company needs privacy to complete the work, then a coworking space is not a great choice. The kind of business that needs privacy includes the business of accountants, lawyers, or any other businesses that might not want anyone to have an eye on their product.

On the other hand, the startups that need discussions and brainstorming to get new ideas for their products can use the coworking spaces to expand their knowledge base. Coworking spaces would allow them to discuss openly and get more ideas for what they are creating. The companies under this category include marketing, advertising, graphic design and any other company that needs engagement and conversation between employees.

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by +409,714 people.

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