Co-working spaces are all the rage these days. And why shouldn’t they be? After all, everyone wants to work in a place where they can network, be among other keen creatives and business-minded-types, and actually have a place to, well, work that’s not mum’s garage or Uncle Ned’s shed in the far corner of the backyard.
But here’s a shocker: co-working spaces are changing. Dramatically.
Auckland Tourism, Events & Economic Development (ATEED) General Manager Business, Innovation and Skills , Patrick McVeigh, says Auckland especially is seeing a dramatic shift in how co-working spaces like GridAKL are reinventing themselves to cater to the evolving needs of entrepreneurs and to stimulate economic growth for the region.
“Part of this is a natural change we’re seeing in the real estate landscape,” he says. “Entrepreneurship and small business is becoming increasingly important.”
GridAKL at the Wynyard Quarter Innovation Precinct is expanding, not just in size but in the services it offers businesses that reside there; these being a diverse mix of start-ups, small and medium-sized enterprises (SMEs), and corporates with a strong technology and creative focus.
The location at GridAKL is ideal with surrounding businesses in the innovation precinct including Datacom, Fonterra, IBM, Air New Zealand and Microsoft.
The expanded GridAKL encompasses the restored historic Mason Brothers building and purpose built 12 Madden Street, which are being managed by coworking operator, Generator with ATEED holding the head lease at Madden Street and leasing space at Mason Brothers.
The new space will be able to host hundreds of businesses, all under one (open plan) roof. But McVeigh says that alone won’t be enough. “As soon as you start providing added value to your residents, the closer you’re getting to their needs. You’re building communities and social capital. Innovation is increasingly seen as a social process.”
The key to doing that, he says, is understanding the needs of residents in a co-working space. “Collaboration is key. You need to be attuned to the needs of the economy. Our role as Auckland’s economic growth agency is to help create momentum.”
It’s that last bit – creating momentum – that especially has McVeigh and ATEED looking at ways to diversify the GridAKL offerings. “We need economic diversification,” he stresses. “Competition in any form is a driver of productivity and there is a need for us to collaborate to compete globally if we are to become a major innovation hub of the Asia Pacific.”
In order to help diversify, Generator has launched Generator Capital, which helps provide funding for start-ups, SMEs and businesses in the Generator community. “The growth of small businesses and entrepreneurs is only going to continue,” Patrick McVeigh says. “Disruption will be there, but it will be in technologies we haven’t thought of yet.”
Generator Capital director Duncan Stewart says the idea of Generator Capital is a simple – yet important – one. “Generator Capital is an investment and advisory organisation that works alongside Generator to help grow the businesses of our members,” he says. “We also provide support to Generator with respect to identifying innovative high-growth businesses that will help further the economic growth mandate of the GridAKL precinct. Whilst Generator Capital’s focus is not exclusively on member companies, it makes sense for us to nurture these businesses foremost – as our clients are literally on our doorstep.
“We grow companies in three ways; firstly, by providing strategic advisory services which could include development of business strategy, M&A advisory, market analysis, identifying channel into export markets, setting up governance programmes, cashflow analysis and many other services – we have a very broad skillset in this regard. Secondly, we are in the process of setting up two new funds, one for direct equity investment, and one for the provision of debt. We believe there is a good opportunity to help companies through cashflow lending, which is not currently being provided by the retail banks. Finally, we act as an advocate for innovative high-growth companies to help them use the GridAKL precinct as a platform to tell their story and connect with supportive people, programmes and global markets.”
Stewart adds that he sees Generator Capital’s involvement as contributing to the evolution of co-working in New Zealand. “The Generator co-working environment removes administrative distractions and allows companies to focus on getting ahead. And by also providing members with a suite of wrap-around business support and investment services in-house, we supercharge their opportunity for success.”
Generator’s other business services includes an innovative events programme, client hosting facilitates, access to international partnerships and collaborations such as the global WeWork network, and a range of administrative support services.
Like ATEED’s McVeigh, Stewart also believes co-working spaces are changing. “Generator Capital’s perspective is that businesses operating out of co-working spaces are ‘fully optimised’ – they typically have very linear and predictable growth costs, fewer administrative distractions, and generally good cashflow and credit track records,” he says. “Our mission is make Generator’s co-working environments synonymous with commercial success and encourage more promising Kiwi businesses to join us.”
National co-working operator, BizDojo co-founder Jonah Merchant says. “What has changed, and drastically at that, is the depth and the scale in which we can help people and their businesses grow, something that has only been possible for us by embracing change and staying agile,” he says. “Nick (Shewring) and I (BizDojo co-founder) launched a scrappy stand-alone space on K Road in 2009 with collaboration as our core focus, and today we are getting ready to open expanded, and new spaces across New Zealand. We are working with local government in Auckland and Wellington to deliver programming and business development support, creating our own bespoke learning programs for inside our BizDojo locations, which include GridAKL, and crafting our Founders Central programme to extend learning opportunities to the wider public.
“We put a lot of pressure on ourselves to constantly evolve our offering, building on what has worked in the past and experimenting with what could work in the future. And as we have scaled our other operations, we have scaled our capacity to experiment as well.
“Expanding on our offering, launching new products and taking on this wider mandate of programming and business support is only made possible by growing our business itself. So, if we are looking at our how operations have changed at BizDojo over the years, some of our biggest shifts have been internal ones, grappling with rapid physical expansion, doubling our team, and structuring our business to support the 37 humans that keep our BizDojo spaces ticking.”
And does Merchant believe co-working will continue to boom? You bet. “Co-working started to take hold at a time when people were leaving traditional work and embracing freelancing, contracting, small business and startup,” he says. “At the time, the idea of co-located working with some facilitation was pretty groundbreaking, and those people leaving the safety of traditional work for the independence of business ownership were considered to be on the fringe.
“Today, freelancers and contractors are being tipped to represent more than 30 percent of the workforce by 2020, and larger more established businesses are looking to the small business and startup sector for inspiration for everything from retaining employees to developing products and services. It is this kind of rapid change that highlights the opportunity for co-working operators who are agile enough, and future thinking enough to embrace it.”
It’s why Merchant is positive about where co-working spaces are heading – and why their evolution will only benefit individual entrepreneurs and society as a whole. “Today we are creating environments and building communities in a time in which people’s desire to find connection, and derive meaning from their work is combining with a ubiquity of technology that enables increased freedom in the way people work,” he says. “At BizDojo we have met this by diversifying what we do, expanding support services for businesses and focusing deeply on the needs of the people that call us home. This means we provide everything from one-to-one business mentoring, through to mental health and wellbeing support, introductions to investors, advocacy, topic-based learning, business services and social events. We have even created a consultancy side of our business designed to help larger businesses.
“This is our response to the needs of the community we serve at this moment, and for some, these may not be services or programming they would expect from a co-working provider. But we know this is what our community demands, and if we are here to support them this is what we not only should provide, but must provide.
“Co-working is quickly becoming its own established category, and we think the future will bring increased opportunity and more players. To ignore evolution is to ignore the very spirit of why co-working exists.”