New co-working pricing model?

My partners and I at DueCourse have not only become experts at all things “invoice”, we’ve also become quite good at the vagabond lifestyle. We’re a start up after all, and one of biggest costs is office space.

Since we came together as a group, we’ve rented 2 offices, shared an office with another company, worked out of several co-working spaces, visited quite a few more and, as a last resort, set up in coffee shops.

The office spaces we rented were good, because we had a private space where we could white board and debate. Unfortunately, because we were on a tight budget, they weren’t the nicest places to work (we went a winter without proper heating….saved only by a couple space heaters). There were also times when the office was empty….particularly when we were deep into the building the product and it was more productive to work from home.

We worked out a couple free (sponsored) co-working spaces, but the collaborative work suffered. We visited several spaces that offered hot desking, but with 3 to 4 of us, it was actually more expensive than the office spaces we had rented.

Coffee shops worked as a last resort, but it was always a hack, and personally I never felt comfortable working there. It’s questionable whether the owners want the laptop armies hoarding the best seats….my guess is they begrudgingly tolerate it.

Recently, we’ve been working out of Ziferblat in Manchester. They’ve got a unique approach. They are a large mixed use space (“Work, Study, Relax, Explore, Play, Attend Events, Eat Cake, Have a Brew”) that charge by the minute and offer several seating options with free food/drinks. We were able to negotiate a daily cap on their rate and because we only pay when we are there, the monthly cost is comparable to the offices we had rented.

It dawned on me recently, is this the co-working business model?

When Paul, Jon and I started tossing around start up ideas, co-working came up a few times. We’d noticed that in the Manchester city centre, there was a lot of empty office space (dead inventory). According to Mary Meeker (via Fred Wilson), there is also a growing trend in the number of freelancers. We also realised that there is no dominant player in this market….no Airbnb or Uber.

When we were down in London in the summer, for investor meetings, we stopped by the Google Campus in Shoreditch. It’s a free (sponsored) co-working space that offers food and drinks. At the time, I wondered if charging for food/drinks was a better pricing model for a co-working space then charging for the physical space. Since then, we’ve set up shop at Ziferblat, it’s looking like it might be.